SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities and 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 Under Rule 14a-12
MISSION WEST PROPERTIES, INC.
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------------
(Name of Person (s) Filing Proxy Statement, if other than 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 transaction applies:
(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):
(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 provide 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:
MISSION WEST PROPERTIES, INC.
10050 Bandley Drive
Cupertino, California 95014
Dear Stockholder,
You are cordially invited to attend the 2003 Annual Meeting of Stockholders
of MISSION WEST PROPERTIES, INC. (the "Company") to be held on May 21, 2003 at
10:00 a.m., Pacific time, at the Company's offices at 10050 Bandley Drive,
Cupertino, California 95014.
The matters expected to be acted upon at the meeting are described in
detail in the following Notice of the 2003 Annual Meeting of Stockholders and
Proxy Statement. Also included is a Proxy Card and postage paid envelope.
Whether you plan to attend the Annual Meeting or not, it is important that
you promptly complete, sign, date and return the enclosed Proxy Card, or vote in
accordance with the instruction set forth on the Proxy Card. This will ensure
your proper representation at the Annual Meeting.
Sincerely,
/s/ Carl E. Berg
---------------------------------
Carl E. Berg
Chairman of the Board and
Chief Executive Officer
YOUR VOTE IS IMPORTANT.
PLEASE REMEMBER TO PROMPTLY RETURN YOUR PROXY
MISSION WEST PROPERTIES, INC.
NOTICE OF 2003 ANNUAL MEETING OF STOCKHOLDERS
To be held May 21, 2003
To the Stockholders of Mission West Properties, Inc.:
NOTICE IS HEREBY GIVEN that the 2003 Annual Meeting of Stockholders of
Mission West Properties, Inc., a Maryland corporation (the "Company"), will be
held May 21, 2003 at the Company's offices at 10050 Bandley Drive, Cupertino,
California 95014, at 10:00 a.m., Pacific time, for the following purposes:
1. To elect five members of the Board of Directors to hold office until
the next Annual Meeting of Stockholders or until their respective
successors have been elected and qualify. The nominees are Carl E.
Berg, John C. Bolger, William A. Hasler, Lawrence B. Helzel, and
Raymond V. Marino.
2. To ratify the appointment of the accounting firm of
PricewaterhouseCoopers LLP as independent auditors for the Company for
the year ending December 31, 2003.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment of the Annual Meeting.
The Board of Directors has fixed the close of business on April 15, 2003 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting and at any adjournments thereof. A list of such
stockholders will be available for inspection at the principal office of the
Company.
All stockholders are cordially invited to attend the Annual Meeting.
However, to ensure your representation, you are requested to complete, sign,
date and return the enclosed proxy as soon as possible in accordance with the
instructions on the proxy card. A return addressed envelope is enclosed for your
convenience. Any stockholder attending the Annual Meeting may vote in person
even though the stockholder has returned a proxy previously. Your proxy is
revocable in accordance with the procedures set forth in the Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Raymond V. Marino
-----------------------------------
Raymond V. Marino
Secretary
Cupertino, California
April 8, 2003
MISSION WEST PROPERTIES, INC.
10050 Bandley Drive
Cupertino, California 95014
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PROXY STATEMENT
---------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Mission West Properties, Inc., a Maryland corporation
(the "Company"), of proxies, in the accompanying form, to be used at the 2003
Annual Meeting of Stockholders to be held at 10:00 a.m., Pacific time, on May
21, 2003 at 10050 Bandley Drive, Cupertino, California 95014, and any
postponement or adjournments thereof (the "Annual Meeting").
This Proxy Statement and the accompanying proxy are being mailed on or
about April 21, 2003 to all stockholders of our Common Stock entitled to notice
of and to vote at the Annual Meeting.
SOLICITATION AND VOTING PROCEDURES
Shares represented by valid proxies in the form enclosed, received in time
for use at the Annual Meeting and not revoked at or before the Annual Meeting,
will be voted at the Annual Meeting. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of the Company's common stock,
par value $.001 per share ("Common Stock"), is necessary to constitute a quorum
at the Annual Meeting. Holders of Common Stock are entitled to one vote per
share on all matters. The Company will tabulate stockholder votes, and an
officer of the Company will tabulate votes cast in person at the Annual Meeting.
With respect to the tabulation of proxies for purposes of constituting a quorum,
abstentions are treated as present, but will not be counted as votes cast at the
Annual Meeting with respect to any proposal and will have no effect on the
result of the vote.
Assuming the presence of a quorum, the affirmative vote of a plurality of
the votes cast at the Annual Meeting and entitled to vote is required for
Proposal No. 1 regarding the election of each director. An affirmative vote of
the holders of a majority of the votes cast affirmatively or negatively at the
Annual Meeting is necessary for approval of Proposal No. 2 to ratify the
appointment of independent auditors. All proxies will be voted as specified on
the proxy cards submitted by stockholders, if the proxy is properly executed and
is received by the Company before the close of voting at the Annual Meeting or
any adjournment or postponement thereof. If no choice has been specified, a
properly executed and timely proxy will be voted for Proposals Nos. 1 and 2,
which are described in detail elsewhere in this Proxy Statement.
The close of business on April 15, 2003 has been fixed as the record date
for determining the stockholders entitled to notice of and to vote at the Annual
Meeting. As of that date, the Company had 17,653,691 shares of Common Stock
outstanding and entitled to vote.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock for their expenses in forwarding
proxy material to such beneficial owners. Solicitation of proxies by mail may be
supplemented by telephone, telegram, telex and other electronic means, and
personal solicitation by the directors, officers or employees of the Company. No
additional compensation will be paid to directors, officers or employees for
such solicitation.
The Company's Annual Report on Form 10-K for the year ended December 31,
2002 is being mailed to the stockholders with this Proxy Statement.
VOTING ELECTRONICALLY OR BY TELEPHONE
A number of brokerage firms and banks are participating in a program
provided through ADP Investor Communication Services that offers telephone and
Internet voting options. If your shares are held in an account at a brokerage
firm or bank participating in the ADP program, you may authorize and direct your
vote of those shares by calling the telephone number which appears on your
voting form or though the Internet in accordance with instructions set forth on
the voting form. The authorization to vote your shares through the ADP program
must be received by midnight on May 20, 2003.
- 1 -
The Internet and telephone voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to communicate their
authorization of a proxy to vote their shares and to confirm that their
instructions have been properly recorded. The Company has been advised by its
counsel that the procedures that have been put in place are consistent with the
requirements of applicable law. Stockholders communicating voting authorization
via the Internet through ADP Investor Communication Services should understand
that there may be costs associated with electronic access, such as usage charges
from Internet access providers and telephone companies, that would be borne by
the stockholder.
REVOCABILITY OF PROXIES
You can revoke your proxy at any time before the voting at the Annual
Meeting by sending a properly signed written notice of your revocation to the
Secretary of the Company, by submitting another proxy that is properly signed
and bears a later date or by attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not itself revoke an earlier submitted
proxy. Requests for additional copies of the Annual Report and Proxy Statement
may be made by calling the Company at (408) 725-0700. You should direct any
written notices of revocation, requests for additional copies of the Annual
Report and Proxy Statement, and related correspondence to: Mission West
Properties, Inc., 10050 Bandley Drive, Cupertino, California 95014, Attention:
Secretary.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of Mission West Properties, Inc. as of
March 31, 2003 are as follows:
Name Age Positions with the Company
---- --- --------------------------
Carl E. Berg 65 Chairman of the Board, Chief Executive Officer and Director
Raymond V. Marino 44 President, Chief Operating Officer and Director
Wayne N. Pham 33 Vice President of Finance and Controller
John C. Bolger (1) 56 Director
William A. Hasler (1) 61 Director
Lawrence B. Helzel (1) 55 Director
(1) Member of the Audit Committee, the Compensation Committee, and the
Independent Directors Committee.
The following is a biographical summary of the experience of our executive
officers and directors:
Mr. Berg has served as Chairman of the Board, Chief Executive Officer and
President of the Company since September 1997. Since 1979, Mr. Berg has been a
general partner of Berg & Berg Developers and has been a director and officer of
Berg & Berg Enterprises, Inc. since its inception. Mr. Berg is a private
investor and is also a director of Monolithic System Technology, Inc., Focus
Enhancements, Inc., Valence Technology, Inc., and System Integrated Research,
Ltd.
Mr. Marino joined the Company in June 2001 as President and Chief Operating
Officer and was appointed by the Board of Directors to fill a newly created
board seat in July 2001. From November 1996 to August 2000, he was President,
Chief Executive Officer and a member of the board of directors of Pacific
Gateway Properties, Inc.
Mr. Pham joined the Company in March 2000 as Controller and was promoted to
Vice President of Finance in October 2000. From September 1995 to July 1999, he
was Corporate Accountant and Accounting Manager at AvalonBay Communities, Inc.,
a multi-family apartment REIT.
Mr. Bolger became a director of the Company on March 30, 1998. Mr. Bolger
is a private investor and certified public accountant. He is the retired Vice
President of Finance and Administration of Cisco Systems, Inc., a manufacturer
of computer networking systems, a position that he held from May 1989 to
December 1992. Mr. Bolger is also a director of Integrated Device Technology,
Inc., JNI Corporation, Sanmina-SCI Corporation, and Wind River Systems, Inc.
Mr. Hasler became a director of the Company on December 4, 1998. For seven
years, Mr. Hasler was Dean of the Haas School of Business at the University of
California, Berkeley, and is a former vice chairman and director of KPMG LLP. In
1998, he retired as Dean Emeritus and became Co-CEO of Aphton Corporation, a
public pharmaceutical company. Mr. Hasler is also the chairman of the board of
directors of Solectron Corporation and a director of Aphton Corporation, Walker
Interactive Systems, Inc., Technical Olympic USA, Inc., Tenera, Inc., Ditech
Communications Network, and DMC Stratex Networks, Inc. He is a public governor
of the Pacific Stock and Options Exchange and a trustee of the Schwab Funds.
Mr. Helzel became a director of the Company on December 4, 1998. Mr. Helzel
is a general partner of Helzel Kirshman, L.P., a private investment partnership,
a position which he has held for more than five years.
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NUMBER TERMS AND ELECTION OF DIRECTORS
The Company's Bylaws currently provide for a Board of Directors consisting
of five directors. Each director serves for a term of one year or until the next
annual meeting at which directors are elected and the director's successor is
elected and qualifies. In the election of directors, each stockholder is
entitled to one vote for each share of Common Stock held by such stockholder.
MEETINGS OF DIRECTORS
Under the Company's Articles of Amendment and Restatement, or Charter, its
Bylaws and contracts with the "Berg Group," which consists of Carl E. Berg,
Clyde J. Berg, the members of their respective immediate families, and
affiliated entities owning limited partnership interests, or O.P. Units, in
Mission West Properties, L.P., Mission West Properties, L.P. I, Mission West
Properties, L.P. II, or Mission West Properties, L.P. III (the "Operating
Partnerships"), the Berg Group has special rights with respect to meetings of
the Board of Directors. A quorum for any meeting requires the presence of Carl
E. Berg, or in the event of his death, disability or other event which results
in his ceasing to be director, the presence of someone who Mr. Berg has
designated to replace him ("Berg Designee"). With written consent from Mr. Berg
or the Berg Designee, meetings of the Board of Directors may be held without the
presence of either of them. Mr. Berg is obligated to submit a written statement
identifying the Berg Designee to the Company from time to time and may amend the
statement at his sole discretion. In addition, a majority of the Board of
Directors, which includes Mr. Berg or the Berg Designee, is required for
approval of any amendment to the Charter or Bylaws and any merger, consolidation
or sale of all or substantially all of the assets of the Company or the
Operating Partnerships. These special provisions will remain in effect as long
as the Berg Group collectively owns at least 15% of the voting stock of the
Company computed on a diluted, or "Fully Diluted", basis taking into account all
voting stock issuable upon the exercise of all outstanding warrants, options,
convertible securities and other rights to acquire voting stock of the Company,
and all O.P. Units exchangeable or redeemable for Common Stock or other voting
stock of the Company without regard to any percentage ownership limit set forth
in the Charter or Bylaws, or by agreement.
COMPENSATION OF DIRECTORS
The Company pays each director who is not an officer or employee of the
Company a fee for serving as director. The annual fee is equal to $15,000 plus
$1,000 for attendance (in person or by telephone) at each meeting of the Board
of Directors, excluding committee meetings. Officers of the Company who are also
directors do not receive any directors' fees.
Each non-employee member of the Board of Directors who became or becomes a
member of the Board of Directors after November 10, 1997, the date on which the
1997 Stock Option Plan (the "Option Plan") was approved by the stockholders of
the Company, automatically receives a grant of an option to purchase 50,000
shares of Common Stock at an exercise price equal to 100% of the fair market
value of the Common Stock at the date of grant of such option upon joining the
Board of Directors. Such options become exercisable cumulatively with respect to
1/48th of the underlying shares on the first day of each month following the
date of grant. Generally, the options must be exercised while the optionee
remains a director.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Company's Board of Directors has standing Audit and Compensation
Committees. The Board of Directors does not have a nominating committee. The
Audit Committee currently has three members: John C. Bolger, William A. Hasler
and Lawrence B. Helzel. The Compensation Committee currently has the same three
members.
The Board of Directors has an Independent Directors Committee, which is
also comprised of Messrs. Bolger, Hasler and Helzel. This Committee is
responsible for reviewing and acting upon proposed transactions between the
Company and members of the Berg Group under the terms of certain agreements
between the Company and such Berg Group members. See "Certain Relationships and
Related Transactions."
During the year ended December 31, 2002, there were four meetings of the
Board of Directors and four meetings of the Audit Committee. Each of the
directors attended 100% of the total number of meetings of the Board of
Directors and meetings of the committees of the Board of Directors of which he
is a member. In addition, the members of the Board of Directors acted at various
times by unanimous written consent pursuant to Maryland law.
- 4 -
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth summary information as
to compensation received by the Company's Chief Executive Officer and all other
executive officers of the Company (collectively the "named executive officers"),
for the years ended December 31, 2002, 2001 and 2000.
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------- ------------
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation (1) Options Compensation
--------------------------------- ------ -------- ------- ------------------ ------------ --------------
Carl E. Berg 2002 $100,000 $ -- $22,500 -- --
Chairman of the Board and Chief 2001 100,000 -- 22,500 -- --
Executive Officer 2000 100,000 -- 22,500 -- --
Raymond V. Marino (2) 2002 200,000 -- 29,000 375,000 --
President and Chief Operating 2001 116,667 -- -- -- --
Officer
Wayne N. Pham
Vice President and Controller 2002 94,000 -- 14,100 152,000 --
2001 94,000 -- 14,100 -- --
2000 94,000 -- -- -- --
------------------------------------
(1) Employer contribution to 401(k) plan.
(2) Mr. Marino joined the Company in June 2001.
OPTION GRANTS IN LAST FISCAL YEAR
The Company did not grant options to purchase any shares of Common Stock
with respect to the fiscal year ended December 31, 2002.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table provides information regarding the aggregate exercises
of options by each of the named executive officers. In addition, this table
includes the number of shares covered by both exercisable and unexercisable
stock options as of December 31, 2002, and the values of "in-the-money" options,
which values represent the positive spread between the exercise price of any
such options and the fiscal year-end value of the Company's Common Stock.
Number of Securities Value of the Unexercised
Underlying Unexercised In-The-Money Options at
Shares Options at December 31, 2002 December 31, 2002 (1)
Acquired on Value --------------------------- ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----------------------------- --------------- -------------- ------------- ------------- ------------- -------------
Carl E. Berg.............. -- N/A N/A N/A N/A N/A
Raymond V. Marino......... -- N/A 104,167 270,833 -- --
Wayne N. Pham............. -- N/A 86,000 66,000 $82,500 $49,500
----------------------
(1) The value of unexercised in-the-money options at fiscal year end assumes a
fair market value for the Company's Common Stock of $9.90, the closing
market price per share of the Company's Common Stock as reported on the
American Stock Exchange on December 31, 2002, the last trading day for the
year.
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EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2002 regarding
equity compensation plans approved by the Company's security holders.
Number of
Number of Shares of Common
Shares of Common Stock Remaining
Stock to be Issued Weighted-Average Available for Future
Upon Exercise of Exercise Price of Issuance Under Equity
Plan Category Outstanding Options Outstanding Options Compensation Plans
--------------- ------------------------- ------------------------ ------------------------
Equity Compensation plans approved by security holders 950,362 $10.65 3,978,089
Equity Compensation plans not approved by security holders N/A N/A N/A
------------------------- ------------------------ ------------------------
Total 950,362 $10.65 3,978,089
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SHARE OWNERSHIP
The following table sets forth certain information as of March 31, 2003,
concerning the ownership of Common Stock by (i) each stockholder of the Company
known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, (ii) each current member of the Board of
Directors of the Company, (iii) each executive officer and director of the
Company named in the Summary Compensation Table appearing under "Executive
Compensation" below and (iv) all current directors and executive officers of the
Company as a group.
The Company has relied on information supplied by its officers, directors
and certain shareholders and on information contained in filings with the SEC.
Percent of All
Shares of
Common Stock
Percent of All (Assuming Percent of All
Number of Shares Shares Exchange of Shares of Common
Beneficially of Common Number of O.P. Holder's O.P. Stock/O.P. Units
Name Owned (1) Stock Units Units)(2) (1)(2)
------------------------------------------------------------------------------------------------------------------------------------
Executive Officers and Directors:
Carl E. Berg 18,650 (3) * 44,777,310(4)(15) 71.75% 43.01%
Chairman of the Board, Chief Executive
Officer and Director
Raymond V. Marino 160,338 (5) * -- * *
President, Chief Operating Officer and
Director
Wayne N. Pham 100,500 (6) * -- * *
Vice President of Finance and Controller
John C. Bolger, Director 59,222 (7) * -- * *
96 Southerland Drive
Atherton, CA 94027
William A. Hasler, Director 72,000 (8) * -- * *
c/o Aphton Corporation
1 Market Street, Spear Tower, Ste. 1850
San Francisco, CA 94105
Lawrence B. Helzel, Director 219,500 (9) 1.24% -- 1.24% *
c/o Helzel Kirshman, LP
5550 Redwood Road, Suite 4
Oakland, CA 94619
5% Stockholders:
Cohen & Steers Capital Management, Inc. 1,146,000 (10) 6.49% -- 6.49% 1.10%
757 Third Avenue
New York, NY 10017
Neuberger Berman, LLC 2,503,023 (11) 14.18% -- 14.18% 2.40%
Neuberger Berman, Inc.
605 Third Avenue
New York, NY 10158
Ingalls & Snyder, LLC 1,623,411 (12) 9.20% -- 9.20% 1.56%
61 Broadway
New York, NY 10006
Teachers Insurance & Annuity Association 1,100,000 (13) 6.23% -- 6.23% 1.06%
of America
730 Third Avenue
New York, NY 10017
Clyde J. Berg -- * 44,376,789(14)(15) 71.54% 42.61%
c/o Berg & Berg Developers
10050 Bandley Drive
Cupertino, CA 95014
Berg & Berg Enterprises, Inc. (15) -- * 10,789,383 37.93% 10.36%
10050 Bandley Drive
Cupertino, CA 95014
Thelmer W. Aalgaard -- * 1,954,225 9.97% 1.88%
c/o Berg & Berg Developers
10050 Bandley Drive
Cupertino, CA 95014
John T. Kontrabecki -- * 1,755,761 9.05% 1.69%
2755 Campus Drive, Suite 100
San Mateo, CA 94403
All Directors and Officers as a group (6 630,210 (16) 3.50% 44,777,310 (14) 72.33% 43.45%
persons)
----------------------------------
* Less than 1%.
- 7 -
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those securities and includes
securities which such person has the right to acquire beneficial ownership
within 60 days of March 31, 2003. Unless otherwise indicated, the persons
or entities identified in this table have sole voting and investment power
with respect to all shares shown as beneficially owned by them. Common
Stock percentage ownership interest calculations are based on 17,653,691
shares outstanding as of March 31, 2003 and excluding all shares of Common
Stock issuable upon the exercise of outstanding options other than the
shares so issuable within 60 days under options held by the named person.
Common Stock/O.P. Units percentage ownership interest calculations are
based on 104,151,755 shares of Common Stock and O.P. Units exchangeable for
Common Stock as of March 31, 2003.
(2) Assumes O.P. Units are exchanged for shares of Common Stock without regard
to (i) whether such O.P. Units may be exchanged for shares of Common Stock
within 60 days of March 31, 2003, and (ii) certain ownership limit
provisions set forth in the Company's Articles of Amendment and
Restatement.
(3) Mr. Berg disclaims beneficial ownership of 2,112 shares of Common Stock
held by him as a trustee under various pension and profit sharing plans.
Such shares are not included herein.
(4) Includes O.P. Units in which Mr. Berg has a pecuniary interest because of
his status as a limited partner in the operating partnerships. Also
includes an additional 10,789,383 and 196,428 shares of Common Stock held
by or issuable on exchange of O.P. Units beneficially owned by Berg & Berg
Enterprises, Inc. and Berg & Berg Enterprises, LLC, respectively. Mr. Berg
disclaims beneficial interest in any shares or O.P. Units deemed
beneficially owned by Kara Ann Berg, his daughter, Carl Berg Child's Trust
UTA dated June 2, 1978 and the 1981 Kara Ann Berg Trust.
(5) Includes 130,208 shares of Common Stock issuable on exercise of options.
Does not include 244,792 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(6) Includes 100,500 shares of Common Stock issuable on exercise of options.
Does not include 51,500 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(7) Includes 37,000 shares of Common Stock issuable on exercise of options.
Does not include 10,000 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(8) Includes 58,000 shares of Common Stock issuable on exercise of options.
Does not include 10,000 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(9) Includes 22,000 shares of Common Stock issuable on exercise of options.
Does not include 10,000 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(10) Cohen & Steers Capital Management, Inc. is the beneficial owner on behalf
of other persons. No such person is known to have an interest in more than
5% of the Common Stock reported. Amount based on the filing of Schedule 13G
on February 14, 2003.
(11) Neuberger Berman, LLC & Neuberger Berman, Inc. is the beneficial owner on
behalf of other persons. One employee, Dan McCarthy, has an interest in
5.7% of the Common Stock reported. No other person is known to have an
interest in more than 5% of the Common Stock reported. Amount based on the
filing of Schedule 13G on February 13, 2003.
(12) Ingalls & Snyder, LLC is the beneficial owner on behalf of other persons.
No such person is known to have an interest in more than 5% of the Common
Stock reported. Amount based on the filing of Schedule 13G on February 11,
2003.
(13) Teachers Insurance & Annuity Association of America is the beneficial owner
on behalf of other persons. No such person is known to have an interest in
more than 5% of the Common Stock reported. Amount based on the filing of
Schedule 13G on February 14, 2003.
(14) Includes O.P. Units in which Mr. Berg has a pecuniary interest because of
his status as a limited partner in the operating partnerships. Also
includes L.P. Units held by Mr. Berg as trustee of the Carl Berg Child's
Trust UTA dated June 2, 1978 and the 1981 Kara Ann Berg Trust, and an
additional 10,789,383 shares of Common Stock held by or issuable on
exchange of O.P. Units beneficially owned by Berg & Berg Enterprises, Inc.
This does not include any share deemed beneficially owned by Sonya L. Berg
and Sherri L. Berg, his daughters, as to which he disclaims beneficial
ownership.
(15) Carl E. Berg is an executive officer and director and Clyde J. Berg is a
director of Berg & Berg Enterprises, Inc. With members of their immediate
families, the Messrs. Berg beneficially owns, directly and indirectly, all
of the O.P. Units of Berg & Berg Enterprises, Inc.
(16) Current officers and directors include Carl E. Berg, Raymond V. Marino,
Wayne N. Pham, John C. Bolger, William A. Hasler, and Lawrence B. Helzel.
See Notes 3 through 9.
- 8 -
CONTRACTUAL AND OTHER CONTROL ARRANGEMENTS
SPECIAL BOARD VOTING PROVISIONS. The Charter and Bylaws provide substantial
control rights for the Berg Group. These rights include a requirement that Mr.
Berg or his designee as director approve certain fundamental corporate actions,
including amendments to the Charter and Bylaws and any merger, consolidation or
sale of all or substantially all of our assets. In addition, the Bylaws provide
that a quorum necessary to hold a valid meeting of the board of directors must
include Mr. Berg or his designee. The rights described in the two preceding
sentences apply only as long as the Berg Group members and their affiliates,
other than the Company and the Operating Partnerships, beneficially own, in the
aggregate, at least 15% of the outstanding shares of Common Stock on a Fully
Diluted basis. In addition, directors representing more than 75% of the entire
board of directors must approve other significant transactions, such as
incurring debt above certain amounts, acquiring assets and conducting business
other than through the Operating Partnerships.
BOARD OF DIRECTORS REPRESENTATION. The Berg Group members have the right to
designate two of the director nominees submitted by the Board of Directors to
stockholders for election, as long as the Berg Group members and their
affiliates, other than the Company and the Operating Partnerships, beneficially
own, in the aggregate, at least 15% of our outstanding shares of Common Stock on
a Fully Diluted basis. If the Fully Diluted ownership of the Berg Group members
and their affiliates is less than 15% but is at least 10% of the Common Stock,
the Berg Group members have the right to designate one of the director nominees
submitted by the Board of Directors to stockholders for election. Its right to
designate director nominees affords the Berg Group substantial control and
influence over the management and direction of our corporation.
SUBSTANTIAL OWNERSHIP INTEREST. The Berg Group currently owns O.P. Units
representing approximately 75.2% of the equity interests in the operating
partnerships. The O.P. Units may be converted into shares of Common Stock,
subject to limitations set forth in the Charter (including an overall 20%
ownership limitation for the Berg Group), and other agreements with the Berg
Group. Upon conversion these shares would represent voting control of the
Company. The Berg Group's ability to exchange its O.P. Units for Common Stock
permits it to exert substantial influence over the management and direction of
the Company.
LIMITED PARTNER APPROVAL RIGHTS. Mr. Berg and other limited partners of the
Operating Partnerships, including other members of the Berg Group, may restrict
the Company's operations and activities through rights provided under the terms
of the Amended and Restated Agreement of Limited Partnership which governs each
of the Operating Partnerships and the Company's legal relationship to each
Operating Partnership as its general partner. Matters requiring approval of the
holders of a majority of the O.P. Units, which necessarily would include the
Berg Group, include (i) the amendment, modification or termination of any of the
Operating Partnership Agreements; (ii) the transfer of any general partnership
interest in the Operating Partnerships, including, with certain exceptions,
transfers attendant to any merger, consolidation or liquidation of our
corporation; (iii) the admission of any additional or substitute general
partners in the Operating Partnerships; (iv) any other change of control of the
Operating Partnerships; (v) a general assignment for the benefit of creditors or
the appointment of a custodian, receiver or trustee of any of the assets of the
Operating Partnerships; and (vi) the institution of any bankruptcy proceeding
for any Operating Partnership.
In addition, as long as the Berg Group members and their affiliates,
beneficially own, in the aggregate, at least 15% of the outstanding shares of
Common Stock on a Fully Diluted basis, the consent of the limited partners
holding the right to vote a majority of the total number of O.P. Units
outstanding is also required with respect to (i) the sale or other transfer of
all or substantially all of the assets of the Operating Partnerships and certain
mergers and business combinations resulting in the complete disposition of all
O.P. Units; (ii) the issuance of limited partnership interests senior to the
O.P. Units as to distributions, assets and voting; and (iii) the liquidation of
the Operating Partnerships.
- 9 -
Comparison of Shareholder Return on Investment
The following line graph compares the change in the Company's cumulative
stockholder return on its shares of Common Stock to the cumulative total return
of the NAREIT Equity REIT Total Return Index ("NAREIT Equity Index") and the
Standard & Poor's 500 Stock Index ("S & P 500 Index") from December 31, 1998 to
December 31, 2003. The line graph starts December 31, 1998; however, the Company
started trading under the Berg Group ownership on December 8, 1998. The graph
assumes that the value of the investment in the Company's Common Stock was $100
at December 31, 1998 and that all dividends were reinvested. The Common Stock's
price on December 31, 1998 was $6.75. The Company obtained the information about
the NAREIT Equity Index and S & P 500 Index from each entity respectively, and
has assumed that the information is reliable, but cannot assume its accuracy.
[OBJECT OMITTED]
Mission West
Properties, Inc. S & P 500 NAREIT EQUITY INDEX
---------------- --------- -------------------
1998 $100.00 $100.00 $100.00
1999 $123.18 $119.53 $ 95.38
2000 $233.98 $ 89.86 $126.37
2001 $230.37 $ 86.96 $113.93
2002 $194.82 $ 76.63 $103.82
(1) The stock price performance shown in the graph is not necessarily
indicative of future performance of the Company's Common Stock.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate
this Proxy Statement on future filings made by the Company under those
statutes, the Audit Committee Report, the Report on Executive Compensation
and Stock Performance Graph are not deemed filed with the Securities
Exchange Commission and shall not be deemed incorporated by reference into
any such filings.
- 10 -
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Set forth below is a summary of certain material transactions since January
1, 2002 between the Company and any of its directors, executive officers or
holders of more than 5% of the Company's Common Stock, or between the Company
and persons in which directors, executive officers or such stockholders have
direct or indirect material interests.
PROPERTY ACQUISITIONS AND FINANCIAL TRANSACTIONS BETWEEN THE COMPANY AND THE
BERG GROUP
Through a series of transactions in 1997 and 1998, the Company became the
vehicle for substantially all of the Silicon Valley R&D property activities of
the Berg Group, which includes Mr. Berg, his brother Clyde J. Berg, members of
their families and a number of entities in which they have controlling or
substantial ownership interests. The Company owns these former Berg Group
properties, as well as the rest of its properties, through the Operating
Partnerships, of which the Company is the sole general partner. Through various
property acquisition agreements with the Berg Group, the Company has the right
to purchase, on pre-negotiated terms, R&D and other types of office and light
industrial properties that the Berg Group develops in the future in the states
of California, Oregon and Washington.
PENDING PROJECTS ACQUISITION AGREEMENT. In December 1998, the Company
entered into the Pending Projects Acquisition Agreement with members of the Berg
Group, under which the Company agreed to acquire, through the Operating
Partnerships, approximately 1.0 million square feet upon the completion and
leasing of identified pending development projects owned by certain members of
the Berg Group. The Pending Projects Acquisition Agreement was terminated in
December 2000 when the last property contemplated for development was completed,
leased, and purchased by the Company.
BERG LAND HOLDINGS OPTION AGREEMENT. In December 1998, the Company entered
into the Berg Land Holdings Option Agreement under which the Company, through
the Operating Partnerships, has the option to acquire any future R&D, office and
industrial property developed by the Berg Group on land currently owned or
optioned, or acquired for these purposes in the future, directly or indirectly,
by Carl E. Berg or Clyde J. Berg. The principal terms of the Berg Land Holdings
Option Agreement include the following:
- So long as the Berg Group members and their affiliates own or have the
right to acquire shares representing at least 65% of our Common Stock
on a Fully Diluted basis the Company will have the option to acquire
any building developed by any member of the Berg Group on the land
subject to the agreement at such time as the building has been leased.
Upon the exercise of the option, the option price will equal the sum
of:
(1) the full construction cost of the building; plus
(2) 10% of the full construction cost of the building; plus
(3) interest at LIBOR plus 1.65% on the amount of the full
construction cost of the building for the period from the date
funds were disbursed by the developer to the close of escrow;
plus
(4) the original acquisition cost of the parcel on which the
improvements will be constructed; plus
(5) 10% per annum of the amount of the original acquisition cost of
the parcel from the later of January 1, 1998 and the seller's
acquisition date, to the close of escrow; minus
(6) the aggregate principal amount of all debt encumbering the
acquired property, or a lesser amount as approved by the
Independent Directors Committee.
- The acquisition cost, net of any debt, will be payable in cash, or
O.P. Units valued at the average closing price of the Common Stock
over the 30-trading-day period preceding the acquisition or in cash,
at the option of the Berg Group.
- The Company must assume all property tax assessments.
- If the Company elects not to exercise the option with respect to any
property, the Berg Group may hold and lease the property for its own
account, or may sell it to a third party.
- All action taken by the Company under the Berg Land Holdings Option
Agreement must be approved by a majority of the members of the
Independent Directors Committee.
- 11 -
The following table presents certain information concerning projects and
joint venture acquired under the Berg Land Holdings Option Agreement ("Berg
Land"):
Approximate
Rentable Actual
Area (square Acquisition Acquisition Cash/Deb O.P. Units
Property feet) Period Price Assumption Issued
------------------------------- -------------- ------------- ------------- ------------ ------------
Berg Land:
5345 Hellyer Avenue 125,000 Q1 2002 $13,651,965 $ 7,500,000 502,805
5900 Optical Court 165,000 Q3 2002 17,300,621 10,500,000 332,686
TBI-Mission West, LLC JV 593,000 Q1 2003 1,800,000 - 181,032
-------------- ------------- ------------ ------------
TOTAL 883,000 $32,752,586 $18,000,000 1,016,523
============== ============= ============ ============
On January 1, 2003, we acquired a 50% interest in TBI-Mission West, LLC, a
two-member joint venture that owns and developed a complex of four R&D
properties totaling approximately 593,000 rentable square feet, from the Berg
Group. The properties are operated and managed by the other joint venture
partner of TBI-Mission West, LLC. The total acquisition price for the 50%
interest in the joint venture was $1.8 million, which we financed by issuing
181,032 O.P. Units to the Berg Group.
OTHER COVENANTS. The acquisition agreement, Berg Land Holdings Option
Agreement and supplemental agreement to which the Company and the Berg Group, or
Carl E. Berg and Clyde J. Berg, individually are parties includes the
undertaking of Carl E. Berg not to directly or indirectly acquire or develop, or
acquire any equity ownership interest in any entity that has an ownership
interest in, any real estate zoned or intended for use as R&D, office or
industrial properties, with the exception of investments in securities of
publicly traded companies, which securities do not represent more than 10% of
the outstanding voting securities of such companies, in California, Oregon or
Washington without first disclosing such investment opportunity to the Company
and making such opportunity available to the Company, subject to the approval of
the Independent Directors Committee. This restriction does not apply to any
acquisition of the projects subject to the Pending Projects Acquisition
Agreement or completed buildings acquired pursuant to the Berg Land Holdings
Option Agreement or the supplemental agreement. This restriction remains in
effect until the date on which both of the following conditions are satisfied:
(i) no nominee of the Berg Group is a member of the Board of Directors; and (ii)
the Berg Group and its affiliates, other than the Company and the Operating
Partnerships, beneficially own less than 25% of the outstanding Common Stock,
including for these purposes all shares issuable upon exercise of the rights to
exchange O.P. Units for Common Stock.
In addition, all transactions between the Company and any member of the
Berg Group, or an entity in which a member of the Berg Group holds at least 5%
of the equity interests, including the Company's election to issue Common Stock
or pay cash in exchange for O.P. Units tendered by the Berg Group are subject to
review and approval by the Independent Directors Committee. The Independent
Directors Committee reviewed and approved all of the transactions between the
Company and the Berg Group in 2002. Aside from these restrictions, the Berg
Group is generally free to conduct its business activities and will not be
required to seek the approval of such activities or refer business opportunities
to the Company, nor will it have any liability to the Company for its failure to
do so.
ISSUANCE AND ASSUMPTION OF DEBT. As of March 31, 2003, the Company was
liable for loans aggregating approximately $25,911 and $11,001,022 payable to
the Berg Group under a collateralized line of credit and mortgage loan,
respectively. The Berg Group line of credit is collateralized by ten properties,
bears interest at LIBOR plus 1.30%, and the maturity date has recently been
extended to March 2004. The mortgage loan is collateralized by two properties,
bears interest at 7.65%, and matures in June 2010. The Company borrowed and
repaid funds under the line of credit and made regular debt service payments on
the mortgage loan throughout 2002.
LEASE FROM BERG GROUP. The Company leases its executive offices from Berg &
Berg Enterprises, Inc. For the year ended December 31, 2002, the Company paid
$90,240 to Berg & Berg Enterprises, Inc. under the terms of the lease agreement
for its executive offices.
- 12 -
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Directors, officers and greater than ten percent holders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
To the Company's knowledge, based solely on review of the copies of the
above-mentioned reports furnished to the Company and written representations
regarding all reportable transactions, during the fiscal year ended December 31,
2002, all Section 16(a) filing requirements applicable to its directors,
officers and greater than ten percent holders were complied with on time, except
that Carl E. Berg and certain members of the Berg Group did not timely file two
reports on Form 4 that may have been due with respect to acquired O.P. Units
issued pursuant to the Berg Land Holdings Option Agreement and one report on
Form 4 related to a liquidation distribution of O.P. Units from two partnerships
owned and controlled by members of the Berg Group.
REPORT ON EXECUTIVE COMPENSATION BY THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee (the "Committee") comprises three independent
members of the Board of Directors. The Company's Board of Directors has
delegated to the Committee responsibility for reviewing, recommending and
approving the Company's compensation policies and benefits programs. The
Committee also has the principal responsibility for the administration of the
company's stock plans, including approving stock option grants to executive
officers.
COMPENSATION PHILOSOPHY
The Company's executive compensation policy is designed to attract and
retain qualified executive personnel by providing executives with a competitive
total compensation package based in large part on their contribution to the
financial and operational success of the Company, the executive's personal
performance and increases in stockholder value as measured by the Company's
stock price.
COMPENSATION PROGRAM
The compensation package for the Company's executive officers consists of the
following three components:
BASE SALARY. The Committee determines the base salary of each executive
based on the executive's scope of responsibility, past accomplishments and
experience and personal performance, internal comparability considerations and
data regarding the prevailing compensation levels for comparable positions in
relevant competing executive labor markets. The Committee may give different
weight to each of these factors for each executive, as it deems appropriate. In
selecting comparable companies for the purpose of setting competitive
compensation for the Company's executives, the Committee considers many factors
not directly associated with stock price performance, such as geographic
location, annual revenue and profitability, organizational structure,
development stage and market capitalization.
ANNUAL INCENTIVE COMPENSATION. At the present time, the Company does not
have an annual incentive compensation program in place. However, the Committee
may in the future at the Committee's discretion institute an annual incentive
program.
STOCK OPTIONS. The Committee believes that granting stock options to
executives and other key employees on an ongoing basis gives them a strong
incentive to maximize stockholder value and aligns their interests with those of
other stockholders. The Committee determines stock option grants to executives
and has authorized the Company's CEO to determine stock option grants for all
other employees, subject to the Committee's approval of total share allocations
from the Company's Option Plan. In determining the size of stock option grants,
the Committee considers the executive's current position with and
responsibilities to the Company, potential for increased responsibility and
promotion over the option term, tenure with the Company and performance in
recent periods, as well as the size of comparable awards made to executives in
similar positions in competing executive labor markets. Generally, each stock
option grant allows the executive to purchase shares of the Company's Common
Stock at a price per share equal to the market price on the date the option is
granted, but the Committee has the power to grant options at a lower price if
considered appropriate under the circumstances. Each stock option grant
generally becomes exercisable, or vests, in installments over time, contingent
upon the executive's continued employment with the Company.
- 13 -
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The annual salary for Mr. Berg was
set in 1997 and first became payable in 1998. The Committee has no plan to
adjust his compensation.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M). Section 162(m) of the
Internal Revenue Code generally disallows a tax deduction to publicly-held
companies for compensation paid to certain executive officers, to the extent
that compensation paid to the officer exceeds $1 million during the Company's
taxable year. the compensation paid to the company's executive officers for the
year ended December 31, 2002 did not exceed the $1 million limit per officer. In
addition, the Company's 1997 Stock Option Plan and executive incentive option
grants have been structured so that any compensation deemed paid to an executive
officer in connection with the exercise of his or her outstanding options with
an exercise price per share equal to the fair market value per share of the
Common Stock on the grant date will qualify as performance-based compensation
that will not be subject to the $1 million limitation. It is very unlikely that
the cash compensation payable to any of the Company's executive officers in the
foreseeable future will approach the $1 million limit, and the Committee does
not expect to take any action at this time to modify cash compensation payable
to the Company's executive officers to avoid the application of Section 162(m).
The Compensation Committee of the Board of Directors
John C. Bolger
William A. Hasler
Lawrence B. Helzel
- 14 -
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors was formed in December
1998 and currently is comprised of Messrs. John C. Bolger, William A. Hasler and
Lawrence B. Helzel. None of these individuals were at any time during 2002, or
at any other time, an officer or employee of the Company. No executive officer
of the Company serves as a member of the Compensation Committee of any other
entity that has one or more executive officers serving as a member of the
Company's Board of Directors or Compensation Committee.
AUDIT COMMITTEE REPORT
The Audit Committee reviews, acts on and reports to the Board with respect
to various auditing and accounting matters. The Audit Committee has the
authority and responsibility to select, evaluate, and where appropriate, replace
the Company's independent public accountants. The Audit Committee also reviews
the scope of the annual audit fees to be paid to the Company's independent
public accountants, the performance of the independent public accountants, the
audit report of the Company's consolidated financial statements following
completion of the audit and the accounting practices of the Company with respect
to internal accounting and financial controls. The Audit Committee notes,
however, that management has primary responsibility for the Company's financial
statements and the overall reporting process, including the Company's system of
internal controls. The independent public accountants audit the financial
statements prepared by management, express an opinion on whether those financial
statements fairly present the financial position, results of operations and cash
flows of the Company in conformity with accounting principles generally accepted
in the United States of America, and discuss with the Audit Committee any issues
they believe should be raised with us.
The Board of Directors of the Company adopted an Audit Committee Charter on
June 9, 2000. The Audit Committee is currently comprised of Messrs. John C.
Bolger, William A. Hasler, and Lawrence B. Helzel, all of whom are independent
within the meaning of AMEX's listing standards.
The Audit Committee has reviewed and discussed the audited financial
statements of the Company for fiscal year 2002 with management and the Company's
independent public accountants, PricewaterhouseCoopers LLP ("PwC"). The
Committee discussed with PwC matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). The Audit
Committee was also provided by PwC the written disclosures required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and the Committee discussed with PwC that firm's independence.
Based on the discussions with PwC concerning the audit, the independence
discussions and the financial statement review, and such other matters deemed
relevant and appropriate by the Audit Committee, the Audit Committee recommended
to the Board that the Company's financial statements for the fiscal year ended
December 31, 2002 be included in its 2002 Annual Report on Form 10-K filed with
the Securities and Exchange Commission.
FEES PAID TO ACCOUNTANTS IN 2002
The aggregate fees billed to the Company by our independent accountants, PwC,
for professional services rendered in connection with fiscal year 2002 are as
follows:
Audit Fees $123,450
Audit Related Fees -
Tax Fees -
Other Fees -
--------
Total $123,450
Audit Fees include amounts related to professional services rendered in
connection with audits of our annual financial statements for the year ended
December 31, 2002 and the reviews of our quarterly financial statements.
The Audit Committee of the Board of Directors
John C. Bolger
William A. Hasler
Lawrence B. Helzel
- 15 -
--------------------------------------------------------
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
--------------------------------------------------------
At the Annual Meeting, five directors (constituting the entire Board of
Directors) are to be elected to serve until the next annual meeting of
Stockholders and until a successor for such director is elected and qualified,
or until the death, resignation or removal of such director. There are five
nominees, all of whom are currently directors of the Company.
NOMINEES
Set forth below is information regarding the nominees for election to the
Board of Directors:
Name Position(s) with the Company First Elected Director
----------------------------- --------------------------------------------------------------- ----------------------------
Carl E. Berg Chairman of the Board, Chief Executive Officer and Director 1997
John C. Bolger Director 1998
William A. Hasler Director 1998
Lawrence B. Helzel Director 1998
Raymond V. Marino President, Chief Operating Officer and Director 2001
In accordance with the Company's Bylaws, it is a qualification of two
directors that they be nominated by the Berg Group and that one such director be
Carl E. Berg or the Berg Designee as long as the Berg Group and its affiliates
(other than the Company and the Operating Partnership) own at least 15% of the
Fully Diluted number of shares. The Company has been advised by Mr. Berg, who
represents the Berg Group, that he will be the only Berg Group nominee for
election at this meeting.
A plurality of the votes cast at the Annual Meeting is required to elect
each nominee as a director. Unless authority to vote for any of the nominees
named above is withheld, the shares represented by the enclosed proxy will be
voted FOR the election as directors of such nominees. Each person nominated has
agreed to serve if elected, and the Board of Directors has no reason to believe
that any nominee will be unavailable or will decline to serve. In the event,
however, that any nominee is unable or declines to serve as a director at the
time of the Annual Meeting, the proxies will be voted for any nominee who is
designated by the current Board of Directors to fill the vacancy.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE ABOVE NOMINEES.
- 16 -
--------------------------------------------------------
PROPOSAL NO. 2:
INDEPENDENT PUBLIC ACCOUNTANTS
--------------------------------------------------------
The Board of Directors has appointed PricewaterhouseCoopers LLP,
independent public accountants, to audit the financial statements of the Company
for the year ending December 31, 2003. The Board of Directors proposes that the
stockholders ratify this appointment.
The Company expects that representatives of PricewaterhouseCoopers LLP will
be present at the Annual Meeting, will have the opportunity to make a statement
if they desire to do so, and will be available to respond to appropriate
questions.
In the event that stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors, in its discretion, may direct the appointment of a different
independent accounting firm at any time during the year if the Board of
Directors determines that such a change would be in the Company's best
interests.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP TO SERVE AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 2003.
- 17 -
STOCKHOLDER PROPOSALS FOR 2004 ANNUAL MEETING
To be considered for inclusion in the Company's proxy card and proxy
statement relating to the 2004 Annual Meeting of Stockholders, proposals subject
to SEC Rule 14a-8 must be received at the Company's principal office no later
than January 2, 2004.
In addition, if you desire to bring other business, including director
nominations, for the 2004 Annual Meeting that will not be included in the
Company's proxy card and proxy statement, your notice must be delivered to the
Company no earlier than January 31, 2004 and no later than March 1, 2004.
For additional requirements, a stockholder should refer to our Bylaws,
Article II, Section 12, "Nominations and Proposals by Stockholders," a current
copy of which may be obtained from our Secretary. If the Company does not
receive timely notice pursuant to the Company's Bylaws, any proposal will be
excluded from consideration at the 2004 Annual Meeting.
All stockholder proposals should be addressed to the attention of the
Secretary at the principal office of the Company.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
stockholder action at the Annual Meeting. However, if other matters do properly
come before the Annual Meeting or any adjournments or postponements thereof, the
Board of Directors intends that the persons named in the proxies will vote upon
such matters in accordance with the best judgment of the proxy holders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Raymond V. Marino
----------------------------------
Raymond V. Marino
Secretary
Cupertino, California
April 8, 2003
- 18 -
MISSION WEST PROPERTIES, INC.
------------------
------------------------
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 2003 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Carl E. Berg and Raymond V. Marino, each
with the power to appoint his substitute, and hereby authorizes them to
represent and to vote all shares of common stock of Mission West Properties,
Inc. (the "Company") held of record by the undersigned in favor of each proposal
designated on this Proxy Card and to vote the shares of the undersigned in their
discretion with respect to other matters that properly come before the 2003
Annual Meeting of Stockholders (the "Annual Meeting") to be held May 21, 2003
and any adjournment of the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE REQUIRED IF MAILED IN THE UNITED STATES.
--------------------------------------------------------------------------------
DETACH HERE
[X] Please mark vote
as in this example
1. Election of Directors 2. Ratify the appointment of FOR AGAINST ABSTAIN
NOMINEES: 01 Carl E. Berg 02 John C. Bolger PricewaterhouseCoopers LLP as [ ] [ ] [ ]
03 William A. Hasler 04 Lawrence B. Helzel independent auditors.
05 Raymond V. Marino
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(except as marked)
Instructions: To withhold authority to vote 3. In their discretion, the proxies are authorized to vote
for any indicated nominee, write the number(s) upon any other business that may properly come before
of the nominee(s) in the box provided below. the meeting.
---------------------------------------------
| |
---------------------------------------------
MARK HERE FOR
---------------------------------------------------- ADDRESS CHANGE [ ]
Name AND NOTE AT LEFT
----------------------------------------------------
Street Address Please sign exactly as name appears hereon. Joint owners should
each sign. Executors, administrators, trustees,guardians or other
---------------------------------------------------- fiduciaries should give full title as such. If signing for a
City State Country Zip Code corporation, please sign in full corporate name by a duly
authorized officer.
[ ] Please check here if you plan on attending the 2003
Annual Stockholders Meeting.
Signature: ________________________ Date: ________________ Signature: __________________________ Date: _________________