<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
    
   
                             WASHINGTON, D.C. 20549
    
 
                           -------------------------
 
   
                                  FORM 10-K/A
    
 
   
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    
   
                      THE SECURITIES EXCHANGE ACT OF 1934
    
 
   
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
    
 
   
                                AMENDMENT NO. 1
    
 
   
                              HORIZON GROUP, INC.
    
   
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
    
 
   
<TABLE>
<S>                                              <C>                                   <C>
               MICHIGAN                                1-12424                                38-2559212     
              (State of                            (Commission File                        (I.R.S. Employer  
            incorporation)                             Number)                           Identification No.) 
                                                                                                             
</TABLE>
    
 
   
                5000 HAKES DRIVE, NORTON SHORES, MICHIGAN  49441
    
   
     (Address of principal executive office)                    (Zip Code)
    
 
   
       Registrant's telephone number, including area code: (616) 798-9100
    
 
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<PAGE>   2
 
               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
     The statements contained herein which are not historical facts are forward
looking statements based upon economic forecasts, budgets, and other factors
which, by their nature, involve known risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Horizon
Group, Inc. to be materially different from any future results implied by such
statements. In particular, among the factors that could cause actual results to
differ materially are the following: Business conditions and the general
economy, competitive factors, and interest rates and other risks inherent in the
real estate business. For further information on factors which could impact the
Company and the statements contained herein, reference is made to the Company's
other filings with the Securities and Exchange Commission.
 
                                     PART I
 
ITEM 1 -- BUSINESS
 
     As used in this report, the "Company" means Horizon Group, Inc. ("Horizon")
and Horizon/Glen Outlet Centers Limited Partnership (the "Operating
Partnership"), a Delaware limited partnership of which Horizon is the general
partner, and their respective subsidiaries and predecessors.
 
GENERAL
 
     Horizon is one of the largest owners, operators and developers of outlet
centers in the United States based on total gross leasable area ("GLA"), number
of tenants and total revenue. At December 31, 1997, the Company owned and
operated 37 outlet centers containing an aggregate of approximately 9.9 million
square feet of GLA located in 21 states.
 
     Commencing with its taxable year ended December 31, 1994, the Company has
elected to be treated as a self-administered and self-managed Real Estate
Investment Trust ("REIT") for federal income tax purposes and Horizon believes
that it has operated in such a manner as to qualify for taxation as a REIT under
the Internal Revenue Code of 1986, as amended (the "Code"). Horizon intends to
continue to operate in the manner required to continue to be taxed as a REIT.
 
     The Company's properties (the "Properties") are held by, and all of the
Company's operations are conducted through, the Operating Partnership and its
subsidiaries. Horizon is the general partner of the Operating Partnership and,
as of December 31, 1997, owned approximately 85.1% of the outstanding
partnership interest ("Units"). The Units are exchangeable, subject to certain
limitations to protect the Company's status as a REIT, into shares of common
stock of the Company ("Common Stock") on a Unit-for-share basis.
 
BUSINESS DEVELOPMENTS
 
     In December 1997, the Company acquired a 203,000 square foot outlet center
adjacent to the Company's existing center in Gilroy, California for $38.5
million, which was financed in its entirety by the Company's primary lender.
 
     Results of operations for 1997 include a charge for asset impairment of
$7.8 million. At September 30, 1997, four outlet centers were reclassified by
the Company as held for sale, in addition to the two classified as held for sale
at December 31, 1996. This reclassification was made as a result of sales
agreements to sell, subject to certain contingencies, all but one of these
outlet centers. The loss on asset impairment was recorded to reduce the carrying
value of these outlet centers to an amount equal to the estimated sales proceeds
less costs to dispose. In November 1997, one property sold for $4.5 million. The
remaining sale agreements were subsequently terminated. It was management's
decision to then pursue the sale of only one of the outlet centers classified as
held for sale. The remaining four outlet centers were reclassified to real
estate assets during the fourth quarter of 1997 at their fair values as of the
date of the decision not to sell.
 
                                        2
<PAGE>   3
 
     On November 12, 1997, the Company entered into a merger agreement (which
was amended and restated on February 1, 1998) with Prime Retail, Inc. ("Prime")
which provides for Prime to integrate 22 of the Company's existing outlet
centers into its portfolio and the Company's remaining 13 centers (as well as
two centers currently owned by Prime) to be operated by a newly formed entity.
The shares of the newly formed entity will be distributed following the merger,
on a pro rata basis, to the shareholders of both Prime and the Company. The
transaction will establish Prime as the largest owner/operator and developer of
factory outlet centers in the United States, with 48 centers totaling 13.4
million square feet of GLA in 26 states. The merger is conditioned upon, among
other things, the approvals of each company's shareholders and unit holders and
the satisfaction of other customary conditions.
 
   
     On April 1, 1998, the Company consummated an agreement with Castle & Cooke
Properties, Inc. which released the Company from its obligations under its
long-term lease of the Dole Cannery outlet center in Honolulu, Hawaii, in
connection with the formation of a joint venture with certain affiliates of
Castle & Cooke, Inc. ("Castle & Cooke") to operate such property. Under the
terms of the agreement, Castle & Cooke Properties, Inc., the landlord of the
project, released the Company from all post-closing obligations under the lease,
which expires in 2045, in exchange for the Company's conveyance to the joint
venture of its rights and obligations under such lease. The agreement also
provided that the Company transfer to such joint venture substantially all of
the Company's economic interest in its outlet center in Lake Elsinore,
California together with vacant property located adjacent to the center. The
Company expects to record a net loss of $30.0 million to reflect the transfer of
the economic interest in this property. The Company holds a small minority
interest in the joint venture but has no obligation or commitment with respect
to the operations of the Dole Cannery project following the closing.
    
 
BUSINESS STRATEGY
 
     The Company's business strategy consists primarily of increasing its focus
on the leasing of existing outlet centers, reducing general and administrative
expenses and limiting new development to the expansion of certain selected
existing outlet centers where the Company anticipates high demand for additional
retail space. While the Company may engage in new developments or acquisitions,
it will do so only in limited circumstances with compelling business rationale.
In addition, the Company is also attempting to divest itself of one of its
centers, and may also divest itself of additional centers.
 
     SEASONALITY -- The Company's revenues are primarily derived from long-term
leases with five to ten year terms. Accordingly, the Company's revenues are not
significantly affected by seasonal factors. The Company does, however, generate
a small amount of additional revenue, primarily from temporary tenant income, in
the fourth quarter resulting from the holiday season. Revenues in the fourth
quarter of 1997 also include $3.0 million from the acceleration of revenue from
a two year lease of its New Mexico outlet center that was terminated early.
Revenues for each quarter of 1997 and 1996 are as follows (in thousands):
 
   
<TABLE>
<CAPTION>
              QUARTER ENDED                   FISCAL 1997    FISCAL 1996
              -------------                   -----------    -----------
<S>                                           <C>            <C>
March 31..................................      $37,303        $37,004
June 30...................................       37,281         37,215
September 30..............................       38,023         38,651
December 31...............................       43,119         40,916
</TABLE>
    
 
     FINANCING -- In 1997, the Company financed its operations, expansions and
development with undistributed cash flow, bank or other borrowings from
institutional lenders and the issuance of equity securities. As of December 31,
1997, the Company had aggregate commitments under existing revolving lines of
credit of $4.0 million. While the Company has additional availability under its
loan agreements with its lenders, additional borrowings are effectively limited
by the financial ratios the Company is required to maintain. As of December 31,
1997, the Company had a debt to total market capitalization (the aggregate of
the market value of the Company's outstanding Common Stock, including Units
exchangeable for Common Stock, and its long-term debt) ratio of approximately
67%.
 
                                        3
<PAGE>   4
 
     The Company's general financing strategy has been not to incur additional
debt if such additional debt would cause its ratio of debt to total market
capitalization to exceed 40%, however, the Company may incur additional debt if
the total consolidated debt of the Company does not exceed 55% of the then fair
market value of the real estate owned by the Company. Due primarily to the
decline in the market price of Horizon Common Stock from the time the debt was
incurred, the Company's debt to total market capitalization at December 31, 1997
exceeded 40%; however, the Company does not believe that its total consolidated
debt exceeded 55% of the current market value of the real estate owned by the
Company at December 31, 1997. The Company may from time to time re-evaluate and
modify its debt policies in light of then current economic conditions, relative
costs of debt and equity capital, the market value of its properties, growth and
acquisition opportunities and other factors. The governing instruments of the
Company do not contain any limitations on the amount of indebtedness the Company
may incur.
 
     Any additional debt financing, including additional lines of credit, may be
secured by mortgages on its properties. Such mortgages may be recourse or
non-recourse and/or cross-collateralized and/or may contain cross-default
provisions. The Company does not have a policy limiting the number of mortgages
that may be placed on, or the amount of indebtedness that may be secured by, any
particular property, but mortgage financing instruments usually limit additional
indebtedness on such properties.
 
COMPETITION
 
     The Company's outlet centers compete for customers primarily with outlet
centers built and operated by other developers, traditional shopping malls and
"off-price" retailers. The Company believes that the location of the other
outlet centers near its centers generally is not harmful to its business since a
concentration of value retail stores tends to create a shopping destination. The
Company carefully considers the degree of existing and planned competition in a
proposed area before deciding to build or acquire a new center or expand an
existing center.
 
     The Company's outlet centers compete to a limited extent with various full-
and off-price retailers in the highly fragmented retailing industry. However,
the Company believes that the majority of its customers visit outlet centers
because they are intent on buying first-quality, name brand goods at discounted
prices. Traditional full- and off-price retailers are often unable to provide
such a variety of products at attractive prices.
 
POLICIES WITH RESPECT TO CERTAIN ACTIVITIES
 
     The following supplements the discussion of the Company's primary strategy
as set forth elsewhere in this report. The Company's policies with respect to
those activities and the matters discussed below have been determined by the
Board of Directors of the Company and may be amended or revised from time to
time at the discretion of the Board of Directors without a vote of the
shareholders of the Company.
 
     INVESTMENT POLICIES -- The Company may expand existing properties, develop
new properties, purchase or lease income-producing properties for long-term
investment, expand and improve the properties it owns or sell such properties,
in whole or in part, when circumstances warrant. The Company may also
participate with other entities in property ownership through joint ventures or
other types of co-ownership. Equity investments may be subject to existing
mortgage financing and other indebtedness which have priority over the equity
interest of the Company.
 
     While the Company has emphasized equity real estate investments, it may, in
its discretion, invest in mortgages and other real estate interests. The Company
has not previously invested in mortgages and it does not presently intend to
invest to a significant extent in mortgages or deeds of trust, but it may invest
in participating or convertible mortgages if it concludes that it may benefit
from the cash flow or any appreciation in the value of the subject property.
 
     Subject to the percentage of ownership limitations and gross income test
which must be satisfied to qualify as a REIT, the Company may also invest in
securities of concerns engaged in real estate activities or in securities of
other issuers. The Company does not intend to invest in the securities of any
other issuer for the
 
                                        4
<PAGE>   5
 
purpose of exercising control; however, the Company may in the future acquire
all or substantially all of the securities or assets of other REITs, management
companies or similar entities where such investments would be consistent with
the Company's investment policies. In any event, the Company does not intend
that its investments in securities would require the Company to register as an
investment company under the Investment Company Act of 1940, and the Company
would divest securities before any such registration would be required.
 
POLICIES WITH RESPECT TO CERTAIN OTHER ACTIVITIES
 
     The Company may, but does not presently intend to, make investments other
than as previously described. The Company has authority to offer its capital
shares or other senior securities in exchange for property and to repurchase or
otherwise reacquire its Common Stock or any other securities and may engage in
such activities in the future. During the last four years, the Company has not
engaged in trading, underwriting or agency distribution or resale of securities
of other issuers and does not intend to do so. At all times, the Company intends
to make investments in such a manner as to be consistent with the requirements
of the Internal Revenue Code of 1986 to qualify as a REIT unless, because of
changed circumstances, the Board of Directors determines that it is no longer in
the best interests of the Company to qualify as a REIT.
 
ENVIRONMENTAL MATTERS
 
     Under various federal, state and local laws, ordinances and regulations, a
current or previous owner or operator of real property may be liable for the
costs of removal or remediation of hazardous or toxic substances on, under or in
such property. Such laws often impose liability whether or not the owner or
operator knew of, or was responsible for, the presence of such hazardous or
toxic substances. The presence of toxic or hazardous substances can, under
certain circumstances, also result in claims for personal injury and property
damage. The presence of such substances may adversely affect the owner's ability
to sell such real estate or to borrow using such real estate as collateral. Such
costs or liabilities may exceed the value of such real estate. In addition,
persons who arrange for the disposal or treatment of hazardous or toxic
substances may also be liable for the costs of removal remediation of such
substances at the disposal or treatment facility, whether or not such facility
is owned by such person. In connection with its ownership and operation of the
Properties, the Company may be potentially liable for the costs described above.
However, the Company has not been notified by any governmental authority of any
non-compliance, liability or other claim in connection with any of the
Properties. The Company is not aware of any other environmental condition with
respect to any of the Properties that it believes would have a material adverse
effect on the Company's business, assets, results of operations, or competitive
conditions nor does the Company believe that compliance with federal, state or
local environmental laws and regulations will have a material adverse effect on
the capital expenditures, earnings or competitive position of the Company. It is
the Company's policy to obtain Phase I environmental studies before acquiring
properties.
 
INSURANCE
 
     Management believes that each of the Properties is covered by adequate
fire, flood, property and, in the case of the Lake Elsinore, Gilroy, Pismo
Beach, Tracy and Tulare centers in California, the Burlington center in
Washington and the Laughlin center in Nevada, earthquake insurance provided by
reputable companies and with commercially reasonable deductibles and limits.
 
EMPLOYEES
 
     As of December 31, 1997, the Company had 438 full-time employees. The
Company believes that this staffing will be sufficient to manage the Company and
its 37 outlet centers. The Company believes that its relations with its
employees are good.
 
                                        5
<PAGE>   6
 
MANAGEMENT
 
     The executive officers of the Company, and their ages and positions as of
December 31, 1997 were as follows:
 
<TABLE>
<CAPTION>
                NAME                     AGE                            POSITION
                ----                     ---                            --------
<S>                                      <C>    <C>
James S. Wassel......................    47     Chief Executive Officer, President and Director
Paul Comarato........................    46     Vice President of Operations/Asset Management
James S. Harris......................    49     Vice President of Retail Strategies
Stephen J. Moore.....................    44     Senior Vice President of Marketing and Communications
Thomas A. Rumptz.....................    37     Vice President of Real Estate
</TABLE>
 
     JAMES S. WASSEL. Mr. Wassel joined Horizon as President in April 1997 and
has served as President and Chief Executive Officer of Horizon since he was made
CEO in June 1997. From June 1994 to April 1997, Mr. Wassel served as Senior Vice
President of Asset Management with Crescent Real Estate Equities of Fort Worth,
Texas ("Crescent"), where he oversaw asset management, strategic planning and
implementation of value enhancement programs for Crescent's 30 million square
foot portfolio of commercial real estate. From November 1990 to January 1993,
Mr. Wassel was a partner and Director of Asset Management with Trammell Crow
Realty Advisors of Dallas, Texas ("Trammell Crow"). While with Trammell Crow,
Mr. Wassel oversaw the disposition of $250 million in assets, the redevelopment
of other portfolio properties and was responsible for the asset management of a
portfolio of over $3.0 billion in assets. In addition, Mr. Wassel also served as
President of Trammell Crow Real Estate Investors, a REIT, where he oversaw the
revitalization of that company's under-performing industrial and office
properties. From September 1987 to October 1990, Mr. Wassel served as
Partner/Director of Asset Management with Jones Lang Wootton Realty Advisors of
New York, where he oversaw the asset management and administration of a $1.0
billion portfolio of diversified assets on behalf of public and corporate
pension funds and served as President and Chief Operating Officer of JLW
Management Group. Earlier in his career, Mr. Wassel served as a Vice President
with The Rouse Company of Columbia, Maryland ("Rouse"), where he directed the
management of Rouse's centers in the Northeast United States and oversaw
development and re-merchandising efforts at Rouse's South Street Seaport (New
York), Faneuil Hall (Boston), Willowbrook Mall (Wayne, New Jersey) and Paramus
Park Mall (Paramus, New Jersey) properties.
 
     PAUL COMARATO. Mr. Comarato has served as Vice President of Operations of
Horizon since August 1997 and oversees all aspects of property level operations,
tenant construction and legal, business and strategic planning. From June 1994
to July 1997, Mr. Comarato held a similar position managing East Coast
Operations for Chelsea GCA Realty, where he managed nearly two million square
feet of GLA, including Chelsea's flagship center in Woodbury, New York and
oversaw the opening of that company's two most recent developments. From June
1990 to May 1994, Mr. Comarato served as General Manager at Wilmorite's Freehold
Raceway Mall in Freehold, New Jersey. Prior to his employment by Wilmorite, Mr.
Comarato served as General Manager of Paramus Park Mall in Paramus, New Jersey
and Willowbrook Mall in Wayne, New Jersey, both owned by The Rouse Company.
 
     JAMES S. HARRIS. Mr. Harris currently serves as Vice President -- Retail
Strategies of Horizon. Mr. Harris oversees the strategic merchandising efforts
of Horizon. Mr. Harris joined Horizon in July 1995 in conjunction with Horizon's
merger with and assimilation of McArthur/Glen, where Mr. Harris served as Vice
President from November 1990 until he was appointed Chief Operating Officer in
July 1993. Prior to his employment by McArthur/Glen, Mr. Harris spent six year
managing and leasing regional shopping centers for the Taubman Company of
Bloomfield Hills, Michigan.
 
     STEPHEN J. MOORE. Mr. Moore has served as Senior Vice President of
Marketing and Communications of Horizon since May 1997 and oversees all aspects
of corporate and property level marketing, advertising and public relations.
From April 1994 to April 1997, Mr. Moore served as Director of the Commercial
Division of The Becker Group in Baltimore, Maryland ("Becker"). From April 1979
to March 1993, Mr. Moore was with The Rouse Company, where he served as Group
Director of Sales and Marketing and directed all aspects of
 
                                        6
<PAGE>   7
 
Marketing and Strategic Planning for Rouse's East Coast properties in the United
States and properties in Canada.
 
     THOMAS A. RUMPTZ. Mr. Rumptz currently serves as Vice President of Real
Estate of Horizon, and oversees the expansion of existing centers as well as new
development and residual land sales. In addition, Mr. Rumptz has overseen the
management of joint venture investments and development relationships for
Horizon. During his eight year tenure with Horizon, Mr. Rumptz has served as
Vice President of Finance, Director of Real Estate, Senior Acquisitions Analyst
and Controller. Prior to his employment by Horizon, Mr. Rumptz served as Manager
of Investment Real Estate with Foremost Insurance of Grand Rapids, Michigan and
Business Manager at Robert Grooter Development Company, a Grand Rapids, Michigan
based developer of commercial and light industrial facilities, where he oversaw
leasing, accounting and operations.
 
ITEM 2 -- PROPERTIES
 
GENERAL
 
     As of December 31, 1997, the Company's portfolio consisted of the following
Properties: (i) 37 outlet centers located in California, Colorado, Florida,
Georgia, Hawaii, Indiana, Kentucky, Maryland, Massachusetts, Michigan,
Minnesota, Missouri, Nevada, New Mexico, New York, Ohio, Pennsylvania, Texas,
Virginia, Washington and Wisconsin with an average size of approximately 267,800
square feet of GLA, aggregating approximately 9.9 million square feet of GLA;
and (ii) an aggregate of approximately 346 acres of outlots, retail pads and
expansion pads located adjacent to or near certain of the Company's existing
outlet centers (the "Undeveloped Parcels").
 
<TABLE>
<CAPTION>
                                            YEAR OF        TOTAL
                                           OPENING/     APPROXIMATE   PERCENTAGE
                                          MOST RECENT     GLA AS      GLA LEASED
               NAME AND                   EXPANSION/    OF 12/31/97     AS OF
          LOCATION OF CENTER             NO. OF PHASES   (SQ. FT.)     12/31/97           CERTAIN TENANTS
          ------------------             -------------  -----------   ----------          ---------------
<S>                                      <C>            <C>           <C>          <C>
Bellport Outlet Center(1)..............   1992/1997        291,248       79.5%     Anne Klein, Bass, Corning/
Patchogue, New York                        3 Phases                                Revere, Dress Barn, Gap,
                                                                                   Jockey, Jones New York, Liz
                                                                                   Claiborne, London Fog,
                                                                                   Maidenform, Nike, Nine West,
                                                                                   OshKosh B'Gosh, Reebok, Van
                                                                                   Heusen, Vanity Fair
Outlets at Birch Run...................  1986/1996         720,983       97.3%     American Eagle, Ann Taylor,
Birch Run, Michigan                       18 Phases                                BOSE, Dansk, Eddie Bauer,
                                                                                   Espirt, Etienne Aigner, Fila,
                                                                                   Gap, Guess?, J. Crew, Lenox,
                                                                                   Levi's, Liz Claiborne,
                                                                                   Mikasa, Nautica, Nike, Nine
                                                                                   West, NordicTrack, Noritake,
                                                                                   OshKosh B'Gosh, Polo/Ralph
                                                                                   Lauren, Reebok, Sony,
                                                                                   Spiegel, Springmaid-Wamsutta,
                                                                                   Tommy Hilfiger, Van Heusen,
                                                                                   Vanity Fair, WestPoint
                                                                                   Stevens
Burlington Outlet Center...............   1989/1993        174,105       98.7%     Bass, Bugle Boy, Fila,
Burlington, Washington                     3 Phases                                Guess?, J. Crew, Jones New
                                                                                   York, Liz Claiborne,
                                                                                   Maidenform, Mikasa, Tommy
                                                                                   Hilfiger, Van Heusen
Calhoun Outlet Center..................   1992/1995        254,270       87.7%     Dress Barn, J. Crew, Jones
Calhoun, Georgia                           2 Phases                                New York, Liz Claiborne,
                                                                                   London Fog, Mikasa, Nike,
                                                                                   Nine West, OshKosh B'Gosh,
                                                                                   Springmaid-Wamsutta, Van
                                                                                   Heusen
</TABLE>
 
                                        7
<PAGE>   8
 
<TABLE>
<CAPTION>
                                            YEAR OF        TOTAL
                                           OPENING/     APPROXIMATE   PERCENTAGE
                                          MOST RECENT     GLA AS      GLA LEASED
               NAME AND                   EXPANSION/    OF 12/31/97     AS OF
          LOCATION OF CENTER             NO. OF PHASES   (SQ. FT.)     12/31/97           CERTAIN TENANTS
          ------------------             -------------  -----------   ----------          ---------------
<S>                                      <C>            <C>           <C>          <C>
Conroe Outlet Center...................   1992/1994        281,436       92.4%     Bass, Bugle Boy, Carter's
Conroe, Texas                              3 Phases                                Childrenswear,
                                                                                   Corning/Revere, Elisabeth,
                                                                                   Etienne Aigner, Fila, Guess?,
                                                                                   Jockey, Levi's, Liz
                                                                                   Claiborne, Mikasa, Nike, Nine
                                                                                   West, OshKosh B'Gosh,
                                                                                   Springmaid-Wamsutta, Van
                                                                                   Heusen
Dry Ridge Outlet Center................   1991/1994        117,980       71.3%     Guess?, Jones New York, Liz
Dry Ridge, Kentucky                        2 Phases                                Claiborne, Mikasa, Nike, Nine
                                                                                   West, Van Heusen, Westport
                                                                                   Ltd.
Horizon Outlet Center -- Edinburgh.....   1989/1995        298,068       92.3%     American Eagle, Ann Taylor,
Edinburgh, Indiana                         2 Phases                                Bugle Boy, Corning/Revere,
                                                                                   Dansk, Eddie Bauer, Esprit,
                                                                                   Florsheim, Jockey, Lenox,
                                                                                   Levi's, Nautica, OshKosh
                                                                                   B'Gosh, Tommy Hilfiger,
                                                                                   Spiegel, Van Heusen
Finger Lakes Outlet Center(2)..........   1995/1997        391,746       98.2%     Bass, BOSE, Brooks Brothers,
Waterloo, New York                         3 Phases                                Bugle Boy, Calvin Klein,
                                                                                   Coach, Dockers, Esprit,
                                                                                   Etienne Aigner, Fila,
                                                                                   Florsheim, Gap, J. Crew,
                                                                                   Jockey, Jones New York,
                                                                                   Levi's, Liz Claiborne, London
                                                                                   Fog, Mikasa, Nautica, Nine
                                                                                   West, OshKosh B'Gosh,
                                                                                   Polo/Ralph Lauren, Reebok,
                                                                                   Springmaid-Wamsutta, Van
                                                                                   Heusen, Vanity Fair,
                                                                                   Waterford Wedgwood
Horizon Outlet Center -- Fremont.......   1985/1994        229,029       93.3%     Ann Taylor, Bass, Bugle Boy,
Fremont, Indiana                           3 Phases                                Coach, Corning/Revere,
                                                                                   Florsheim, Jockey, Jones New
                                                                                   York, Levi's, London Fog,
                                                                                   Mikasa, Nautica, OshKosh
                                                                                   B'Gosh, Polo/Ralph Lauren,
                                                                                   Reebok, Tommy Hilfiger, Van
                                                                                   Heusen
Outlets at Gilroy......................   1990/1995        576,699       97.1%     Ann Taylor, Bass, BOSE,
Gilroy, California                         5 Phases                                Brooks Brothers, Esprit,
                                                                                   Etienne Aigner, Eddie Bauer,
                                                                                   Florsheim, Gap, Guess?, J.
                                                                                   Crew, Jones New York, Lenox,
                                                                                   Levi's, Liz Claiborne, London
                                                                                   Fog, Mikasa, Nike,
                                                                                   NordicTrack, Noritake,
                                                                                   OshKosh B'Gosh, Reebok, Reed
                                                                                   & Barton, Springmaid-
                                                                                   Wamsutta, Timberland, Van
                                                                                   Heusen, Vanity Fair
</TABLE>
 
                                        8
<PAGE>   9
 
<TABLE>
<CAPTION>
                                            YEAR OF        TOTAL
                                           OPENING/     APPROXIMATE   PERCENTAGE
                                          MOST RECENT     GLA AS      GLA LEASED
               NAME AND                   EXPANSION/    OF 12/31/97     AS OF
          LOCATION OF CENTER             NO. OF PHASES   (SQ. FT.)     12/31/97           CERTAIN TENANTS
          ------------------             -------------  -----------   ----------          ---------------
<S>                                      <C>            <C>           <C>          <C>
Southwest Outlet Center at Hillsboro...   1989/1995        359,255       98.7%     American Eagle, Corning/
Hillsboro, Texas                           3 Phases                                Revere, Eddie Bauer, Etienne
                                                                                   Aigner, Fila, Florsheim, Gap,
                                                                                   Guess?, J. Crew, Jockey,
                                                                                   Jones New York, Levi's, Liz
                                                                                   Claiborne, Mikasa, Nike, Nine
                                                                                   West, OshKosh B'Gosh, Reebok,
                                                                                   Springmaid-Wamsutta, Van
                                                                                   Heusen
Horizon Outlet Center -- Holland.......   1988/1990        185,769       72.8%     Bass, Bugle Boy, Carter's
Holland, Michigan                          2 Phases                                Childrenswear, Casual Corner,
                                                                                   Dress Barn, Eddie Bauer,
                                                                                   Florsheim, Jockey, Oneida,
                                                                                   Reebok, S&K Menswear, Van
                                                                                   Heusen
The Dole Cannery(3)....................  1996 4 Phases     254,999       40.5%     Big Dog Sportswear,
Honolulu, Hawaii                                                                   California Luggage, Dockers,
                                                                                   Leathermode, Levi's, 'Van's
Jeffersonville Outlet Center...........   1993/1994        314,102       82.3%     Anne Klein, BD Baggies, Bass,
Jeffersonville, Ohio                       3 Phases                                Big Dog Sportswear, Corning/
                                                                                   Revere, Dress Barn, Etienne
                                                                                   Aigner, Everything
                                                                                   Rubbermaid, Genuine Article,
                                                                                   Jones New York, Linen Barn,
                                                                                   Liz Claiborne, Maidenform,
                                                                                   Mikasa, Reebok, Spiegel, Van
                                                                                   Heusen
Lakeside Marketplace...................   1988/1991        268,736       97.0%     Anne Klein, Bass, Brooks
Kenosha, Wisconsin                         4 Phases                                Brothers, Dansk, Etienne
                                                                                   Aigner, Fila, Gap, Genuine
                                                                                   Article, J. Crew, Jones New
                                                                                   York, Liz Claiborne, London
                                                                                   Fog, Maidenform, Mikasa,
                                                                                   Nike, NordicTrack, Noritake,
                                                                                   Polo/ Ralph Lauren, Reebok,
                                                                                   Timberland, Van Heusen,
                                                                                   Woolrich
Lake Elsinore Outlet Center(3).........   1991/1995        368,785       90.9%     Bass, Bugle Boy, Corning/
Lake Elsinore, California                  4 Phases                                Revere, Esprit, Etienne
                                                                                   Aigner, Florsheim, Jockey,
                                                                                   Jones New York, Levi's, Liz
                                                                                   Claiborne, London Fog,
                                                                                   Maidenform, Mikasa, Nike,
                                                                                   Nine West, NordicTrack,
                                                                                   OshKosh B'Gosh, Reebok, Sony,
                                                                                   Van Heusen, Vanity Fair
Horizon Outlet Center -- Laughlin......      1996          258,312       79.2%     Bass, Big Dog Sportswear,
Laughlin, Nevada                                                                   Bugle Boy, Corning/Revere,
                                                                                   Dress Barn, Levi's, Linen
                                                                                   Barn, Maidenform, Mikasa,
                                                                                   OshKosh B'Gosh, Polo/Ralph
                                                                                   Lauren, Reebok, Van Heusen
</TABLE>
 
                                        9
<PAGE>   10
 
<TABLE>
<CAPTION>
                                            YEAR OF        TOTAL
                                           OPENING/     APPROXIMATE   PERCENTAGE
                                          MOST RECENT     GLA AS      GLA LEASED
               NAME AND                   EXPANSION/    OF 12/31/97     AS OF
          LOCATION OF CENTER             NO. OF PHASES   (SQ. FT.)     12/31/97           CERTAIN TENANTS
          ------------------             -------------  -----------   ----------          ---------------
<S>                                      <C>            <C>           <C>          <C>
Berkshire Outlet Village...............      1997          224,363       99.2%     Anne Klein, Coach, Dockers,
Lee, Massachusetts                                                                 Etienne Aigner, Fila, Gap,
                                                                                   Guess?, J. Crew, Johnston &
                                                                                   Murphy, Jones New York,
                                                                                   Levi's, Liz Claiborne,
                                                                                   Mikasa, Nautica, Polo/Ralph
                                                                                   Lauren, Reebok, Tommy
                                                                                   Hilfiger, Waterford Wedgewood
Medford Outlet Center..................   1991/1995        188,060       80.3%     American Eagle, Bass, Bugle
Medford, Minnesota                         2 Phases                                Boy, Casual Corner, Corning/
                                                                                   Revere, Dress Barn, Etienne
                                                                                   Aigner, Guess?, Levi's, Liz
                                                                                   Claiborne, Mikasa, Nike, Van
                                                                                   Heusen
Lighthouse Place.......................   1987/1997        490,915       98.1%     American Eagle, Ann Taylor,
Michigan City, Indiana                     7 Phases                                Anne Klein, Bass, Big Dog
                                                                                   Sportswear, Brooks Brothers,
                                                                                   Coach, Corning/Revere, Crate
                                                                                   & Barrel, Eddie Bauer,
                                                                                   Esprit, Etienne Aigner, Gap,
                                                                                   Guess?, J. Crew, Jockey,
                                                                                   Jones New York, Lenox,
                                                                                   Levi's, Liz Claiborne, London
                                                                                   Fog, Mikasa, Nautica, Nine
                                                                                   West, NordicTrack, OshKosh
                                                                                   B'Gosh, Polo/Ralph Lauren,
                                                                                   Reebok, Spiegel, Timberland,
                                                                                   Tommy Hilfiger, Van Heusen
Horizon Outlet Center -- Monroe........   1987/1989        230,139       87.3%     Bass, Bugle Boy, Carter's
Monroe, Michigan                           2 Phases                                Childrenswear, Casual Corner,
                                                                                   Corning/Revere, Dress Barn,
                                                                                   Hit or Miss, Levi's, Mikasa,
                                                                                   Nike, Van Heusen, WestPoint
                                                                                   Stevens
Lakeshore Marketplace..................      1995          360,592       74.3%     Barnes & Noble, Ben Franklin,
Norton Shores, Michigan                                                            Di's Hallmark, Dunham's
                                                                                   Sporting Goods,
                                                                                   Elder-Beerman, Great Party,
                                                                                   Old Navy, TJ Maxx, Toys 'R'
                                                                                   Us
Horizon Outlet Center -- Oshkosh.......   1989/1991        259,443       85.4%     Bass, Bugle Boy, Dansk, Eddie
Oshkosh, Wisconsin                         2 Phases                                Bauer, Florsheim, Jockey,
                                                                                   Jones New York, Land's End,
                                                                                   Lenox, Levi's, London Fog,
                                                                                   Nautica, OshKosh B'Gosh,
                                                                                   Polo/Ralph Lauren, Tommy
                                                                                   Hilfiger, Van Heusen
Perryville Outlet Center...............      1990          148,134       93.9%     Bass, Dan River, Elisabeth,
Perryville, Maryland                                                               Etienne Aigner, Florsheim,
                                                                                   Jones New York, Liz
                                                                                   Claiborne, Mikasa, Nike, Van
                                                                                   Heusen
Pismo Beach Outlet Center..............      1994          147,576       98.0%     Anne Klein, Bass, Big Dog
Pismo Beach, California                                                            Sportswear, Florsheim,
                                                                                   Jockey, Jones New York,
                                                                                   Levi's, London Fog,
                                                                                   Maidenform, Mikasa, Nine
                                                                                   West, Tommy Hilfiger, Van
                                                                                   Heusen
</TABLE>
 
                                       10
<PAGE>   11
 
<TABLE>
<CAPTION>
                                            YEAR OF        TOTAL
                                           OPENING/     APPROXIMATE   PERCENTAGE
                                          MOST RECENT     GLA AS      GLA LEASED
               NAME AND                   EXPANSION/    OF 12/31/97     AS OF
          LOCATION OF CENTER             NO. OF PHASES   (SQ. FT.)     12/31/97           CERTAIN TENANTS
          ------------------             -------------  -----------   ----------          ---------------
<S>                                      <C>            <C>           <C>          <C>
Chesapeake Village at Queenstown.......   1989/1993        220,415      100.0%     Big Dog Sportswear, Brooks
Queenstown, Maryland                       5 Phases                                Brothers, Corning/Revere,
                                                                                   Dockers, Etienne Aigner,
                                                                                   Guess?, Jones New York,
                                                                                   Lenox, Levi's, Liz Claiborne,
                                                                                   Nike, Nine West, Springmaid-
                                                                                   Wamsutta, St. John Knits, Van
                                                                                   Heusen, Vanity Fair
Sealy Outlet Center....................   1995/1996        191,865       90.1%     Bass, Bugle Boy, Dress Barn,
Sealy, Texas                               2 Phases                                Florsheim, J. Crew, Jockey,
                                                                                   Jones New York, Liz
                                                                                   Claiborne, Mikasa, Nine West,
                                                                                   OshKosh B'Gosh, Reebok,
                                                                                   Spiegel, Springmaid-Wamsutta,
                                                                                   Van Heusen
Silverthorne Factory Stores............   1988/1993        257,470       92.9%     American Eagle, Anne Klein,
Silverthorne, Colorado                     3 Phases                                Bass, Big Dog Sportswear,
                                                                                   Dansk, Eddie Bauer, Fila,
                                                                                   Gap, Genuine Article, J.
                                                                                   Crew, Jones New York, Liz
                                                                                   Claiborne, London Fog,
                                                                                   Maidenform, Mikasa, Nike,
                                                                                   Nine West, Tommy Hilfiger,
                                                                                   Van Heusen
Horizon Outlet Center..................      1990          199,962       80.0%     Bass, Brooks Brothers, Bugle
-- Somerset                                                                        Boy, Casual Corner, Corning/
Somerset, Pennsylvania                                                             Revere, Dress Barn, Jones New
                                                                                   York, Levi's, Mikasa, Polo/
                                                                                   Ralph Lauren, S&K Menswear,
                                                                                   Van Heusen
Tracy Outlet Center....................      1994          153,000       94.5%     Anne Klein, Big Dog
Tracy, California                                                                  Sportswear, Casual Corner,
                                                                                   Corning/Revere, Fila, Jones
                                                                                   New York, Levi's,
                                                                                   Leathermode, Liz Claiborne,
                                                                                   Mikasa, Nine West, OshKosh
                                                                                   B'Gosh, Reebok, Sony
Horizon Outlet Center --...............   1990/1996        147,455       71.5%     Bass, Bugle Boy, Carter's
Traverse City                              2 Phases                                Childrenswear,
Traverse City, Michigan                                                            Corning/Revere, Dansk,
                                                                                   Levi's, London Fog, S&K
                                                                                   Menswear, Van Heusen
Horizon Outlet Center..................      1995          139,433       83.7%     Bass, Big Dog Sportswear,
-- Tulare                                                                          Corning/Revere, Jones New
Tulare, California                                                                 York, Linen Barn, Maidenform,
                                                                                   Mikasa, Polo/Ralph Lauren,
                                                                                   Reebok, Van Heusen
Horizon Outlet Center..................   1994/1995        323,463       94.4%     Ann Taylor, Anne Klein, Big
-- Vero Beach                              2 Phases                                Dog Sportswear, BOSE, Bugle
Vero Beach, Florida                                                                Boy, Dansk, Etienne Aigner,
                                                                                   Jockey, Jones New York,
                                                                                   Levi's, Liz Claiborne, London
                                                                                   Fog, Mikasa, Nautica, Nine
                                                                                   West, Polo/Ralph Lauren,
                                                                                   Reebok, Reed & Barton,
                                                                                   Spiegel, Springmaid-Wamsutta,
                                                                                   Timberland, Van Heusen
</TABLE>
 
                                       11
<PAGE>   12
 
<TABLE>
<CAPTION>
                                            YEAR OF        TOTAL
                                           OPENING/     APPROXIMATE   PERCENTAGE
                                          MOST RECENT     GLA AS      GLA LEASED
               NAME AND                   EXPANSION/    OF 12/31/97     AS OF
          LOCATION OF CENTER             NO. OF PHASES   (SQ. FT.)     12/31/97           CERTAIN TENANTS
          ------------------             -------------  -----------   ----------          ---------------
<S>                                      <C>            <C>           <C>          <C>
Warrenton Outlet Center................   1993/1995        200,363       81.7%     Bass, Corning/Revere, Jockey,
Warrenton, Missouri                        2 Phases                                Jones New York, Levi's, Linen
                                                                                   Barn, Liz Claiborne, Mikasa,
                                                                                   Nike, Nine West, Van Heusen
Berkeley Commons.......................   1988/1995        274,565      100.0%     American Eagle, Anne Klein,
Outlet Center                              4 Phases                                Bass, BOSE, Brooks Brothers,
Williamsburg, Virginia                                                             Coach, Eddie Bauer, Etienne
                                                                                   Aigner, Guess?, J. Crew,
                                                                                   Jones New York, Liz
                                                                                   Claiborne, Lladro, Mikasa,
                                                                                   Nautica, Nike, Nine West,
                                                                                   NordicTrack, OshKosh B'Gosh,
                                                                                   Reebok, Timberland, Tommy
                                                                                   Hilfiger, Van Heusen,
                                                                                   Waterford Wedgewood
Horizon Outlet Center..................   1992/1994        249,208       92.6%     American Eagle, Big Dog
Woodbury                                   3 Phases                                Sportswear, Bugle Boy, Casual
Woodbury, Minnesota                                                                Corner, Corning/Revere, Eddie
                                                                                   Bauer, Fila, Levi's, Reebok,
                                                                                   Spiegel, Van Heusen,
                                                                                   WestPoint Stevens
New Mexico Outlet Center(4)............      1993          155,170
Algodones, New Mexico                       1 Phase
                                                         ---------      -----
TOTAL HORIZON PORTFOLIO                                  9,907,113       89.4%
                                                         =========      =====
</TABLE>
 
-------------------------
(1) Owned by a partnership in which the Company has an interest.
(2) Owned by a joint venture with an institutional investor.
(3) Subject to an agreement with Castle & Cooke, See "Business Developments".
(4) As of January 31, 1998, the center was unoccupied and held for sale. See
    note 3 to the Consolidated Financial Statements.
 
EXECUTIVE OFFICES
 
     The Company owns its 35,000 square foot executive offices in Norton Shores,
Michigan.
 
                                       12
<PAGE>   13
 
STATE INFORMATION
 
     The following table indicates, as of December 31, 1997, certain information
regarding the outlet centers presented by state.
 
   
<TABLE>
<CAPTION>
                                                                                  PERCENTAGE
                                                                                    OF GLA
                                                                 PERCENTAGE       LEASED ON           TOTAL
                                  NUMBER OF       TOTAL GLA       OF TOTAL       DECEMBER 31,        OCCUPIED
             STATE                PROPERTIES      (SQ. FT.)         GLA              1997           BASE RENT
             -----                ----------      ---------      ----------      ------------       ---------
<S>                                  <C>         <C>              <C>              <C>           <C>
California......................       5          1,385,493         14.0%            93.9%         $ 22,706,178
Colorado........................       1            257,470          2.6             92.9             3,937,864
Florida.........................       1            323,463          3.3             94.4             4,125,131
Georgia.........................       1            254,270          2.6             87.7             2,852,791
Hawaii..........................       1            254,999          2.6             40.5               723,616
Indiana.........................       3          1,018,012         10.3             95.3            12,549,876
Kentucky........................       1            117,980          1.2             71.3               545,725
Maryland........................       2            368,549          3.7             97.6             5,059,763
Massachusetts...................       1            224,363          2.3             99.2             3,745,012
Michigan........................       5          1,644,938         16.6             85.8            15,353,883
Minnesota.......................       2            437,268          4.4             87.3             4,221,059
Missouri........................       1            200,363          2.0             81.7             2,026,827
Nevada..........................       1            258,312          2.6             79.2             3,016,854
New Mexico......................       1            155,170          1.5               --                    --
New York........................       2            682,994          6.9             90.2             9,069,950
Ohio............................       1            314,102          3.2             82.3             3,035,163
Pennsylvania....................       1            199,962          2.0             80.0             1,363,240
Texas...........................       3            832,556          8.4             94.6            10,226,495
Virginia........................       1            274,565          2.8            100.0             4,730,477
Washington......................       1            174,105          1.7             98.7             2,192,176
Wisconsin.......................       2            528,179          5.3             91.3             6,466,519
                                      --          ---------        ------           ------         ------------
Total...........................      37          9,907,113        100.0%            89.4%         $117,948,599
                                      ==          =========        ======           ======         ============
</TABLE>
    
 
UNDEVELOPED PARCELS
 
     The Company owns undeveloped parcels aggregating approximately 346 acres of
outlots, retail pads and expansion pads located near certain of the Company's
outlet centers. The Company intends to pursue an aggressive marketing program to
lease, develop or sell the parcels owned by it. However, the sale of property by
a REIT is subject to significant restrictions imposed by the Internal Revenue
Code of 1986. Accordingly, such restrictions may limit the number, size and
timing of such sales.
 
TENANTS
 
     GENERAL. The Company's portfolio features a diverse mix of tenants. The
Company's tenants are typically the retailing outlet of large publicly traded
manufacturers. Substantially all of the leases require tenants to pay their pro
rata share of all property operating expenses and real estate taxes.
 
                                       13
<PAGE>   14
 
     The following table sets forth certain information with respect to each
tenant which individually accounts for more than 2% of the Company's total base
rental revenues or total occupied GLA for the year ended December 31, 1997 and
to all other tenants as a group:
 
<TABLE>
<CAPTION>
                                                                                              PERCENTAGE OF
                                        NUMBER     OCCUPIED    TOTAL ANNUAL   PERCENTAGE OF    BASE RENTAL
               TENANT                  OF STORES   GLA (SF)     BASE RENT     GLA OCCUPIED       INCOME
               ------                  ---------   --------    ------------   -------------   -------------
<S>                                    <C>         <C>         <C>            <C>             <C>
Phillips-Van Heusen Retail
  Division...........................      123       576,174    $8,142,269        6.7%             6.6%
Spiegel, Inc. .......................       18       283,477     3,000,148        3.3              2.4
LCI Holdings, Inc. ..................       31       271,413     2,821,250        3.2              2.3
Dress Barn, Inc. ....................       34       220,942     3,320,674        2.6              2.7
Sara Lee Corporation.................       65       214,043     2,971,922        2.5              2.4
Mikasa, Inc. ........................       27       208,647     2,543,044        2.4              2.1
Brown Retail Group, Inc. ............       46       204,706     3,041,900        2.4              2.5
Melru Corporation....................       59       182,090     2,979,331        2.1              2.4
Reebok International Ltd. ...........       21       176,086     2,193,448        2.0              1.8
Other................................    1,664     6,253,792    91,468,013       72.8             74.8
</TABLE>
 
     TENANT LEASES. Substantially all of these leases require tenants to pay
their pro rata shares of all property operating expenses and real estate taxes.
 
     During 1997, leases for approximately 621,000 square feet of GLA in the
Company's outlet centers came up for renewal. Of this amount, approximately
487,000 renewed at an average rental rate of $15.10, representing an 8.4%
increase from 1996 rental rates. In addition to renewals, in 1997 the Company
entered into new leases totaling 875,000 square feet of GLA at an average base
rental rate of $14.70 per square foot with an average base term of 5.0 years.
The Company's average tenant space is approximately 4,000 square feet of GLA. As
of December 31, 1997, executed leases at the Company's outlet centers had an
average base rent of $14.99 per square foot.
 
     The following table sets forth, as of December 31, 1997, tenant lease
expirations for the next ten years at the Company's outlet centers (assuming
that none of the tenants exercises any renewal option):
 
   
<TABLE>
<CAPTION>
                      YEAR ENDING                                           APPROXIMATE       ANNUAL
                      DECEMBER 31,                          # OF LEASES    GLA (SQ. FT.)     BASE RENT
                      ------------                          -----------    -------------     ---------
<S>                                                         <C>            <C>              <C>
1998....................................................        263            805,337      $11,233,077
1999....................................................        318          1,056,048       16,302,012
2000....................................................        388          1,331,800       20,602,713
2001....................................................        346          1,281,811       20,215,217
2002....................................................        341          1,288,618       20,066,706
2003....................................................         90            498,550        6,862,590
2004....................................................         71            379,366        5,452,987
2005....................................................         49            374,102        4,306,609
2006....................................................         41            412,316        4,122,149
2007....................................................         23            172,164        1,948,703
</TABLE>
    
 
                                       14
<PAGE>   15
 
MORTGAGE DEBT
 
     The following table sets forth, as of December 31, 1997, certain
information regarding the mortgages currently encumbering the Company's outlet
centers.
 
   
<TABLE>
<CAPTION>
                                                                                                    ESTIMATED
                                                     12/31/97                                        BALLOON
                                     ANNUAL         PRINCIPAL      ANNUAL DEBT      MATURITY         PAYMENT
           PROPERTY               INTEREST RATE      BALANCE         SERVICE          DATE         AT MATURITY
           --------               -------------     ---------      -----------      --------       -----------
<S>                                <C>           <C>             <C>                   <C>          <C>
Perryville, MD................       8.625%        $  9,741,064    $   976,400           Nov-05       8,223,900
Bellport, NY..................       10.25           10,891,034      1,284,000           Jun-18
Edinburgh, IN.................        9.50            6,985,835        754,900           Jun-01       6,619,300
Edinburgh, IN.................        9.50           10,212,077      1,088,800           May-01       9,748,900
Birch Run, MI.................        9.50           22,363,938      2,411,400           Jun-02      20,797,500
Birch Run, MI.................        9.50            4,861,727        524,200           Jun-02       4,521,200
Birch Run, MI.................        9.50           17,502,221      1,887,200           Jun-02      16,276,300
Birch Run, MI.................        9.50           10,471,570      1,111,300           Jun-01      10,003,600
Williamsburg, VA..............        8.75           14,004,323      1,633,100           Nov-00      12,698,700
Williamsburg, VA..............        8.25            9,759,024      1,022,500           Oct-00       9,090,600
Vero Beach, FL................       7.875           26,798,254      2,528,900           Nov-05      22,284,000
Woodbury, MN..................       7.875           17,865,503      1,685,900           Nov-05      14,856,000
Conroe, TX....................        9.40            6,794,610        794,200           May-02       5,966,900
Conroe, TX....................        9.40            1,900,601        222,100           May-02       1,669,100
Conroe, TX....................        9.40            8,695,210      1,016,300           May-02       7,636,000
Jeffersonville, OH............        9.40            7,459,827        871,900           May-02       6,551,000
Jeffersonville, OH............        9.40            9,645,511      1,127,400           May-02       8,470,500
Jeffersonville, OH............        9.40            2,185,684        255,500           May-02       1,919,400
First Horizon.................        8.57           63,761,603      6,319,700           Mar-06      54,458,700
  Burlington, WA..............
  Fremont, IN.................
  Kenosha, WI.................
  Oshkosh, WI.................
Second Horizon................        9.06           98,668,991      9,639,400           Oct-06      90,933,800
  Hillsboro, TX...............
  Lake Elsinore, CA...........
  Pismo Beach, CA.............
  Queenstown, MD..............
  Tracy, CA...................
Third Horizon.................    LIBOR + 1.75      244,195,696      8,109,500           Jul-99     244,195,696
  Calhoun, GA.................
  Dry Ridge, KY...............
  Gilroy, CA..................
  Holland, MI.................
  Laughlin, NV................
  Lee, MA.....................
  Medford, MN.................
  Michigan City, IN...........
  Monroe, MI..................
  Norton Shores, MI...........
  Sealy, TX...................
  Silverthorne, CO............
  Somerset, PA................
  Traverse City, MI...........
  Tulare, CA..................
  Warrenton, MO...............
Third Horizon.................    LIBOR + 2.25        9,724,304        200,800           Jul-99       9,724,304
Other.........................     6.90-10.0          7,259,783        883,000    Aug-00-Dec-02       3,159,431
                                                   ------------    -----------                     ------------
                                                   $621,748,390    $46,348,400                     $569,804,831
                                                   ============    ===========                     ============
</TABLE>
    
 
     During 1997, the Company, through indirect wholly-owned subsidiaries
("Borrower"), entered into a $300.6 million credit facility with Lehman Brothers
Realty Corporation ("Lender"). The initial loan (the "Initial Loan") of $250.6
million included an initial funding at closing of $212.1 million and a
reservation of
 
                                       15
<PAGE>   16
 
financing for the acquisition of a certain specified property (the "Additional
Loan"). The Borrower may borrow an additional $50.0 million in increments of no
less than $10.0 million each, subject to the satisfaction of certain conditions,
including predefined debt service coverage ratios (the "Second Loan" and
collectively with the "Initial Loan," including the "Additional Loan," the
"Loan"). Subsequent to the Initial Loan, the Company borrowed $38.5 million of
the Additional Loan for the acquisition of an outlet center and $11.0 million of
the Second Loan. Interest on the Loan is payable at the following rates: (i)
1.75% over the London interbank offered rate ("LIBOR") for the Initial Loan, and
(ii) 2.25% over LIBOR for the Second Loan, or (iii) if the Loan is converted to
a prime rate loan under certain circumstances at the Lender's discretion, the
prime rate plus .75% with respect to the Initial Loan and prime plus 1.25% with
respect to the Second Loan. While the Company has additional availability under
the Second Loan, additional borrowings may not be available due to the financial
ratios the Company is required to maintain. The maturity date of the Loan is
July 1, 1999, unless otherwise extended pursuant to the terms of the Loan. The
net proceeds of the Initial Loan were primarily used to retire the Company's
aggregate outstanding balances under the following: (i) a revolving credit
facility with a subsidiary of First Chicago NBD Corporation and other banks,
(ii) construction financing facilities with Canadian Imperial Bank of Commerce,
(iii) four permanent loans and (iv) one revolving credit facility. The Company
recorded a $3.3 million extraordinary charge, net of minority interests, upon
repayment of the above mentioned debt, comprised primarily of the write-off of
unamortized debt issuance costs associated with the debt retired. The Loan is
guaranteed by the Company and the Operating Partnership and is secured by a pool
of 16 properties transferred to Borrower. The Loan requires the Company to
maintain certain financial ratios and restricts the amount of dividends and
distributions that can be made.
 
     The Company has a $4.0 million revolving credit facility for working
capital requirements. Interest on the facility is charged at prime and the
facility expires in August 1998. The outstanding balance on this line was $4.0
million at December 31, 1997.
 
     During 1997, the Company issued approximately 320,000 shares of Common
Stock with net proceeds of $5.9 million under the Company's Dividend
Reinvestment Plan. The Company has discontinued further stock issuances under
the DRIP based on the current market price of the Company's Common Stock.
 
   
     In 1996, the Company formed a venture (the "Venture") with a pension fund
(the "Fund") advised by Heitman Capital Management. The Company contributed a
325,000 square foot center in the Finger Lakes region of New York in 1996 and a
67,000 square foot expansion in 1997 to the Venture. In exchange for the
contribution, the Company received $34.9 million and $7.6 million in cash in
1996 and 1997, respectively, and a 50% interest in the Venture. The Fund
contributed, concurrent with the Company's contribution of property, $34.9
million and $7.6 million in cash in 1996 and 1997, respectively, in return for a
$38.2 million preferred equity position that earns a 9.6% return on the
outstanding balance and a 50% ownership in the Venture. The Fund's equity
position, upon election of the Fund, is convertible into 2.2 million shares of
the Company's Common Stock, which represents an exercise price of $19.63 per
share (the approximate market price of the Company's Common Stock on the date of
issuance). The Venture is a limited liability corporation in which the Company
owns 50% of the voting interest; therefore, the Venture is accounted for under
the equity method of accounting.
    
 
TAXES
 
   
     At December 31, 1997, the Company had an aggregate cost basis of $868.9
million in its real estate assets for federal income tax purposes. Depreciation
for income tax purposes is calculated using the straight line method over the
estimated useful lives of the assets, which for buildings placed in service
prior to May 13, 1993 is 31.5 years (resulting in a rate of 3.2% per year) and
buildings placed in service after May 13, 1993 is 39 years (resulting in a rate
of 2.6% per year).
    
 
   
     The Company's aggregate real estate tax obligation during the year ended
December 31, 1997 was approximately $13.0 million. Estimated aggregate 1998 real
estate taxes, taking into account planned expansions, are approximately $14.1
million.
    
 
                                       16
<PAGE>   17
 
   
                                    PART IV
    
 
   
ITEM 14 -- EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
    
(a)(1) and (2)  The response to this section of Item 14 is submitted as a 
                separate section of this report. 

(a)(3)          The exhibits, as listed in the Exhibit Index set forth on pages
                E-1 through E-  are submitted as a separate section of
                this report. An 8-K (dated September 25, 1997) was filed on   
                October 10, 1997 reporting the Company's engagement of Lehman
                Brothers to assist the Company in assessing strategic
                alternatives.

                An 8-K (dated   November 12, 1997) was filed on November 14,
                1997 reporting the Company's agreement to merge with Prime.

                An 8-K (dated December 12, 1997) was filed on December
                10, 1997 reporting a purported shareholder's class action
                lawsuit filed against the Company. 

(c)             See Item 14(a) (3) above. 

(d)             The response to this portion of Item 14 is submitted as a 
                separate section of this report. 
 
                                       17
<PAGE>   18
 
                                   SIGNATURES
 
   
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to
this report to be signed on its behalf by the undersigned, there unto duly
authorized.
    
 
   
Dated: May 11, 1998                       HORIZON GROUP, INC.
    
 
                                          By:     /s/ JAMES S. WASSEL
                                          --------------------------------------
                                          Title: President
 
   
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 1 to this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the date indicated.
    
   
<TABLE>
<CAPTION>
                   SIGNATURE                                      TITLE                      DATE
                   ---------                                      -----                      ----
<S>                                              <C>                                    
 
               NORMAN PERLMUTTER*                 Director and Chairman of the Board of  May 11, 1998
 ---------------------------------------------    Directors
               Norman Perlmutter
 
              /s/ JAMES S. WASSEL                 Director, President and Chief          May 11, 1998
 ---------------------------------------------    Executive Officer (Principal
                James S. Wassel                   Executive Officer) and Principal
                                                  Financial Officer)
 
              DOUGLAS CROCKER II*                 Director                               May 11, 1998
 ---------------------------------------------
               Douglas Crocker II
 
               WILLIAM P. DICKEY*                 Director                               May 11, 1998
 ---------------------------------------------
               William P. Dickey
 
                NORMAN R. HIGO*                   Director                               May 11, 1998
 ---------------------------------------------
                 Norman R. Higo
 
              RONALD L. PIASECKI*                 Director                               May 11, 1998
 ---------------------------------------------
               Ronald L. Piasecki
 
             ROBERT D. PERLMUTTER*                Director                               May 11, 1998
 ---------------------------------------------
              Robert D. Perlmutter
 
                MARTIN SHERMAN*                   Director                               May 11, 1998
 ---------------------------------------------
                 Martin Sherman
 
              RICHARD D. STEWART*                 Assistant Controller (Principal        May 11, 1998
 ---------------------------------------------    Accounting Officer)
               Richard D. Stewart
 
            *By: /s/ JAMES S. WASSEL
    ---------------------------------------
                James S. Wassel
                Attorney-in-fact
</TABLE>
    
 
                                       18
<PAGE>   19
 
FORM 10-K -- ITEM 14(A)(1) AND (2)
 
                              HORIZON GROUP, INC.
         LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
 
     The following financial statements of Horizon Group, Inc., included in the
annual report of the registrant to its shareholders for the year ended December
31, 1997, are incorporated by reference in Item 8:
 
CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------

Consolidated Statements of Operations for the years ended
  December 31, 1997, 1996 and 1995..........................
Consolidated Balance Sheets as of December 31, 1997 and
  1996......................................................
Consolidated Statements of Cash Flows for the years ended
  December 31, 1997, 1996 and 1995..........................
Consolidated Statements of Shareholders' Equity for the
  years ended December 31, 1997, 1996 and 1995..............
Notes to Consolidated Financial Statements..................
Report of Independent Auditors..............................
 
     The following financial statement schedule of Horizon Group, Inc. is
included in Item 14(d):
 
Schedule III -- Real Estate and Accumulated Depreciation
 
     All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable, and therefore have been
omitted.
 
                                       F-1
<PAGE>   20
 
                              HORIZON GROUP, INC.
 
            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                               DECEMBER 31, 1997
   
<TABLE>
<CAPTION>
                                                                          COSTS CAPITALIZED
                                                                            SUBSEQUENT TO
                                                                        INITIAL DEVELOPMENT OF
                                  INITIAL COST TO COMPANY(A)                ACQUISITION(B)
                           ----------------------------------------   --------------------------
                                                      BUILDINGS AND                BUILDINGS AND
                           ENCUMBRANCE      LAND      IMPROVEMENTS       LAND      IMPROVEMENTS
                           -----------      ----      -------------      ----      -------------
<S>                        <C>           <C>          <C>             <C>          <C>
Bellport.................  $12,643,100   $  460,700    $16,036,400    $  355,800    $   318,500
Birch Run................  54,751,600     3,439,900     39,671,400     3,423,000     32,215,100
Burlington...............  13,117,300     3,568,200     21,629,200            --        178,100
Calhoun..................  16,410,500     3,292,100     19,862,700       439,000      6,067,900
Conroe...................  18,179,000     2,100,900     37,483,100            --        218,000
Dry Ridge................   1,572,300       995,900      8,627,500        (1,700)    (5,567,500)
Edinburgh................  17,197,900       988,300     11,314,700        46,400     16,077,900
Fremont..................  14,200,900     2,434,800     10,268,700            --      9,072,200
Gilroy...................  65,248,800    11,283,400     61,998,500     6,580,200      7,588,900
Hillsboro................  28,318,900     6,397,700     44,761,100        50,100      3,850,100
Holland..................   3,242,800       791,600     12,265,800         3,100     (6,841,800)
Jeffersonville...........  20,165,800     1,629,700     37,073,300         1,900        830,600
Kenosha..................  22,242,500     6,299,100     34,658,100         5,100      1,758,800
Lake Elsinore............  29,312,600    19,404,900     43,393,400      (234,500)     6,047,900
Laughlin.................  13,855,500            --     43,571,500            --          1,600
Lee......................  20,341,000     8,232,400     33,241,900            --             --
Medford..................   9,138,800       269,600     18,586,100       144,400        356,300
Michigan City............  42,352,800     3,796,200     37,359,700        43,400     12,774,400
Monroe...................   8,450,900       815,000     17,982,900       225,800      1,936,800
Muskegon.................   8,844,000     3,538,300     22,346,900       225,900      1,094,700
Oshkosh..................  14,200,900       644,800     11,452,800            --      4,987,100
Perryville...............   9,741,100     3,151,100     16,870,000      (136,200)      (318,900)
Pismo Beach..............  11,725,000     8,774,900     16,255,100          (100)       253,800
Queenstown...............  17,289,400     3,455,300     28,620,000          (900)       358,300
Sealy....................  10,612,800       827,400     13,454,700        18,100      4,169,500
 
<CAPTION>
 
                               GROSS AMOUNT AT WHICH CARRIED AT CLOSE OF PERIOD
                           --------------------------------------------------------
                                         BUILDINGS AND                 ACCUMULATED      DATE OF        DATE
                              LAND       IMPROVEMENTS       TOTAL      DEPRECIATION   CONSTRUCTION   ACQUIRED
                              ----       -------------      -----      ------------   ------------   --------
<S>                        <C>           <C>             <C>           <C>            <C>            <C>
Bellport.................  $   816,500    $16,354,900    $17,171,400    $2,072,400        1992         1995
Birch Run................    6,862,900     71,886,500     78,749,400     9,038,100        1986         1995
Burlington...............    3,568,200     21,807,300     25,375,500     1,948,400        1989         1995
Calhoun..................    3,731,100     25,930,600     29,661,700     2,156,800        1992         1995
Conroe...................    2,100,900     37,701,100     39,802,000     3,536,500        1992         1995
Dry Ridge................      994,200      3,060,000      4,054,200            --        1991         1995
Edinburgh................    1,034,700     27,392,600     28,427,300     4,816,200        1989           --
Fremont..................    2,434,800     19,340,900     21,775,700     2,704,900        1985           --
Gilroy...................   17,863,600     69,587,400     87,451,000     5,225,900        1992         1993
Hillsboro................    6,447,800     48,611,200     55,059,000     4,350,400        1989         1995
Holland..................      794,700      5,424,000      6,218,700       297,300        1988         1995
Jeffersonville...........    1,631,600     37,903,900     39,535,500     3,444,700        1993         1995
Kenosha..................    6,304,200     36,416,900     42,721,100     3,239,200        1988         1995
Lake Elsinore............   19,170,400     49,441,300     68,611,700     4,316,600        1991         1995
Laughlin.................           --     43,573,100     43,573,100        71,600        1996           --
Lee......................    8,232,400     33,241,900     41,474,300        59,000        1996           --
Medford..................      414,000     18,942,400     19,356,400     2,345,600        1991         1995
Michigan City............    3,839,600     50,134,100     53,973,700     6,398,600        1987         1993
Monroe...................    1,040,800     19,919,700     20,960,500     5,829,800        1987           --
Muskegon.................    3,764,200     23,441,600     27,205,800     1,272,100        1995           --
Oshkosh..................      644,800     16,439,900     17,084,700     4,159,200        1989           --
Perryville...............    3,014,900     16,551,100     19,566,000     1,800,000        1990         1995
Pismo Beach..............    8,774,800     16,508,900     25,283,700     1,683,600        1994         1995
Queenstown...............    3,454,400     28,978,300     32,432,700     2,501,200        1989         1995
Sealy....................      845,500     17,624,200     18,469,700     1,316,100        1995         1995
</TABLE>
    
<PAGE>   21
 
                              HORIZON GROUP, INC.
                               DECEMBER 31, 1997
   
<TABLE>
<CAPTION>
                                                                              COSTS CAPITALIZED
                                                                            SUBSEQUENT TO INITIAL
                                                                               DEVELOPMENT OR
                                   INITIAL COST TO COMPANY(A)                  ACQUISITION(B)
                           -------------------------------------------   ---------------------------
                                                         BUILDINGS AND                 BUILDINGS AND
                           ENCUMBRANCE        LAND       IMPROVEMENTS       LAND       IMPROVEMENTS
                           -----------        ----       -------------      ----       -------------
<S>                        <C>            <C>            <C>             <C>           <C>
Silverthorne               $ 27,121,500   $  9,048,200   $ 36,000,000    $       200   $    251,500
Somerset                      4,422,000      1,750,000     16,460,300             --        237,100
Tracy                        12,023,100      4,655,100     18,087,200      1,509,000         (1,000)
Traverse City                 2,554,900        675,600      7,976,000             --     (5,000,500)
Tulare                        8,156,000      3,330,900     16,188,000        416,200      1,752,600
Vero Beach                   26,798,300      2,707,800     18,915,400           (100)    10,198,300
Warrenton                    11,595,400      1,982,500     14,760,800          8,300      5,750,400
Williamsburg                 24,033,300     10,086,500     27,728,200       (551,100)     7,327,000
Woodbury                     17,865,500      1,139,900      8,992,400             --      8,818,900
Miscellaneous                 8,371,000         42,500      5,445,600          5,700      4,421,100
                           ------------   ------------   ------------    -----------   ------------
                           $626,097,200   $132,011,200   $829,339,400    $12,577,000   $131,183,700
                           ============   ============   ============    ===========   ============
 
<CAPTION>
 
                                 GROSS AMOUNT AT WHICH CARRIED AT CLOSE OF PERIOD
                           ------------------------------------------------------------
                                          BUILDINGS AND                    ACCUMULATED      DATE OF        DATE
                               LAND       IMPROVEMENTS        TOTAL        DEPRECIATION   CONSTRUCTION   ACQUIRED
                               ----       -------------       -----        ------------   ------------   --------
<S>                        <C>            <C>             <C>              <C>            <C>            <C>
Silverthorne               $  9,048,400   $ 36,251,500    $   45,299,900   $ 3,176,800        1988         1995
Somerset                      1,750,000     16,697,400        18,447,400     2,375,900        1990         1993
Tracy                         6,164,100     18,086,200        24,250,300     1,811,100        1994         1995
Traverse City                   675,600      2,975,500         3,651,100        29,800        1990           --
Tulare                        3,747,100     17,940,600        21,687,700       658,300        1995           --
Vero Beach                    2,707,700     29,113,700        31,821,400     3,461,600        1994           --
Warrenton                     1,990,800     20,511,200        22,502,000     1,688,900        1993         1995
Williamsburg                  9,535,400     35,055,200        44,590,600     2,895,700        1988         1995
Woodbury                      1,139,900     17,811,300        18,951,200     2,764,100        1992           --
Miscellaneous                    48,200      9,866,700         9,914,900     2,065,200        1995           --
                           ------------   ------------    --------------   -----------
                           $144,588,200   $960,523,100    $1,105,111,300   $95,511,600
                           ============   ============    ==============   ===========
</TABLE>
    
 
Depreciation of the Company's investment in buildings and improvements reflected
in the Statements of Operations is calculated over the estimated useful lives of
the assets as follows:
    Buildings                31.5 years
    Improvements             Shorter of 10 years or useful life
 
   
The aggregate gross cost of property included above for federal income tax
purposes approximated $868.9 million as of December 31, 1997.
    
 
Notes:
(a) The Initial Cost amounts for assets purchased in the merger with
    McArthur/Glen have been restated to reflect refinements in the purchase
    price adjustments.
(b) Includes adjustments for the impairment of long-lived assets on Dry Ridge,
    Holland, New Mexico, Traverse City and Hawaii.
<PAGE>   22
 
                              HORIZON GROUP, INC.
 
        SCHEDULE III - REAL ESTATE AND ACCUMULATION DEPRECIATION CONT. -
                             NOTES TO SCHEDULE III
                               DECEMBER 31, 1997
 
1. RECONCILIATION OF REAL ESTATE PROPERTIES:
 
     The following table reconciles the Real Estate Properties from January 1,
1995 to December 31, 1997:
 
   
<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                   --------------------------------------------------
                                                        1997              1996              1995
                                                        ----              ----              ----
<S>                                                <C>               <C>               <C>
Balance, Beginning of Period...................    $1,037,734,500    $1,059,960,400    $  305,987,300
  Additions during Period
     Development of New Projects...............        22,910,900        49,997,800        79,253,400
     Improvements of Existing Properties.......        21,776,100        42,372,300        73,668,900
     Acquisitions..............................        38,520,000                --       601,050,800
     Retirements...............................        (8,361,900)       (1,115,000)               --
     Contribution of Assets to Venture.........        (7,497,900)      (35,756,000)               --
     Write Down to Net Book Value(c)...........                --        (6,997,000)               --
     Transfer of Assets Held for Sale..........         3,707,500       (23,754,000)               --
     Write-off of Impaired Properties..........        (3,677,900)      (46,974,000)               --
                                                   --------------    --------------    --------------
Balance, End of Period.........................    $1,105,111,300    $1,037,734,500    $1,059,960,400
                                                   ==============    ==============    ==============
</TABLE>
    
 
     The following table reconciles the accumulated depreciation from January 1,
1995 to December 31, 1997:
 
   
<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                   --------------------------------------------------
                                                        1997              1996              1995
                                                        ----              ----              ----
<S>                                                <C>               <C>               <C>
Balance, Beginning of Period...................    $   65,401,000    $   37,838,900    $   18,154,300
  Additions during Period
     Depreciation..............................        37,449,700        34,729,400        19,684,600
     Write Down to Net Book Value(c)...........                --        (6,997,000)               --
  Retirements During Period....................        (7,339,100)         (170,300)               --
                                                   --------------    --------------    --------------
Balance, End of Period.........................    $   95,511,600    $   65,401,000    $   37,838,900
                                                   ==============    ==============    ==============
</TABLE>
    
 
(c) The cost basis of the impaired assets held for sale have been adjusted to
    reflect the write-off of accumulated depreciation.
<PAGE>   23
 
                                 EXHIBIT INDEX
 
   
<TABLE>
<CAPTION>
EXHIBIT
  NO.                            DESCRIPTION
-------                          -----------
<C>      <S>
 *3.1    Amended and Restated Articles of Incorporation of the
         Company [Incorporated by reference to Exhibit 3.1 to
         Registration Statement 33-95174]
 *3.2    Amended and Restated Bylaws of the Company [Incorporated by
         reference to Exhibit 3.2 to the Company's quarterly report
         on Form 10-Q for the quarterly period ended June 30, 1996
         (SEC File No. 1-12424)]
 *4      Specimen Common Stock Certificate (reference is also made to
         Exhibits 3.1 and 3.2) [Incorporated by reference to Exhibit
         4 to Registration Statement No. 33-91236]
*10.1    Agreement of Limited Partnership of Horizon/Glen Outlet
         Centers Limited Partnership [Incorporated by reference to
         Exhibit 10.1 to the Company's annual report on Form 10-K for
         fiscal year ended December 31, 1995 (SEC File No. 1-12424)]
*10.2    Registration Rights Agreement [Incorporated by reference to
         Exhibit 10.25 to Registration Statement No. 33-68420]
*10.3    Registration Rights Agreement between the Company and
         Jeffrey A. Kerr [Incorporated by reference to Exhibit 10.26
         to Registration Statement No. 33-68420]
*10.4    Employee Bonus Plan [Incorporated by reference to Exhibit
         10.27 to Registration Statement No. 33-68420]
*10.5    Director Stock Option Plan [Incorporated by reference to
         Exhibit 10.5 to the Company's annual report on Form 10-K for
         fiscal year ended December 31, 1995 (SEC File No. 1-2424)]
*10.6    Amended and Restated 1993 Stock Option Plan [Incorporated by
         reference to Exhibit 10.29 to Registration Statement No.
         33-68420]
*10.7    Employee Stock Bonus Arrangement Agreement [Incorporated by
         reference to Exhibit 10.30 to Registration Statement No.
         33-68420]
*10.8    Form of Indemnification Agreement by and between the Company
         and each of the Executive Officers and Directors of the
         Company [Incorporated by reference to Exhibit 10.34 to
         Registration Statement No. 33-68420]
*10.8    Loan Agreement, dated as of June 30, 1997, between HGL
         Outlet Associates and Third Horizon Group Limited
         Partnership and Lehman Brothers Realty Corporation
         [Incorporated by reference to Exhibit 10.1 to the Company's
         current report on Form 8-K dated June 30, 1997 (SEC File No.
         1-12424)]
*10.10   Option Agreement by and among Court Concept Associates,
         Inc., Jeffrey A. Kerr and the Company [Incorporated by
         reference to Exhibit 10.41 to the Company's annual report on
         Form 10-K for fiscal year ended December 31, 1994 (SEC File
         No. 1-12494)]
*10.11   Horizon Outlet Centers, Inc. Profit Sharing/401(k) Plan
         [Incorporated by reference to Exhibit 10.42 to the Company's
         annual report on Form 10-K for fiscal year ended December
         31, 1994 (SEC File No. 1-12494)]
*10.12   Consulting and Non-Competition Agreement by and among
         McArthur/Glen Realty Corp., McG Outlet Centers Limited
         Partnership, Horizon Outlet Centers, Inc., Horizon Outlet
         Centers Limited Partnership, Cheryl McArthur and upon its
         formation, Horizon/Glen Outlet Centers Limited Partnership
         dated as of March 13, 1995 [Incorporated by reference to
         Exhibit (10)(d) to the Company's current report on Form 8-K
         dated March 16, 1995 (SEC File No. 1-12424)]
*10.13   Termination of Employment Agreement by and among
         McArthur/Glen Realty Corp., McG Outlet Centers Limited
         Partnership, Horizon Outlet Centers, Inc., Horizon Outlet
         Centers Limited Partnership, Cheryl McArthur and upon its
         formation, Horizon/Glen Outlet Centers Limited Partnership
         dated as of March 13, 1995 [Incorporated by reference to
         Exhibit (10)(e) to the Company's current report on Form 8-K
         dated March 16, 1995 (SEC File No. 1-12424)]
</TABLE>
    
<PAGE>   24
 
   
<TABLE>
<CAPTION>
EXHIBIT
  NO.                            DESCRIPTION
-------                          -----------
<C>      <S>
*10.14   Amendment No. 1 to Consulting and Non-Competition Agreement
         by and between McArthur/Glen Realty Corp., McG Outlet
         Centers Limited Partnership, Horizon Outlet Centers, Inc.,
         Horizon Outlet Centers Limited Partnership, Cheryl McArthur
         and Horizon/Glen Outlet Centers Limited Partnership dated as
         of March 13, 1995 [Incorporated by reference to Exhibit
         2.3.1 to Registration Statement No. 33-91236]
*10.15   Agreement dated as of May 15, 1995 by and between
         McArthur/Glen Realty Corp., McG Outlet Centers Limited
         Partnership, Horizon Outlet Centers, Inc., Horizon Outlet
         Centers Limited Partnership, Cheryl McArthur and
         Horizon/Glen Outlet Centers Limited Partnership
         [Incorporated by reference to Exhibit 10(a) to the Company's
         current report on Form 8-K dated May 16, 1995 (SEC File No.
         1-12424)]
*10.16   Form of Employment Agreement by and between HGI Realty,
         Inc., Horizon/Glen Outlet Centers Limited Partnership and
         James S. Harris [Incorporated by reference to Exhibit 2.8.6
         to Registration Statement 33-91236]
*10.27   Bonus Agreement by and between Horizon Group, Inc.,
         Horizon/Glen Outlet Centers Limited Partnership and Richard
         A. Phillips [Incorporated by reference to Exhibit 10.22 to
         the Company's annual report on Form 10-K for fiscal year
         ended December 31, 1996 (SEC File No. 1-12424)]
*10.28   Consulting Agreement dated as of January 1, 1996 among M & S
         Advisor Group, Inc., Martin Sherman and HGI Realty, Inc.
         [Incorporated by reference to Exhibit 10.38 to the Company's
         annual report on Form 10-K for fiscal year ended December
         31, 1995 (SEC File No. 1-12424)]
*10.29   Agreement with Jeffrey A. Kerr dated April 11, 1997
         [Incorporated by reference to Exhibit 10.1 to the Company's
         quarterly report on Form 10-Q for the quarterly period ended
         March 31, 1997 (SEC File No. 1-12424)]
*10.30   Employment Agreement with James S. Wassel [Incorporated by
         reference to Exhibit 10.2 to the Company's quarterly report
         on Form 10-Q for the quarterly period ended March 31, 1997
         (SEC File No. 1-12424)]
*10.31   1997 Stock Option Plan
*10.32   Employment Letter to Stephen J. Moore dated April 24, 1997
*10.33   Employment Letter to Paul Comarato dated July 23, 1997
*10.34   Agreement with Norman Perlmutter dated as of October 23,
         1997
*10.35   Bonus grant to Ronald L. Piasecki
*10.36   Agreement with Stephen J. Moore dated as of November 12,
         1997
*10.37   Agreement with Paul Comarato dated as of November 12, 1997
*10.38   Amended and Restated Agreement and Plan of Merger by and
         among Prime Retail, Inc., Prime Retail, L.P., Horizon Group,
         Inc., Sky Merger Corp., Horizon Group Properties, Inc.,
         Horizon Group Properties, L.P. and Horizon/Glen Outlet
         Centers Limited Partnership dated as of February 1, 1998
         [Incorporated by reference to Exhibit (10)(a) to the
         Company's current report on Form 8-K dated February 1, 1998
         (SEC File No. 1-12424)]
*10.39   Agreement by and among Prime Retail, Inc., Horizon Group,
         Inc., Mr. David H. Murdoch and Pacific Holding Company dated
         as of February 1, 1998 [Incorporated by reference to Ex-
         hibit (10)(b) to the Company's current report on Form 8-K
         dated February 1, 1998 (SEC File No. 1-12424)]
*10.40   Contribution Agreement by and among Castle & Cooke
         Commercial-CA, Inc., Castle & Cooke Retail, Inc. and
         Horizon/Glen Outlet Centers Limited Partnership dated as of
         February 1, 1998 [Incorporated by reference to Exhibit
         (10)(c) to the Company's current report on Form 8-K dated
         February 1, 1998 (SEC File No. 1-12424)]
 13      Annual Report to Shareholders for the fiscal year ended
         December 31, 1996
</TABLE>
    
<PAGE>   25
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.                                           DESCRIPTION
-------                                         -----------
<S>     <C>
*21      Subsidiaries of the Company
 23      Consent of Independent Auditors
*24      Powers of Attorney
 27.1    Financial Data Schedule
</TABLE>
 
-------------------------
* Previously filed.