Edgar Filing: PS BUSINESS PARKS INC/CA

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934

Filed by the registrant |X|
Filed by a party other than the registrant | |

PS BUSINESS PARKS, INC.
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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)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

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(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.

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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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(4) Date filed:

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PS BUSINESS PARKS, INC.

Notice Of Annual Meeting Of Shareholders

May 14, 2002

The Annual Meeting of Shareholders of PS Business Parks, Inc.
a California corporation, will be held at the Hilton Glendale, 100 West Glenoaks
Boulevard, Glendale, California, on May 14, 2002, at the hour of 1:00 p.m. Los
Angeles time, for the following purposes:

1. To elect directors for the ensuing year.

2. To consider and act upon such other matters as may
properly come before the meeting or any adjournment of
the meeting.

The Board of Directors has determined that only holders of
record of Common Stock at the close of business on March 15, 2002 will be
entitled to receive notice of, and to vote at, the meeting or any adjournment of
the meeting.

Please mark your vote on the enclosed Proxy, then date, sign
and promptly mail the Proxy in the stamped return envelope included with these
materials.

You are cordially invited to attend the meeting in person. If
you do attend and you have already signed and returned the Proxy, you may
nevertheless change your vote at the meeting, in which case your Proxy will be
disregarded. Therefore, whether or not you presently intend to attend the
meeting in person, you are urged to mark your vote on the Proxy, date, sign and
return it.

By Order of the Board of Directors

JACK E. CORRIGAN, Secretary

Glendale, California
April 15, 2002

PS BUSINESS PARKS, INC.

701 Western Avenue
Glendale, California 91201-2349

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS

May 14, 2002

GENERAL

This Proxy Statement (first mailed to shareholders on or about
April 17, 2002) is furnished in connection with the solicitation by the Board of
Directors of PS Business Parks, Inc. (the "Company") of proxies for use at the
Company's Annual Meeting of Shareholders to be held at the Hilton Glendale, 100
West Glenoaks Boulevard, Glendale, California at 1:00 p.m. Los Angeles time on
May 14, 2002 or at any adjournment of the meeting. The purposes of the meeting
are (1) to elect seven directors of the Company and (2) to consider such other
business as may properly be brought before the meeting or any adjournment of the
meeting.

Shares of Common Stock represented by a Proxy in the
accompanying form, if the Proxy is properly executed and is received by the
Company before the voting, will be voted in the manner specified on the Proxy.
If no specification is made, the shares will be voted FOR the election as
directors of the nominees named hereinafter. The persons designated as proxies
reserve full discretion to cast votes for other persons if any of the nominees
become unavailable to serve. A Proxy is revocable by delivering a subsequently
signed and dated Proxy or other written notice to the Secretary of the Company
at any time before its exercise. A Proxy may also be revoked if the person
executing the Proxy is present at the meeting and chooses to vote in person.

In a March 17, 1998 merger (the "AOPP Merger") of American
Office Park Properties, Inc. ("AOPP") with and into the Company, the Company
acquired the commercial property business previously operated by AOPP and the
Company changed its name from "Public Storage Properties XI, Inc." to "PS
Business Parks, Inc." As a result of the AOPP Merger, the Company became the
sole general partner of PS Business Parks, L.P. (the "Operating Partnership"),
through which the Company conducts most of its activities.

QUORUM AND VOTING

The presence at the meeting in person or by proxy of the
holders of a majority of the outstanding shares of the Common Stock is necessary
to constitute a quorum for the transaction of business.

Only holders of record of Common Stock at the close of
business on March 15, 2002 (the "Record Date") will be entitled to vote at the
meeting, or at any adjournment of the meeting. On the Record Date, the Company
had 21,546,449 shares of Common Stock issued and outstanding.

If you participate in the PS 401(k)/Profit Sharing Plan (the
"401(k) Plan"), your Proxy will also serve as a voting instruction for the
trustee of the 401(k) Plan (the "Trustee") with respect to the amount of shares
of Common Stock credited to your account as of the Record Date. If you provide
voting instructions via your Proxy with respect to shares in the 401(k) Plan,
the Trustee will vote those shares of Common Stock in the manner specified. If
you do not provide voting instructions via your Proxy with respect to shares in
the 401(k) Plan, the Trustee will vote those shares of Common Stock at its
discretion.

With respect to the election of directors, each holder of
Common Stock on the Record Date is entitled to cast as many votes as there are
directors to be elected multiplied by the number of shares registered in his
name on the Record Date. The holder may cumulate his votes for directors by
casting all of his votes for one candidate or by distributing his votes among as
many candidates as he chooses. The seven candidates who receive the most votes
will be elected directors of the Company. In voting upon any other proposal that
might properly come before the meeting, each holder of Common Stock is entitled
to one vote for each share registered in his name.

ELECTION OF DIRECTORS

Seven directors, constituting the entire Board of Directors,
are to be elected at the Annual Meeting of Shareholders, to hold office until
the next annual meeting and until their successors are elected and qualified.
When the accompanying Proxy is properly executed and returned to the Company
before the voting, the persons named in the Proxy and/or the Trustee will vote
the shares represented by the Proxy as indicated on the Proxy. If any nominee
below becomes unavailable for any reason or if any vacancy on the Company's
Board of Directors occurs before the election, the shares represented by any
Proxy voting for that nominee will be voted for the person, if any, designated
by the Board of Directors to replace the nominee or to fill the vacancy on the
Board. However, the Board of Directors has no reason to believe that any nominee
will be unavailable or that any vacancy on the Board of Directors will occur.
The following persons are nominees for director:

Name Age Director Since

Ronald L. Havner, Jr. 44 1998
Harvey Lenkin 65 1998
Vern O. Curtis 67 1990
Arthur M. Friedman 66 1998
James H. Kropp 53 1998
Alan K. Pribble 59 1998
Jack D. Steele 78 1990

Ronald L. Havner, Jr. has been Chairman, President and Chief
Executive Officer of the Company since March 1998. From December 1996 until
March 1998, Mr. Havner was Chairman, President and Chief Executive Officer of
AOPP. He was Senior Vice President and Chief Financial Officer of Public
Storage, Inc. ("PSI"), an affiliated REIT, and Vice President of the Company and
certain other REITs affiliated with PSI, until December 1996. Mr. Havner became
an officer of PSI in 1986, prior to which he was in the audit practice of Arthur
Andersen & Company. He is a member of the American Institute of Certified Public
Accountants (AICPA), the National Association of Real Estate Investment Trusts
(NAREIT) and the Urban Land Institute (ULI) and a director of Business Machine
Security, Inc., Mobile Services Group, Inc. and Burnham Pacific Properties, Inc.

Harvey Lenkin, a member of the Compensation Committee, became
a director of the Company in March 1998 and was President of the Company
(formerly Public Storage Properties XI, Inc.) from its inception in 1990 until
March 1998. Mr. Lenkin has been employed by PSI for 24 years and has been
President and a director of PSI since November 1991. He was a director of AOPP
from December 1997 until March 1998. From 1989-90 until the respective dates of
merger, Mr. Lenkin was President of 18 affiliated REITs that were merged into
PSI between September 1994 and May 1998 (the "Merged Public Storage REITs"), and
he was also a director of one of the Merged Public Storage REITs from 1989 until
June 1996. Mr. Lenkin is a member of the Executive Committee of the Board of
Governors of NAREIT.

Vern O. Curtis, Chairman of the Audit Committee, is a private
investor. Mr. Curtis has been a director of the Company since its inception in
1990. Mr. Curtis is also a director of the Pimco Funds, Pimco Commercial
Mortgage Securities Trust, Inc. and Fresh Choice, Inc. From 1989-90 until the
respective dates of merger, he was a director of the Merged Public Storage
REITs. Mr. Curtis was Dean of Business School of Chapman College from 1988 to
1990 and President and Chief Executive Officer of Denny's, Inc. from 1980 to
1987.

Arthur M. Friedman, a member of the Audit Committee, became a
director of the Company in March 1998. Mr. Friedman, a certified public
accountant, has been an independent business and tax consultant since September
1995. He was a partner of Arthur Andersen from 1968 until August 1995. During
his 38-year career in public accounting, he specialized in tax consultation. He
was a member of the Andersen Board of Partners from 1980-1988.

James H. Kropp, a member of the Compensation Committee, became
a director of the Company in March 1998. Mr. Kropp has been Director of
Investment Management and Banking of Christopher Weil & Company, Inc. ("CWC"), a
securities broker-dealer and registered investment adviser, since April 1995.
CWC has rendered, and is expected to continue to render, financial advisory and

securities brokerage services for the Company, PSI and their affiliates. Mr.
Kropp was a director of AOPP from December 1996 until December 1997. From July
1994 to November 1994, he was Executive Vice President and Chief Financial
Officer of Hospitality Investment Trust, a REIT. From 1989 to July 1994, he was
Managing Director of MECA Associates USA, a real estate advisory and asset
management company serving institutional property owners. He is a director of US
Restaurant Properties, Inc. and Madison Park Real Estate Investment Trust.

Alan K. Pribble, chairman of the Compensation Committee,
became a director of the Company in March 1998. He has been an independent
business consultant since June 1997. Mr. Pribble was employed by Wells Fargo
Bank, N.A. for 30 years until June 1997. He was a Senior Vice President of Wells
Fargo from 1984 until June 1997. In 1992, Mr. Pribble opened a commercial
finance division for Wells Fargo and was involved in its operations until June
1997. From 1988 until 1992, he was a Senior Vice President and Regional Manager,
and from 1984 until 1988, Mr. Pribble was a Senior Credit Officer, for Wells
Fargo.

Jack D. Steele, a member of the Audit Committee, has been a
director of the Company since its inception in 1990. Dr. Steele is also a
director of M.C. Gill and a member of the Advisory Board of Clark/Bardes. Dr.
Steele is a business consultant. From 1989-90 until the respective dates of
merger, he was a director of the Merged Public Storage REITs. Dr. Steele was
Chairman - Board Services of Korn/Ferry International from 1986 to 1988 and Dean
of School of Business and Professor at the University of Southern California
from 1975 to 1986.

Directors and Committee Meetings

During 2001, the Board of Directors held five meetings (and
acted three times by unanimous written consent), the Audit Committee held three
meetings and the Compensation Committee held two meetings (and acted twice by
unanimous written consent). During 2001, each of the directors attended at least
75% of the meetings held by the Board of Directors or, if a member of a
committee of the Board of Directors, held by both the Board of Directors and all
committees of the Board of Directors on which he served.

The primary functions of the Audit Committee are to meet with
the Company's outside auditors, to conduct a pre-audit review of the audit
engagement, to conduct a post-audit review of the results of the audit, to
oversee the Company's accounting and financial reporting policies, to monitor
the adequacy of internal financial controls of the Company, to review the
independence of the outside auditors and to make recommendations to the Board of
Directors regarding the appointment and retention of auditors. Executive
officers receive grants of options under the Company's stock option and
incentive plan only with the approval of the Audit Committee.

The primary functions of the Compensation Committee are to
determine the salary and bonus compensation for the Company's executive officers
and to administer the Company's stock option and incentive plan, except for
grants of options to executive officers.

The Company does not have a nominating committee. Pursuant to
the terms of an Agreement Among Shareholders and Company dated as of December
23, 1997, as amended, among Acquiport Two Corporation ("Acquiport"), AOPP,
American Office Park Properties, L.P. and PSI (which agreement was assumed by
the Company in the AOPP Merger), the nominees for the Board of Directors (which
constitute the current Board of Directors) consist of two nominees of PSI
(currently Ronald L. Havner, Jr. and Harvey Lenkin) and five independent
directors mutually acceptable to PSI and Acquiport (currently Vern O. Curtis,
Arthur M. Friedman, James H. Kropp, Alan K. Pribble and Jack D. Steele). PSI and
Acquiport have agreed to vote their respective shares of the Company's Common
Stock to support such nominees to the Board. This voting agreement expires at
the later of the following dates: (1) when PSI's interest in the Company or
Acquiport's interest in the Company is less than 20%, assuming conversion of all
limited partnership interests in PS Business Parks, L.P. into shares of the
Company's Common Stock or (2) December 24, 2001.

Security Ownership of Certain Beneficial Owners

The following table sets forth information as of the dates
indicated with respect to persons known to the Company to be the beneficial
owners of more than 5% of the outstanding shares of the Company's Common Stock:

Shares of Common Stock
Beneficially Owned
--------------------------------------------
Number Percent
Name and Address of Shares of Class
--------------------------------- ------------------- -------------------

Public Storage, Inc. ("PSI"), 5,418,273 25.1%
PS Texas Holdings, Ltd.,
PS GPT Properties, Inc.
701 Western Avenue,
Glendale, California 91201-2349 (1)(3)

Acquiport Two Corporation ("Acquiport") 6,110,265 28.4%
c/o Heitman Capital Management Corporation
180 North LaSalle Street
Chicago, Illinois 60601,
New York State Common Retirement Fund
633 Third Avenue, 31st Floor
New York, New York 10017-6754 (2)(3)

LaSalle Investment Management, Inc. 1,671,634 7.8%
LaSalle Investment Management (Securities), L.P.
200 East Randolph Drive
Chicago, Illinois 60601 (4)

----------------

(1) This information is as of March 15, 2002. The reporting persons listed
above have filed a joint Schedule 13D, amended as of September 3, 1998.
The 5,418,273 shares of Common Stock beneficially owned by the reporting
persons include (i) 5,151,567 shares as to which PSI has sole voting and
dispositive power and (ii) 266,706 shares held of record by PS Texas
Holdings, Ltd., a Texas limited partnership, as to which (a) PS GPT
Properties, Inc., the sole general partner of PS Texas Holdings, Ltd.
and a wholly-owned subsidiary of PSI, and (b) PSI, share voting and
dispositive power.

The 5,418,273 shares of Common Stock in the above table does not include
7,305,355 units of limited partnership interest in PS Business Parks,
L.P. ("Units") held by PSI and affiliated partnerships which (pursuant
to the terms of the agreement of limited partnership of PS Business
Parks, L.P.) are redeemable by the holder for cash or, at the Company's
election, for shares of the Company's Common Stock on a one-for-one
basis. Upon conversion of the Units to Common Stock, PSI and its
affiliated partnerships would own 44.1% of the Common Stock (based upon
the Common Stock outstanding at March 15, 2002, assuming such
conversion).

(2) This information is as of December 31, 2001 (except that the percent
shown in the table is based on the Common Stock outstanding at March 15,
2002). The reporting persons listed above have filed a joint Schedule
13D, amended as of May 21, 1998. The 6,110,265 shares of Common Stock
beneficially owned by the reporting persons are held of record by
Acquiport. New York State Common Retirement Fund, as the sole
stockholder of Acquiport, shares voting and dispositive power with
respect to the 6,110,265 shares.

(3) See "Directors and Committee Meetings" above for a description of the
agreement of PSI and Acquiport to vote their respective shares of the
Company's Common Stock to support their nominees for the Board of
Directors.

(4) This information is as of December 31, 2001 and is based on a Schedule
13G (Amendment No. 4) filed by LaSalle Investment Management, Inc. and
LaSalle Investment Management (Securities), L.P. (except that the
percent shown in the table is based on the Common Stock outstanding at
March 15, 2002). LaSalle Investment Management, Inc. and LaSalle
Investment Management (Securities), L.P., registered investment
advisers, have different advisory clients. As of December 31, 2001,
LaSalle Investment Management, Inc. beneficially owned 329,202 shares of
Common Stock and LaSalle Investment Management (Securities), L.P.
beneficially owned 1,342,432 shares of Common Stock. LaSalle Investment
Management, Inc. has sole voting power and sole dispositive power with
respect to 96,502 shares and shared dispositive power with respect to
232,700 shares. LaSalle Investment Management (Securities), L.P. has
sole voting power with respect to 754,718 shares, shared voting power

with respect to 531,714 shares, sole dispositive power with respect to
733,218 shares and shared dispositive power with respect to 609,214
shares.

Security Ownership of Management

The following table sets forth information as of February 28,
2002 concerning the beneficial ownership of Common Stock of each director of the
Company, the Company's Chief Executive Officer, the other four most highly
compensated persons who were executive officers of the Company on December 31,
2001 and all directors and executive officers as a group:

Shares of Common Stock:
Beneficially Owned (1)
Shares Subject to Options (2)
-----------------------------------
Name Number of Shares Percent
-------------------------------- ------------------- -------
Ronald L. Havner, Jr. 121,598(1)(3) .6%
125,035(2) .6%
------- ---
246,633 1.1%

Harvey Lenkin 1,600(1)(4) *
5,999(2) *
----- --
7,599 *

Vern O. Curtis 5,000(1) *
5,999(2) *
----- --
10,999 *

Arthur M. Friedman 3,000(1) *
5,999(2) *
----- --
8,999 *

James H. Kropp 7,791(1)(5) *
5,999(2) *
----- --
13,790 *

Alan K. Pribble -- --
5,999(2) *
----- --
5,999 *

Jack D. Steele 2,100(1)(6) *
5,999(2) *
----- --
8,099 *

Angelique A. Benschneider -- --
5,000(2) *
----- --
5,000 *

Shares of Common Stock:
Beneficially Owned (1)
Shares Subject to Options (2)
-----------------------------------
Name Number of Shares Percent
-------------------------------- ------------------- -------
Jack E. Corrigan 5,800(1) *
48,333(2) .2%
------ ---
54,133 .2%

J. Michael Lynch 147(1) *
48,333(2) .2%
------ ---
48,480 .2%

Jeffrey H. Reinstein -- --

8,333(2) *
----- --

8,333 *

All Directors and Executive Officers 151,793(1)(3)(4)(5)
as a Group (6) .7%
(15 persons) 307,654(2) 1.4%
------- ----
459,447 2.1%
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* Less than 0.1%

(1) Shares of Common Stock beneficially owned as of February 28, 2002.
Except as otherwise indicated and subject to applicable community
property and similar statutes, the persons listed as beneficial owners
of the shares have sole voting and investment power with respect to
such shares. Includes shares credited to the accounts of the executive
officers of the Company that are held in the 401(k) Plan as of December
31, 2001. Does not include restricted stock units described in note (1)
to the summary compensation table under "Compensation -- Compensation
of Executive Officers."

(2) Represents vested portion as of February 28, 2002, and portion of which
will be vested within 60 days of February 28, 2002, of shares of Common
Stock subject to options held by the named individuals or the group
pursuant to the Company's stock option and incentive plan.

(3) Includes 500 shares held by a custodian of an IRA for Mrs. Havner as to
which she has investment power.

(4) Includes 221 shares as to which Mrs. Lenkin has investment power.

(5) Includes 100 shares held by Mr. Kropp's daughter as to which she has
investment power, and 600 shares held by CWC Good Company Portfolio, a
general partnership of which Mr. Kropp is a general partner, as to
which Mr. Kropp shares investment power.

(6) Shares held by Mr. and Mrs. Steele as trustees of Jack D. Steele
Retirement Trust as to which they share investment power.

The Company has outstanding a class of preferred stock,
consisting of various series of non-voting preferred stock. As of February 28,
2002, Arthur M. Friedman owned 2,000 depositary shares representing interests in
the preferred stock, Alan K. Pribble owned 6,000 depositary shares, Jack D.
Steele owned 3,000 depositary shares (as to which he shared investment power),
Jeffrey H. Reinstein owned 1,000 depositary shares, and the directors and
executive officers as a group owned a total of 12,000 shares, representing less
than 1% of the outstanding shares.

COMPENSATION

Compensation of Executive Officers

The following table sets forth certain information concerning
the annual and long-term compensation paid to Ronald L. Havner, Jr., the
Company's Chief Executive Officer, and the other four most highly compensated
persons who were executive officers of the Company on December 31, 2001 (the
"Named Executive Officers") for 2001, 2000 and 1999.

Summary Compensation Table

Long-Term Compensation
----------------------------
Annual Compensation Awards
------------------------------------------ ----------------------------
Restricted Securities
Name and Other Annual Stock Unit Underlying All Other
Principal Position Year Salary Bonus Compensation Awards ($)(1) Options (#) Compensation
------------------ ---- ------------- ---------- ------------ ------------- ----------- ------------

Ronald L. Havner, Jr. 2001 $ 285,000 $ 450,500 (2) -- 50,000 $ 5,100(3)
Chairman of the Board,
President and Chief 2000 285,000 350,500 (2) -- 100,000 4,800(3)
Executive Officer
1999 268,300(4) 350,500 (2) -- -- 4,700(3)

Jack E. Corrigan 2001 175,000 100,000 -- -- 25,000 10,300(3)
Vice President and
Chief Financial Officer 2000 145,000 125,500 -- $ 96,000 25,000 6,800(3)

1999 145,000 53,000 -- -- -- 4,700(3)

J. Michael Lynch 2001 175,000 100,500 (2) 54,960 25,000 13,000(3)
Vice President-Director
of Acquisitions and 2000 145,000 125,500 (2) 96,000 25,000 6,800(3)
Development
1999 145,000 53,000 (2) -- -- 4,700(3)

Jeffrey H. Reinstein 2001 145,000 52,500 (2) 54,960 20,000 6,700(3)
Vice President-
Business Services 2000 89,000(5) 45,500 (2) -- 25,000 2,700(3)

Angelique A. Benschneider 2001 113,300 110,000 (2) 113,080 45,000 2,900(3)
Vice President(6)

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(1) Represents the value of grants of restricted stock units made under the
1997 Stock Option and Incentive Plan (with the value of one restricted
stock unit deemed equivalent to the value of one share of Common Stock
and based on the closing price of the Common Stock on the American
Stock Exchange on the date of grant). The restricted stock units vest
30% on the third anniversary, 30% on the fourth anniversary and 40% on
the fifth anniversary, of the date of grant. On each vesting date, the
holder will receive shares of Common Stock representing the applicable
percentage of the total number of restricted stock units granted.
Holders of restricted stock units receive payments equal to the
dividends that would have been paid on an equivalent number of shares
of Common Stock. The grants of restricted stock units do not entitle
the holders to any current voting rights. As of December 31, 2001, the
total holdings of restricted stock units of the Named Executive
Officers and the market value of such holdings (with the value of one
unit deemed equivalent to the value of one share of Common Stock on the
American Stock Exchange on December 31, 2001) were as follows: Mr.
Corrigan - 4,000 restricted stock units ($126,000), Mr. Lynch - 6,000
restricted stock units ($189,000), Mr. Reinstein - 2,000 restricted
stock units ($63,000) and Ms. Benschneider - 4,000 restricted stock
units ($126,000).

(2) Value did not exceed 10% of the annual salary and bonus of the
individual for the years indicated.

(3) Consists of employer contributions to the 401(k) Plan in the case of
Mr. Havner and employer contributions and dividend equivalent payments
based on ownership of restricted stock units in the case of the other
Named Executive Officers.

(4) Mr. Havner's annual base salary was increased from $185,000 to $285,000
effective March 1, 1999.

(5) For the period May 22, 2000 through December 31, 2000.

(6) Ms. Benschneider was hired at the end of 2000. Her 2001 bonus includes
a $50,000 signing bonus paid at the end of 2000 and her 2001 options
include 15,000 options granted at the end of 2000. Her annual base
salary was increased from $110,000 to $120,000 effective September 1,
2001.

The following table sets forth certain information relating to
options to purchase shares of Common Stock granted to the Named Executive
Officers during 2001.

Option Grants in Last Fiscal Year

Individual Grants
------------------------------------------------------------------------------------
Potential Realizable Value
Number of Percent of at Assumed Annual Rates
Securities Total Options of Share Price Appreciation
Underlying Granted to Exercise for Option Term
Options Employees in Price Expiration ------------------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5% 10%
-------------------------- ------------- ---------------- ------------ ------------- ------------------------------

Ronald L. Havner, Jr. 50,000 15.5% $27.48 3/13/11 $864,101 $2,189,802
Jack E. Corrigan 25,000 7.8% 26.71 9/21/11 419,944 1,064,222
J. Michael Lynch 25,000 7.8% 26.71 9/21/11 419,944 1,064,222
Jeffrey H. Reinstein 20,000 6.2% 26.71 9/21/11 335,956 851,377
Angelique A. Benschnieder 15,000(1) 4.7% 26.80 11/22/10 252,816 640,684
30,000 9.3% 26.71 9/21/11 503,933 1,277,066

----------------

(1) Granted at the end of 2000 when Ms. Benschneider was hired.

All options granted in 2001 become exercisable in three equal
installments beginning on the first anniversary of the date of grant and have a
term of ten years.

The following table sets forth certain information concerning
exercised and unexercised options held by the Named Executive Officers at
December 31, 2001.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

Shares Number of
Acquired on Securities Underlying Value of Unexercised
Exercise(#) Value Unexercised Options In-the-Money Options at
Name Realized($) at December 31, 2001 December 31, 2001(1)
------------------------- ------------ ----------- ---------------------------- -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- --------------

Ronald L. Havner, Jr. 50,000 $503,250 108,369 116,667 $ 1,290,823 $ 559,335
Jack E. Corrigan -- -- 48,333 41,667 364,790 209,335
J. Michael Lynch -- -- 48,333 41,667 364,790 209,335
Jeffrey H. Reinstein -- -- 8,333 36,667 67,706 231,219
Angelique A. Benshneider -- -- 5,000 40,000 23,500 190,700

--------------

(1) Based on closing price of $31.50 per share of Common Stock on December
31, 2001, as reported by the American Stock Exchange. On April 11,
2002, the closing price per share of Common Stock as reported by the
American Stock Exchange was $36.15.

Compensation of Directors

Each of the Company's directors, other than Ronald L. Havner,
Jr., receives directors' fees of $10,000 per year plus $1,000 for each meeting
attended and $500 for each telephone meeting. In addition, each member of the
Audit Committee receives $1,000 for each meeting of the Audit Committee attended
and $500 for each telephone meeting. Each member of the Compensation Committee
receives $1,000 for each meeting of the Compensation Committee attended and $500
for each telephone meeting. The policy of the Company is to reimburse directors
for reasonable expenses. Directors who are not officers or employees of the
Company ("Outside Directors") also receive automatic grants of options under the
1997 Stock Option and Incentive Plan (the "1997 Plan"), and Ronald L. Havner,
Jr. is eligible to receive discretionary grants of options and/or restricted
stock thereunder. Under the 1997 Plan, each new Outside Director is, upon the
date of his or her initial election to serve as an Outside Director,
automatically granted a non-qualified option to purchase 5,000 shares of Common
Stock. In addition, after each annual meeting of shareholders, each Outside
Director then duly elected and serving is automatically granted, as of the date
of such annual meeting, a non-qualified option to purchase 1,000 shares of
Common Stock.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors appointed a Compensation Committee in
March 2000. Until that date, the Company's stock option and incentive plan,
under which executive officers are eligible to receive options and/or restricted
stock, was administered by the Audit Committee. The Audit Committee continues to
administer the stock option and incentive plan with respect to grants of options
to executive officers.

Ronald L. Havner, Jr., who is an executive officer of the
Company, is a member of the Board of Directors.

Certain Relationships and Related Transactions

Sales of Shares to Company. In August, 2001, State Treasurer,
State of Michigan, which owned more than 5% of the outstanding shares of the
Company's Common Stock, sold to the Company in a privately negotiated
transaction 431,611 shares of the Company's Common Stock for $11,900,000.
Concurrently, State Treasurer, State of Michigan sold 1,200,000 shares to other
institutional investors on the same terms.

Loan from PSI. In December 2001, the Operating Partnership
borrowed a total of $35 million from PSI. The loan was repaid in January 2002.
The loan bore interest at 3.25% per year and was approved by the Company's
disinterested directors.

Assignment from PSI. At the Company's request, PSI has agreed
to assign to the Company PSI's right to acquire from an unaffiliated third party
a parcel of undeveloped land. The land is located adjacent to the Company's
business park known as Metro Park North in Rockville, Maryland. In consideration
for the assignment, the Company has agreed to reimburse PSI for all of its costs
incurred in connection with the acquisition and development of the land,
($221,000 billed to PSI through March 1, 2002, including $87,000 of land
deposits paid by PSI to the unaffiliated seller of the land, and an estimated
additional $30,000 of accrued but unbilled costs). The land deposits would be
applied to the $800,000 purchase price for the land.

Management Agreement with Affiliates. The Operating
Partnership operates industrial, retail and office facilities for PSI and
partnerships and joint ventures of which PSI is a general partner or joint
venturer ("Affiliated Entities") pursuant to a management agreement under which
PSI and the Affiliated Entities pay to the Operating Partnership a fee of 5% of
the gross revenues of the facilities operated for PSI and the Affiliated
Entities. During 2001, PSI and the Affiliated Entities paid fees of $562,000 to
the Operating Partnership pursuant to that management agreement. As to
facilities directly owned by PSI, the management agreement has a seven-year term

with the term being automatically extended for one year on each anniversary date
(thereby maintaining a seven-year term) unless either party (PSI or the
Operating Partnership) notifies the other that the management agreement is not
being extended, in which case it expires, as to such facilities, on the first
anniversary of its then scheduled expiration date. As to facilities owned by the
Affiliated Entities, the management agreement may be terminated as to such
facilities upon 60 days' notice by PSI (on behalf of the Affiliated Entity) and
upon seven years' notice by the Operating Partnership.

Transactions with Christopher Weil & Company. In January 2001,
the Operating Partnership purchased from an affiliate of Christopher Weil &
Company, Inc. ("CWC") 11,400 partnership units in an unaffiliated public limited
partnership, at the market price of $56 per unit plus commissions, for an
aggregate price of $638,863. The Board of Directors also approved in January
2001 the payment by the Operating Partnership to CWC up to $250,000 of fees for
financial advisory services, of which $75,000 has been paid through March 2002.
James H. Kropp, a director of the Company, is Director of Investment Management
and Banking of CWC.

REPORT OF THE BOARD OF DIRECTORS,
THE COMPENSATION COMMITTEE AND THE AUDIT COMMITTEE
ON EXECUTIVE COMPENSATION

The Company pays its executive officers compensation deemed
appropriate in view of the nature of the Company's business, the performance of
individual executive officers, and the Company's objective of providing
incentives to its executive officers to achieve a level of individual and
Company performance that will maximize the value of shareholders' investment in
the Company. To those ends, the Company's compensation program consists of
payment of a base salary and, potentially, bonus compensation, and making
incentive awards of options to purchase Common Stock and restricted stock units.
Grants of options and restricted stock units to executive officers are made
under the 1997 Stock Option and Incentive Plan (the "1997 Plan").

Cash Compensation. Base salary levels are based generally on
market compensation rates and each individual's role in the Company. The Company
determines market compensation rates by reviewing public disclosures of
compensation paid to executive officers by other REITs of comparable size and
market capitalization. Some of the REITs whose executive compensation the
Company considered in establishing the compensation it pays to executive
officers are included in the NAREIT Equity Index referred to below under the
caption "Stock Price Performance Graph." Generally, the Company seeks to
compensate its executives at levels consistent with the middle of the range of
amounts paid by REITs deemed comparable by the Company. Individual salaries may
vary based on the experience and contribution to overall corporate performance
by a particular executive officer. The base salary of Mr. Havner, the Chief
Executive Officer, has not increased since March 1999. Mr. Havner's base salary
for 2001 was determined to be appropriate based on a review of total
compensation paid to the chief executive officers of other REITs deemed
comparable by the Company and a review of the growth in the Company's net asset
value (NAV) per share and funds from operations (FFO) per share compared to the
growth in NAV per share and FFO per share of the REITs deemed comparable by the
Company.

The Company uses annual cash bonuses as an important method of
rewarding executive officers commensurate with the Company's performance,
departmental performance and individual performance. Early in 2001, the Company
established a target bonus amount for each executive officer (other than the
Chief Executive Officer). Payment of the target bonus amounts was based
primarily on each executive officer's achievement of individualized quantitative
financial and operational goals related to the activities he managed. The bonus
paid to the Chief Executive Officer was the same in 1998, 1999 and 2000 and was
increased in 2001. Mr. Havner's bonus for 2001 was determined to be appropriate
based on a review of total compensation paid to the chief executive officers of
other REITs deemed comparable by the Company, a review of the growth in the
Company's NAV per share and FFO per share compared to the growth in NAV per
share and FFO per share of the REITs deemed comparable by the Company and the
significant acquisition activity of the Company in 2001.

Equity-Based Compensation. The Company believes that its
executive officers should have an incentive to improve the Company's performance
by having an ongoing stake in the success of the Company's business. The Company
seeks to create this incentive by granting to appropriate executive officers
stock options that have an exercise price of not less than 100% of the fair
market value of the underlying stock on the date of grant, so that the executive

officer may not profit from the option unless the price of the Common Stock
increases. Options granted by the Company also are designed to help the Company
retain executive officers in that options are not exercisable at the time of
grant, and achieve their maximum value only if the executive remains in the
Company's employ for a period of years. Options were granted to the named
executive officers during 2001 as reflected above in the table captioned "Option
Grants in Last Fiscal Year." The number of options granted to individual
executive officers is based on a number of factors, including seniority,
individual performance, and the number of options previously granted to such
executive officer. The number of options granted to the Chief Executive Officer
during 2001 was based on the factors outlined above.

Beginning in 2000, the Company determined to make awards of
restricted stock units to its executive officers as another form of long-term
incentive compensation. Restricted stock units entitle the holder to receive
shares of Common Stock at a specified vesting date. Restricted stock units
increase in value as the value of the Common Stock increases, and vest over time
provided that the executive officer remains in the employ of the Company.
Accordingly, awards of restricted stock units serve the Company's objectives of
retaining its executive officers and motivating them to advance the interests of
the Company and its shareholders. The number of restricted stock units granted
to individual executive officers during 2001 was based on a number of factors,
including seniority and individual performance. The Company has not granted any
restricted stock units to the Chief Executive Officer.

BOARD OF DIRECTORS COMPENSATION COMMITTEE AUDIT COMMITTEE
Ronald L. Havner, Jr. Alan K. Pribble (Chairman) Vern O. Curtis (Chairman)
Harvey Lenkin James H. Kropp Arthur M. Friedman
Vern O. Curtis Harvey Lenkin Jack D. Steele
Arthur M. Friedman
James H. Kropp
Alan K. Pribble
Jack D. Steele

STOCK PRICE PERFORMANCE GRAPH

The graph set forth below compares the yearly change in the
cumulative total shareholder return on the Common Stock (formerly Common Stock
Series A) of the Company (formerly Public Storage Properties XI, Inc.) for the
five-year period ended December 31, 2001 to the cumulative total return of the
American Stock Exchange Market Value Index ("AMEX Index") and the National
Association of Real Estate Investment Trusts Equity Index ("NAREIT Equity
Index") for the same period (total shareholder return equals price appreciation
plus dividends). The stock price performance graph assumes that the value of the
investment in the Company's Common Stock and each index was $100 on December 31,
1996 and that all dividends (including a special dividend of $.15 per share of
common stock payable on January 24, 2002 to shareholders of record on December
28, 2001) were reinvested. The stock price performance shown in the graph is not
necessarily indicative of future price performance.

Comparison of Cumulative Total Return
PS Business Parks, Inc., AMEX Index and NAREIT Equity Index
December 31, 1996 - December 31, 2001

[PERFORMANCE GRAPH APPEARS HERE]

MEASUREMENT PERIOD PS BUSINESS NAREIT
(FISCAL YEAR COVERED) PARKS, INC. AMEX EQUITY
------------------------- ------------- --------- --------
Measurement Pt. 12/31/96 $100.00 $100.00 $100.00
FYE 12/31/97 118.10 121.28 120.26
FYE 12/31/98 133.63 123.40 99.21
FYE 12/31/99 132.80 159.41 94.63
FYE 12/31/00 169.10 166.17 119.58
FYE 12/31/01 200.53 160.32 136.24

AUDIT COMMITTEE REPORT

The Audit Committee of the PS Business Parks Board of
Directors is composed of three directors who qualify as independent under the
rules of the American Stock Exchange. The Audit Committee operates under a
written charter adopted by the Board of Directors in May 2000 (Exhibit A). The
members of the Audit Committee are Vern O. Curtis (Chairman), Arthur M. Friedman
and Jack D. Steele. The Audit Committee recommends to the Board of Directors the
selection of the Company's independent auditors.

Management is responsible for the Company's internal controls
and the financial reporting process. The independent auditors are responsible
for performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and for
issuing a report thereon. The Audit Committee's responsibility is to monitor and
oversee these processes.

In this context, the Audit Committee has met with management
and the independent auditors and has reviewed and discussed with them the
audited consolidated financial statements. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles. The Audit Committee
discussed with the independent auditors matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).

The Company's independent auditors also provided to the Audit
Committee the written disclosures required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the Audit
Committee discussed with the independent auditors that firm's independence. In
addition, the Audit Committee has considered whether the independent auditors'
provision of non-audit services to the Company is compatible with the auditors'
independence.

Based on the Audit Committee's discussions with management and
the independent auditors, the representation of management and the report of the
independent auditors, the Audit Committee recommended to the Board of Directors,
and the Board has approved, that the audited consolidated financial statements
be included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001 filed with the Securities and Exchange Commission.

AUDIT COMMITTEE
Vern O. Curtis (Chairman)
Arthur M. Friedman
Jack D. Steele

INDEPENDENT AUDITORS

The Board of Directors has selected Ernst & Young LLP,
independent auditors, to audit the accounts of the Company for the fiscal year
ending December 31, 2002.

It is anticipated that representatives of Ernst & Young LLP,
which has acted as the independent auditors for the Company since the Company's
organization, will be in attendance at the Annual Meeting of Shareholders and
will have the opportunity to make a statement if they desire to do so and to
respond to any appropriate inquiries of the shareholders or their
representatives.

Fees Billed to the Company by Ernst & Young LLP for 2001:

Audit Fees:

Audit fees billed to the Company by Ernst & Young LLP for
audit of the Company's annual financial statements for the 2001 fiscal year and
review of the quarterly financial statements included in the Company's quarterly
reports on Form 10-Q for the 2001 fiscal year totaled $66,000.

Financial Information Systems Design and Implementation Fees:

The Company did not engage Ernst & Young LLP to provide advice
to the Company regarding financial information systems design and implementation
during the 2001 fiscal year.

All Other Fees:

Fees billed (or expected to be billed) to the Company by Ernst
& Young LLP for the Company's 2001 fiscal year for all other non-audit services
(primarily for income tax return preparation) rendered to the Company totaled
$240,000.

ANNUAL REPORT

The Company has filed, for its fiscal year ended December 31,
2001, an Annual Report on Form 10-K with the Securities and Exchange Commission,
together with applicable financial statements and schedules thereto. THE COMPANY
WILL FURNISH, WITHOUT CHARGE, UPON WRITTEN REQUEST OF ANY SHAREHOLDER AS OF
MARCH 15, 2002, WHO REPRESENTS IN SUCH REQUEST THAT HE OR SHE WAS THE RECORD OR
BENEFICIAL OWNER OF THE COMPANY'S SHARES ON THAT DATE, A COPY OF THE ANNUAL
REPORT TOGETHER WITH THE FINANCIAL STATEMENTS AND ANY SCHEDULES THERETO. Upon
written request and payment of a copying charge of 15 cents per page, the
Company will also furnish to any shareholder a copy of the exhibits to the
Annual Report. Requests should be addressed to: Jack E. Corrigan, Secretary, PS
Business Parks, Inc., 701 Western Avenue, Glendale, California 91201-2349.

EXPENSES OF SOLICITATION

The Company will pay the cost of soliciting Proxies. In
addition to solicitation by mail, certain directors, officers and regular
employees of the Company and its affiliates may solicit the return of Proxies by
telephone, telegram, personal interview or otherwise. The Company may also
reimburse brokerage firms and other persons representing the beneficial owners
of the Company's stock for their reasonable expenses in forwarding proxy
solicitation materials to such beneficial owners. Shareholder Communications
Corporation, New York, New York may be retained to assist the Company in the
solicitation of Proxies, for which Shareholder Communications Corporation would
receive normal and customary fees and expenses from the Company.

DEADLINES FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR
CONSIDERATION AT 2003 ANNUAL MEETING

Any proposal that a shareholder wishes to submit for inclusion
in the Company's Proxy Statement for the 2003 Annual Meeting of Shareholders
("2003 Proxy Statement") pursuant to Securities and Exchange Commission Rule
14a-8 must be received by the Company no later than December 16, 2002. In
addition, notice of any proposal that a shareholder wishes to propose for
consideration at the 2003 Annual Meeting of Shareholders, but does not seek to
include in the Company's 2003 Proxy Statement pursuant to Rule 14a-8, must be
delivered to the Company no later than February 28, 2003 if the proposing
shareholder wishes for the Company to describe the nature of the proposal in its
2003 Proxy Statement as a condition to exercising its discretionary authority to
vote proxies on the proposal. Any shareholder proposals or notices submitted to
the Company in connection with the 2003 Annual Meeting of Shareholders should be
addressed to: Jack E. Corrigan, Secretary, PS Business Parks, Inc., 701 Western
Avenue, Glendale, California 91201-2349.

OTHER MATTERS

The management of the Company does not intend to bring any
other matter before the meeting and knows of no other matters that are likely to
come before the meeting. If any other matters properly come before the meeting,
the persons named in the accompanying Proxy and the Trustee will vote the shares
represented by the Proxy in accordance with their best judgment on such matters.

You are urged to vote the accompanying Proxy and sign, date
and return it in the enclosed stamped envelope at your earliest convenience,
whether or not you currently plan to attend the meeting in person.

By Order of the Board of Directors

JACK E. CORRIGAN, Secretary

Glendale, California
April 15, 2002

Exhibit A

PS BUSINESS PARKS, INC.

CHARTER OF AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Adopted by the Board of Directors on May 9, 2000

1. The Audit Committee shall have at least three members and shall be composed
entirely of independent members of the Board of Directors (the "Board"). Each
member of the Audit Committee shall be able to read and understand fundamental
financial statements, and at least one member shall have had employment
experience in finance or accounting, or comparable experience providing
sophistication in matters of accounting or finance.

2. The purposes of the Audit Committee are:

o to oversee the Company's accounting and financial reporting policies
and practices, its internal controls and accounting and computer
practices and procedures;

o to oversee the quality, appropriateness of accounting practices and
objectivity of the Company's financial statements and the independent
audit thereof; and

o to act as a liaison between the Company's independent auditors and the
full Board.

The function of the Audit Committee is oversight; it is the responsibility of
the Company to maintain appropriate systems for accounting and internal control,
and the auditors' responsibility to plan and carry out a proper audit. To this
end, the Audit Committee shall have unrestricted access to the Board, the
independent auditors and the executive and financial management of the Company.
Ultimately, the outside auditors shall be accountable to the Audit Committee and
the Board, as representatives of the shareholders of the Company, and therefore
both the Audit Committee and the Board shall have authority and responsibility
to select, evaluate and, where appropriate, replace the outside auditor.

3. To carry out its purposes, the Audit Committee shall have the following
duties and powers:

o to recommend to the Board the selection, retention or termination of
auditors;

o to require the independent auditors to submit to the Audit Committee,
on a periodic basis, a written list of all relationships between the
independent auditors and the Company (consistent with Independence
Standards Board standards), to discuss with the independent auditors
any such relationship that may affect the objectivity or independence
of the outside auditors, and to recommend to the full Board any action
deemed necessary to maintain the independence of the outside auditors;

o to meet with the Company's independent auditors, including private
meetings, as necessary (i) to review the arrangements for, procedures
to be utilized, and scope of the annual audit and any specific audits,
(ii) to discuss any matters of concern relating to the Company's
financial statements, including any adjustments to such statements
recommended by the auditors, disagreements with management or other
results of audit(s), (iii) to review the annual financial statements of
the Company and significant accounting policies underlying the
statements and their presentation to the public in the annual or other
reports, (iv) to consider the auditors' comments with respect to the
Company's financial policies, procedures and internal accounting
controls and the Company's responses thereto and resolve as necessary,
and (v) to review the form of opinion the auditors propose to render to
the Board and shareholders;

o to consider the appropriateness of and effect upon the Company of any
changes in accounting principles or practices proposed by the Company
or the auditors;

o to review legal and regulatory matters that may have a material impact
on the financial statements of the Company, including company
compliance policies and procedures;

o to review the fees charged by the auditors for audit or non-audit
services;

o as authorized by the full Board, to investigate improprieties or
suspected improprieties in the Company's financial operations;

o to act in an advisory capacity to the Chief Executive Officer regarding
personnel matters relating to legal and ethical behavior;

o to perform such other functions as assigned by law, the Company's
bylaws or the full Board; and

o to report activities to the full Board on a regular basis and to make
such recommendations with respect to the above and other matters as the
Audit Committee may deem necessary or appropriate.

4. The Audit Committee shall have a chairman, who shall be elected by a majority
vote of the Board, shall meet on a regular basis, and shall hold special
meetings as circumstances require. The Audit Committee shall act by majority
vote of its members.

5. The Audit Committee shall meet regularly with the financial officers of the
Company, with internal auditors, if any, and with other officers as it deems
appropriate.

6. The Audit 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.

7. The Audit Committee shall prepare a report for inclusion in the Company's
annual proxy statement in accordance with applicable requirements of the U.S.
Securities and Exchange Commission.

8. The Audit Committee shall review this Charter periodically and recommend any
changes to the full Board.

PS BUSINESS PARKS, INC.

701 Western Avenue
Glendale, California 91201-2349

This Proxy is Solicited on Behalf of the Board of Directors

The undersigned, a record holder of Common Stock of PS
Business Parks, Inc. and/or a participant in the PS 401(k)/Profit Sharing Plan
(the "401(k) Plan"), hereby (i) appoints Ronald L. Havner, Jr. and Harvey
Lenkin, or either of them, with power of substitution, as Proxies, to appear and
vote, as designated on the reverse side, all the shares of Common Stock held of
record by the undersigned on March 15, 2002, at the Annual Meeting of
Shareholders to be held on May 14, 2002 (the "Annual Meeting"), and any
adjournments thereof, and/or (ii) authorizes and directs the trustee of the
401(k) Plan (the "Trustee") to vote or execute proxies to vote, as instructed on
the reverse side, all the shares of Common Stock credited to the undersigned's
account under the 401(k) Plan on March 15, 2002, at the Annual Meeting and any
adjournments thereof. In their discretion, the Proxies and/or the Trustee are
authorized to vote upon such other business as may properly come before the
meeting.

THE PROXIES AND/OR THE TRUSTEE WILL VOTE ALL SHARES OF COMMON
STOCK TO WHICH THIS PROXY RELATES, IN THE MANNER DIRECTED BY THE UNDERSIGNED. IF
NO DIRECTION IS GIVEN WITH RESPECT TO COMMON STOCK HELD OF RECORD BY THE
UNDERSIGNED, THE PROXIES WILL VOTE SUCH COMMON STOCK FOR THE ELECTION OF ALL
NOMINEES LISTED ON THE REVERSE. IF NO DIRECTION IS GIVEN WITH RESPECT TO COMMON
STOCK CREDITED TO THE UNDERSIGNED'S ACCOUNT UNDER THE 401(k) PLAN, THE TRUSTEE
WILL VOTE SUCH COMMON STOCK FOR THE ELECTION OF ALL NOMINEES LISTED ON THE
REVERSE.

(continued and to be signed on reverse side)

X Please mark your votes as indicated in this example.
---
1. Election of Directors
FOR WITHHELD Nominees:
ALL FROM ALL Ronald L. Havner, Jr.
NOMINEES NOMINEES Harvey Lenkin
--- --- Vern O. Curtis
For all nominees except as noted below Arthur M. Friedman
James H. Kropp
Alan K. Pribble
Jack D. Steele
-----------------------------------------

2. Other matters: In their discretion, the Proxies and/or the Trustee are
authorized to vote upon such other business as may properly come before
the meeting.

The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement dated April 15, 2002.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE TO
AMERICAN STOCK TRANSFER & TRUST COMPANY, 40 WALL STREET, 46TH FLOOR, NEW YORK,
NEW YORK 10005.

Signature Signature if held jointly
----------------------- ----------------------

Dated , 2002
---------

Note: Please sign exactly as your name appears. Joint owners should each
sign. Trustees and others acting in a representative capacity should
indicate the capacity in which they sign.