SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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IRT PROPERTY COMPANY
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IRT PROPERTY COMPANY
200 GALLERIA PARKWAY, SUITE 1400
ATLANTA, GEORGIA 30339
NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 30, 2002
To our Shareholders:
Our 2002 Annual Meeting of Shareholders (together with any postponements or
adjournments thereof, the "Annual Meeting") will be held at the Cobb Galleria
Centre, Two Galleria Parkway, Room 106, Atlanta, Georgia, on Thursday, May 30,
2002, at 11:00 A.M. Eastern Time, for the following purposes:
1. To elect six directors to serve until the 2003 Annual Meeting of
Shareholders and until their successors have been duly elected
and qualified; and
2. To transact such other business as may properly come before the Annual
Meeting.
Only shareholders of record at the close of business on March 25, 2002 are
entitled to notice of, and to vote at, the Annual Meeting. A complete list of
shareholders entitled to vote at the Meeting will be available at the Annual
Meeting.
Our Proxy Statement is enclosed along with our 2001 Annual Report to
Shareholders, for the fiscal year ended December 31, 2001.
By Order of the Board of Directors
/s/ W. Benjamin Jones III
W. BENJAMIN JONES III
Executive Vice President
and Secretary
Atlanta, Georgia
April 30, 2002
YOU ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN YOUR PROXY PROMPTLY IN THE
ENVELOPE PROVIDED SO THAT YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH YOUR
WISHES. RETURNING YOUR PROXY DOES NOT DEPRIVE YOU OF YOUR RIGHT TO ATTEND THE
MEETING AND VOTE YOUR SHARES IN PERSON.
IRT PROPERTY COMPANY
200 GALLERIA PARKWAY, SUITE 1400
ATLANTA, GEORGIA 30339
------------------------------------------
PROXY STATEMENT FOR 2002 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 30, 2002
------------------------------------------
GENERAL
The enclosed proxy is solicited by the Board of Directors of IRT Property
Company (the "Company") for use at the Company's 2002 Annual Meeting of
Shareholders (together with any postponements or adjournments thereof, the
"Annual Meeting") to be held at 11:00 A.M. Eastern Time at the Cobb Galleria
Centre, Two Galleria Parkway, Room 106, Atlanta, Georgia, on Thursday, May 30,
2002. The enclosed proxy is revocable at any time before its exercise at the
Annual Meeting by (i) written notice to the Company, (ii) properly submitting to
the Company a duly executed proxy bearing a later date, or (iii) attending the
Annual Meeting and voting in person. All written notices of revocation or other
communications with respect to proxies should be addressed as follows: IRT
Property Company, 200 Galleria Parkway, Suite 1400, Atlanta, Georgia 30339,
Attention: W. Benjamin Jones III, Executive Vice President and Secretary.
The Annual Meeting will be held for the following purposes: (i) to elect
six directors to serve until the Company's 2003 Annual Meeting of Shareholders
and until their successors have been duly elected and qualified, and (ii) to
transact such other business as may properly come before the Annual Meeting.
The Board of Directors is not aware of any other business to be presented
to a vote of the shareholders at the Annual Meeting. However, the persons named
as proxies on the enclosed proxy card will have discretionary authority to vote
in their judgment on any proposals properly presented at the Annual Meeting.
Such proxies also will have discretionary authority to vote in their judgment
upon the election of any person as a director if a director nominee is unable to
serve for good cause and will not serve, and on matters incident to the conduct
of the Annual Meeting.
The 2001 Annual Report to Shareholders (the "Annual Report"), including
financial statements for the fiscal year ended December 31, 2001, accompanies
this Proxy Statement. These materials are first being mailed to the Company's
shareholders on or about April 30, 2002.
As of March 25, 2002 (the "Record Date"), 30,542,176 shares of the
Company's common stock, par value $1.00 per share ("Common Stock"), were issued
and outstanding. Holders of Common Stock are entitled to one vote on each matter
considered and voted upon at the Annual Meeting for each share of Common Stock
held of record at the close of business on the Record Date. Shares of Common
Stock represented by a properly executed proxy, if such proxy is received in
time and not revoked, will be voted at the Annual Meeting in accordance with the
instructions indicated in such proxy.
1
IF NO INSTRUCTIONS ARE INDICATED, SUCH SHARES OF COMMON STOCK WILL BE VOTED
"FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR NAMED IN THE PROXY STATEMENT,
AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER BUSINESS PROPERLY
BROUGHT BEFORE THE ANNUAL MEETING.
The approval of each proposal set forth in this Proxy Statement requires
that a quorum be present at the Annual Meeting. The presence, in person or by
properly executed proxy, of the holders of a majority of the outstanding shares
of Common Stock entitled to vote at the Annual Meeting is necessary to
constitute a quorum. Each shareholder is entitled to one vote on each proposal
per share of Common Stock held as of the Record Date.
Proposal One, relating to the election of the nominees for directors,
requires approval by a "plurality" of the votes cast by the shares of Common
Stock entitled to vote in the election. This means that Proposal One will be
approved only if the holders of a majority of the shares of Common Stock
entitled to vote and voting at the Annual Meeting vote in favor of Proposal One.
With respect to Proposal One, abstentions and "broker non-votes" will be counted
as shares of Common Stock present for purposes of determining the presence of a
quorum. However, neither abstentions nor "broker non-votes" will be counted as
votes cast for purposes of determining whether a particular proposal has
received sufficient votes for approval. A "broker non-vote" occurs when a
nominee does not have discretionary voting power with respect to that proposal
and has not received instructions from the beneficial owner.
Any other proposal that is properly brought before the Annual Meeting will
require approval by the holders of a majority of the shares of Common Stock
entitled to vote at the Annual Meeting. With respect to such proposals,
abstentions will be counted, but "broker non-votes" will not be counted, as
shares of Common Stock present for purposes of determining the presence of a
quorum. Both abstentions and "broker non-votes" will be counted as votes cast
against such proposals for purposes of determining whether such proposal has
received sufficient votes for approval.
In the event that a quorum is not represented in person or by proxy at the
Annual Meeting, a majority of shares represented at that time may adjourn the
Annual Meeting to allow the solicitation of additional proxies or other measures
to obtain a quorum.
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PROPOSAL ONE - ELECTION OF DIRECTORS
The members of the Company's Board of Directors are elected annually by the
shareholders for a one-year term. Six incumbent directors have been nominated
and have agreed to serve as directors if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
FOR ELECTION AS DIRECTORS.
CERTAIN INFORMATION CONCERNING NOMINEES, EXECUTIVE OFFICERS AND PRINCIPAL
SHAREHOLDERS
The following table sets forth the name and age of each nominee for
election to the Board of Directors of the Company and information as of March
25, 2002 regarding the beneficial ownership of the Company's Common Stock by
each director of the Company, by the executive officers and by all directors and
executive officers as a group. The amounts shown are based upon information
furnished by the individuals named.
COMPANY SHARES
OWNED PERCENTAGE OF
BENEFICIALLY AND OUTSTANDING
NAME CURRENT POSITION NATURE OF BENEFICIAL SHARES OWNED
(DIRECTOR SINCE) AGE WITH COMPANY OWNERSHIP (1) BENEFICIALLY (1)
---------------------------------- --- --------------------------------- --------------------- ----------------
Thomas H. McAuley (2) (3) 56 Chairman, President and
(1987) Chief Executive Officer, Director 389,424 (6) (7) 1.26%
Thomas P. D'Arcy (2) (3) (5) 42 Director 5,000 (6) (10)
(2001)
Patrick L. Flinn (2) (3) (5) 59 Director 11,000 (6) (10)
(1997)
Homer B. Gibbs, Jr. (3) (4) 69 Director 40,216 (6) (9) (10)
(1976)
Samuel W. Kendrick (2) (3) (4) (5) 62 Director 16,690 (6) (10)
(1993)
Bruce A. Morrice (3) (4) (5) 68 Director 24,504 (6) (9) (10)
(1986)
OTHER EXECUTIVE OFFICERS
James G. Levy 43 Executive Vice President and 84,157 (6) (8) (9) (10)
Chief Financial Officer
W. Benjamin Jones III 51 Executive Vice President 184,155 (6) (7) (10)
Robert E. Mitzel 53 Executive Vice President 177,591 (6) (7) (9) (10)
E. Thornton Anderson 39 Senior Vice President 53,438 (6) (8) (10)
Daniel F. Lovett 55 Senior Vice President 90,809 (6) (8) (10)
--------------------- ----------------
All Directors, Nominees and
Executive Officers as a Group
(11 Persons) 1,076,984 3.34% (11)
===================== ================
(1) Information relating to beneficial ownership of Company Common Stock in based upon information furnished by
each person using "beneficial ownership" concepts set forth in the rules of the Securities and Exchange Commission.
Under those rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting
power," which includes the power to vote or direct the voting of such security, or "investment power," which
includes the power to dispose of or to direct the disposition of such security. The person is also deemed to be a
beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days.
Under those rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person
may be deemed to be a beneficial owner of securities as to which he or she may disclaim any beneficial interest.
Accordingly, the directors are named as beneficial owners of shares as to which they may disclaim any beneficial
interest.
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(2) Member of the Executive Committee.
(3) Member of the Nominating Committee.
(4) Member of the Audit Committee.
(5) Member of the Compensation Committee. The Compensation Committee also acts as the Stock Option Committee.
(6) The number of shares reflected as being owned includes 261,416 shares for Mr. McAuley; 5,000 shares for Mr.
D'Arcy; 10,000 shares for Mr. Flinn; 16,250 shares each for Messrs. Gibbs and Morrice; 15,000 shares for Mr.
Kendrick; 74,716 shares for Mr. Levy; 116,308 shares for Messrs. Jones and Mitzel; 43,687 shares for Mr. Anderson;
and 78,153 shares for Mr. Lovett, which each has the right to acquire pursuant to the Company's Stock Option Plan.
(7) Includes 47,904 shares received by Mr. McAuley and 23,952 shares received by each of Messrs. Jones and Mitzel
of restricted stock, pursuant to the Company's 1998 Long-Term Incentive Plan, with a fair market value on the date
of distribution in 1998 of $10.437 per share.
(8) Includes 8,333 shares received by Mr. Levy and 5,556 shares received by each of Messrs. Anderson and Lovett of
restricted stock, pursuant to the Company's 1998 Long-Term Incentive Plan, with a fair market value on the date of
distribution in 2000 of $8.188 per share.
(9) The number of shares reflected as being beneficially owned by Mr. Morrice includes 2,966 shares owned by a
marital trust and 1,000 shares owned by a profit sharing plan, over neither of which he has voting or investment
power; with regards to Mr. Lovett includes 7,100 shares owned by a trust over which he has voting or investment
power; and with regards to Messrs. Gibbs and Mitzel includes 4,500 and 392 shares, respectively, owned by their
wives; and with regards to Mr. Levy includes 400 and 102 shares owned by his wife and son, respectively. Messrs.
Morrice, Gibbs, Levy, Mitzel and Lovett are deemed to be beneficial owners of such shares under the regulations of
the SEC, but they disclaim such beneficial ownership.
(10) Less than 1%.
(11) Includes 690,588 shares which the Company's executive officers have the right to acquire and 62,500 shares
which the Company's non-management directors have the right to acquire pursuant to the Company's stock option
plans. Also, includes 5,394 shares owned by family of the directors and executive officers, 10,066 shares owned by
trusts, and 1,000 shares owned by a profit sharing plan. The directors and executive officers are deemed to be the
beneficial owners of such shares under the regulations of the SEC, but they disclaim beneficial ownership in such
shares held by their spouses, trusts and profit sharing plans.
4
STOCK OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
The following is the only person who is known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of the Company's
Common Stock:
AMOUNTS AND NATURE
OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER DATE OWNERSHIP CLASS
------------------------------------ --------- ------------------- -----------
E. Stanley Kroenke 2/12/2002 2,100,000 (1) 6.89%
1001 Cherry Street Centre
Suite 308
Columbia, MO 65201
(1) This information is contained in a Schedule 13G dated February 12, 2002,
filed by E. Stanley Kroenke with the Securities and Exchange Commission. Such
Schedule 13G states that the reporting person has shared voting and dispositive
power with respect to the 2,100,000 shares.
PRINCIPAL OCCUPATIONS OF NOMINEES FOR ELECTION DURING THE PAST FIVE YEARS
The principal occupations during the past five years of the nominees for
election as directors of the Company are as follows:
Mr. McAuley has been President of the Company since October 1, 1995, and
was named Chief Executive Officer of the Company on January 1, 1997, and
Chairman in June 1998. He was regional partner of Faison Associates, Inc.
("Faison"), a real estate development and management company headquartered in
Charlotte, North Carolina, from May 1993 through September 1995. From June 1988
to May 1993, he served as Chairman and Chief Executive Officer and part owner of
Ewing Southeast Realty, Inc. ("Ewing"), an Atlanta, Georgia real estate company.
Ewing was acquired by Faison Associates, Inc. ("Faison") on May 1, 1993, when
Mr. McAuley became a partner with Faison. Mr. McAuley also currently serves as a
director of RBC Centura Card Bank, a subsidiary of the Royal Bank of Canada.
Mr. D'Arcy is currently occupied as President and Chief Executive Officer
of Equity Investment Group. He was previously the President, Chief Executive
Officer and a director of Bradley Real Estate from February 1996 to August 2000.
He joined Bradley Real Estate in 1989 where he served in various positions
within the company until being elected President, Chief Executive Officer and a
director in 1996.
Mr. Flinn is currently occupied as a private investor and serves as a
director of Theragenics, Inc. (NYSE: TGX). He retired from BankSouth
Corporation after serving as Chairman and Chief Executive Officer from August
1991 to January 1996.
Mr. Gibbs is currently occupied as a private investor. He retired as Vice
Chairman of Mid-South Financial Corporation, a Nashville, Tennessee mortgage
banking firm, on January 1, 1994, a position he had held since 1986. Mr. Gibbs
was in the mortgage banking industry for over 40 years, specializing in the
financing of income producing properties.
Mr. Kendrick, currently a real estate consultant, retired from Ruddick
Investment Company ("RIC") after serving as President from November 1994 to
April 1998. RIC, an affiliate of Harris Teeter, Inc. ("Harris Teeter"), a
supermarket chain with principal executive offices in Charlotte, North Carolina,
is involved in real estate development and venture capital investment. Mr.
Kendrick served as Executive Vice President of Harris Teeter from July 1992 to
5
October 1994. Harris Teeter is a tenant in some of the shopping centers owned
and managed by the Company.
Mr. Morrice has been Managing Director of Morrice Financial Corp., a
Dallas, Texas real estate finance and investment firm, since 1987.
EXECUTIVE OFFICERS
In addition to Thomas H. McAuley, President and Chief Executive Officer of
the Company, the executive officers of the Company are as follows:
James G. Levy has been Executive Vice President and Chief Financial Officer
of the Company since April 2000. He served as Senior Vice President and Chief
Accounting Officer from December 1998 to April 2000 and as Vice President and
Treasurer from June 1994 to December 1998. From May 1993 to May 1994, he was
with Faison, serving as Regional Comptroller.
W. Benjamin Jones III has been employed by the Company since 1977, and has
been Executive Vice President since May 1994 and Secretary since May 1998.
Robert E. Mitzel has been with the Company since 1987, and has served as
Executive Vice President since May 1994.
E. Thornton Anderson has been the Company's Senior Vice President, Director
of Leasing, since September 1999. From 1997 to 1999, he served as Vice
President of the Company, and, from 1995 to 1997, he served as Assistant Vice
President of the Company. He joined the Company in 1993 from the Sofran Group,
an Atlanta-based development company, where he served as a leasing
representative for five years.
Daniel F. Lovett joined the Company in October 1994 as Vice President and
Director of Construction and became Senior Vice President in February 1998.
From 1979 to September 1994, he was with Southeast Shopping Centers Corp., a
South Florida neighborhood and community shopping center developer, last serving
as Vice President and Director of Construction and Development.
The executive officers are elected by and serve at the pleasure of the
Board of Directors.
COMMITTEES OF THE BOARD OF DIRECTORS, MEETINGS AND COMPENSATION OF DIRECTORS
The Board of Directors has an Executive Committee, a Nominating Committee,
an Audit Committee, and a Compensation Committee, which also serves as the Stock
Option Committee.
Executive Committee. The Executive Committee is comprised of Patrick L.
Flinn, Samuel W. Kendrick, Thomas H. McAuley and Thomas P. D'Arcy. The Executive
Committee may exercise all the powers of the Board of Directors between meetings
of the Board, except as may be otherwise limited by law. The Executive Committee
met in conjunction with the Company's Board of Directors, which held thirteen
meetings during 2001.
Nominating Committee. The Executive Committee may also serve as a
Nominating Committee, which nominates persons to serve as directors of the
Company. The full Board of Directors currently acts as the Nominating
Committee. However, only Directors who are independent of the Company may vote
to nominate any persons to serve as directors, whether such persons were
recommended for nomination made by other members of the Nominating Committee or
shareholders. As such, the Nominating Committee has nominated the six persons
named in the foregoing table. No recommendations were submitted by shareholders
6
with respect to the nomination of directors, and the Nominating Committee has no
policy with respect to whether or not it would consider such recommendations by
shareholders. The Nominating Committee met in conjunction with the Company's
Board of Directors, which held thirteen meetings during 2001.
Audit Committee. The Audit Committee, which is composed solely of outside
directors, approves any transactions involving related parties, recommends to
the Board of Directors the engagement of the independent auditors of the
Company, and reviews with the independent auditors the scope and results of the
Company's audits, the Company's internal accounting controls and the
professional services furnished by the independent auditors to the Company. The
Audit Committee is comprised of Samuel W. Kendrick, Homer B. Gibbs, Jr. and
Bruce A. Morrice. The Audit Committee held four meetings during 2001. See
"Report of the Audit Committee."
Compensation Committee. The Compensation Committee, composed of outside
directors, determines the salary and other compensation to be paid to the
executive officers of the Company. The Compensation Committee is comprised of
Bruce A. Morrice, Patrick L. Flinn, Thomas P. D'Arcy and Samuel W. Kendrick. The
Compensation Committee also acts as the Stock Option Committee, and, in such
capacity, is responsible for the administration of the Company's stock option
plans. The Compensation Committee held one meeting during 2001. See
"Compensation Committee Report on Executive Compensation."
Board of Directors. During the Company's fiscal year ended December 31,
2001, the Company's Board of Directors held thirteen meetings, and each member
of the Company's Board of Directors attended at least 75% of the aggregate
number of meetings on the Board of Directors and committees thereof on which he
served.
The Company pays directors who are not also employees of the Company a
retainer fee of $1,250 per month; $1,000 plus expenses for each Board meeting
attended; $500 plus expenses for each Executive Committee, Audit Committee or
Compensation Committee meeting attended; and $1,000 plus expenses for the
Committee Chairman for each Committee meeting attended. Directors' fees in 2001
aggregated $120,250. In addition, each non-employee director receives
nonqualified stock options to purchase 5,000 shares of the Company's Common
Stock upon his or her election and each annual re-election to the Board of
Directors.
The Company adopted the IRT Property Company Deferred Compensation Plan for
Outside Directors at the end of 1995. This plan allows non-employee directors
to defer their director fees to the earlier of the date selected by the director
or the date the director ceases to be a board member. Any such fees deferred
will accrue interest monthly at an annual rate based on 13-week Treasury Bills.
During 2001, no director fees were deferred in accordance with this plan.
There are no family relationships among any of the directors and/or
executive officers of the Company.
EXECUTIVE COMPENSATION
Under rules established by the SEC, the Company is required to provide
certain data and information in regard to the compensation and benefits provided
to the Company's chief executive officer and each of the four other most highly
compensated executive officers whose total annual salary and bonus was in excess
of $100,000 in fiscal year 2001 (collectively, the "Named Executive Officers").
The disclosure requirements for the Named Executive Officers include the use of
tables and a report explaining the rationale and considerations that led to
fundamental executive compensation decisions affecting these individuals.
7
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy
The Compensation Committee, composed entirely of outside directors,
determines the salary and other compensation to be paid to the executive
officers of the Company. The Compensation Committee typically reviews the
salary of each executive officer once each year at its November meeting. At
that meeting, the Compensation Committee, acting as a Stock Option Committee,
also usually determines the individuals to whom incentive stock options are to
be awarded and the number of shares for which options are to be granted.
The Company's executive compensation program has three primary objectives:
- Reward executives for long-term management focus and the enhancement
of shareholder value.
- Attract and retain key executives critical to the long-term success of
the Company.
- Support the achievement of desired Company performance.
In determining the compensation to be paid to the executive officers of the
Company, the Compensation Committee considers compensation paid to other
executives performing similar jobs within the industry. Some of the companies
considered by the Compensation Committee to be of comparable size and complexity
are included in the NAREIT All REIT Index included in the Comparative Stock
Performance section of this Proxy Statement. In these comparisons, the
Compensation Committee strives to fix the compensation of the Company's
executive officers in the middle of the class of comparable companies. The
Committee also considers the performance of the Company and the merits of the
individual under consideration. Committee members use their discretion to set
executive compensation where, in their judgment, external, internal or an
individual's circumstances warrant it.
Executive Officer Compensation Program
The Company's executive officer compensation program is comprised of base
salary, year-end additional cash compensation, long-term incentive compensation
in the form of stock options and restricted stock awards, and various benefits,
including medical and life insurance generally available to all employees of the
Company.
Base Salary
The Chief Executive Officer recommends to the Compensation Committee the
base salary levels for the Company's other executive officers based on his
evaluation of individual experience and performance, on his review of employee
evaluation reports prepared by certain of the executive officers and in his
subjective discretion on the overall operating performance of the Company. Base
salary levels are then set in the discretion of the Compensation Committee after
consideration of such recommendations. The Compensation Committee members also
may consider salary levels of executive officers of other comparable companies.
Annual Incentives
The Chief Executive Officer recommends to the Compensation Committee the
annual incentive compensation levels based on obtaining certain company
operating performance criteria, as well as individual performance. As certain
performance criteria were met, the Chief Executive Officer's recommendations for
annual incentives were awarded as shown on the "Summary Compensation Table."
8
Long Term Incentives
In order to more closely link the interests of the Company's shareholders
and its employees, the Company maintains the 1998 Long-Term Incentive Plan.
Stock Options, restricted stock, and other equity and non-equity awards may be
granted pursuant to this Plan.
For 2001, options were granted to the executive officers based upon their
positions and a subjective assessment of individual performance. Generally,
equity based incentive awards are targeted at the 50th percentile of the
competitive market. The Company utilizes the same surveys and peer institutions
for this purpose as it does in analyzing base salary while also taking into
consideration options and restricted stock which has already been granted.
In February 2000, the Committee adopted a dividend equivalent program for
use in connection with certain stock option grants under the 1998 Long-Term
Incentive Plan. The Committee believes that the program serves to fairly and
adequately compensate the executive officers and intends the program to assist
the Company in retaining those executives critical to the performance of the
Company. Under this program, the executive officers granted nonqualified stock
options in 2000 and 2001 are entitled to receive a cash payment at the dividend
rate paid with respect to the Company's common stock for a portion of such
options granted in 2000 and 2001 that remain unexercised. This dividend
equivalent right also vested as to 25% of such option shares in 2000 and 2001
and vests as to an additional 25% annually in 2002, 2003, and 2004. The Company
has traditionally paid dividends on restricted stock awards.
401(k) Plan and Year-End Additional Cash Compensation Program
In August 1996, the Company terminated its Year-End Additional Cash
Compensation Program and adopted a 401(k) Plan. All employees who have
completed one year of service and are at least 18 years of age are eligible to
participate in the 401(k) Plan, and the Company matches 100% of employee
contributions, up to 6% of each individual participant's compensation.
Employees vest in the Company match based on length of service, with full
vesting at 5 years of service.
Compensation to Chief Executive Officer
Mr. McAuley has served as the Company's Chief Executive Officer since
January 1, 1997, and has served as President since October 1, 1995 and Chairman
since June 18, 1998.
Mr. McAuley's base salary for 2001 was $347,110, as compared to $334,652
and $318,798 in each of 2000 and 1999. Mr. McAuley received a $100,000
performance bonus during 2001, as compared to no bonus in 2000 and a $100,000
bonus in 1999. Mr. McAuley also was awarded, during fiscal years 2001, 2000 and
1999, incentive stock options to purchase 12,000, 12,800 and 9,500 shares of
Company Common Stock, respectively. Mr. McAuley was also granted 74,212 and
72,779 nonqualified stock options in 2001 and 2000, respectively, that included
the dividend equivalent right described above.
The Compensation Committee considered Mr. McAuley's role as Chairman, Chief
Executive Officer and President during 2001, 2000 and 1999, and the salaries and
benefits of other chief executive officers for similar companies within the
industry in determining his cash compensation. The stock option awards to Mr.
McAuley were based, among other things, on competitive practice within the
industry, the Committee's perception of his past and expected contributions to
the Company's long-term performance, and the $100,000 incentive stock option
("ISO") limitation.
9
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally limits to $1 million the deduction that can be claimed by any
publicly-held corporation for compensation paid to any "covered employee" in any
taxable year beginning after December 31, 1993. The term "covered employee" for
this purpose is defined generally as the Chief Executive Officer and the four
other highest paid employees of the Company. Performance-based compensation is
outside the scope of the $1 million limitation and, hence, generally can be
deducted by a publicly-held corporation without regard to amount, provided that,
among other requirements, such compensation is approved by the shareholders.
The Compensation Committee has not and does not anticipate the need to develop a
formal policy on this matter since the compensation of the Company's executive
officers has been less than the limitations contemplated by Section 162(m).
COMPENSATION COMMITTEE
Bruce A. Morrice, Chairman
Patrick L. Flinn
Thomas P. D'Arcy
Samuel W. Kendrick
March 25, 2002
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Morrice, Flinn, D'Arcy and Kendrick are the sole members of the
Compensation Committee, none of whom were officers or employees of the Company
or any of its subsidiaries. The Company's Board of Directors designates the
members and the Chairman of the Compensation Committee.
Summary Compensation Table
Annual Compensation (1) Long-Term Compensation
------------------------------------- ------------------------
Restricted Securities All
Other Annual Stock Underlying Other
Name and Principal Position Year Salary Bonus(3) Compensation(2) Awards Options (#) Compensation(6)
----------------------------- ---- -------- --------- ---------------- ----------- ----------- ----------------
Thomas H. McAuley 2001 $347,110 $ 100,000 $ - $ - 86,212 (5) $ 10,500
Chairman, President 2000 334,652 - 3,500 - 85,579 11,350
and Chief Executive Officer 1999 318,798 100,000 3,500 - 9,500 10,000
James G. Levy 2001 150,000 22,000 - - 25,313 (5) 10,472
Executive Vice President and 2000 135,958 - - 68,226 (4) 25,028 9,058
Chief Financial Officer 1999 110,120 18,000 2,709 - 9,500 6,607
W. Benjamin Jones III 2001 164,285 17,000 - - 27,168 (5) 10,500
Executive Vice President 2000 159,500 - - - 27,365 10,609
1999 154,223 15,000 - - 9,500 9,282
Robert E. Mitzel 2001 164,285 18,000 - - 27,168 (5) 10,500
Executive Vice President 2000 159,500 - - - 27,365 11,084
1999 154,443 15,000 - - 9,500 9,282
E. Thornton Anderson 2001 234,054 20,000 - - 15,133 (5) 10,500
Senior Vice President 2000 197,669 - - 45,490 (4) 19,879 12,410
1999 144,803 7,000 - - 4,000 8,207
(1) Excludes perquisites and other personal benefits, the aggregate amount of which did not, in the case of any Named
Executive Officer, exceed $50,000 or 10% of such Named Executive Officer's annual salary and bonus in any year.
10
(2) Year-End Additional Cash Compensation in lieu of pension under a benefit plan that was terminated upon adoption of
its 401(k) Plan. No future benefits will be paid pursuant to the plan.
(3) The 2001 and 1999 bonus amounts were paid pursuant to the 1998 Long-Term Incentive Plan based upon the attainment
of certain performance goals. See "Employment Agreements."
(4) Represents the value of 5,556 shares received by Mr. Anderson and 8,333 shares received by Mr. Levy pursuant to
the 1998 Long-Term Incentive Plan, with a fair market value on January 7, 2000 the date of distribution, of $8.1875
per share. The fair market value of these shares based on the Company's common stock price at December 31, 2001 was
$147,223. The restricted stock awards granted in 1998 for Messrs. Anderson and Levy provides that the shares of the
restricted stock shall vest 11.11% on January 31st of each year commencing in 2000 and ending in 2008. In 2001, the
Company recognized compensation expense of $5,054 and $7,581 for Messrs. Anderson and Levy, respectively. The
restricted stock is subject to the Executive remaining an employee of the Company or the subsidiary, except in the
case of death, disability, or a change in control. Each individual receives quarterly dividend payments for all
shares under this plan.
(5) Represents stock options granted for 12,000 to Messrs. McAuley, Jones, Mitzel and Levy pursuant to the 1998
Long-Term Incentive Stock Plan. This also represents stock options in the amount of 7,000 granted to Mr. Anderson. In
addition, this represents nonqualified options in the amounts of 74,212, 15,168, 15,168, 8,133 and 13,313 granted to
Messrs. McAuley, Jones, Mitzel, Anderson, and Levy, respectively, pursuant to the 1998 Long-Term Incentive
Compensation Plan with a dividend equivalent feature. Under this feature, the optionees are entitled to receive on the
date a dividend is paid on the Company stock, a cash payment for the portion of the options granted that remain
unexercised. This dividend equivalent right vests as to 25% of such options shares in 2000-2003 for the 2000 grant and
2001-2004 for the 2001 grant.
(6) Represents the Company's 2001 matching contribution under the 401(k) Plan.
STOCK OPTION PLANS
Long-term incentives are presently provided through the Company's 1989
Stock Option Plan (the "1989 Plan") and its 1998 Long-Term Incentive Plan (the
"1998 Plan," and collectively with the 1989 Plan, the "Plans"). These Plans are
intended to promote the long-term success of the Company by providing financial
incentives to the directors, officers, and employees of the Company who are in
positions to make significant contributions toward the success of the Company.
Options granted under the Plans may be either incentive stock options
(options that meet certain requirements of the Internal Revenue Code, thereby
receiving special tax treatment) or nonqualified stock options (options that do
not meet the special requirements for incentive stock options). Incentive Stock
Options ("ISOs") may be granted only to persons who are employees of the
Company, including members of the Board of Directors who are also employees of
the Company. Nonqualified stock options ("NSOs") may also be granted to
officers, directors and employees of the Company. Only the 1998 Plan also
provides for awards of stock appreciation rights ("SARs"); however no SARs have
been awarded.
The Plans are administered by the Compensation Committee. Subject to the
approval of the Board of Directors, the Compensation Committee has the authority
to determine the individuals to whom stock options are awarded, the number of
shares for which options are granted (the aggregate fair market value of stock
with respect to which ISOs are exercisable for the first time by any individual
during any calendar year shall not, however, exceed $100,000, and no person
shall be eligible to receive an ISO for shares in excess of such limitation),
and the determination of whether an option shall be an ISO or a NSO. Options
granted under the Plans are exercisable no later than 10 years from the date of
grant with the exercise price being equal to 100% of the market value on the
date of grant.
In determining the grants of stock options to officers and employees of the
Company, including the executive officers other than the Chief Executive
Officer, the Compensation Committee reviewed with the Chief Executive Officer,
11
the recommended individual awards, based on the respective performance,
responsibilities, and contributions of each of the individuals under
consideration, and the operating performance of the Company. The Compensation
Committee also considered the expected performance requirements and
contributions, as well as the position level, of each of these individuals. The
Compensation Committee did not give consideration to current holdings of the
Common Stock or options to purchase the Common Stock of the Company when making
their decision regarding option awards.
The following tables set forth (i) all individual grants of stock options
made by the Company during fiscal 2001 to each of the Named Executive Officers
(all of which are granted under the 1998 Plan and exercisable immediately upon
grant), (ii) the ratio that the number of options granted to each individual
bears to the total number of options granted to all employees of the Company,
(iii) the exercise price and expiration date of these options, and (iv)
estimated potential realizable values assuming the stock price appreciates over
a ten-year term at rates of 5% and 10% compounded annually.
OPTION GRANTS IN FISCAL 2001
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES BASE PRICE EXPIRATION ------------------------
NAME GRANTED (#) IN 2001 ($/SH) DATE 5% 10%
-------------------------- ----------- ---------- ------------ ---------- ------------- ---------
Incentive Stock Options
Thomas H. McAuley 12,000 2.39% $ 8.313 1/2/11 $ 217,477 $394,181
James G. Levy 12,000 2.39% 8.313 1/2/11 217,477 394,181
W. Benjamin Jones, III 12,000 2.39% 8.313 1/2/11 217,477 394,181
Robert E. Mitzel 12,000 2.39% 8.313 1/2/11 217,477 394,181
E. Thornton Anderson 12,000 2.39% 8.313 1/2/11 217,477 394,181
Nonqualified Stock Options
Thomas H. McAuley 74,212 (1) 14.79% $ 8.313 1/2/08 $ 251,135 $585,251
James G. Levy 13,313 (1) 2.65% 8.313 1/2/08 45,051 104,989
W. Benjamin Jones, III 15,168 (1) 3.02% 8.313 1/2/08 51,329 119,618
Robert E. Mitzel 15,168 (1) 3.02% 8.313 1/2/08 51,329 119,618
E. Thornton Anderson 8,133 (1) 1.62% 8.313 1/2/08 27,522 64,139
(1) Includes a dividend equivalent feature as described in the Summary Compensation Table.
The following table sets forth (i) the number of shares received and the
aggregate dollar value realized in connection with each exercise of outstanding
stock options during 2001 by each of the Named Executive Officers, (ii) the
total number and value of all outstanding, unexercised options (all of which are
assumed exercisable) held by the Named Executive Officers as of the end of 2001,
and (iii) the aggregate dollar value of all such unexercised options that are
in-the-money; that is, when the fair market value of the common stock that is
subject to the option exceeds the exercise price of the option.
12
AGGREGATED OPTION EXERCISES IN 2001
AND YEAR-END OPTION VALUES
NUMBER OF SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON UNDERLYING UNEXERCISED IN-THE-MONEY
NAME EXERCISE VALUE REALIZED (1) OPTIONS AT 12/31/01 OPTIONS AT 12/31/01 (1)
---------------------- ----------- ------------------- ---------------------- ------------------------
Thomas H. McAuley 6,400 $ 14,320 251,941 $ 424,770
James G. Levy 12,800 26,976 65,241 98,023
W. Benjamin Jones, III 3,918 6,974 106,833 148,949
Robert E. Mitzel 6,000 10,680 106,833 148,949
E. Thornton Anderson 12,800 28,640 34,212 54,948
(1) Value based on market value of Company's Common Stock at date of exercise or the end of fiscal 2001
minus the exercise price.
COMPARATIVE STOCK PERFORMANCE
The line graph below compares the cumulative total shareholder return on
Common Stock of the Company for the last five fiscal years with the cumulative
total return on the NAREIT All REIT Total Return Index and the Russell 2000
Index over the same period. The Company is using the Russell 2000 Index because
it believes that the companies comprising the Russell 2000 Index have comparable
market capitalization to the Company. This comparison assumes that the value of
the investment in the Company Common Stock and each index was $100 on December
31, 1996 and that all dividends were reinvested.
PERIOD ENDING
------------------------------------------------------------
INDEX 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
--------------------- ---------- -------- -------- -------- -------- --------
IRT Property Company 100.00 110.76 102.09 88.52 102.78 147.34
Russell 2000 100.00 122.36 119.25 144.60 140.23 143.71
NAREIT All REIT Index 100.00 118.86 96.49 90.24 113.61 131.25
13
EMPLOYMENT AGREEMENTS
On October 1, 1995, the Company entered into an employment agreement with
Mr. McAuley as President and Chief Operating Officer of the Company, which
provided, among other things, for a minimum annual base salary of $250,000, a
commencement bonus of $100,000, and the opportunity to participate in such
incentive bonus plans as may be determined by the Company's Board of Directors.
Mr. McAuley also was granted an NSO to purchase 50,000 shares of Company Common
Stock under the 1989 Plan.
The Company entered into an Amended and Restated Employment Agreement with
Mr. McAuley as of November 11, 1997. This Employment Agreement provides for an
initial annual salary of $306,000 with annual reviews and permits participation
in all other incentive, benefit, welfare and retirement plans offered by the
Company, and the use and maintenance costs of a Company automobile (or a
comparable automobile allowance). It is automatically renewable each year
unless sooner terminated. Following a "Change In Control" as defined therein,
Mr. McAuley may, for good reason, terminate his employment and receive the sum
of 2.99 times the sum of his annual base salary and his most recent bonus.
Following a Change in Control and termination of employment, the Company will
continue to provide benefits to Mr. McAuley for two years, consistent with the
benefits he received prior to such termination.
As of November 11, 1997, the Company also entered into Change In Control
Employment Agreements with Messrs. W. Benjamin Jones III and Robert E. Mitzel,
which are generally similar to the Change In Control provisions contained in the
President's Employment Agreement. The provisions of their agreements provide for
payments of the sum of one year's salary and bonus in the event of a Change In
Control and termination of employment, and benefits are payable for a period of
one year. During the fourth quarter of 1999 and the first quarter of 2000, the
Company entered into Change In Control Employment Agreements with each of
Messrs. James G. Levy and E. Thornton Anderson, respectively, upon terms and
conditions substantially similar to those contained in the Agreements with
Messrs. Jones and Mitzel.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Beginning in 2000, the Company provided management services for two
shopping centers owned principally by two real estate joint ventures in which
Thomas H. McAuley, Chief Executive Officer of the Company, has economic
interests of 33.3% and less than 1%, respectively. Such services are performed
pursuant to management agreements which provide for fees based upon a percentage
of gross revenues from the properties and other direct costs incurred in
connection with management of the shopping centers. During 2001, the management
fees charged by the Company to the real estate joint ventures were approximately
$100,000. The Company anticipates the continuation of these management services
in 2002. The Audit Committee, which is responsible for evaluating the
appropriateness of all related party transactions, will review this relationship
annually for significant conflicts of interest.
In 1998, the Company loaned Messrs. McAuley, Jones and Mitzel $500,000,
$250,000 and $250,000, respectively, pursuant to secured promissory notes
bearing interest at 7% per annum, with interest payable quarterly. The principal
is payable at the maturity of the notes on July 1, 2008. The proceeds of the
notes were used by Messrs. McAuley, Jones and Mitzel to buy 47,904, 23,952 and
23,952 shares, respectively. The secured promissory notes are accompanied by a
pledge agreement on all restricted shares to secure the employee obligations to
the notes. The Company can release collateral in the Company's judgment at any
time after July 10, 2003, provided the fair market value of the remaining
collateral is not less than 200% of the then outstanding principal balance of
the related note and provided further all interest payments are current.
14
REPORT OF THE AUDIT COMMITTEE
The Audit Committee monitors the Company's financial reporting process on
behalf of the Board of Directors. The Audit Committee operates under a written
charter adopted by the Board of Directors and the Audit Committee on June 9,
2000. This report reviews the actions taken by the Audit Committee with regard
to the Company's financial reporting process during 2001 and particularly with
regard to the Company's audited consolidated financial statements as of December
31, 2001 and 2000 and for the three years in the period ended December 31, 2001.
The Audit Committee is composed of three persons, all of whom currently are
"independent directors", as defined by the New York Stock Exchange, Inc. (the
"NYSE"). None of the Audit Committee members is or has been an officer or
employee of the Company or any of its subsidiaries, has engaged in any business
transaction or has any business or family relationship with the Company or any
of its subsidiaries or affiliates.
The Company's management has the primary responsibility for the Company's
financial statements and reporting process, including the systems of internal
controls. The Company's independent auditors are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes and to recommend annually to the Board of Directors the accountants to
serve as the Company's independent auditors for the coming year.
The Audit Committee believes that it has taken the actions it deems
necessary or appropriate to fulfill its oversight responsibilities under the
Audit Committee's charter. To carry out its responsibilities, the Audit
Committee met four times during 2001.
In fulfilling its oversight responsibilities, the Audit Committee reviewed
with management the audited financial statements to be included in the Company's
Annual Report on Form 10-K for 2001, including a discussion of the quality
(rather than just the acceptability) of the accounting principles, the
reasonableness of significant judgments and the clarity of disclosures in the
financial statements.
The Audit Committee also reviewed with the Company's independent auditors,
Arthur Andersen LLP, their judgments as to the quality (rather than just the
acceptability) of the Company's accounting principles and such other matters as
are required to be discussed with the Audit Committee under Statement on
Auditing Standards No. 61, Communication with Audit Committees. In addition, the
Audit Committee discussed with Arthur Andersen LLP its independence from
management and the Company, including the written disclosures, letter and other
matters required of Arthur Andersen LLP by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees. The Audit Committee also
considered whether the provision of services during 2001 by Arthur Andersen LLP
that were unrelated to its audit of the financial statements referred to above
and to their reviews of the Company's interim financial statements during 2001
is compatible with maintaining Arthur Andersen LLP's independence. The Audit
Committee will continue to consider developments regarding Arthur Andersen LLP's
ability to continue to provide audit services to the Company. The Audit
Committee may consider possible alternatives as it deems appropriate in light of
such developments.
Additionally, the Audit Committee discussed with the Company's independent
auditors the overall scope and plan for their respective audits. The Audit
Committee met with the independent auditors, with and without management
present, to discuss the results of their examinations, their evaluations of the
Company's internal controls and the overall quality of the Company's financial
reporting.
15
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Company's Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form 10-K for
2001 for filing with the Securities and Exchange Commission.
The Audit Committee also recommended to the Company's Board of Directors
that the Company retain Arthur Andersen LLP as the Company's independent
auditors for 2002. Before making its recommendation, the Audit Committee
carefully considered Arthur Andersen's qualifications, including those
individuals who will lead and serve on the engagement team; the quality control
procedures the firm has established and any issues raised by the most recent
quality control review of the firm, which the Committee viewed as acceptable.
The Audit Committee also considered that Arthur Andersen's long-term service to
the Company has enabled it to provide effective and efficient service to the
Company. However, the Audit Committee continues to monitor these factors and
Arthur Andersen's capabilities, and may recommend the Company consider other
independent auditors if the Audit Committee determines that such change would be
in the best interest of the Company and its shareholders.
AUDIT COMMITTEE
Samuel W. Kendrick, Chairman
Homer B. Gibbs. Jr.
Bruce A. Morrice
March 25, 2002
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has been appointed by the Board of Directors as the
independent public accountants for the Company for fiscal year ending December
31, 2002. On taking this action, the members of the Board and the Audit
Committee considered carefully Arthur Andersen's performance for the Company
since Arthur Andersen was originally retained in 1979 and their qualifications
as independent auditors for the Company. This included a comprehensive review of
the qualifications of those individuals who will lead and serve on the
engagement team; the quality control procedures the firm has established, and
any issue raised by the most recent quality control review of the firm. The
Committee's review also included matters required to be considered under U.S.
Securities and Exchange Commission Rules on Auditor Independence, including the
nature and extent of non-audit services to ensure that they will not impair the
independence of the accountants. The Board of Directors and the Audit Committee
in their discretion may change the appointment at any time during the year if
they determine that such change would be in the best interest of the Company and
its shareholders.
Representatives of the firm of Arthur Andersen LLP will be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and will be available to answer questions concerning the financial affairs of
the Company.
Arthur Andersen LLP has advised the Company that neither the firm nor any
of its partners has any direct or material interest in the Company and its
subsidiaries except as auditors and independent certified public accountants of
the Company and its subsidiaries. During the Company's 2001 fiscal year, Arthur
16
Andersen LLP consulted with the Company on various matters and provided
professional services for the Company for fees and expenses as follows:
Audit and Review Fees $136,000
Financial Information Systems Design and Implementation -
All other fees 164,220
--------
Total $300,220
========
As shown in the table above, the aggregate fees billed for professional
services rendered by the independent accountants for the audit of the company's
financial statements as of and for the fiscal year ended December 31, 2001 and
for the review of the Company's quarterly reports on Form 10-Q for the year were
approximately $136,000. The aggregate fees billed by the independent
accountants for all other services performed for the fiscal year ended December
31, 2001 amounted to approximately $164,220, including audit-related fees of
$29,500 and other fees of $134,720. Audit-related fees include statutory audits
of subsidiaries, acquisition due diligence, accounting consultation, various
attest services under professional standards, assistance with registration
statements, comfort letters and consents. Other fees were primarily tax
services. There were no services performed by the independent accountants in
connection with financial information systems design and implementation.
ADDITIONAL INFORMATION
The closing price of the Common Stock, as reported by the New York Stock
Exchange on March 25, 2002 was $11.57.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's Common Stock, to file with the SEC initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Directors, executive officers, and greater than 10%
shareholders are required by SEC regulation to furnish the Company the copies of
all 16(a) reports they file. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended December 31, 2001, all Section 16(a) filing requirements applicable to
directors, executive officers, and greater than 10% beneficial owners were
complied with by such persons.
IMPORTANT NOTICE REGARDING DELIVERY OF THE COMPANY'S ANNUAL DISCLOSURE DOCUMENTS
The Company intends to send one copy of its Annual Report to Shareholders
and Proxy Statement to each household at which two or more of its shareholders
reside. This reduces the volume of duplicate information received by you, and
reduces the Company's printing and mailing expenses. Each of the Company's
shareholders, including shareholders whose materials have been "householded,"
will continue to receive individual Proxy Cards.
17
If your household has previously received a single set of disclosure
documents, but you would prefer to receive your own copy this year or in future
years, then you should contact the Company at the address below. The Company
will also deliver a separate copy of either its Annual Report or Proxy Statement
to any shareholder upon request to the Company at the address below. Similarly,
if you share an address with another Company shareholder, and you wish to
receive only a single set of the Company's annual disclosure documents, then you
should also contact the Company at the following address. In either case, if
you hold your shares in "street name" through a bank, broker or other third
party nominee holder of record, then you will need to inform the Company of the
identity of such third party record holder, and the Company will work with that
third party to process your request.
Investor Relations
IRT Property Company
200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
Telephone: (770) 955-4406
Facsimile: (770) 988-8773
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition
to solicitations by mail, officers, directors, and regular employees of the
Company may solicit proxies personally or by telephone, facsimile, internet or
other means without additional compensation. The Company will reimburse
brokers, fiduciaries, and custodians for their costs in forwarding proxy
materials to beneficial owners of Common Stock held in their names.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 2003 annual
meeting of shareholders must be received at the Company's principal executive
offices on or before December 27, 2002 to be eligible for inclusion in the
Company's proxy statement and proxy relating to that meeting.
OTHER MATTERS
The management of the Company does not know of any matters to be presented
at the Meeting other than those mentioned in this Proxy Statement. If any other
matters properly come before the Meeting, the persons designated as proxies will
vote on such matters in accordance with their best judgment.
The management of the Company urges you to attend the Meeting and to vote
your shares in person. Whether or not you plan to attend, please sign and
promptly return your proxy. Your proxy may be revoked at any time before it is
voted. Such proxy, if executed and returned, gives discretionary authority with
respect to any other matters that may come before the Meeting.
18
ANNUAL REPORT ON FORM 10-K
Upon the written request of any person whose Proxy is solicited by this
Proxy Statement, the Company will furnish to such person without charge (other
than for exhibits) a copy of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001, including financial statements and
schedules thereto, as filed with the Securities and Exchange Commission.
Requests may be made to IRT Property Company, 200 Galleria Parkway, Suite 1400,
Atlanta, Georgia 30339, Attention: W. Benjamin Jones III, Executive Vice
President and Secretary.
IRT PROPERTY COMPANY
/s/ W. Benjamin Jones III
By: W. BENJAMIN JONES III
Executive Vice President
and Secretary
19
PROXY FORM PROXY FORM
IRT PROPERTY COMPANY
Please date and sign this proxy on the reverse side and mail without delay in
the enclosed envelope
IRT PROPERTY COMPANY
PROXY FOR 2002 ANNUAL MEETING OF SHAREHOLDERS
Proxy for Annual Meeting of Shareholders Solicited by the Board of Directors
The undersigned hereby appoints Thomas H. McAuley and W. Benjamin Jones
III, and either of them, as Proxies, each with the full power of substitution,
to represent the undersigned and to vote all the shares of IRT Property Company
(the "Company") which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held at the Cobb Galleria Centre, Two
Galleria Parkway, Room 106, Atlanta, Georgia 30339 on Thursday, May 30, 2002 at
11:00 A.M. local time, and any adjournments thereof (the "Meeting") (1) as
hereinafter specified upon the proposals listed on the reverse side and more
particularly described in the Company's proxy statement, receipts of which is
hereby acknowledged, and (2) in their discretion, upon such other matters as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE COMPANY'S BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE
--------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS
Nominees: 01) Thomas P. D'Arcy
02) Patrick L. Flinn
03) Homer B. Gibbs, Jr.
04) Samuel W. Kendrick
05) Thomas H. McAuley
06) Bruce A. Morrice
[ ] For All [ ] Withhold All [ ] For All Except:
To withhold authority to vote for any individual nominee, mark "For All Except"
and write the nominee's number on the line below.
---------------------------------
[ ] Please mark this box if you plan to attend the Annual Meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the shareholder whose signature appears below. If no direction is
made, the proxy will be voted FOR Item 1, and in the discretion of the Proxies
on any other matters. When signing as attorney-in-fact, executor, administrator,
trustee, guardian or officer of a corporation, please give full title as such.
On joint accounts, each owner should sign.
--------------------------------------------------
Signature Date
--------------------------------------------------
Signature (Joint Owners) Date