-----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, Rps6ItNWgnXVI+jPcS75sLVReUIkV+QyAfnupKiXjmjn4dQ83H9Kc2fcyqaDCZ2M 55E9V0gvw/k1pkkzBmUlfw== 0000912057-97-010899.txt : 19970401 0000912057-97-010899.hdr.sgml : 19970401 ACCESSION NUMBER: 0000912057-97-010899 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961130 FILED AS OF DATE: 19970331 SROS: AMEX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSION WEST PROPERTIES/NEW/ CENTRAL INDEX KEY: 0000704874 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 952635431 STATE OF INCORPORATION: CA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08383 FILM NUMBER: 97568332 BUSINESS ADDRESS: STREET 1: 6815 FLANDERS DR STE 250 CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194503135 MAIL ADDRESS: STREET 1: 6815 FLANDERS DR STREET 2: SUITE 250 CITY: SAN DIEGO STATE: CA ZIP: 92121-3914 10-K/A 1 FORM 10-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ----------------- FORM 10-K/A AMENDMENT NO. 1 [X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended November 30, 1996, or [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to -------- ------- Commission File Number 1-8383 MISSION WEST PROPERTIES Incorporated in California IRS Employer Identification Number: 95-2635431 Principal Executive Offices: 6815 Flanders Drive, Suite 250 San Diego, California 92121-3914 Telephone: (619) 450-3135 PART I All items required under Part I are hereby incorporated by reference to the Company's originally filed Form 10-K for the year ended November 30, 1996. Such items remain unchanged by this amendment. PART II All items required under Part II are hereby incorporated by reference to the Company's originally filed Form 10-K for the year ended November 30, 1996. Such items remain unchanged by this amendment. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT DIRECTORS AND EXECUTIVE OFFICERS The following table provides certain information regarding the Company's Directors and Executive Officers at November 30, 1996. There is no relationship by blood, marriage, or adoption among the Directors and/or Executive Officers. All officers hold office at the discretion of the Board of Directors. NAME AGE POSITION ---- ---- --------- Michael M. Earley 41 Director, Member of Compensation and Nominating Committee Harve Filuk 54 Vice President of Real Estate Operations Mark G. Foletta 36 Director, Member of Audit and Compensation and Nominating Committee J. Gregory Kasun 41 Director, President, Chief Executive Officer William E. Nelson 70 Director, Member of Audit and Compensation and Nominating Committees Richard R. Tartre 58 Director, Member of Compensation and Nominating Committee Katrina L. Thompson 38 Vice President of Finance, Chief Financial Officer, Corporate Secretary Byron B. Webb, Jr. 70 Director, Member of Audit and Compensation and Nominating Committees Mr. Earley has served as a Director since July 1993. Mr. Earley is Chief Executive Officer (since February 1996), President (since 1994), and was previously Senior Vice President and Chief Financial Officer (1991 to June 1994) of Triton Group Ltd. He previously served as Senior Vice President and Chief Financial Officer (1991 to 1993) of Intermark, Inc. He additionally serves as a Director of Triton Group Ltd. and a Director of Ridgewood Properties, Inc. Mr. Filuk first became Vice President of the Company in 1979. - 1 - DIRECTORS AND EXECUTIVE OFFICERS (CONTINUED) Mr. Foletta has served as a Director since July 1993. Mr. Foletta is Senior Vice President, Chief Financial Officer, Corporate Secretary (since July 1994), and a Director (since January 1996), and was previously Vice President, Controller, and Corporate Secretary (1993 to July 1994) of Triton Group Ltd. He previously served as Vice President (1991 to 1993) and Controller (1990 to 1993) of Intermark, Inc. Mr. Kasun first became a Director of the Company in November 1993 and was appointed President in November 1993 and Chief Executive Officer in July 1994. He previously served as Chief Financial Officer, Vice President, and Corporate Secretary (1989 to November 1993). Mr. Nelson has served as a Director since 1979. Mr. Nelson, a private investor engaged in development and management of real estate and securities investments, is Chairman of Scripps Bank and a member of the California Bar. Mr. Tartre has served as a Director since January 1993. Mr. Tartre, a consultant and private investor, is Senior Vice President of MetLife Insurance Company (since January 1997). He previously was President and Chief Executive Officer of Astra Management Corporation (May 1995 to April 1996) and Managing Director of Eden Financial Group (1982 to August 1995). He additionally serves as a Director of Triton Group Ltd. and a Director of Burnham Pacific Properties. Ms. Thompson is Vice President, Chief Financial Officer, and Corporate Secretary (since November 1993) of the Company. She previously served as Controller (1991 to November 1993). Mr. Webb has served as a Director since 1975. Mr. Webb is President of La Jolla Savers and Mortgage Fund, Chairman and President of Home Investment & Loan, and Chairman and President of Byron B. Webb, Inc. (Palmyra, Missouri, bank holding company). Effective March 7, 1997, Messrs. Filuk, Kasun, and Tartre resigned all positions with the Company. Following these resignations, Mr. Earley was appointed President and Chief Executive Officer and Mr. Foletta was appointed Vice President and Assistant Corporate Secretary of the Company. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT Directors, executive officers, and each beneficial owner of more than ten (10) percent of the Common Stock of the Company are required by section 16(a) of the Securities Exchange Act of 1934 to file reports periodically disclosing their transactions in the Company's securities. Based on a review of such reports, no reporting person failed to file required reports on a timely basis during fiscal year 1996. ITEM 11. EXECUTIVE COMPENSATION SUMMARY OF COMPENSATION The following table summarizes the compensation paid or accrued during the year ended November 30, 1996, to each person who served as Chief Executive Officer and to each other executive officer whose aggregate remuneration in all capacities from the Company exceeded $100,000 (the "named executive officers") during the fiscal year. - 2 - SUMMARY OF COMPENSATION (CONTINUED)
Long-Term Annual Compensation Compensation -------------------------------------------------------------------- Other Annual No. of Options All Other Name and Principal Position Fiscal Year Salary Bonus Compensation(1) Granted Compensation - --------------------------- ----------- --------- -------- -------------- -------------- -------------- J. Gregory Kasun 1996 $145,000 $ 0 $16,896 0 $ 0 President and Chief 1995 145,000 15,000 20,807 0 0 Executive Officer 1994 135,000 15,000 5,600 0 82,125(2) Harve Filuk 1996 105,000 0 9,682 0 0 Vice President 1995 85,000 15,000 9,165 0 0 1994 85,000 25,000 67,980 0 0 Katrina L. Thompson 1996 85,000 35,000 6,133 0 0 Vice President and 1995 N/A N/A N/A N/A N/A Chief Financial 1994 N/A N/A N/A N/A N/A Officer
- ------------------- (1) Includes the Company's contributions to its 401(k) Plan and its Stock Purchase Plan, and participation payments in accordance with the Company's Management Incentive Plan (see "Management Incentive Plan" below). (2) Represents the difference between the option price and the market price on the date of grant of 73,000 nonqualified stock options granted and vested during fiscal year 1994. EMPLOYMENT SEPARATION AGREEMENTS The Company is a party to employment separation agreements with each of its named executive officers. Each agreement provides that the officer be retained as a consultant to the Company upon termination of employment other than for cause, or upon resignation following a reduction in salary or benefits not shared with all other employees of the Company, a reduction in corporate title, or a relocation of the officer's place of work greater than 50 miles from the Company's current headquarters. While a consultant, a former officer would receive a consulting fee equal to the individual's annual base salary immediately before termination, paid in a lump-sum or in monthly installments for the consulting period, which ranges from 12 to 24 months. While a consultant, the former officer would continue to be eligible to participate in medical, dental, and life insurance programs generally available to the Company's employees, for which the officer would contribute 50 percent of any applicable premiums, and would be reimbursed for actual, pre-approved expenses incurred while performing consulting services. Benefits under these agreements became payable upon the resignations of Messrs. Filuk and Kasun effective March 7, 1997. MANAGEMENT INCENTIVE PLAN Certain former and current named executive officers and staff participate in ten (10) percent of the profits generated from the 1986 sale of the Company's properties in Del Mar, California; Mr. Filuk has a three (3) percent interest in any such profits, a former executive has a six (6) percent interest, and all other employees share a one (1) percent interest. The term "profits" as used herein means the amount by which the deferred sales prices exceed $12,400,000, the estimated value of these properties at the time the Management Incentive Plan was adopted. The amounts to which participants are entitled are based on cash proceeds less related expenses. In fiscal year 1996 the following amounts were distributed to the named executive officers in conjunction with this arrangement: Mr. Filuk, $4,349; and all named executive officers as a group (three (3) persons), $4,349. - 3 - GRANTS OF STOCK OPTIONS No options were granted to, and no options were exercised by, the named executive officers during the year ended November 30, 1996. At the 1991 Annual Meeting of Shareholders, the shareholders approved the 1990 Incentive Stock Option Plan (the "1990 Plan"), under which 200,000 shares of Common Stock are reserved for issuance. The 1990 Plan succeeded the Company's 1981 Incentive Stock Option Plan pursuant to which no further options are available for grant although outstanding options may be exercised according to their terms. Options to purchase Common Stock of the Company may from time to time be granted to executive officers and key employees as an incentive to encourage the maximum effort by the grantees and their continued association with the Company by facilitating their acquisition of, or increase in, a proprietary interest in the Company. Such options constitute "incentive stock options" as defined in Section 422A of the Internal Revenue Code and the Treasury Regulations promulgated thereunder and conform to the requirements thereof. EXERCISES OF STOCK OPTIONS The following table sets forth information regarding the exercise of stock options by the named executive officers during the year ended November 30, 1996, and the value of unexercised options at year end.
Number of Unexercised Value of Unexercised Options at In-the-Money Options at November 30, 1996 November 30, 1996(1) No. of Shares Acquired Exercisable/ Exercisable/ Name on Exercise Value Realized Unexercisable Unexercisable - ----------------- ----------- --------------- -------------- ----------------- J. Gregory Kasun 0 0 93,580/57,320 $572,887/$384,425 Harve Filuk 0 0 24,540/3,960 $74,002/$24,585 Katrina L. Thompson 0 0 3,960/2,640 $25,740/$17,160
- -------------------- (1) Represents the difference between the exercise price of the options and the closing price of the Company's Common Stock on November 30, 1996, of $9.75 per share. All such options were exercised after November 30, 1996, but prior to a distribution to shareholders of record on February 19, 1997. COMPENSATION OF DIRECTORS Each Director who is not a salaried officer of the Company receives $500 per month and $750 for each meeting of the Board or any committee thereof he attends; see also "Stock Purchase Plan" below. There were 18 meetings of the Directors and one (1) meeting of the Independent Directors (Messrs. Nelson and Webb) during the year ended November 30, 1996. Additionally, there were two (2) meetings of Board Committees during the year. No options were granted, nor were any options exercised by Directors, during fiscal year 1996. At the 1991 Annual Meeting of Shareholders, the shareholders approved the 1990 Director Stock Option Program (the "1990 Program"), under which 150,000 shares of Common Stock are reserved for issuance. The 1990 Program succeeded the Company's 1980 Initial Director Stock Option Program pursuant to which no further options are available for grant, although outstanding options may be exercised according to their terms. The 1990 Program allows for granting of options to purchase shares of Common Stock of the Company to Directors of the Company who do not receive a salary from the Company, exclusive of Directors' fees. The option price in all instances shall not be less than the fair market value of the shares on the date of grant and all determinations as to grants of options, the number of shares subject to option, and other terms and conditions of the options are made by the Board upon the recommendation of the Compensation and Nominating Committee. - 4 - STOCK PURCHASE PLAN The Company has made available to its employees and Directors a plan whereby such individuals can, through voluntary payroll deductions or other contributions of up to $3,000 per month, acquire shares of Common Stock of the Company in the open market. The Company contributes a matching $0.50 for each $1.00 contributed by individuals. During the year ended November 30, 1996, matching contributions made by the Company to the Stock Purchase Plan on behalf of each Director and the named executive officers were as follows: Messrs. Earley, Foletta, and Filuk, $0; Mr. Kasun; $9,646, Mr. Nelson, $3,000; Mr. Tartre, $10,125; Ms. Thompson, $1,800; Mr. Webb, $10,875; and all Directors and named executive officers as a group (eight (8) persons) $35,446. All contributions to the Plan were suspended as of January 1, 1997. COMPENSATION AND NOMINATING COMMITTEE REPORT REGARDING EXECUTIVE OFFICERS' SALARIES IN FISCAL YEAR 1996 The Compensation and Nominating Committee's objective with respect to executive compensation is to provide the executive officers of the Company with competitive compensation that enables the Company to attract and retain employees who contribute to the success of the Company, thereby maximizing shareholder value. Among the factors considered by the Compensation and Nominating Committee in setting the salaries of the executive officers of the Company for the year ended November 30, 1996, were the operating results of the Company in the preceding fiscal year compared to the expectations of the committee for such fiscal year and the committee's evaluation of the degree of difficulty encountered by management in achieving such operating results posed by national and local economic conditions generally and other unforeseen circumstances; the committee's evaluation of each officer's skill and judgment in carrying out his assigned duties; the salaries paid to persons in similar positions in other companies in the same geographic area; and the Company's own historical patterns of remuneration. The salaries set for fiscal year 1996 were also affected by the committee's anticipation that certain of the executive officers would spend significant time exploring strategic alternatives available to the Company, as well as by negotiation between the committee and the executive officers. Under Section 162(m) of the Internal Revenue Code, adopted in August 1993, and regulations recently adopted thereunder, publicly held companies may be precluded from deducting certain compensation paid to an executive officer in excess of $1 million per year. The Company does not anticipate that a change in its current compensation policy will be necessary for the purpose of qualifying under Section 162(m). By the Committee: Michael M. Earley Richard R. Tartre Mark G. Foletta Byron B. Webb, Jr. William E. Nelson COMPARISON OF SHAREHOLDER RETURN ON INVESTMENT The following graph compares the percentage change in the cumulative total shareholder return on the Common Stock of the Company for fiscal years 1992 through 1996, as of each fiscal year end, with (i) the cumulative total return (assuming reinvestment of dividends) of the Russell 2000 Index, a broad equity market index, and (ii) the cumulative total return (assuming reinvestment of dividends) of a peer group of real estate companies with portfolios of income-producing industrial and office properties believed by the Company's management to be comparable to those of the Company. PEER GROUP RUSSELL MWP YEAR ---------- ----------- ------ ------- 100 100 100 1991 103 124 50 1992 145 147 46 1993 152 145 87 1994 179 187 69 1995 241 218 127 1996 - 5 - ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The outstanding securities of the Company at February 19, 1997, consisted of 1,533,121 shares of Common Stock. Shares of the Company are traded on the American and Pacific Stock Exchanges. The following table sets forth the beneficial ownership of the outstanding shares of the Company held at February 19, 1997, by the only persons known to management to be the beneficial owners of more than five (5) percent of these shares, each of the Directors of the Company, each of the named executive officers of the Company, and all Directors and named executive officers as a group.
Shares Beneficially Owned As of Percent of Beneficial Owner February 19, 1997 Class ------------------------------- --------------- ---------- Triton Group Ltd. 676,050 44.10% Michael M. Earley, CEO 550 West "C" Street, Suite 1880 San Diego, CA 92101 Tennenbaum & Co., LLC 162,700 10.61 1999 Avenue of the Stars, Suite 1010 Los Angeles, CA 90067-6022 Michael M. Earley, Director 0 0.00 Harve Filuk, VP 34,491 2.25 Mark G. Foletta, Director 0 0.00 J. Gregory Kasun, Director and CEO 115,114 7.51 6815 Flanders Drive, Suite 250 San Diego, CA 92121 William E. Nelson, Director 76,311 4.98 7817 Ivanhoe Avenue La Jolla, CA 92037 Richard R. Tartre, Director 18,871 1.23 Katrina L. Thompson, CFO 10,933 0.71 Byron B. Webb, Jr., Director 170,123 11.10 1026 Wall Street La Jolla, CA 92037 All Directors and all named 1,101,893(1) 71.87(1) executive officers as a group (8 persons)
- -------------------- (1) Includes 676,050 shares held by Triton Group Ltd. - 6 - ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS TRITON GROUP LTD. Triton Group Ltd. ("Triton"), of which Michael M. Earley is President, Chief Executive Officer, and a Director, and Mark G. Foletta is Senior Vice President, Chief Financial Officer, Corporate Secretary, and a Director, is a publicly owned company, the shares of which are traded on the American Stock Exchange. Triton is an operating/holding company that has entered into an agreement to merge with Security Holdings, Inc.; such merger will be voted on by Triton shareholders on April 14, 1997 and, if approved by the shareholders, is expected to close shortly thereafter. Previously, Triton had been disposing of its subsidiaries and other investments in accordance with an announced plan to realize value. Mission West Properties is one of Triton's few remaining investments. Messrs. Earley and Foletta became the President and Chief Executive Officer and Vice President, respectively, of the Company effective March 7, 1997. As of February 19, 1997, the Directors and named executive officers of the Company owned in the aggregate 773,033 shares of Triton, of which 811 shares may be acquired within 60 days after February 19, 1997 upon the exercise of warrants. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. MISSION WEST PROPERTIES Registrant By: /s/ Katrina L. Thompson ----------------------------------------------- Katrina L. Thompson Chief Financial Officer & Secretary (Principal Financial and Accounting Officer) March 31, 1997 - 7 - -----END PRIVACY-ENHANCED MESSAGE-----