SCHEDULE 14A
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
|_| Confidential, for use of the Commission only
(as permitted by Rule 14a-6(e)(2))
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-12
KIMCO REALTY CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined).
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(4) Proposed maximum aggregate value of transaction:
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(5) Total Fee Paid:
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|_| 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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KIMCO REALTY CORPORATION
3333 NEW HYDE PARK ROAD
NEW HYDE PARK, NY 11042-0020
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 15, 2003
Notice is hereby given of, and you are cordially invited to attend, the 2003
Annual Meeting of Stockholders (the "Meeting") of Kimco Realty Corporation, a
Maryland corporation (the "Company"), to be held on Thursday, May 15, 2003, at
10 o'clock a.m. at 270 Park Avenue, 11th Floor, Room C, New York, NY 10017 for
the following purposes:
1. To elect directors to serve for a term of one year and until their
successors are duly elected and qualify;
2. To approve a recommendation by the Executive Compensation Committee
of the Board of Directors that the number of shares of the Company's
Common Stock, par value $.01 per share, subject to Option under the
Company's 1998 Equity Participation Plan be increased by 5,000,000
shares; and
3. To transact such other business as may properly come before the
Meeting or any adjournment(s) or postponement(s) thereof.
Only holders of record of the Common Stock of the Company at the close of
business on April 3, 2003, will be entitled to vote at the Meeting or any
adjournment(s) or postponement(s) thereof.
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING IN PERSON, PLEASE SIGN AND
DATE THE ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS,
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE OR, ALTERNATIVELY, YOU MAY
AUTHORIZE YOUR PROXY BY TELEPHONE OR BY INTERNET BY FOLLOWING THE INSTRUCTIONS
ON THE PROXY CARD.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Bruce M. Kauderer
Bruce M. Kauderer
Secretary
April 7, 2003.
KIMCO REALTY CORPORATION
3333 NEW HYDE PARK ROAD, NEW HYDE PARK, NY 11042-0020
--------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
to be held on May 15, 2003
This Proxy Statement is furnished to holders of record of the Common Stock,
par value $.01 (the "Common Stock") of Kimco Realty Corporation, a Maryland
corporation (the "Company"), in connection with the solicitation of proxies in
the form enclosed herewith for use at the 2003 Annual Meeting of Stockholders
(the "Meeting") of the Company to be held on Thursday, May 15, 2003, at 10
o'clock a.m. for the purposes set forth in the Notice of Annual Meeting of
Stockholders.
This solicitation is made by the Company on behalf of the Board of Directors
of the Company (the "Board of Directors" or the "Board"). Costs of this
solicitation will be borne by the Company. Directors, officers and employees
of the Company and its affiliates may also solicit proxies by telephone,
telegraph, fax, e-mail or personal interview. The Company will reimburse
banks, brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy material to
stockholders.
The Company's Annual Report for the calendar year ended December 31, 2002
has been mailed with this Proxy Statement. This Proxy Statement and the
enclosed form of proxy were mailed to stockholders on or about April 11, 2003.
The principal executive offices of the Company are located at 3333 New Hyde
Park Road, New Hyde Park, New York 11042-0020; telephone (516) 869-9000.
Holders of record of the Common Stock as of the close of business on the
record date, April 3, 2003, are entitled to receive notice of, and to vote at,
the Meeting. The outstanding Common Stock constitutes the only class of
securities entitled to vote at the Meeting, and each share of Common Stock
entitles the holder thereof to one vote. At the close of business on April 3,
2003, there were 104,940,140 shares of Common Stock issued and outstanding.
Shares represented by proxies in the form enclosed, if such proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned form of
proxy, the shares will be voted FOR the election of all nominees for Director
(See Proposal 1) and FOR the recommendation by the Executive Compensation
Committee of the Board of Directors that the shares of the Common Stock
subject to Option under the Company's 1998 Equity Participation Plan (the
"Equity Participation Plan") be increased by 5,000,000 shares (See Proposal
2). To be voted, proxies must be filed with the Secretary of the Company prior
to voting. Proxies may be revoked at any time before exercise (i) by filing a
notice of such revocation, (ii) by filing a later dated proxy with the
Secretary of the Company or (iii) by voting in person at the Meeting.
Dissenting stockholders will not have rights of appraisal with respect to any
matter to be acted upon at the Meeting.
Under Maryland law, shares represented by proxies that reflect abstentions
or "broker non-votes" (i.e., shares held by a broker or nominee which are
represented at the Meeting, but with respect to which such broker or nominee
is not empowered by the beneficial owner of the stock to vote on a particular
proposal) will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum.
1
PROPOSAL 1
Election of Directors
The Company's Bylaws, as amended (the "Bylaws"), provide that all directors
be elected at each annual meeting of stockholders. Pursuant to the Company's
charter and such Bylaws, the Directors have fixed the number of directors to
be elected at seven. The persons named as proxies in the accompanying form of
proxy intend to vote in favor of the election of the seven nominees for
director designated below, all of whom are presently directors of the Company,
to serve until the next annual meeting of stockholders and until their
respective successors are duly elected and qualify. It is expected that each
of these nominees will be able to serve, but if any such nominee is unable to
serve, the proxies may vote for another person nominated by the Nominating and
Corporate Governance Committee and approved by the Board of Directors or the
Board may amend the Bylaws to reduce the number of directors to be elected at
the meeting.
Information Regarding Nominees (as of April 3, 2003)
Present Principal Occupation or
Name Age Employment and Five-Year Employment History
---- --- --------------------------------------------
Martin S. Kimmel(2)(3)(4) 87 Chairman (Emeritus) of the Board of Directors of the Company since November 1991;
Chairman of the Board of Directors of the Company for more than five years prior
to such date. Founding member of the Company's predecessor in 1966.
Milton Cooper(2)(3) 74 Chairman of the Board of Directors and Chief Executive Officer of the Company since
November 1991; Director and President of the Company for more than five years
prior to such date. Founding member of the Company's predecessor in 1966.
Richard G. Dooley(1)(3)(4) 73 Director of the Company since December 1991. Consultant to, and from 1978 to 1993,
Executive Vice President and Chief Investment Officer of Massachusetts Mutual Life
Insurance Company.
Michael J. Flynn(2) 67 Vice Chairman of the Board of Directors of the Company since January 1996 and,
since January 1997, President and Chief Operating Officer; Director of the Company
since December 1991. Chairman of the Board and President of Slattery Associates,
Inc. for more than five years prior to joining the Company in 1996.
Joe Grills(1)(3)(4) 68 Director of the Company since January 1997. Chief Investment Officer for the IBM
Retirement Funds from 1986 to 1993 and held various positions at IBM for more than
five years prior to 1986.
David B. Henry 54 Vice Chairman of the Board of Directors of the Company since May 2001 and, since
April 2001, Chief Investment Officer of the Company. Prior to joining the Company,
Chief Investment Officer of G.E. Capital Real Estate since 1997 and held various
positions at G.E. Capital for more than five years prior to 1997.
Frank Lourenso (1)(3)(4) 62 Director of the Company since December 1991. Executive Vice President of J.P.
Morgan ("J.P. Morgan", and successor by merger to The Chase Manhattan Bank and
Chemical Bank, N.A.) since 1990. Senior Vice President of J.P. Morgan for more
than five years prior to that time.
---------------
(1) Member of Audit Committee.
(2) Member of Executive Committee.
(3) Member of Executive Compensation Committee.
(4) Member of Nominating and Corporate Governance Committee.
2
Mr. Cooper is also a director of Getty Realty Corp. and Blue Ridge Real
Estate/Big Boulder Corporation. He also serves as a member of the Board of
Governors of the National Association of Real Estate Investment Trusts.
Mr. Dooley is also a director of Jefferies Group, Inc. and a trustee of
MassMutual Corporate Investors and MassMutual Participation Investors.
Mr. Flynn is also Chairman of the Board of Directors of Blue Ridge Real
Estate/Big Boulder Corporation.
Mr. Grills is also a Director of certain Merrill Lynch Mutual Funds and Duke
University Management Company. He also serves as a member of the Investment
Advisory Committees of the State of New York Common Retirement Fund and the
Virginia Retirement System. Mr. Grills is a member of the Association of
Financial Professionals Committee on Investment of Employee Benefit Assets,
its executive committee and is a former chairman of that committee.
All directors of the Company serve terms of one year and until the election
and qualification of their respective successors. Each of the above Directors
was in attendance at each of the four regular meetings of the Board of
Directors held during 2002, which occurred on February 6, April 24, July 24
and October 23. All of the Directors of the Board were in attendance at the
2002 Annual Meeting of Stockholders held on May 14, 2002.
Committees of the Board of Directors
Audit Committee. The Audit Committee currently consists of three directors,
none of whom are employees of the Company, including Mr. Lourenso, who is the
chairman of the Audit Committee. The Board of Directors has established the
Audit Committee to make recommendations concerning the engagement of
independent public accountants, review with the independent public accountants
the plans and results of the audit engagement, approve professional services
provided by the independent public accountants, review the independence of the
independent public accountants, consider the range of audit and non-audit
fees, review the Company's financial statements, financial reporting issues
and review the adequacy of the Company's internal accounting controls. Four
meetings of the Audit Committee were held during 2002, on February 6, April 24,
July 24, and October 23. In addition, the Audit Committee held a meeting on
February 11, 2003 and a telephonic meeting on March 25, 2003.
Executive Committee. The Executive Committee currently consists of three
directors, of whom two are employees of the Company, including Mr. Cooper who
is chairman of the Executive Committee. The Executive Committee has been
granted the authority to acquire and dispose of real property, to borrow money
on behalf of the Company and to authorize, on behalf of the full Board of
Directors, the execution of certain contracts and agreements (except for
contracts between the Company and KC Holdings, Inc. - see "Compensation
Committee Interlocks and Insider Participation"). The Executive Committee
convened twice during 2002, on April 24 and October 23.
Executive Compensation Committee. The Executive Compensation Committee
currently consists of five directors, of whom one is an employee of the
Company, including Mr. Grills, who is chairman of the Executive Compensation
Committee. The Board of Directors has established an Executive Compensation
Committee to determine compensation for the Company's executive officers, in
addition to administering the Company's Equity Participation Plan (as defined
herein). Three meetings of the Executive Compensation Committee were held
during 2002, on February 6, July 24, and October 23. In addition, the
Executive Compensation Committee held a meeting on February 11, 2003.
Nominating and Corporate Governance Committee. The Board of Directors has
established a Nominating and Corporate Governance Committee which currently
consists of four directors, none of whom are employees of the Company,
including Mr. Dooley, who is chairman of the Nominating and Corporate
Governance Committee. The functions of the Nominating and Corporate Governance
Committee include recommending candidates for annual election to the Board of
Directors and to fill vacancies on the Board of Directors that may arise from
time to time. The Nominating and Corporate Governance Committee will consider
all candidates recommended by stockholders in accordance with the procedure
established in the Company's
3
Bylaws which requires recommendations to be submitted in writing ninety days
in advance of the anniversary of the preceding year's annual meeting of
stockholders. Such recommendations should include the name and address and
other pertinent information about the candidate as is required to be included
in the Company's proxy statement. Recommendations should be submitted to the
Secretary of the Company. The Nominating and Corporate Governance Committee is
also responsible for ensuring that the Company is in adherence with good
corporate governance principles and is responsible for developing and
implementing the Company's corporate governance guidelines that apply to all
of its directors and management, code of business conduct and ethics and code
of ethics for its chief executive officer and senior financial officers. The
Nominating and Corporate Governance Committee is also charged with the task of
ensuring the Company's compliance with all New York Stock Exchange listing
requirements. The Nominating and Corporate Governance Committee conducts
private sessions prior to the regular scheduled board meetings. Such sessions
were held during 2002 on February 5, April 23, July 23 and October 22. One
formal meeting of the Nominating and Corporate Governance Committee was held
during 2002, on April 24. In addition, the Nominating and Corporate Governance
Committee held a formal meeting on February 11, 2003.
Each of the Directors comprising these various Committees of the Board of
Directors was in attendance at all meetings of such Committees held on the
dates indicated.
Compensation of Directors
Members of the Board of Directors and Committees thereof who are not also
employees of the Company ("Non-employee Directors") receive an annual fee of
$30,000, plus fees of $2,000 for attending each regular or special meeting of
the full Board. The Non-employee Directors, other than Mr. Kimmel, receive
$500 for attending each Executive Compensation Committee and Nominating and
Corporate Governance Committee meeting. The Non-employee Directors who are
members of the Audit Committee also receive an additional annual fee of
$10,000 and $2,000 for attending each Audit Committee meeting. In accordance
with the Company's Equity Participation Plan (as defined herein), the Non-
employee Directors may be granted awards of deferred stock ("Deferred Stock")
in lieu of directors' fees. Unless otherwise provided by the Board, a grantee
of Deferred Stock shall have no rights as a Company stockholder with respect
to such Deferred Stock until such time as the Common Stock underlying the
award has been issued. Pursuant to such arrangements, each of Messrs. Kimmel,
Dooley, Grills and Lourenso received directors' fees in cash of $21,000,
$41,000, $41,000 and $41,000, respectively, during 2002. During 2002, Messrs.
Kimmel, Dooley, Grills and Lourenso each received Deferred Stock awards valued
at $19,000, in lieu of directors' fees and meeting fees. Employees of the
Company who are also Directors are not paid any directors' fees.
Mr. Kimmel received approximately $44,000 during 2002, as payment for
consulting services rendered to, and reimbursement of certain expenses
incurred on behalf of, the Company.
During 2002, 2001 and 2000, the Company granted each Non-employee Director
options to acquire 11,250 shares of Common Stock at $31.25, $32.80 and
$27.1667 per share, respectively, the market prices on the dates of such
option grants. See "Executive Compensation and Transactions with Management
and Others -- Executive Compensation and Employment Contracts" for information
concerning stock options granted to Mr. Cooper, Mr. Flynn and Mr. Henry. The
Company intends to grant Non-employee Directors, options to acquire an
additional 11,250 shares during 2003 at the then current market price.
Vote Required
Assuming the presence of a quorum, a plurality of all the votes cast by the
holders of shares of Common Stock present, in person or by proxy, and entitled
to vote at the Company's Annual Meeting will be sufficient to elect a nominee
as a director. Accordingly, abstentions or broker non-votes as to the election
of directors will not affect the result of election of directors.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR ALL OF
THE NOMINEES SET FORTH IN THIS PROXY STATEMENT.
4
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information available to the Company
as of April 3, 2003, with respect to shares of its Common Stock (i) held by
those persons known to the Company to be the beneficial owners (as determined
under the rules of the U.S. Securities and Exchange Commission, the "SEC") of
more than 5% of such shares and (ii) held, individually and as a group, by the
directors and executive officers of the Company:
Shares Owned Percent
Beneficially (#) of Class (%)
Name & Address (where required) ---------------- ------------
of Beneficial Owner Common Common
------------------------ ------ ------
Stichting Pensioenfonds ABP 10,300,000 9.8
Oude Lindestraat 70
Postbus 2889
6401 DL Heerlen, The Netherlands
Milton Cooper 6,948,737(1)(4) 6.6
c/o Kimco Realty Corporation
3333 New Hyde Park Rd.
New Hyde Park, NY 10042
Martin S. Kimmel 4,146,056(2) 4.0
c/o Kimco Realty Corporation
3333 New Hyde Park Rd.
New Hyde Park, NY 11042
Helen Kimmel 3,568,451(3) 3.4
445 Park Avenue
New York, NY 10022
Michael J. Flynn 477,938 *
Michael V. Pappagallo 365,999 *
Jerald Friedman 236,500 *
Richard G. Dooley 154,637 *
Frank Lourenso 137,896(6) *
Glenn G. Cohen 127,914 *
David M. Samber 106,875 *
Joe Grills 86,250 *
David B. Henry 58,226 *
Bruce M. Kauderer 31,161 *
Raymond Edwards 10,786 *
Thomas Caputo 10,500(5) *
All Directors and executive 12,899,475(4) 12.3
officers as a group (14 persons)
---------------
* Less than 1%
(1) Includes 1,624,125 shares held by Mr. Cooper as trustee for the benefit
of Mr. Kimmel's son. Does not include 385,790 shares held by adult
members of Mr. Cooper's family, as to all of which shares Mr. Cooper
disclaims beneficial ownership.
5
(2) Does not include 1,624,125 shares held in trust by Mr. Cooper for
Mr. Kimmel's son or 2,395,951 shares held by Mrs. Helen Kimmel, his wife,
as to all of which shares Mr. Kimmel disclaims beneficial ownership.
Also, does not include 1,172,500 shares held by foundations and trusts
for which Mrs. Kimmel is a trustee, as to all of which shares Mr. Kimmel
disclaims beneficial ownership.
(3) Does not include 4,146,056 shares held by Mr. Kimmel, her husband, or
1,624,125 shares held in trust by Mr. Cooper for Mr. Kimmel's son, as to
all of which shares Mrs. Kimmel disclaims beneficial ownership.
(4) Does not include 1,635,148 shares held by KC Holdings, Inc., a related,
private corporation in which Mr. Cooper holds a controlling interest. See
"Compensation Committee Interlocks and Insider Participation -
Transactions with KC Holdings, Inc."
(5) Does not include 4,500 shares owned by Mrs. Caputo, his wife, as to all
of which shares Mr. Caputo disclaims beneficial ownership.
(6) Does not include 2,250 shares owned by Mrs. Lourenso, his wife, as to all
of which shares Mr. Lourenso disclaims beneficial ownership.
The following table sets forth certain information available to the Company
as of April 3, 2003, with respect to its Depositary Shares representing its
Class A, Class B and Class C Preferred Stock (i) held by those persons known
to the Company to be the beneficial owners (as determined under the rules of
the SEC) of more than 5% of such shares and (ii) held, individually and as a
group, by the directors and executive officers of the Company:
Shares Owned Percent
Beneficially(#) of Class (%)
---------------------------- ----------------------------
Name & Address (where required) Depositary Shares Depositary Shares
of Beneficial Owner Class A Class B Class C Class A Class B Class C
------------------------------- ------- ------- ------- ------- ------- -------
David M. Samber 3,700 3,550 5,560 * * *
Bruce M. Kauderer -- 1,900 2,100 -- * *
All Directors and executive
officers as a group (2 persons) 3,700 5,450 7,660 * * *
---------------
* Less than 1%
6
Executive Compensation and Transactions with Management and Others
Executive Officers. Reference should be made to the Company's annual report
on Form 10-K for the year ended December 31, 2002, incorporated herein by
reference, following Part I, Item IV, for information with respect to the
executive officers of the Company.
Executive Compensation. The following table sets forth the summary
compensation of the Chairman of the Board of Directors (and Chief Executive
Officer) and the four other most highly paid executive officers of the Company
for calendar years 2002, 2001 and 2000.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
----------------------------- ---------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h)
Other Securities
Name and Annual Restricted Underlying All other
Principal Period Salary Bonus Compensation Stock Options Compensation
Position Ended ($) ($) ($) (1) Awards (#) (2) ($) (3)
----------- ------- ------- --------- ------------ ----------- ----------- --------------
Milton Cooper 12/02 658,500 250,000 -- -- 112,500 630
Chairman of the Board 12/01 658,500 1,550,000(6) -- -- 112,500 1,696
Of Directors and Chief 12/00 658,000 100,000 -- -- 112,500 8,034
Executive Officer
Michael J. Flynn (5) 12/02 658,500 350,000 -- -- 112,500 630
Vice Chairman of the 12/01 658,500 375,000 -- -- 337,500 1,696
Board of Directors and 12/00 658,000 200,000 -- -- 112,500 4,953
President & Chief
Operating Officer
David B. Henry (5) 12/02 508,500 400,000 -- -- 65,000 17,875(7)
Vice Chairman of the 12/01 365,385 1,177,885(4) -- -- 425,000 18,947(7)
Board of Directors and 12/00 -- -- -- -- -- --
Chief Investment Officer
Jerald Friedman (5) 12/02 458,500 450,000 -- -- 30,000 630
Executive Vice 12/01 458,500 450,000 -- -- 25,000 1,696
President 12/00 426,769 150,000 -- -- 37,500 1,677
Raymond Edwards (5) 12/02 355,481 150,000 -- -- 65,000 630
Vice President 12/01 154,808 115,500(8) -- -- 127,500 262
12/00 -- -- -- -- -- --
---------------
(1) No named officer received perquisites or other personal benefits
aggregating the lesser of 10% of annual salary and bonus or $50,000.
(2) Options to acquire shares of Common Stock at exercise prices equal to the
fair market value on the dates of grant.
(3) The amounts shown represent the value of Company paid group term life
insurance premiums.
(4) Includes unrestricted stock award of 37,500 shares of Common Stock valued
at $1,062,500 based upon a price of $28.33 per share on April 2, 2001, as
reported on the New York Stock Exchange.
(5) See "Executive Compensation and Transactions with Management and Others -
Employment Contracts".
(6) Includes a special incentive award of $1,300,000.
(7) Includes life insurance premium for individual policy paid by the Company
and the value of Company paid group term life insurance premiums.
(8) Represents an unrestricted stock award of 3,750 shares of Common Stock
valued at $115,500 based upon a price of $30.80 per share on July 12,
2001, as reported on the New York Stock Exchange.
7
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on options to acquire shares of the
Company's Common Stock granted to the named executive officers during 2002.
Potential Realizable
Value
at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term (1)
----------------- ----------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options Option Granted Exercise
Granted to Employees Price Expiration
Name (#) (2) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- --------- -------------- --------- ----------- -------- --------
Milton Cooper 112,500 7.2 31.25 12/12/12 2,210,958 5,603,001
Michael J. Flynn 112,500 7.2 31.25 12/12/12 2,210,958 5,603,001
David B. Henry 65,000 4.2 31.25 12/12/12 1,277,442 3,237,289
Jerald Friedman 30,000 1.9 31.25 12/12/12 589,589 1,494,134
Raymond Edwards 65,000 4.2 31.25 12/12/12 1,277,442 3,237,289
---------------
(1) Assumed annual rates of stock price appreciation, as determined by the
SEC, for illustrative purposes only. Actual stock prices will vary from
time to time based upon market factors and the Company's financial
performance. No assurance can be given that such rates will be achieved.
(2) Options generally become exercisable one-third on each of the first three
anniversaries of the date of grant or sooner at the discretion of the
Executive Compensation Committee of the Board.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table provides information on options to acquire shares of
Common Stock exercised in 2002 by the named executive officers, and the value
of each such officer's unexercised options to acquire shares of Common Stock
outstanding at December 31, 2002.
(a) (b) (c) (d) (e)
Number of Value of Unexercised
Unexercised In-the-Money
Options at Year Options at Year End
Shares Acquired Value End (#) ($)(1)
Name on Exercise (#) Realized ($) Exer. Unexer. Exer. Unexer.
---- ---------------- ------------ ------ -------- --------- ----------
Milton Cooper 4,687 51,401 209,813 226,125 1,174,025 132,854
Michael J. Flynn(2) 4,687 51,401 288,856 376,875 1,231,740 430,329
David B. Henry(2) 3,658 18,168 -- 482,684 -- 1,215,820
Jerald Friedman(2) 4,687 51,401 226,125 59,500 1,339,615 44,285
Raymond Edwards(2) 3,258 5,256 -- 185,984 -- --
---------------
(1) Based upon the closing price of the Company's Common Stock on the New
York Stock Exchange on December 31, 2002 of $30.64 per share.
(2) See "Executive Compensation and Transactions with Management and Others
-- Employment Contracts".
8
Employment Contracts. In November 1998, the Company entered into a new
five-year employment agreement with Mr. Michael J. Flynn pursuant to which
Mr. Flynn continues to serve as President and Chief Operating Officer of the
Company. Mr. Flynn also serves as Vice Chairman of the Board of Directors. In
accordance with this employment agreement, Mr. Flynn (i) is to receive a base
salary of $650,000 per annum, (ii) shall be eligible to receive a bonus in
such amounts, if any, as the Board, in its sole discretion shall determine and
(iii) shall be eligible to receive grants of Common Stock or options with
respect thereto, in such amounts, if any, as the Board, in its sole discretion
shall determine.
Effective April 2001, the Company commenced a five-year employment agreement
with David B. Henry pursuant to which Mr. Henry will serve as Chief Investment
Officer of the Company. Mr. Henry also serves as Vice Chairman of the Board of
Directors. In accordance with this employment agreement, Mr. Henry is to
receive $750,000 per annum ($500,000 base salary and $250,000 guaranteed
bonus) as compensation for his services. In addition, Mr. Henry received an
unrestricted award of 37,500 shares of Common Stock which was valued at
$1,062,500 based on the closing price of Common Stock on the date of the
grant. Mr. Henry was also granted options to acquire 375,000 shares of Common
Stock at an exercise price equal to the market price on the date of grant.
With respect to 37,500 of these stock options, they are to be considered
qualified incentive stock options, as defined in and to the extent permitted
under the Company's Equity Participation Plan, and the remaining 337,500 stock
options shall be non-qualified options. Options with respect to these shares
generally vest in three equal installments upon each of the first three
anniversaries of the date of grant. Mr. Henry will also be entitled to an
unrestricted award of 37,500 shares of Common Stock if Mr. Henry is employed
by the Company on the tenth anniversary of the effective date of the
employment agreement. In the event of, and depending upon the reasons for a
termination of Mr. Henry's employment with the Company prior to such dates,
(i) any such non-vested shares would become 100% vested as the termination
date and (ii) Mr. Henry would receive severance in the amount equal to the
base salary and guaranteed bonus then in effect for the greater of the balance
of the term of his employment agreement or one year.
In June 1998, the Company entered into a three-year employment agreement
with Mr. Jerald Friedman, pursuant to which Mr. Friedman began to serve as
Executive Vice President of the Company. In accordance with this employment
agreement, Mr. Friedman was to receive $450,000 per annum ($300,000 base
salary and $150,000 guaranteed bonus) as compensation for his services. The
agreement further provided that Mr. Friedman be granted options to acquire
150,000 shares of Common Stock at an exercise price of $24.958 per share, the
market price on the date of grant. These stock options are to be considered
qualified incentive stock options, as defined in and to the extent permitted
under the Company's Equity Participation Plan. Options with respect to these
shares shall vest in three equal installments upon each of the first three
anniversaries of the date of grant. In the event of, and depending upon the
reasons for, a termination of Mr. Friedman's employment with the Company prior
to such dates, (i) any such non-vested shares would become 100% vested as of
the termination date and (ii) Mr. Friedman would receive severance in the
amount equal to the base salary and bonus then in effect for the greater of
the balance of the term of this agreement or one year.
In April 2000, the Company amended and restated the employment agreement
with Mr. Friedman whereby effective January 1, 2000, Mr. Friedman will also
serve as President of the Company's new development subsidiary (the
"Development Company" or "KDI"). Effective January 2002, the term of this
agreement has been extended through December 31, 2005 (the "First Amendment to
Employment Agreement"). In accordance with the First Amendment to Employment
Agreement, Mr. Friedman is to receive a base salary of $450,000 per annum. In
addition, Mr. Friedman shall be eligible to earn a bonus upon the calculation
of Development Company Profits, as defined in the First Amendment to
Employment Agreement. The bonus shall be determined and paid semi-annually.
Pursuant to the First Amendment to Employment Agreement, the bonus payable to
Mr. Friedman for each six month period ending on the June 30th Measurement
Date, as defined, shall be an amount equal to the lesser of (i) fifteen
percent (15%) of Development Company Profits for that six month period or (ii)
$225,000. The bonus payable to Mr. Friedman for each six month period ending
on the December 31st Measurement Date, as defined, shall be an amount equal to
fifteen percent (15%) of Development Company Profits for the twelve month
period just ended, minus the bonus calculated on the immediately preceding
June 30th Measurement Date, provided that the annual bonus to be earned by
Mr. Friedman shall never exceed $450,000 for any said twelve month period
ending on December 31st.
9
Effective July 2001, the Company commenced a five-year employment agreement
with Raymond Edwards pursuant to which Mr. Edwards will serve as Vice
President. In accordance with this employment agreement, Mr. Edwards is to
receive $400,000 per annum ($350,000 base salary and $50,000 guaranteed bonus)
as compensation for his services. In addition, Mr. Edwards received an
unrestricted award of 3,750 shares of Common Stock which was valued at
$115,500 based on the price of the Common Stock on the date of the grant.
Mr. Edwards was also granted options to acquire 127,500 shares of Common Stock
at an exercise price equal to the market price on the date of grant. With
respect to 24,000 of these stock options, they are to be considered qualified
incentive stock options, as defined in and to the extent permitted under the
Company's Equity Participation Plan, and the remaining 103,500 stock options
shall be non-qualified options. Options with respect to these shares generally
vest in three equal installments upon each of the first three anniversaries of
the date of grant. In the event of, and depending upon the reasons for a
termination of Mr. Edwards employment with the Company prior to such dates,
(i) any such non-vested shares would become 100% vested as of the termination
date and (ii) Mr. Edwards would receive severance in the amount equal to the
base salary and guaranteed bonus then in effect for the greater of the balance
of the term of his employment agreement or one year.
Compensation Committee Interlocks and Insider Participation
The Executive Compensation Committee of the Board of Directors, comprised of
Messrs. Martin Kimmel, Milton Cooper, Richard Dooley, Joe Grills and Frank
Lourenso, is charged with the responsibility of determining compensation
levels, including awards pursuant to the Company's Equity Participation Plan,
for the named executive officers other than Mr. Cooper. Mr. Cooper's
compensation and participation in the Equity Participation Plan is subject to
review and approval by the members of the Executive Compensation Committee
other than Mr. Cooper.
Mr. Milton Cooper is Chairman of the Board of Directors of the Company, and
Mr. Martin Kimmel is Chairman Emeritus of the Board. Messrs. Cooper and Kimmel
were founding members of the Company's predecessor in 1966.
The Company is party to a management agreement pursuant to which it manages
three of KC Holdings' four remaining shopping center properties under terms
which the Company believes are no less favorable than would be obtained in
negotiations with an independent third party. The remaining property is owned
in a joint venture and is managed by an unaffiliated joint venture partner.
The management agreement was approved by a majority of the Company's Directors
who are not also stockholders of KC Holdings. Management fees paid by KC
Holdings to the Company was approximately $0.3 million during 2002.
Joint Ventures. Members of the Company's management have investments in
certain real estate joint ventures or limited partnerships, which own and/or
operate seven of the Company's 599 property interests as of December 31, 2002.
Such management investments predate the Company's IPO and, in each case, the
Company is a general partner of the joint venture or partnership and controls
or directs the management of the joint venture or partnership. Any material
future transactions involving these joint ventures or partnerships, such as
major renovations, disposal or sale, will be subject to the approval of a
majority of disinterested directors of the Company.
Relationship with J.P. Morgan. Mr. Lourenso, an Executive Vice President of
J.P. Morgan, has been a Director of the Company since December 1991. The
Company has maintained its principal banking relationship with J.P. Morgan.
J.P. Morgan, together with a consortium of additional banks, has provided the
Company with a $250.0 million, unsecured revolving credit facility which is
scheduled to expire in August 2003. At December 31, 2002 there was
$40.0 million outstanding under this facility.
Relationship with The State of New York Common Retirement Fund. Mr. Grills
is a member of the Investment Advisory Committee of The State of New York
Common Retirement Fund (the "NYSCRF"). Mr. Grills has been a Director of the
Company since January 1997. During 1999, the Company entered into a joint
venture arrangement with the NYSCRF and other institutional investors in
connection with the Kimco Income Operating Partnership ("KIR"), an entity
established for the purposes of investing in high quality retail properties,
financed primarily through the use of individual non-recourse mortgages. The
NYSCRF has committed approximately
10
$267.0 million to the joint venture of which $215.0 million has been
contributed. This investment by the NYSCRF was reviewed by the NYSCRF Real
Estate Advisory Committee of which Mr. Grills is not a member.
Report of the Executive Compensation Committee on Executive Compensation
The Executive Compensation Committee has provided the following Report on
Executive Compensation:
Compensation Strategy and Performance Criteria. The members of this
Committee believe the Company's success is attributable in large part to the
talent and dedication of its associates and, in particular, to the management
and leadership efforts of its executive officers. Accordingly, the Company,
under the guidance of the Executive Compensation Committee, is committed to
develop and maintain compensation policies, plans and programs which seek to
enhance cash flows, and consequently real property and stockholder values, by
aligning the financial interests of the Company's senior management with those
of its stockholders.
In furtherance of these goals, the Company relies, to a large degree, on
annual and longer term incentive compensation (that is, specifically cash
bonuses, stock grants and stock option grants) to attract and retain corporate
officers and other key associates of outstanding ability, and to motivate such
persons to perform to their fullest potential. These forms of incentive
compensation are variable and designed to effectuate a pay-for-performance
philosophy which considers management's ability to consistently improve the
Company's Funds from Operations (a widely-accepted measure of performance for
real estate investment trusts) to be of paramount importance. Other
performance criteria which affect incentive awards include the demonstrated
ability to strengthen the Company's capital structure, the measure of improved
total return to stockholders and individual performance/contributions to
corporate goals and objectives.
The Committee periodically deliberates the appropriate combination of cash
and stock-based compensation, and weighs the competitiveness of the Company's
plans in relation to compensation practices employed by a select group of
successful real estate investment trusts that are (i) included in the NAREIT
equity index used in the accompanying stock performance graph, and (ii)
believed to be comparable to the Company based on market capitalization,
portfolio size and distribution and product type. In general, the Committee
has set base compensation levels for the Company's executive officers at
competitive levels relative to this peer group. The number of stock options
granted annually is an amount which the Committee, after due consideration of
corporate and individual performance, changes in job function or title,
competitive option grant levels and previously awarded options, considers
appropriate to fairly compensate and properly motivate its officers.
From time to time the Committee may retain compensation and other management
consultants to assist with, among other things, structuring the Company's
various compensation programs and determining appropriate levels of salary,
bonus and other awards payable to the Company's officers and key personnel, as
well as to guide the Company in the development of near-term individual
performance objectives necessary to achieve long-term profitability. During
2001, the Company on behalf of the executive Compensation Committee engaged a
compensation consulting firm to perform a market survey of the compensation
levels for all key positions in the Company and engaged PricwaterhouseCoopers
LLP to perform a study with regard to a special incentive award for Mr. Milton
Cooper, Chief Executive Officer or the Company.
2002 Performance. In evaluating 2002 performance, particularly noteworthy
was the Company's ability, under senior management's direction, to increase
Funds from Operations ("FFO", a widely-accepted measure of performance for
real estate investment trusts) for the year ended December 31, 2002 to
$319.7 million, or $3.03 per share on a diluted basis, from $295.9 million, or
$2.99 per share on a diluted basis, during the preceding year. This increase
was achieved despite the bankruptcy filing of Kmart Corporation ("Kmart"), the
Company's largest tenant. The Company's improved performance reflects the
combined effect of increased contributions from the investments in KIR, Kimco
Retail Opportunity Portfolio ("KROP"), the RioCan Venture and other financing
investments, reduced by lower income resulting from tenant bankruptcies and
subsequent rejections of leases and a decrease in profits from the Montgomery
Ward Venture.
In January 2002, Kmart filed for protection under Chapter 11 of the U.S.
Bankruptcy Code. During 2002, Kmart rejected its leases at 31 locations,
representing approximately $30.8 million of annualized base
11
rental revenues and approximately 3.2 million square feet of Gross Leaseable
Area ("GLA"). As of December 31, 2002, Kmart represented 4.5% of annualized
base rents and 6.9% of leased GLA.
The Company had significant success in mitigating the vacancies caused by
the Kmart bankruptcy filing and subsequent rejection of leases. During 2002,
the Company disposed of, in separate transactions, seven former Kmart sites,
comprised of approximately 1.0 million square feet of GLA, for an aggregate
sales price of approximately $40.8 million. In addition, the Company has
currently leased or is under agreement to lease eleven of the rejected
locations, has terminated four ground lease locations and has received offers
to purchase three of these sites. The Company is reviewing the offers received
and is actively marketing the remaining six locations to prospective tenants.
During 2002, the Company continued its investment in KIR, a joint venture
established in 1998 with institutional partners for the purpose of investing
in high quality real estate properties primarily financed with individual non-
recourse mortgages. During 2002, KIR acquired 5 property interests aggregating
1.8 million square feet for approximately $213.5 million. As of December 31,
2002, KIR was comprised of 68 shopping center properties with total assets of
approximately $1.6 billion. The Company, through its 43.3% non-controlling
limited partnership interest in KIR increased its equity in income from KIR to
$16.3 million for the year ended December 31, 2002 as compared to $13.2 million
for the preceding year.
During 2001, the Company formed a joint venture (the "Kimco Retail
Opportunity Portfolio" or "KROP") with GE Capital Real Estate ("GECRE"), in
which the Company has a 20% non-controlling interest and manages the
portfolio. The purpose of this joint venture is to acquire established, high-
growth potential retail properties in the United States. Total capital
commitments to KROP from GECRE and the Company are for $200.0 million and
$50.0 million, respectively, and such commitments are funded proportionately
as suitable opportunities arise and are agreed to by GECRE and the Company.
During 2002, KROP purchased 16 shopping centers aggregating 1.6 million
square feet of GLA for approximately $177.8 million, including the assumption
of approximately $29.5 million of mortgage debt encumbering three of the
properties. Equity in income from KROP for the year ended December 31, 2002
was approximately $0.9 million.
The Company formed the RioCan Venture with RioCan Real Estate Investment
Trust ("RioCan", Canada's largest publicly traded REIT measured by gross
leasable area) in which the Company has a 50% non-controlling interest, to
acquire retail properties and development projects in Canada. The acquisition
and development projects are to be sourced and managed by RioCan and are
subject to review and approval by a joint oversight committee consisting of
RioCan management and the Company's management personnel. During 2002, the
RioCan venture acquired 24 shopping center properties and four development
properties, in separate transactions, comprising approximately 5.7 million
square feet of GLA for an aggregate purchased price of approximately
$683.7 million Canadian dollars ("CAD") (approximately USD $435.8 million)
including the assumption of approximately CAD $321.5 million (approximately
USD $203.1 million) in mortgage debt encumbering 13 of the properties. As of
December 31, 2002, the RioCan Venture was comprised of 28 operating properties
and four development properties, consisting of approximately 6.7 million
square feet of GLA. Equity in income from RioCan for the year ended
December 31, 2002 was approximately $9.1 million as compared to $0.4 million
for the preceding year.
In connection with the Tax Relief Extension Act of 1999 (the "RMA"), which
became effective January 1, 2001, the Company is now permitted to participate
in activities which the Company was precluded from previously in order to
maintain its qualification as a REIT, so long as these activities are
conducted in entities which elect to be treated as taxable subsidiaries under
Sections 856 through 860 of the Internal Revenue code of 1986, as amended (the
"Code"), subject to certain limitations.
Effective January 1, 2001, the Company elected taxable REIT subsidiary
status for its wholly owned development subsidiary, KDI. KDI is primarily
engaged in the ground-up development of neighborhood and community shopping
centers and the subsequent sale thereof upon completion. During the year ended
December 31, 2002, KDI sold four of its recently completed projects and eight
out-parcels, in separate transactions, for approximately $128.7 million, which
resulted in pre-tax gains of approximately $15.9 million.
Additional activities conducted by the Company during 2002 through its
taxable REIT subsidiaries ("TRS") primarily include, but are not limited to,
real estate advisory and disposition services provided in
12
connection with asset designation rights and assistance with inventory and
fixture liquidations in connection with going-out-of-business sales by certain
bankrupt retailers. During 2002, the Company's additional TRS activities
provided approximately $10.4 million of pretax income.
Further, consideration was given to management's ability to continue its
strengthening of the Company's consolidated balance sheet by effectively
utilizing its medium-term notes ("MTN") program and senior note debt offerings
to obtain cost effective unsecured debt. During 2002, the Company issued an
aggregate $102.0 million of unsecured debt under its MTN program and an
aggregate $235.0 million of fixed-rate senior notes providing capital for debt
repayment and property acquisitions. The Company continues to maintain a
strong, prudent capital structure as evidenced by the percentage of its total
debt to total market capitalization of 31% at December 31, 2002. In addition,
the Company intends to maintain strong debt service coverage and fixed charge
coverage ratios as part of its commitment to maintaining its investment-grade
debt ratings.
The increase in FFO, coupled with the ongoing strategy of maintaining a
conservative capital structure, enabled the Company to provide common
stockholders with dividends of $2.08 per share in 2002, which represented an
8.3% increase from the prior year. This dividend increase was the tenth
consecutive annual increase enjoyed by the Company's common stockholders.
However, the Kmart bankruptcy situation caused investor uncertainty that
affected the short term performance of the stock price, and as a result, total
returns to stockholders were approximately 0.2% during 2002. Nevertheless, the
Executive Compensation Committee believes the Company's financial and
operating performance in the face of the Kmart situation was an outstanding
accomplishment and underscored the soundness of the Company's long term
strategy to enhance shareholder value. In that regard, dividends on the Common
Stock have been further increased by approximately 3.8% for 2003, or $2.16 per
share.
2002 Incentive Compensation. In establishing 2002 incentive compensation
(that is, the cash bonuses, stock grants and stock option grants as set forth
in the accompanying Summary Compensation and Option Grants in Last Fiscal Year
tables) for the Company's named executive officers, the Committee concluded
that each such officer had individually made a very substantial contribution
toward achieving the aforementioned performance levels. The Committee did not
specifically relate any measure of performance or any accomplishment to the
incentives awarded, nor did the Committee assign relative weight to any
specific performance factor. Rather, the Committee members made the subjective
determination that the incentives awarded were appropriate in view of
previously awarded incentives and their qualitative assessment that 2002
represented a year of significant achievement for the Company that was, in
large part, attributable to the talents and efforts of its executive officers.
The annual bonus and option to acquire shares of Common Stock awarded during
2002 to Mr. Cooper, Chairman of the Board of Directors and Chief Executive
Officer, as set forth in the accompanying Summary Compensation Table, was
determined by the members of the Executive Compensation Committee, other than
Mr. Cooper, after evaluating generally the Company's achievements for the year
and specifically Mr. Cooper's contributions towards realizing such performance
levels. The Board concluded that Mr. Cooper's leadership, vision and decision
making warranted the bonus awarded to Mr. Cooper.
Martin S. Kimmel
Milton Cooper
Richard G. Dooley
Joe Grills
Frank Lourenso
As to that portion of the report which pertains to
Mr. Cooper's compensation:
Martin S. Kimmel
Richard G. Dooley
Joe Grills
Frank Lourenso
13
Stock Price Performance. The following stock price performance chart
compares the Company's 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"). 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 equity
real estate investment trusts listed on the New York Stock Exchange, American
Stock Exchange or the NASDAQ National Market System. Stock price performance,
presented quarterly for the five years ended December 31, 2002, is not
necessarily indicative of future results. All stock price performance assumes
the reinvestment of dividends.
Kimco Realty Corporation
2002 Total Return Proxy Data
(December 1997 - December 2002)
[graphic]
NAREIT Equity S&P 500 KIMCO
----------------- ----------------------------------
Date Return Index Return Index Return Index
--------------------------------------------------------------
Sep-97 100.00 100.00 100.00
Oct-97 97.30 96.66 93.16
Nov-97 99.40 101.13 100.07
Dec-97 101.75 102.87 102.62
Jan-98 101.21 104.01 101.83
Feb-98 99.49 111.51 103.67
Mar-98 101.27 117.22 104.41
Apr-98 97.97 118.40 110.81
May-98 97.29 116.37 116.42
Jun-98 96.63 121.09 122.58
Jul-98 90.36 119.80 111.88
Aug-98 81.83 102.48 107.35
Sep-98 86.46 109.05 114.91
Oct-98 84.86 117.92 121.84
Nov-98 86.11 125.06 118.40
Dec-98 83.94 132.27 121.61
Jan-99 82.19 137.80 119.50
Feb-99 80.26 133.52 115.67
Mar-99 79.89 138.86 112.98
Apr-99 87.47 144.24 122.24
May-99 89.40 140.83 124.38
Jun-99 87.95 148.65 123.79
Jul-99 85.15 144.01 118.59
Aug-99 84.07 143.29 117.80
Sep-99 80.88 139.37 113.05
Oct-99 78.89 148.19 109.78
Nov-99 77.60 151.20 106.97
Dec-99 80.06 160.10 111.10
Jan-00 80.32 152.06 115.20
Feb-00 79.37 149.18 112.94
Mar-00 81.98 163.77 122.98
Apr-00 87.49 158.85 132.89
May-00 88.35 155.59 135.19
Jun-00 90.61 159.42 136.86
Jul-00 98.53 156.93 139.88
Aug-00 94.53 166.68 137.75
Sep-00 97.54 157.88 143.26
Oct-00 93.32 157.21 138.78
Nov-00 94.52 144.82 142.22
Dec-00 101.17 145.53 154.85
Jan-01 102.23 150.69 154.02
Feb-01 100.59 136.95 146.65
Mar-01 101.57 128.27 150.69
Apr-01 103.99 138.24 156.80
May-01 106.51 139.17 152.27
Jun-01 112.75 135.78 168.73
Jul-01 110.51 134.44 169.36
Aug-01 114.55 126.03 173.59
Sep-01 109.80 115.85 175.69
Oct-01 106.66 118.06 179.57
Nov-01 112.53 127.12 182.18
Dec-01 115.27 128.23 182.98
Jan-02 115.49 126.36 170.83
Feb-02 117.72 123.92 173.63
Mar-02 124.78 128.58 183.04
Apr-02 125.85 120.85 182.57
May-02 127.55 119.90 181.43
Jun-02 131.04 111.36 190.47
Jul-02 124.18 102.68 185.67
Aug-02 123.94 103.35 183.42
Sep-02 119.18 92.12 179.66
Oct-02 113.45 100.22 178.01
Nov-02 118.79 106.12 184.19
Dec-02 119.67 99.89 183.15
Audit Committee Report
The Audit Committee of the Board of Directors of the Company is responsible
for providing objective oversight of the Company's financial accounting and
reporting functions, system of internal control and audit process. The Audit
Committee is composed of three directors, each of whom is independent as
defined under the listing standards of the New York Stock Exchange. The Audit
Committee operates under a written charter approved by the Board of Directors.
A copy of the Audit Committee Charter is attached to this Proxy Statement as
Appendix A.
Management of the Company is responsible for the Company's system of
internal control and its financial reporting process. The independent
accountants, PricewaterhouseCoopers LLP, are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with auditing standards generally accepted in the United States of
America and to issue a report thereon. The Audit Committee is responsible for
the monitoring and oversight of these processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants to review and discuss the
December 31, 2002 consolidated financial statements. The Audit Committee also
discussed with the independent accountants the matters required by Statement on
14
Auditing Standards No. 61 (Communication with Audit Committees). The Audit
Committee also received written disclosures from the independent accountants
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Audit Committee discussed with the
independent accountants that firm's independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the
representations of management and the independent accountants, the Audit
Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report on Form 10-K
for the year ended December 31, 2002, to be filed with the SEC.
Frank Lourenso
Richard G. Dooley
Joe Grills
Equity Participation Plan
Description of Plan. The Company maintains its Stock Option Plan (the
"Stock Option Plan") and its 1998 Equity Participation Plan (the "Equity
Participation Plan") for the benefit of its eligible employees, consultants
and directors. The Equity Participation Plan was established for the purpose
of attracting and retaining the Company's directors, executive officers and
other key employees by offering them an opportunity to own Common Stock and/or
rights which will reflect the growth, development and financial success of the
Company. The Equity Participation Plan provides that the Executive
Compensation Committee or the Board, as applicable, may grant or issue
"incentive" stock options and "non-qualified" stock options (within the
meaning of the Internal Revenue Code, the "Code"), that vest over time and are
exercisable at the "fair market value" of the Common Stock at the date of
grant. In addition, the Equity Participation Plan provides for the granting of
deferred stock ("Deferred Stock") to the Non-employee Directors of the
Company. Deferred Stock may be granted to Non-employee Directors in lieu of
directors' fees which would otherwise be payable to such Non-employees
Directors, pursuant to such policies as may be adopted by the Board from time
to time. Unless otherwise provided by the Board, a grantee of Deferred Stock
shall have no rights as a Company stockholder with respect to such Deferred
Stock until such time as the Common Stock underlying the award has been
issued. The term of an award of Deferred Stock shall be set by the Board in
its sole discretion.
The Executive Compensation Committee has the authority under the Equity
Participation Plan to determine the terms of options granted under the Equity
Participation Plan, including, among other things, the individuals (who may be
employees, consultants or directors of the Company) who shall receive options,
the times when they shall receive them, whether an incentive stock option and/
or non-qualified option shall be granted, the number of shares to be subject
to each option and the date or dates each option shall become exercisable. The
Executive Compensation Committee also has the authority to grant options upon
the condition that the employee agrees to cancel all or a part of a previously
granted option and to amend or accelerate the vesting of previously granted
options. The Board of Directors has adopted an amendment to the Equity
Participation Plan that provides that the stock options, once granted, may not
be repriced by the Executive Compensation Committee, except in connection with a
transaction such as a stock split, stock dividend, merger, corporate
reorganization or other transaction in an appropriate manner in order to prevent
dilution or enlargement of the benefits or potential benefits to the holder as a
result of or in connection with such transaction.
The exercise price and term of each option are fixed by the Executive
Compensation Committee, provided, however, that the exercise price must be at
least equal to the fair market value of the stock on the date of grant and the
term cannot exceed 10 years; and further provided that in the case of an
incentive stock option granted to an individual who owns (or is deemed to own)
at least 10% of the total combined voting power of all classes of stock of the
Company, a subsidiary or a parent (within the meaning of Section 424 of the
Code), the exercise price must be at least 110% of the fair market value on
the date of grant and the term cannot exceed five years. Incentive stock
options may be granted only within 10 years from the date of adoption of the
Equity Participation Plan. The aggregate fair market value (determined at the
time the option is granted) of shares with respect to which incentive stock
options may be granted under the Equity Participation Plan, or any other plan
of the Company or any parent or subsidiary, which stock options are
exercisable for the first time during any calendar year, may not exceed
$100,000. The maximum number of options that may be granted to any one
individual in any calendar year shall not exceed 750,000, provided that the
grant of the options will not cause the Company to fail to qualify as a real
estate investment trust for Federal income tax purposes. An optionee may, with
the consent of the Executive Compensation Committee, elect to pay for the
15
shares to be received upon exercise of his options in cash, shares of Common
Stock or any combination thereof.
Option Grants. A maximum aggregate of 13,500,000 shares of Common Stock
have been reserved for issuance under the Stock Option Plan (4,500,000 shares,
all of which have been issued) and the Equity Participation Plan (9,000,000
shares). Options to acquire 1,562,525, 2,119,175 and 1,347,637 shares were
granted during 2002, 2001 and 2000 at weighted average exercise prices of
$31.43, $30.71 and $27.09 per share, respectively.
Equity Compensation Plan Information
The following table sets forth certain information regarding the Company's
equity compensation plans as of December 31, 2002.
Number of securities
remaining available for
Number of securities to Weighted-average future issuance under
be issued upon exercise exercise price of equity compensation plans
of outstanding options, outstanding options, (excluding securities
Plan Category warrants and rights warrants and rights reflected in column (a))
----------------------- -------------------- -------------------------
(a) (b) (c)
Equity compensation plans
approved by stockholders 7,102,703 $27.37 1,731,321
Equity compensation plans
not approved by
stockholders N/A N/A N/A
--------- ------ ---------
Total 7,102,073 $27.37 1,731,321
========= ====== =========
401(k) Plan
The Company maintains a 401(k) retirement plan covering substantially all
officers and employees of the Company. The 401(k) plan permits participants to
defer up to a maximum of 10% of their eligible compensation, which deferrals
generally are matched concurrently by the Company up to a maximum of 5% of the
employee's eligible compensation. Participants in the 401(k) Plan are not
subject to Federal and state income tax on salary deferral contributions or
Company contributions or on the earnings thereon until such amounts are
withdrawn from the 401(k) Plan. Salary reduction contributions are treated as
wages subject to FICA tax. Withdrawals from the plan may only be made upon
termination of employment, or in connection with certain provisions of the
401(k) Plan that permit hardship withdrawals.
Certain Relationships and Related Transactions
Members of the Company's management hold investments in certain real estate
joint ventures or limited partnerships to which the Company is a party. Such
investments predate the Company's IPO and, in each case, the Company controls
or directs the management of the joint venture or limited partnership. Any
material future transactions involving these joint ventures or partnerships
require the approval of a majority of disinterested directors of the Company.
See "Compensation Committee Interlocks and Insider Participation".
Messrs. Kimmel and Cooper, Directors of the Company, are stockholders of KC
Holdings. See "Compensation Committee Interlocks and Insider Participation".
Mr. Frank Lourenso, a Director of the Company, is also an Executive Vice
President of J.P. Morgan. The Company maintains its principal banking
relationship with J.P. Morgan. See "Compensation Committee Interlocks and
Insider Participation".
Mr. Joe Grills, a Director of the Company, is also a member of the
Investment Advisory Committee of NYSCRF. The Company has a joint venture
arrangement with NYSCRF. See "Compensation Committee Interlocks and Insider
Participation".
Mr. Paul Dooley, Manager of Real Estate Tax Administration and Insurance of
the Company, is the son of Mr. Richard G. Dooley, a director of the Company.
Mr. Paul Dooley was paid a cash salary in 2002 as an
16
employee of the Company that is commensurate with his position and was granted
10,000 options in 2002 pursuant to the Equity Participation Plan. In addition,
Mr. Dooley was extended loans in the amount of $49,983 in 2001, $36,960 in
2000 and $62,865 in 1999 to supplement available margin loans and partially
fund the purchase of 4,511 shares, 3,465 shares and 4,950 shares,
respectively, of Common Stock. The stock purchase loans are scheduled to be
repaid over a term of two years, however, the term may be extended at the
discretion of the Board of Directors. The amount outstanding as of April 3,
2003 was $126,871.
Mr. Patrick Flynn, Director of Real Estate of the Company, is the son of
Mr. Michael J. Flynn, Vice Chairman of the Board, President and Chief
Operating Officer of the Company. Mr. Patrick Flynn is also the President and
a director of Blue Ridge Real Estate/Big Boulder Corporation, an entity in
which the Company has a significant interest. Mr. Patrick Flynn was paid a
cash salary in 2002 as an employee of the Company that is commensurate with
his position and was granted 6,000 options in 2002 pursuant to the Equity
Participation Plan.
During 2002, the Company, through its KDI subsidiary, sold a property in
Cedar Hill, Texas for a sales price of $23.7 million. The purchaser was a
limited partnership, (the "Cedar Hill LP") of which the general partner is an
unaffiliated party of the Company. The general partner is actively involved,
among other things, in the sourcing of capital for investment in real estate
ventures. Mr. Martin Kimmel, a Director of the Company, made a capital
contribution to the Cedar Hill LP to acquire a 16.7% limited partnership
interest. The Company believes that the sales price obtained from the Cedar
Hill LP was at the then current market value as determined by competitive bids
from other potential non-affiliated buyers. Current market value is defined as
the most probable price for which a property will sell in a competitive market
under all conditions requisite to a fair sale, with buyer and seller each
acting prudently, knowledgably and for self interest, assuming that neither is
under duress. Effective with the sale, the Company entered into a property
management agreement with Cedar Hill LP. The Company believes the terms of the
management agreement are no less favorable than would be obtained in
negotiations with an independent third party.
Transactions with Ripco Real Estate Corporation ("Ripco"). Ripco's primary
business activity is that of a leasing agent and representative for national
and regional retailers. Mr. Todd Cooper, an officer and 37% shareholder of
Ripco, is a son of Mr. Milton Cooper, Chief Executive Officer and Chairman of
the Board of Directors of the Company. During 2002, the Company (i) purchased
a property for approximately $26.8 million from an entity in which Ripco had
an approximate 16% interest and (ii) paid a brokerage commission of $10,000 to
Ripco for services rendered as leasing agent for a national tenant in a
shopping center property owned by the Company. The Company believes the
purchase price paid for the property was at the then current market value. The
Company determined its purchase price by discounting expected future cash
flows from the property at a discount rate commensurate with that of similar
retail properties within the same regional location. Current market value is
defined as the most probable price for which a property will sell in a
competitive market under all conditions requisite to a fair sale, with buyer
and seller each acting prudently, knowledgably and for self-interest, assuming
that neither is under duress. In addition, the Company believes that the
brokerage commission paid was at or below the customary rates for such leasing
services. The Company's Investment Committee, comprised of Milton Cooper,
Chief Executive Officer and Chairman of the Board of Directors, Michael J.
Flynn, President and Chief Operating Officer, David B. Henry, Chief Investment
Officer and Michael V. Pappagallo, Chief Financial Officer, unanimously
approved this transaction except, as to Milton Cooper, who abstained as a
result of the nature of the relationship with the seller.
17
Indebtedness of Management. The following table sets forth information with
respect to indebtedness of Directors and executive officers to the Company.
Largest
Aggregate
Indebtedness
Outstanding Amount
Name and During 2002 Purpose of Outstanding Interest Rate
Principal Position ($) (9) Indebtedness ($) (8) (%)
------------------ -------------- --------------- ------------ --------------
Michael J. Flynn 97,108(1) Stock purchase 83,563 6.0
Vice Chairman of the
Board of Directors,
President and Chief
Operating Officer
Michael V. Pappagallo 714,208(2) Stock purchase -- 6.0
Vice President -
Chief Financial Officer
David B. Henry 430,997(3) Stock purchase 376,069 6.0
Vice Chairman of the
Board of Directors,
Chief Investment Officer
Glenn G. Cohen 315,035(4) Stock purchase -- 6.0
Vice President - Treasurer
Bruce M. Kauderer 144,479(5) Stock purchase 94,996 6.0
Vice President - Legal
Jerald Friedman 99,274(6) Stock purchase 90,884 6.0
Executive Vice President
Raymond Edwards 110,242(7) Stock purchase 103,828 6.0
Vice President
---------------
(1) Represents loans extended during 2001 and 2002 to supplement available
margin loans and partially fund the purchase of 4,687 shares and 4,687
shares, respectively, of Common Stock. The stock purchase loans are
scheduled to be repaid over a term of two years.
(2) Loans extended during 1999, 2000, 2001 and 2002 to supplement available
margin loans and partially fund the purchase of 49,500 shares, 4,687
shares, 4,687 shares and 4,687 shares, respectively, of Common Stock by
Mr. Pappagallo. These stock purchase loans were scheduled to be repaid
over a term of two years. During 2002, Mr. Pappagallo repaid these loans
in full.
(3) Represents (i) loan associated with an unrestricted stock award of 37,500
shares; this loan which is collateralized by the shares of Common Stock
awarded is scheduled to be repaid over a term of five years and (ii)
loans extended during 2001 and 2002 to supplement available margin loans
and partially fund the purchase of 3,658 shares and 3,658 shares,
respectively, of Common Stock by Mr. Henry. These stock purchase loans
are scheduled to be repaid over a term of two years.
(4) Loans extended during 1999, 2000, 2001 and 2002 to supplement available
margin loans and partially fund the purchase of 14,850 shares, 4,687
shares, 4,687 shares and 4,687 shares, respectively, of Common Stock by
Mr. Cohen. These stock purchase loans were scheduled to be repaid over a
term of two years. During 2002, Mr. Cohen repaid these loans in full.
(5) Loans extended during 2000, 2001 and 2002 to supplement available margin
loans and partially fund the purchase of 4,687 shares, 4,687 shares and
4,594 shares, respectively, of Common Stock by Mr. Kauderer. These stock
purchase loans are scheduled to be repaid over a term of two years. In
addition, the loan extended in 2000 has been repaid in full.
(6) Loans extended during 2001 and 2002 to supplement available margin loans
and partially fund the purchase of 4,687 shares and 4,687 shares,
respectively, of Common Stock by Mr. Friedman. These stock purchase loans
are scheduled to be repaid over a term of two years.
(7) Loans extended during 2001and 2002 to supplement available margin loans
and partially fund the purchase of 3,258 shares and 3,258 shares,
respectively, of Common Stock by Mr. Edwards. These stock purchase loans
are scheduled to be repaid over a term of two years.
(8) Indebtedness outstanding as of April 3, 2003.
(9) Each of these loans was made prior to July 30, 2002.
18
Independent Public Accountants
PricewaterhouseCoopers LLP was engaged to perform the annual audit of the
books of account of the Company for the calendar years ended December 31, 2002
and 2001. There are no affiliations between the Company and
PricewaterhouseCoopers LLP, its partners, associates or employees, other than
as pertain to its engagement as independent auditors for the Company in
previous years. Representatives of PricewaterhouseCoopers LLP are expected to
be present at the Meeting and will be given the opportunity to make a
statement if they so desire and to respond to appropriate questions.
The following table provides information relating to the fees billed to the
Company by PricewaterhouseCoopers LLP for the years ended December 31, 2002
and 2001:
2002 2001
-------- --------
Audit Fees (1) $410,000 $250,000
Audit Related Fees (2) $ 25,000 $ 25,000
Tax Fees $ -- $ --
All Other Fees(3) $ -- $ 25,000
---------------
(1) Audit fees include all fees for services in connection with (i) the
annual audit of the Company's fiscal 2002 and 2001 financial statements
included in its annual reports on Form 10-K, (ii) the review of the
financial statements included in the Company's quarterly reports on
Form 10-Q and (iii) the audit of the fiscal 2002 and 2001 financial
statements of KIR, an entity in which the Company has a 43.3% non-
controlling limited partnership interest and (iv) the consents and
comfort letters issued in connection with four debt offerings during 2002
and two equity offerings in 2001.
(2) Includes fees for the audit of the Company's employee benefit plan.
(3) Includes fees from the compensation consulting engagement in connection
with the recommendation of a special incentive award to Mr. Milton
Cooper, Chairman of the Board and Chief Executive Officer of the Company,
during 2001. The Audit Committee discussed these services with
PricewaterhouseCoopers LLP and determined that their provision of these
services is compatible with maintaining PricewaterhousCoopers LLP's
independence.
The Audit Committee of the Board of Directors annually submits its
recommendation with respect to the engagement of independent public
accountants at the meeting of the full Board of Directors which takes place
each year during the Company's third fiscal quarter. PricewaterhouseCoopers
LLP has been the Company's independent public accountants since 1986. The
Audit Committee of the Board of Directors will review the appointment of
PricewaterhouseCoopers LLP for 2003 later this year.
19
PROPOSAL 2
Proposal Regarding Equity Participation Plan
The Company maintains its Stock Option Plan and its Equity Participation
Plan pursuant to which the Executive Compensation Committee of the Board of
Directors may grant incentive and non-qualified stock options, for the
purposes of (i) furthering the growth, development and financial success of
the Company by providing additional incentive to its directors, executive
officers, consultants and other key employees who have been or will be given
responsibilities for the management or administration of the Company's
business affairs, and (ii) enabling the Company to attract and retain the
services of the type of professional and managerial personnel considered
essential to the long range success of the Company by providing an opportunity
for such personnel to become owners of capital stock of the Company.
A maximum aggregate of 13,500,000 shares of Common Stock are reserved for
issuance under the Stock Option Plan (4,500,000 shares, all of which have been
issued) and the Equity Participation Plan (9,000,000 shares). Options to
acquire 11,768,679 shares at a weighted average exercise price of $23.41 have
been granted through December 31, 2002, and as of such date 1,731,321 shares
remain available for future grant under the Equity Participation Plan. As of
December 31, 2002, there were options to acquire 7,102,703 shares of Common
Stock outstanding at a weighted average price of $27.37.
The Executive Compensation Committee of the Board of Directors considers the
future grant of options under the Equity Participation Plan to be an integral
part of the Company's compensation strategies and polices, as it seeks to
enhance cash flows, and consequently real property and stockholder value, by
aligning the financial interests of the Company's directors, executive
officers, consultants and other key employees with those of its shareholders.
Accordingly, the members of the Executive Compensation Committee have
recommended that the Equity Participation Plan be amended so that the number
of shares of Common Stock subject to Option under the Equity Participation
Plan would be increased by 5,000,000 shares. The directors, executive
officers, consultants and other key employees who may receive grants of
options to acquire such additional shares will continue to be determined in
the future by the Executive Compensation Committee of the Board of Directors.
The persons named as proxies in the accompanying form of proxy intend to vote
FOR this recommendation.
Vote Required
Approval of the recommendation by the Executive Compensation Committee to
increase the numbers of shares of Common Stock subject to Option under the
Equity Participation Plan by 5,000,000 shares requires approval by the
affirmative vote of the holders of a majority of the votes cast at the
Meeting; provided that the total number of votes cast at the Meeting
represents over 50% in interest of all Common Stock entitled to vote on such
proposal. Accordingly, abstentions and broker non-votes will have the effect
of a vote against such proposal unless holders of more than 50% in interest of
all securities entitled to vote on such proposal cast votes, in which event
broker non-votes will have no effect on the result of such vote.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR THE
PROPOSAL TO INCREASE THE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK
SUBJECT TO OPTION UNDER ITS EQUITY PARTICIPATION PLAN.
Other Matters
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of
the Exchange Act requires the Company's officers and directors, and persons
who own more than ten percent of a registered class of the Company's equity
securities, to file reports (Forms 3, 4 and 5) of the ownership and changes in
the ownership of such equity securities with the SEC and the New York Stock
Exchange. Officers, directors and beneficial owners of more than ten percent
of the Company's stock are required by SEC regulation to furnish the Company
with copies of all such forms which they file.
Based solely on the Company's review of the copies of Forms 3, 4 and 5 and
amendments thereto received by it for the year ended December 31, 2002, or
written representations from certain reporting persons that no such forms were
required to be filed by those persons, the Company believes that during the
year
20
ended December 31, 2002, all filing requirements were complied with by its
officers, directors, beneficial owners of more than ten percent of the
Company's stock and other persons subject to Section 16 of the Exchange Act.
Financial and Other Information. On October 24, 2001, the Company's Board
of Directors declared a three-for-two split (the "Stock Split") of the Common
Stock which was effected in the form of a stock dividend payment on
December 21, 2001 to stockholders of record on December 10, 2001. All Common
Stock share and per share data included in this Proxy Statement have been
adjusted to reflect this Stock Split.
Reference should be made to the Company's annual report on Form 10-K for the
year ended December 31, 2002, and the Company's Annual Report delivered
together with this Proxy Statement, such documents incorporated herein by
reference, for financial information and related disclosures required to be
included herein.
Stockholders' Proposals. Proposals of stockholders intended to be presented
at the Company's Annual Meeting of Stockholders to be held in 2004 must be
received by the Company no later than December 11, 2003, in order to be
included in the Company's proxy statement and form of proxy relating to that
meeting. Such proposals must comply with the requirements as to form and
substance established by the SEC for such proposals in order to be included in
the proxy statement. A stockholder who wishes to make a proposal at the 2004
Annual Meeting without including the proposal in the Company's proxy statement
and form of proxy relating to that meeting must notify the Company by
February 26, 2004. If the stockholder fails to give notice by this date, then
the persons named as proxies in the proxies solicited by the Board for the
2004 Annual Meeting may exercise discretionary voting power with respect to
any such proposal.
Documents Incorporated by Reference. This Proxy Statement incorporates
documents by reference which are not presented herein or delivered herewith.
These documents (except for certain exhibits to such documents, unless such
exhibits are specifically incorporated herein) are available upon request
without charge. Requests may be oral or written and should be directed to the
attention of the Secretary of the Company at the principal executive offices
of the Company. In addition, the Company's Web site is located at http://
www.kimcorealty.com. On the Company's Web site you can obtain, free of charge,
a copy of our annual report on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as
amended, as soon as reasonably practicable after we file such material
electronically with, or furnish it to, the SEC.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the date
of the Meeting shall be deemed incorporated by reference into this Proxy
Statement and shall be deemed a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this Proxy
Statement to the extent that a statement contained herein (or subsequently
filed document which is also incorporated by reference herein) modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed to constitute a part of this Proxy Statement, except as so modified
or superseded.
Other Business. All shares represented by the accompanying proxy will be
voted in accordance with the proxy. The Company knows of no other business
which will come before the Meeting for action. However, as to any such
business, the persons designated as proxies will have authority to act in
their discretion.
21
Appendix A
KIMCO REALTY CORPORATION
AUDIT COMMITTEE CHARTER
Mission Statement and Organization
The Audit Committee of the Board of Directors will:
o Oversee the Company's accounting and financial reporting policies and
practices and system of internal control;
o Oversee the quality and objectivity of its financial statements and the
independent audit thereof; and
o Act as a liaison between the Company's independent auditors and its full
board of directors.
This Audit Committee shall consist entirely of members of the Board that are
free of any relationships that, in the opinion of the Board, would interfere
with the exercise of their independent judgment. The Audit Committee shall
consist of three members, each of whom shall have accounting or financial
management experience and expertise, as determined by the full Board in its
business judgment. One member shall serve as Committee Chair. The Audit
Committee will meet at least two times per year with special meetings called
as circumstances warrant, and shall meet annually with the Chief Financial
Officer of the Company. The Audit Committee will review and reassess the
adequacy of this charter on an annual basis.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control, and the independent auditor's responsibility to plan and carry out a
proper audit.
Roles and Responsibilities
o To recommend the selection, retention or termination of independent
auditors and to evaluate their independence;
o Meet with the Company's independent auditors, including private meetings,
as deemed necessary to:
o to review the arrangements for the annual audit and any special audits;
o to discuss any matters of concern brought to their attention relating
to the Company's financial statements;
o consider the auditors' comments with respect to the Company's financial
policies, procedures and internal accounting controls and management's
responses thereto;
o to review the form of opinion the auditors propose to render to the
Board and shareholders; and
o to review the Company's quarterly financial results prior to the public
release and/or the Company's quarterly financial statements prior to
filing or distribution. The Committee Chair may represent the full
Committee for the review of the quarterly statements.
o To receive reports concerning any changes in accounting principles or
practices proposed by management or the independent auditors;
o To review the fees charged by the independent auditors for audit and non-
audit services brought to the Committee's attention by management;
o To investigate improprieties or suspected improprieties in the Company's
operations; and
o Regularly update the Board of Directors with respect to the above and
other matters as the Committee may deem necessary or appropriate and make
appropriate recommendations.
The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain special
counsel and other experts or consultants at the expense of the Company.
2740-PS-02
[Kimco Realty Corporation Logo] VOTE BY INTERNET - www.proxyvote.com
KIMCO REALTY CORPORATION Use the Internet to transmit your voting
C/O PROXY SERVICES instructions and for electronic delivery of
P.O. B0X9142 information up until 11:59 P.M. Eastern Time
FARMINGDALE, NY 11735 the day before the cut-off date or meeting
date. Have your proxy card in hand when you
access the web site. You will be prompted to
enter your 12-digit Control Number which is
located below to obtain your records and to
create an electronic voting instruction
form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit
your voting instructions up until 11:59 P.M.
Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in
hand when you call. You will be prompted to
enter your 12-digit Control Number which is
located below and then follow the simple
instructions the Vote Voice provides you.
VOTE BY MAIL
Mark, sign, and date your proxy card and
return it in the postage-paid envelope we
have provided or return it to Kimco Realty
Corporation, c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KIMCO1 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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KIMCO REALTY CORPORATION
Vote On Directors
1. To elect Directors to serve for a term For Withhold For All To withhold authority to vote, mark "For
of one year and until their successors All All Except All Except" aid write the nominee's
are duly elected and qualify: |_| |_| |_| number on the line below.
Nominees:
(01) M.Kimmel (05) J. Grills
(02) M. Cooper (06) D. Henry
(03) R. Dooley (07) F. Lourenso
(04) M. Flynn
Vote On Proposal For Against Abstain
2. To approve a recommendation by the Executive Compensation Committee of the Board of
Directors that the number of shares of the Company's Common Stock par value $.01 per
share, subject to Option under the Company's 1998 Equity Participation Plan be increased
by 5,000,000 shares; |_| |_| |_|
3. To transact such other business as may properly come before the Meeting or any
adjournment(s) or postponement(s) thereof.
For address changes, please check this box
and write them on the back where indicated |_|
Please sign exactly as name appears above.
When shares are held by joint tenants, both
should sign. When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as such, If
a corporation, please sign in corporate name
by President or other authorized officer. If
a partnership, please sign in partnership
name by authorized person.
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (joint Owners) Date
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KIMCO REALTY CORPORATION
PROXY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Milton Cooper, Michael J. Flynn and Bruce
Kauderer as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side, all
of the shares of Common Stock of Kimco Realty Corporation held of record by the
undersigned on April 3, 2003, at the Annual Meeting of Stockholders to be held
on May 15, 2003, or any adjournment(s) or postponement(s) thereof. The
undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of
Stockholders and the accompanying Proxy Statement.
The Board of Directors recommends a vote (1) FOR all of the nominees for
director and a vote (2) FOR the recommendation by the Executive Compensation
Committee of the Board of Directors that the number of shares of the Company's
Common Stock par value $.01 per share, subject to Option under the Company's
1998 Equity Participation Plan be increased by 5,000,000 shares.
To vote FOR all of the nominees for director and FOR the recommendation by
the Executive Compensation Committee, just sign and date the reverse side. No
boxes need to be checked.
This proxy when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR the election of all nominees for director and FOR the recommendation
by the Executive Compensation Committee of the Board of Directors and in the
discretion of the Proxies upon such other business as may properly come before
the Meeting. By executing this proxy the undersigned hereby revokes all prior
proxies.
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Address Changes:
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(If you noted any Address Changes above, please mark corresponding box on
the reverse side.)
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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