-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Hg/5bc8z+L/YTNVjTQm1IravjdCmwsEuBv5I5wADr+hvMReJsEdTW5l0wSB39BuD HAgzzPYp72Rth3ZRE7TRnQ== 0000897069-97-000186.txt : 19970429 0000897069-97-000186.hdr.sgml : 19970429 ACCESSION NUMBER: 0000897069-97-000186 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970428 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGENCY REALTY CORP CENTRAL INDEX KEY: 0000910606 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 593191743 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12298 FILM NUMBER: 97588470 BUSINESS ADDRESS: STREET 1: 121 WEST FORSYTH ST STREET 2: STE 200 CITY: JACKSONVILLE STATE: FL ZIP: 32202 BUSINESS PHONE: 9043567000 MAIL ADDRESS: STREET 1: 121 W FORSYTH STREET STREET 2: SUITE 200 CITY: JACKSONVILLE STATE: FL ZIP: 32202 10-K/A 1 REGENCY REALTY CORPORATION'S 10-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 1 (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1996 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transaction period from _________ to ____________ Commission File No. 1-12298 REGENCY REALTY CORPORATION (Exact name of registrant as specified in its charter) Florida 59-3191743 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 121 West Forsyth Street, Suite 200 (904) 356-7000 Jacksonville, Florida 32202 (Registrant's Telephone No.) (Address of principal executive offices) (zip code) Securities registered under Section 12(b) of the Act: Common Stock, $.01 par value (Title of Class) New York Stock Exchange (Name of exchange on which registered) Securities registered pursuant to Section(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YES (X) NO ( ) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K/A or any amendment to this Form 10-K/A. (X) The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $165,638,487 based on the closing price on the New York Stock Exchange for such stock on March 20, 1997. The approximate number of shares of Registrant's Common Stock outstanding was 12,323,183 as of March 21, 1997. Documents Incorporated by Reference None. PART III Item 10. Directors and Executive Officers of the Registrant The Company's Amended and Restated Articles of Incorporation divide the Board of Directors into three classes, as nearly equal in number as possible. Information concerning all incumbent directors and all nominees for director who will stand for election at the Company's 1997 annual meeting of shareholders, based on data furnished by them, is set forth below. Martin E. Stein, Jr. and Richard W. Stein are brothers, and Joan W. Stein is their mother. Mr. Underhill and Ms. Rogers have been nominated by Security Capital as its representatives to the Company's Board of Directors pursuant to a Stockholders Agreement between the Company and Security Capital, which gives Security Capital the right, under certain circumstances, to nominate for election by shareholders its proportionate share of the members of the Board (but generally not fewer than two, nor more than 49% of the directors). Shares of Company Common Stock Owned Year Beneficially Positions with the First as of Class/ Company; Principal Became March 1, Term Occupations During Director 1997 Expires Past Five Years; of the (% of Name Age (1) Other Directorships Company Class)(2) Joan W. Class Chairman of the Board 1993 586,461(3) Stein*+ III and Director of the (4.8%) (68) 1999 Company; Chairman since 1968 of The Regency Group, Inc. ("TRG"), which transferred substantially all the assets of its real estate division to the Company upon the closing of the Company's initial public offering in November 1993; retired as a director of Barnett Bank of Jacksonville, N.A. in 1995. Martin E. Class President, Chief 1993 712,216(3)(4) Stein, Jr.*+ II Executive Officer and (5.8%) (44) 1998 Director of the Company; President and Chief Executive Officer of TRG since 1988 and President of TRG's real estate division since 1981; director of FRP Properties, Inc., a publicly held transportation and real estate company. Richard W. Class I President and Chief 578,146(3) Stein nominee Executive Officer of (41) Palmer & Cay of (4.7%) Florida, Inc., an insurance agency, since 1993; Executive Vice President and director of TRG, 1989 to present. Douglas S. Class I Director of the 1993 12,123(5) Luke= 1997 Company; President (55) and Chief Executive Officer since 1991 of WLD Enterprises, Inc., a Ft. Lauderdale, Florida based diversified private investment and management company with interests in securities, real estate and operating businesses; managing director of Rothschild Inc./Rothschild Ventures from 1987 to 1990; director of DNA Plant Technology Corporation, an agricultural biotechnology corporation, Orbital Sciences Corporation, a space systems company, and Westvaco Corporation, a diversified paper and chemicals manufacturing company. Mary Lou Class I Managing Director of N/A -- Rogers nominee Security Capital (45) Strategic Group Incorporated, an affiliate of Security Capital, since March 1997, responsible for developing retail operating systems for Security Capital retailing-related initiatives; Senior Vice President, Director of Stores- New England, for Macy's East/Federated Department Stores from 1994 to March 1997; Senior Vice President, Director of Stores for Henri Bendels from 1993 to 1994; Senior Vice President, Regional Director of Stores for the Burdines Division of Federated Department Stores, from 1991 to 1993. A. R. Class Director of the 1993 10,623(5) Carpenter#+ II Company; President (55) 1998 and Chief Executive Officer (since January 1992) of CSX Transportation, Inc., with which he has held a variety of positions since 1962, including Executive Vice President-Sales and Marketing (from 1989 to 1992); director of Barnett Banks, Inc., a Jacksonville based bank holding company, and its affiliate, Barnett Bank of Jacksonville, N.A., Florida Rock Industries, Inc., Stein Mart, Inc., a Jacksonville based discount retailer, and American Heritage Life Insurance Company. J. Dix Druce, Class Director of the 1993 10,039(5) Jr.= II Company; President (49) 1998 and director of Life Service Corp., Inc., a life insurance management company, since 1988; Chairman of the Board and President of American Merchants Life Insurance Company and its parent, AML Acquisition Company, since October 1992; President and director (Chairman from May 1989 to July 1991) of National Farmers Union Life Insurance Company from 1987 to 1991; President and director of Loyalty Life Insurance Company and NFU Acquisition Company from 1987 to 1991; director of American National Bank of Florida. Edward L. Class Director of the 1993 12,271(5) Baker#+ III Company; Chairman of (62) 1999 the Board of Florida Rock Industries, Inc., a publicly held construction materials company listed on the American Stock Exchange, and its affiliate, FRP Properties, Inc., since May 1989 and President from 1967 to May 1989; director of American Heritage Life Insurance Company, based in Jacksonville, Florida, and Flowers Industries, a producer of baked goods located in Thomasville, Georgia. J. Alexander Class Founder, Chairman and 1997 67,616 Branch III III Chief Executive (55) nominee Officer for more than five years of Branch Properties, L.P. and predecessors, prior to the transfer by it of substantially all its assets to a partnership controlled by the Company. Albert Class Director of the 1993 9,617(5) Ernest, Jr.#+ III Company; President of (66) 1999 Albert Ernest Enterprises, a consulting and investment firm; director of Barnett Banks, Inc., from 1982 until 1991, President and Chief Operating Officer from November 1988 until his retirement in 1991, and Vice Chairman from 1984 to 1988; director of Florida Rock Industries, Inc., and its affiliate, FRP Properties, Inc., Stein Mart, Inc., a publicly held discount apparel chain based in Jacksonville, Florida, Emerald Funds and Wickes Lumber Co., a publicly held retailer and distributor of building materials. Robert S. Class Senior Vice President N/A -- Underhill III of Security Capital (41) nominee Strategic Group, Inc., from 1995 to present, where he is responsible for researching corporate and portfolio acquisitions; Senior Vice President, LaSalle Partners Limited, a real estate investment firm, from 1993 to 1994; and Vice President of its affiliate, LaSalle Partners International, from 1990 to 1993. _________________________ * Member of the Executive Committee, any meeting of which also must include any one of the outside directors. = Member of the Audit Committee. # Member of the Compensation Committee. + Member of the Nominating Committee. (1) The Company's Amended and Restated Articles of Incorporation divide the Board of Directors into three classes, as nearly equal in number as possible, with directors elected for three-year terms. (2) Where percentage is not indicated, amount is less than 0.1% of total outstanding Common Stock. Unless otherwise noted, all shares are owned directly, with sole voting and dispositive powers. (3) Includes 160,263 shares held through The Regency Group, Inc. The named individual is deemed to have shared voting and investment power over these shares by virtue of testamentary trusts and a voting trust of which the Steins and John D. Baker, II are trustees, which trusts own 100% of the voting stock of The Regency Group, Inc. Also includes 307,147 shares and 108,235 shares held through two family partnerships, The Regency Group II and Regency Square II, respectively. The general partners of The Regency Group II and Regency Square II are the Steins, and a testamentary trust of which the Steins and Mr. Baker are trustees. (4) Includes 40,000 shares subject to presently exercisable options. (5) Includes 5,000 shares subject to presently exercisable options. Item 11. Executive Compensation The following table summarizes the compensation paid or accrued by the Company for services rendered during fiscal 1996, 1995 and 1994 to the Company's Chief Executive Officer and to the Company's four most highly compensated executive officers whose total salary and bonus exceeded $100,000 during the year ended December 31, 1996. SUMMARY COMPENSATION TABLE
Long-Term Annual Compensation Compensation Restricted Securities Name & Principal Cash Stock Stock Underlying SPP Loan All Other Position Year Salary(1) Bonus(2) Bonus(2) Awards(3) Options/SARs Awards(4) Compensation(5) Martin E. Stein, Jr. 1996 $252,391 $102,250 $123,750 $168,000 0 $186,338 $34,439 President and Chief 1995 240,000 56,760 86,640 0 0 103,950 23,331 Executive Officer 1994 230,000 1,000 94,500 0 0 69,300 11,868 Bruce M. Johnson 1996 145,076 52,750 63,250 84,000 0 84,083 19,753 Executive Vice 1995 135,000 29,560 42,840 0 0 41,580 14,142 President and Chief 1994 123,000 1,000 46,370 0 0 27,720 12,019 Financial Officer Robert C. Gillander, Jr. 1996 137,500 50,005 59,895 73,500 0 80,502 18,266 Executive Vice 1995 125,000 25,000 36,000 0 0 41,580 13,175 President, Investments 1994 116,000 1,000 40,320 0 0 27,720 11,736 James D. Thompson 1996 129,826 47,350 56,650 68,250 0 71,185 17,929 Executive Vice 1995 121,000 25,840 37,260 0 0 36,383 12,930 President, Operations 1994 116,000 1,000 40,320 0 0 24,256 11,648 Richard E. Cook 1996 125,114 31,000 30,000 68,250 0 74,535 17,038 Senior Vice President, 1995 121,000 23,560 33,840 0 0 41,580 12,930 Development(6) 1994 116,000 1,000 40,320 0 0 27,720 12,040 _________________________ (1) Includes amounts deferred under the 401(k) feature of the Company's profit sharing plan. (2) Bonuses for the year ended December 31, 1996 were paid 45% in cash and 55% in stock; for the year ended December 31, 1995 were paid 40% in cash and 60% in stock; and for the year ended December 31, 1994 were paid 100% in stock. (3) Consists of the fair market value of restricted stock awards on December 31, 1996, the date of grant. Awards vest 34%, 33% and 33% on the first, second and third anniversary date of the grant provided that the executive is employed by the Company or any affiliate on the date of vesting, except that Mr. Cook's award could vest in full in January 1998, subject to the provisions of his termination agreement. The executive is entitled to dividends and voting rights on unvested shares. Unvested shares, representing the full amount of the awards listed above, held by the named executives as of the date of this Proxy Statement are as follows: Mr. Stein, 6,400 shares; Mr. Johnson, 3,200 shares; Mr. Gillander, 2,800 shares; Mr. Thompson, 2,600 shares; and Mr. Cook, 6,500 shares. (4) Represents amounts earned by the named executive officers in accordance with the terms of Stock Purchase Plan that is part of the Company's 1993 Long Term Omnibus Plan. (5) Consists of (a) contributions in the form of stock to the Company's profit sharing and 401(k) plan for 1996, 1995 and 1994, the non- 401(k) portion of which was based on the attainment of predetermined levels of funds from operations per share, and stock bonuses in the amount equal to what would have been contributed to the 401(k) plan in the absence of applicable IRS limitations: Mr. Stein, $33,629, $22,521 and $11,448; Mr. Johnson, $18,943, $13,332 and $11,448; Mr. Gillander, $13,456, $12,365 and $11,448; Mr. Thompson, $17,119, $12,120 and $11,448; and Mr. Cook, $16,228, $12,120 and $11,448; and (b) excess term life insurance premiums for 1996, 1995 and 1994: Mr. Stein, $810, $810 and $420; Mr. Johnson, $810, $810 and $571; Mr. Gillander, $810, $810 and $288; Mr. Thompson, $810, $810 and $200 and Mr. Cook, $810, $810 and $592. (6) Mr. Cook resigned from the Company effective January 31, 1997.
Employment Agreements. The Company has entered into a three-year employment agreement with Martin E. Stein, Jr., the Company's President and Chief Executive Officer, providing for an annual base salary and participation in the Company's executive compensation plans on the same terms as other executive officers. The agreement, which was effective in October 1993, will be renewed automatically for an additional year on each anniversary date thereof so that the remaining term will be three years, unless either party gives written notice of non-renewal. The agreement provides for Mr. Stein to receive base salary and incentive compensation for the remainder of the term of the agreement in the event that he is terminated, his responsibilities are materially reduced or the Company's headquarters are relocated from Jacksonville, Florida as a result of a sale, merger or other change of control of the Company. The Company has entered into agreements with its executive officers that provide for the payment of salary and benefits for a specified period in the event of a change of control only. A change of control is defined to include a change in at least one-third of the directors (unless recommended by a majority of the continuing directors), the acquisition by any person of at least 30% of the combined voting power of the Company's outstanding securities unless pursuant to transactions approved by a majority of the continuing directors, certain mergers, and a sale of substantially all the Company's assets. Options. The following table sets forth information concerning the value of unexercised options as of December 31, 1996 held by the executives named in the Summary Compensation Table above. No options were exercised during 1996. OPTION YEAR-END VALUES TABLE Number of Unexercised Value of Unexercised Options at December 31, In-the-Money Options at 1996 December 31, 1996 Name Exercisable/Unexercisable Exercisable/Unexercisable Martin E. Stein, Jr. 40,000 (E) / 0 (U) $280,000 Bruce M. Johnson 16,000 (E) / 0 (U) 112,000 Robert C. Gillander, 16,000 (E) / 0 (U) 112,000 Jr. James D. Thompson 14,000 (E) / 0 (U) 98,000 Richard E. Cook 16,000 (E) / 0 (U) 112,000 _________________________ Stock Purchase Plan Loans. To further align the interest of management with the Company's shareholders, the Company has implemented a stock purchase plan ("SPP") as part of its Long-Term Omnibus Plan to encourage stock ownership by management. Management purchased 226,000 shares under this program during 1993 and 1996 at fair market value at the time of purchase. The stock purchases were funded by SPP loans from the Company (averaging 92% of the purchase price) and cash provided directly from management. The current SPP loans outstanding are fully secured by a portion of the stock purchased, have full recourse to management, are interest only (due quarterly) with fixed rates of interest of 7.34% to 7.79%, and mature in 10 years. As part of the program, a portion of the loans may be forgiven annually based on Company FFO performance, and total shareholder return. The following table sets forth as of March 1, 1997, the amounts outstanding under the SPP loan program from each of the Company's executive officers. SPP Loan Balance Largest Balance Executive Officer March 1, 1997 Since January 1, 1996 Martin E. Stein, Jr. $651,662 $838,000 Bruce M. Johnson 314,767 398,850 Robert C. Gillander, Jr. 294,479 374,981 James D. Thompson 261,896 333,081 Richard E. Cook 163,645 335,200 Compensation of Directors. In 1996, the Company paid an annual fee of $17,000 to each of its directors, other than the Chairman and the President, plus $2,500 per year for service on a Board committee ($3,000 per year for chairing a committee). Directors' fees are currently paid in shares of Common Stock, unless the director elects to receive all or any portion of the fees in cash. Non-employee directors also receive non-qualified options to purchase 1,000 shares of Common Stock at the end of each year and may elect to participate in a stock purchase matching program that provides for a total stock value match of up to $10,000 per year. The options vest one year after grant and have a term of ten years and an exercise price equal to the greater of the fair market value of the Common Stock on the date of grant or the average trading price of the Common Stock on the 20 business days preceding the date of grant. Compensation Committee Interlocks and Insider Participation During the year ended December 31, 1996, Martin E. Stein, President and Chief Executive Officer of the Company, served on the board of directors of FRP Properties, Inc. Edward L. Baker, Chairman of the Board of FRP Properties, Inc. is a member of the Company's Compensation Committee. Item 12. Security Ownership of Certain Beneficial Owners and Management The following table shows certain information relating to the beneficial ownership as of March 1, 1997 of (i) each person known to the Company to be the beneficial owner of more than 5% of the Company's Common Stock, which is the only outstanding class of voting securities of the Company, (ii) each director and nominee for director, (iii) each of the named executive officers shown in the Summary Compensation Table elsewhere herein, and (iv) all directors and executive officers as a group. Except as otherwise indicated, the shareholders listed exercise sole voting and dispositive power over the shares. Percent Amount and Nature of of Voting Beneficial Owner(1) Beneficial Ownership Securities(2) Security Capital U.S. ) 5,246,078 42.6% Realty(3) ) Security Capital Holdings ) S.A. ) AXA Assurances I.A.R.D. ) Mutuelle(4) ) ) AXA Assurances Vie ) Mutuelle(4) ) ) Alpha Assurances ) 623,700(6) 5.1% I.A.R.D. Mutuelle(5) ) ) Alpha Assurances ) Vie Mutuelle(5) ) ) Uni Europe Assurance ) Mutuelle(7) ) ) AXA(8) ) ) The Equitable Companies ) Incorporated(9) ) Joan W. Stein(10) ) ) Martin E. Stein, Jr.(10) ) ) Richard W. Stein(11) ) 733,440(12)(13) 5.9% ) Robert L. Stein(14) ) ) John D. Baker II(15) ) Edward L. Baker 12,271(16) * A.R. Carpenter 10,623(16) * J. Dix Druce, Jr. 10,039(16) * Albert Ernest, Jr. 9,617(16) * Douglas S. Luke 12,123(16) * Paul E. Szurek 4,078(16) * J. Marshall Peck 4,728(16) * J. Alexander Branch III 67,616(17) Mary Lou Rogers(18) -- -- Robert S. Underhill(18) -- -- Bruce M. Johnson 58,717(13)(19) * Robert C. Gillander, Jr. 55,180(19) * James D. Thompson 47,952(19) * Richard E. Cook(20) 54,857(19) All directors, nominees for 1,026,384(21) 8.2% director and executive officers as a group (a total of 17 persons) ________________________ * Less than one percent. (1) Information presented in this table and related notes has been obtained from the beneficial owner and from reports filed by the beneficial owner with the Securities and Exchange Commission pursuant to Section 13 of the Securities Act of 1934. (2) The percentages shown on the above table do not take into account the shares of Common Stock issuable upon conversion of the Company's Class B Non-Voting Stock (the "Class B Stock"). The Company has outstanding a total of 2,500,000 shares of Class B Stock held by a single institutional investor which are convertible into Common Stock at the holder's option beginning December 20, 1998, subject to certain numerical limitations, including a requirement that conversion not result in the holder being the beneficial owner of more than 4.9% of the Company's outstanding Common Stock. The Class B Stock will be immediately convertible into Common Stock in full upon the occurrence of certain extraordinary events or defaults, including certain changes in management. A total of 2,975,468 shares of Common Stock are issuable upon conversion of the Class B Stock. Based on the number of shares of Common Stock outstanding on the record date for the annual meeting (and assuming no other changes), the 2,975,468 shares of Common Stock issuable upon conversion of the Class B Stock would constitute approximately 19.4% of the Common Stock outstanding immediately following conversion. (3) The business address of Security Capital U.S. Realty and Security Capital Holdings S.A. (collectively, "Security Capital") is 69, route d'Esch, L-1470 Luxembourg. (4) The business address of AXA Assurances I.A.R.D. Mutuelle and AXA Assurances Vie Mutuelle is La Grande Arche, Pardi Nord, 92044 Paris La Defense France. (5) The business address of Alpha Assurances I.A.R.D. Mutuelle and Alpha Assurances Vie Mutuelle is 101-100 Terrasse Boieldieu, 92042 Paris La Defense France. (6) AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, Alpha Assurances I.A.R.D. Mutuelle, Alpha Assurances Vie Mutuelle, Uni Europe Assurance Mutuelle and AXA, as a group, disclaim any beneficial ownership of these shares which include 64,000 shares over which the reporting parties exercise shared voting power. (7) The business address of Uni Europe Assurance Mutuelle is 24 Rue Drouot, 75009 Paris France. (8) The business address of AXA is 23 Avenue Matignon, 75008 Paris France. (9) The business address of The Equitable Companies Incorporated is 787 Seventh Avenue, New York, New York 10019. (10) The business address of Joan W. Stein and Martin E. Stein, Jr. is 121 West Forsyth Street, Suite 200, Jacksonville, Florida 32202. (11) The business address of Richard W. Stein is 1650 Prudential Drive, Suite 304, Jacksonville, Florida 32207. (12) Includes 160,263 shares held through The Regency Group, Inc. The named individual is deemed to have shared voting and investment power over these shares by virtue of testamentary trusts and a voting trust of which the Steins and John D. Baker, II are trustees, which trusts own 100% of the voting stock of The Regency Group, Inc. Also includes: 307,147 shares and 108,235 shares owned through two family partnerships, The Regency Group II and Regency Square II, respectively. The general partners of The Regency Group II and Regency Square II are the Steins and a testamentary trust of which the Steins and Mr. Baker are trustees. Also includes: 10,816 shares owned by Joan W. Stein, individually; 92,571 shares owned by Martin E. Stein, Jr., individually; 40,000 shares subject to presently exercisable options held by Martin E. Stein, Jr.; 4,000 shares held by a trust of which Martin E. Stein, Jr. is the beneficiary; 1,305 shares held for the benefit of Martin E. Stein, Jr.'s minor children over which he has sole voting and dispositive power; 2,501 shares owned by Richard W. Stein, individually; 3,407 shares owned by Robert L. Stein, individually; 2,000 shares subject to presently exercisable options held by Robert L. Stein; and 2,500 shares held for the benefit of Robert L. Stein's minor children, over which he has sole voting and dispositive power. (13) Excludes 46,691 shares held by the Company's 401(k) plan, of which Messrs. Martin E. Stein, Jr. and Johnson are trustees. The trustees have shared voting power over these shares. (14) Robert L. Stein's business address is 1610 Independent Square, Jacksonville, Florida 32202. (15) Mr. Baker's business address is 155 E. 21st Street, Jacksonville, Florida 32206. (16) Includes the following shares covered by presently exercisable options: Mr. Baker, 5,000 shares; Mr. Carpenter, 5,000 shares; Mr. Druce, 5,000 shares; Mr. Ernest, 5,000 shares; Mr. Luke, 5,000 shares; Mr. Szurek, 3,000 shares; and Mr. Peck, 3,000 shares. (17) Excludes 80,309 shares issuable upon redemption of limited partnership units held by Mr. Branch and 2,228 shares issuable upon redemption of limited partnership units held by Mr. Branch's wife as trustee for the benefit of their children. (18) Nominee for director. (19) Includes the following shares covered by presently exercisable options: Mr. Johnson, 16,000 shares; Mr. Gillander, 16,000 shares; Mr. Thompson, 14,000 shares; and Mr. Cook, 16,000 shares. (20) Mr. Cook resigned as Senior Vice President, Development, effective January 31, 1997. (21) Includes 119,000 shares subject to presently exercisable options. Security Capital has agreed to a five-year standstill (renewable for additional one-year terms) in its Stockholders Agreement with the Company, as amended, pursuant to which Security Capital may not, among other things, (i) acquire more than 45% of the Company's outstanding Common Stock on a fully diluted basis, (ii) transfer shares in a negotiated transaction that would result in any transferee beneficially owning more than 9.8% of the Company's capital stock unless the Company approves the transfer, in its sole discretion, (iii) act in concert with any third parties as part of a 13D group, or (iv) seek to change the composition or size of the Board of Directors (except as provided in the Stockholders Agreement with respect to Security Capital's representation on the Board). During the standstill term, Security Capital is generally required to vote its shares of Common Stock in accordance with the recommendation of the Company's Board of Directors or proportionally in accordance with the vote of the other holders of the Common Stock except with respect to the election of Security Capital's nominees to the Company's Board (as to which Security Capital can vote its shares in its sole discretion) and with respect to an amendment to the Company's Articles of Incorporation or Bylaws and certain extraordinary matters (as to which Security Capital may vote Common Stock owned by it up to 40% of the outstanding shares). The standstill will terminate automatically prior to the end of its stated term upon the occurrence of certain events, including the acquisition by another person or group of 9.8% or more of the voting power of the Company's outstanding voting securities. Opportunity Capital Partners II Limited Partnership, a Maryland limited partnership ("OCP"), is expected to have beneficial ownership of more than 9.8% of the Common Stock following the exercise by it of redemption rights with respect to units of limited partnership interest that are redeemable for Common Stock. Security Capital has agreed that the standstill will not be terminated by OCP's exercise of redemption rights so long as the shares acquired by OCP as a result of such exercise are held directly and beneficially by OCP. The waiver of the termination of the standstill also extends to (i) 225,930 shares beneficially owned for various managed accounts by ABKB/LaSalle Securities Limited, an affiliate of OCP's general partner ("ABKB/LaSalle") (including 32,200 shares held in a discretionary account for the benefit of OCP's limited partner), but only to the extent that such shares are continuously held in each such account, and (ii) up to 4.9% of the outstanding Common Stock beneficially owned as a result of the conversion of Class B Stock, which is beneficially owned by an affiliate of ABKB/LaSalle for another client. However, the waiver will terminate as to all the shares described above if OCP, ABKB/LaSalle, any other affiliate of OCP, or any member of a group of which OCP is a member acquires beneficial ownership of any additional voting securities of the Company or takes any other actions that would otherwise result in the termination of the standstill. During the standstill period, OCP has agreed with the Company that OCP will not, and OCP and ABKB/LaSalle have agreed that they will not cause other managed accounts for OCP's limited partner (collectively with OCP, the "OCP Accounts") to acquire additional shares (i) so long as OCP continues to beneficially own more than 9.8% of the Common Stock, on a fully diluted basis, or (ii) thereafter if, after giving effect to the acquisitions, the OCP Accounts would own more than 9.8% of the Common Stock, on a fully diluted basis. However, neither ABKB/LaSalle nor any of its affiliates is so bound with respect to any of their other clients or accounts. Accordingly, if ABKB/LaSalle becomes the beneficial owner of any shares that are not exempted from the standstill waiver as described above (or if any of the exempted shares are transferred between ABKB/LaSalle affiliates even though their aggregate beneficial ownership does not decrease), then all shares beneficially owned by OCP, ABKB/LaSalle and their affiliates will be counted in determining whether Security Capital's standstill has terminated. If after any such event such persons then beneficially own more than 9.8% of the outstanding Common Stock, the standstill will terminate, and Security Capital will not be restricted in the voting of the shares that it owns or in any other action that it might take as a shareholder of the Company. Item 13. Certain Relationships and Transactions The Audit Committee of the Board of Directors is responsible for evaluating the appropriateness of all related-party transactions. Company Option on TRG Properties. TRG and Joan W. Stein, Martin E. Stein, Jr. and Robert L. Stein (who are directors of the Company, and together with Richard W. Stein, the "Steins") have retained interests in properties that were determined not to be appropriate for ownership by the Company initially because their transfer is restricted or because they lack cash flow or are of a type presently inconsistent with the Company's investment objectives. Upon consummation of the Company's initial public offering in 1993, TRG granted options to the Company for all of the properties (the "Option Properties") that TRG has the right to option and that are likely to become suitable for Company investment, e.g., land that can be developed into shopping centers or suburban office buildings. One of the Option Properties consists of a 19-story downtown office building in Fort Lauderdale, Florida ("BBP"), as to which the Company has been granted a right of first refusal. The remaining Option Properties consist of land in Florida that does not produce any cash flow. The Company has an option to purchase any of these properties, in whole or in part, for development as a Company property at a price equal to the sum of (i) 85% of the appraised value of the property multiplied by the percentage interest of TRG in the partnership that owns the property, plus (ii) 100% of the appraised value of the property multiplied by the percentage interest of any existing third party partners who also own an interest in the property. Management Services for TRG and its Affiliates. The Company, through its affiliate Regency Realty Group, Inc. (the "Management Company"), provides management and leasing services for BBP, and also will receive brokerage fees for arranging the sale of any of the Option Properties, in the event the Company does not acquire them, and development fees for providing development services for the Option Properties that consist of land held for sale. These arrangements are intended to give the Company the economic benefit from the management, leasing, brokerage and development activities with respect to such properties. All of such services are provided on terms and conditions no less favorable to the Management Company than the terms and conditions on which the Management Company provides similar services to third parties. The Audit Committee of the Board of Directors is required to review annually the terms and conditions on which such services are provided. During the year ended December 31, 1996, TRG paid the Management Company an aggregate of $413,199 for such services. The Management Company also will receive incentive compensation for developing certain Option Properties for others and for arranging the sale of certain Option Properties as to which the Company elects not to exercise its options in the form of a share of TRG's net proceeds from such activities in excess of specified levels. Administrative Services for TRG and its Affiliates. From time to time, certain personnel of the Company or its subsidiaries provide risk management, accounting, office space and other services to TRG and certain of its affiliates, including the Steins, pursuant to an administrative services agreement entered into in November 1993. The cost of such services are reimbursed by TRG based on percentage allocations of management time and general overhead made in compliance with applicable regulations of the Internal Revenue Service. The Audit Committee of the Board of Directors is required to review annually the cost allocations made pursuant to the administrative services agreement. During the year ended December 31, 1996, $95,000 was reimbursed to the Company under this agreement. Cost Sharing Arrangement with Management Company. The Company manages, leases and develops its own properties under employee and cost sharing arrangements with the Management Company. TRG owns 95% of the voting common stock of the Management Company, and the Company owns 100% of the Management Company's non-voting preferred stock and 5% of its voting common stock. The cost sharing arrangements are based on allocations of management time and general overhead made on an arm's-length basis and in compliance with applicable regulations of the Internal Revenue Service. All such cost sharing arrangements must be reviewed annually by the Audit Committee of the Board of Directors, and any changes in such arrangements must be approved by a majority of the Company's independent directors. Under generally accepted accounting principles, all items of income and expense of the Management Company are consolidated with the Company and included in the Company's financial statements, net of inter-company transactions. Limited Partnership Agreement with WLD Enterprises, Inc. The Company, through its subsidiary RRC JV One, Inc., has entered into a limited partnership with WLD Realty, Ltd. known as Regency Ocean East Partnership, Ltd. in which the Company, as general partner, owns a twenty-five percent (25%) interest and WLD Realty, Ltd., as limited partner, owns a seventy-five percent (75%) interest. Douglas S. Luke, a director of the Company, is President and Chief Executive Officer of WLD Enterprises, Inc. ("WLD"), an affiliate of WLD Realty, Ltd., and also owns a 3.85% interest in WLD Realty, Ltd. The purpose of the partnership is to operate Ocean East, a Florida shopping center. Each partner contributed their pro rata share of capital on the closing date, January 31, 1996. Future distributions from the operations of the shopping center will be made pro rata until each partner has achieved a cumulative internal rate of return of 12%, then distributions will be 50% to each partner. In the event of sale or refinancing, distributions to each partner after return of capital will be pro rata and after an IRR of 18% will be 50% to each partner. In the opinion of the Board of Directors, the terms of the partnership agreement are at least as favorable as those that could be obtained from entering into a partnership with an unrelated party. Consulting Services from Security Capital Affiliate. Security Capital Investment Research, Inc.("SCII"), an affiliate of Security Capital, provides consulting services from time to time on an as-needed basis to the various entities in which Security Capital has invested. During the year ended December 31, 1996, the Company accrued consulting fees and expenses to SCII of approximately $95,000, primarily for due diligence assistance in connection with the Branch Transaction. Other. Richard W. Stein, a nominee for director and the son and brother, respectively, of Joan W. Stein, the Company's Chairman, and Martin E. Stein, Jr., the Company's President and a director, is President and Chief Executive Officer, and a director of Palmer & Cay/Carswell, Inc., an independent insurance agency. During the year ended December 31, 1996, the Company obtained insurance through Palmer & Cay/Carswell for which Palmer & Cay/Carswell received commissions in the aggregate amount of approximately $127,000. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly executed this report to be signed on its behalf by the undersigned, thereunto duly authorized. REGENCY REALTY CORPORATION Date: April 28, 1997 By: /s/ Martin E. Stein, Jr. Martin E. Stein, Jr. President and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----