-----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, Pb3lq1OrqlR8CZaLL/sS0ssvYXcy8Rgu9sR5jEnduTVTUhqt8rQAV2pooeVVdBuk lZVbRYcGlWcdmHi7qqgHxw== 0000890566-99-000565.txt : 19990430 0000890566-99-000565.hdr.sgml : 19990430 ACCESSION NUMBER: 0000890566-99-000565 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990603 FILED AS OF DATE: 19990429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MID AMERICA APARTMENT COMMUNITIES INC CENTRAL INDEX KEY: 0000912595 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 621543819 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-12762 FILM NUMBER: 99604050 BUSINESS ADDRESS: STREET 1: 6584 POPLAR AVE STREET 2: STE 340 CITY: MEMPHIS STATE: TN ZIP: 38138 BUSINESS PHONE: 9016826600 MAIL ADDRESS: STREET 1: 6584 POPLAR AVE STREET 2: SUITE 340 CITY: MEMPHIS STATE: TN ZIP: 38138 DEF 14A 1 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12 MID-AMERICA APARTMENT COMMUNITIES, INC. (Name of Registrant as Specified in its Charter) _____________________________________________________________________ (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1. Title of each class of securities to which transaction applies: 2. Aggregate number of securities to which transaction applies: 3. Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: 4. Proposed maximum aggregate value of transaction: 5. Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1. Amount Previously Paid: 2. Form, Schedule or Registration Statement No.: 3. Filing Party: 4. Date Filed: MID-AMERICA APARTMENT COMMUNITIES, INC. 6584 POPLAR AVENUE SUITE 340 MEMPHIS, TENNESSEE 38138 April 30, 1999 TO THE SHAREHOLDERS OF MID-AMERICA APARTMENT COMMUNITIES, INC. In connection with the Annual Meeting of Shareholders of your Company to be held on June 3, 1999, we enclose a Notice of Annual Meeting of Shareholders, a Proxy Statement and a form of Proxy. At the meeting you will be asked to elect three Class II directors to serve until the 2002 Annual Meeting of Shareholders or until their successors are duly elected and qualified and to ratify the selection of KPMG LLP as the Company's independent auditors for 1999. Information about these matters is contained in the attached Proxy Statement. Detailed information relating to the Company's activities and operating performance during 1998 is contained in the Company's Annual Report to Shareholders' on Form 10-K, which is being mailed to you with this Proxy Statement, but is not a part of the proxy soliciting material. If you do not receive or have access to the 1998 Annual Report or Form 10-K, please notify Mark S. Martini, Secretary, Mid-America Apartment Communities, Inc., 6584 Poplar Avenue, Suite 340, Memphis, Tennessee 38138. You are cordially invited to attend the Annual Meeting of Shareholders in person. We would appreciate your completing the enclosed form of proxy so that your shares can be voted in the event you are unable to attend the meeting. If you are present at the meeting and desire to vote your shares personally, your form of proxy will be withheld from voting upon your request prior to balloting. We urge you to return your proxy card to us in the stamped envelope as soon as possible. Very truly yours, /s/ GEORGE E. CATES GEORGE E. CATES CHIEF EXECUTIVE OFFICER MID-AMERICA APARTMENT COMMUNITIES, INC. 6584 POPLAR AVENUE SUITE 340 MEMPHIS, TENNESSEE 38138 --------------- NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 3, 1999 --------------- Notice is hereby given that the Annual Meeting of Shareholders of Mid-America Apartment Communities, Inc. (the "Company") will be held on June 3, 1999, at 4:00 P.M., local time, at the Reserve at Dexter Lake Apartments, Memphis, Tennessee 38018, for the following purposes: 1. To elect three Class II directors to serve until the 2002 Annual Meeting of Shareholders or until their successors have been duly elected and qualified. 2. To ratify the selection of KPMG LLP as the Company's independent auditors for 1999. 3. To transact such other business as may properly come before the meeting or any adjournment thereof. The close of business on April 12, 1999 has been fixed as the record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Shareholders' Meeting. The stock transfer books of the Company will be closed at that time. There is enclosed , as a part of this Notice, a Proxy Statement that contains further information regarding the Annual Meeting, the nominees for election to the Board of Directors of the Company, and the independent auditors of the Company. By Order of the Board of Directors /s/ MARK S. MARTINI MARK S. MARTINI SECRETARY IMPORTANT SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. SHAREHOLDERS WHO ATTEND THE MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE ALREADY SENT IN A PROXY. MID-AMERICA APARTMENT COMMUNITIES, INC. 6584 POPLAR AVENUE SUITE 340 MEMPHIS, TENNESSEE 38138 --------------- PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 3, 1999 --------------- GENERAL INFORMATION This statement is furnished in connection with the solicitation of proxies to be used at the Annual Meeting of Shareholders (the "Annual Meeting") of Mid-America Apartment Communities, Inc. (the "Company") to be held on June 3, 1999 at 4:00 P.M., local time, at the Reserve at Dexter Lake Apartments, Memphis, Tennessee 38018 and at any adjournment or adjournments thereof. No person is authorized to give any information or to make any representation not contained in this Proxy Statement and, if given or made, such information or representation should not be relied upon as having been authorized. This Proxy Statement does not constitute the solicitation of a proxy in any jurisdiction where, or from any person to whom it is unlawful to make such proxy solicitation. The delivery of this Proxy Statement shall not, under any circumstances, imply that there has been no change in the information set forth herein since the date of the Proxy Statement. THE PROXY The solicitation of proxies in the enclosed form is made on behalf of the Board of Directors of the Company. The entire cost of soliciting these proxies will be borne by the Company. In addition to being solicited through the mail, proxies may be solicited personally or by telephone or telegraph by officers, directors and employees of the Company who will receive no additional compensation for such activities. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of shares held of record by such persons. It is expected that this Proxy Statement will first be sent to shareholders on or about April 30, 1999. Shareholders are urged to sign the enclosed form of proxy and return it promptly in the envelope enclosed for that purpose. If no instruction is indicated on the proxy, the named holders of the proxies will vote all such shares of Common Stock (hereinafter defined) of such holder (i) FOR the election of the nominees named herein as directors and (ii) FOR the ratification of the selection of KPMG LLP as the Company's independent auditors for 1999. The named holders of proxies also will use their discretion in voting the shares of Common Stock in connection with any other business that properly may come before the Annual Meeting. VOTING RIGHTS Each outstanding share of the Company's common stock $.01 par value (the "Common Stock") is entitled to one vote. Cumulative voting is not permitted. Only shareholders of record at the close of business on April 12, 1999 will be entitled to notice of, and to vote at, the Annual Meeting and any adjournment thereof. As of the close of business on April 12, 1999, the Company had outstanding 18,918,754 shares of Common Stock. No specific provision of the Tennessee Business Corporation Act, the Company's Charter or the Company's Bylaws addresses the issue of abstentions or broker non-votes. Brokers holding shares for beneficial owners must vote those shares according to the specific instructions they receive from the owners. However, brokers or nominees holding shares for a beneficial owner may not have discretionary voting power and may not have received voting instructions from the beneficial owner with respect to voting on certain proposals. In such cases, absent specific voting instructions from the beneficial owner, the broker may not vote on these proposals. This results in what is know as a "broker non-vote", which will not be counted as votes cast but will be counted for purposes of determining the existence of a quorum. Because the election of directors and ratification of the selection of independent auditors are routine matters for which specific instructions from beneficial owners will not be required, the Company does not anticipate that any "broker non-votes" will arise in the context of the election of directors or the ratification of the selection of independent auditors. Votes "withheld" from a director-nominee or from the ratification of the selection of independent auditors have the effect of a negative vote because a plurality of the shares cast at the Annual Meeting is required for the election of each director and the ratification of the selection of independent auditors. REQUIRED VOTE Under Tennessee law, the Company's Charter and Bylaws, if a majority of the votes entitled to be cast is present at the Annual Meeting so as to constitute a quorum, in person or by proxy, approval of each matter submitted to the shareholders of the Company for a vote at the Annual Meeting will require the affirmative vote of a plurality of the votes cast. OWNERSHIP OF THE COMPANY'S COMMON STOCK SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The following table sets forth information as of April 12, 1999, regarding each person known to the Company to be the beneficial owner of more than five percent of its Common Stock: NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS (1) ---------------------------- -------------------- ---------- John F. Flournoy 1,149,260(2) 6.07% 900 Brookstone Centre Parkway Columbus, GA 31904 First Manhattan Co. 1,078,513(3) 5.70% 437 Madison Avenue New York, NY 10022 Snyder Capital Management, L.P. 1,011,150(4) 5.34% 350 California Street, Suite 1460 San Francisco, CA 94104 - ---------------------------------------- (1) Based on 18,918,754 shares of Common Stock Outstanding on April 12, 1999, plus, with respect to Mr. Flournoy, the number of shares of Common Stock issuable by the Company to him in exchange for units of limited partnership interests in Mid-America Apartments, L.P. ("Units"). (2) Includes 1,107,989 shares owned directly by Mr. Flournoy and 41,271 shares that Mr. Flournoy has the current right to acquire upon redemption of Units. (3) The information set forth is based on a Schedule 13G filed by First Manhattan Co. on February 11, 1999 that indicates beneficial ownership of 1,074,813 shares of Common Stock, of which it has sole voting power over 3,700 shares, shared voting power over 995,948 shares, sole dispositive power over 3,700 shares, and shared dispositive power over 1,074,813 shares. (4) The information set forth is based on a Schedule 13G filed by Snyder Capital Management, L.P. on February 5, 1999 that indicates beneficial ownership of 1,011,150 shares of Common Stock, of which it has shared voting power over 952,250 shares and shared dispositive power over 1,011,150. SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth the beneficial ownership of the Company's Common Stock as of April 12, 1999 by (i) each director, (ii) each director nominee, (iii) each executive officer named in the Summary Compensation Table, and (iv) all directors, nominees and executive officers as a group: AMOUNT AND NATURE OF PERCENT BENEFICIAL OF NAME OF BENEFICIAL OWNER OWNERSHIP CLASS(1) ------------------------ ---------- -------- John F. Flournoy 1,149,260 (2) 6.07% George E. Cates 829,569 (3) 4.38% Robert F. Fogelman 652,200 (4) 3.45% O. Mason Hawkins ** 359,417 (5) 1.90% W. Randall Jones 216,666 (6) 1.15% Simon R. C. Wadsworth 155,046 (7) * H. Eric Bolton ** 141,614 (8) * Ralph Horn ** 33,000 (9) * John S. Grinalds 1,100 (10) * Michael S. Starnes 1,000 (11) * All directors, Nominees and Executive Officers as a group (10 Persons) 3,538,872 18.71% - --------------------------- (1) Based on 18,918,754 shares of Common Stock outstanding on April 12, 1999, plus with respect to each listed person (or all listed persons, as a group), the number of shares of Common Stock issuable by the Company to such person or group in exchange for Units plus the number of shares of Common Stock issuable to such person (or group) in respect of currently exercisable options. The total number of shares used in calculating this percentage assumes that none of the Units or exercisable options held other persons are redeemed for shares of Common Stock. (2) Includes 1,107,989 shares owned directly by Mr. Flournoy and 41,271 shares that Mr. Flournoy has the current right to acquire upon redemption of Units. (3) Includes 408,635 shares owned directly by Mr. Cates, 239,436 shares that Mr. Cates has the current right to acquire upon redemption of Units, 100,000 shares that Mr. Cates has the current right to acquire upon the exercise of options that are currently exercisable and 76,009 shares owned by the Company's ESOP over which Mr. Cates shares voting power. Excludes 4,721 shares owned by Mr. Cate's wife, over which Mr. Cates exercises no voting or investment power and with respect to which Mr. Cates disclaims beneficial ownership. (4) Includes 78,500 shares owned directly by Mr. Fogelman, 570,500 shares that Mr. Fogelman has the current right to acquire upon redemption of Units, and 3,000 shares that Mr. Fogelman has the current right to acquire upon the exercise of options that are currently exercisable. (5) Includes 194,799 shares owned directly by Mr. Hawkins, 158,618 shares that Mr. Hawkins has the current right to acquire upon redemption of Units, and 6,000 shares that Mr. Hawkins has the current right to acquire upon exercise of options that are currently exercisable. (6) Includes 212,741 shares owned directly by Mr. Jones and 3,925 shares that Mr. Jones has the current right to acquire upon redemption of Units. (7) Includes 38,289 shares owned directly by Mr. Wadsworth, 92,188 shares that Mr. Wadsworth has the current right to acquire upon redemption of Units, and 24,569 shares that Mr. Wadsworth has the current right to acquire upon the exercise of options that are currently exercisable. (8) Includes 5,014 shares owned directly by Mr. Bolton, 110,000 shares that Mr. Bolton has the current right to acquire upon redemption of Units, and 26,600 shares that Mr. Bolton has the current right to acquire upon the exercise of options that are currently exercisable. (9) Includes 32,000 shares owned directly by Mr. Horn and 1,000 shares that Mr. Horn has the current right to acquire upon the exercise of options that are currently exercisable. (10) Includes 100 shares owned directly by Mr. Grinalds and 1,000 shares that Mr. Grinalds has the current right to acquire upon the exercise of options that are currently exercisable (11) Includes 1,000 shares that Mr. Starnes has the current right to acquire upon the exercise of options that are currently exercisable * Represents less than 1% of total. ** Director Nominee. PROPOSAL NO. 1 ELECTION OF DIRECTORS COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS The Company presently has an Audit Committee and a Compensation Committee composed of certain of its directors who are not employees of the Company or any affiliate thereof ("Independent Directors"). The Company may, from time to time, form other committees as circumstances warrant. Such committees have authority and responsibility as delegated by the Board of Directors. AUDIT COMMITTEE. The Audit Committee of the Board of Directors is composed of Messrs. Hawkins (Chairman), Fogelman, Grinalds, Horn and Starnes. The Audit Committee makes recommendations concerning the engagement of independent public accountants, reviews with the independent public accountants the plans and results of the audit engagement, approves professional services provided by the independent public accountants, reviews the independence of the independent public accountants, considers the range of audit and non-audit fees and reviews the adequacy of the Company's internal accounting controls. The Audit Committee met twice during 1998. COMPENSATION COMMITTEE. The Compensation Committee of the Board of Directors is composed of Messrs. Horn (Chairman), Fogelman, Hawkins, Grinalds and Starnes. The Compensation Committee determines compensation for the Company's executive officers and administers the Company's Amended and Restated 1994 Restricted Stock and Stock Option Plan and the Company's Non-Qualified Executive Deferred Compensation Plan. The Compensation Committee met once during 1998. DIRECTOR MEETINGS. The business of the Company is under the general management of its Board of Directors as provided by the Company's by-laws and the laws of Tennessee, the Company's state of incorporation. The Board of Directors regularly meets quarterly during the Company's fiscal year. There are presently nine directors. The Board of Directors held four regular meetings during fiscal 1998 and two special meetings during the year. Messrs. Grinalds, Horn and Starnes each missed one regular meeting during 1998 and Mr. Horn also missed one committee meeting. COMPENSATION OF DIRECTORS Directors who are employees of the Company or one of its subsidiaries do not receive additional remuneration as directors. Prior to 1995, the Company's directors who were not employees were awarded 2,500 shares of Common Stock for their services as director. The directors' rights in the Common Stock vest at the rate of 500 shares per year beginning in 1994. Each director is entitled to receive the distributions paid on his shares of Common Stock prior to vesting. Directors who cease to be directors will forfeit any shares not previously vested prior to the termination of that person's service on the Board of Directors. Directors added since June 1995 who are not employees of the Company were compensated 550 shares for their service during 1998. During 1998, the Company granted to each director who were not employees 1,000 options to purchase shares and an additional 1,000 options for each committee chairman. The Compensation Committee has established that all Independent Directors will receive 875 shares of Common Stock for their service during 1999 and an additional 100 for each committee chaired. NOMINEES FOR DIRECTORS The Company's Charter divides the Board of Directors into three classes as nearly equal in number as possible, with each class serving a term of three years. One class of Directors is elected by the shareholders of the Company at each annual meeting. The Board of Directors has set at nine the number of directors constituting the full Board of Directors. The Board of Directors proposes to nominate the following three individuals for election to serve as directors of the Company. Messrs. Bolton, Hawkins and Horn are all currently directors of the Company. The remaining members of the Board of Directors listed below will continue as members thereof until their respective terms expire as indicated below. Unless a shareholder specifies otherwise, it is intended that such shareholder's shares of Common Stock will be voted for the election of the nominees to serve as directors until the annual meetings disclosed below and until their successors are elected and qualified. If any nominee shall become unavailable or unwilling to serve the Company as a director for any reason, the persons named in the Proxy Form are expected to consult with the management of the Company in voting the shares represented by them. The Board of Directors has no reason to doubt the availability of any of the nominees, and each has indicated his willingness to serve as a director of the Company if elected. - -------------------------------------------------------------------------------- NOMINEES FOR ELECTION AS CLASS II DIRECTORS (TERMS EXPIRING 2002) - -------------------------------------------------------------------------------- H. ERIC BOLTON, JR., age 42. Mr. Bolton is President, Chief Operating Officer and a director of the Company. Mr. Bolton joined the Company in 1994 as Vice-President of Development and was named Chief Operating Officer in February 1996 and promoted to President in December 1996. Mr. Bolton was with Trammell Crow Company for more than five years and prior to joining the Company was Executive Vice President and Chief Financial Officer of Trammell Crow Realty Advisors. Committees: None - -------------------------------------------------------------------------------- O. MASON HAWKINS, age 51. Mr. Hawkins has served as a director of the Company since October 1993 and is Chairman and Chief Executive Officer of Southeastern Asset Management, Inc., a registered investment advisor, since 1975. He is also a director of Longleaf Partners Funds Trust, a registered investment company of which Southeastern Asset Management, Inc. serves as investment advisor, for more than five years. Committees: Audit, Compensation - -------------------------------------------------------------------------------- RALPH HORN, age 58. Mr. Horn has served as a director of the Company since April 1998 and is Chairman of the Board and Chief Executive Officer of First Tennessee National Corporation. Mr. Horn was elected President, Chief Operating Officer, and a director of First Tennessee National Corporation in July 1991, Chief Executive Office in April 1994, and Chairman of the Board, effective January 1, 1996. Mr. Horn is also a director of Harrah's Entertainment, Inc. Committees: Audit, Compensation - -------------------------------------------------------------------------------- INCUMBENT DIRECTORS -- CLASS I (TERMS EXPIRING 2001) - -------------------------------------------------------------------------------- ROBERT F. FOGELMAN, age 63. Mr. Fogelman has served as a director of the Company since July 1994 and has been the President of Fogelman Investment Company, a privately owned investment firm for more than five years. Committees: Audit, Compensation - -------------------------------------------------------------------------------- JOHN F. FLOURNOY, age 58. Mr. Flournoy has served as the Vice-Chairman of the Board of Directors of the Company and President of Flournoy Development Company (a subsidiary of the Company) since November 1997. Prior to the acquisition of Flournoy Development Company and certain related entities by the Company in November 1997, Mr. Flournoy served as the Chairman and Chief Executive Officer of Flournoy Development Company for more than five years. Mr. Flournoy currently serves as a director of W.C. Bradley Co. and is on the advisory board of Columbus Bank and Trust Company. Committees: None - -------------------------------------------------------------------------------- MICHAEL S. STARNES, age 54. Mr. Starnes was appointed to the Board of Directors in July 1998 to fill a vacated seat. Mr. Starnes founded M. S. Carriers, Inc. a truckload transportation and logistics company, in 1978 and has since served as Chairman and Chief Executive Officer. Committees: Audit, Compensation - -------------------------------------------------------------------------------- INCUMBENT DIRECTORS - CLASS III (TERM EXPIRING 2000) - -------------------------------------------------------------------------------- GEORGE E. CATES, age 61. Mr. Cates is the Chief Executive Officer and Chairman of the Board of Directors of the Company since October 1993. Mr. Cates served as President, Chief Executive Officer and Chairman of the Board of Directors of the Company since inception of the Company in February 1994 through December 1996. Mr. Cates was President and Chief Executive Officer of The Cates Company from 1977 until its merger with the Company in February 1994. Mr. Cates has served as a director of First Tennessee National Corporation since 1996. Committees: None - -------------------------------------------------------------------------------- SIMON R. C. WADSWORTH, age 52. Mr. Wadsworth is Executive Vice President, Chief Financial Officer and a director of the Company since March 1994. Mr. Wadsworth was President of TMF, Inc., an industrial equipment dealership, from 1981 until March 1994. Committees: None - -------------------------------------------------------------------------------- JOHN S. GRINALDS, age 61. General Grinalds has served as a director of the Company since November 1997. General Grinalds became the President of The Citadel, Charleston, South Carolina in 1997. Prior to assuming the presidency of The Citadel, General Grinalds was the headmaster of Woodberry Forest School in Virginia. From 1989 to 1991, General Grinalds held the rank of Major General and was the commanding general of the Marine Corps Recruit Depot in San Diego, California. Committees: Audit, Compensation CERTAIN TRANSACTIONS WITH MANAGEMENT All transactions involving related parties must be approved by a majority of the disinterested members of the Company's Board of Directors. The Company has, and expects to have, transactions in the ordinary course of its business with directors and officers of the Company and their affiliates, including members of their families or corporations, partnerships or other organizations in which such officers or directors have a controlling interest, on substantially the same terms (including price, or interest rates and collateral) as those prevailing at the time for comparable transactions with unrelated parties. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE.
ANNUAL COMPENSATION -------------------------------------- RESTRICTED OTHER ANNUAL STOCK NAME AND POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) OPTIONS(#) - --------------------------------------------------------- ---- --------- -------- --------------- ---------- ----------- George E. Cates ......................................... 1998 $ 281,925 $ 78,786 $ 91,936 -- 20,000 Chairman, Chief Executive ............................... 1997 272,000 42,331 -- -- 40,000 Officer and Director .................................... 1996 255,137 -- -- -- 25,000 John F. Flournoy ........................................ 1998 256,000 74,701 -- -- 20,000 Vice-Chairman and Director of the Company, Chairman and Chief Executive Officer Flournoy Development Company H. Eric Bolton .......................................... 1998 218,815 64,196 68,564 -- 20,000 President, Chief Operating .............................. 1997 166,251 22,762 -- -- 33,000 Officer, and Director ................................... 1996 136,670 15,770 -- -- 15,000 Simon R. C. Wadsworth ................................... 1998 177,560 52,524 51,656 -- 20,000 Executive Vice-President, Chief ......................... 1997 136,974 22,192 -- -- 27,000 Financial Officer and Director .......................... 1996 135,187 -- -- -- 27,000 W. Randall Jones ........................................ 1998 215,000 62,737 -- -- 20,000 President Flournoy Development Company
OPTION GRANTS AS OF DECEMBER 31, 1998. The following table provides information on option grants during the year ending December 31, 1998 to the executive officers listed in the table above. INDIVIDUAL GRANTS
POTENTIAL REALIZATION VALUE AT ASSUMED RATES OF % OF TOTAL ANNUAL STOCK PRICE OPTIONS APPRECIATION FOR GRANTED TO EXERCISE OPTION TERM OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------- GRANTED FISCAL YEAR ($/SHARE) DATE 5% 10% -------- ------------ --------- ---------- --------- --------- George E. Cates ............................ 20,000 5.6% $ 28.9375 2/11/08 $ 363,973 $ 922,378 John F. Flournoy ........................... 20,000 5.6% 28.9375 2/11/08 363,973 922,378 H. Eric Bolton ............................. 20,000 5.6% 28.9375 2/11/08 363,973 922,378 Simon R. C. Wadsworth ...................... 20,000 5.6% 28.9375 2/11/08 363,973 922,378 W. Randall Jones ........................... 20,000 5.6% 28.9375 2/11/08 363,973 922,378
AGGREGATED OPTION EXERCISES THROUGH DECEMBER 31, 1998. The following table provides information on options held by the executive officers listed above through December 31, 1998, and the value of each of their unexercised options at December 31, 1998.
NUMBER OF SHARES VALUE OF UNEXERCISED UNDERLYING IN-THE-MONEY OPTIONS UNEXERCISED OPTIONS AT DECEMBER 31, EXERCISED OPTIONS AT DECEMBER 31, 1998 1998(1) ----------------------- -------------------- -------------------- SHARES ACQUIRED VALUE EXERCISABLE/ NAME ON EXERCISE REALIZED UNEXERCISABLE - ---- ----------- -------- -------------------- George E. Cates .......................................... -- -- 100,000/65,000 $ 293,750 John F. Flournoy ......................................... -- -- --/20,000 -- H. Eric Bolton ........................................... -- -- 26,600/56,400 -- Simon R. C. Wadsworth .................................... 4,831 $ 28,358 24,569/52,100 -- W. Randall Jones ......................................... -- -- --/20,000 --
- ---------- (1) Based upon the closing price of the Company's Common Stock on the NYSE on December 31,1998 of $22.6875 per share. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS During 1998 no insider participated in decisions related to his compensation. COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION GENERAL The Compensation Committee of the Board of Directors is composed of the Independent Directors. The Compensation Committee is responsible for ensuring that a proper balance of current compensation and longer-term equity-based rewards are offered to executive management to provide incentives to increase shareholder value. Each executive officer's compensation is determined annually by the Committee, including base salary, discretionary cash bonuses, and stock incentive awards. The Company's compensation policy is to reward performance, which leads to long, term growth in shareholder value per share, as exemplified by growth in funds from operations per share, which the Committee believes is a primary measure of performance. The Committee has reviewed the Compensation plans of other multi-family REITs of similar size and performance to the Company and attempts to be competitive on a total compensation basis. BASE SALARY Each executive officer's base salary is based upon the competitive market for the executive officer's services, including the executive's specific responsibilities, experience and overall performance. The Committee attempts to reward long term performance, and it is the objective of the Company to set base salaries at or below the level of median base salary level of the Company's peers in its industry. ANNUAL INCENTIVE COMPENSATION The Committee awards discretionary year-end bonuses which are tied to achieving specific goals for growth in funds from operations per share and other specific individual and Company goals which it believes are instrumental in building long term value. The Committee sets the Company's bonus formula annually. AMENDED AND RESTATED 1994 RESTRICTED STOCK AND STOCK OPTION PLAN The Amended and Restated 1994 Restricted Stock and Stock Option Plan (the "1994 Plan") is the Company's long-term incentive plan for executive officers and other selected employees. The objective of the program is to retain and motivate executives to improve long-term stock performance. The Compensation Committee has the authority, within limitations set forth in the 1994 Plan, (i) to establish rules and regulations concerning the 1994 Plan, (ii) to determine the persons to whom options and restricted securities may be granted (iii) to fix the number of shares of Common Stock to be covered by each option and (iv) to set the terms and provisions of each option and restricted security to be granted. Stock options are generally granted at the prevailing market value and will only have value if the Company's stock increases. NON-QUALIFIED EXECUTIVE DEFERRED COMPENSATION PLAN The non-qualified deferred compensation plan is the Company's long-term incentive plan for key employees who are not qualified for participation in the Company's 401 (k). Under the terms of the plan, key employees may elect to defer a percentage of their compensation and the Company matches a portion of their salary deferral with similar provisions as apply for the Company's 401 (k). The plan is designed so that the employees' investment earnings under the non-qualified plan should be the same as the earning assets in the Company's 401 (k). COMPENSATION OF CHIEF EXECUTIVE OFFICER Mr. Cates' base salary was $270,000 for the year ended December 31, 1998. The Compensation Committee considered the annual base salary of Mr. Cates to be competitive with comparable REITs in the Company's geographic area. The terms of Mr. Cates' employment contract provides for certain severance payments in the event of death or disability or upon termination by the Company without cause or by the employee with cause. The agreement contains a non-competition provision which prohibits Mr. Cates, except as an officer or employee of the Company, from engaging directly or indirectly in the acquisition, development, operation, management, leasing or landscaping of any multifamily community. This prohibition extends to all multifamily communities wherever located, during the term of employment and to multifamily properties within 30 miles of any multifamily community owned by the Company after termination of such employment. COMPENSATION COMMITTEE O Mason Hawkins (Chairman) Robert F. Fogelman Ralph Horn John S. Grinalds Michael S. Starnes PERFORMANCE GRAPH The following graph compares the Company's cumulative total return to the shareholders of Mid-America Apartment Communities, Inc. ("MAA") to the S&P 500 and the Equity Total Return index prepared by the National Association of Real Estate Investment Trusts ("NAREIT") assuming a base share price of $100 for the Common Stock and each index for comparison purposes and assuming all dividends are reinvested. The performance graph is not necessarily indicative of future investment performance. MID-AMERICA APARTMENT COMMUNITIES, INC. TOTAL RETURN PERFORMANCE [LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW] INDEX 2/4/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 - ----- ------ -------- -------- -------- -------- -------- MAA 100.00 142.20 142.63 180.11 192.35 165.84 S & P 500 100.00 98.02 134.72 165.65 220.91 284.05 NAREIT Equity REITs 100.00 100.20 114.43 156.10 187.98 155.09 COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") requires the Company's directors and executive officers to file with the Commission initial reports of ownership and reports of changes in ownership of the Company's Common Stock and to furnish the Company with copies of all forms filed. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the past fiscal year all Section 16(a) filing requirements applicable to the Company's directors and executive officers were completed on a timely basis. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES FOR CLASS II DIRECTORS PROPOSAL NO. 2 RATIFICATION OF SELECTION OF KPMG PEAT MARWICK LLP AS THE 1999 INDEPENDENT AUDITORS The Board of Directors has selected KPMG LLP as the Company's independent auditors for 1999. KPMG LLP served as independent auditors of the Company for the year ended December 31, 1998. Representatives of the firm will be present at the Annual Meeting, have an opportunity to make a statement if they so desire and are expected to be available to respond to appropriate questions. The affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote at the Meeting is required to ratify the selection of KPMG LLP as the Company's independent auditors for 1999. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION OF PROPOSAL NO. 2. SHAREHOLDERS' PROPOSALS FOR 1999 ANNUAL MEETING Shareholders' proposals intended to be presented at the 1999 Annual Meeting of Shareholders must be received by the Company no later than January 5, 2000 for inclusion in the Company's proxy statement and form of proxy relating to that meeting. OTHER MATTERS The Board of Directors, at the time of the preparation of this Proxy Statement, knows of no business to come before the meeting other than that referred to herein. If any other business should come before the meeting, the person named in the enclosed Proxy will have discretionary authority to vote all proxies in accordance with his best judgment. Upon the written request of any record holder or beneficial owner of Common Stock entitled to vote at the Annual Meeting, the Company, without charge, will provide a copy of its Annual Report on Form 10-K for the year ended December 31, 1998, as filed with the Securities and Exchange Commission. Requests should be directed to Mark. S. Martini, Secretary, Mid-America Apartment Communities, Inc., 6584 Poplar Avenue, Suite 340, Memphis, Tennessee, 38138, which is the address of the Company's principal executive offices. BY ORDER OF THE BOARD OF DIRECTORS /s/ MARK S. MARTINI MARK S. MARTINI SECRETARY April 30, 1999 PROXY MID-AMERICA APARTMENT COMMUNITIES, INC. NO. OF SHARES____ 6584 POPLAR AVENUE, SUITE 340, MEMPHIS, TENNESSEE 38138 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints George E. Cates, Simon R.C. Wadsworth, and Mark S. Martini as proxies, each with the power to appoint such person's substitute, and hereby authorizes them to vote, as designated below, all the shares of common stock of Mid-America Apartment Communities, Inc. (the "Company") held of record by the undersigned on April 12, 1999 at the annual meeting of shareholders to be held on June 3, 1999, or any adjournment thereof. 1. ELECTION OF THREE CLASS II DIRECTORS. [ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY to vote for all nominees listed below (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME ON THE LIST BELOW) H. Eric Bolton, Jr. , O. Mason Hawkins and Ralph Horn 2. RATIFICATION OF KPMG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR 1999 [ ] FOR RATIFICATION [ ] AGAINST RATIFICATION 3. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AND FOR ALL PROPOSALS. DATED:__________________, 1999 Please sign exactly as name appears to left. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. ______________________________________ Signature ______________________________________ Signature (if held jointly) PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. -----END PRIVACY-ENHANCED MESSAGE-----