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As filed with the Securities and Exchange Commission on December 6, 1996
Registration No. 333-03999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST INDUSTRIAL REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland 36-3935116
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
150 N. Wacker Drive, Suite 150
Chicago, Illinois 60606
(312) 704-9000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Michael T. Tomasz
President and Chief Executive Officer
First Industrial Realty Trust, Inc.
150 N. Wacker Drive, Suite 150
Chicago, Illinois 60606
(312) 704-9000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Gerald S. Tanenbaum, Esq.
Roger Andrus, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
Subject to Completion, Dated December 6, 1996
Prospectus
1,000,000 Shares
First Industrial Realty Trust, Inc.
Common Stock
This Prospectus relates to the offer and sale from time to time of up
to 1,000,000 shares (the "Redemption Shares") of common stock, par value $.01
per share (the "Common Stock") of First Industrial Realty Trust, Inc. (the
"Company") by persons ("Selling Stockholders") who may receive such shares in
exchange for units of partnership interest (the "Units") in First Industrial,
L.P. (the "Operating Partnership") acquired or to be acquired in connection with
acquisitions of properties by the Operating Partnership. See "Selling
Stockholders". The Company is the sole general partner of the Operating
Partnership. The registration of the Redemption Shares does not necessarily mean
that any of such shares will be issued by the Company or sold by the Selling
Stockholders.
The Common Stock is listed on the New York Stock Exchange (the "NYSE")
under the symbol "FR." In order to maintain the Company's qualification as a
real estate investment trust ("REIT"), ownership by any person of the Company's
capital stock is limited, with certain exceptions, to an aggregate of 9.9% in
value of the outstanding capital stock of the Company.
For information concerning risk factors relevant to an investment in
the Common Stock see "Risk Factors" on pages 1 - 4.
The Selling Stockholders from time to time may offer and sell
Redemption Shares held by them directly or through agents or broker-dealers on
terms to be determined at the time of sale. To the extent required, the names of
any agent or broker-dealer and applicable commissions or discounts and any other
required information with respect to any particular offer will be set forth in
an accompanying Prospectus Supplement. See "Plan of Distribution." Each of the
Selling Stockholders reserves the right to accept or reject, in whole or in
part, any proposed purchase of Redemption Shares to be made directly or through
agents.
The Selling Stockholders and any agents or broker-dealers that
participate with the Selling Stockholders in the distribution of Redemption
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), and any commissions received by
them and any profit on the sale of Redemption Shares may be deemed to be
underwriting commissions or discounts under the Securities Act.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Company will not receive any proceeds from the sale of Redemption
Shares by the Selling Stockholders. The Company will bear certain expenses of
the registration of the Redemption Shares under federal and state securities
laws. The Company will acquire additional Units in the Operating Partnership in
exchange for any Redemption Shares that the Company may issue to holders of
Units.
, 1996
No dealer, salesperson or other person has been authorized to give any
information or make any representations other than those contained in or
incorporated by reference in this Prospectus and any accompanying Prospectus
Supplement and if given or made, such other information or representations must
not be relied upon as having been authorized by the Company or by any of the
Selling Stockholders. This Prospectus and any accompanying Prospectus Supplement
do not constitute an offer to sell, or a solicitation of an offer to buy, to any
person in any jurisdiction where such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create an implication that the information
contained herein is correct as of any time subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be examined without
charge at, and copies obtained upon payment of prescribed fees from, the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 and are also available for inspection and copying at the regional offices
of the Commission located at 7 World Trade Center, New York, New York 10048 and
at Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661-2511. In addition, the Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission at http://www.sec.gov.
The Common Stock is listed on the NYSE and such material can also be inspected
and copied at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act, and the rules and regulations promulgated
thereunder, with respect to the shares of Common Stock offered pursuant to this
Prospectus. This Prospectus, which is part of the Registration Statement, does
not contain all of the information set forth in, or incorporated by reference
into, the Registration Statement and the exhibits thereto. For further
information concerning the Company and the Common Stock offered hereby,
reference is made to the Registration Statement. Any statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company (File No.
1-13102) with the Commission are incorporated herein by reference:
(1) Annual Report on Form 10-K for the year ended December 31, 1995;
(2) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996;
(3) Current Report on Form 8-K dated April 3, 1996, as amended by
Form 8-K/A No. 1 filed May 17, 1996;
(4) Current Report on Form 8-K dated October 24, 1996; and
(5) the description of the Common Stock included in the Company's
Registration Statement on Form 8-A, dated June 23, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14, or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Common Stock offered hereby
shall be deemed to be incorporated by reference in this Prospectus and made a
part hereof from the date of the filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein (in the case of
a previously filed document incorporated or deemed to be incorporated by
reference herein) or in any other document subsequently filed with the
Commission which also
(ii)
is incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the information incorporated by
reference herein (not including the exhibits to the information that is
incorporated by reference herein, unless such exhibits are specifically
incorporated by reference into the information that is incorporated by reference
herein). Requests for such copies should be directed to: First Industrial Realty
Trust, Inc., Attn: Michael J. Havala, Secretary, 150 N. Wacker Drive, Suite 150,
Chicago, Illinois 60606, telephone (312) 704-9000.
(iii)
TABLE OF CONTENTS
Page
Available Information.......................................... (ii)
Incorporation of Certain Documents by Reference................ (ii)
The Company.................................................... 1
Risk Factors................................................... 1
Restrictions on Transfers of Capital Stock..................... 4
Certain Federal Income Tax Considerations...................... 5
Selling Stockholders........................................... 8
Plan of Distribution........................................... 8
Experts........................................................ 10
Legal Matters.................................................. 10
(iv)
THE COMPANY
As used herein, the terms "Company" and "First Industrial" refer to
First Industrial Realty Trust, Inc. and its subsidiaries, including the
Operating Partnership, First Industrial Financing Partnership, L.P. (the
"Financing Partnership") and First Industrial Pennsylvania, L.P. (the
"Pennsylvania Partnership"), unless the context otherwise requires. Unless
otherwise indicated, all information regarding properties owned by the Company
(the "Properties") is as of September 30, 1996.
The Company is a REIT which owns, manages, acquires and develops bulk
warehouse and light industrial properties. Markets in which the Company
currently operates include: Chicago, Illinois; Detroit, Michigan;
Minneapolis/St. Paul, Minnesota; Atlanta, Georgia; Grand Rapids, Michigan;
Central Pennsylvania; Indianapolis, Indiana; St. Louis, Missouri; Nashville,
Tennessee; Cincinnati, Ohio; Des Moines, Iowa; Mikwaukee, Wisconsin; and Dayton
and Columbus, Ohio. The Company owns 328 Properties containing an aggregate of
approximately 29.9 million square feet of GLA which, as of September 30, 1996,
was approximately 96% leased to 870 tenants. First Industrial is a
self-administered and fully integrated industrial real estate company. The
Company's executive offices are located at 150 N. Wacker Drive, Suite 150,
Chicago, Illinois 60606, and its telephone number is (312) 704-9000.
The Company conducts its operations primarily through the Operating
Partnership, of which the Company is the sole general partner and, as of
September 30, 1996, holds approximately 91.8% of the ownership interest.
The transfer agent and registrar for the Common Stock is KeyCorp
Shareholder Services, Inc. of Cleveland, Ohio.
RISK FACTORS
Prospective investors should carefully consider the following factors,
in addition to other matters set forth or incorporated in this Prospectus prior
to making an investment decision regarding the Redemption Shares offered hereby.
Common Stock Price Fluctuations and Trading Volume; Shares Available for Future
Sale
A number of factors, many of which are beyond the control of the
Company, may adversely influence the price of the Company's Common Stock in
public markets. In particular, an increase in market interest rates may lead
purchasers of Common Stock to demand a higher annual distribution rate on the
price paid for shares from distributions by the Company, which could adversely
affect the market price of the shares of Common Stock. In addition, although the
Company's Common Stock is listed on the NYSE, the daily trading volume of REITs,
including the Company, may be lower than the trading volume for certain other
industries. As a result, investors in the Company who desire to liquidate
substantial holdings at a single point in time may find that they are unable to
dispose of such shares in the market without causing a substantial decline in
the market value of such shares. Sales of a substantial number of shares of
Common Stock, or the perception that such sales could occur, also could
adversely affect prevailing market prices for shares. The Company also may issue
shares of Common Stock upon redemption of Units issued in connection with the
formation of the Company, subsequent acquisitions or options granted to
employees of the Company. No prediction can be made about the effect that any
such factors will have on the market prices of shares of Common Stock.
Real Estate Investment Considerations
General
Income from real property investments, and the Company's resulting
ability to make expected distributions to stockholders, may be adversely
affected by the general economic climate, local conditions such as oversupply
or a reduction in demand in the area, the attractiveness of the properties to
tenants, tenant defaults, zoning or other regulatory restrictions, competition
from other available real estate, the ability of the Company to provide adequate
maintenance and insurance and increased operating costs (including insurance
premiums and real estate taxes). The Company's income would also be adversely
affected if tenants were unable to pay rent or the Company were unable to rent
properties on favorable terms. In addition, certain expenditures associated with
real estate investment (such as real estate taxes and maintenance costs)
generally are not reduced when circumstances cause a reduction in income from
the investment. Furthermore, real estate investments are relatively illiquid
and, therefore, will tend to limit the ability of the Company to vary its
portfolio promptly in response to changes in economic or other conditions.
Renewal of Leases and Reletting of Space
The Company will be subject to the risks that, upon expiration of
leases, the leases may not be renewed, the space subject to such leases may not
be relet or the terms of renewal or reletting (including the cost of required
renovations) may be less favorable than expiring lease terms. If the Company
were unable promptly to renew a significant number of expiring leases or
promptly to relet the space covered by such leases, or if the rental rates upon
such renewal or reletting were significantly lower than the then current rates,
the Company's funds from operations and ability to make expected distributions
to stockholders might be adversely affected. Leases with respect to
approximately 1.4 million, 4.3 million and 5.4 million square feet of GLA expire
between September 30, 1996 and December 31, 1996, in 1997 and in 1998,
respectively.
Potential Environmental Liability
Under various federal, state and local laws, ordinances and
regulations, an owner or operator of real estate may be liable for the costs of
clean-up of certain conditions relating to the presence of hazardous or toxic
materials on, in or emanating from the property, and any related damages to
natural resources. Such laws often impose liability without regard to whether
the owner knew of, or was responsible for, the presence of hazardous or toxic
materials. The presence of such materials, or the failure to address such
conditions properly, may adversely affect the ability to rent or sell the
property or to borrow using the property as collateral. Persons who dispose of
or arrange for the disposal or treatment of hazardous or toxic materials may
also be liable for the costs of clean-up of such materials, or for related
natural resource damages, at or from an off-site disposal or treatment facility,
whether or not such facility is owned or operated by such persons. No assurance
can be given that existing environmental assessments with respect to any of the
Company's properties reveal all environmental liabilities, that any prior owner
or operator of any of the properties did not create any material environmental
condition not known to the Company or that a material environmental condition
does not otherwise exist as to any one or more properties.
Tax Risks
Consequences of Failure to Qualify as a REIT
The Company intends to operate so as to qualify as a REIT under the
Internal Revenue Code of 1986, as amended (the "Code"). Although the Company
believes that it is organized and will operate in a manner so as to qualify as a
REIT, qualification as a REIT involves the satisfaction of numerous requirements
(some of which must be met on a recurring basis) established under highly
technical and complex Code provisions of which there are only limited judicial
or administrative interpretations, and involves the determination of various
factual matters and circumstances not entirely within the Company's control. If
the Company were to fail to qualify as a REIT in any taxable year, the Company
would be subject to federal income tax (including any applicable alternative
minimum tax) on its taxable income at corporate rates and, unless entitled to
relief under certain statutory provisions, the Company also would be
disqualified from treatment as a REIT for the four taxable years that follow.
See "Certain Federal Income Tax Considerations."
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Effect of Distribution Requirements
The Company could, in certain instances, have taxable income without
sufficient cash to enable the Company to meet the distribution requirements of
the REIT provisions of the Code. Accordingly, the Company could be required to
borrow funds or sell properties on adverse terms in order to meet such
distribution requirements. In addition, because the Company must distribute to
its stockholders at least 95% of its REIT taxable income each year, the
Company's ability to accumulate capital may be limited. Thus, it may be more
dependent on outside sources of financing, such as debt financing or issuances
of additional capital stock, in connection with future acquisitions. See
"Certain Federal Income Tax Considerations."
Consequences of Failure to Qualify as Partnerships
The Company expects that the partnerships in which it has interests
will be treated as partnerships for federal income tax purposes under the Code.
If any of such entities fails to qualify for treatment as such under the Code,
the Company would cease to qualify as a REIT. See " -- Consequences of Failure
to Qualify as a REIT" and "Certain Federal Income Tax Considerations."
Risks Associated with Debt Financing and Leverage
Where possible, the Company intends to continue to use leverage to
increase the rate of return on its investments and to allow the Company to make
more investments than it otherwise could. Such use of leverage presents an
additional element of risk in the event that the cash flow from the Company's
properties is insufficient to meet both debt payment obligations and the
distribution requirements of the REIT provisions of the Code.
Balloon Payments
The Company is required to make lump-sum or "balloon" payments
pursuant to the terms of certain of its indebtedness, including a $150 million
collateralized revolving credit facility (the "Acquisition Facility") under
which the Company, through the Operating Partnership and the Pennsylvania
Partnership may borrow to finance the acquisition of additional properties and
for other corporate purposes, including working capital, and a mortgage loan
under which the Financing Partnership borrowed $300 million (the "Mortgage
Loan"). The Acquisition Facility and the Mortgage Loan provide for the repayment
of principal in a lump-sum or "balloon" payment at maturity in 1997 and 1999
(subject to a two-year extension at the Financing Partnership's option, subject
to certain conditions), respectively. The Company's ability to make such
payments may depend on its ability either to refinance the applicable
indebtedness or to sell properties. The Company's existing debt obligations are
secured by its properties, and therefore such obligations will permit the lender
to foreclose on those properties in the event of a default.
No Limitation on Debt
The Company currently has a policy of maintaining a ratio of debt to
total market capitalization (i.e., total consolidated debt of the Company as a
percentage of the aggregate market value of all outstanding shares of Common
Stock, assuming the exchange of all Units for Common Stock, plus the aggregate
stated value of all outstanding shares of preferred stock, plus total
consolidated debt) which generally will not exceed 50% and a coverage ratio
(computed as total revenues minus property expenses and general and
administrative expenses divided by interest expense plus dividends on preferred
stock) of at least 2.0:1. However, the organizational documents of the Company
do not contain any limitation on the amount or percentage of indebtedness the
Company may incur. Accordingly, the Company could become more highly leveraged,
resulting in an increase in debt service that could adversely affect the
Company's ability to make expected distributions to stockholders and in an
increased risk of default on its obligations.
-3-
Rising Interest Rates
The Acquisition Facility bears interest at a floating rate. Increases
in the interest rate payable on balances outstanding under the Acquisition
Facility would have an adverse effect on the Company's cash available for
distribution.
Risks Associated with Possible Conflicts of Interest
Competition from Other Business Interests of Certain Officers and Directors
Entities affiliated with or controlled by certain officers and
directors of the Company hold equity interests in industrial properties not
owned by the Company. Some of these properties may compete with properties owed
by the Company. There can be no assurance that decisions by officers and
directors of the Company will fully represent the interests of stockholders of
the Company rather than such individuals and their affiliates.
Tax Consequences to Certain Officers and Directors
Certain officers and directors of the Company own Units which may be
exchanged for shares of Common Stock. Prior to the exchange of Units for Common
Stock, officers and directors of the Company who own Units may suffer different
and more adverse tax consequences than holders of Common Stock upon the sale of
certain of the Company's properties, the refinancing of debt associated with
those properties or in connection with a proposed tender offer or merger
involving the Company and, therefore, such individuals and the Company, as
partners in the Operating Partnership, may have different objectives regarding
the appropriate terms of any such transaction.
RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK
For the Company to qualify as a REIT under the Code, among other
things, not more than 50% in value of its outstanding capital stock may be
owned, directly or indirectly, by five or fewer individuals (as defined in the
Code to include certain entities) during the last half of a taxable year, and
such capital stock must be beneficially owned by 100 or more persons during at
least 335 days of a taxable year of 12 months or during a proportionate part of
a shorter tax year. See "Certain Federal Income Tax Considerations." To ensure
that the Company remains a qualified REIT, the Company's Articles of
Incorporation, subject to certain exceptions, provide that no holder may own, or
be deemed to own by virtue of the attribution provisions of the Code, more than
an aggregate of 9.9% in value of the Company's capital stock. Any transfer of
capital stock or any security convertible into capital stock that would create a
direct or indirect ownership of capital stock in excess of the ownership limit
or that would result in the disqualification of the Company as a REIT, including
any transfer that results in the capital stock being owned by fewer than 100
person or results in the Company being "closely held" within the meaning of
Section 856(h) of the Code, shall be null and void, and the intended transferee
will acquire no rights to the capital stock. Capital stock owned, or deemed to
be owned, or transferred to a stockholder in excess of the ownership limit will
automatically be exchanged for shares of Excess Stock (as defined in the
Company's Articles of Incorporation) that will be transferred, by operation of
law, to the Company as trustee of a trust for the exclusive benefit of the
transferees to whom such capital stock may be ultimately transferred without
violating the ownership limit. While the Excess Stock is held in trust, it will
not be entitled to vote, it will not be considered for purposes of any
stockholder vote or the determination of a quorum for such vote, and it will not
be entitled to participate in the accumulation or payment of dividends or other
distributions. A transferee of Excess Stock may, at any time such Excess Stock
is held by the Company in trust, designate as beneficiary of the transferee
stockholder's interest in the trust representing the Excess Stock any individual
whose ownership of the capital stock exchanged into such Excess Stock would be
permitted under the ownership limit, and may transfer such interest to such
beneficiary at a price not in excess of the price paid by the original
transferee-stockholder for the capital stock that was exchanged into Excess
Stock. Immediately upon the transfer to the permitted beneficiary, the Excess
Stock will automatically
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be exchanged for capital stock of the class from which it was converted. In
addition, the Company will have the right, for a period of 90 days during the
time any Excess Stock is held by the Company in trust, and, with respect to
Excess Stock resulting from the attempted transfer of preferred stock of the
Company, at any time when any outstanding shares of preferred stock of such
series are being redeemed, to purchase all or any portion of the Excess Stock
from the original transferee-stockholder at the lesser of the price paid for the
capital stock by the original transferee-stockholder and the market price (as
determined in the manner set forth in the Articles of Incorporation) of the
capital stock on the date the Company exercises its option to purchase or, in
the case of a purchase of Excess Stock attributed to preferred stock which has
been called for redemption, at its stated value, plus all accumulated and unpaid
dividends to the date of redemption. The 90-day period begins on the date of the
violative transfer if the original transferee-stockholder gives notice to the
Company of the transfer or, if no such notice is given, the date the Board of
Directors determines that a violative transfer has been made.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
This section is a summary of the material federal income tax matters
of general application pertaining to REITs under the Code. The discussion is
based on current law and does not purport to deal with all aspects of federal
income taxation that may be relevant to investors subject to special treatment
under the federal income tax laws, such as tax-exempt investors, dealers in
securities or foreign persons. The provisions of the Code pertaining to REITs
are highly technical and complex and sometimes involve mixed questions of fact
and law. In addition, this section does not discuss foreign, state or local
taxation. The Company has received an opinion from Cahill Gordon & Reindel as to
the conclusions of law expressed in this summary. Prospective investors should
consult their own tax advisors regarding the federal, state, local, foreign and
other tax consequences specific to them of holding and disposing of the Common
Stock.
Taxation of the Company
In the opinion of Cahill Gordon & Reindel, commencing with its taxable
year ended December 31, 1994, the Company has been organized in conformity with
the requirements for qualification as a REIT under the Code, and the Company's
method of operation will enable the Company to continue to so qualify, provided
that the Company continues to satisfy the various requirements applicable under
the Code to REITs, as described herein. Cahill Gordon & Reindel's opinion is
based on various assumptions and is conditioned upon certain representations as
to factual matters made by the Company and certain partnerships through which
the Company holds substantially all of its assets (the "Partnerships").
Moreover, such qualification and taxation as a REIT depend upon the Company's
ability to meet, through actual annual operating results, distribution levels,
diversity of stock ownership and various other qualification tests imposed under
the Code discussed below, the results of which will not be reviewed by Cahill
Gordon & Reindel. Accordingly, no assurance can be given that the actual results
of the Company's operations for any one taxable year will satisfy such
requirements.
To qualify as a REIT under the Code for a taxable year, the Company
must meet certain organizational and operational requirements, which generally
require it to be a passive investor in operating real estate and to avoid
excessive concentration of ownership of its capital stock. The Company's
principal activities must be real estate related. Generally, at least 75% of the
value of the total assets of the Company at the end of each calendar quarter
must consist of real estate assets, cash or governmental securities. The Company
may not own more than 10% of the outstanding voting securities of any
corporation and the value of any one issuer's securities may not exceed 5% of
the Company's gross assets; shares of qualified REITs, qualified temporary
investments and shares of certain wholly owned subsidiary corporations are
exempt from these prohibitions. The Company holds assets through certain wholly
owned subsidiary corporations and holds non-voting stock interests in certain
corporations that provide services to third parties; the Company has been
advised by Cahill Gordon & Reindel, based on certain representations, that these
holdings do not violate the prohibition on ownership of voting securities.
Additionally, gross income from the sale or other disposition of stock and
securities held for less than one year and of real property held for less than
four years must constitute less than 30% of the gross income for each taxable
year of a REIT. For each taxable year, at least 75% of a REITs gross income must
be derived from specified real estate
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sources and 95% must be derived from such real estate sources plus certain other
permitted sources. Real estate income for purposes of these requirements
includes gain from the sale of real property not held primarily for sale to
customers in the ordinary course of business, dividends on REIT shares, interest
on loans secured by mortgages on real property, certain rents from real property
and income from foreclosure property. For rents to qualify, they may not be
based on the income or profits of any person, except that they may be based on a
percentage or percentages of gross income or receipts, and, subject to certain
limited exceptions, a REIT may not manage the property or furnish services to
tenants except through an independent contractor which is paid an arm's-length
fee and from which the REIT derives no income.
Substantially all of the Company's assets are held through the
Partnerships. In general, in the case of a REIT that is a partner in a
partnership, applicable regulations treat the REIT as holding directly its
proportionate share of the assets of the partnership and as being entitled to
the income of the partnership attributable to such share. The Partnerships have
not requested, and they do not intend to request, a ruling from the Internal
Revenue Service (the "Service") that they will be treated as partnerships for
federal income tax purposes. Instead, Cahill Gordon & Reindel has delivered its
opinion that, based on the provisions of the partnership agreements of the
Partnerships, the Code, Treasury Regulations, administrative rulings and certain
factual assumptions and representations, the Partnerships will be classified as
partnerships for federal income tax purposes and not as associations taxable as
corporations under Section 7701 of the Code and the Treasury Regulations
thereunder. Unlike a private letter ruling, an opinion of counsel is not binding
on the Service and no assurance can be given that the Service will not challenge
the status of one or more of the Partnerships as a partnership for federal
income tax purposes. If such a challenge were sustained by a court, the relevant
Partnership would be treated as a corporation for federal income tax purposes
and the Company would not be able to satisfy the asset requirements for REIT
status, and thus would not qualify as a REIT. Moreover, the opinion of Cahill
Gordon & Reindel is based on existing law, which is, to a great extent, the
result of administrative and judicial interpretation. No assurance can be given
that administrative or judicial changes would not modify the conclusions
expressed in the opinion.
The Company must satisfy certain ownership restrictions that limit (i)
concentration of ownership of the Company's capital stock by a few individuals
and (ii) ownership by the Company of its tenants. The outstanding capital stock
of the Company must be held by at least 100 stockholders. No more than 50% in
value of the outstanding capital stock, including in some circumstances capital
stock into which outstanding securities might be converted, may be owned
actually or constructively by five or fewer individuals or certain other
entities at any time during the last half of the Company's taxable year.
Accordingly, the Company's Articles of Incorporation contain certain
restrictions regarding the transfer of Common Stock, preferred stock and any
other outstanding securities convertible into Common Stock when necessary to
maintain the Company's qualification as a REIT under the Code. However, because
the Code imposes broad attribution rules in determining constructive ownership,
no assurance can be given that the restrictions contained in the Company's
Articles of Incorporation will be effective in maintaining the Company's REIT
status. See "Restrictions on Transfers of Capital Stock."
So long as the Company qualifies for taxation as a REIT and
distributes at least 95% of its REIT taxable income (computed without regard to
net capital gain or the dividends paid deduction) for its taxable year to its
stockholders annually, the Company itself will not be subject to federal income
tax on that portion of such income distributed to stockholders. The Company will
be taxed at regular corporate rates on all income not distributed to
stockholders. The Company's policy is to distribute at least 95% of its taxable
income. REITs also may incur taxes for certain other activities or to the extent
distributions do not satisfy certain other requirements.
Failure of the Company to qualify during any taxable year as a REIT
could, unless certain relief provisions were available, have a material adverse
effect upon its stockholders. If disqualified for taxation as a REIT for a
taxable year, the Company also would be disqualified for taxation as a REIT for
the next four taxable years, unless the failure were considered to be due to
reasonable cause and not willful neglect. The Company would be subject to
federal income tax at corporate rates on all of its taxable income and would not
be able to deduct any dividends paid, which could result in a discontinuation of
or substantial reduction in dividends to stockholders. Dividends also would be
subject to the regular tax rules applicable to dividends received by
stockholders of corporations. Should
-6-
the failure to qualify as a REIT be determined to have occurred retroactively in
an earlier tax year of the Company, the imposition of a substantial federal
income tax liability on the Company attributable to any nonqualifying tax years
may adversely affect the Company's ability to pay dividends. In the event that
the Company fails to meet certain income tests applicable to REITs, it may,
generally, nonetheless retain its qualification as a REIT if it pays a 100% tax
on the amount by which it failed to meet the relevant income test so long as
such failure was considered to be due to reasonable cause and not willful
neglect. Any such taxes would adversely affect the Company's ability to pay
dividends and distributions.
-7-
SELLING STOCKHOLDERS
The Selling Stockholders have received or may receive Redemption
Shares in exchange for Units. The Selling Stockholders have received, or may
receive in the future, Units in the Operating Partnership in connection with the
contribution of properties, or interests therein, to the Operating Partnership.
The following table provides, as of November 12, 1996, the names of and the
number of Redemption Shares offered hereby by each Selling Stockholder. As the
Selling Stockholders may sell all, some or none of their Redemption Shares, no
estimate can be made of the aggregate number of Redemption Shares that are to be
offered hereby, or the aggregate number of shares of Common Stock that will be
owned by each Selling Stockholder upon completion of the offering to which this
Prospectus relates.
The Redemption Shares offered by this Prospectus may be offered from
time to time by the Selling Stockholders named below:
Number of Shares of
Common Stock and Units Number of Redemption
Name Owned Before the Offering Shares Offered Hereby
- ---- ------------------------- ---------------------
BK Columbus Venture 24,789 24,789
Farlow Road Associates Limited Partnership 2,751 2,751
Highland Associates Limited Partnership 69,039 69,039
Peter Murphy(1) 56,184 56,184
North Star Associates Limited Partnership 19,333 19,333
Arden O'Connor 63,845 63,845
Peter O'Connor 118,281 118,281
Partridge Road Associates Limited Partnership 2,751 2,751
Shadeland Associates Limited Partnership 42,976 42,976
Shadeland Corporation 4,442 4,442
Kevin Smith(2) 13,571 13,571
Robert Stein 56,778 56,778
S. Larry Stein 56,778 56,778
Jonathan Stott 182,126 182,126
Future partners in the Operating Partnership (3) (3)
(1) Mr. Murphy is a Senior Regional Director of the Company.
(2) Mr. Smith is a Regional Director of the Company.
(3) 286,356 Redemption Shares may be offered pursuant to this Prospectus by
persons acquiring Units after the date of this Prospectus. Such persons
will be identified in a prospectus supplement to this Prospectus.
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time to time of
Redemption Shares if, and to the extent that, holders of Units tender such Units
for redemption. The Company is registering the Redemption Shares for sale to
provide the holders thereof with freely tradeable securities, but the
registration of such shares does not necessarily mean that any of such shares
will be issued by the Company or offered or sold by the Selling Stockholders.
-8-
The Company will not receive any proceeds from the offering by the
Selling Stockholders of Redemption Shares or from the issuance of Redemption
Shares to holders of Units upon redemption (but anticipates acquiring from such
holders the Units tendered for redemption).
The Selling Stockholders may from time to time offer the Redemption
Shares in one or more transactions (which may involve block transactions) on the
NYSE or otherwise, in special offerings, exchange distributions or secondary
distributions pursuant to and in accordance with the rules of the NYSE, in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Redemption Shares (whether such options are listed on an options
exchange or otherwise), or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
The Selling Stockholders may effect such transactions by selling
Redemption Shares to or through broker-dealers or through other agents, and such
broker-dealers or agents may receive compensation in the form of commissions
from the Selling Stockholders, which will not exceed those customary in the
types of transactions involved, and/or the purchasers of Redemption Shares for
whom they may act as agent. The Selling Stockholders and any dealers or agents
that participate in the distribution of Redemption Shares may be deemed to be
"underwriters" within the meaning of the Securities Act and any profit on the
sale of Redemption Shares by them and any commissions received by any such
dealers or agents might be deemed to be underwriting commissions under the
Securities Act.
In the event of a "distribution" of the shares, Selling Stockholders,
any selling broker-dealer or agent and any "affiliated purchasers" may be
subject to Rule 10b-6 under the Exchange Act, which would prohibit, with certain
exceptions, each such person from bidding for or purchasing any security which
is the subject of such distribution until his participation in that distribution
is completed. In addition, Rule 10b-7 under the Exchange Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purpose of pegging, fixing
or stabilizing the price of Common Stock in connection with this offering.
At a time a particular offer of Redemption Shares is made, a
Prospectus Supplement, if required, will be distributed that will set forth the
name or names of any dealers or agents and any commissions and other terms
constituting compensation from the Selling Stockholders and any other required
information. The Redemption Shares may be sold from time to time at varying
prices determined at the time of sale or at negotiated prices.
In order to comply with the securities laws of certain states, if
applicable, the Redemption Shares, may be sold only through registered or
licensed brokers or dealers. In addition, in certain states, the Redemption
Shares may not be sold unless they have been registered or qualified for sale in
such state or an exemption from such registration or qualification requirement
is available and the conditions to the availability of such exemption are
complied with.
The Company may from time to time issue up to 1,000,000 Redemption
Shares upon the acquisition of the Units tendered for redemption. The Company
will acquire one Unit from a Selling Stockholder in exchange for each Redemption
Share that the Company issues in connection with these acquisitions.
Consequently, with each redemption, the Company's interest in the Operating
Partnership will increase.
Pursuant to various registration rights agreements for the benefit of
certain holders of Units, the Company has agreed to pay all expenses of
effecting the registration of 713,644 of the 1,000,000 Redemption Shares offered
hereby (other than underwriting discounts and commissions, fees and
disbursements of counsel, accountants or others representing the limited partner
and transfer taxes, if any) and has agreed to indemnify each holder of such
Redemption Shares and its officers and directors and any person who controls any
holder against certain losses, claims, damages and expenses arising under the
securities laws.
-9-
EXPERTS
The financial statements and schedule incorporated by reference in
this Prospectus and elsewhere in the Registration Statement, to the extent and
for the periods indicated in their reports, have been audited by Coopers &
Lybrand L.L.P., independent accountants, and are incorporated by reference
herein and therein in reliance upon the authority of said firm as experts in
giving said reports.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Cahill
Gordon & Reindel (a partnership including a professional corporation), New York,
New York. Cahill Gordon & Reindel will rely as to all matters of Maryland law on
the opinion of McGuire, Woods, Battle & Boothe, L.L.P., Baltimore, Maryland.
-10-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection
with the issuance and distribution of the securities registered hereby, which
will be borne by the Company:
Securities and Exchange Commission
registration fee........................... $ 8,125
NYSE fee..................................... 3,500
Legal fees and expenses ..................... 55,000
Accounting fees and expenses................. 4,000
-----
Total................................. $70,625
=======
Item 15. Indemnification of Directors and Officers.
The Company's Articles of Incorporation and Bylaws provide certain
limitations on the liability of the Company's Directors and officers for
monetary damages to the Company. The Articles of Incorporation and Bylaws
obligate the Company to indemnify its Directors and officers, and permit the
Company to indemnify its employees and other agents, against certain liabilities
incurred in connection with their service in such capacities. These provisions
could reduce the legal remedies available to the Company and its stockholders
against these individuals. The provisions of Maryland law provide for the
indemnification of officers and directors of a company under certain
circumstances.
Item 16. Exhibits.
Exhibit Number Description
4.1 Amended and Restated Bylaws of the Company.
5 Opinion of Cahill Gordon & Reindel, counsel to the Registrant, as to
the legality of the securities being registered, together with the
opinion of McGuire, Woods, Battle & Boothe, L.L.P.
8 Opinion of Cahill Gordon & Reindel, counsel to the Registrant, as to
certain tax matters.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Cahill Gordon & Reindel (included in Exhibit 5 and Exhibit
8).
23.3 Consent of McGuire, Woods, Battle & Boothe, L.L.P. (included in
Exhibit 5).
24* Powers of Attorney.
- -------------------
* Previously filed.
II-1
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities
Act of 1933, if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the undersigned
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described under Item 15 above, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses
II-2
incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the manner has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Pre-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago,
State of Illinois, on December 6, 1996.
FIRST INDUSTRIAL REALTY TRUST, INC.
By:/s/ Michael T. Tomasz
-------------------------------
Name: Michael T. Tomasz
Title: President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Michael T. Tomasz Principal Executive December 6, 1996
______________________________ Officer and Director
Michael T. Tomasz
*
- ------------------------------ Principal Financial and December 6, 1996
Michael J. Havala Accounting Officer
*
- ------------------------------ Director December 6, 1996
Michael W. Brennan
*
- ------------------------------ Director December 6, 1996
Michael G. Damone
II-4
Signature Title Date
*
- ----------------------------- Director December 6, 1996
John L. Lesher
*
- ----------------------------- Director December 6, 1996
Kevin W. Lynch
*
- ----------------------------- Chairman of the Board December 6, 1996
Jay H. Shidler of Directors
*
- ----------------------------- Director December 6, 1996
Robert J. Slater
*
- ----------------------------- Director December 6, 1996
J. Steven Wilson
* By: /s/ Michael T. Tomasz
--------------------------------------
(Michael T. Tomasz, Attorney-in-fact)
II-5
EXHIBIT INDEX
Exhibit
Number Description Page
4.1 Amended and Restated Bylaws of the Company
5 Opinion of Cahill Gordon & Reindel, counsel to
Registrant, as to the legality of the securities
being registered, together with the opinion
of McGuire, Woods, Battle & Boothe, L.L.P.
8 Opinion of Cahill Gordon & Reindel, counsel to
Registrant, as to certain tax matters.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Cahill Gordon & Reindel (included in
Exhibit 5 and Exhibit 8).
23.3 Consent of McGuire, Woods, Battle & Boothe, L.L.P.
(included in Exhibit 5).
24* Powers of Attorney.
- -------------------
* Previously filed.
AMENDED AND RESTATED
BYLAWS
OF
FIRST INDUSTRIAL REALTY TRUST, INC.
(December 3, 1996)
TABLE OF CONTENTS
ARTICLE I MEETINGS OF STOCKHOLDERS 1
1.1 PLACE...............................................................1
1.2 ORGANIZATION MEETING; ANNUAL MEETING................................1
1.3 MATTERS TO BE CONSIDERED AT ANNUAL MEETING..........................1
1.4 SPECIAL MEETINGS....................................................5
1.5 NOTICE..............................................................5
1.6 SCOPE OF NOTICE.....................................................5
1.7 QUORUM..............................................................5
1.8 VOTING..............................................................6
1.9 PROXIES.............................................................7
1.10 CONDUCT OF MEETINGS.................................................7
1.11 TABULATION OF VOTES.................................................7
1.12 INFORMAL ACTION BY STOCKHOLDERS.....................................8
1.13 VOTING BY BALLOT....................................................8
ARTICLE II DIRECTORS 8
2.1 GENERAL POWERS......................................................8
2.2 OUTSIDE ACTIVITIES..................................................9
2.3 NUMBER, TENURE AND QUALIFICATION....................................9
2.4 NOMINATION OF DIRECTORS............................................10
2.5 ANNUAL AND REGULAR MEETINGS........................................13
2.6 SPECIAL MEETINGS...................................................14
2.7 NOTICE.............................................................14
2.8 QUORUM.............................................................14
2.9 VOTING.............................................................15
2.10 CHAIRMAN OF THE BOARD..............................................15
2.11 CONDUCT OF MEETINGS................................................15
2.12 RESIGNATIONS.......................................................16
2.13 REMOVAL OF DIRECTORS...............................................16
2.14 VACANCIES..........................................................16
2.15 INFORMAL ACTION BY DIRECTORS.......................................17
2.16 COMPENSATION.......................................................17
ARTICLE III COMMITTEES 17
3.1 NUMBER, TENURE AND QUALIFICATION...................................17
3.2 DELEGATION OF POWER................................................17
3.3 QUORUM AND VOTING..................................................18
3.4 CONDUCT OF MEETINGS................................................18
3.5 INFORMAL ACTION BY COMMITTEES......................................18
i
ARTICLE IV 19
OFFICERS 19
4.1 TITLES AND ELECTION.................................................19
4.2 REMOVAL.............................................................19
4.3 OUTSIDE ACTIVITIES..................................................19
4.4 VACANCIES...........................................................20
4.5 PRESIDENT...........................................................20
4.6 CHIEF OPERATING OFFICER.............................................21
4.7 CHIEF FINANCIAL OFFICER.............................................21
4.8 VICE PRESIDENTS.....................................................22
4.9 SECRETARY...........................................................22
4.10 TREASURER...........................................................22
4.11 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS......................23
4.12 OTHER OFFICERS......................................................23
4.13 SALARIES............................................................24
ARTICLE V SHARES OF STOCK 24
5.1 NO CERTIFICATES FOR STOCK...........................................24
5.2 ELECTION TO ISSUE CERTIFICATES......................................24
5.3 STOCK LEDGER........................................................24
5.4 RECORDING TRANSFERS OF STOCK........................................25
5.5 LOST CERTIFICATES...................................................26
5.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE..................26
ARTICLE VI DIVIDENDS AND DISTRIBUTIONS 27
6.1 DECLARATION.........................................................27
6.2 CONTINGENCIES.......................................................28
ARTICLE VII INDEMNIFICATION 28
7.1 INDEMNIFICATION TO THE EXTENT PERMITTED BY LAW......................28
7.2 INSURANCE...........................................................29
7.3 NON-EXCLUSIVE RIGHT TO INDEMNITY; HEIRS AND PERSONAL
REPRESENTATIVES....................................................29
7.4 NO LIMITATION.......................................................29
ARTICLE VIII 30
NOTICES 30
8.1 NOTICES.............................................................30
8.2 SECRETARY TO GIVE NOTICE............................................30
8.3 WAIVER OF NOTICE....................................................31
ii
ARTICLE IX MISCELLANEOUS 31
9.1 BOOKS AND RECORDS...................................................31
9.2 INSPECTION OF BYLAWS AND CORPORATE RECORDS..........................31
9.3 CONTRACTS...........................................................32
9.4 CHECKS, DRAFTS, ETC.................................................32
9.5 LOANS...............................................................32
9.6 FISCAL YEAR.........................................................33
9.7 ANNUAL REPORT.......................................................33
9.8 INTERIM REPORTS.....................................................34
9.9 OTHER REPORTS.......................................................34
9.10 BYLAWS SEVERABLE....................................................34
ARTICLE X 34
AMENDMENT OF BYLAWS 34
10.1 BY DIRECTORS........................................................34
10.2 BY STOCKHOLDERS.....................................................35
iii
ARTICLE I
MEETINGS OF STOCKHOLDERS
1.1 PLACE. All meetings of the holders of the issued and outstanding
capital stock of the Corporation (the "Stockholders") shall be held at the
principal executive office of the Corporation or such other place within the
United States as shall be stated in the notice of the meeting.
1.2 ORGANIZATION MEETING; ANNUAL MEETING. An annual meeting of the
Stockholders for the election of Directors and the transaction of such other
business as properly may be brought before the meeting shall be held on the
third Wednesday in April of each year or at such other date and time as may be
fixed by the Board of Directors. If the date fixed for the annual meeting shall
be a legal holiday, such meeting shall be held on the next succeeding business
day. If no annual meeting is held on the date designated, a special meeting in
lieu thereof may be held, and such special meeting shall have, for purposes of
these Bylaws or otherwise, all the force and effect of an annual meeting. Any
and all references hereinafter in these Bylaws to an annual meeting or to annual
meetings shall be deemed to refer also to any special meeting(s) in lieu
thereof. Failure to hold an annual meeting shall not invalidate the
Corporation's existence or affect any otherwise valid act of the Corporation.
1.3 MATTERS TO BE CONSIDERED AT ANNUAL MEETING.
(a) At an annual meeting of Stockholders only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
properly brought before the annual meeting (i) by, or at the direction of, a
majority of the Board of Directors or (ii)
by any holder of record (both as of the time notice of such proposal is given by
the Stockholder as set forth below and as of the record date for the annual
meeting in question) of any shares of the Corporation's capital stock entitled
to vote at such annual meeting who complies with the procedure set forth in this
Section 1.3. For a proposal to be properly brought before an annual meeting by a
Stockholder, the Stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation, and such Stockholder or his representative
must be present in person at the annual meeting. For the first annual meeting
following the initial public offering of common stock of the Corporation, a
Stockholder's notice shall be timely if delivered to, or mailed and received at,
the principal executive office of the Corporation not later than the close of
business on the 20th calendar day (or if that day is not a business day for the
Corporation, on the next business day) following the date on which notice of the
date for the first annual meeting is mailed or otherwise transmitted to
Stockholders. For all subsequent annual meetings, a Stockholder's notice shall
be timely if delivered to, or mailed and received at, the principal executive
offices of the Corporation (A) not less than 75 days nor more than 180 days
prior to the anniversary date of the immediately preceding annual meeting of
Stockholders or special meeting in lieu thereof (the "Anniversary Date") or (B)
in the event that the annual meeting of Stockholders is called for a date more
than 7 calendar days prior to the Anniversary Date, not later than the close of
business on (1) the 20th calendar day (or if that day is not a business day for
the Corporation, on the next succeeding business day) following the earlier of
(x) the date on which notice of the date of such meeting was mailed to
Stockholders or (y) the date on which the date of such meeting was publicly
disclosed or (2) if such date of notice or public disclosure occurs more than 75
calendar days prior to the scheduled date of such meeting, then the later of (x)
the 20th calendar day (or if that day is not a business day for the Corporation,
on the next
2
succeeding business day) following the date of the first to occur of such notice
or public disclosure or (y) the 75th calendar day prior to such scheduled date
of such meeting (or if that day is not a business day for the Corporation, on
the next succeeding business day).
(b) A Stockholder's notice to the Secretary shall set forth as to each
matter the Stockholder proposes to bring before the annual meeting (i) a brief
description of the proposal desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the Corporation's stock transfer books, of the
Stockholder proposing such business and of the beneficial owners (if any) of the
stock registered in such Stockholder's name and the name and address of other
Stockholders known by such Stockholder to be supporting such proposal on the
date of such Stockholder's notice, (iii) the class and number of shares of the
Corporation's capital stock which are beneficially owned by the Stockholder and
such beneficial owners (if any) on the date of such Stockholder's notice and by
any other Stockholders known by such Stockholder to be supporting such proposal
on the date of such Stockholder's notice and (iv) any financial interest of the
Stockholder or of any such beneficial owner in such proposal.
(c) If the Board of Directors, or a designated committee thereof,
determines that any Stockholder proposal was not timely made in accordance with
the terms of this Section 1.3, such proposal shall not be presented for action
at the annual meeting in question. If the Board of Directors or a designated
committee thereof determines that the information provided in a Stockholder's
notice does not satisfy the informational requirements of this section in any
material respect, the Secretary of the Corporation shall promptly notify such
Stockholder of the deficiency in the notice. Such Stockholder shall have an
opportunity to cure the deficiency by
3
providing additional information to the Secretary within the period of time, not
to exceed 5 days from the date such deficiency notice is given to the
Stockholder, determined by the Board of Directors or such committee. If the
deficiency is not cured within such period, or if the Board of Directors of such
committee determines that the additional information provided by the
Stockholder, together with the information previously provided, does not satisfy
the requirements of this Section 1.3 in any material respect, then such proposal
shall not be presented for action at the annual meeting in question.
(d) Notwithstanding the procedure set forth in the preceding
paragraph, if neither the Board of Directors nor such committee makes a
determination as to the validity of any Stockholder proposal as set forth above,
the presiding Officer of the annual meeting shall determine and declare at the
annual meeting whether the Stockholder proposal was made in accordance with the
terms of this Section 1.3. If the presiding Officer determines that a
Stockholder proposal was made in accordance with the terms of this Section 1.3,
the presiding Officer shall so declare at the annual meeting. If the presiding
Officer determines that a Stockholder proposal was not made in accordance with
the provisions of this Section 1.3, the presiding Officer shall so declare at
the annual meeting and such proposal shall not be acted upon at the annual
meeting.
(e) This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of Officers, Directors and
committees of the Board of Directors, but in connection with such reports, no
new business shall be acted upon at such annual meeting except in accordance
with the provisions of this Section 1.3.
4
1.4 SPECIAL MEETINGS. The Chairman of the Board, the President or a
majority of the Board of Directors may call special meetings of the
Stockholders. Special meetings of Stockholders shall also be called by the
Secretary, but only upon the written request of the holders of shares entitled
to cast a majority of all the votes entitled to be cast at the meeting. Such
request shall state the purpose or purposes of such meeting and the matters
proposed to be acted on thereat. The date, time, place and record date for any
special meeting, including a special meeting called at the request of
Stockholders, shall be established by the Board of Directors or Officer calling
the same.
1.5 NOTICE. Not less than ten (10) nor more than ninety (90) days
before the date of every meeting of Stockholders, written or printed notice of
such meeting shall be given, in accordance with Article VIII, to each
Stockholder entitled to vote or entitled to notice by statute, stating the time
and place of the meeting and, in the case of a special meeting or as otherwise
may be required by statute, the purpose or purposes for which the meeting is
called.
1.6 SCOPE OF NOTICE. No business shall be transacted at a special
meeting of Stockholders except that specifically designated in the notice of the
meeting. Any business of the Corporation may be transacted at the annual meeting
without being specifically designated in the notice, except such business as is
required by statute to be stated in such notice.
1.7 QUORUM. At any meeting of Stockholders, the presence in person or
by proxy of Stockholders entitled to cast a majority of the votes shall
constitute a quorum; but this Section shall not affect any requirement under any
statute or the Articles of Incorporation of the Corporation, as amended (the
"Charter"), for the vote necessary for the adoption of any measure.
5
If, however, a quorum is not present at any meeting of the Stockholders, the
Stockholders present in person or by proxy shall have the power to adjourn the
meeting from time to time without notice other than by announcement at the
meeting until a quorum is present, and the meeting so adjourned may be
reconvened without further notice. At any adjourned meeting at which a quorum is
present, any business may be transacted that might have been transacted at the
meeting as originally notified. The Stockholders present at a meeting which has
been duly called and convened and at which a quorum is present at the time
counted may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Stockholders to leave less than a quorum.
1.8 VOTING. A majority of the votes cast at a meeting of Stockholders
duly called and at which a quorum is present shall be sufficient to take or
authorize action upon any matter which may properly come before the meeting,
unless more than a majority of the votes cast is specifically required by
statute, the Charter or these Bylaws. Unless otherwise provided by statute, the
Charter or these Bylaws, each outstanding share (a "Share") of capital stock of
the Corporation (the "Stock"), regardless of class, shall be entitled to one
vote upon each matter submitted to a vote at a meeting of Stockholders. Pursuant
to Section 3-702 of the Maryland General Corporation Law, any and all
acquisitions of Shares of Stock are hereby exempted from the provisions of Title
3, Subtitle 7 of the Maryland General Corporation Law, which relates to voting
rights of certain control shares. Shares of its own Stock directly or indirectly
owned by the Corporation shall not be voted in any meeting and shall not be
counted in determining
6
the total number of outstanding Shares entitled to vote at any given time, but
Shares of its own voting Stock held by it in a fiduciary capacity may be voted
and shall be counted in determining the total number of outstanding Shares at
any given time. Notwithstanding anything contained in these Bylaws the rights of
Excess Stock and the holders of Excess Stock shall be limited to rights provided
in the Corporation's Articles of Incorporation, as amended from time to time.
1.9 PROXIES. A Stockholder may vote the Shares owned of record by him
or her, either in person or by proxy executed in writing by the Stockholder or
by his or her duly authorized attorney in fact. Such proxy shall be filed with
the Secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven (11) months from the date of its execution, unless
otherwise provided in the proxy.
1.10 CONDUCT OF MEETINGS. The Chairman of the Board or, in the absence
of the Chairman, the President, or, in the absence of the Chairman, President
and Vice Presidents, a presiding Officer elected at the meeting, shall preside
over meetings of Stockholders. The Secretary of the Corporation, or, in the
absence of the Secretary and Assistant Secretaries, the person appointed by the
presiding Officer of the meeting, shall act as secretary of such meeting.
1.11 TABULATION OF VOTES. At any annual or special meeting of
Stockholders, the presiding Officer shall be authorized to appoint a teller for
such meeting (the "Teller"). The Teller may, but need not, be an Officer or
employee of the Corporation. The Teller shall be responsible for tabulating or
causing to be tabulated Shares voted at the meeting and reviewing or causing to
be reviewed all proxies. In tabulating votes, the Teller shall be entitled to
rely in whole or in part on tabulations and analyses made by personnel of the
Corporation, its counsel, its transfer agent, its registrar or such other
organizations that are customarily employed to provide such services. The Teller
may be authorized by the presiding Officer to determine on a
7
preliminary basis the legality and sufficiency of all votes cast and proxies
delivered under the Corporation's Charter, Bylaws and applicable law. The
presiding Officer may review all preliminary determinations made by the Teller
hereunder and, in doing so, the presiding Officer shall be entitled to exercise
his or her sole judgment and discretion and he or she shall not be bound by any
preliminary determinations made by the Teller. Each report of the Teller shall
be in writing and signed by him or her.
1.12 INFORMAL ACTION BY STOCKHOLDERS. An action required or permitted
to be taken at a meeting of Stockholders may be taken without a meeting if a
consent in writing, setting forth such action, is signed by all the Stockholders
entitled to vote on the subject matter thereof and any other Stockholders
entitled to notice of a meeting of Stockholders (but not to vote thereat) have
waived in writing any rights which they may have to dissent from such action,
and such consents and waivers are filed with the minutes of proceedings of the
Stockholders. Such consents and waivers may be signed by different Stockholders
on separate counterparts.
1.13 VOTING BY BALLOT. Voting on any question or in any election may
be viva voce unless the presiding Officer shall order or any Stockholder shall
demand that voting be by ballot.
ARTICLE II
DIRECTORS
8
2.1 GENERAL POWERS. The business and affairs of the Corporation shall
be managed by its Board of Directors. All powers of the Corporation may be
exercised by or under
the authority of the Board of Directors, except as conferred on or reserved to
the Stockholders by statute, the Charter or these Bylaws.
2.2 OUTSIDE ACTIVITIES. The Board of Directors and its members are
required to spend only such time managing the business and affairs of the
Corporation as is necessary to carry out their duties in accordance with Section
2-405.1 of the Maryland General Corporation Law. The Board of Directors, each
Director, and the agents, Officers and employees of the Corporation or of the
Board of Directors or of any Director may engage with or for others in business
activities of the types conducted by the Corporation. Except as set forth in the
Charter or by separate agreement, none of such individuals has an obligation to
notify or present to the Corporation or each other any investment opportunity
that may come to such person's attention even though such investment might be
within the scope of the Corporation's purposes or various investment objectives.
Any interest (including any interest as defined in Section 2-419(a) of the
Maryland General Corporation Law) that a Director has in any investment
opportunity presented to the Corporation must be disclosed by such Director to
the Board of Directors (and, if voting thereon, to the Stockholders or to any
committee of the Board of Directors) within ten (10) days after the later of the
date upon which such Director becomes aware of such interest or the date upon
which such Director becomes aware that the Corporation is considering such
investment opportunity. If such interest comes to the interested Director's
attention after a vote to take such investment opportunity, the voting body
shall be notified of such interest and shall reconsider such investment
opportunity if not already consummated or implemented.
2.3 NUMBER, TENURE AND QUALIFICATION. The number of Directors of the
Corporation shall be that number set forth in the Charter or such other number
as may be
9
designated from time to time by resolution of a majority of the entire Board of
Directors; provided, however, that the number of Directors shall never be more
than the maximum number provided in the Charter nor less than the number
required by Section 2-402 of the Maryland General Corporation Law, as amended
from time to time, and further provided that the tenure of office of a Director
shall not be affected by any decrease in the number of Directors. Each Director
shall serve for the term set forth in the Charter and until his or her successor
is elected and qualified.
2.4 NOMINATION OF DIRECTORS.
(a) Nominations of candidates for election as Directors of the
Corporation at any annual meeting of Stockholders may be made (i) by, or at the
direction of, a majority of the Board of Directors or (ii) by any holder of
record (both as of the time notice of such nomination is given by the
Stockholder as set forth below and as of the record date for the annual meeting
in question) of any shares of the Corporation's capital stock entitled to vote
at such meeting who complies with the procedures set forth in this Section 2.4.
Any Stockholder who seeks to make such a nomination, or his or her
representative, must be present in person at the annual meeting.
Only persons nominated in accordance with the procedures set forth in this
Section 2.4 shall be eligible for election as Directors at an annual meeting of
Stockholders.
(b) Nominations, other than those made by, or at the direction of, the
Board of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation as set forth in this Section 2.4. For all annual
meetings prior to the initial public offering of common stock of the
Corporation, notice shall be timely if delivered to, or mailed and received
10
at, the principal executive office of the Corporation not later than the close
of business on the 20th calendar day (or if that day is not a business day for
the Corporation, the next business day) following the date on which notice of
such annual meeting is mailed or otherwise transmitted to Stockholders. For all
annual meetings subsequent to the initial public offering of common stock of the
Corporation, a Stockholder's notice shall be timely if delivered to, or mailed
and received at, the principal executive offices of the Corporation (i) not less
than 75 days nor more than 180 days prior to the Anniversary Date or (ii) in the
event that the annual meeting of Stockholders is called for a date more than 7
calendar days prior to the Anniversary date, not later than the close of
business on (A) the 20th calendar day (or if that day is not a business day for
the Corporation, on the next succeeding business day) following the earlier of
(1) the date on which notice of the date of such meeting was mailed to
Stockholders or (2) the date on which the date of such meeting was publicly
disclosed or (B) if such date of notice or public disclosure occurs more than 75
calendar days prior to the scheduled date of such meeting, then the later of (1)
the 20th calendar day (or if that day is not a business day for the Corporation,
on the next succeeding business day) following the date of the first to occur of
such notice or public disclosure or (2) the 75th calendar day prior to such
scheduled date of such meeting (or if that day is not a business day for the
Corporation, on the next succeeding business day).
(c) A Stockholder's notice of nomination shall set forth as to each
person the Stockholder proposes to nominate for election as a Director (i) the
name, age, business address and residence address of such person, (ii) the
principal occupation or employment of such person for the past five years, (iii)
the class and number of shares of the Corporation's capital stock which are
beneficially owned by such person on the date of such notice, (iv) such
nominee's
11
written consent to be named in the proxy statement as a nominee and to
serve as a Director if elected, (v) whether such Director is an Independent
Director (as defined in the Charter) and (vi) any other information relating to
such person that is required to be disclosed in solicitations of proxies with
respect to nominees for election as may be deemed necessary or desirable by the
Corporation's counsel, in the exercise of his or her discretion. Notice by a
Stockholder shall, in addition to the above-referenced information, set forth as
to the Stockholder giving the notice (A) the name and address, as they appear on
the Corporation's stock transfer books, of such Stockholder and of the
beneficial owners (if any) of the stock registered in such Stockholder's name;
(B) the name and address of other Stockholders known by such Stockholder to be
supporting such nominees on the date of such Stockholder's notice; (C) the class
and number of shares of the Corporation's capital stock which are beneficially
owned by such Stockholder and such beneficial owners (if any) on the date of
such Stockholder's notice; and (D) the class and number of shares of the
Corporation's capital stock which are beneficially owned by any other
Stockholders known by such Stockholder to be supporting such nominees on the
date of such Stockholder's notice. At the request of the Board of Directors, any
person nominated by or at the
direction of the Board of Directors for election as a Director at any annual
meeting shall furnish to the Secretary of the Corporation that information which
would be required to be set forth in a Stockholder's notice of nomination of
such nominee.
(d) No person shall be elected by the Stockholders as a Director of
the Corporation unless nominated in accordance with the procedures set forth in
this Section 2.4. If the Board of Directors, or a designated committee thereof,
determines that a nomination made by any Stockholder was not timely made in
accordance with the terms of this section, such
12
nomination shall not be considered at the annual meeting in question. If the
Board of Directors, or a designated committee thereof, determines that the
information provided in a Stockholder's notice does not satisfy the
informational requirements of this Section 2.4 in any material respect, the
Secretary of the Corporation shall promptly notify such Stockholder of the
deficiency in the notice. Such Stockholder shall have an opportunity to cure the
deficiency by providing additional information to the Secretary within the
period of time, not to exceed 5 days from the date such deficiency notice is
given to such Stockholder, determined by the Board of Directors or such
committee. If the deficiency is not cured within such period, or if the Board of
Directors or such committee determines that the additional information provided
by such Stockholder, together with the information previously provided, does not
satisfy the requirements of this Section 2.4 in any material respect, such
nomination shall not be considered at the annual meeting in question.
(e) Notwithstanding the procedures set forth in the preceding
paragraph, if neither the Board of Directors nor a designated committee thereof
makes a determination as to the validity of any nominations by any Stockholder
as set forth above, the presiding Officer of
the Stockholders' meeting shall determine and declare at the Stockholders'
meeting whether a nominations as made in accordance with the terms of this
Section 2.4. If the presiding Officer determines that a nomination was not made
in accordance with the terms of this Section 2.4, such nomination shall be
disregarded, and the Board of Directors shall make all Director nominations on
behalf of the Corporation.
2.5 ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of
Directors may be held immediately after and at the same place as the annual
meeting of
13
Stockholders, or at such other time and place, either within or without the
State of Maryland, as is selected by resolution of the Board of Directors, and
no notice other than this Bylaw of such resolution shall be necessary. The Board
of Directors may provide, by resolution, the time and place, either within or
without the State of Maryland, for the holding of regular meetings of the Board
of Directors without other notice than such resolution.
2.6 SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by or at the request of the Chairman of the Board, the President or a
majority of the Directors then in office. The person or persons authorized to
call special meetings of the Board of Directors may fix any place, either within
or without the State of Maryland, as the place for holding any special meeting
of the Board of Directors called by them.
2.7 NOTICE. Notice of any special meeting to be provided herein shall
be given, in accordance with Article VIII, by written notice delivered
personally, telegraphed or telecopied to each director at his or her business or
residence at least twenty-four (24) hours, or by mail at least five (5) days,
prior to the meeting. Neither the business to be transacted at, nor the purpose
of, any annual, regular or special meeting of the Board of Directors need be
specified in the notice, unless specially required by statute, the Charter or
these Bylaws.
2.8 QUORUM. A majority of the Board of Directors then in office shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors. If less than a majority of the Board of Directors is present at
said meeting, a majority of the Directors present may adjourn the meeting from
time to time without further notice.
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2.9 VOTING. The act of a majority of the Directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors,
unless the concurrence of a greater proportion is required for such action by
applicable statute, the Charter or these Bylaws; provided, however, that (1) no
act relating to any matter in which a Director (or affiliate of such Director)
has any interest shall be the act of the Board of Directors unless such act has
been approved by a majority of the Board of Directors that includes a majority
of the disinterested Directors and (2) commencing on the Initial Public Offering
Date (as defined in the Charter) no decision by the Corporation whether to issue
shares of Common Stock (as defined in the Charter) or to pay cash in exchange
for partnership units of First Industrial, L.P. shall be the act of the Board of
Directors unless such act has been approved by a majority of the Independent
Directors (as defined in the Charter).
2.10 CHAIRMAN OF THE BOARD. The Board of Directors may appoint a
Chairman of the Board. The Chairman of the Board shall not be an officer of the
Company, but may sign and execute all authorized bonds, contracts or other
obligations in the name of the Corporation, except in cases where the execution
thereof shall be expressly delegated by the Board of Directors or by these
Bylaws to some other Officer or agent of the Corporation or shall be required by
law to be otherwise signed or executed.
2.11 CONDUCT OF MEETINGS. All meetings of the Board of Directors shall
be called to order and presided over by the Chairman of the Board or, in the
absence of the Chairman of the Board, by the President (if a member of the Board
of Directors) or, in the absence of the Chairman of the Board and the President,
by a member of the Board of Directors selected by the members present. The
Secretary of the Corporation, or in the absence of the
15
Secretary, any Assistant Secretary, shall act as secretary at all meetings of
the Board of Directors, and in the absence of the Secretary and Assistant
secretaries, the presiding Officer of the meeting shall designate any person to
act as secretary of the meeting. Members of the Board of Directors may
participate in meetings of the Board of Directors by conference telephone or
similar communications equipment by means of which all Directors participating
in the meeting can hear each other at the same time, and participation in a
meeting in accordance herewith shall constitute presence in person at such
meeting for all purposes of these Bylaws.
2.12 RESIGNATIONS. Any Directors may resign from the Board of
Directors or any committee thereof at any time. Such resignation shall be made
in writing and shall take effect at the time specified therein, or if no time be
specified, at the time of the receipt of notice of such resignation by the
President or the Secretary.
2.13 REMOVAL OF DIRECTORS. Consistent with the Charter, the
Stockholders may, at any time, remove any Director, with or without cause, by
the affirmative vote of a majority of all the votes entitled to be cast on a
matter, and may elect a successor to fill any resulting vacancy for the balance
of the term of the removed Director.
2.14 VACANCIES. The Stockholders may elect a successor to fill a
vacancy on the Board of Directors which results from the removal of a Director.
Furthermore, any vacancy occurring on the Board of Directors for any cause other
than by reason of an increase in the number of Directors may be filled by a
majority vote of the remaining Directors, although such majority is less than a
quorum. Any vacancy occurring on the Board of Directors by reason of an increase
in the number of Directors may be filled by a majority vote of the entire Board
of Directors. A Director elected by the Board of
16
Directors to fill a vacancy shall hold office until the next annual meeting of
Stockholders and until his or her successor is elected and qualifies.
2.15 INFORMAL ACTION BY DIRECTORS. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting, if a consent in writing to such action is signed by all of the
Directors and such written consent is filed with the minutes of the Board of
Directors. Consents may be signed by different Directors on separate
counterparts.
2.16 COMPENSATION. An annual fee for services and payment for expenses
of attendance at each meeting of the Board of Directors, or of any committee
thereof, may be allowed to any Director by resolution of the Board of Directors.
ARTICLE III
COMMITTEES
3.1 NUMBER, TENURE AND QUALIFICATION. The Board of Directors may
appoint from among its members an Executive Committee and other committees,
composed of two or more Directors, to serve at the pleasure of the Board of
Directors; provided, however, that the Board of Directors will appoint to the
Corporation's Audit Committee only Independent Directors (as defined in the
Charter).
3.2 DELEGATION OF POWER. The Board of Directors may delegate to these
committees in the intervals between meetings of the Board of Directors any of
the powers of the Board of Directors to manage the business and affairs of the
Corporation, except those powers
17
which the Board of Directors is specifically prohibited from delegating pursuant
to Section 2- 411(a)(2) of the Maryland General Corporation Law.
3.3 QUORUM AND VOTING. A majority of the members of any committee
shall constitute a quorum for the transaction of business by such committee, and
the act of a majority of the quorum shall constitute the act of the committee.
3.4 CONDUCT OF MEETINGS. Each committee shall designate a presiding
Officer of such committee, and if such Officer is not present at a particular
meeting, the committee shall select a presiding Officer for such meeting.
Members of any committee may participate in meetings of such committee by
conference telephone or similar communications equipment by means of which all
Directors participating in the meeting can hear each other at the same time, and
participation in a meeting in accordance herewith shall constitute presence in
person at such meeting for all purposes of these Bylaws. Each committee shall
keep minutes of its meetings, and report the results of any proceedings at the
next succeeding annual or regular meeting of the Board of Directors.
3.5 INFORMAL ACTION BY COMMITTEES. Any action required or permitted to
be taken at any meeting of a committee of the Board of Directors may be taken
without a meeting, if a written consent to such action is signed by all members
of the committee and such written consent is filed with the minutes of
proceedings of such committee. Consents may be signed by different members on
separate counterparts.
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ARTICLE IV
OFFICERS
4.1 TITLES AND ELECTION. The Corporation shall have a President,
Secretary and Treasurer to comply with MGCL ss.2-412(a), and such other Officers
as the Board of Directors, or any committee or Officer appointed by the Board of
Directors for such purpose, may from time to time elect. The Officers of the
Corporation shall be elected annually by the Board of Directors at the first
meeting of the Board of Directors held after each annual meeting of
Stockholders. If the election of Officers shall not be held at such meeting,
such election shall be held as soon thereafter as may be convenient. Each
Officer shall hold office until his successor is duly elected and qualified or
until his death, resignation or removal in the manner hereinafter proved. Any
two or more offices except President and Vice President may be held by the same
person. Election or appointment of an Officer or agent shall not of itself
create contract rights between the Corporation and such Officer or agent.
4.2 REMOVAL. Any Officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in its judgment the
best interests of the Corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person
removed. The fact that a person is elected to an office, whether or not for a
specified term, shall not by itself constitute any undertaking or evidence of
any employment obligation of the Corporation to that person.
4.3 OUTSIDE ACTIVITIES. The Officers and agents of the Corporation are
required to spend only such time managing the business and affairs of the
Corporation as is necessary to carry out their duties in accordance with the law
and these Bylaws. The Officers
19
and agents of the Corporation may engage with or for others in business
activities of the types conducted by the Corporation. Except as set forth in the
Charter or by separate agreement, none of such individuals has an obligation to
notify or present to the Corporation or each other any investment opportunity
that may come to such person's attention even though such investment might be
within the scope of the Corporation's purposes or various investment objectives.
Any interest (including any interest within the meaning of Section 2-419(a) of
the Maryland General Corporation Law as if the Officer or agent were a Director
of the Corporation) that an Officer or an agent has in any investment
opportunity presented to the Corporation must be disclosed by such Officer or
agent to the Board of Directors (and, if voting thereon, to the Stockholders or
to any committee of the Board of Directors) within ten (10) days after the later
of the date upon which such Officer or agent becomes aware of such interest or
the date upon which such Officer or agent becomes aware that the Corporation is
considering such investment opportunity. If such interest comes to the attention
of the interested Officer or agent after a vote to take such investment
opportunity, the voting body shall be notified of such interest and shall
reconsider such investment opportunity if not already consummated or
implemented.
4.4 VACANCIES. A vacancy in any office may be filled by the Board of
Directors for the unexpired portion of the term.
4.5 PRESIDENT. Unless the Board of Directors shall otherwise
determine, the President shall be the Chief Executive Officer and general
manager of the Corporation and shall in general supervise and control all of the
business and affairs of the Corporation. In the absence of the Chairman of the
Board, the President shall preside at all meetings of the Stockholders and of
the Board of Directors (if a member of the Board of Directors). The President
may sign any
20
deed, mortgage, bond, contract or other instruments on behalf of the Corporation
except in cases where the execution thereof shall be expressly delegated by the
Board of Directors or by these Bylaws to some other Officer or agent of the
Corporation or shall be required by law to be otherwise signed or executed. In
general, the President shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board of Directors
from time to time.
4.6 CHIEF OPERATING OFFICER. The Board of Directors may appoint a
Chief Operating Officer. In the absence of the President or in the event of a
vacancy in such office, the Chief Operating Officer shall perform the duties of
the President and when so acting shall have all the powers of and be subject to
all the restrictions upon the President. The Chief Operating Officer may sign
any deed, mortgage, bond, contract or other instruments on behalf of the
Corporation except in cases where the execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other Officer or
agent of the Corporation or shall be required by law to be otherwise signed or
executed. In general, the Chief Operating Officer shall perform all duties
incident to the office of Chief Operating Officer and such other duties as may
be prescribed by the Board of Directors from time to time.
4.7 CHIEF FINANCIAL OFFICER. The Board of Directors may appoint a
Chief Financial Officer. In general, the Chief Financial Officer shall perform
all duties incident to the office of Chief Financial Officer and such other
duties as may be prescribed by the Board of Directors from time to time.
21
4.8 VICE PRESIDENTS. The Board of Directors may appoint one or more
Vice President. In the absence of both the President and the Chief Operating
Officer or in the event of a vacancy in both such offices, the Vice President
(or in the event there be more than one Vice President, the Vice Presidents in
the order designated at the time of their election or, in the absence of any
designation, then in the order of their election) shall perform the duties of
the President and when so acting shall have all the powers of and be subject to
all the restrictions upon the President. Every Vice President shall perform such
other duties as from time to time may be assigned to him or her by the President
or the Board of Directors.
4.9 SECRETARY. The Secretary shall (i) keep the minutes of the
proceedings of the Stockholders and Board of Directors in one or more books
provided for that purpose; (ii) see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law; (iii) be
custodian of the corporate records of the Corporation; (iv) unless a transfer
agent is appointed, keep a register of the post office address of each
Stockholder that shall be furnished to the Secretary by such Stockholder and
have general charge of the Stock Ledger of the Corporation; (v) when authorized
by the Board of Directors or the President, attest to or witness all documents
requiring the same; (vi) perform all duties as from time to time may be assigned
to him or her by the President or by the Board of Directors; and (vii) perform
all the duties generally incident to the office of secretary of a corporation.
4.10 TREASURER. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositaries as may be designated by the Board of
22
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
the regular meetings of the Board of Directors or whenever they may require it,
an account of all his or her transactions as Treasurer and of the financial
condition of the Corporation. The Board of Directors may engage a custodian to
perform some or all of the duties of the Treasurer, and if a custodian is so
engaged then the Treasurer shall be relieved of the responsibilities set forth
herein to the extent delegated to such custodian and, unless the Board of
Directors otherwise determines, shall have general supervision over the
activities of such custodian. The custodian shall not be an Officer of the
Corporation.
4.11 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Board of
Directors may appoint one or more Assistant Secretaries or Assistant Treasurers.
The Assistant Secretaries (i) when authorized by the Board of Directors or the
President, shall have the power to attest to or witness all documents requiring
the same and (ii) shall perform such duties as shall be assigned to them by the
Secretary or by the President or the Board of Directors. The Assistant
Treasurers shall perform such duties as shall be assigned to them by the
Treasurer or by the President or the Board of Directors.
4.12 OTHER OFFICERS. The Corporation shall have such other Officers as
the Board of Directors may from time to time elect. Each such Officer shall hold
office for such period and perform such duties as the Board of Directors, the
President or any designated committee or Officer may prescribe.
23
4.13 SALARIES. The salaries, if any, of the Officers shall be fixed
from time to time by the Board of Directors. No Officer shall be prevented from
receiving such salary, if any, by reason of the fact that he or she is also a
Director of the Corporation.
ARTICLE V
SHARES OF STOCK
5.1 NO CERTIFICATES FOR STOCK. Unless the Board of Directors
authorizes the issuance of certificates pursuant to Section 5.2, none of the
Stock shall be represented by certificates.
5.2 ELECTION TO ISSUE CERTIFICATES. The Board of Directors may
authorize the issuance of certificates representing some or all of the Shares of
any or all of the classes or series of Stock. If the Board of Directors so
authorizes certificates, such certificates shall be of such form, not
inconsistent with the Charter, as shall be approved by the Board of Directors.
All certificates, if issued, shall be signed by the Chairman of the Board, the
President or a Vice President and countersigned by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary. Any signature or
counter-signature may be either a manual or facsimile signature. All
certificates, if issued, for each class of stock shall be consecutively
numbered.
5.3 STOCK LEDGER. The Corporation shall maintain at its principal
executive office, at the office of its counsel, accountants or transfer agent or
at such other place designated by the Board of Directors an original or
duplicate Stock Ledger containing the names and addresses of all the
Stockholders and the number of shares of each class held by each Stockholder.
The Stock Ledger shall be maintained pursuant to a system that the Corporation
24
shall adopt allowing for the issuance, recordation and transfer of its Stock by
electronic or other means that can be readily converted into written form for
visual inspection and not involving any issuance of certificates. Such system
shall include provisions for notice to acquirers of Stock (whether upon issuance
or transfer of stock) in accordance with Sections 2-210 and 2-211 of the
Maryland General Corporation Law, and Section 8-408 of the Commercial Law
Article of the State of Maryland. The Corporation shall be entitled to treat the
holder of record of any Share or Shares as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of the State of Maryland. Until a transfer is duly effected on the Stock Ledger,
the Corporation shall not be affected by any notice of such transfer, either
actual or constructive. Nothing herein shall impose upon the Corporation, the
Board of Directors or Officers or their agents and representatives a duty or
limit their rights to inquire as to the actual ownership of Shares.
5.4 RECORDING TRANSFERS OF STOCK. If transferred in accordance with
any restrictions on transfer contained in the Charter, these Bylaws or
otherwise, Shares shall be recorded as transferred in the Stock Ledger upon
provision to the Corporation or the transfer agent of the Corporation of an
executed stock power duly guaranteed and any other documents reasonably
requested by the Corporation and the surrender of the certificate or
certificates, if any, representing such Shares. Upon receipt of such documents,
the Corporation shall issue the statements required by Sections 2-210 and 2-211
of the Maryland General Corporation Law and Sections 8-408 of the Commercial Law
Article of the State of Maryland, issue as needed a new
25
certificate or certificates (if the transferred Shares were certificated) to the
persons entitled thereto, cancel any old certificates and record the transaction
upon its books.
5.5 LOST CERTIFICATES. The Board of Directors may direct a new
certificate to be issued in the place of any certificate theretofore issued by
the Corporation alleged to have been stolen, lost or destroyed upon the making
of an affidavit of that fact by the person claiming the certificate of Stock to
be stolen, lost or destroyed. When authorizing such issue of a new certificate,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such stolen, lost or destroyed
certificate or his legal representative to advertise the same in such manner as
it shall require and/or to give bond, with sufficient surety, to the Corporation
to indemnify it against any loss or claim which may arise by reason of the
issuance of a new certificate.
5.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
5.6.1 The Board of Directors may fix, in advance, a date as
the record date for the purpose of determining Stockholders entitled to notice
of, or to vote at, any meeting of Stockholders, or Stockholders entitled to
receive payment of any dividend or the allotment of any rights, or in order to
make a determination of Stockholders for any other proper purpose. Such date, in
any case, shall not be prior to the close of business on the day the record date
is fixed and shall be not more than sixty (60) days, and in case of a meeting of
Stockholders not less than ten (10) days, prior to the date on which the meeting
or particular action requiring such determination of Stockholders is to be held
or taken.
26
5.6.2 If, in lieu of fixing a record date, the stock transfer
books are closed by the Board of Directors in accordance with Section 2-511 of
the Maryland General Corporation Law for the purpose of determining Stockholders
entitled to notice of or to vote at a meeting of Stockholders, such books shall
be closed for at least ten (10), but not more than twenty (20) days immediately
preceding such meeting.
5.6.3 If no record date is fixed and the stock transfer books are
not closed for the determination of Stockholders, (a) the record date for the
determination of Stockholders entitled to notice of, or to vote at, a meeting of
Stockholders shall be at the close of business on the day on which the notice of
meeting is mailed or the 30th day before the meeting, whichever is the closer
date to the meeting; and (b) the record date for the determination of
Stockholders entitled to receive payment of a dividend or an allotment of any
rights shall be at the close of business on the day on which the resolution of
the Board of Directors declaring the dividend or allotment of rights is adopted.
5.6.4 When a determination of Stockholders entitled to vote at
any meeting of Stockholders has been made as provided in this section, such
determination shall apply to any adjournment thereof, except where the
determination has been made through the closing of the stock transfer books and
the stated period of closing has expired.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
6.1 DECLARATION. Dividends and other distributions upon the Stock may
be declared by the Board of Directors as set forth in the applicable provisions
of the Charter and any
27
applicable law, at any meeting, limited only to the extent of Section 2-311 of
the Maryland General Corporation Law. Dividends and other distributions upon the
Stock may be paid in cash, property or Stock of the Corporation, subject to the
provisions of law and of the Charter.
6.2 CONTINGENCIES. Before payment of any dividends or other
distributions upon the Stock, there may be set aside (but there is no duty to
set aside) out of any funds of the Corporation available for dividends or other
distributions such sum or sums as the Board of Directors may from time to time,
in its absolute discretion, think proper as a reserve fund to meet
contingencies, for repairing or maintaining any property of the Corporation or
for such other purpose as the Board of Directors shall determine to be in the
best interests of the Corporation, and the Board of Directors may modify or
abolish any such reserve in the manner in which it was created.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION TO THE EXTENT PERMITTED BY LAW. To the maximum
extent permitted by Maryland law in effect from time to time, the Corporation,
without requiring a preliminary determination of the ultimate entitlement to
indemnification, shall indemnify and shall pay or reimburse reasonable expenses
in advance of final disposition of a proceeding to (a) any individual who is a
present or former director or officer of the Corporation and who is made a party
to the proceeding by reason of his or her service in that capacity and (b) any
individual who, while a director or officer of the Corporation and at the
request of the Corporation, serves or has served another corporation,
partnership, joint venture, trust, employee benefit plan or any other enterprise
as a director, officer, partner or trustee of
28
such corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise and who is made a party to the proceeding by reason of his
service in that capacity. The Corporation may, with the approval of its Board of
Directors, provide such indemnification and advance for expenses to a person who
served a predecessor of the Corporation in any of the capacities described in
(a) or (b) above and to any employee or agent of the Corporation or a
predecessor of the Corporation. Any person who may be entitled to
indemnification pursuant to this Section 7.1 shall be referred to in these
Bylaws as an "Indemnified Person".
Neither the amendment nor repeal of this Section 7.1, nor the adoption
or amendment of any other provision of the Bylaws or charter of the Corporation
inconsistent with this Section
7.1, shall apply to or affect in any respect the applicability of the preceding
paragraph with respect to any act or failure to act which occurred prior to such
amendment, repeal or adoption.
7.2 INSURANCE. The Corporation shall have the power to purchase and
maintain insurance on behalf of any Indemnified Person against any liability,
whether or not the Corporation would have the power to indemnify him or her
against such liability.
7.3 NON-EXCLUSIVE RIGHT TO INDEMNITY; HEIRS AND PERSONAL
REPRESENTATIVES. The rights to indemnification set forth in this Article VII are
in addition to all rights to which any Indemnified Person may be entitled as a
matter of law, pursuant to a resolution of the Stockholders or disinterested
Directors as agreed or otherwise, and shall inure to the benefit of the heirs
and personal representatives of each Indemnified Person.
7.4 NO LIMITATION. In addition to any indemnification permitted by
these Bylaws, the Board of Directors shall, in its sole discretion, have the
power to grant such
29
indemnification as it deems in the interest of the Corporation to the full
extent permitted by law. This Article shall not limit the Corporation's power to
indemnify against liabilities other than those arising from a person's serving
the Corporation as a Director or Officer.
ARTICLE VIII
NOTICES
8.1 NOTICES. Whenever notice is required to be given pursuant to these
Bylaws, it shall be construed to mean either written notice personally served
against written receipt or notice in writing transmitted by mail, by depositing
the same in a post office or letter box, in a post-paid sealed wrapper,
addressed, if to the Corporation, at 150 N. Wacker Drive, Chicago, Illinois
60606 (or any subsequent address selected by the Board of Directors), attention
President, or if to a Stockholder, Director or Officer, at the address of such
person as it appears on the books of the Corporation or in default of any other
address at the general post office situated in the city or county of his or her
residence. Unless otherwise specified, notice sent by mail shall be deemed to be
given at the time mailed.
8.2 SECRETARY TO GIVE NOTICE. All notices required by law or these
Bylaws to be given by the Corporation shall be given by the Secretary or any
other Officer of the Corporation designated by the President. If the Secretary
and Assistant Secretary are absent or refuse or neglect to act, the notice may
be given by any person directed to do so by the President, or with respect to
any meeting called pursuant to these Bylaws upon the request of any Stockholders
or Directors, or by any person directed to do so by the Stockholders or
Directors upon whose request the meeting is called.
30
8.3 WAIVER OF NOTICE. Whenever any notice is required to be given
pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Neither the business to be transacted nor the purpose
of any meeting need be set forth in the waiver of notice, unless specifically
required by statute. The attendance of any person at any meeting shall
constitute a waiver of notice of such meeting, except where such person attends
a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE IX
MISCELLANEOUS
9.1 BOOKS AND RECORDS. The Corporation shall keep correct and complete
books and records of its account and transactions and minutes of the proceedings
of its Stockholders and Board of Directors and of its executive or other
committees when exercising any of the powers or authority of the Board of
Directors. The books and records of the Corporation may be in written form or in
any other form that may be converted within a reasonable time into written form
for visual inspection. Minutes shall be recorded in written form, but may be
maintained in the form of a reproduction.
9.2 INSPECTION OF BYLAWS AND CORPORATE RECORDS. These Bylaws, the
accounting books and records of the Corporation, the minutes of proceedings of
the Stockholders, the Board of Directors and committees thereof, annual
statements of affairs and voting trust agreements on record shall be open to
inspection upon written demand delivered to the Corporation by any Stockholder
or holder of a voting trust certificate at any reasonable time
31
during usual business hours, for a purpose reasonably related to such holders'
interests as a Stockholder or as the holder of such voting trust certificate, in
each case to the extent permitted by the Maryland General Corporation Law.
9.3 CONTRACTS. The Board of Directors may authorize any Officer(s) or
agent(s) to enter into any contract or to execute and deliver any instrument in
the name of and on behalf of the Corporation, and such authority may be general
or confined to specific instances.
9.4 CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such Officers or agents of the Corporation
and in such manner as shall from time to time be determined by resolution of the
Board of Directors.
9.5 LOANS.
9.5.1 Such Officers or agents of the Corporation as from time
to time have been designated by the Board of Directors shall have authority (i)
to effect loans, advances or other forms of credit at any time or times for the
Corporation, from such banks, trust companies, institutions, corporations, firms
or persons, in such amounts and subject to such terms and conditions, as the
Board of Directors from time to time has designated; (ii) as security for the
repayment of any loans, advance or other forms of credit so authorized, to
assign, transfer, endorse and deliver, either originally or in addition or
substitution, any or all personal property, real property, stocks, bonds,
deposits, accounts, documents, bills, accounts receivable and other commercial
paper and evidence of debt or other securities, or any rights or interests at
any time held by the Corporation; (iii) in connection with any loans, advances
or other forms of credit so
32
authorized, to make, execute and deliver one or more notes, mortgages, deeds of
trust, financing statements, security agreements, acceptances or written
obligations of the Corporation, on such terms and with such provisions as to the
security or sale or disposition of them as those Officers or agents deem proper;
and (iv) to sell to, or discount or rediscount with, the banks, trust companies,
institutions, corporations, firms or persons making those loans, advances or
other forms of credit any and all commercial paper, bills, accounts receivable,
acceptances and other instruments and evidences of debt at any time held by the
Corporation, and, to that end, to endorse, transfer and deliver the same.
9.5.2 From time to time the Corporation shall certify to each
bank, trust company, institution, corporation, firm or person so designated the
signatures of the Officers or agents so authorized. Each bank, trust company,
institution, corporation, firm or person so designated is authorized to rely
upon such certification until it has received written notice that the Board of
Directors has revoked the authority of those Officers or agents.
9.6 FISCAL YEAR. The Board of Directors shall have the power, from
time to time, to fix the fiscal year of the Corporation by a duly adopted
resolution, and, in the absence of such resolution, the fiscal year shall be the
period ending December 31.
9.7 ANNUAL REPORT. Not later than 120 days after the close of each
fiscal year, the Board of Directors of the Corporation shall cause to be sent to
the Stockholders an Annual Report in such form as may be deemed appropriate by
the Board of Directors. The Annual Report shall include audited financial
statements and shall be accompanied by the report thereon of an independent
certified public accountant.
33
9.8 INTERIM REPORTS. The Corporation may send interim reports to the
Stockholders having such form and content as the Board of Directors deems
proper.
9.9 OTHER REPORTS. Any distributions to Stockholders of income or
capital assets shall be accompanied by a written statement disclosing the source
of the funds distributed unless at the time of distribution they are accompanied
by a written explanation of the relevant circumstances. The statement as to such
source shall be sent to Stockholders not later than sixty (60) days after the
close of the fiscal year in which the distributions were made.
9.10 BYLAWS SEVERABLE. The provisions of these Bylaws are severable,
and if any provision shall be held invalid or unenforceable, that invalidity or
unenforceability shall attach only to that provision and shall not in any manner
affect or render invalid or unenforceable any other provision of these Bylaws,
and these Bylaws shall be carried out as if the invalid or unenforceable
provision were not contained herein.
ARTICLE X
AMENDMENT OF BYLAWS
10.1 BY DIRECTORS. The Board of Directors shall have the power, at any
annual or regular meeting, or at any special meeting if notice thereof is
included in the notice of such special meeting, to alter or repeal any Bylaws of
the Corporation and to make new Bylaws; provided, that no alteration or repeal
of Section 7.1 may affect the rights of any Indemnified Persons to
indemnification arising, and in connection with conduct, prior to such
amendment; and, provided, further, that the Board of Directors shall not alter
or repeal this Section 10.1 or Section 10.2.
34
10.2 BY STOCKHOLDERS. The Stockholders, by affirmative vote of a
majority of the shares of common stock of the Corporation, shall have the power,
at any annual meeting (subject to the requirements of Section 1.3), or at any
special meeting if notice thereof if included in the notice of such special
meeting, to alter or repeal any Bylaws of the Corporation and to make new
Bylaws; provided, that no alteration or repeal of Section 7.1 may affect the
rights of any Indemnified Person to indemnification arising, and in connection
with conduct, prior to such amendment; and, provided, further, that the
Stockholders shall not alter or repeal Section 10.1 or this Section 10.2.
35
[Letterheard of Cahill Gordon & Reindel]
December 6, 1996
(212) 701-3000
First Industrial Realty Trust, Inc.
150 N. Wacker Drive, Suite 150
Chicago, Illinois 60606
Ladies and Gentlemen:
This opinion is being rendered in connection with the
registration statement on Form S-3 (the "Registration Statement")
filed by First Industrial Realty Trust, Inc., a Maryland corpora-
tion (the "Company"), with the Securities and Exchange Commission
(the "Commission") for registration under the Securities Act of
1933, as amended (the "Securities Act"), of 1,000,000 shares of
Common Stock, par value $.01 per share ("Common Stock").
In connection therewith, we have examined and considered
originals or copies certified or otherwise identified to our sat-
isfaction, of the Company's Articles of Incorporation and Bylaws,
each as amended to date, resolutions of its board of directors,
and such other documents and corporate records relating to the
Company and the issuance and sale of the Common Stock covered by
the Registration Statement as we have deemed appropriate for pur-
poses of rendering this opinion.
-2-
In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us
as originals and the conformity to originals of all documents sub-
mitted to us as copies. As to matters of fact which have not been
independently established, we have relied upon representations of
officers of the Company.
Based upon the foregoing examination, information sup-
plied and assumptions, it is our opinion that, when specifically
authorized for issuance by the Company's Board of Directors or an
authorized committee thereof (an "Authorizing Resolution") in
exchange for units of limited partnership interest in First
Industrial, L.P., the actual value of which units is set forth in
the Authorizing Resolution, and when issued as described in the
Registration Statement or a prospectus supplement to the
prospectus contained in the Registration Statement which is
consistent with such Authorizing Resolution, and upon receipt by
the Company of the consideration provided for in such Authorizing
Resolution, the Common Stock will be duly authorized, validly
issued, fully paid and non-assessable.
We are attorneys admitted to practice in the State of
New York. We express no opinion concerning the laws of any juris-
diction other than the laws of the United States of America and
the State of New York. With respect to matters of Maryland law,
we have relied, without independent investigation, upon the opin-
ion of McGuire, Woods, Battle & Boothe, L.L.P., a copy of which is
attached hereto.
We hereby consent to the reference to our firm in the
Registration Statement under the caption "Legal Matters," and to
the inclusion of this opinion as an exhibit to the Registration
Statement. Our consent to such reference does not constitute a
consent under Section 7 of the Securities Act as in consenting to
such reference we have not certified any part of the Registration
Statement and do not otherwise come within the categories of per-
sons whose consent is required under Section 7 or under the rules
and regulations of the Commission thereunder.
Very truly yours,
/s/ Cahill Gordon & Reindel
(Letterhead of McGuire, Woods, Battle & Boothe, L.L.P.)
December 5, 1996
First Industrial Realty Trust, Inc.
150 N. Wacker Drive, Suite 150
Chicago, Illinois 60606
Ladies and Gentlemen:
This opinion is furnished as special Maryland counsel in connection
with the registration, pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), of 1,000,000 shares of Common Stock, par value $.01 per share
(the "Common Stock"), of First Industrial Realty Trust, Inc., a Maryland
corporation (the "Company").
In connection with rendering this opinion, we have examined originals
or copies certified or otherwise identified to our satisfaction, of the Articles
of Amendment and Restatement of the Company, dated June 13, 1994, and Articles
of Amendment of the Company, dated June 20, 1994, and May 31, 1996,
respectively; the Amended and Restated Bylaws of the Company, as amended to
date; resolutions of the Board of Directors of the Company; a registration
statement on Form S-3 (the "Registration Statement"), and the prospectus
contained therein (the "Prospectus"); a Certificate of Good Standing for the
Company dated October 17, 1996, and issued by the State Department of
Assessments and Taxation of Maryland; and such other certificates, receipts,
records and documents relating to the Company and the issuance of the Common
Stock covered by the Registration Statement as we considered necessary for the
purposes of rendering this opinion. Capitalized terms used herein but not
otherwise defined herein have the respective meanings accorded such terms in the
Prospectus.
In conducting our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to originals of all documents submitted to us as copies. As to
matters of fact which have not been independently established, we have relied
upon representations of officers of the Company.
We are attorneys admitted to practice in the State of Maryland. We
express no opinion concerning the laws of any jurisdictions other than the State
of Maryland.
Based upon the foregoing, we are of the opinion that the Common Stock,
when specifically authorized for issuance by the Company's Board of Directors or
an authorized committee thereof (an "Authorizing Resolution") in exchange for
Units, the actual value of which is set forth in the Authorizing Resolution,
First Industrial Realty Trust, Inc.
December 5, 1996
Page 2
and when issued as described in the Registration Statement or a prospectus
supplement to the Prospectus, consistent with such Authorizing Resolution, and
upon receipt by the Company of the consideration provided for in such
Authorizing Resolution, will be duly authorized, validly issued, fully paid and
nonassessable shares of the Company's Common Stock.
The foregoing assumes that all requisite steps will be taken to comply
with the requirements of the Securities Act and applicable requirements of state
laws regulating the offer and sale of securities.
This opinion may be relied upon by Messrs. Cahill Gordon & Reindel
with respect to that firm's opinion to be filed as an exhibit to the
Registration Statement. In addition, we hereby consent to the filing of this
opinion as an exhibit to the Registration Statement and to the reference to our
firm under the caption "Legal Matters" in the Prospectus. Our consent to such
reference does not constitute a consent under Section 7 of the Securities Act
and in consenting to such reference we have not certified any part of the
Registration Statement and do not otherwise come within the categories of
persons whose consent is required under Section 7 or under the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ McGuire, Woods, Battle & Boothe, L.L.P.
-------------------------------------------
MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
[Letterhead of Cahill Gordon & Reindel]
December 6, 1996
(212) 701-3000
First Industrial Realty Trust, Inc.
150 North Wacker Drive, Suite 150
Chicago, Illinois 60606
Ladies and Gentlemen:
We have acted as tax counsel to First Industrial Realty
Trust, Inc. (the "Company") in connection with the Form S-3 Regis-
tration Statement filed by the Company with the Securities and
Exchange Commission on May 17, 1996, as amended through the date
hereof and including the documents incorporated by reference
therein (the "Registration Statement").* We have been asked to
provide our opinion on certain federal income tax matters arising
under the Internal Revenue Code of 1986, as amended (the "Code"),
relating to the Company's qualification for taxation as a real
estate investment trust (a "REIT") under the Code.
_________________________
* Capitalized terms used in this letter that are not otherwise
defined herein have the meanings ascribed to them in the Regis-
tration Statement.
-2-
The opinions set forth in this letter are based on rele-
vant provisions of the Code, Treasury Regulations thereunder
(including proposed and temporary Regulations) and interpretations
of the foregoing as expressed in court decisions and administra-
tive determinations as of the date hereof. These provisions and
interpretations are subject to changes that might result in modi-
fications of our opinions.
For purposes of rendering the opinions contained in this
letter, we have reviewed (i) the Registration Statement; (ii) the
Articles of Incorporation of each of the Company, First Industrial
Finance Corporation (the "Financing Partnership Subsidiary"),
First Industrial Management Corporation (the "Mortgage Loan Prop-
erties Management Company"), First Industrial Third-Party Manage-
ment Corporation ("First Industrial Management"), First Industrial
Enterprises of Michigan, Inc. ("Damone/Andrew"), First Industrial
Pennsylvania Corporation ("First Industrial Pennsylvania"), First
Industrial Harrisburg Corporation ("First Industrial Harrisburg"),
First Industrial Securities Corporation ("First Industrial Securi-
ties"), First Industrial Mortgage Corporation ("First Industrial
Mortgage"), FR Acquisitions, Inc. ("FR Acquisitions"), First
Industrial Indianapolis Corporation ("First Industrial Indianapo-
lis") and First Industrial Development Services, Inc. ("First
Industrial Development"); (iii) the partnership agreement of each
of First Industrial, L.P. (the "Operating Partnership"), First
Industrial Financing Partnership, L.P. (the "Financing Partner-
ship"), First Industrial Securities, L.P. (the "Securities Part-
nership"), First Industrial Pennsylvania, L.P. (the "Pennsylvania
Partnership"), First Industrial Harrisburg, L.P. (the "Harrisburg
Partnership"), First Industrial Mortgage Partnership, L.P. (the
"Mortgage Partnership"), First Industrial Indianapolis, L.P. (the
"Indianapolis Partnership") and First Industrial Development Ser-
vices Group, L.P. (the "Development Partnership"); and (iv) such
other documents, law and facts as we have deemed necessary to ren-
der the opinions set forth in this letter. In our review, we have
assumed the genuineness of all signatures; the proper execution of
all documents; the authenticity of all documents submitted to us
as originals; the conformity to originals of all documents submit-
ted to us as copies; and the authenticity of the originals of any
copies.
In addition, for purposes of rendering the opinions set
forth herein, we have assumed that (i) each of the Company, the
Financing Partnership Subsidiary, the Mortgage Loan Properties
Management Company, First Industrial Management, First Industrial
Pennsylvania, First Industrial Harrisburg, First Industrial Secu-
rities, First Industrial Mortgage, FR Acquisitions, First Indus-
trial Indianpolis and First Industrial Development is a validly
organized and duly incorporated corporation under the laws of the
-3-
State of Maryland; (ii) Damone/Andrew is a validly organized and
duly incorporated corporation under the laws of the State of Mich-
igan; and (iii) each of the Operating Partnership, the Financing
Partnership, the Pennsylvania Partnership, the Harrisburg Partner-
ship, the Securities Partnership, the Mortgage Partnership, the
Indianapolis Partnership and the Development Partnership is a duly
organized and validly existing limited partnership subject to the
Delaware Revised Uniform Limited Partnership Act.
These opinions also are premised on certain written rep-
resentations made by (i) the Company, both in its capacity as a
corporate entity and as general partner of the Operating Partner-
ship; (ii) the Financing Partnership Subsidiary in its capacity as
general partner of the Financing Partnership; (iii) First Indus-
trial Pennsylvania in its capacity as general partner of the Penn-
sylvania Partnership; (iv) First Industrial Harrisburg in its
capacity as general partner of the Harrisburg Partnership;
(v) First Industrial Securities in its capacity as general partner
of the Securities Partnership; (vi) First Industrial Mortgage in
its capacity as general partner of the Mortgage Partnership;
(vii) First Industrial Indianapolis in its capacity as general
partner of the Indianapolis Partnership and (viii) First
Industrial Development in its capacity as general partner of the
Development Partnership, in certificates dated the date hereof
(the "Certificates"). For purposes of our opinions, we have not
made an independent investigation of the representations contained
in the Certificates, and consequently we have relied on the
representations therein that the information contained in the
Certificates or otherwise furnished to us accurately describes all
material facts relevant to our opinions.
Based upon and subject to the foregoing, we are of the
opinion that:
(i) The Operating Partnership, the Financing Partner-
ship, the Pennsylvania Partnership, the Harrisburg Partnership,
the Securities Partnership, the Mortgage Partnership, the India-
napolis Partnership and the Development Partnership will be
treated as partnerships for federal income tax purposes and not as
associations taxable as corporations.
(ii) Commencing with the Company's taxable year ended
on December 31, 1994, the Company has been organized in conformity
with the requirements for qualification as a REIT under the Code,
and the Company's method of operation, as described in the Regis-
tration Statement and as set forth in the Certificates, will
enable it to meet the requirements for qualification and taxation
as a REIT, provided that the Company continues to satisfy the
applicable asset composition, source of income, shareholder
-4-
diversification, distribution, recordkeeping and other require-
ments of the Code necessary for a corporation to qualify as a
REIT.
(iii) The information in the Registration Statement under
the heading "Certain Federal Income Tax Considerations", to the
extent that such information constitutes conclusions of law, has
been reviewed by us and is correct in all material respects.
We express no opinion with respect to the matters
described herein or in the Registration Statement other than those
expressly set forth herein. Our opinions are not binding on the
Internal Revenue Service (the "IRS") and the IRS may disagree with
the opinions contained herein. Although we believe that our opin-
ions would be sustained if challenged, there can be no assurance
that this will be the case. The opinions expressed herein are
based upon the law as it currently exists. Consequently, future
changes in the law may cause the federal income tax treatment of
the matters referred to herein to be materially and adversely dif-
ferent from that described above. In addition, any variation in
the facts from those set forth in the Registration Statement, the
representations contained in the Certificates or otherwise pro-
vided to us may affect the conclusions stated herein. Moreover,
the Company's qualification and taxation as a REIT depends upon
the Company's ability to meet, through actual annual operating
results, distribution levels, diversity of stock ownership and
various other qualification tests imposed under the Code, none of
which will be reviewed by us. Accordingly, no assurance can be
given that the actual results of the Company's operations for any
taxable year will satisfy the requirements for the Company to
maintain its qualification as a REIT.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to our
firm therein as counsel to the Company. Our consent to such ref-
erence does not constitute a consent under Section 7 of the Secu-
rities Act of 1933, as amended, as in consenting to such reference
we have not certified any part of the Registration Statement and
do not otherwise come within the categories of persons whose con-
sent is required under such Section 7 or under the rules and regu-
lations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Cahill Gordon & Reindel
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
Amendment No. 1 to the registration statement on Form S-3 (File
no. 333-03999) of our report dated March 15, 1996, on our
audits of the consolidated financial statements and the finan-
cial statement schedule of First Industrial Realty Trust, Inc.
and the combined financial statements of the Contributing Busi-
nesses which is included in the 1995 Annual Report on Form
10-K, and our report dated May 13, 1996 on our audits of the
combined historical statements of revenues and certain expenses
of First Highland Properties and the Other Acquisition Proper-
ties which is included in the Form 8-K/A No. 1 filed May 17,
1996. We also consent to the reference to our firm under the
caption "Experts."
/s/ Coopers & Lybrand L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
December 6, 1996