-----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, F+VClhq+Y+SRncWxE6e/HEw8IIUDMTTJiZ7f4fp6Ph+BpxlfcdMd3U2PMwvtMr43 ElELjAxivczZYzlHIy89qQ== 0000906345-99-000012.txt : 19990331 0000906345-99-000012.hdr.sgml : 19990331 ACCESSION NUMBER: 0000906345-99-000012 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990513 FILED AS OF DATE: 19990330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMDEN PROPERTY TRUST CENTRAL INDEX KEY: 0000906345 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 766088377 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-12110 FILM NUMBER: 99578301 BUSINESS ADDRESS: STREET 1: THREE GREENWAY PLAZA STREET 2: SUITE 1300 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7139643555 MAIL ADDRESS: STREET 1: 3200 SOUTHWEST FREEWAY STREET 2: SUITE 1500 CITY: HOUSTON STATE: TX ZIP: 77027 DEF 14A 1 DEFINITIVE PROXY MATERIALS 1 SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant X Filed by a Party other than the Registrant Check the appropriate box: Preliminary Proxy Statement Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) X Definitive Proxy Statement Definitive Additional Materials Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 CAMDEN PROPERTY TRUST (Name of Registrant as Specified in Its Charter) NOT APPLICABLE (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): X No fee required. Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: Fee paid previously with preliminary materials. Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. 1) Amount previously paid: 2) Form, Schedule or Registration Statement No.: 3) Filing party: 4) Date filed: 2 CAMDEN PROPERTY TRUST THREE GREENWAY PLAZA, SUITE 1300 HOUSTON, TEXAS 77046 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS DATE: May 13, 1999 TIME: 10:00 a.m., central time PLACE: The Houstonian 111 North Post Oak Lane Houston, Texas MATTERS TO BE VOTED ON: 1. Election of eight trust managers to hold office for a one-year term; 2. Ratification of the appointment of Deloitte & Touche LLP as our independent auditors for 1999; 3. Approval of the postponement or adjournment of the meeting to solicit additional votes, if necessary to approve proposal 1 or 2; and 4. Any other matter that may properly come before the meeting. THE BOARD OF TRUST MANAGERS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE ELECTION OF TRUST MANAGERS AND THE APPOINTMENT OF DELOITTE & TOUCHE LLP. Shareholders who are holders of record of common shares at the close of business on March 16, 1999 will be entitled to vote at the annual meeting. Please read the attached proxy statement and the voting instructions on the proxy card and then vote by filling out, signing and dating the proxy card and returning it in the enclosed postage pre-paid envelope or by facsimile to (713) 354-2710. You may vote in person if present at the annual meeting, or are represented at the annual meeting by a proxy. Please contact our investor relations department at 1-800-9Camden, or in Houston at (713) 354-2500, if you have any questions. By Order of the Board of Trust Managers, G. Steven Dawson Senior Vice President--Finance, Chief Financial Officer, Treasurer and Secretary Houston, Texas March 26, 1999 3 TABLE OF CONTENTS THE ANNUAL MEETING 1 BOARD OF TRUST MANAGERS 2 EXECUTIVE OFFICERS 5 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 6 SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 8 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 8 COMPENSATION COMMITTEE REPORT ON EXECUTIVE OFFICER COMPENSATION 8 COMPENSATION OF EXECUTIVE OFFICERS 11 PERFORMANCE GRAPH 14 SELECTION OF INDEPENDENT AUDITORS 15 POSTPONEMENT OR ADJOURNMENT OF THE MEETING 15 SHAREHOLDER PROPOSALS 15 ANNUAL REPORTS 15 4 THE ANNUAL MEETING The board of trust managers is soliciting proxies to be used at the annual meeting. This proxy statement and form of proxy are first being sent to shareholders on March 31, 1999. WHAT YOU ARE VOTING ON At the annual meeting, you will be voting on three proposals. Item numbers refer to the numbers on the proxy card. Item 1: Election of eight trust managers. Item 2: Ratification of the appointment of Deloitte & Touche LLP as our independent auditors for 1999. Item 3: Approval of the postponement or adjournment of the meeting to solicit additional votes, if necessary to approve proposal 1 or 2. WHO MAY VOTE All shareholders of record on the close of business on March 16, 1999 are entitled to vote at the annual meeting. On March 16, 1999, we had 42,374,365 common shares outstanding. Each share is entitled to one vote. HOW YOU MAY VOTE To cast your vote, please complete, date, sign and mail the proxy card in the enclosed postage pre-paid envelope or by facsimile to (713) 354-2710. You may vote in person if you are present at the annual meeting, or are represented at the annual meeting by a proxy. By voting, you will authorize the individuals named on the proxy card, referred to as proxies, to vote your shares according to your instructions. You may specify on the proxy whether your shares should be voted for all, some or none of the nominees for trust manager. You may also specify whether you approve, disapprove or abstain from voting on the proposal that Deloitte & Touche LLP be our independent auditors for 1999 or the proposal that the meeting be postponed or adjourned to solicit additional votes, if necessary to approve proposal 1 or 2. IF YOU DO NOT INDICATE HOW YOU WISH TO VOTE FOR ONE OR MORE OF THE NOMINEES FOR TRUST MANAGER IN ITEM 1, THE PROXIES WILL VOTE FOR ELECTION OF ALL OF THE NOMINEES FOR TRUST MANAGER. IF YOU "WITHHOLD" YOUR VOTE FOR ANY OF THE NOMINEES, YOUR VOTE WILL NOT BE COUNTED IN THE TABULATION OF VOTES CAST ON THAT NOMINEE. IF YOU LEAVE ITEM 2 BLANK, THE PROXIES WILL VOTE FOR RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITORS FOR 1999. IF YOU LEAVE ITEM 3 BLANK, THE PROXIES WILL VOTE FOR APPROVAL OF THE POSTPONEMENT OR ADJOURNMENT OF THE MEETING TO SOLICIT ADDITIONAL VOTES, IF NECESSARY TO APPROVE PROPOSAL 1 OR 2. IF YOU ABSTAIN FROM VOTING ON ITEM 2 OR ITEM 3, YOUR VOTE WILL NOT BE COUNTED IN THE TABULATION OF VOTES CAST ON THAT PROPOSAL. HOW TO REVOKE YOUR PROXY You may revoke your proxy at any time before it is exercised in any of three ways: 1. by submitting written notice of revocation to our Secretary; 2. by submitting another proxy that is properly signed and later dated; or 3. by voting in person at the meeting. HOW VOTES ARE COUNTED The meeting will be held if a majority of the outstanding common shares entitled to vote is represented at the meeting. If you have returned valid proxy instructions or attend the meeting in person, your shares will be counted for the purpose of determining whether there is a quorum, even if you wish to abstain from voting. Abstentions will not be counted as votes cast on a proposal and will have no effect on the result of the vote on that proposal. Broker non-votes occur when proxies submitted by a broker, bank or other nominee holding shares in "street" name do not indicate a vote for some or all of the proposals because they do not have discretionary voting authority and have not receive instructions as to how to vote on those proposals. We will treat broker non-votes as shares that are present and entitled to vote for quorum purposes. However, broker non-votes will not be counted as votes cast on a proposal and will have no effect on the result of the vote on that proposal. 5 COSTS OF SOLICITATION We will pay all of the costs of soliciting proxies on the accompanying form. Some of our trust managers, officers and other employees may solicit proxies personally or by telephone, mail or facsimile. They will not be specially compensated for these solicitation activities. We do not expect to pay any fees for the solicitation of proxies, but may pay brokerage firms and other custodians for their reasonable expenses for forwarding solicitation materials to the beneficial owners of shares. OTHER MATTERS TO BE ACTED ON AT THE MEETING We do not know of any other matter to be presented or acted upon at the meeting. If any other matter is presented at the meeting on which a vote may be properly taken, the shares represented by proxies will be voted in accordance with the judgment of the persons named as proxies on the accompanying proxy card. BOARD OF TRUST MANAGERS ELECTION OF TRUST MANAGERS (ITEM 1 ON PROXY CARD) There are currently eight trust managers on the board. The board has selected each of the eight current trust managers as a nominee for election at the annual meeting. Trust managers elected at the meeting will hold office for a one-year term. Unless you withhold authority to vote for one or more nominees, the persons named as proxies intend to vote for election of the eight nominees. All nominees have consented to serve as trust managers. The board has no reason to believe that any of the nominees will be unable to act as trust manager. However, if a trust manager is unable to stand for re-election, the board may either reduce the size of the board or designate a substitute. If a substitute nominee is named, the proxies will vote for the election of the substitute. The nominees are as follows: RICHARD J. CAMPO Age: 44 Trust Manager Since: 1993 Principal Occupation: Chairman of the Board and Chief Executive Officer of Camden Property Trust since May 1993 Recent Business Experience: Mr. Campo was also our President from June 1993 through December 1993. Other Directorships: First Sierra Financial (a publicly-held financial services company) WILLIAM R. COOPER Age: 62 Trust Manager Since: 1997 Principal Occupation: Private Investor Recent Business Experience: Prior to April 1997, Mr. Cooper served for 30 years in a variety of capacities with Paragon Group, Inc. or its predecessor. Most recently, Mr. Cooper served as Chairman of the Board of Directors and Chief Executive Officer of Paragon Group, Inc. 6 GEORGE A. HRDLICKA Age: 67 Trust Manager Since: 1993 Principal Occupation: Attorney Recent Business Experience: Mr. Hrdlicka is a founding partner of the law firm of Chamberlain, Hrdlicka, White, Williams, and Martin and has been primarily involved in the practice of tax law since 1965. He is a regular lecturer on tax subjects at institutes and seminars around the country and is board certified as a tax lawyer by the Texas Board of Legal Specialization. SCOTT S. INGRAHAM Age: 44 Trust Manager Since: 1998 Principal Occupation: Private Investor Recent Business Experience: From 1992 to 1998, Mr. Ingraham was a director and officer of Oasis Residential, Inc., most recently serving as its President and Chief Executive Officer. He served as Chief Financial Officer of Oasis from March 1993 to March 1996. He also served as Executive Vice President of Oasis from March 1993 to June 1994. LEWIS A. LEVEY Age: 57 Trust Manager Since: 1997 Principal Occupation: Private Investor Recent Business Experience: Prior to April 1997, Mr. Levey served for 26 years in a variety of capacities with Paragon Group, Inc. or its predecessor. Most recently Mr. Levey served as Vice Chairman of the Board of Directors and as a director of Paragon Group, Inc. D. KEITH ODEN Age: 42 Trust Manager Since: 1993 Principal Occupation: President and Chief Operating Officer of Camden Property Trust since December 1993 Recent Business Experience: From July 1993 through December 1993, Mr. Oden was a consultant to us. F. GARDNER PARKER Age: 57 Trust Manager Since: 1993 Principal Occupation: Private Investor Recent Business Experience: Mr. Parker has been involved in structuring private and venture capital investments for the past fourteen years. STEVEN A. WEBSTER Age: 47 Trust Manager Since: 1993 Principal Occupation: President and Chief Executive Officer of R&B Falcon Corporation since 1997 Recent Business Experience: From the time of its formation in 1991 until 1997, Mr. Webster was the Chief Executive Officer and Chairman of the Board of Falcon Drilling Company, Inc., a predecessor of R&B Falcon Corporation. Other Directorships: Crown Resources Corporation (precious metals mining), Greywolf, Inc. (land drilling), Geokinetics, Inc. (seismic acquisitions) and Carrizo Oil and Gas, Inc. (oil and gas exploration). 7 REQUIRED VOTE Each of Messrs. Campo, Cooper, Hrdlicka, Levey, Oden, Parker and Webster must be reelected by the affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the annual meeting. Mr. Ingraham must be elected by the affirmative vote of the holders of two-thirds of the shares present in person or represented by proxy at the meeting. THE BOARD RECOMMENDS THAT YOU VOTE FOR THE NOMINEES LISTED ABOVE. BOARD MEETINGS The board of trust managers met either in person or by conference call 13 times in 1998. All of the trust managers attended 75% or more of meetings of the board and the committees on which they served during 1998. AUDIT COMMITTEE OF THE BOARD Members: George A. Hrdlicka Lewis A. Levey Meetings in 1998: 2 Functions: Makes recommendations concerning the engagement of independent auditors, reviews with the independent auditors the plans and results of the audit engagement, approves professional services provided by the independent auditors, reviews the independence of the independent auditors, and reviews reports on the adequacy of our internal accounting controls. EXECUTIVE COMMITTEE OF THE BOARD Members: Richard J. Campo William R. Cooper F. Gardner Parker Steven A. Webster Meetings in 1998: 1 Functions: May approve the acquisition and disposal of investments and the execution of contracts and agreements, including those related to the borrowing of money. May also exercise all other powers of the trust managers, except for those that require action by all trust managers or the independent trust managers under our declaration of trust or bylaws or under applicable law. COMPENSATION COMMITTEE OF THE BOARD Members: George A. Hrdlicka F. Gardner Parker Meetings in 1998: 3 Function: Determines compensation for executive officers and administers the Camden Property Trust 1993 Share Incentive Plan. BOARD COMPENSATION Trust managers, other than those who are our employees or consultants, are paid the following fees: Annual fee $12,000 For each board meeting attended in person $1,000 For each board meeting attended by telephone conference $250 For each committee meeting attended (unless on the same day as another meeting) $500 8 We also may reimburse trust managers for travel expenses incurred in connection with their activities on our behalf. Prior to May 1995, each non-employee trust manager annually received options to purchase 4,000 common shares. We have granted a total of 24,000 options, all of which are vested and expire ten years from the grant date. Beginning in May 1995, each non-employee trust manager receives 2,000 restricted shares upon his election and 2,000 restricted shares on each anniversary of his election. In 1998, Mr. Parker was elected Managing Outside Director. Upon his election, he received 2,000 restricted shares. He will receive 2,000 restricted shares in 1999, and 1,000 shares annually thereafter . We have granted a total of 34,000 restricted shares, 8,000 of which were vested at December 31, 1998. The restricted shares vest in equal increments over five years from date of grant. EXECUTIVE OFFICERS There is no family relationship among any of our trust managers or executive officers. No trust manager or executive officer was selected as a result of any arrangement or understanding between that trust manager or executive officer and any other person. All executive officers are elected annually by, and serve at the discretion of, the board. Our executive officers are as follows:
NAME AGE POSITION RECENT BUSINESS EXPERIENCE - ---- --- -------- -------------------------- Richard J. Campo 44 Chairman of the Board of Trust See "Election of Trust Managers" Managers and Chief Executive section. Officer (May 1993-present) D. Keith Oden 42 President and Chief Operating See "Election of Trust Managers" Officer (December 1993-present) section. H. Malcolm Stewart 47 Executive Vice President (September Senior Vice President-Construction 1998-present) of Camden Property Trust (December 1993-September 1998). President of the construction division of a predecessor company (1989-December 1993). G. Steven Dawson 41 Senior Vice President-Finance, Chief Senior Vice President-Finance and Chief Financial Officer, Treasurer and Financial Officer of a predecessor company Secretary (May 1993-present) (1990-May 1993). Alison L. Dimick 36 Senior Vice President-Acquisitions Vice President of Acquisitions of MIG and Dispositions (April 1997-present) Realty Advisors, a pension fund specializing in multifamily properties (1991-1997). James M. Hinton 41 Senior Vice President-Development Vice President of Development of (June 1996-present) Camden Development, Inc., one of our wholly-owned subsidiaries (December 1993-May 1996). National Multifamily Asset Manager of J.E. Roberts Company (February 1991-November 1993).
9 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table shows how many shares are owned by the trust managers and five most highly paid executive officers as of March 16, 1999. The following table also shows how many shares are owned by beneficial owners of more than 5% of our shares as of March 16, 1999. Unless otherwise noted, each person has sole voting and investment power over the shares indicated below.
Name and Address of Beneficial Owners (1) Shares Beneficially Owned (2)(3) - ------------------------------------------------------------------------ ----------------------------------- Amount Percent of Class ------------ ------------------- Wellington Management Company, LLP (4) 3,202,372 7.6% LaSalle Advisors Capital Management, Inc. (5) 2,831,036 6.7% Vanguard/Windsor Funds, Inc.-Windsor Fund (6) 2,369,400 5.6% William R. Cooper 1,087,835 2.5% PGI Associates, L.P. 797,495 1.8% Richard J. Campo 712,735 1.7% D. Keith Oden 709,447 1.7% Lewis A. Levey 603,664 1.4% Scott S. Ingraham 325,242 * H. Malcolm Stewart 97,058 * G. Steven Dawson 86,229 * James M. Hinton (7) 41,434 * Steven A. Webster 12,533 * F. Gardner Parker (8) 10,933 * George A. Hrdlicka 10,533 * All trust managers and executive officers as a group (12 persons) (9) 3,479,540 7.7%
* Less than 1% (1) The address for Wellington Management Company, LLP is 75 State Street, Boston, Massachusetts 02109. The address for Vanguard/Windsor Funds, Inc.-Windsor Fund is P. O. Box 2600, Valley Forge, Pennsylvania 19482. The address for ABKB/LaSalle Securities Limited Partnership and LaSalle Advisors Capital Management is 200 East Randolph Drive, Chicago, Illinois 60601. The address for PGI Associates, L.P. is Ten Thousand North Central Expressway, Suite 1150, Dallas, Texas 75231. The address for Messrs. Cooper, Campo, Oden, Levey, Stewart, Dawson, Hinton, Webster, Parker and Hrdlicka is c/o Camden Property Trust, Three Greenway Plaza, Suite 1300, Houston, Texas 77046. 10 (2) These amounts include the following shares that the following persons had a right to acquire within 60 days after March 16, 1999 that are restricted shares held in a rabbi trust, through the exercise of options and through the exchange of units of limited partnership interest in Camden Operating, L.P. Each unit is exchangeable for one common share. We may elect to pay cash instead of issuing shares upon a tender of units for exchange.
Restricted Shares Held in a Rabbi Trust Options Units ------------------------ ----------------- ------------------ William R. Cooper 444 ---- 1,083,386 (a)(b) Richard J. Campo (a) 58,716 371,082 ---- D. Keith Oden (a) 58,106 371,082 ---- Lewis A. Levey 444 ---- 540,959 (b) Scott S. Ingraham ---- 265,650 ---- H. Malcolm Stewart 25,892 60,777 ---- G. Steven Dawson 23,019 55,610 ---- James M. Hinton 17,234 18,444 ---- Steven A. Webster 1,333 8,000 ---- F. Gardner Parker 1,333 8,000 ---- George A. Hrdlicka 1,333 8,000 ---- All trust managers and executive officers as a group 191,742 1,185,035 1,383,404
(a) Includes 797,495 units held by PGI Associates, L.P., the general partner of which is controlled by Mr. Cooper, and 21,978 units held by WRC Holdings, Inc., which is controlled by Mr. Cooper. (b) Includes 240,941 units held by Gateway Associates I, L.P. Messrs. Cooper and Levey are the general partners of the general partner of Gateway Associates I, L.P. (3) The amounts exclude the following unvested restricted shares held in a rabbi trust and unvested options.
Unvested Restricted Shares Unvested Held in a Rabbi Trust Options ----------------------------- ------------------- William R. Cooper 3,378 ---- Richard J. Campo (a) 80,272 476,667 D. Keith Oden (a) 80,272 476,667 Lewis A. Levey 3,378 ---- H. Malcolm Stewart 27,093 57,553 G. Steven Dawson 19,312 47,220 James M. Hinton 19,412 46,887 Steven A. Webster 5,689 ---- F. Gardner Parker 7,689 ---- George A. Hrdlicka 5,689 ---- All trust managers and executive officers as a group 265,736 1,161,773
(a) Does not include 9,348 shares of the 18,696 shares owned by Centeq Realty, Inc. Messrs. Oden and Campo each own 50% of the common shares of Centeq Realty, Inc. (4) Based on information contained in an amendment to Schedule 13G filed with the SEC on February 10, 1999, as of December 31, 1998, Wellington Management Company, LLP, in its capacity as investment advisor, possessed shared dispositive power over 3,202,372 shares, which are held of record by its clients. (5) Based on information contained in an amendment to Schedule 13G filed with the SEC on February 16, 1999, as of December 31, 1998, ABKB/LaSalle Securities Limited Partnership possessed sole voting power over 271,576 shares, shared voting power over 1,907,985 shares, sole dispositive power over 241,276 shares and shared dispositive power over 2,021,594 shares, and LaSalle Advisors Capital Management, Inc. possessed sole voting power over 11 227,800 shares, shared voting power over 35,600 shares, sole dispositive power over 227,800 shares and shared dispositive power over 340,366 shares. (6) Based on information contained in an amendment to Schedule 13G filed with the SEC on February 10, 1999, as of December 31, 1998, Vanguard/Windsor Funds, Inc.-Windsor Fund possessed sole voting power and shared dispositive power over 2,369,400 shares. (7) Includes 2,210 shares that are held in trusts for the benefit of Mr. Hinton's two minor children, for whom Mr. Hinton and his wife are the trustees. (8) Includes 200 shares that are held by Mr. Parker's wife and 100 shares that are held in trusts for the benefit of Mr. Parker's two children, for whom his wife is the trustee. (9) Shares and/or units beneficially owned by more than one individual have been counted only once for this purpose. SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Based on our records and other information, we believe that all SEC filing requirements applicable to our trust managers and officers were complied with in 1998. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS One of our nonqualified-REIT subsidiaries has made unsecured, full recourse loans to Messrs. Campo and Oden of $900,000 each. Messrs. Campo and Oden used the proceeds of these loans to purchase common shares. The loans have the following terms: Maturity: 2004 Interest Rate: 5.23% per year Repayment Dates: Principal due at maturity and interest payable quarterly We provide residential services for properties that are owned by limited partnerships in which Mr. Cooper has ownership interests. In 1998, we earned about $159,000 in management fees on these properties. In connection with the merger with Oasis Residential, we entered into a consulting agreement with Mr. Ingraham. In this agreement, Mr. Ingraham agreed to locate potential investment opportunities in California through Camden Capital, Inc., one of our subsidiaries. In 1998, we paid about $184,000 in consulting fees to Mr. Ingraham. COMPENSATION COMMITTEE REPORT ON EXECUTIVE OFFICER COMPENSATION The compensation committee administers our executive compensation program. The compensation committee consists entirely of non-employee trust managers. OBJECTIVES Our executive compensation program aims to: Support our business objectives to produce consistent earnings growth and selectively invest in favorable markets; Attract, reward, motivate and retain talented executives; Tie executive compensation to our financial performance and portfolio growth; and Link executives' goals with shareholders' interests. 12 TYPES OF COMPENSATION Our executive compensation system consists of three elements: base salary; annual bonus; and long-term compensation, which includes grants of restricted shares and options. The compensation committee does not allocate a fixed percentage of compensation to these three elements. Nor, except when awarding bonuses, does the compensation committee use specific qualitative or quantitative measures or factors in assessing individual performance. BASE SALARY The compensation committee wants the compensation of our executive officers to be competitive within our industry and with companies of similar size and complexity. The compensation committee reviews data on other companies' compensation. Based on this review, and an assessment of our overall corporate performance and the executive's specific job duties, experience and impact on our financial performance and short- and long-term growth, the compensation committee decides on base salary levels and annual increases. BONUS COMPENSATION Executive officers may receive bonuses that are intended to reward them for their contribution to the achievement of our business objectives. Award levels are determined for each executive, as a percentage of base salary, based on the executive's responsibilities, the achievement of corporate goals, the achievement of individual goals and, in part, a discretionary evaluation by the compensation committee. Corporate goals are based on operating performance, as measured by our funds from operations. Individual goals include both objective financial measures and subjective factors, such as efficient management of capital resources or successful acquisitions or development. LONG-TERM COMPENSATION Because today's business decisions affect us over a number of years, long-term incentive awards are tied to our performance and the long-term value of our shares. Grants of restricted shares and options to purchase common shares are an important part of our long-term compensation plan. The executives who receive grants only gain when shareholders gain--when share value increases. During 1998, the compensation committee did not follow any firmly established formula for the issuance of long-term compensation. Instead, grants were made based on an assessment of corporate performance and the performance of the executive's department. The compensation committee granted 1,037,830 options to seven executives for 1998. Holders of at least 20,000 vested options are eligible for reloads upon the exercise of the options. Options vest 33% on the next three anniversaries of the date of grant. To more fully tie compensation to long-term performance, executives must receive between 25% and 50% of their annual bonuses in restricted shares. Restricted shares are valued at 150% of the cash value of the corresponding portion of the bonus. The number of shares to be issued is determined based on the market share price at the date of grant. Restricted shares vest 25% on the grant date and 25% on each of the next three anniversaries of the grant date. The compensation committee has established a rabbi trust in which granted restricted shares may be placed for the benefit of certain officers. Vested restricted shares and the dividends that are paid on restricted shares held by the rabbi trust may be purchased by the officer at any time within 20 years from the date of vesting of such shares. The purchase price of the restricted shares is (1) 10% of the fair value of the shares on the date that the shares were placed to the rabbi trust and (2) 5% of the amount of dividends declared and paid into the rabbi trust with respect to such shares. 13 CEO PERFORMANCE EVALUATION For 1998, the compensation committee increased Mr. Campo's base salary by 3.4% and granted him restricted shares, options and a bonus based upon a variety of factors, including the following: an increase of $0.33 per share or 12.5% in funds from operations (which we consider to be an appropriate measure of performance of an equity REIT) over 1997; the successful completion of our 1998 objectives to grow earnings with a diversified portfolio; the successfully acquisition and integration of Oasis Residential, Inc.; increased profitability resulting from the addition of newly developed properties; and disciplined management of assets. This section of the proxy statement is not deemed "filed" with the SEC and is not incorporated by reference into our Annual Report on Form 10-K. This executive officer compensation report is given by the following members of the compensation committee: F. Gardner Parker George A. Hrdlicka 14 COMPENSATION OF EXECUTIVE OFFICERS The table below shows the pre-tax compensation for the last three years for our Chief Executive Officer and the four next highest paid executive officers at the end of 1998. SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation --------------------------------------------------------------- Securities Restricted Share Underlying Name and Prinicpal Position Year Salary Bonus(1) Awards(1)(2) Options (3)(4)(5) - --------------------------- -------- ------------- ------------- ------------------ ----------------- Richard J. Campo 1998 $ 258,000 $ 170,313 $ 649,827 537,749 Chairman of the Board and Chief 1997 249,493 137,500 1,211,719 160,000 Executive Officer 1996 241,055 123,750 765,313 150,000 D. Keith Oden 1998 $ 258,000 $ 170,313 $ 649,827 537,749 President and Chief Operating 1997 249,493 137,500 1,211,719 160,000 Officer 1996 241,055 123,750 765,313 150,000 H. Malcolm Stewart 1998 $ 190,000 $ 103,125 $ 183,875 46,330 Executive Vice President 1997 157,448 101,250 400,156 20,000 1996 152,125 61,875 321,750 -- James Hinton 1998 $ 160,000 $ 85,938 $ 144,938 35,330 Senior Vice President--Development 1997 134,600 68,750 323,500 20,000 1996 130,000 30,938 205,313 -- G. Steven Dawson 1998 $ 175,000 $ 68,750 $ 130,875 35,830 Senior Vice President--Finance, 1997 144,147 61,875 226,500 20,000 Chief Financial Officer, Treasurer and 1996 139,275 56,375 280,103 -- Secretary
- ----------------------- (1) The compensation committee requires executives to receive between 25% and 50% of their annual bonus in restricted shares. Restricted shares are valued at 150% of the cash value of the corresponding portion of the bonus. The number of shares issued was determined based on the market share price at the date of grant. Restricted shares vest 25% on the grant date and 25% on each of the next three anniversaries of the grant date. Vested restricted shares are included in the above table under "Bonus" and the unvested restricted shares are included in the above table under "Restricted Share Awards." (2) At December 31, 1998, the aggregate value of the 308,313 restricted shares outstanding based on the closing share price of $26.00 at December 31, 1998 was $8,016,138. In January 1999, Camden awarded 46,394 restricted shares. These grants were awarded based on 1998 corporate and individual performance. The aggregate value of restricted shares, including the grants made in January 1999, based on the share price of $26.00 on December 31, 1998, was $9,222,382. Distributions on restricted shares were paid at the same rate as paid to all shareholders. (3) Includes a total of 340,000 options granted in January 1999, which related to 1998 corporate and individual performance. All options vest 33% on the next three anniversaries of the date of grant. (4) Includes 235,498 options granted in 1998 for reloads upon the exercise of previously granted options. (5) Includes a total of 70,000 options granted for 1998 that have dividend equivalent rights attached. These rights allow the option holders to receive a dividend equivalent to the amount paid to common shareholders if Camden reaches certain financial levels. 15 The following two tables gives more information on options, which were awarded to the five executive officers based on 1998 corporate and individual performance. The tables below includes a total of 340,000 options granted in January 1999. OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at Assumed Number of Percent of Total Annual Rates of Share Common Options Price Appreciation For Shares Granted to Option Term (1) Underlying Employees Exercise ------------------------ Options For Price per Expiration Name Granted (2) 1998 Share Date (2) 5% 10% - -------- -------------- ---------------- ----------------- ------------ ------------ ----------- Richard J. Campo 300,000 19% $ 29.4375 4/1/08 $5,554,050 $14,074,650 120,000 8% 24.8750 1/29/09 1,877,280 4,757,280 D. Keith Oden 300,000 19% 29.4375 4/1/08 5,554,050 14,074,650 120,000 8% 24.8750 1/29/09 1,877,280 4,757,280 H. Malcolm Stewart 6,330 0% 29.4375 4/1/08 117,190 296,975 40,000 3% 24.8750 1/29/09 625,760 1,585,760 James M. Hinton 5,330 0% 29.4375 4/1/08 98,677 250,060 30,000 2% 24.8750 1/29/09 469,320 1,189,320 G. Steven Dawson 5,830 0% 29.4375 4/1/08 99,603 252,405 30,000 2% 24.8750 1/29/09 469,320 1,189,320
(1) These columns present hypothetical future values that might be realized upon exercise of the options, minus the exercise price. These values assume that the market price of our shares at the date of grant appreciates at a five and ten percent compound annual rate over the ten-year term of the options. The five and ten percent rates of price appreciation are presented as examples under the SEC's proxy rules and do not necessarily reflect management's assessment of our future share price performance. These potential realizable values are not intended to indicate the value of the options. (2) All options vest 33% on the next three anniversaries of the date of grant and expire ten years from date of grant. 16 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Common Shares Underlying Unexercised Value of Unexercised Options at In-The-Money Options at Shares December 31, 1998 (1) December 31, 1998 (1) Acquired ---------------------------- --------------------------------- on Value Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable - -------- ------------- ----------- ------------- -------------- ---------------- ---------------- Richard J. Campo 32,251 $ 931,250 167,749 680,000 $ ----- $ 135,000 D. Keith Oden 32,251 931,250 167,749 680,000 ----- 135,000 H. Malcolm Stewart ----- ----- 52,000 66,330 208,000 45,000 James M. Hinton ----- ----- 10,000 55,330 20,000 33,750 G. Steven Dawson ----- ----- 47,000 55,830 188,000 33,750
(1) These year-end values represent the difference between the fair market value of the shares subject to options (based on the share price of $26.00 on December 31, 1998) and the exercise prices of the options. "In-the-money" means that the fair market value of the shares is greater than the option's exercise price on the valuation date. EMPLOYMENT AGREEMENTS We have entered into an employment agreement with each of Messrs. Campo, Oden, Stewart, Dawson and Hinton. The agreements expire August 20, 2000. The agreements provide for minimum salary levels as well as various incentive compensation arrangements, which are payable based on the attainment of specific goals. The agreements also provide for severance payments if certain situations occur, such as termination without cause or a change of control. The severance payments vary based on the officer's position and amount to one times the current salary base for Messrs. Stewart, Dawson and Hinton and 2.99 times the average annual compensation over the previous three fiscal years for Messrs. Campo and Oden. Six months prior to expiration, unless notification of termination is given, these agreements extend for one year from the date of expiration. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION No member who served on our Compensation Committee during 1998 was either: 1) an officer or employee during 1998; 2) a former officer; or 3) was party to any material transaction described earlier in the "Certain Relationships and Related Transactions" section. No executive officer served as a member of the compensation or similar committee or board of directors at any entity whose members served on our Compensation Committee. 17 PERFORMANCE GRAPH SEC rules require proxy statements to contain a performance graph comparing, over a five-year period, the performance of our shares against the Standard & Poor's 500 Composite Stock Index and against either a published industry or line-of-business index or group of peer issuers. We chose the National Association of Real Estate Investment Trusts All Equity Index (excluding health care real estate investment trusts) as the relevant index. The graph assumes the investment of $100 on July 31, 1993 (the month that our initial public offering was consummated) and quarterly reinvestment of dividends. CAMDEN PROPERTY TRUST TOTAL RETURN PERFORMANCE
Jul-93 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 ------------- ------------- -------------- ------------- ------------- ------------- -------------- Camden 100.0 111.6 118.3 122.9 159.7 181.1 162.8 NAREIT 100.0 99.2 102.2 116.7 159.2 191.8 158.2 S&P 500 100.0 105.4 106.8 146.8 180.5 240.7 309.5
18 SELECTION OF INDEPENDENT AUDITORS (ITEM 2 ON PROXY CARD) The audit committee has selected Deloitte & Touche LLP as our independent auditors for 1999. Representatives of Deloitte & Touche LLP will be present at the meeting and will have the opportunity to make a statement if they desire to do so. These representatives will also be available to respond to appropriate questions. REQUIRED VOTE The proposal will be approved if it receives the affirmative vote of a majority of shares represented in person or by proxy at the meeting. THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP. POSTPONEMENT OR ADJOURNMENT OF THE MEETING (ITEM 3 ON PROXY CARD) You must approve the postponement or adjournment of the meeting for the solicitation of additional votes, if necessary to approve proposal 1 or 2. REQUIRED VOTE The proposal will be approved if it receives the affirmative vote of a majority of votes cast at the meeting, whether or not a quorum is present. THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE POSTPONEMENT OR ADJOURNMENT OF THE MEETING TO SOLICIT ADDITIONAL VOTES, IF NECESSARY TO APPROVE PROPOSAL 1 OR 2. SHAREHOLDER PROPOSALS We must receive any shareholder proposal intended for inclusion in the proxy materials for the annual meeting to be held in 2000 no later than December 31, 1999. ANNUAL REPORTS Our 1998 annual report, including consolidated financial statements, is being mailed to you along with this proxy statement. 19 CAMDEN PROPERTY TRUST FORM OF PROXY FOR ANNUAL MEETING TO BE HELD MAY 13, 1999 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUST MANAGERS. The undersigned hereby appoints Richard J. Campo, D. Keith Oden and G. Steven Dawson, or any of them, proxies of the undersigned, with full powers of substitution, to vote all of the common shares of beneficial interest of Camden Property Trust that the undersigned is entitled to vote at the Annual Meeting to be held on May 13, 1999 and at any adjournment thereof, and authorizes and instructs said proxies to vote as set forth on the reverse side. THE BOARD OF TRUST MANAGERS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3. IMPORTANT - THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE. 20 X PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. Election of Trust Managers FOR WITHHOLD NOMINEES: Instruction: To withhold authority to AUTHORITY Richard J. Campo vote for any individual nominee, write FOR ALL William R. Cooper in that nominee's name on the lines NOMINEES George A. Hrdlicka below. Scott S. Ingraham Lewis A. Levey D. Keith Oden F. Gardner Parker Steven A. Webster 2. Ratification of the appointment of FOR AGAINST ABSTAIN Deloitte & Touche LLP as independent auditors 3. Approval of the postponement or adjournment of the meeting for the solicitation of additional votes, if necessary to approve proposal 1 or 2.
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. This Proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR all nominees listed in Proposal 1 and FOR Proposals 2 and 3. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. -------------------------------- Signature Dated: _____________________, 1999 NOTE: Please sign name exactly as it appears on the share certificate. Only one of several joint owners need to sign. Fiduciaries should give full title. -----END PRIVACY-ENHANCED MESSAGE-----