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 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
Post Properties, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[ ] 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.:
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(4) Date Filed:
(POST PROPERTIES LOGO)
April 8, 2002
Dear Shareholder:
We cordially invite you to attend the 2002 Annual Meeting of Shareholders
of Post Properties, Inc. to be held on Thursday, May 23, 2002, at 9:00 a.m.
local time, at One Riverside, 4401 Northside Parkway, Suite 800, Atlanta,
Georgia 30327-3057.
The items of business are listed in the following Notice of Annual Meeting
and are more fully addressed in the Proxy Statement.
Please date, sign, and return your proxy card in the enclosed envelope at
your convenience to assure that your shares will be represented and voted at the
Annual Meeting even if you cannot attend. If you attend the Annual Meeting, you
may vote your shares in person even though you have previously signed and
returned your proxy.
On behalf of your board of directors, thank you for your continued support
and interest in Post Properties, Inc.
Sincerely,
(/s/ JOHN A. WILLIAMS)
John A. Williams
Chairman of the Board and
Chief Executive Officer
(POST PROPERTIES LOGO)
POST PROPERTIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 2002
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Post
Properties, Inc. will be held at One Riverside, 4401 Northside Parkway, Suite
800, Atlanta, Georgia 30327-3057, on Thursday, May 23, 2002 at 9:00 a.m., local
time, for the following purposes:
(1) To elect two directors to serve until the 2005 Annual Meeting of
Shareholders;
(2) To approve our shareholder value plan; and
(3) To transact such other business as may properly come before the
meeting or any adjournment of the meeting.
Only the holders of record of common stock of Post Properties at the close
of business on March 25, 2002 are entitled to notice of and to vote at the
Annual Meeting of Shareholders and any adjournment of the meeting. A list of
shareholders as of the close of business on March 25, 2002, will be available at
the Annual Meeting of Shareholders for examination by any shareholder, his
agent, or his attorney.
Your attention is directed to the Proxy Statement provided with this
Notice.
By Order of the Board of Directors,
(/s/ Sherry W. Cohen)
Sherry W. Cohen
Executive Vice President
and Secretary
Atlanta, Georgia
April 8, 2002
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE,
WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
POST PROPERTIES, INC.
ONE RIVERSIDE
4401 NORTHSIDE PARKWAY, SUITE 800
ATLANTA, GEORGIA 30327-3057
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 2002
Our 2002 Annual Meeting of Shareholders (the "Annual Meeting") will be held
on May 23, 2002, at One Riverside, 4401 Northside Parkway, Suite 800, Atlanta,
Georgia 30327, beginning promptly at 9:00 a.m. local time. The enclosed form of
proxy is solicited by our board of directors. We anticipate that this Proxy
Statement and the accompanying proxy will first be mailed to holders of our
common stock on or about April 8, 2002.
Q: WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD?
A: You are receiving a Proxy Statement and proxy card from us because you own
shares of our common stock. This Proxy Statement describes issues on which we
would like you, as a shareholder, to vote. It also gives you information on
these issues so that you can make an informed decision.
When you sign the proxy card, you appoint David P. Stockert and Sherry W. Cohen
as your representatives at the meeting. Mr. Stockert and Ms. Cohen will vote
your shares at the meeting as you have instructed them on the proxy card. This
way, your shares will be voted whether or not you attend the Annual Meeting.
Even if you plan to attend the meeting, it is a good idea to complete, sign and
return your proxy card in advance of the meeting just in case your plans change.
If an issue comes up for vote at the meeting that is not on the proxy card, Mr.
Stockert and Ms. Cohen will vote your shares, under your proxy, in their
discretion.
Q: WHAT IS THE RECORD DATE?
A: The record date is set for March 25, 2002. Only holders of common stock of
record as of the close of business on this date will be entitled to vote at the
Annual Meeting.
Q: HOW MANY SHARES ARE OUTSTANDING?
A: As of the record date, we had 36,889,842 shares of common stock outstanding
in addition to 41,975,447 outstanding units of limited partnership in Post
Apartment Homes, L.P., which are exchangeable for shares of common stock on a
one-for-one basis.
Q: WHAT AM I VOTING ON?
A: You are being asked to vote on the following:
- the election of two directors, and
- the approval of our shareholder value plan.
No cumulative rights are authorized and dissenters' rights are not applicable to
the matters being voted upon.
Q: HOW DO I VOTE?
A: YOU MAY VOTE BY MAIL.
You do this by signing your proxy card and mailing it in the enclosed, prepaid
and addressed envelope. If you mark your voting instructions on the proxy card,
your shares will be voted as you instruct.
If you return a signed card but do not provide voting instructions, your shares
will be voted for the two named nominees and for the approval of our shareholder
value plan.
YOU MAY VOTE IN PERSON AT THE MEETING.
We will pass out written ballots to anyone who wants to vote at the meeting. If
you hold your shares through a brokerage account but do not have a physical
share certificate, you must request a legal proxy from your stockbroker in order
to vote at the meeting.
We encourage you to examine your proxy card closely to make sure you are voting
all of your shares in Post Properties.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
A: It means that you have multiple accounts at the transfer agent and/or with
stockbrokers. Please sign and return all proxy cards to ensure that all your
shares are voted.
Q: WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
A: You may revoke your proxy and change your vote at any time before the polls
close at the meeting. You may do this by:
- signing another proxy with a later date,
- voting in person at the Annual Meeting, or
- giving written notice to the Secretary of Post Properties.
Q: HOW MANY VOTES DO YOU NEED TO HOLD THE MEETING?
A: Shares are counted as present at the meeting if the shareholder either:
- is present and votes in person at the meeting, or
- has properly submitted a proxy.
A majority of our outstanding shares of common stock as of the record date must
be present at the meeting in order to hold the meeting and conduct business.
Q: WHAT IF I ABSTAIN FROM VOTING?
A: Abstentions with respect to a proposal are counted for purposes of
establishing a quorum. If a quorum is present, abstentions have no effect on the
outcome of a vote, including the election of directors and the approval of our
shareholder value plan.
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Q: HOW MANY VOTES ARE NEEDED TO ELECT DIRECTORS?
A: The two nominees receiving the highest number of "yes" votes will be elected
as directors.
Q: HOW MANY VOTES ARE NEEDED TO APPROVE THE SHAREHOLDER VALUE PLAN?
A: To approve the shareholder value plan, the "yes" votes cast at the annual
meeting must exceed the "no" votes cast at the annual meeting.
Q: WILL MY SHARES BE VOTED IF I DO NOT SIGN AND RETURN MY PROXY CARD?
A: If your shares are held through a brokerage account, your brokerage firm,
under certain circumstances, may vote your shares.
Brokerage firms have authority under New York Stock Exchange rules to vote their
customers' unvoted shares on certain "routine" matters, including the election
of directors and the approval of our shareholder value plan.
If you do not vote your proxy, your brokerage firm may either:
- vote your shares on routine matters, or
- leave your shares unvoted.
We encourage you to provide instructions to your brokerage firm by voting your
proxy. This ensures your shares will be voted at the meeting.
When a brokerage firm votes its customers' unvoted shares on routine matters,
these shares are counted for purposes of establishing a quorum to conduct
business at the meeting. However, a brokerage firm cannot vote customers' shares
on non-routine matters. Accordingly, these shares are considered not entitled to
vote on non-routine matters, rather than as a vote against the matter.
Q: WHAT HAPPENS IF A DIRECTOR NOMINEE IS UNABLE TO STAND FOR RE-ELECTION?
A: The board of directors may, by resolution, provide for a lesser number of
directors or designate a substitute nominee. In the latter event, shares
represented by proxies will be voted as recommended by the board of directors to
elect a substitute nominee. Proxies cannot be voted for more than two nominees.
Q: HOW ARE VOTES COUNTED?
A: You may vote either "for" or "against" each proposal. If you just sign your
proxy card with no further instructions, your shares will be counted as a yes
vote for each director nominee and for the approval of our shareholder value
plan.
Voting results will be tabulated and certified by our transfer agent, EquiServe.
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Q: WHERE CAN I FIND THE VOTING RESULTS OF THE MEETING?
A: We will announce preliminary voting results at the meeting. We will publish
the final results in our quarterly report on Form 10-Q for the second quarter of
2002. We will file that report with the Securities and Exchange Commission, and
you can get a copy through:
- Our Secretary at Post Properties, Inc., One Riverside, 4401 Northside
Parkway, Suite 800, Atlanta, Georgia 30327-3057;
- The Securities and Exchange Commission at (800) SEC-0330 for the location
of the nearest public reference room; or
- The EDGAR system at www.sec.gov.
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ELECTION OF DIRECTORS
Our Bylaws require at least three and no more than fifteen directors to
constitute a full board of directors. Currently the board of directors is set at
eight members. The Bylaws divide the board of directors into three classes with
the directors in each class serving a term of three years. At the Annual
Meeting, there are two directors who have been nominated to stand for reelection
as directors. In addition to the two nominees, there are six other directors
continuing to serve on the board of directors, whose terms expire in 2003 and
2004.
Except as otherwise provided in this Proxy Statement, a proxy cannot be
voted for the election of a person to fill a directorship for which no nominee
is named in this Proxy Statement. The board of directors has no reason to
believe that any of the nominees for the office of director will be unavailable
for election as a director. However, if at the time of the Annual Meeting any of
the nominees should be unable to serve or, for good cause, will not serve, the
persons named in the proxy will vote as recommended by the board of directors to
elect substitute nominees recommended by the board of directors. In no event,
however, can a proxy be voted to elect more than two directors.
The following list sets forth the names of the nominees and also contains,
as to each nominee and incumbent director, certain biographical information, a
brief description of principal occupation and business experience during the
past five years, directorships of companies (other than Post Properties)
presently held, and certain other information. This information has been
furnished by the respective individuals.
NOMINEES FOR ELECTION
Charles E. Rice has been a director of Post Properties since 1997. Since
January 2001, Mr. Rice has been Chairman of Mayport Venture Partners LLC, a
venture capital firm. From December 1998 until January 2001, Mr. Rice served as
Vice Chairman of Corporate Development of Bank of America. Mr. Rice served as
the Chairman of NationsBank, Inc. (currently Bank of America, Inc.) from January
1998 to October 1998, and as the Chairman of the Board and Chief Executive
Officer of Barnett Banks, Inc. from 1984 until January 1998. He is also a
director of CSX Corporation, Sprint Corporation and Bessemer Trust Company. Mr.
Rice is 66 years old.
John A. Williams has been a director of Post Properties since its inception
in 1971. Mr. Williams is the Chairman of the Board and Chief Executive Officer
of Post Properties. Mr. Williams founded the business of Post Properties in 1971
and since that time has acted as Chairman and Chief Executive Officer. Mr.
Williams is also a director of Crawford & Company and the Georgia Regional
Transportation Authority. Mr. Williams is 59 years old.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR CHARLES E. RICE
AND JOHN A. WILLIAMS TO HOLD OFFICE UNTIL THE ANNUAL MEETING OF SHAREHOLDERS IN
2005 OR UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
INCUMBENT DIRECTORS -- TERM EXPIRING 2003
Herschel M. Bloom has been a director of Post Properties since May 1994.
Mr. Bloom is currently, and has been for more than five years, a partner in the
law firm of King & Spalding, which has represented Post Properties since 1971.
Mr. Bloom is also a director of Russell Corporation. Mr. Bloom is 59 years old.
Ronald de Waal has been a director of Post Properties since May 2000. Since
1983, Mr. de Waal has been Chairman of the Board of We International b.v., a
Netherlands corporation, which operates
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fashion specialty stores in Belgium, the Netherlands, Switzerland, Germany and
France. Mr. de Waal is also a director of Saks Incorporated. Mr. de Waal is 50
years old.
Russell R. French has been a director of Post Properties since July 1993.
Mr. French is currently, and has been for more than five years, a general
partner of Moseley & Co. II and has been a member of Moseley & Co. III since
1994, a member of MKFJ-IV, LLC since 1998 and a member of Moseley & Co. V, LLC
since 2000, each of which is the general partner of a venture capital fund. Mr.
French is 56 years old.
INCUMBENT DIRECTORS -- TERM EXPIRING 2004
Robert L. Anderson has been a director of Post Properties since May 2000.
Mr. Anderson has been President of Robert Anderson Consulting, LLC, a firm
specializing in investment and structuring advice, since its founding in October
1997. In addition, he has been President of Ronus, Inc., a privately owned real
estate investment firm, since October 1998. Mr. Anderson served as a partner at
Price Waterhouse (currently PricewaterhouseCoopers LLP) from July 1982 to
October 1997. Mr. Anderson is a director of Harold's Stores, Inc. Mr. Anderson
is 59 years old.
Arthur M. Blank has been a director of Post Properties since May 1994.
Since February 15, 2001, Mr. Blank has been the Chairman, President and Chief
Executive Officer of AMB Group, LLC, a privately owned investment firm. Since
February 2002, Mr. Blank has also been the Chairman, President and CEO of
Atlanta Falcons Football Club, L.L.C. Mr. Blank was a director of The Home
Depot, Inc. beginning in 1978, when he co-founded the company, through his
retirement in 2001. Mr. Blank served as President and Chief Operating Officer of
Home Depot from 1978 to 1997, when he became Chief Executive Officer. In
December 2000, Mr. Blank became Co-Chairman of the Board and served in that
capacity until his retirement from Home Depot in May, 2001. In addition to
serving on a number of non-profit boards, Mr. Blank is Chairman of The Arthur M.
Blank Family Foundation and is a director of Cox Enterprises, Inc. and Staples,
Inc. Mr. Blank is 59 years old.
John T. Glover has been a director of Post Properties since 1984 and has
been Vice Chairman since March 2000. From 1984 until March 2000, Mr. Glover
acted as its President, Chief Operating Officer and Treasurer. Mr. Glover is a
director of Haverty Furniture Companies, Inc., a trustee of Emory University and
a director of Emory Healthcare, Inc. Mr. Glover is 55 years old.
MEETINGS OF THE BOARD OF DIRECTORS
During 2001, our board of directors held six meetings. Messrs. Anderson,
Bloom, French, Glover and Williams each attended 100% of all board of directors
meetings. Messrs. Blank, Rice and de Waal each attended 83% of all board of
directors meetings. Messrs. Anderson, Blank, Bloom, French, Rice and Williams
each attended 100% of all committee meetings and Mr. de Wall attended 50% of all
committee meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
Audit Committee. The board of directors has established an Audit Committee
that consists of Messrs. Bloom, French and de Waal. Mr. French currently serves
as Chairman of the Audit Committee.
During 2001, the Audit Committee held two meetings. The Audit Committee is
responsible for, among other things:
- recommending independent auditors,
- discussing with our independent auditors their independence from
management,
- reviewing with our independent auditors the scope and results of their
audit,
- discussing with management and our independent auditors the interim and
annual financial statements that we file with the Securities and Exchange
Commission, and
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- reviewing and monitoring our accounting principles, policies and
financial and accounting controls.
The Audit Committee operates under a written Audit Committee Charter
adopted by the Board, a copy of which was attached to our proxy statement for
our 2001 Annual Meeting of Shareholders.
Compensation Committee. The board of directors has established an
Executive Compensation Committee that consists of Messrs. Anderson, Blank and
Rice. Mr. Rice currently serves as Chairman of the Compensation Committee. The
Compensation Committee is responsible for making recommendations, at least
annually, to the board of directors regarding our policies relating to, and the
amounts and terms of, all compensation of our executive officers and
administering and discharging in full the authority of the board of directors
with respect to the Employee Stock Plan. During 2001, the Compensation Committee
held four meetings.
We do not have a nominating committee.
COMPENSATION OF DIRECTORS
We pay our non-employee directors fees for their services as directors.
Directors receive annual compensation of $12,000 plus a fee of $500 for
attendance (in person or by telephone) at each meeting of the board of
directors, but not for committee meetings. The board of directors has authorized
the payment, at the option of each non-employee director, of all director fees
in shares of common stock. Directors are reimbursed for all out-of-pocket
expenses incurred in attending all board of directors and committee meetings.
Each non-employee director who is serving as such on December 31 of each
year and who has served as such for more than one year, on each December 31,
automatically receives a grant of options to purchase 3,000 shares of common
stock at an exercise price equal to 100% of the fair market value of the common
stock on the date of such grant. Pursuant to this plan, each of Messrs.
Anderson, Blank, Bloom, de Waal, French and Rice received a grant of options to
purchase 3,000 shares of common stock on December 31, 2001. In addition, on the
date of his initial appointment to the board of directors, each director
automatically receives a grant of options to purchase that number of shares of
common stock determined by dividing $10,000 by the fair market value per share
of the common stock on the date of such grant at an exercise price equal to 100%
of the fair market value of the common stock on such date. No director received
such a grant during 2001. In the event of a change of control of Post
Properties, the board of directors may unilaterally cancel a director's option
to purchase common stock as of any date to the extent then unexercised after
advance written notice to each affected director.
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COMMON STOCK OWNERSHIP BY MANAGEMENT
AND PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of shares of common
stock as of March 1, 2002 for:
- our directors,
- our Chief Executive Officer and each of our five other most highly
compensated executive officers (collectively the "Named Executive
Officers"),
- our directors and executive officers as a group, and
- each shareholder that holds more than a 5% interest in our outstanding
common stock.
Unless otherwise indicated in the footnotes, all of such interests are owned
directly, and the indicated person or entity has sole voting and disposition
power.
TOTAL NUMBER
NUMBER NUMBER OF OF UNITS
NAME AND ADDRESS OF SHARES EXERCISABLE BENEFICIALLY PERCENT OF
OF BENEFICIAL OWNER OWNED OPTIONS(1) OWNED(2) TOTAL CLASS(3)
------------------- --------- ----------- ------------ --------- ----------
DIRECTORS AND EXECUTIVE
OFFICERS:
John A. Williams............ 861,685(4) 413,071 2,003,570(5) 3,278,326 8.9%
John T. Glover.............. 325,451(6) 456,977 695,344(7) 1,477,772 4.0%
David P. Stockert........... 56,034 35,000 -- 91,034 *
W. Daniel Faulk, Jr......... 29,795 172,073 141,810 343,678 *
Thomas L. Wilkes............ 40,322 55,045 -- 95,367 *
R. Gregory Fox.............. 27,605 101,483 -- 129,088 *
Robert L. Anderson.......... 3,811 3,226 -- 7,037 *
Arthur M. Blank............. 31,157 13,876 -- 45,033 *
Herschel M. Bloom........... 10,298 13,876 -- 24,174 *
Russell R. French........... 16,344(8) 14,241 -- 30,585 *
Charles E. Rice............. 16,441(9) 12,248 -- 28,689 *
Ronald de Waal.............. 465,653 3,226 -- 468,879 1.3%
All executive officers and
directors as a group (14
persons).................. 1,918,283 1,434,548 2,840,724 6,193,555 16.8%
OTHER FIVE PERCENT
SHAREHOLDERS:
Security Capital Group
Incorporated(9)........... 3,472,515 -- -- 3,472,515 9.4%
Stichting Pensioenfonds
ABP(10)................... 2,225,386 -- -- 2,225,386 6.0%
---------------
* Less than 1%
(1) Includes options that become exercisable on or before May 1, 2002. Assumes
options that become exercisable when the market price of our common stock
maintains a certain level will not become exercisable on or before May 1,
2002.
(2) Includes the number of shares of common stock into which units of limited
partnership interests in Post Apartment Homes, L.P. ("Units") beneficially
owned by the person are redeemable (if we
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elect to issue shares of common stock rather than pay cash upon such
redemption). Units are redeemable for common stock or cash, at our option.
(3) Based on an aggregate of 36,871,554 shares of common stock issued and
outstanding as of March 1, 2002. Assumes that all options beneficially
owned by the person are exercised and all Units beneficially owned by the
person are redeemed for shares of common stock. The total number of shares
outstanding used in calculating this percentage assumes that none of the
options beneficially owned by other persons are exercised and none of the
Units beneficially owned by other persons are redeemed for shares of common
stock.
(4) Includes 1,405 shares of common stock held by Mr. Williams' spouse.
(5) Includes (a) 1,643,970 shares of common stock issuable upon redemption of
Units deemed beneficially owned by Mr. Williams through control of certain
limited partnerships and (b) 209,839 shares of common stock (of which Mr.
Williams has shared voting and disposition power) issuable upon redemption
of Units deemed beneficially owned by Mr. Williams through his control of a
corporation (which shares are also shown as being beneficially owned by Mr.
John T. Glover).
(6) Includes (a) 2,476 shares deemed beneficially owned by Mr. Glover as
Trustee for the John A. Williams 1989 Trust, (b) 1,408 shares deemed
beneficially owned by Mr. Glover as Trustee for the John A. Williams 1988
Trust and (c) 346 shares owned by Mr. Glover's spouse.
(7) Includes (a) 405,426 shares of common stock issuable upon redemption of
Units deemed beneficially owned by Mr. Glover through his control of
certain limited partnerships, (b) 11,189 shares of common stock issuable
upon redemption of Units deemed beneficially owned by Mr. Glover as trustee
of a trust for the benefit of Mr. Williams' family and (c) 209,839 shares
of common stock (of which Mr. Glover has shared voting and disposition
power) issuable upon redemption of Units deemed beneficially owned by Mr.
Glover through his control of a corporation (which shares are also shown as
being beneficially owned by Mr. John A. Williams).
(8) Includes 602 shares of common stock held by Mr. French's spouse and 388
shares owned by Mr. French's spouse as trustee for her mother.
(9) Includes (a) 413,000 shares of common stock deemed beneficially owned by
Mr. de Waal through Inter-Him USA Inc. and (b) 27,000 shares of common
stock deemed beneficially owned by Mr. de Waal through Ronus Properties,
Inc.
(10) Represents shares of common stock beneficially owned by Security Capital
Group Incorporated ("SCGI") and Security Capital Research & Management
Incorporated ("SCR&M"), an affiliate of SCGI, with whom SCGI is deemed to
form a "group" for Schedule 13G reporting purposes. This information is
included in reliance upon a Schedule 13G filed by SCGI and SCR&M with the
Commission on February 14, 2002. The address of SCGI is 125 Lincoln Avenue,
Santa Fe, New Mexico 87501.
(11) Represents shares of common stock beneficially owned by Stichting
PensioenFonds ABP ("Stichting"). This information is included in reliance
upon a Schedule 13D filed by Stichting with the Commission on February 15,
2001. The address of Stichting is Oude Lindestraat 70, Postbus 2889, 6401
DL Heerlen, The Netherlands.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the
compensation paid to our Named Executive Officers for the year ended December
31, 2001.
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -----------------------
-------------------------------------------- SECURITIES RESTRICTED
OTHER UNDERLYING STOCK ALL
ANNUAL OPTIONS(2) AWARDS(3) OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) (#) ($) COMPENSATION(4)
--------------------------- ---- -------- ------- --------------- ---------- ---------- ---------------
John A. Williams........... 2001 $450,000 $ -- $168,275 -- $ -- $408,989
Chairman of the Board of 2000 325,000(5) -- 187,648 -- -- 443,456
Directors and Chief 1999 325,000(6) -- 192,068 14,192(7) -- 413,849
Executive Officer
John T. Glover............. 2001 $375,000 $ -- $ 98,296 -- $ -- $207,046
Vice Chairman 2000 240,284(5) -- 89,883 -- -- 233,337
1999 325,000(6) -- 91,450 39,192(7) -- 204,137
David P. Stockert(8)....... 2001 $375,000 $ -- $107,200 175,000 $33,750 $ 2,615
President and Chief 2000 -- -- -- -- -- --
Operating Officer 1999 -- -- -- -- -- --
W. Daniel Faulk, Jr.(9).... 2001 $315,000 $ -- $ -- -- $ -- $ 28,253
President -- Post 2000 315,000 31,500 -- -- 39,900 29,575
Apartment Development 1999 230,000 65,000 -- 28,261 -- 27,499
Thomas L. Wilkes........... 2001 $315,000 $ -- $108,109 50,000 $60,645 $ 2,611
President -- Post 2000 210,000 54,986 -- -- 34,609 2,611
Apartment Management 1999 190,000 40,000 -- -- -- 1,665
R. Gregory Fox............. 2001 $315,000 $ -- $ 27,200 25,000 $55,455 $ 2,615
Executive Vice President 2000 210,000 36,000 -- -- 50,371 1,664
and Chief Financial 1999 175,000 70,100 -- 40,057 -- 1,652
Officer
------------------
(1) Amounts shown for Mr. Williams for 2001, 2000 and 1999 include (a) the cost
of tax and financial planning by third parties in the amounts of $78,319,
$75,000 and $70,804, respectively, and (b) personal use of the corporate
aircraft in the amounts of $66,106, $73,576 and $82,482, respectively.
Amounts shown for Mr. Glover for 2001, 2000 and 1999 include (a) the cost
of tax and financial planning by third parties in the amounts of $52,959,
$50,000 and $37,702, respectively, and (b) personal use of the corporate
aircraft in the amounts of $36,019, $30,565 and $44,040, respectively. The
amounts shown for Mr. Stockert for 2001 include forgiveness of indebtedness
in the amount of $100,000. The amounts shown for Mr. Wilkes for 2001
include (a) the forgiveness of indebtedness in the amount of $40,000 and
(b) relocation expenses of $60,909. The amounts shown for Mr. Fox for 2001
include the forgiveness of indebtedness in the amount of $20,000.
(2) Options shown for 1999 include options granted to the Named Executive
Officers for meeting certain performance goals during 1999, but granted in
2000.
(3) Includes restricted shares granted to the Named Executive Officers for
meeting certain performance goals during the year set forth, but granted in
the following year.
(4) The amounts shown for 2001 include (a) the value of our contributions to
the company-sponsored 401(k) plan for each of the Named Executive Officers,
(b) the amount paid by us for term life insurance coverage for each of the
Named Executive Officers and (c) the dollar value of the benefit of
premiums paid for split-dollar life insurance policies (unrelated to the
term life insurance component of the coverage paid for directly by the
Named Executive Officer) projected on an actuarial basis for Messrs.
Williams, Glover and Faulk. The dollar value of the benefit of premiums
paid for split-dollar life insurance policies projected on an actuarial
basis for Messrs. Williams, Glover and Faulk is disclosed in the following
table.
10
NAME 2001 2000 1999
---- -------- -------- --------
John A. Williams................................. $406,374 $442,017 $412,410
John T. Glover................................... 204,431 231,675 202,472
W. Daniel Faulk, Jr.............................. 25,638 27,910 25,834
(5) Includes $125,000 that each of Messrs. Williams and Glover elected to
receive in the form of 54,585 options to purchase common stock. These
options are not otherwise reflected in the table.
(6) Includes $125,000 that each of Messrs. Williams and Glover elected to
receive in the form of 82,871 options to purchase common stock. These
options are not otherwise reflected in the table.
(7) Includes options granted in lieu of cash incentive compensation.
(8) Mr. Stockert's employment with Post Properties began effective January 1,
2001.
(9) Mr. Faulk ceased to be employed by Post Properties on February 28, 2002.
OPTION GRANTS TABLE
The following table sets forth information regarding option grants during
2001 to each of the Named Executive Officers:
OPTION GRANTS
INDIVIDUAL GRANTS
-------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATE OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ------------------------
GRANTED FISCAL 2001 PER SHARE DATE 5% 10%
---------- ------------ --------- ---------- ---------- -----------
John A. Williams............ -- 0.0% $ -- N/A $ -- $ --
John T. Glover.............. -- 0.0 -- N/A -- --
David P. Stockert........... 175,000 42.1 36.47 5/31/11 4,013,763 10,171,663
W. Daniel Faulk, Jr......... -- 0.0 -- N/A -- --
Thomas L. Wilkes............ 50,000 12.0 36.47 5/31/11 1,146,789 2,906,189
R. Gregory Fox.............. 25,000 6.0 36.47 5/31/11 573,395 1,453,095
11
FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information with respect to the
exercise of stock options during the year ended December 31, 2001 and the value
of unexercised in-the-money options held by the Named Executive Officers at
December 31, 2001. These are options for which the exercise price is lower than
the closing price on that date.
FISCAL YEAR-END OPTION VALUES
SECURITIES UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END OPTIONS AT FY-END
------------------------------- -------------------------------------
NAME (EXERCISABLE) (UNEXERCISABLE) (EXERCISABLE)(1) (UNEXERCISABLE)(1)
---- ------------- --------------- ---------------- ------------------
John A. Williams........................ 398,983 14,088 $450,305 $ --
John T. Glover.......................... 402,596 62,715 119,939 --
David P. Stockert....................... -- 175,000 -- --
W. Daniel Faulk, Jr..................... 132,799 48,695 278,788 --
Thomas L. Wilkes........................ 25,856 82,961 -- --
R. Gregory Fox.......................... 62,852 91,984 24,450 --
------------------
(1) Based on a closing price of $35.51 per share of common stock on December 31,
2001.
NONCOMPETITION AGREEMENTS, EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL
AGREEMENTS
Noncompetition Agreements
Each of Messrs. Williams and Glover has entered into noncompetition
agreements with Post Properties and Post Apartment Homes, L.P. These agreements
prohibit each individual, subject to certain limited exceptions, from engaging
in managerial responsibilities directly or indirectly in the development,
operation, management, leasing or landscaping of any upscale multifamily
community for the period of his employment by us or our affiliates and for two
years from the termination of his employment and, subject again to certain
exceptions and time limits, from soliciting employees or soliciting customers
following a termination of employment or from divulging trade secrets or
confidential information.
Employment Agreements
Each of Messrs. Williams and Glover entered into an employment agreement
with us, effective June 1, 1998. The contracts provide for annual base
compensation equal to the equivalent of $325,000 subject to any increases in
base compensation approved by the Compensation Committee as well as other
benefits including the right to participate in our bonus programs and stock
option plans.
Mr. Williams entered into a new employment agreement with us that will be
effective July 1, 2002 and will replace his existing employment agreement. His
new agreement provides that he will be the Chairman of our Board of Directors
and that he will receive a minimum base salary of $150,000. This agreement will
end on the date of our regularly scheduled annual shareholders' meeting in 2013.
Mr. Glover entered into a new employment agreement with us that was effective
January 1, 2002 and replaced his existing employment agreement. His new
agreement provides that he will be the Vice Chairman of our Board of Directors
and that he will receive a minimum base salary of $100,000. This agreement will
end on May 30, 2016. All of Messrs. Williams' and Glover's duties and
responsibilities under the new employment agreements will be part-time and
consultative in nature. Both agreements provide for continued participation in
our employee benefit plans as well as for the continuation of various executive
perquisites consistent with perquisites provided under Messrs. Williams' and
Glover's
12
existing employment agreements. The perquisites include the use of company
aircraft, an automobile allowance and office space and secretarial services. If
the agreements are terminated by us without cause or by Mr. Williams or Mr.
Glover after a change in duties or title or a change of control, Mr. Williams or
Mr. Glover, as applicable, will continue to receive his current base salary and
other benefits and perquisites until the end of the term of the agreement, any
unvested stock options will become immediately exercisable and the restrictions
on any restricted stock will lapse. In the event of a termination by us for
cause, Mr. Williams or Mr. Glover, as applicable, will not be entitled to
receive his current base salary or any of the perquisites and benefits provided
exclusively by his employment agreement.
Change of Control Agreements
Each of Messrs. Stockert, Wilkes and Fox have entered into change of
control agreements with us. These change of control agreements provide a range
of benefits to an executive if at any time during the three year period which
starts on the effective date of a change of control we terminate such
executive's employment without "cause" or he resigns for good reason or if he
resigns for any reason during the ninety day period which starts on the first
anniversary of the effective date of the change of control. Upon any such
termination,
- he would receive a cash payout equal to three times his current salary
and bonus in a cash lump sum within thirty days after his employment
terminates,
- any of his unvested stock options would become immediately exercisable
and all his options would be exercisable for three years or until the
expiration of their term, whichever comes first,
- the restrictions on any of his restricted stock would lapse,
- he would be treated as if he had remained employed by us for three years
for purposes of any loan made by us to him, including any provisions
regarding the forgiveness of any such loan for continuing to work for us
over such period,
- he would receive a payment of 140% of the excess, if any, of the
principal and interest outstanding on any loan made by us to help him
purchase shares of our stock over the total market value of such shares
on the date his employment terminates, and
- he would continue for three years to be eligible to participate in
employee benefit plans and receive various executive perquisites
consistent with plans in which he participated and perquisites he
received prior to the date his employment terminates.
An executive also will be eligible to receive such benefits if we terminate his
employment without "cause" or he resigns for good reason during the sixty day
period which ends on the date of a change of control if such change of control
becomes effective.
Under these change of control agreements, a change of control is defined
as:
- any change which is required to be reported in a proxy statement,
- a person becoming a beneficial owner of 45% or more of the combined
voting power of our then outstanding securities for the election of
directors,
- the members of our board of directors at the beginning of any period of
two consecutive years or less cease for any reason to constitute a
majority of our board of directors unless their successors were approved
by at least two-thirds of the members of our board at the beginning of
such period,
- our shareholders approve a reorganization, merger, consolidation or share
exchange which results in our common stock being changed into securities
of another non-Post affiliated organization,
13
- any dissolution or liquidation of Post Properties or the disposition of
50% or more of our assets or business, or
- our shareholders approve any reorganization, merger, consolidation or
share exchange with another corporation that would cause existing
shareholders of Post Properties to hold less than 60% of the outstanding
shares of common stock of the surviving entity.
A change of control is "effective" under these change of control agreements
on the date of the closing of the transaction which effects the change of
control or, if there is no such closing, on the date the change is reported to
the Securities and Exchange Commission.
If an executive would be subject to a "golden parachute" excise tax as a
result of the benefits called for under his change of control agreement, he
agrees to waive his right to up to $25,000 of such benefits in order to
eliminate such tax. However, if such a waiver would fail to eliminate such tax,
no waiver shall be required, and we will make payments to the executive
sufficient to pay such excise tax and any additional taxes due as a result of
such payment.
Pursuant to the change of control agreements, each of Messrs. Stockert,
Wilkes and Fox agrees to protect our trade secrets and confidential information
for the one year period following his termination of employment and to refrain
from soliciting our customers and our employees for the two year period
following his termination of employment.
The initial term of these change of control agreements ends in September
2004, but the term automatically extends for one additional year following the
first anniversary of the agreements and for one additional year on each
subsequent anniversary date unless we advise Messrs. Stockert, Wilkes and Fox at
least 180 days before any such anniversary date that there will be no automatic
extension on the subsequent anniversary date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2001, Messrs. Anderson, Blank and Rice served as members of the
Compensation Committee. During 2001:
- no member of the Compensation Committee was an officer or employee of
Post Properties or any of its subsidiaries;
- other than as described below no member of the Compensation Committee
entered into any transaction with Post Properties in which the amount
involved exceeded $60,000;
- none of our executive officers served on the compensation committee of
any entity where one of that entity's executive officers served on Post
Properties' Compensation Committee;
- none of our executive officers was a director of another entity where one
of that entity's executive officers served on Post Properties'
Compensation Committee; and
- none of our executive officers served on the compensation committee of
another entity where one of that entity's executive officers served as a
director on Post Properties' board.
As discussed below under the caption "Certain Transactions -- Third Party
Landscaping Transaction," during 2001, we received landscaping fees of $301,108
from Mr. Blank.
14
CERTAIN TRANSACTIONS
INSIDER LOANS
In November 1999, our board of directors approved a Senior Management Stock
Ownership Program. The senior officers are expected to use the proceeds of the
loans to purchase shares of our common stock. Pursuant to this program, in
December 1999, we made loans to senior officers in the principal amounts set
forth below. This listing includes only those senior officers that were still
employees during the year ended December 31, 2001. The original amount of the
loans and the outstanding balances as of March 1, 2002 are as follows:
OUTSTANDING
SENIOR OFFICER AMOUNT OF LOAN BALANCE
-------------- -------------- -----------
W. Daniel Faulk, Jr............................ $1,000,000 $1,000,000
John B. Mears.................................. 750,000 750,000
R. Gregory Fox................................. 750,000 750,000
Sherry W. Cohen................................ 500,000 500,000
Douglas S. Gray................................ 500,000 500,000
Thomas L. Wilkes............................... 500,000 500,000
Joseph R. Taylor............................... 250,000 0
Sheila J. Teabo................................ 250,000 250,000
In February 2000, we made additional loans to senior officers pursuant to
the Senior Management Stock Ownership Program in the principal amounts set forth
below. This listing includes only those senior officers that were still
employees during the year ended December 31, 2001. The original amount of the
loans and the outstanding balances as of March 1, 2002 are as follows:
OUTSTANDING
SENIOR OFFICER AMOUNT OF LOAN BALANCE
-------------- -------------- -----------
Janet Appling.................................. $250,000 $250,000
John D. Hooks.................................. 250,000 250,000
William F. Leseman............................. 250,000 250,000
William C. Lincicome........................... 250,000 250,000
Terry L. Chapman............................... 250,000 250,000
Janie S. Maddox................................ 250,000 250,000
In June 2001 and August 2001, we made additional loans to senior officers
pursuant to the Senior Management Stock Ownership Program in the principal
amounts set forth below. This listing includes only those senior officers that
were still employees during the year ended December 31, 2001. The original
amount of the loans and the outstanding balances as of March 1, 2002 are as
follows:
OUTSTANDING
SENIOR OFFICER AMOUNT OF LOAN BALANCE
-------------- -------------- -----------
David P. Stockert.............................. $1,000,000 $1,000,000
Clifford L. Ratkovich.......................... 500,000 500,000
John R. Allums................................. 500,000 500,000
Thomas L. Wilkes............................... 250,000 250,000
15
In May 2001, we made additional loans to three of our senior officers
outside of our Senior Management Stock Ownership Program, in order to allow them
purchase shares of our common stock in the principal amounts set forth below.
The outstanding balances for such loans as of March 1, 2002 are also set forth
below.
OUTSTANDING
SENIOR OFFICER AMOUNT OF LOAN BALANCE
-------------- -------------- -----------
David P. Stockert.............................. $1,000,000 $900,000
Thomas L. Wilkes............................... 200,000 160,000
R. Gregory Fox................................. 100,000 80,000
All of the loans described above bear interest at 6.32%. Interest is
payable quarterly and the loans are due in full on the earlier of (1) the tenth
anniversary of the date of the note or (2) 30 days after the employee ceases for
any reason to be an employee of Post Properties. The outstanding balance for the
loans described above excludes accrued interest.
We intend to forgive the May 2001 loans of Messrs. Stockert, Wilkes and Fox
in installments equal to the following amounts each year.
AMOUNT OF LOAN
SENIOR OFFICER FORGIVENESS
-------------- --------------
David P. Stockert......................................... $100,000
Thomas L. Wilkes.......................................... 40,000
R. Gregory Fox............................................ 20,000
The outstanding balances as of March 1, 2002 include the amounts we forgave
during the year ended December 31, 2001.
In connection with the transfer of our landscaping services, third party
property management and third party construction businesses, we waived our right
to demand payment on the loans of Messrs. Lincicome, Leseman and Faulk when
their employment with us ended. The loans of these borrowers are due in full on
the earlier of (1) the tenth anniversary of the original date of the note or (2)
30 days after such borrower ceases for any reason to be employed by the entities
that acquired our landscaping services, third party property management and
third party construction businesses.
THIRD PARTY LANDSCAPING TRANSACTION
During 2001, some of our executive officers and directors employed Post
Properties to provide landscaping services through our former landscaping
affiliate, Post Landscape Group, Inc. During 2001, we received landscaping fees
of $266,248 from Mr. Williams and $301,108 from Mr. Blank. As a result of these
transactions, $567,356 of landscape services revenue was recognized in our 2001
financial statements. All landscaping services were provided to the outside
directors at the market price for the services and to the executive officers at
the cost to us of providing the services.
In November 2001, Post Properties agreed to transfer substantially all the
assets of Post Landscape Group, Inc., its third party landscaping business, to
Highgrove Partners, LLC in exchange for an approximately $3.8 million promissory
note and Highgrove Partners' assumption of substantially all of Post Landscape
Group's liabilities related to the transferred assets. The purchase price was
determined by arm's length negotiations between Highgrove Partners and certain
of our executive officers. In addition, we engaged an independent industry
valuation consultant to help us determine the value of the assets. The assets
consisted of contracts, equipment, vehicles, interest, cash assets and rights of
the kind that were used in the operation of the third party landscaping service
business. William C. Lincicome, our former Executive Vice President --Post
Landscape Group, is one of the founders and principal equity owners of Highgrove
Partners. Mr. Lincicome owns 51% of the outstanding equity interests in
16
Highgrove Partners. The loan evidenced by the promissory note bears interest at
9.00% per annum. Interest is payable quarterly and payments of principal are due
in installments of $250,000 each December 31, beginning December 31, 2002,
unless the borrower elects to defer the first annual principal payment, in which
case, the annual principal payments will be increased to $300,000 beginning
December 31, 2003. The loan is due in full on December 31, 2006, unless certain
conditions are met, in which case the loan maturity date may be extended to
December 31, 2008. The loan is secured by the assets transferred to Highgrove
Partners and is subject to earlier prepayments if certain operating levels are
attained by Highgrove Partners.
In connection with the transfer of our landscaping services business, we
also agreed to treat employment by Highgrove Partners the same as employment by
Post Properties for purposes of (1) any stock option grants or restricted stock
grants made by Post Properties to any of the former Post Properties employees
employed by Highgrove Partners following the closing (under our option
agreements and our restricted stock agreements, options to purchase Post
Properties common stock generally expire and restricted stock will not vest and
will become forfeitable after someone ceases to be an employee) and (2) Post
Properties' loan to Mr. Lincicome described above under the section entitled
"Insider Loans." Mr. Lincicome currently holds options to purchase 59,188 shares
of Post Properties common stock, 45,271 of which are currently exercisable. Mr.
Lincicome did not hold any unexercised, in-the-money options at the end of
December 31, 2001. Mr. Lincicome holds 1,205 shares of restricted stock.
THIRD PARTY MANAGEMENT TRANSACTION
In December 2001, Post Properties agreed to transfer substantially all the
assets of RAM Partners Inc., its third party property management business to RAM
Apartment Management, LLC in exchange for an approximately $1.3 million
promissory note and RAM Apartment Management's assumption of substantially all
of RAM Partners' liabilities related to the transferred assets. The purchase
price was determined by arm's length negotiations between RAM Apartment
Management and certain of our executive officers. In addition, we engaged an
independent industry valuation consultant to help us determine the value of the
assets. The assets consisted of contracts, interests, cash assets and rights of
any kind that were used in the operation of the third party property management
business. William F. Leseman, our former Executive Vice President -- RAM
Partners, is one of the founders and principal equity owners of RAM Apartment
Management. Mr. Leseman owns 83% of the outstanding equity interests in RAM
Apartment Management. The loan evidenced by the promissory note bears interest
at 9.00% per annum. Principal and interest are payable quarterly in an amount
equal to $49,631. The loan is due in full on December 31, 2007. The loan is
secured by the assets transferred to RAM Apartment Management.
In connection with the transfer of our third party property management
business, we also agreed to treat employment by RAM Apartment Management the
same as employment by Post Properties for purposes of (1) any stock option
grants or restricted stock grants made by Post Properties to any of the former
Post Properties employees employed by RAM Apartment Management following the
closing (under our option agreements and our restricted stock agreements,
options to purchase Post Properties common stock generally expire and restricted
stock will not vest and will become forfeitable after someone ceases to be an
employee) and (2) Post Properties' loan to Mr. Leseman described above under the
section entitled "Insider Loans." Mr. Leseman currently holds options to
purchase 66,076 shares of Post Properties common stock, 56,631 of which are
currently exercisable. The value of Mr. Leseman's unexercised, in-the-money
options at the end of December 31, 2001 was $32,140. Mr. Leseman also holds
1,166 shares of restricted stock.
17
POST CONSTRUCTION SERVICES TRANSACTION
During the first quarter of 2002, Post Properties agreed to transfer
certain construction contracts of Post Construction Services Inc., its third
party construction business, to Oxford Properties, LLC in exchange for $100 and
Oxford Properties' assumption of substantially all of Post Construction
Service's liabilities related to the transferred assets. In approving the
transaction, our board of directors ascribed nominal value to the assets being
transferred. The assets consisted principally of third party construction
contracts for the construction of four garden style apartment, condominium and
townhome communities as well as related subcontracts, indemnities and
guarantees. In connection with the transfer of Post Construction Services'
construction contracts, Oxford Properties has the right to receive a deferred
fee upon completion of one of the construction projects in the amount of
$500,000. Oxford Properties has also agreed to employee 28 former Post
Properties and Post Construction Services employees. As a result, we will not be
responsible for costs that would otherwise result from winding up the third
party construction business. Oxford Properties is an entity formed by W. Daniel
Faulk, Jr., our former President -- Post Apartment Development, Richard A. Denny
III, a former Vice President of Post Properties and John A. Williams, Jr., who
is the son of John A. Williams, our Chairman and Chief Executive Officer. John
A. Williams, Jr. purchased 100% of the preferred membership interests of Oxford
Properties for $1 million. The preferred membership interests earn a preferred
return of 6.00% per annum. In addition, Messrs. Faulk, Denny and Williams own
45%, 20% and 35%, respectively, of the common membership interests in Oxford
Properties. John A. Williams does not own any of the outstanding equity
interests in Oxford Properties and he will not have any management role in
Oxford Properties.
Oxford Properties and each of Messrs. Faulk and Denny have entered into a
three-year non-competition agreement with Post Properties prohibiting Oxford
Properties or such individuals from owning direct or indirect interests in any
multifamily communities, other than student housing and senior housing, within a
five-mile radius of any one of our properties. John A. Williams remains subject
the non-competition agreement described above under the caption "Noncompetition
Agreements, Employment Agreements and Change of Control
Agreements -- Noncompetition Agreements."
In connection with the transfer of our third party construction business,
we also agreed to treat employment by Oxford Properties the same as employment
by Post Properties for purposes of (1) any stock option grants or restricted
stock grants made by Post Properties to any of the former Post Properties
employees employed by Oxford Properties following the closing (under our option
agreements, options to purchase Post Properties common stock generally expire
and restricted stock will not vest and will become forfeitable after someone
ceases to be an employee) and (2) Post Properties' loan to Mr. Faulk described
above under the section entitled "Insider Loans." Mr. Faulk currently holds
options to purchase 181,494 shares of Post Properties common stock, 172,073 of
which are currently exercisable. As disclosed above under the section entitled
"Executive Compensation -- Fiscal Year-End Option Value Table," the value of Mr.
Faulk's unexercised, in-the-money options at the end of December 31, 2001 was
$278,788. Mr. Faulk also holds 869 shares of restricted stock.
REPORT ON EXECUTIVE COMPENSATION
TO OUR SHAREHOLDERS:
The Compensation Committee is comprised of three independent, non-employee
directors. It is the Committee's responsibility to:
- make recommendations and reports to the board of directors concerning
matters of executive compensation,
- administer our executive incentive plans,
18
- review compensation plans, programs and policies, and
- monitor the performance and compensation of executive officers.
In performing these duties, the Compensation Committee considers
recommendations from management along with other factors. The Compensation
Committee has available to it an executive compensation consultant, as well as
access to an extensive compensation database.
THE COMPENSATION COMMITTEE'S PHILOSOPHY
The Compensation Committee's philosophy on establishing executive
compensation programs is to:
- foster a high performance culture that motivates and retains
high-performing executives,
- direct the compensation program for the achievement of strategic
objectives that enhance shareholder value,
- be more performance driven than our market, and
- orient total compensation more toward incentive pay components rather
than base salary.
In 2002, our annual incentive plan will continue to reinforce the
pay-for-performance philosophy. Annual incentive opportunities will be targeted
at the market median for comparable REITs. Actual incentive payouts will be
determined based on a combination of corporate and business unit performance.
As further explained below in the section entitled "Annual Incentive Plan,"
our performance will have a prominent role in the determination of annual
incentive payouts, particularly for senior corporate executives. Our performance
will be judged based on Funds From Operations ("FFO") per share versus
internally established goals, total return to shareholders in comparison to a
peer group of equity REITs and meeting the objectives set forth in our strategic
plan. This approach is more clearly aligned with the Committee's objective of
being more performance driven than our market and more closely links
compensation to enhancing shareholder value.
For employees with significant business unit responsibilities, a
substantial portion of the annual incentive will be earned based on achieving
predetermined operational and financial goals. Specific goals have been
established for all of our operating units.
BASE SALARY PROGRAM
Base salary levels are determined based on the Compensation Committee's
assessment of competitive market practices, individual performance over time and
each individual's role and responsibilities in the organization.
Our base salaries for executive officers are competitive with market median
practices of other multifamily REITs and REITs of comparable size outside of the
multifamily asset class. The Compensation Committee intends to maintain this
posture for base salaries, provided the practice is serving our best interests.
19
Annual salary increases for executive officers take into account the
individual's performance, our overall financial performance and changes in the
competitive marketplace. The Compensation Committee considers a number of
factors when evaluating individual performance. They include the executive's
contribution in:
- generating favorable financial performance,
- promoting our values,
- improving product and service quality,
- developing strong relationships with customers, suppliers, and employees,
and
- demonstrating leadership abilities.
ANNUAL INCENTIVE PLAN
Our annual incentive plan (the "Plan") promotes our pay-for-performance
philosophy by communicating specific annual corporate and individual business
unit performance goals, based on our strategic plan, and rewarding senior
management for achievement of those goals. The Plan is structured to foster
teamwork among the executive officers and to focus efforts on corporate results
that directly impact shareholders, and to link individual performance to our
strategic plan.
In 2001, one of the corporate performance measures was achieving targeted
per share FFO. FFO is defined to mean net income available to common
shareholders determined in accordance with GAAP, excluding gains (or losses)
from debt restructuring and sales of property, plus deprecation of real estate
assets, and after adjustment for unconsolidated partnerships and joint ventures.
Industry analysts consider FFO to be an appropriate measure of the performance
of an equity REIT. Another performance measure is individual goals which are
designed to promote achievement of our strategic goals and recognize outstanding
leadership and personal growth.
Target awards were established at the start of the year. Actual payouts
varied above or below target based on the performance level achieved.
LONG-TERM INCENTIVE PLAN
The Committee believes that the financial interests of executive officers
and managers should be closely aligned with those of shareholders through equity
ownership. Performance guidelines for 2001 for executive officers under the Post
Properties, Inc. Employee Stock Plan were based on the same criteria used for
the Annual Incentive Plan and were based on our performance, the performance of
each business unit and individual performance. Based on performance in 2001, the
Committee granted 8,627 shares of restricted stock to our executive officers in
February 2002.
SHAREHOLDER VALUE PLAN
Our board of directors adopted our shareholder value plan at its regularly
scheduled meeting on February 28, 2002. The purpose of the plan is to give each
participant the opportunity to receive a percentage of his target bonus for each
performance period based on Post Properties' total shareholder return in
relation to the total shareholder return reported for such period in the NAREIT
total return index for all equity REITs whose return is reported in such index.
A performance period is a three calendar year period, and a target bonus will be
set for each participant for each performance period. A percentage of a
participant's target bonus will be payable for a performance period under the
plan's standard benchmark rankings and related target bonus payment percentage
only if our total shareholder
20
return for a performance period ranks Post Properties in the top 50% of all
equity REITs whose total shareholder return is reported in the NAREIT total
return index for such period. Thus, the plan is intended to tie a participant's
bonus to Post Properties' long term performance relative to the long term
performance of other REITs with respect to providing a total return to our
shareholders.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Williams' base compensation for 2001 was $450,000.
Under last year's annual incentive plan, Mr. Williams had the opportunity
to earn an annual bonus which was contingent upon our achieving predetermined
FFO per share objectives and our success in meeting the objectives set forth in
our strategic plan. No bonus was paid out under this plan to Mr. Williams last
year.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
The Omnibus Budget Reconciliation Act of 1993 placed certain limits on the
deductibility of non-performance based executive compensation for a company's
employees, unless certain requirements are met.
While the Compensation Committee previously did not see a risk that a
deduction would be lost under this law, the Committee now sees such a risk with
respect to the shareholder value plan which was adopted on February 28, 2002.
Thus the shareholders have been asked to approve this plan, which is one of the
requirements which must be satisfied in order to protect Post Properties'
deduction for bonuses paid under this plan. Finally, the Committee will continue
to use its best judgment, taking all factors into account, including the
materiality of any deductions that might be lost versus the broader interests to
be served by paying compensation for services rendered which is competitive,
before adopting any plan or compensation arrangement.
THE FOREGOING REPORT SHOULD NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF
1934 (TOGETHER, THE "ACTS"), EXCEPT TO THE EXTENT THAT WE SPECIFICALLY
INCORPORATE THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED
FILED UNDER SUCH ACTS.
By the Compensation Committee:
Charles E. Rice
Robert L. Anderson
Arthur M. Blank
REPORT OF THE AUDIT COMMITTEE
Post Properties' Audit Committee is responsible for, among other things,
reviewing with PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), our
independent auditors, the scope and results of their audit engagement. In
connection with the audit for the year ended December 31, 2001, the Audit
Committee has:
- reviewed and discussed with management Post Properties' audited financial
statements to be included in our Annual Report on Form 10-K for the year
ended December 31, 2001;
- discussed with PricewaterhouseCoopers the matters required by Statement
of Accounting Standards No. 61, as amended; and
21
- received from and discussed with PricewaterhouseCoopers the
communications from PricewaterhouseCoopers required by Independence
Standards Board Standard No. 1 regarding their independence.
Based on the review and the discussions described in the preceding bullet
points, the Audit Committee has recommended to the board of directors that the
audited financial statements be included in our Annual Report on Form 10-K for
the year ended December 31, 2001 for filing with the Securities and Exchange
Commission.
Management is responsible for Post Properties' financial reporting process
including its system of internal control, and for the preparation of the
consolidated financial statements of Post Properties and Post Apartment Homes in
accordance with generally accepted accounting principles. PricewaterhouseCoopers
is responsible for auditing those financial statements. The Audit Committee's
responsibility is to monitor and review these processes. It is not the Audit
Committee's duty or responsibility to conduct auditing or accounting reviews or
procedures. The members of the Audit Committee are not employees of Post
Properties and do not represent themselves to be or to serve as, accountants or
auditors by profession or experts in the field of accounting or auditing.
Therefore, the Audit Committee has relied, without independent verification, on
management's representation that the financial statements have been prepared
with integrity and objectivity and in conformity with accounting principles
generally accepted in the United States and on the representations of
PricewaterhouseCoopers included in their report to the financial statements of
Post Properties and Post Apartment Homes.
THE FOREGOING REPORT SHOULD NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE ACTS, EXCEPT TO THE EXTENT THAT WE SPECIFICALLY INCORPORATE
THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER
SUCH ACTS.
By the Audit Committee:
Russell R. French
Herschel M. Bloom
Ronald de Waal
AUDIT FEES
The aggregate fees billed by PricewaterhouseCoopers for professional
services rendered for the audit of the annual financial statements of Post
Properties and Post Apartment Homes for the fiscal year ended December 31, 2001
and for the reviews of the financial statements included in the quarterly
reports on Form 10-Q of Post Properties and Post Apartment Homes for the same
fiscal year were $259,955.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by PricewaterhouseCoopers for professional
services rendered for information technology services relating to financial
information systems design and implementation for the fiscal year ended December
31, 2001.
ALL OTHER FEES
The aggregate fees billed by PricewaterhouseCoopers for services rendered
to Post Properties and Post Apartment Homes, other than the services described
above under "Audit Fees" and "Financial
22
Information Systems Design and Implementation Fees," for the fiscal year ended
December 31, 2001 were $1,018,787. The fees were incurred as follows:
Tax planning and compliance................................. $ 783,676
Other accounting and auditing services...................... 151,941
Securities Act of 1933 and similar regulatory filings and
reports................................................... 83,170
----------
Total............................................. $1,018,787
==========
The Audit Committee has considered whether the provision of non-audit
services by PricewaterhouseCoopers is compatible with maintaining auditor
independence.
STOCK PRICE PERFORMANCE GRAPH
The following stock price performance graph compares our performance to the
S&P 500 and the index of equity real estate investment trusts prepared by the
National Association of Real Estate Investment Trusts ("NAREIT"). The stock
price performance graph assumes an investment of $100 in Post Properties and in
the two indexes on December 31, 1996 and further assumes the reinvestment of all
dividends. Equity real estate investment trusts are defined as those which
derive more than 75% of their income from equity investments in real estate
assets. The NAREIT equity index includes all tax qualified real estate
investment trusts listed on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq Stock Market. Stock price performance, presented for the
period from December 31, 1996 through December 31, 2001 is not necessarily
indicative of future results.
(PERFORMANCE GRAPH)
PPS NAREIT EQUITY S&P 500
------ ------------- -------
Dec-96...................................................... 100.00 100.00 100.00
Mar-97...................................................... 95.89 100.70 102.68
Jun-97...................................................... 103.66 105.70 120.61
Sep-97...................................................... 103.09 118.20 129.64
Dec-97...................................................... 106.95 120.26 133.36
Mar-98...................................................... 106.78 119.70 151.97
Jun-98...................................................... 104.56 114.21 156.98
Sep-98...................................................... 106.80 102.19 141.37
Dec-98...................................................... 107.93 99.21 171.48
Mar-99...................................................... 103.56 94.43 180.02
Jun-99...................................................... 119.27 103.95 192.71
Sep-99...................................................... 116.37 95.59 180.68
Dec-99...................................................... 115.30 94.63 207.56
Mar-00...................................................... 123.85 96.89 212.32
Jun-00...................................................... 137.66 107.10 206.68
Sep-00...................................................... 138.66 115.29 204.68
Dec-00...................................................... 122.13 119.58 188.66
Mar-01...................................................... 116.02 120.05 166.29
Jun-01...................................................... 128.18 133.27 176.03
Sep-01...................................................... 128.12 129.77 150.19
Dec-01...................................................... 125.40 136.24 166.24
THE STOCK PRICE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE ACTS EXCEPT TO THE EXTENT THAT WE
SPECIFICALLY INCORPORATE THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACTS.
APPROVAL OF OUR SHAREHOLDER VALUE PLAN
The following description of our shareholder value plan is being provided
to you in connection with the solicitation of proxies for approval of the plan.
This description is a summary only and does not purport to be complete. The
summary is qualified in its entirety by reference to the text of the plan.
23
PLAN DESCRIPTION
Background. Our board of directors adopted our shareholder value plan at
its regularly scheduled meeting on February 28, 2002. The plan requires that we
submit the plan to you for approval and provides that any awards granted under
the plan shall be granted subject to that approval. This was done because Post
Properties, under section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), cannot deduct compensation paid in any calendar year to
our chief executive officer or our other four most highly compensated executive
officers (our "covered officers") for such year which exceeds $1 million unless
such compensation meets the requirements for performance-based compensation
under Code section 162(m). No compensation paid to any covered officer to date
has been subject to this deduction limitation. However, our Compensation
Committee proposes that any bonus paid to any covered officer under our
shareholder value plan meet the requirements for performance-based compensation.
One of those requirements under section 162(m) is that our shareholders approve
the material terms of certain provisions of our plan, and we believe that
approving the plan as a whole clearly will satisfy this shareholder approval
requirement.
Purpose. The purpose of our plan is to give each participant the
opportunity to receive a percentage of his target bonus for each performance
period based on Post Properties' total shareholder return ranking in relation to
the total shareholder return reported for such period in the NAREIT total return
index for all equity REITs whose return is reported in such index.
Participants. Each of our executive officers and other non-executive
officers and non-executive officers of our affiliates will be eligible to be a
participant in the plan for any performance period year. The Committee in the
exercise of its discretion will decide for each performance period which
executive officers and other non-executive officers actually will be
participants in the plan for such performance period. This will be done no later
than the end of the ninety day period which starts at the beginning of the
performance period.
Performance Period. A performance period is a three consecutive calendar
year period, and the first performance period started on January 1, 2002. The
plan contemplates that a new performance period will begin on each subsequent
January 1.
Target Bonus. The Committee will set a target bonus for each officer for
each performance period when the Committee decides that the officer will be a
participant for such performance period. The Committee can set a participant's
target bonus as a specific dollar figure or as a percentage of the participant's
base salary or base salary and bonus for all or any part of a performance
period. The percentage of a participant's target bonus, if any, payable for any
performance period will depend, first, on how Post Properties' total shareholder
return ranks against the total shareholder return for all equity REITs whose
total shareholder return is reported in the NAREIT total return index for the
performance period and, second, on the target bonus payment percentage set by
the Committee for such ranking.
Total Shareholder Return Rankings and Payment Percentages. The plan
establishes a standard set of benchmark rankings and related target bonus
payment percentages which the Committee will use to determine the percentage of
a participant's target bonus which will be payable at the end of a performance
period, but the Committee has the right to adopt a different set of benchmark
rankings and related payment percentages for a performance period at any time
before the end of the ninety day period which starts at the beginning of a
performance period. A benchmark ranking is the ranking which Post Properties
needs to achieve within the NAREIT total return index for equity REITs for a
performance period, and the related target bonus payment percentage is the
percentage of a participant's
24
target bonus which will be payable if Post Properties achieves the related
benchmark ranking. The standard set of benchmark rankings and payment
percentages are as follows:
BENCHMARK RANKING: PERCENTAGE OF TARGET BONUS PAYABLE:
------------------ -----------------------------------
Under top 50%............................... none
Top 50%..................................... 50%
Top 45%..................................... 75%
Top 40%..................................... 100%
Top 35%..................................... 125%
Top 30%..................................... 150%
Top 25%..................................... 175%
Top 20%..................................... 200%
Top 15%..................................... 250%
Top 10% or Higher........................... 300%
For example, if a participant's target bonus was $100,000 for a performance
period, the standard set of benchmark rankings and related payment percentages
were applicable and Post Properties' total shareholder return ranking for the
performance period in the NAREIT total return index for equity REITs was in the
top 30%, the bonus payable to the participant would be $150,000. On the other
hand, using the same assumptions, if Post Properties' ranking was below the top
50%, no bonus would be payable.
NAREIT Total Return Index. All benchmark rankings under the plan will be
based on where Post Properties ranks on the NAREIT total return index for equity
REITs for a performance period. The NAREIT total return index is prepared by the
National Association of Real Estate Investment Trusts.
Committee Certification. The Committee after the end of each performance
period will certify Post Properties' ranking on the NAREIT total return index,
determine the related target bonus payment percentage and then determine the
bonus, if any, payable to each participant.
Bonus Cap. No bonus shall be paid to any executive for any performance
period in excess of $1,500,000.
Bonus Payment. A bonus as a general rule will be paid to a participant
only if he is employed by Post Properties or an affiliate throughout the
performance period. There are two exceptions to this general rule. First, a
bonus will be paid to, or on behalf of, a participant whose employment
terminates during a performance period if his employment terminates as a result
of his death, disability or retirement after reaching at least age 60. Second, a
participant who is first employed in the ninety day period which starts at the
beginning of a performance period shall be treated as if he had been employed
throughout such ninety day period. A bonus at the Committee's discretion can be
paid in cash or in our common stock or in any combination of cash and common
stock, and the bonuses, if any, for any performance period will be paid no later
than the March 15 following the end of such period. There will be 200,000 shares
of our common stock available to pay bonuses under our plan, and the Committee
will adjust this number in an equitable manner to reflect any change in the
capitalization of Post Properties, including stock splits and stock dividends.
Change in Control. If there is a "change in control" of Post Properties,
all performance periods in effect on the effective date of such change in
control will terminate on such effective date, and a bonus will be paid to each
participant for each such performance period. A participant's bonus for each
performance period will equal the greater of (1) his target bonus for such
period or (2) the bonus computed for the performance period using the plan's
standard benchmark rankings and target bonus
25
payment percentages and Post Properties' ranking in the most recent NAREIT total
return index for equity REITs which covers such performance period.
Taxes. All bonuses shall be paid subject to applicable tax withholdings
unless the withholdings relate to an excise tax under Code section 4999. If any
bonus paid under the plan is subject to a tax under Code section 4999, Post
Properties shall make a payment to the participant which is sufficient to pay
such tax in full and to pay any related income or other taxes on such payment.
In addition, Post Properties will have the right to deduct from any bonus any
debts which the participant owes Post Properties or any affiliate.
Administration. Our program is administered by the Compensation Committee,
each member of which is an "outside director" within the meaning of Code section
162(m). The Committee has the right to amend or terminate the plan at any time
subject to the condition that no amendment or termination affect a participant's
target bonus for any performance period or his opportunity for the payment of a
bonus for such period.
ESTIMATE OF BENEFITS
The Committee has (subject to our shareholders approving the plan) decided
to use the standard benchmark rankings and target bonus payment percentages set
forth in the plan for the performance period which started on January 1, 2002.
It is not possible to predict today what Post Properties' total shareholder
return ranking will be at the end of this performance period and thus what
bonuses will be for this performance period. However, if the standard benchmark
ranking and target bonus payment percentages set forth in the plan had been in
effect for the three calendar year period which ended December 31, 2001, no
bonus would have been paid because our total shareholder return ranking for this
three year period was below the total shareholder return for the top 50% of all
equity REITs whose return was reported in the NAREIT total return index for this
three year period.
The target bonuses set by the Committee for our executive officers and
non-executive officers for the first performance period are reflected in the
following table.
SHAREHOLDER VALUE PLAN
NAME AND POSITION(1) TARGET BONUS
-------------------- ------------
John A. Williams............................................ $ 0
Chairman of the Board of Directors and Chief Executive
Officer
John T. Glover.............................................. 0
Vice Chairman
David P. Stockert........................................... 33,750
President and Chief Operating Officer
W. Daniel Faulk, Jr......................................... 0
President -- Post Apartment Development
Thomas L. Wilkes............................................ 60,630
President -- Post Apartment Management
R. Gregory Fox.............................................. 55,470
Executive Vice President and Chief Financial Officer
All executive officers as a group(8)........................ 215,190
All non-executive officers as a group (15).................. 285,956
---------------
(1) All of our Named Executive Officers and our other executive officers,
other than Messrs. Williams, Glover and Faulk have been selected as
participants in the plan for the first performance period, which
started on January 1, 2002. Mr. Faulk ceased to be employed by Post
Properties on February 28, 2002.
26
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our executive officers and
directors and persons who beneficially own more than ten percent of our common
stock to file with the Securities and Exchange Commission certain reports with
respect to each such person's beneficial ownership of our equity securities.
Grants of options on May 31, 2001 for David P. Stockert, Thomas L. Wilkes and R.
Gregory Fox and the receipt of shares of common stock in lieu of cash
compensation for director fees by Robert L. Anderson, Russell R. French and
Charles E. Rice were not timely reported on Form 5s (Annual Statement of Changes
in Beneficial Ownership). Based solely upon a review of copies of reports and
certain representations of our executive officers and directors, all such
persons, other than those noted above, have complied with the applicable
reporting requirements.
INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers has audited our accounts for fiscal year 2001 and
has been appointed by the board of directors to continue in that capacity for
our fiscal year ending December 31, 2002. A representative of
PricewaterhouseCoopers will be present at the Annual Meeting, will have the
opportunity to make a statement and will be available to respond to appropriate
questions.
ANNUAL REPORT TO SHAREHOLDERS
Our Annual Report for the year ended December 31, 2001, including audited
financial statements, accompanies this Proxy Statement. The Annual Report does
not form any part of the material for the solicitation of proxies.
ANNUAL REPORT ON FORM 10-K
WE WILL PROVIDE WITHOUT CHARGE, AT THE WRITTEN REQUEST OF ANY HOLDER OF
COMMON STOCK OF RECORD AS OF THE CLOSE OF BUSINESS ON MARCH 25, 2002, A COPY OF
OUR ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
EXCEPT EXHIBITS THERETO. We will provide copies of the exhibits, if they are
requested by eligible shareholders, and we may impose a reasonable fee for
providing such exhibits. Request for copies of our Annual Report on Form 10-K
should be mailed to:
Post Properties, Inc.
One Riverside
4401 Northside Parkway, Suite 800
Atlanta, Georgia 30327-3057
Attention: Secretary
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at our 2003 Annual
Meeting of Shareholders must be received by us on or before December 1, 2002 to
be eligible for inclusion in the Proxy Statement and form of proxy to be
distributed by the board of directors in connection with such meeting. Any
shareholder proposals intended to be presented from the floor at our 2002 Annual
Meeting of Shareholders must be received by us on or before April 18, 2002 or
the persons appointed as proxies may exercise their discretionary voting
authority with respect to the shareholder proposal.
27
OTHER MATTERS
The board of directors knows of no other matters to be brought before the
Annual Meeting.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by us. In an effort to
have as large a representation at the meeting as possible, special solicitation
of proxies may, in certain instances, be made personally or by telephone,
telegraph or mail by one or more of our employees. We also will reimburse
brokers, banks, nominees and other fiduciaries for postage and reasonable
clerical expenses of forwarding the proxy material to their principals who are
beneficial owners of our common stock. In addition, we have retained Corporate
Communications, Inc. to assist in the solicitation of proxies with respect to
shares of our common stock held of record by brokers, nominees and institutions
and, in certain cases, by other holders. Such solicitation may be made through
the use of mails, by telephone or by personal calls. The anticipated cost of the
services of Corporate Communications, Inc. is a fee of $5,000 plus expenses.
By Order of the Board of Directors,
/s/ SHERRY W. COHEN
Sherry W. Cohen
Executive Vice President and Secretary
Atlanta, Georgia
April 8, 2002
28
APPENDIX A
POST PROPERTIES, INC.
2002 SHAREHOLDER VALUE PLAN
I. PURPOSE
The purpose of this Plan is to provide for the payment of a bonus to an
Eligible Executive for a Performance Period based on the Eligible
Executive's Target Bonus for such Performance Period and Post's Total
Shareholder Return for such Performance Period relative to the Total
Shareholder Return for such period for all equity REITs whose Total
Shareholder Return is reported in the NAREIT Total Return Index for such
period.
II. DEFINITIONS
sec. 2.1 Beneficiary. The term "Beneficiary" mean the person or persons
designated as such under sec. 5.5.
sec. 2.2 Board. The term "Board" for purposes of this Plan shall mean
the Board of Directors of Post.
sec. 2.3 Change in Control. The term "Change in Control" for purposes of
this Plan shall mean:
(a) a "change in control" of Post of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A for a
proxy statement filed under Section 14(a) of the Exchange Act as
in effect on the date of this Agreement;
(b) a "person" (as that term is used in 14(d)(2) of the Exchange
Act) becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly of securities
representing 45% or more of the combined voting power for
election of directors of the then outstanding securities of
Post;
(c) the individuals who at the beginning of any period of two
consecutive years or less (starting on or after January 1, 2002)
constitute Post's Board cease for any reason during such period
to constitute at least a majority of Post's Board, unless the
election or nomination for election of each new member of the
Board was approved by vote of at least two-thirds of the members
of such Board then still in office who were members of such
Board at the beginning of such period;
(d) the shareholders of Post approve any reorganization, merger,
consolidation or share exchange as a result of which the common
stock of Post shall be changed, converted or exchanged into or
for securities of another organization (other than a merger with
a Post Affiliate or a wholly-owned subsidiary of Post) or any
dissolution or liquidation of Post or any sale or the
disposition of 50% or more of the assets or business of Post; or
(e) the shareholders of Post approve any reorganization, merger,
consolidation or share exchange with another corporation unless
(i) the persons who were the beneficial owners of the
outstanding shares of the common stock of Post immediately
before the consummation of such transaction beneficially own
more than 60% of the outstanding shares of the common stock of
the successor or survivor corporation in such transaction
immediately following the consummation of such transaction and
(ii) the number of shares of the common stock of such successor
or survivor
A-1
corporation beneficially owned by the persons described in
sec. 2.3(e)(i) immediately following the consummation of such
transaction is beneficially owned by each such person in
substantially the same proportion that each such person had
beneficially owned shares of Post common stock immediately
before the consummation of such transaction, provided (iii) the
percentage described in sec. 2.3(e)(i) of the beneficially owned
shares of the successor or survivor corporation and the number
described in sec. 2.3(e)(ii) of the beneficially owned shares of
the successor or survivor corporation shall be determined
exclusively by reference to the shares of the successor or
survivor corporation which result from the beneficial ownership
of shares of common stock of Post by the persons described in
sec. 2.3(e)(i) immediately before the consummation of such
transaction.
sec. 2.4 Code. The term "Code" for purposes of this Plan shall mean the
Internal Revenue Code of 1986, as amended.
sec. 2.5 Committee. The term "Committee" for purposes of this Plan shall
mean the Compensation Committee of the Board or, if all the
members of such Compensation Committee do not meet the
requirements for an "outside director" under sec. 162(m) of the
Code, shall mean a sub-committee of such Compensation Committee,
all of the members of which meet such requirements.
sec. 2.6 Disability. The term "Disability" for purposes of this Plan
shall mean that an Eligible Executive is unable as a result of a
mental or physical condition or illness to perform the essential
functions of the Eligible Executive's job at Post or a Post
Affiliate even with reasonable accommodation for any consecutive
180-day period, all as reasonably determined by the Committee.
sec. 2.7 Effective Date. The term "Effective Date" for purposes of this
Plan shall mean either the date which includes the "closing" of
the transaction which makes a Change in Control effective if the
Change in Control is made effective through a transaction which
has a "closing" or the date a Change in Control is reported in
accordance with applicable law as effective to the Securities
and Exchange Commission if the Change in Control is made
effective other than through a transaction which has a
"closing".
sec. 2.8 Eligible Executive. The term "Eligible Executive" for purposes
of this Plan shall mean for each Performance Period an executive
of Post or a Post Affiliate for whom the Committee sets a Target
Bonus for such Performance Period.
sec. 2.9 Exchange Act. The term "Exchange Act" for purposes of this Plan
shall mean the Securities Exchange Act of 1934, as amended.
sec. 2.10 Gross Up Payment. The term "Gross Up Payment" for purposes of
this Plan shall mean a payment to or on behalf of an Eligible
Executive which shall be sufficient to pay (a) any excise tax
described in sec. 7 in full, (b) any federal, state and local
income tax and social security and other employment tax on the
payment made to pay such excise tax as well as any additional
taxes on such payment and (c) any interest or penalties assessed
by the Internal Revenue Service on the Eligible Executive which
are related to the payment of such excise tax unless such
interest or penalties are attributable to the Eligible
Executive's willful misconduct or gross negligence.
sec. 2.11 NAREIT Total Return Index. The term "NAREIT Total Return Index"
for purposes of this Plan shall mean the total return report
index which is prepared by the National Association of Real
Estate Investment Trusts for its universe of equity and other
REITs.
A-2
sec. 2.12 Performance Period. The term "Performance Period" for purposes
of this Plan means the three (3) consecutive calendar year
period which starts on January 1, 2002 and on each anniversary
of such date.
sec. 2.13 Plan. The term "Plan" shall mean this Post Properties, Inc.
2002 Shareholder Value Plan, as amended from time to time.
sec. 2.14 Post. The term "Post" for purposes of this Plan shall mean Post
Properties, Inc. and any successor to Post Properties, Inc.
sec. 2.15 Post Affiliate. The term "Post Affiliate" for purposes of this
Plan shall for any period mean any organization in which Post
has directly or indirectly an ownership interest and which is
designated as such for such period by the Committee.
sec. 2.16 REIT. The term "REIT" for purposes of this Plan shall mean a
real estate investment trust.
sec. 2.17 Target Bonus. The term "Target Bonus" for purposes of this Plan
shall mean the bonus target set by the Committee under sec. 3
for an Eligible Executive for a Performance Period.
sec. 2.18 Total Shareholder Return. The term "Total Shareholder Return"
for purposes of this Plan for any period shall mean the total
rate of return reported for each equity REIT in the NAREIT Total
Return Index for such period.
III. TARGET BONUS
The Committee for each Performance Period shall identify each Eligible
Executive of Post and each Post Affiliate and set a Target Bonus for each
such Eligible Executive. Such action shall be taken no later than the end
of the 90 day period which starts on the first day of such Performance
Period. An Eligible Executive's Target Bonus may be expressed as a
specific dollar figure or as a percentage of his or her base salary or
base salary and annual bonus for all or any part of such Performance
Period. The Committee shall notify an executive in writing that he or she
is an Eligible Executive for a Performance Period and such notice shall
set forth his or her Target Bonus and Post's Total Shareholder Return
benchmark rankings and the related Target Bonus payment percentages set in
accordance with sec. 4.2 for such Performance Period.
IV. TOTAL SHAREHOLDER RETURN
sec. 4.1 General. The percentage, if any, of an Eligible Executive's
Target Bonus which he or she will be eligible to receive under
sec. 5 after the end of a Performance Period shall be determined
by the Committee based on where Post's Total Shareholder Return
for such Performance Period ranks relative to the Total
Shareholder Return for each other equity REIT as reported for
such period in the NAREIT Total Return Index and on Post's
benchmark Total Shareholder Return rankings for such period and
the related Target Bonus payment percentages as set in accordance
with sec. 4.2.
sec. 4.2 Benchmark Rankings and Target Bonus Payment Percentages.
(a) Standard Rankings and Percentages. Absent the action required by
the Committee under sec. 4.2(b) to set any non-standard benchmark
Total Shareholder Return rankings for Post and any non-standard
target bonus payment percentages, the benchmark Total Shareholder
Return rankings for Post for a Performance Period and the target
A-3
bonus payment percentages for each Eligible Executive for a
Performance Period shall be as follows:
BENCHMARK RANKING: PERCENTAGE OF TARGET BONUS PAYABLE:
------------------ -----------------------------------
Under top 50%........................................ 0%
Top 50%.............................................. 50%
Top 45%.............................................. 75%
Top 40%.............................................. 100%
Top 35%.............................................. 125%
Top 30%.............................................. 150%
Top 25%.............................................. 175%
Top 20%.............................................. 200%
Top 15%.............................................. 250%
Top 10% or Higher.................................... 300%
(b) Non-Standard Rankings and Percentages. The Committee shall have
the discretion to set benchmark Total Shareholder Return rankings
for Post for any Performance Period and target bonus payment
percentages for each Eligible Employee for any Performance Period
which are different than the benchmark rankings and the target
bonus payment percentages described in sec. 4.2(a) provided that
such rankings and percentages are set before the end of the 90
day period which starts on the first day of such Performance
Period.
sec. 4.3 Interpolation. If Post's actual ranking for any Performance
Period falls in between two benchmark rankings for such
Performance Period, the Committee shall round Post's ranking to
the nearest whole number and shall compute the percentage of an
Eligible Executive's Target Bonus which he or she is eligible to
receive under sec. 5 by interpolation and shall round the
resulting percentage to the nearest whole percentage.
sec. 4.4 Certification. The Committee shall certify (in a manner which
satisfies the certification requirements of sec. 162(m) of the
Code) the computations made for each Eligible Executive for each
Performance Period under this sec. 4.
V. BONUS CAP AND BONUS PAYMENT
sec. 5.1 Bonus Cap. The bonus paid to any Eligible Executive for any
Performance Period shall not exceed $1,500,000.
sec. 5.2 Employment Rules.
(a) General Rule. No bonus shall (subject to sec. 5.2(b) and
sec. 5.2(c)) be paid under this Plan to an Eligible Executive
for a Performance Period unless he or she is employed by Post or
a Post Affiliate for the entire Performance Period.
(b) Exceptions for Death, Disability or Retirement. If during a
Performance Period an Eligible Executive's employment by Post or
a Post Affiliate terminates as a result of his or her death or a
Disability or terminates after he or she reaches age 60, his or
her bonus, if any, for such Performance Period as computed under
sec. 4 shall be paid after the end of such Performance Period to
such Eligible Executive or, in the event of his or her death, to
his or her Beneficiary; provided, however, if an Eligible
Executive's employment terminates as a result of his or her
death and his or her Beneficiary is his or her estate and his or
her estate requests that the Committee accelerate the
computation and payment of the bonus, if any, which will be
payable
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on behalf of the Eligible Executive in order to timely close the
Eligible Executive's estate, the Committee acting in its
absolute discretion may accelerate the computation and payment
of the Eligible Executive's bonus, if any, in accordance with
such procedures as the Committee deems appropriate and
reasonable if the Eligible Executive's estate waives (to the
Committee's satisfaction) any right to any re-computation of the
Eligible Executive's bonus at the end of the Performance Period.
(c) Deemed Employment. If an executive is first employed by Post or
a Post Affiliate during the 90 day period which starts on the
first day of a Performance Period and he or she becomes an
Eligible Executive at any time during such period, he or she
shall be deemed to be employed by Post or a Post Affiliate
throughout such 90 day period for purposes of satisfying the
employment requirement under sec. 5.2(a) for such Performance
Period.
sec. 5.3 Cash or Stock. Any bonus payable under this Plan shall (subject
to sec. 5.4) be paid at the discretion of the Committee in a
lump sum in cash or in whole shares of common stock of Post or
in any combination of cash and whole shares of common stock of
Post as the Committee deems appropriate, and payment shall be
made no later than the March 15 which immediately follows the
end of the Performance Period for which the payment is made. If
a bonus is paid in whole or in part in common stock of Post, the
value of the stock (for purposes of making such payment) shall
be treated as equal to the closing price of a share of such
common stock as reported in The Wall Street Journal for the last
trading day in the Performance Period for which the payment is
made. There shall be 200,000 shares of Post's common stock
available for payments under this Plan, and such number shall be
adjusted by the Committee in an equitable manner to reflect any
change in the capitalization of Post, including, but not limited
to, such changes as stock dividends or stock splits.
sec. 5.4 Deferral Election. An Eligible Executive shall have the right
to elect to defer the payment of any bonus to the extent that
Post maintains a deferred compensation plan which provides for
the deferral of any bonus otherwise payable under this Plan and
the Eligible Executive makes a proper and timely deferral
election under the terms of such deferred compensation plan. If
an Eligible Executive makes such a proper and timely deferral
election, such Eligible Executive shall be treated as if his or
her bonus was payable 100% in cash.
sec. 5.5 Beneficiary. Each Eligible Executive shall have the right to
designate a person, or more than one person, as his or her
Beneficiary to receive any bonus payable on his or her behalf
under this Plan in the event of his or her death. Any such
designation shall be made on a form provided for this purpose
and shall be effective when such form is properly completed and
delivered (in accordance with the instructions on such form) by
the Eligible Executive to Post before his or her death. An
Eligible Executive may change his or her Beneficiary designation
from time to time and, if an Eligible Executive changes his or
her Beneficiary designation at any time, his or her Beneficiary
shall be the person or persons designated on the last form which
is effective on his or her date of death. If no Beneficiary
designation is in effect on the date an Eligible Executive dies
or if no designated Beneficiary survives an Eligible Executive,
the Eligible Executive's estate automatically shall be treated
as his or her Beneficiary under this Plan.
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VI. CHANGE IN CONTROL
Each Performance Period which is in effect on the Effective Date of a
Change in Control shall terminate on such Effective Date, and a bonus
shall be paid under this sec. 6 in cash to each Eligible Executive who is
employed by Post or a Post Affiliate on such Effective Date for each such
Performance Period and to, or on behalf of, each Eligible Employee
described in sec. 5.2(b) on such Effective Date for each such Performance
Period. Such bonus shall equal to the greater of (a) his or her Target
Bonus for such Performance Period or (b) a bonus calculated using (1) the
benchmark rankings and the related target bonus payment percentages under
sec. 4.2(a), (2) his or her Target Bonus for such Performance Period and
(3) Post's Total Shareholder Return ranking for the period which began on
the first day of such Performance Period and ended as of the last day of
the calendar quarter ending immediately before such Effective Date as
shown in the NAREIT Total Return Index for such period. Any bonus paid
under this sec. 6 shall be paid in lieu of any bonus under sec. 5, and any
bonus payable under this sec. 6 shall be paid no later than 15 days after
such Effective Date or, if later, no later than 15 days after the
publication of the applicable NAREIT Total Return Index described in this
sec. 6.
VII. TAX PROTECTION
If Post or Post's independent accountants determine that the bonus
payments called for under sec. 6 of this Plan together with any other
payments and benefits made available to an Eligible Executive by Post or a
Post Affiliate will result in an Eligible Executive being subject to an
excise tax under sec. 4999 of the Code or if such an excise tax is
assessed against an Eligible Executive as a result of any such payments
and other benefits and there is no other separate, written agreement
between the Eligible Executive and Post which requires Post to make a
Gross Up Payment to, or on behalf of, the Eligible Executive, Post shall
make a Gross Up Payment to, or on behalf of, the Eligible Executive as and
when any such determination or assessment is made, provided the Eligible
Executive takes such action (other than waiving his or her right to any
payments or benefits in excess of the payments or benefits which an
Eligible Executive has expressly agreed to waive under this sec. 7) as
Post reasonably requests under the circumstances to mitigate or challenge
such tax; provided, however, if Post or Post's independent accountants
make such a determination and, further, determine that the Eligible
Executive will not be subject to any such excise tax if the Eligible
Executive waives his or her right to receive a part of the bonus payments
called for under sec. 6 of this Plan and such part does not exceed
$10,000, the Eligible Executive shall irrevocably waive his or her right
to receive such part of his or her bonus if an independent accountant or
lawyer retained by the Eligible Executive and paid by Post agrees with the
determination made by Post or Post's independent accountants with respect
to the effect of such reduction in bonus payments. Any determinations
under this sec. 7 shall be made in accordance with sec. 280G of the Code
and any applicable related regulations (whether proposed, temporary or
final) and any related Internal Revenue Service rulings and any related
case law and, if Post reasonably requests that the Eligible Executive take
action to mitigate or challenge, or to mitigate and challenge, any such
tax or assessment (other than waiving the Eligible Executive's right to
any payments or benefits in excess of the bonus payments which the
Eligible Executive has expressly agreed to waive under this sec. 7) and
the Eligible Executive complies with such request, Post shall provide the
Eligible Executive with such information and such expert advice and
assistance from Post's independent accountants, lawyers and other advisors
as the Eligible Executive may reasonably request and shall pay for all
expenses incurred in effecting such compliance and any related fines,
penalties, interest and other assessments.
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VIII. MISCELLANEOUS
sec. 8.1 Administration. The Committee shall have the power to take such
action in the administration and operation of this Plan as the
Committee in its absolute discretion deems necessary or
appropriate and which (to the extent practicable) is consistent
with Post's intention that any bonus paid under sec. 5 to an
Eligible Executive meets the requirements for performance-based
compensation under sec. 162(m) of the Code. Any decision by the
Committee under this sec. 8.1 shall be binding on Post, each
Post Affiliate, each Eligible Executive and each other person
who claims to have any interest under this Plan.
sec. 8.2 No Contract of Employment. The fact that an executive is an
Eligible Employee under this Plan for any Performance Period
shall not constitute a contract of employment for such
Performance Period between Post or any Post Affiliate and such
Eligible Executive and shall not otherwise have any effect on
the terms and conditions of his or her employment or the right
of Post or a Post Affiliate to terminate his or her employment
at any time.
sec. 8.3 No Assignment. Neither an Eligible Executive nor his or her
Beneficiary shall have the right to assign or to otherwise
alienate, commute or encumber any bonus payable under this Plan
for any reason whatsoever, and any attempt to do so shall be
treated as null and void under this Plan and shall be given no
force or effect whatsoever.
sec. 8.4 Construction. This Plan shall be construed in accordance with
the laws of the State of Georgia. Headings and subheadings have
been added only for convenience and shall have no substantive
effect whatsoever. All references to sections (sec. ) shall be
to sections (sec. ) of this Plan or, where specified, to the
Code.
sec. 8.5 Tax Withholdings and Offsets for Debts. Any bonus payable under
this Plan shall be paid subject to applicable tax withholding
and, if an Eligible Executive's employment terminates for any
reason before a bonus under this Plan (other than a bonus
payable under sec. 6) has been paid, Post shall have the right
to offset against and deduct from all or any part of such bonus
any outstanding indebtedness or other obligation he or she has
with or to Post or a Post Affiliate which is then due and
payable to Post or a Post Affiliate.
sec. 8.6 Amendment or Termination. The Committee shall have the right to
amend or terminate this Plan at any time and in any respect;
provided that (a) no amendment or termination shall have any
effect on an Eligible Executive's Target Bonus for any
Performance Period or his or her opportunity for the payment of
a bonus with respect to such Performance Period absent the
Eligible Executive's express written consent to such amendment
or termination and (b) the Committee shall not have any right to
amend this sec. 8.6.
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sec. 8.7 Shareholder Approval. This Plan shall be submitted to Post's
shareholders for approval at its 2002 shareholder meeting in
order to meet one of the conditions for each bonus paid under
this Plan to be treated as "performance-based" compensation
under sec. 162(m) of the Code, and any Target Bonus set before
such shareholder approval shall (by operation of this sec. 8.7)
automatically be set subject to such shareholder approval.
POST PROPERTIES, INC.
By: /s/ DAVID P. STOCKERT
------------------------------------
Title: President and Chief
Operating Officer
Date: March 29, 2002
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POST PROPERTIES, INC.
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 23, 2002
The undersigned hereby appoints David P. Stockert and Sherry W. Cohen each,
proxies, with full power of substitution and resubstitution, for and in the
name of the undersigned, to vote all shares of common stock of Post Properties,
Inc. The undersigned would be entitled to vote these shares if personally
present at the Annual Meeting of Shareholders, or at any adjournment thereof.
The Annual Meeting will be held on Thursday, May 23, 2002, at 9:00 a.m., local
time, at One Riverside, 4401 Northside Parkway, Suite 800, Atlanta, Georgia.
The undersigned acknowledges receipt of the accompanying Notice of Annual
Meeting of Shareholders and Proxy Statement, and will vote on the matters
described in both and upon any other business that may properly come before the
Annual Meeting of Shareholders or any adjournment thereof. Said proxies are
directed to vote on the matters described in the Notice of Annual Meeting of
Shareholders and Proxy Statement as follows, and otherwise in their discretion
upon such other business as may properly come before the Annual Meeting of
Shareholders or any adjournment thereof.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING ON MAY
23, 2002. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
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Please sign exactly as your name or names appear hereon. For more than one
owner, each should sign. When signing in a fiduciary or representative
capacity, please give full title. If this proxy is submitted by a corporation,
it should be executed in the full corporate name by a duly authorized officer.
If a partnership, please sign in partnership name by authorized person.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
----------------------------------- -----------------------------------
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[X] Please mark
votes as in
this example.
1. To elect two (2) directors to serve until the 2005 Annual Meeting of
Shareholders:
(01) Charles E. Rice
(02) John A. Williams
FOR WITHHOLD
ALL FROM ALL
NOMINEES [ ] [ ] NOMINEES
[ ]
------------------------------------------------
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write that nominee's name in the
space provided above.)
FOR AGAINST ABSTAIN
2. To approve the Shareholder Value Plan. [ ] [ ] [ ]
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR THE ABOVE-STATED PROPOSALS.
Mark box at right if an address change or comment has been
noted on the reverse side of this card. [ ]
Please be sure to sign and date this Proxy.
Signature: Date:
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Signature: Date:
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