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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[x] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-12
First Industrial Realty Trust, Inc.
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(Name of Registrant as Specified in Its Charter)
First Industrial Realty Trust, Inc.
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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FIRST INDUSTRIAL REALTY TRUST, INC.
311 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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TO BE HELD ON MAY 16, 2001
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Stockholders
(the "Annual Meeting") of First Industrial Realty Trust, Inc. (the "Company")
will be held on Wednesday, May 16, 2001 at 9:00 a.m. at the Sears Tower
Conference Center, 233 South Wacker Drive, 33rd Floor, Lincoln Room, Chicago,
Illinois 60606 for the following purposes:
1. To elect three Class I directors of the Company to serve until the
2004 Annual Meeting of Stockholders and until their respective successors are
duly elected and qualified;
2. To approve the Company's 2001 Stock Incentive Plan;
3. To ratify the Board of Directors' selection of
PricewaterhouseCoopers LLP as the Company's independent auditors for the fiscal
year ending December 31, 2001; and
4. To consider and act upon any other matters that may properly be
brought before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting
on the date specified above, or on any date or dates to which, by original or
later adjournment, the Annual Meeting may be adjourned, or to which the Annual
Meeting may be postponed.
The Board of Directors has fixed the close of business on March 20,
2001 as the record date for the Annual Meeting. Only stockholders of record of
the Company's common stock, $.01 par value per share, at the close of business
on that date will be entitled to notice of and to vote at the Annual Meeting and
at any adjournments or postponements thereof.
You are requested to fill in and sign the enclosed Proxy Card, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
By Order of the Board of Directors
Chicago, Illinois Michael J. Havala
April 9, 2001 Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
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FIRST INDUSTRIAL REALTY TRUST, INC.
311 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
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PROXY STATEMENT
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FOR THE 2001 ANNUAL MEETING OF STOCKHOLDERS
to be held on May 16, 2001
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of First Industrial Realty Trust, Inc. (the
"Company") for use at the 2001 Annual Meeting of Stockholders of the Company to
be held on Wednesday, May 16, 2001, and at any adjournments or postponements
thereof (the "Annual Meeting"). At the Annual Meeting, stockholders will be
asked to vote on the election of three Class I directors of the Company, to
approve the 2001 Stock Incentive Plan, to ratify the Board of Directors'
selection of PricewaterhouseCoopers LLP as the Company's independent auditors
for the current fiscal year and to act on any other matters properly brought
before them.
This Proxy Statement and the accompanying Notice of Annual Meeting and
Proxy Card are first being sent to stockholders on or about April 9, 2001. The
Board of Directors has fixed the close of business on March 20, 2001 as the
record date for the Annual Meeting (the "Record Date"). Only stockholders of
record of the Company's common stock, par value $.01 per share (the "Common
Stock"), at the close of business on the Record Date will be entitled to notice
of and to vote at the Annual Meeting. As of the Record Date, there were
39,209,645 shares of Common Stock outstanding and entitled to vote at the Annual
Meeting. Holders of Common Stock outstanding as of the close of business on the
Record Date will be entitled to one vote for each share held by them on each
matter presented to the stockholders at the Annual Meeting.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY CARD RECEIVED PRIOR TO
THE VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL
MEETING AS DIRECTED ON THE PROXY CARD. IF A PROPERLY EXECUTED PROXY CARD IS
SUBMITTED AND NO INSTRUCTIONS ARE GIVEN, THE PERSONS DESIGNATED AS PROXY HOLDERS
ON THE PROXY CARD WILL VOTE (I) FOR THE ELECTION OF THE THREE NOMINEES FOR CLASS
I DIRECTORS OF THE COMPANY NAMED IN THIS PROXY STATEMENT, (II) FOR THE APPROVAL
OF THE 2001 STOCK INCENTIVE PLAN, (III) FOR THE RATIFICATION OF THE BOARD OF
DIRECTORS' SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE CURRENT FISCAL YEAR AND (IV) IN THEIR OWN DISCRETION WITH
RESPECT TO ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE STOCKHOLDERS AT
THE ANNUAL MEETING OR AT ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. IT IS NOT
ANTICIPATED THAT ANY MATTERS OTHER THAN THOSE SET FORTH IN THE PROXY STATEMENT
WILL BE PRESENTED AT THE ANNUAL MEETING.
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The presence, in person or by proxy, of holders of at least a majority
of the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. The affirmative vote of the holders of a majority of the votes cast
with a quorum present at the Annual Meeting is required for the election of
Class I directors, the approval of the 2001 Stock Incentive Plan and the
ratification of the selection of the Company's auditors. Abstentions and broker
non-votes will not be counted as votes cast and, accordingly, will have no
effect on the majority vote required, although they will be counted for quorum
purposes.
A stockholder of record may revoke a proxy at any time before it has
been exercised by filing a written revocation with the Secretary of the Company
at the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not a proxy has been previously
given, but the presence (without further action) of a stockholder at the Annual
Meeting will not constitute revocation of a previously given proxy.
The Company's 2000 Annual Report, including financial statements for
the fiscal year ended December 31, 2000, is being mailed to stockholders
concurrently with this Proxy Statement. The Annual Report, however, is not part
of the proxy solicitation material.
PROPOSAL I
ELECTION OF A CLASS OF DIRECTORS
Pursuant to the Articles of Amendment and Restatement of the Company,
as amended (the "Articles"), the maximum number of members allowed to serve on
the Company's Board of Directors is 12. The Board of Directors of the Company
currently consists of nine seats and is divided into three classes, with the
directors in each class serving for a term of three years and until their
successors are duly elected and qualified. The term of one class expires at each
Annual Meeting of Stockholders. Nine persons currently serve as directors of the
Company.
At the Annual Meeting, three directors will be elected to serve until
the 2004 Annual Meeting of Stockholders and until their successors are duly
elected and qualified. The Board of Directors has nominated Jay H. Shidler, John
L. Lesher and J. Steven Wilson to serve as Class I directors (the "Nominees").
Each of the Nominees is currently serving as a Class I director of the Company
and has consented to be named as a nominee in this Proxy Statement. The Board of
Directors anticipates that each of the Nominees will serve as a director if
elected. However, if any person nominated by the Board of Directors is unable to
accept election, the proxies will vote for the election of such other person or
persons as the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.
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INFORMATION REGARDING NOMINEES AND DIRECTORS
The following biographical descriptions set forth certain information
with respect to the three Nominees for election as Class I directors at the
Annual Meeting, the continuing directors whose terms expire at the Annual
Meetings of Stockholders in 2002 and 2003 and certain executive officers, based
on information furnished to the Company by such persons. The following
information is as of March 20, 2001, unless otherwise specified.
CLASS I NOMINEES FOR ELECTION AT 2001 ANNUAL MEETING - TERM TO EXPIRE IN 2004
JAY H. SHIDLER Director since 1993
Mr. Shidler, 54, has been Chairman of the Board of Directors since the
formation of the Company in August 1993. He is the founder and managing
partner of The Shidler Group. A nationally acknowledged expert in the
field of real estate investment and finance, Mr. Shidler has over 30
years of experience in real estate investment and has acquired and
managed properties involving several billion dollars in aggregate
value. Since 1970, Mr. Shidler has been directly involved in the
acquisition and management of over 1,000 properties in 40 states and
Canada. Mr. Shidler is the Chairman of the Board of Directors of
Corporate Office Properties Trust, Inc. (NYSE:OFC). Mr. Shidler is also
a founder and Chairman of the Board of Directors of CGA Group, Ltd., a
holding company whose subsidiary is a AAA-rated financial guarantor
based in Bermuda. He serves on the boards of directors of several
private companies and is active as a trustee of several charitable
organizations, including The Shidler Family Foundation. Mr. Shidler is
a member of the National Association of Real Estate Investment Trusts
("NAREIT").
JOHN L. LESHER Director since 1994
Mr. Lesher, 67, has been a director of the Company since June 1994. Mr.
Lesher is President of Jack Lesher and Associates, a management
consulting firm. Since March 1999, he has served as a Senior Advisor of
Resource Evaluation, Inc., a consulting firm specializing in working
capital management. Prior to March 1999, Mr. Lesher also served with
Resource Evaluation, Inc. as Chairman, from July 1997 to March 1999,
and as President, from 1994 to July 1997. He is a director of The Sound
Shore Fund and of Mondial Ltd. and is an Operating Partner of the
Bradford Equities Fund III. From 1990 to 1993, he was a Managing
Director of Korn/Ferry International, an executive recruiting
organization. From 1985 to 1989, he was Vice President of the New York
financial services practice of Cresap, McCormick & Paget, a management
consulting organization; President of Home Group Financial Services, a
subsidiary of Home Insurance Company; and President of Mars & Company,
an international strategic planning and consulting firm. Prior to 1985,
he served for 24 years in various capacities at Booz, Allen & Hamilton,
including from 1976 to 1985 as its President.
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J. STEVEN WILSON Director since 1994
Mr. Wilson, 57, has been a director of the Company since June 1994.
Since 1991, Mr. Wilson has been Chairman of the Board of Directors and
Chief Executive Officer of Wickes Inc., which is one of the largest
lumber yard chains in the United States. Since 1985, Mr. Wilson has
been President, Chief Executive Officer and Chairman of the Board of
Directors of Riverside Group, Inc., a holding company engaged in
traditional and e-commerce based supply and distribution of building
materials, as well as Internet services and web design. Since 1998, Mr.
Wilson has been President, Chief Executive Officer and Chairman of the
Board of Directors of Buildscape, Inc., an Internet based business to
business marketer of building materials.
CLASS II CONTINUING DIRECTORS - TERM TO EXPIRE IN 2002
MICHAEL W. BRENNAN Director since 1996
Mr. Brennan, 44, has been a director since March 1996. He has been
President and Chief Executive Officer of the Company since November
1998, prior to which time he served as Chief Operating Officer of the
Company from December 1995 to November 1998 and as Senior Vice
President--Asset Management of the Company from April 1994 to December
1995. He was a partner of The Shidler Group between 1988 and 1994 and
the President of the Brennan/Tomasz/Shidler Investment Corporation and
was in charge of asset management, leasing, project finance, accounting
and treasury functions for The Shidler Group's Chicago operations.
Between 1986 and 1988, Mr. Brennan served as The Shidler Group's
principal acquisition executive in Chicago. Prior to joining The
Shidler Group, Mr. Brennan was an investment specialist with CB
Commercial (now CB Richard Ellis, Inc.). His professional affiliations
include the Urban Land Institute ("ULI"), the National Association of
Industrial and Office Properties ("NAIOP"), NAREIT, the Council for
Logistic Management, the Young Presidents Organization and the Economic
Club of Chicago. Mr. Brennan's charitable affiliations include the
United Way, Founder's Circle of LaSalle Preparatory High School and the
Big Shoulders Fund.
MICHAEL G. DAMONE Director since 1994
Mr. Damone, 66, is Director of Strategic Planning for the Company and
has been a director of the Company since June 1994. Between 1973 and
1994, Mr. Damone was Chief Executive Officer of Damone/Andrew, a full
service real estate organization, which developed several million
square feet of industrial, warehouse, distribution and research and
development buildings. Prior to co-founding Damone/Andrew in 1973, Mr.
Damone was the executive vice president of a privately held, Michigan
based real estate development and construction company, where he was
responsible for the development of industrial/business parks. His
professional affiliations include the Society of Industrial and Office
Realtors ("SIOR"), the National Association of Realtors ("NAR"), the
Michigan Association of Realtors and the South Oakland County Board of
Realtors.
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KEVIN W. LYNCH Director since 1994
Mr. Lynch, 48, has been a director of the Company since June 1994. Mr.
Lynch is the co-founder and Principal of The Townsend Group
("Townsend"), an institutional real estate consulting firm, which
provides real estate consulting for pension funds and institutional
investors. In his capacity as Principal, Mr. Lynch is responsible for
strategic development and implementation of client real estate
portfolios. Mr. Lynch is also responsible for new product development.
Prior to founding Townsend, Mr. Lynch was associated with Stonehenge
Capital Corporation, where he was involved in the acquisition of
institutional real estate properties and the structuring of
institutional real estate transactions. From 1996 to 2000, Mr. Lynch
served on the Board of Directors of Lexington Corporate Properties. He
is a member of the National Real Estate Advisory Board for the Real
Estate Center at New York University, the National Council of Real
Estate Investment Fiduciaries, and the Pension Real Estate Association.
CLASS III CONTINUING DIRECTORS - TERM TO EXPIRE IN 2003
JOHN RAU Director since 1994
Mr. Rau, 52, has been a director of the Company since June 1994. Mr.
Rau is Chairman of the Chicago Title and Trust Company Foundation. From
January 1997 to March 2000, he was President and Chief Executive
Officer of Chicago Title Corporation, a New York Stock Exchange listed
company, and its subsidiaries Chicago Title and Trust Co., Chicago
Title Insurance Co., Ticor Title Insurance Co. and Security Union Title
Insurance Co. Mr. Rau is a director of LaSalle Bank, N.A., BorgWarner,
Inc., Nicor Inc., Divine Interventures, Inc. and YOUcentric Inc. Mr.
Rau also serves on the Advisory Boards of Financial Technology
Ventures, BlueStar Ventures, eReliable Commerce, Inc., Electronic
Knowledge Interchange and Incent, Inc. From January 1997 to March 2000,
he was a director of Chicago Title Corporation, Chicago Title and Trust
Co. and Chicago Title Insurance Co., as well as Chairman of the Board
of Directors of Ticor Title Insurance Co. and Security Union Title
Insurance Co. From July 1993 until November 1996, Mr. Rau was Dean of
the Indiana University School of Business. From 1991 to 1993, Mr. Rau
served as Chairman of the Illinois Economic Development Board and as
special advisor to Illinois Governor James Edgar. From 1990 to 1993, he
was Chairman of the Banking Research Center Board of Advisors and a
Visiting Scholar at Northwestern University's J.L. Kellogg Graduate
School of Management. During that time he also served as Special
Consultant to McKinsey & Company, a worldwide strategic consulting
firm. From 1989 to 1991, Mr. Rau served as President and Chief
Executive Officer of LaSalle National Bank. From 1979 to 1989, he was
associated with The Exchange National Bank, serving as President from
1983 to 1989, at which time The Exchange National Bank merged with
LaSalle National Bank. Prior to 1979, he was associated with First
National Bank of Chicago.
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ROBERT J. SLATER Director since 1994
Mr. Slater, 63, has been a director of the Company since June 1994.
Since 1985, Mr. Slater has been President of Jackson Consulting, Inc.,
a private consulting company specializing in advising basic
manufacturing and the distribution industries. He has retired as
President of Crane Co., a multinational manufacturing company.
W. ED TYLER Director since 2000
Mr. Tyler, 48, has been a director of the Company since March 2000.
From 1998 to 2000, Mr. Tyler served as Chief Executive Officer and a
director of Moore Corporation Limited, a provider of data capture,
information design, marketing services, digital communications and
print solutions that enable clients to improve their business processes
and to increase revenues. Prior to joining Moore Corporation, Mr. Tyler
served in various capacities at R.R. Donnelley & Sons Company, most
recently as Executive Vice President and Chief Technology Officer, from
1997 to 1998, and as Executive Vice President and Sector President of
Donnelley's Networked Services Sector, from 1995 to 1997. He is also a
director of the American Red Cross (Mid-America).
EXECUTIVE OFFICERS AND OTHER SENIOR MANAGEMENT
MICHAEL J. HAVALA
Mr. Havala, 41, has been Chief Financial Officer, Treasurer and
Secretary of the Company since April 1994. He joined The Shidler Group
in 1989, and was Chief Financial Officer for The Shidler Group's
midwest region with responsibility for accounting, finance and treasury
functions. With The Shidler Group, Mr. Havala structured joint
ventures, obtained and refinanced project financing, developed and
implemented management information systems and directed all financial
aspects of a several million square foot portfolio located in various
states throughout the Midwest. Prior to joining The Shidler Group, Mr.
Havala was a Senior Tax Consultant with Arthur Andersen & Company,
where he specialized in real estate, banking and corporate finance. Mr.
Havala is a certified public accountant. His professional affiliations
include NAREIT and the Illinois CPA Society.
JOHANNSON L. YAP
Mr. Yap, 38, has been the Chief Investment Officer of the Company since
February 1997. From April 1994 to February 1997, he served as Senior
Vice President--Acquisitions of the Company. During this time, he
oversaw and implemented the Company's investment strategy and
initiatives. In addition to participating in over one billion dollars
of investments, Mr. Yap has extensive experience in entity acquisitions
using the UPREIT structure. Prior to joining the Company, Mr. Yap
joined The Shidler Group in 1988 as an acquisitions associate, and
became Vice President in 1991, with responsibility for acquisitions,
property management, leasing, project financing, sales and
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construction management functions. Between 1988 and 1994, he
participated in the acquisition, underwriting and due diligence of
several hundred million dollars of commercial properties. His
professional affiliations include the Chicago Real Estate Council, ULI,
NAREIT, NAIOP and the Real Estate Investment Advisory Council.
DAVID P. DRAFT
Mr. Draft, 49, has been Executive Vice President - Operations of the
Company since January 2001, prior to which time he served as Managing
Director of the Company's Central region from December 1998 to January
2001 and as Senior Regional Director of the Company's Michigan and
Northern Ohio regions from March 1996 to December 1998. He oversees
operations for the Company's entire portfolio. He has 25 years
experience in real estate brokerage, sales, leasing and asset
management. Between 1994 and March 1996, Mr. Draft was Co-Founder and
Principal of Draft & Gantos Properties, L.L.C., where he was
responsible for real estate management, construction and development.
From 1990 to 1994, Mr. Draft was Director of Development and Operations
for Robert Grooters Development Company where he was responsible for
land acquisitions, development project planning, financing and
construction of industrial property. From 1977 to 1990, he was with
First Real Estate, Inc. serving in the capacity of chief operating
officer. Mr. Draft is a licensed real estate broker and a member of NAR
and the Michigan Association of Realtors.
ARNE M. COOK
Mr. Cook, 40, has been Managing Director of the Central region since
January 2001, prior to which time he served as Senior Regional Director
of the Company's Minnesota region from January 2000 to December 2000,
as Regional Director of the Company's Minnesota region from April 1998
to December 1999 and as Regional Development Manager from April 1997 to
March 1998. He oversees acquisitions, development, construction, asset
management and lease negotiations for the several million square foot
regional portfolio. He has over 15 years of experience in the office
and industrial real estate industry. From January 1995 to March 1997,
Mr. Cook served as Senior Director of Real Estate Development with Opus
Northwest LLC, a member of the Opus Group of Companies, where he was
responsible for the development, sales, financing and asset management
of office and industrial properties throughout the Midwest. His
professional affiliations include NAIOP, having served as President of
the Minnesota Chapter during 2000, NAREIT, having served on its
National Board of Directors and as President of the Twin Cities
Chapter, ULI and the University of Wisconsin Real Estate Alumni
Association.
J. CRAIG COSGROVE
Mr. Cosgrove, 39, has been Managing Director of the Company's West/Gulf
region since December 1999, prior to which time he served as a Senior
Regional Director of the Company's mid-Atlantic and southeast regions
from December 1997 to December 1999 and as a Regional Director of the
Company's central Pennsylvania region from June of 1994 to December
1997. Mr. Cosgrove joined the Company in 1994 as a Regional Director
upon the Company's acquisition of Rouse &
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Associates through an UPREIT transaction. From 1991 to 1994, Mr.
Cosgrove was an asset manager with Rouse & Associates where he was
responsible for managing and leasing Rouse & Associates' industrial
real estate portfolio. Mr. Cosgrove's professional affiliations include
the Building Owners and Managers Association and NAIOP. He is also
chairperson for Project Mercy's Advisory Board.
TIMOTHY E. GUDIM
Mr. Gudim, 41, has been Managing Director of the Company's California
region since December 1999, prior to which time he served as Managing
Director of the Company's West/Gulf region from December 1998 to
December 1999; as a Senior Regional Director of the Company's West
region from June 1998 to December 1998; and as a Regional Director for
Colorado from November 1997 to June 1998. He oversees acquisitions,
development, build-to-suits, asset management and lease negotiations
for the several million square foot regional portfolio. Mr. Gudim has
19 years experience in the industrial real estate field. Between 1991
and October 1997, he was Vice President and a Principal of Pacifica
Holding Company, a full service real estate company operating in
Denver. Mr. Gudim's professional affiliations include NAIOP, SIOR and
the Association of Industrial Realtors.
ROSS KIRK
Mr. Kirk, 44, has been Managing Director of the Company's east region
since December 1999, prior to which time he served as a Regional
Director of the Company's Tampa region from December 1997. He oversees
acquisitions, development, construction, asset management and lease
negotiations for the several million square foot regional portfolio.
Mr. Kirk has over twenty years of real estate experience. Between July
1992 and December 1997, he was President of Thompson-Kirk Properties, a
full-service real estate firm in Tampa. Mr. Kirk is a licensed general
contractor in the state of Florida, a licensed Florida real estate
broker and a licensed Florida mortgage broker. He holds memberships in
NAIOP, Tampa's Real Estate Investment Council and the Council of
Logistics Management.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company is currently managed by a nine member Board of Directors, a
majority of whom are independent of both The Shidler Group and the Company's
management. The current independent directors are Messrs. Lesher, Lynch, Rau,
Slater, Tyler and Wilson. Pursuant to the terms of the Company's Articles, the
directors are divided into three classes. Class I directors hold office for a
term expiring at this Annual Meeting. Class II directors hold office for a term
expiring at the Annual Meeting of Stockholders to be held in 2002. Class III
directors hold office for a term expiring at the Annual Meeting of Stockholders
to be held in 2003. Each director will hold office for the term to which he is
elected and until his successor is duly elected and qualified. At each Annual
Meeting of Stockholders, the successors to the class of directors whose terms
expire at that meeting will be elected to hold office for a term continuing
until the Annual Meeting of
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Stockholders held in the third year following the year of their election and the
election and qualification of their successors.
The Board of Directors held eight meetings during the fiscal year of
2000. Each of the directors serving in 2000 attended at least 75% of the total
number of meetings of the Board of Directors and of the respective committees of
the Board of Directors of which he was a member.
The Board of Directors has appointed an Audit Committee, a Compensation
Committee, an Investment Committee, a Nominating Committee and a Special
Committee.
Audit Committee. The Audit Committee, which consists of Messrs. Rau,
Lynch and Wilson, makes recommendations concerning the engagement of independent
public accountants, reviews with the independent public accountants the audit
plan, audit scope, and the results of the annual audit engagement, approves
audit services provided by the independent public accountants, reviews the
independence of the independent public accountants, considers the range of audit
and non-audit fees and reviews the adequacy of the Company's internal accounting
controls. In the judgment of the Company's Board of Directors, each member of
the Audit Committee is independent as required by the listing standards of The
New York Stock Exchange. The Audit Committee met twice in 2000. In addition, the
Chairman of the Audit Committee holds on a quarterly basis with the Company's
independent public accountants a pre-earnings release conference and another
conference to discuss the review of quarterly information prior to its issuance.
On May 17, 2000, the Board of Directors, on the unanimous recommendation of the
Audit Committee, approved and adopted the Company's Audit Committee Charter, a
copy of which is attached hereto as Appendix A.
Compensation Committee. The Compensation Committee, which consists of
Messrs. Slater and Lesher, makes recommendations and exercises all powers of the
Board of Directors in connection with certain compensation matters, including
incentive compensation and benefit plans. The Compensation Committee
administers, and has authority to grant awards under, the First Industrial
Realty Trust, Inc. 1994 Stock Incentive Plan (the "1994 Stock Plan"), the First
Industrial Realty Trust, Inc. 1997 Stock Incentive Plan (the "1997 Stock Plan"),
the First Industrial Realty Trust, Inc. Deferred Income Plan (the "Deferred
Income Plan") and, subject to stockholder approval, the First Industrial Realty
Trust, Inc. 2001 Stock Incentive Plan. The Compensation Committee met two times
in 2000.
Investment Committee. The Investment Committee, which consists of
Messrs. Shidler, Brennan and Damone, provides oversight and discipline to the
acquisition and new investment process. New investment opportunities are
described in written reports based on detailed research and analyses in a
standardized format applying appropriate underwriting criteria. The Investment
Committee meets with the Company's acquisition personnel, reviews each
submission thoroughly and approves acquisitions and development projects having
a total investment of less than $30 million. The Investment Committee makes a
formal recommendation to the Board of Directors for all acquisitions and
development projects with a total investment in excess of $30 million. The
Investment Committee met 37 times during 2000.
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Nominating Committee. The Nominating Committee proposes individuals for
election as directors at the Annual Meeting of Stockholders of the Company and
in connection with any vacancy that may develop on the Board of Directors. The
Board of Directors, in turn, as a whole by a majority vote either approves all
of the nominations so proposed by the Nominating Committee or rejects all of the
nominations in whole, but not in part. In the event that the Board of Directors
as a whole by a majority vote rejects the proposed nominations, the Nominating
Committee develops a new proposal. The Nominating Committee will consider
nominees recommended by stockholders of the Company. Such recommendations shall
be submitted in writing to the Secretary of the Company. The membership of the
Nominating Committee consists of a total of four directors which includes (i)
the Chairman of the Board of the Company, (ii) the President of the Company, and
(iii) two other directors selected by the entire Board of Directors of the
Company from among those directors who are not officers of the Company and whose
term is not expiring in the calendar year that the Nominating Committee is
making its proposal. The Nominating Committee that made the proposals approved
by the Board of Directors and set forth in this Proxy Statement consisted of
Messrs. Shidler, Brennan, Slater and Tyler. The Nominating Committee met once in
March 2001 to determine its nominations for this Proxy Statement.
Special Committee. The Special Committee consists of Messrs. Shidler,
Brennan and Rau. The Special Committee is authorized, within limits specified by
the Board of Directors, to approve the terms under which the Company issues
common stock, preferred stock or depository shares representing fractional
interests in preferred stock, or which the Company or any of the Company's
subsidiaries, including First Industrial, L.P., issues debt. The Special
Committee met two times during 2000.
DIRECTOR COMPENSATION
Directors of the Company who are also employees receive no additional
compensation for their services as a director. Non-employee directors of the
Company receive an annual director's fee equivalent in value to $20,000. At
least 50% of the value of such fee must be taken in the form of restricted
stock. Each non-employee director also receives $1,000 for each regular
quarterly meeting of the Board of Directors attended, $1,000 for each special
meeting of the Board attended, $1,000 for each substantive special telephonic
Board meeting participated in and $1,000 for each committee meeting attended.
Following the Annual Meeting of Stockholders held in 2000, each of the Company's
non-employee directors received options under the 1997 Stock Plan to purchase
10,000 shares at the market price of the shares on the date of grant. Such
options granted to non-employee directors vest one year after the date of grant.
Following this Annual Meeting the Company intends to grant 10,000 options under
the 1997 Stock Plan to each of the Company's non-employee directors. Such
options will be granted at the market price of the shares on the date of grant
and will vest one year after the date of grant.
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EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation, including
cash compensation and restricted stock and option awards, paid by the Company
with respect to the fiscal years ended December 31, 1998, 1999 and 2000 to the
Company's Chief Executive Officer and the four other most highly compensated
executive officers of the Company, including the Company's former Chief
Operating Officer (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long Term
Compensation
------------
Restricted Shares All Other
Name and Annual Stock Underlying Compensation
Principal Position Year Salary($) Bonus($)(1) Awards($)(2) Options(#) ($)(6)
- ------------------ ---- --------- ----------- ------------ ---------- ------------
Michael W. Brennan 2000 $ 375,000 $ 600,598 $ 281,160 75,000(5) $ 256,664
President and 1999 320,000 0 875,044 60,000(4) 181,964
Chief Executive Officer 1998 276,875 345,000 163,313 85,000(3) 90,054
Michael J. Havala 2000 $ 265,000 $ 410,141 $ 207,675 52,000(5) $ 186,209
Chief Financial Officer, 1999 247,500 160,000 420,744 45,000(4) 119,856
Treasurer and Secretary 1998 225,000 275,000 138,188 45,000(3) 71,434
Johannson L. Yap 2000 $ 235,000 $ 456,096 $ 207,675 52,000(5) $ 161,690
Chief Investment Officer 1999 214,000 0 776,440 43,000(4) 97,592
1998 200,000 300,000 125,625 40,000(3) 58,502
David P. Draft 2000 $ 210,000 $ 403,200 $ 130,196 34,200(5) $ 87,825
Executive Vice 1999 200,000 80,000 493,019 29,200(4) 61,207
President - Operations 1998 158,241 250,000 75,375 25,000(3) 38,276
Gary H. Heigl 2000 $ 290,000 $ 307,798 $ 0 0(5) $ 719,554
Former Chief 1999 270,000 180,000 472,369 52,000(4) 105,936
Operating Officer 1998 219,167 320,000 150,750 69,000(3) 58,502
- ---------------------------
(1) Amounts for 1998 represent bonuses awarded in February 1999 based on
performance for the year ended December 31, 1998. Amounts for 1999
represent bonuses awarded in February 2000 based on performance for the
year ended December 31, 1999. Amounts for 2000 represent bonuses
awarded in February 2001 based on performance for the year ended
December 31, 2000 and amounts paid to Messrs. Brennan, Havala, Yap and
Heigl in consideration for the purchase all of such executives stock in
FR Development Services, Inc. in connection with that entity's
conversion to a wholly-owned taxable REIT subsidiary. See "Certain
Relationships and Transactions."
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(2) Amounts for 1998 represent restricted Common Stock awarded in March
1999. Amounts for 1999 represent restricted Common Stock awarded in
February 2000. Amounts for 2000 represent restricted Common Stock
awarded in March 2001. The dollar amount shown is approximately equal
to the product of the number of shares of restricted Common Stock
granted multiplied by the closing price of the Common Stock as reported
by the New York Stock Exchange on the date of grant ($25.125 on March
4, 1999 for 1998 amounts; $25.8125 on February 15, 2000 for 1999
amounts; $31.95 on March 16, 2001 for 2000 amounts). This valuation
does not take into account any diminution in value that results from
the restrictions applicable to such Common Stock. From and after the
date of issuance, holders of the restricted Common Stock are entitled
to vote such Common Stock and receive dividends at the same rate
applicable to unrestricted shares of Common Stock. The total number of
shares, and the value, of restricted Common Stock held by each Named
Executive Officer as of December 31, 2000 (based on the closing price
per share of Common Stock as reported on the New York Stock Exchange on
December 29, 2000 ($34.00)) is as follows: Mr. Brennan - 75,428 shares
($2,564,552), Mr. Havala - 49,908 shares ($1,696,872), Mr. Yap - 53,675
shares ($1,824,950), Mr. Draft - 26,600 shares ($904,400) and Mr. Heigl
- 40,893 shares ($1,390,362). An aggregate of 5,211 shares of
restricted Common Stock awarded to Messrs. Brennan, Havala and Yap
vested in January 1999 and restrictions with respect to such shares
have been removed. Of the 99,380 shares of restricted Common Stock
awarded in February 2000 to the Named Executive Officers, other than
Mr. Heigl, one-third vested in January 2001, as to which restrictions
have been removed, and one-third will vest in each of January 2002 and
January 2003. Of the 25,875 shares of restricted Common Stock awarded
in March 2001 to the Named Executive Officers, other than Mr. Heigl,
one-third will vest in each of January 2002, January 2003 and January
2004. As of January 2001, all of the shares of restricted Common Stock
held by Mr. Heigl have vested and restrictions with respect to such
shares have been removed pursuant to the terms of his separation
agreement.
(3) Amounts for 1998 represent an aggregate of 224,000 options granted to
the Named Executive Officers under the 1997 Stock Plan on March 4, 1999
at an exercise price equal to $25.125 per share. Such options vested in
two equal installments on the six-month and first year anniversary of
the date of grant. Amounts for 1998 also represent an aggregate of
40,000 options granted to Messrs. Brennan and Heigl under the 1997
Stock Plan on December 3, 1998 at an exercise price equal to $24.00 per
share and which vested in two equal installments on the six-month and
first anniversary of the date of grant.
(4) Amounts for 1999 represent an aggregate of 229,200 options granted to
the Named Executive Officers under the 1997 Stock Plan on August 28,
2000 at an exercise price equal to $27.25 per share. Such options,
other than Mr. Heigl's, vest in three equal installments on the first,
second and third year anniversary of January 25, 2000. Of Mr. Heigl's
52,000 options, 17,333 vested on January 25, 2001 and the remainder
have been cancelled pursuant to the terms of his separation agreement.
(5) Amounts for 2000 represent an aggregate of 213,200 options granted to
the Named Executive Officers, other than Mr. Heigl, under the 1997
Stock Plan on January 23, 2001 at an exercise price equal to $33.125
per share. Such options vest in three equal installments on the first,
second and third year anniversary of the date of grant.
(6) Includes premiums paid by the Company on term life insurance and long
term disability insurance ($19,993 in 2000; $7,434 in 1999; $7,434 in
1998) for the benefit of certain of the Named Executive Officers. Also
includes car allowances ($67,200 in 2000; $32,088 in 1999; $21,002 in
1998) and personal financial planning allowances ($8,000 in 2000;
$9,000 in 1999; $0 in 1998) for certain of the Named Executive
Officers. Also includes a cash severance payment to Mr. Heigl of
$535,000 pursuant to the terms of his separation agreement. Also
includes benefits accrued on units awarded to the Named Executive
Officers under the Deferred Income Plan. Generally, amounts accrued
under the Deferred Income Plan vest in equal quarterly installments
over three years and are paid out (in cash or Common Stock at the
discretion of the Compensation Committee) in three annual installments,
commencing on the January 31st after the date of grant. A portion of
the amounts accrued under the Deferred Income Plan to each Named
Executive Officer in 1998 were used to acquire Common Stock having an
aggregate value at the time of acquisition to each Named Executive
Officer as follows:
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Mr. Brennan - $43,591, Mr. Havala - $34,491, Mr. Yap - $28,936, Mr.
Draft - $22,274, and Mr. Heigl - $28,936. The remainder of the amounts
accrued under the Deferred Income Plan to each Named Executive Officer
in 1998 were paid in cash. A portion of the amounts accrued under the
Deferred Income Plan to Mr. Brennan and Mr. Draft in 1999 were used to
acquire Common Stock having a value at the time of acquisition of
$77,212 and $30,100, respectively, with the remainder of such amounts
paid in cash. The amounts accrued under the Deferred Income Plan to
each of the other Named Executive Officers in 1999 were paid in cash. A
portion of the amounts accrued under the Deferred Income Plan to
Messrs. Yap and Draft in 2000 was used to acquire Common Stock having a
value at the time of acquisition of $71,754 and $39,111, respectively,
with the remainder of such amounts paid in cash. The amounts accrued
under the Deferred Income Plan to each of the other Named Executive
Officers in 2000 were paid in cash.
OPTION GRANTS AND EXERCISES
Option Grants. The following table sets forth the options granted in
the fiscal year ended December 31, 2000 to the Named Executive Officers.
OPTION GRANTS IN 2000
Individual Grants
------------------------------------------------------------------
Percent of
Number of Total Options Market Price
Options Granted to Exercise or on Grant Total Present
Granted Employees in Base Price Date Expiration Value as of
Name (#)(1) 2000 (%)(2) ($/sh) ($/sh) Date(s) Grant Date (4)
- ---- ------ ----------- ------ ------ ------- --------------
Michael W. Brennan 60,000 6.4 $ 27.25 $ 28.875 (3) $ 175,200
Michael J. Havala 45,000 4.8 27.25 28.875 (3) 131,400
Johannson L. Yap 43,000 4.6 27.25 28.875 (3) 125,560
David P. Draft 29,200 3.1 27.25 28.875 (3) 85,264
Gary H. Heigl 52,000 5.5 27.25 28.875 (3) 151,184
- ---------------------------
(1) Represents an aggregate of 229,200 granted under the 1997 Stock Plan on
August 28, 2000 to the Named Executive Officers. The options, other
than Mr. Heigl's, vest in three equal installments on the first, second
and third year anniversary of January 25, 2000. Of Mr. Heigl's 52,000
options, 17,333 vested on January 25, 2001 and the remainder have been
cancelled.
(2) Percentages do not take into account 70,000 options in the aggregate
granted to non-employee directors of the Company.
(3) All of the options, other than Mr. Heigl's, expire August 28, 2010. Of
Mr. Heigl's 52,000 options, 17,333 expire April 30, 2001 and the
remainder have been cancelled.
(4) Based on the Black-Scholes option pricing model adapted for use in
valuing stock options. The actual value, if any, that the Named
Executive Officer may receive would depend on the excess of the stock
price at the time of exercise over the exercise or base price on the
date the option is exercised. There is no assurance that the value
realized by the Named Executive Officer would be at or near the value
estimated by the Black-Scholes model. The estimated values under the
model are based on certain assumptions, such as interest rates, stock
price volatility and future dividend yields.
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Option Exercises and Year-End Holdings. Certain of the Named Executive
Officers exercised an aggregate of 45,000 options in 2000. In addition, during
such period an aggregate of 87,000 vested options were converted into restricted
Common Stock by certain of the Named Executive Officers. The following table
sets forth information with respect to options exercised during, and the value
of options held at the end of, 2000 by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2000
AND FISCAL YEAR-END 2000 OPTION VALUES
Number of Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options at
Shares at December 31, 2000(#) December 31, 2000(3)
Acquired on Value ------------------------------- ---------------------------
Name Exercise(#)(1) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- ----------- ----------- ------------- ----------- -------------
Michael W. Brennan 0 0 220,000 60,000 $1,492,300 $ 405,000
Michael J. Havala 30,000 $256,432 110,000 45,000 $ 651,400 $ 303,750
Johannson L. Yap 0 0 132,500 43,000 $ 856,325 $ 290,250
David P. Draft 15,000 $ 58,125 55,000 29,200 $ 232,850 $ 197,100
Gary H. Heigl 0 0 144,000 52,000(2) $ 812,380 $ 351,000(2)
- ---------------------------
(1) Represents shares with respect to which options were exercised in 2000
by the Named Executive Officers. Does not include conversions of vested
options into restricted stock. During 2000, Messrs. Brennan, Havala,
Yap and Heigl converted 10,000, 20,000, 30,000 and 27,000 vested
options, respectively, into restricted Common Stock. As a result of
such conversion, Messrs. Brennan, Havala, Yap and Heigl received 1,903,
3,363, 5,044 and 4,593 restricted shares, respectively.
(2) Of such options, 34,667 were cancelled in January 2001. Dollar values
do not reflect such cancellation.
(3) Based on the closing price per share of Common Stock as reported on the
New York Stock Exchange on December 29, 2000 ($34.00).
EMPLOYMENT AGREEMENTS
In February 1997, the Company entered into a written employment
agreement with Michael W. Brennan, who became the Company's President and Chief
Executive Officer in November 1998. The agreement provides for an initial annual
minimum base salary of $195,000, which may be increased at the discretion of the
Compensation Committee, and an annual bonus at the discretion of the
Compensation Committee. The agreement provides for an initial term of two years
and subsequent two-year periods unless otherwise terminated; provided, however,
that the agreement will expire on Mr. Brennan's 70th birthday. Upon certain
changes in control of the Company or a termination without cause, Mr. Brennan is
entitled to severance in an amount equal to two times his annual salary, plus
two times his average bonus over the prior two years. In addition, upon
termination, Mr. Brennan's options and awards under the 1994 Stock Plan, the
1997 Stock Plan and Deferred Income Plan will fully vest and his other benefits
will continue for a period of two years. Severance amounts payable to Mr.
Brennan upon termination will be reduced if such amounts become payable after
Mr. Brennan's 67th birthday. Mr. Brennan has agreed to a two-year covenant not
to compete after termination.
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In July 2000, the Company entered into written employment agreements
with Michael J. Havala, the Company's Chief Financial Officer, Secretary and
Treasurer, and with Johannson L. Yap, the Company's Chief Investment Officer.
The agreements provide for an initial annual minimum base salary of $265,000 for
Mr. Havala and $235,000 for Mr. Yap, which amounts may be increased at the
recommendation of the Chief Executive Officer, with the approval of the
Compensation Committee, and for annual bonuses as recommended by the Chief
Executive Officer and approved by the Compensation Committee. Each of the
agreements provides for an initial term of two years and subsequent two-year
periods unless otherwise terminated; provided, however, that the agreements will
expire on Mr. Havala's and Mr. Yap's respective 70th birthdays. Upon their
termination without cause, through constructive discharge, or upon a
work-related disability, each of Mr. Havala and Mr. Yap is entitled to severance
in an amount equal to three times his annual salary, plus 75% of his maximum
bonus potential for the then-current year. Upon certain changes in control of
the Company, each of Mr. Havala and Mr. Yap is entitled to severance in an
amount equal to two times his annual salary, plus 100% of his maximum cash bonus
for the then-current year, plus two times the product of his annual salary and
an average of his actual cash bonus percentage for the prior two years and his
maximum cash bonus percentage for the then-current year. In addition, upon their
termination, unless they are terminated for cause, each of Mr. Havala's and Mr.
Yap's options and awards under the 1994 Stock Plan, the 1997 Stock Plan and
Deferred Income Plan, and any subsequent similar plan, including the 2001 Stock
Incentive Plan if it is approved by the Company's stockholders, will fully vest
and his health insurance benefits will continue for a period of three years.
Severance amounts payable to Mr. Havala and Mr. Yap upon their termination will
be reduced if such amounts become payable after their respective 67th birthdays.
Each of Mr. Havala and Mr. Yap has agreed to a one-year covenant not to compete
after his termination, except in connection with certain changes in control of
the Company. In connection with certain changes in control of the Company, each
of Mr. Havala and Mr. Yap has agreed to a six-month covenant not to compete.
In January 2001, Gary H. Heigl resigned his position as Chief Operating
Officer of the Company. Pursuant to the terms of a separation agreement, Mr.
Heigl received a cash severance payment of $535,000 and a cash payment of
$250,000 in consideration of a covenant not to compete. The expiration date for
Mr. Heigl's vested stock options was accelerated to April 30, 2001, all
non-vested options were cancelled and all of Mr. Heigl's restricted stock became
fully vested. In addition, Mr. Heigl received a cash payment of $163,582,
representing the amount accrued and owing to him under the Deferred Income Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Slater and Lesher.
Neither of them has served as an officer of the Company and Mr. Lesher has no
other business relationship or affiliation with the Company, except his service
as a director. From time to time, Mr. Slater provides consulting services to the
Company through his private consulting firm, Jackson Consulting, Inc. ("Jackson
Consulting").
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STOCK PERFORMANCE GRAPH
The incorporation by reference of this Proxy Statement into any
document filed with the SEC by the Company shall not be deemed to include the
following performance graph unless such graph is specifically stated to be
incorporated by reference into such document.
The following graph provides a comparison of the cumulative total
stockholder return among the Company, the NAREIT Equity REIT Total Return Index
(the "NAREIT Index"), an industry index which, as of December 31, 2000, was
comprised of 158 tax-qualified equity REITs (including the Company) and the
Standard & Poor's 500 Index ("S&P 500"). The comparison is for the period from
December 31, 1995 to December 31, 2000 and assumes the reinvestment of any
dividends. The closing price for the Company's Common Stock quoted on the New
York Stock Exchange at the close of business on December 29, 1995 was $22.50 per
share. The NAREIT Index includes REITs with 75% or more of their gross invested
book value of assets invested directly or indirectly in the equity ownership of
real estate. Upon written request, the Company will provide stockholders with a
list of the REITs included in the NAREIT Index. The historical information set
forth below is not necessarily indicative of future performance. The following
graph was prepared at the Company's request by Research Data Group, Inc., San
Francisco, California.
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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
[LEGEND]
- --------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------------------------
12/95 12/96 12/97 12/98 12/99 12/00
- --------------------------------------------------------------------------------
FIRST INDUSTRIAL REALTY TRUST, INC. $100 $146 $185 $148 $166 $223
NAREIT EQUITY 100 135 163 134 128 162
S&P 500 100 123 164 211 255 232
- --------------------------------------------------------------------------------
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REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is composed of two
of the Company's independent outside directors, Messrs. Slater and Lesher. The
Compensation Committee is responsible for administering the policies that govern
the Company's executive compensation.
Objectives of Executive Compensation. The Compensation Committee has
designed its compensation policy to provide the proper incentives to management
to maximize the Company's performance in order to serve the best interests of
its stockholders. As a result, the Compensation Committee intends to focus on
incentive awards, such as stock option grants, restricted stock awards and
deferred income awards (as described below), as opposed to large salary
increases, to emphasize performance related incentive compensation. The
Compensation Committee currently grants stock option and other incentive awards
under the 1997 Stock Plan and the Deferred Income Plan, and, subject to
stockholder approval, will also grant such awards under the 2001 Stock Incentive
Plan.
The bonuses and incentive awards awarded for 2000 performance to the
Chief Executive Officer and the other executive officers were based on the
achievement of the Company's business plan, primary components of which were the
Company's Funds from Operations, an industry recognized measure of a REIT's
performance (commonly referred to as "FFO"), and specific performance
objectives, such as individual performance related to same property net
operating income growth and investment goals.
In 1999, an outside third-party consultant was hired to assist the
Compensation Committee in reviewing its compensation objectives and conducting a
market compensation analysis. Among other things, the consultant compared the
Company's executive officers' base salaries, cash and equity bonus awards and
level of stock ownership in the Company with those of other comparable
companies. In general, the consultant affirmed the Compensation Committee's
objectives and found the Company's executive officers' compensation to be
consistent with market. The consultant encouraged the Compensation Committee to
continue its efforts to increase management's level of stock ownership in the
Company and made recommendations toward that effort, which are reflected in 2000
compensation and are expected to be reflected in future compensation.
The Company maintains the philosophy that compensation of its executive
officers and others should be directly and materially linked to operating
performance. To achieve this linkage, executive compensation is weighted towards
bonuses paid and incentive awards granted on the basis of the Company's
performance. Thus, while annual salary increases are based on personal
performance of the executive officers and general economic conditions, annual
bonuses and incentive award grants are directly tied to the Company's actual
economic performance during the applicable fiscal year.
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21
Stock options, together with other incentive awards (e.g., restricted
stock), are granted to the executives under the provisions of the 1997 Stock
Plan and, subject to stockholder approval, will also be granted under the 2001
Stock Incentive Plan in the future. In addition, incentive awards are granted
under the Deferred Income Plan. Such incentive awards are granted to provide
incentive to improve stockholder value over the long-term and to encourage and
facilitate executive stock ownership. Stock options generally are granted at the
market price of the Common Stock at the date of grant to ensure that executives
can only be rewarded for appreciation in the price of the Common Stock when the
Company's stockholders are similarly benefited. The Compensation Committee
determines those executives who will receive incentive award grants and the size
of such awards.
Compensation Committee Procedures. The Compensation Committee will
annually evaluate the personal performance of the Chief Executive Officer and
the other executive officers of the Company, as well as the Company's
performance. In setting the salary levels for compensation, the Compensation
Committee compares the total annual compensation and stock ownership of the
Chief Executive Officer and the other executive officers to the compensation of
executive officers of other publicly held REITs. Personal performance can
include such qualitative factors as organizational and management development
exhibited from year to year. Generally the Compensation Committee will meet
prior to the beginning of each fiscal year to establish base salary and
performance targets for the upcoming year and will meet again at the beginning
of each year to review performance and approve incentive awards for the
preceding fiscal year.
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits
the deductibility on the Company's tax return of compensation over $1 million to
any of the Named Executive Officers unless, in general, the compensation is paid
pursuant to a plan which is performance-related, non-discretionary and has been
approved by the Company's stockholders. The Compensation Committee's policy with
respect to Section 162(m) is to make reasonable efforts to ensure that
compensation is deductible to the extent permitted while simultaneously
providing Company executives with appropriate rewards for their performance.
The Compensation Committee believes that it has designed and
implemented a compensation structure that provides appropriate awards and
incentives for the Company's executive officers as they work to sustain and
improve the Company's overall performance.
Submitted by the Compensation Committee:
Robert J. Slater John L. Lesher
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REPORT OF THE AUDIT COMMITTEE
Pursuant to a meeting of the Audit Committee on March 8, 2001, the
Audit Committee reports that it has: (i) reviewed and discussed the Company's
audited financial statements with management; (ii) discussed with the
independent auditors the matters (such as the quality of the Company's
accounting principles and internal controls) required to be discussed by
Statement on Auditing Standards No. 61; and (iii) received written confirmation
from PricewaterhouseCoopers LLP that it is independent and written disclosures
regarding such independence as required by Independence Standards Board No. 1,
and discussed with the auditors the auditors' independence. Based on the review
and discussions referred to in items (i) through (iii) above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's annual report for the Company's fiscal
year ended December 31, 2000.
Submitted by the Audit Committee:
John Rau Kevin Lynch J. Steven Wilson
Chairman
CERTAIN RELATIONSHIPS AND TRANSACTIONS
From time to time, Robert J. Slater, a director of the Company,
provides consulting services to the Company through his private consulting firm,
Jackson Consulting. In 2000, the Company paid Jackson Consulting approximately
$4,736 in connection with Mr. Slater's consulting services.
On January 28, 2000, the Company purchased two industrial properties
from two limited partnerships, Roosevelt Glen Corporate Center ("Roosevelt") and
Hartford Center Investment Company ("Hartford"), for a total consideration of
approximately $8.36 million. Tomasz/Shidler Investment Corporation ("TSIC"), a
corporation in which Jay H. Shidler, Chairman of the Board of Directors of the
Company, is an officer and shareholder, has a 11.638% general partner interest
in Roosevelt and a 12.39% general partner interest in Hartford. Waikiki
Beachcomber Investment Company, a general partnership in which Mr. Shidler is a
partner, has a 1.397% limited partner interest in Roosevelt. Also on January 28,
2000, the Company purchased one industrial property from Eastgate Shopping
Center Investment Co. ("Eastgate"), a limited partnership, for a total
consideration of approximately $2.52 million. TSIC has a 12.972% general partner
interest in Eastgate. Management of the Company believes the terms of these
transactions were as favorable to the Company as could be obtained in an arm's
length transaction.
In January and February 2001, FR Development Services, Inc. ("FRDS")
purchased all of the voting and non-voting shares (a total of 25,790 shares) of
FRDS held by Messrs. Brennan, Havala, Yap and Heigl for approximately $1,262,633
in the aggregate, in connection with FRDS' election to become a
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23
taxable REIT subsidiary of the Company. As a result of the transaction, First
Industrial, L.P., the operating subsidiary of the Company, became the sole
stockholder of FRDS. At the time of the transaction, Messrs. Brennan, Havala,
Yap and Heigl had equity interests in FRDS of approximately 1.06%, 0.6%, 0.6%
and 0.5%, respectively. The amounts paid to Messrs. Brennan, Havala, Yap and
Heigl have been included in the total Bonus amounts in the Summary
Compensation Table.
The Company often engages in transactions for which CB Richard Ellis,
Inc. ("CB Richard Ellis") acts as a broker. The brother of Michael W. Brennan,
the President and Chief Executive Officer and a director of the Company, is an
employee of CB Richard Ellis and in 2000, in one transaction in which the
Company sold property for approximately $2.2 million, received $4,821 as a
portion of the brokerage commission paid by the Company to CB Richard Ellis in
connection with such transaction, and, in another transaction in which the
Company purchased property for approximately $52.6 million, received $59,264 as
a portion of the brokerage commission paid by the seller to CB Richard Ellis in
connection with such transaction. Management of the Company believes the terms
of brokerage services provided by CB Richard Ellis in such transactions were as
favorable to the Company as could be obtained in an arm's length transaction.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (as amended, the
"Exchange Act") requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange.
Officers, directors and "greater than ten-percent" stockholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms so
filed.
Based solely on review of the copies of such forms furnished to the
Company for 2000, all Section 16(a) filing requirements applicable to the
Company's officers, directors and "greater than ten-percent" stockholders were
complied with, except that (i) Craig Cosgrove filed one Form 4 late with respect
to a transaction in February 2000, (ii) Ed Tyler filed his Form 3 late (iii)
John Lesher filed one Form 4 late with respect to a transaction in June 2000,
(iv) Michael Brennan filed one Form 4 late with respect to a transaction in
August 2000, (v) Jay Shidler filed one Form 4 late with respect to a transaction
in October 2000 and (vi) Anthony Muscatello filed three Forms 4 late, one with
respect to a transaction in February 2000, one with respect to a transaction in
July 2000 and one with respect to a transaction in October 2000. In addition,
Mr. Cosgrove failed to report his ownership of approximately 952 shares of
Common Stock on his Form 3. The ownership of such shares was reported on his
Form 4 for March 2001. Also, Timothy Gudim failed to report the conversion into
Common Stock of certain limited partnership units of First Industrial, L.P. held
indirectly by Mr. Gudim, and the sale of such Common Stock. Such conversion and
sale was reported on his Form 4 for March 2001.
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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table presents information concerning the ownership of Common
Stock of the Company and limited partnership units ("Units") of First
Industrial, L.P. (which generally are exchangeable on a one-for-one basis,
subject to adjustments, for Common Stock) by all directors, the Named Executive
Officers, the directors and executive officers of the Company as a group and
persons and entities known to the Company to be beneficial owners of more than
5% of the Company's Common Stock. The information is presented as of March 20,
2001, unless otherwise indicated, and is based on representations of officers
and directors of the Company and filings received by the Company on Schedule 13G
under the Exchange Act. As of March 20, 2001, there were 39,209,645 shares of
Common Stock and 7,174,179 Units outstanding.
Common Stock/Units
Beneficially
Owned
---------------------
Percent
Number of Class
--------- --------
Names and Addresses of
5% Stockholders
---------------
Cohen & Steers Capital Management, Inc.
757 3rd Avenue
New York, New York 10017(1).............. 2,027,700 5.2%
Names and Addresses of
Directors and Officers*
----------------------
Jay H. Shidler(2)........................ 1,321,597 3.3%
Michael W. Brennan(3).................... 408,849 1.0%
John L. Lesher(4)........................ 41,288 **
Kevin W. Lynch(5)........................ 56,806 **
Michael G. Damone(6)..................... 225,498 **
John Rau(7).............................. 65,788 **
Robert J. Slater(8)...................... 50,613 **
J. Steven Wilson(9)...................... 65,074 **
W. Ed Tyler(10).......................... 10,664 **
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Common Stock/Units
Beneficially
Owned
---------------------
Percent
Number of Class
--------- --------
Michael J. Havala(11).................... 199,658 **
Johannson L. Yap(12)..................... 214,018 **
David P. Draft(13)....................... 96,390 **
Gary H. Heigl(14)........................ 197,161 **
All directors, Named Executive
Officers and other executive officers
as a group (17 persons)(15)............ 3,122,391 7.6%
- ---------------
* The business address for each of the directors and executive officers of
the Company is 311 South Wacker Drive, Suite 4000, Chicago, Illinois 60606.
** Less than 1%
(1) Pursuant to a Schedule 13G dated February 13, 2001 filed by Cohen &
Steers Capital Management, Inc., Cohen & Steers Capital Management,
Inc. has the sole power to dispose of all 2,027,700 shares reported,
but has the sole power to vote only 1,726,700 of such shares.
(2) Includes 910,660 shares held by Shidler Equities, L.P., a Hawaii limited
partnership owned by Mr. Shidler and Mrs. Shidler, 68,020 Units held by Mr.
Shidler directly, 254,541 Units held by Shidler Equities, L.P., 1,223 Units
held by Mr. and Mrs. Shidler jointly, and 22,079 Units held by
Holman/Shidler Investment Corporation. Also includes 22,500 shares which
may be acquired by Mr. Shidler upon the exercise of vested options granted
under the 1994 Stock Plan, consisting of 15,000 shares at an exercise price
of $23.50 per share and 7,500 shares at an exercise price of $18.25 per
share. Also includes 30,000 shares which may be acquired upon the exercise
of vested options granted under the 1997 Stock Plan, consisting of 10,000
shares at an exercise price of $30.50 per share, 10,000 shares at an
exercise price of $31.13 per share and 10,000 shares at an exercise price
of $26.94 per share. Also includes 10,000 shares that may be acquired upon
the exercise of options (which will vest in May 2001) granted under the
1997 Stock Plan at an exercise price of $30.00 per share. Also includes
2,574 shares of restricted Common Stock issued under the 1997 Stock Plan.
(3) Includes 30,000 shares that may be acquired by Mr. Brennan upon the
exercise of vested options granted under the 1994 Stock Plan, consisting of
15,000 shares at an exercise price of $20.25 per share and 15,000 shares at
an exercise price of $22.75 per share. Also includes 210,000 shares that
may be acquired by Mr. Brennan upon the exercise of vested options granted
under the 1997 Stock Plan, consisting of 45,000 shares at an exercise price
of $30.38 per share, 60,000 shares at an exercise price of $31.13 per
share, 25,000 shares at an exercise price of $24.00 per share, 60,000
shares at an exercise price of $25.13 per share and 20,000 shares at an
exercise price of $27.25 per share. Also includes 3,806 Units and 72,928
shares of restricted Common Stock issued under the 1997 Stock Plan. Does
not include 2,650 shares of Preferred Stock.
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(4) Includes 30,000 shares which may be acquired by Mr. Lesher upon the
exercise of vested options granted under the 1997 Stock Plan, consisting of
10,000 shares at an exercise price of $30.50 per share, 10,000 shares at an
exercise price of $31.13 per share and 10,000 shares at an exercise price
of $26.94 per share. Also includes 10,000 shares that may be acquired upon
the exercise of options (which will vest in May 2001) granted under the
1997 Stock Plan at an exercise price of $30.00 per share. Also includes
1,288 shares of restricted Common Stock issued under the 1997 Stock Plan.
(5) Includes 15,000 shares that may be acquired by Mr. Lynch upon the exercise
of vested options granted under the 1994 Stock Plan at an exercise price of
$23.50 per share. Also includes 30,000 shares that may be acquired upon the
exercise of vested options granted under the 1997 Stock Plan, consisting of
10,000 shares at an exercise price of $30.50 per share, 10,000 shares at an
exercise price of $31.13 per share and 10,000 shares at an exercise price
of $26.94 per share. Also includes 10,000 shares that may be acquired upon
the exercise of options (which will vest in May 2001) granted under the
1997 Stock Plan at an exercise price of $30.00 per share. Also includes
1,288 shares of restricted Common Stock issued under the 1997 Stock Plan.
(6) Includes 7,500 shares held by a trust for the benefit of Mr. Damone's wife.
Also includes 7,500 shares that may be acquired by Mr. Damone upon the
exercise of vested options granted under the 1994 Stock Plan at an exercise
price of $22.75 per share. Also includes 36,000 shares that may be acquired
upon the exercise of vested options granted under the 1997 Stock Plan,
consisting of 10,000 shares at an exercise price of $30.38, 10,000 shares
at an exercise price of $31.13, 12,000 shares at an exercise price of
$25.13 and 4,000 shares at an exercise price of $27.25 per share. Also
includes 144,296 Units. Also includes 5,234 shares of restricted Common
Stock issued under the 1997 Stock Plan.
(7) Includes 22,500 shares that may be acquired by Mr. Rau upon the exercise of
vested options granted under the 1994 Stock Plan, consisting of 15,000
shares at an exercise price of $23.50 per share and 7,500 shares at an
exercise price of $18.25 per share. Also includes 30,000 shares that may be
acquired upon the exercise of vested options granted under the 1997 Stock
Plan, consisting of 10,000 shares at an exercise price of $30.50 per share,
10,000 shares at an exercise price of $31.13 per share and 10,000 shares at
an exercise price of $26.94 per share. Also includes 10,000 shares that may
be acquired upon the exercise of options (which will vest in May 2001)
granted under the 1997 Stock Plan at an exercise price of $30.00 per share.
Also includes 1,288 shares of restricted Common Stock issued under the 1997
Stock Plan.
(8) Includes 30,000 shares that may be acquired by Mr. Slater upon the exercise
of vested options granted under the 1997 Stock Plan, consisting of 10,000
shares at an exercise price of $30.50 per share, 10,000 shares at an
exercise price of $31.13 and 10,000 shares at an exercise price of $26.94
per share. Also includes 10,000 shares that may be acquired upon the
exercise of options (which will vest in May 2001) granted under the 1997
Stock Plan at an exercise price of $30.00 per share. Also includes 9,613
shares of restricted Common Stock issued under the 1997 Stock Plan.
(9) Includes 22,500 shares that may be acquired by Mr. Wilson upon the exercise
of vested options granted under the 1994 Stock Plan, consisting of 15,000
shares at an exercise price of $23.50 per share and 7,500 shares at an
exercise price of $18.25 per share. Also includes 30,000 shares that may be
acquired upon the exercise of vested options granted under the 1997 Stock
Plan, consisting of 10,000 shares at an exercise price of $30.50 per share,
10,000 shares at an exercise price of $31.13 per share and 10,000 shares at
an exercise price of $26.94 per share. Also includes 10,000 shares that may
be acquired upon the exercise of options (which will vest in May 2001)
granted under the 1997 Stock Plan at an exercise price of $30.00 per share.
Also includes 2,574 shares of restricted Common Stock issued under the 1997
Stock Plan.
(10) Includes 10,000 shares that may be acquired by Mr. Tyler upon the exercise
of options (which will vest in May 2001) granted under the 1997 Stock Plan
at an exercise price of $30.00 per share. Also includes 664 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(11) Includes 1,251 shares held in custodial accounts for Mr. Havala's children.
Also includes 15,000 shares which may be acquired by Mr. Havala upon the
exercise of vested options granted under the 1994 Stock Plan at an exercise
price of $20.25 per share. Also includes 110,000 shares that may be
acquired by Mr. Havala upon the exercise of vested
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options granted under the 1997 Stock Plan, consisting of 30,000 shares at
an exercise price of $30.38 per share, 40,000 shares at an exercise price
of $31.13 per share, 25,000 shares at an exercise price of $25.13 per share
and 15,000 shares at an exercise price of $27.25 per share. Also includes
50,975 shares of restricted Common Stock issued under the 1997 Stock Plan.
Does not include 2,000 shares of Preferred Stock.
(12) Includes 10,000 shares which may be acquired by Mr. Yap upon the exercise
of vested options granted under the 1994 Stock Plan at an exercise price of
$20.25 per share. Also includes 124,333 shares that may be acquired by Mr.
Yap upon the exercise of vested options granted under the 1997 Stock Plan,
consisting of 30,000 shares at an exercise price of $30.38, 40,000 shares
at an exercise price of $31.13 per share, 40,000 shares at an exercise
price of $25.13 per share and 14,333 shares at an exercise price of $27.25
per share. Also includes 1,680 Units. Also includes 50,149 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(13) Includes 64,733 shares that may be acquired by Mr. Draft upon the exercise
of vested options granted under the 1997 Stock Plan, consisting of 20,000
shares at an exercise price of $30.38 per share, 25,000 shares at an
exercise price of $31.13 per share, 10,000 shares at an exercise price of
$25.13 per share and 9,733 shares at an exercise price of $27.25 per share.
Also includes 24,309 shares of restricted Common Stock issued under the
1997 Stock Plan.
(14) Includes 161,333 shares that may be acquired by Mr. Heigl upon the exercise
of vested options granted under the 1997 Stock Plan, consisting of 30,000
shares at an exercise price of $30.38 per share, 20,000 shares at an
exercise price of $28.50 per share, 40,000 shares at an exercise price of
$31.13 per share, 54,000 shares at an exercise price of $25.13 per share
and 17,333 shares at an exercise price of $27.25 per share.
(15) Includes 145,000 shares in the aggregate that may be acquired by directors
or executive officers upon the exercise of vested options granted under the
1994 Stock Plan, consisting of 60,000 shares at an exercise price of $23.50
per share, 22,500 shares at an exercise price of $18.25 per share, 40,000
shares at an exercise price of $20.25 per share and 22,500 shares at an
exercise price of $22.75 per share. Also includes 1,058,633 shares in the
aggregate that may be acquired by directors and executive officers upon the
exercise of vested options granted under the 1997 Stock Plan, consisting of
175,000 shares at an exercise price of $30.38, 60,000 shares at an exercise
price of $30.50, 20,000 shares at an exercise price of $28.50, 25,000
shares at an exercise price of $24.00, 303,000 shares at an exercise price
of $31.13, 248,500 shares at an exercise price of $25.13, 60,000 shares at
an exercise price of $26.94, 97,133 shares at an exercise price of $27.25
and 70,000 shares at an exercise price of $30.00. Also includes 505,943
Units. Also includes 273,362 shares of restricted Common Stock issued under
the 1997 Stock Plan. Does not include 4,650 shares of Preferred Stock in
the aggregate owned by certain executive officers and directors of the
Company.
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PROPOSAL II
APPROVAL OF THE 2001 STOCK INCENTIVE PLAN
At its meeting on March 9, 2001, the Board of Directors of the Company
adopted the First Industrial Realty Trust, Inc. 2001 Stock Incentive Plan (the
"2001 Stock Incentive Plan") and directed that the 2001 Stock Incentive Plan be
submitted to the stockholders for their approval. The Board of Directors
believes that the adoption of the 2001 Stock Incentive Plan is in the best
interests of the stockholders and the Company because the ability to grant
options and other stock-based awards thereunder is an important factor in
attracting, motivating and retaining qualified personnel.
SUMMARY OF THE PROVISIONS OF THE 2001 STOCK INCENTIVE PLAN
The following summary of the 2001 Stock Incentive Plan is qualified in its
entirety by the specific language of the plan, a copy of which is attached
hereto as Appendix B.
General. The purpose of the 2001 Stock Incentive Plan is to encourage and
enable the officers, employees and directors of the Company and its affiliates,
upon whose judgment, initiative and efforts the Company largely depends for the
successful conduct of its business, to acquire a proprietary interest in the
Company. Approximately 158 employees and all nine directors are eligible to
participate in the 2001 Stock Incentive Plan. The 2001 Stock Incentive Plan
provides for the grant of incentive stock options, within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), to employees
of the Company and for the grant of nonstatutory stock options, stock
appreciation rights ("SARs"), restricted stock awards, performance share awards
and dividend equivalents to officers, employees and directors of the Company.
The Board of Directors has authorized, subject to stockholder approval,
2,300,000 shares of Common Stock for issuance under the 2001 Stock Incentive
Plan. The market value of shares of Common Stock was $31.64 per share, based on
its closing price as reported on the New York Stock Exchange on March 30, 2001.
With respect to SARs, performance share awards and restricted stock awards, the
maximum number of shares of Common Stock, in the aggregate, subject to such
awards granted under the 2001 Stock Incentive Plan will be 345,000 shares. In
addition, the maximum number of shares of Common Stock with respect to which
stock options and SARs may be granted during a calendar year to any participant
under the 2001 Stock Incentive Plan will be 500,000 shares. Also, with respect
to performance share awards and restricted stock awards, the maximum number of
shares of Common Stock subject to such awards granted during a calendar year to
any participant under the 2001 Stock Incentive Plan shall be 100,000 shares. In
the event of any recapitalization, reclassification, split-up or consolidation
of shares of stock, separation (including a spin-off), dividend on shares of
stock payable in capital stock, or other similar change in capitalization of the
Company or a merger or consolidation of the Company or sale by the Company of
all or a portion of its assets or other similar event, appropriate adjustments
will be made to the shares, including the number thereof, subject to the 2001
Stock Incentive
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29
Plan and to any outstanding awards. Shares of Common Stock underlying any awards
which are forfeited, canceled, reacquired by the Company, satisfied without the
issuance of Common Stock or otherwise terminated (other than by exercise) will
be added back to the shares of Common Stock available for issuance under the
2001 Stock Incentive Plan.
Administration. The 2001 Stock Incentive Plan will be administered by the
Compensation Committee of the Board of Directors of the Company. Subject to the
provisions of the 2001 Stock Incentive Plan, the Compensation Committee will
determine the persons to whom grants of options, SARs, restricted stock awards,
performance share awards and dividend equivalents are to be made, the number of
shares of Common Stock to be covered by each grant and all other terms and
conditions of the grant. If an option is granted, the Compensation Committee
will determine whether the option is an incentive stock option or a nonstatutory
stock option, the option's term, vesting and exercisability, and the other terms
and conditions of the grant. The Compensation Committee will also determine the
terms and conditions of SARs, restricted stock awards, performance share awards
and dividend equivalents. The Compensation Committee will have the
responsibility to interpret the 2001 Stock Incentive Plan and to make
determinations with respect to all awards granted under the 2001 Stock Incentive
Plan. All determinations of the Compensation Committee will be binding on all
persons, including the Company and plan participants. The costs and expenses of
administering the 2001 Stock Incentive Plan will be borne by the Company.
Eligibility. Participants in the 2001 Stock Incentive Plan will be
directors and the full or part-time officers and other employees of the Company
and its affiliates who are responsible for or contribute to the management,
growth or profitability of the Company and its affiliates and who are selected
from time to time by the Compensation Committee, in its sole discretion.
Terms and Conditions of Option Grants. Each option granted under the 2001
Stock Incentive Plan will be evidenced by a written agreement in a form that the
Compensation Committee may from time to time approve, will be subject to the
terms and conditions of the 2001 Stock Incentive Plan and may contain such
additional terms and conditions, not inconsistent with the terms of the 2001
Stock Incentive Plan, as may be determined by the Compensation Committee. The
per share exercise price of an incentive stock option may not be less than 100%
of the fair market value of a share of Common Stock on the date of the option's
grant and the term of any such option shall expire on the tenth anniversary of
the date of the option's grant. In addition, the per share exercise price of any
incentive stock option granted to a person who at the time of the grant owns
stock possessing more than 10% of the total combined voting power or value of
all classes of stock of the Company must be at least 110% of the fair market
value of a share of the Company's Common Stock on the date of grant and the
option must expire no later than five years after the date of its grant.
Generally, options may be exercised by the payment by the optionee or the
optionee's broker of the exercise price in cash, certified check or wire
transfer, or, subject to the approval of the Compensation Committee, through the
tender of shares of the Company's Common Stock owned by the optionee having a
fair market value not less than the exercise price. Options granted under the
2001 Stock
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Incentive Plan will become exercisable at such times as may be specified by the
Compensation Committee, subject to various limitations on exercisability in the
event the optionee's employment or service with the Company terminates. Options
are generally nontransferable by the optionee other than by will or by the laws
of descent and distribution and are exercisable during the optionee's lifetime
only by the optionee, except that non-qualified options may be transferred to
one or more members of the optionee's immediate family, to certain entities for
the benefit of the optionee's immediate family members or pursuant to a
certified domestic relations order.
Terms and Conditions of Other Awards. Each SAR, restricted stock award and
performance share award made under the 2001 Stock Incentive Plan will be
evidenced by a written agreement in a form and containing such terms,
restrictions and conditions as may be determined by the Compensation Committee,
consistent with the requirements of the 2001 Stock Incentive Plan. A SAR may be
granted separately or in conjunction with the grant of an option. If the
Compensation Committee determines that a restricted stock award or a performance
share award to be granted to a participant should qualify as "performance-based
compensation" for purposes of Section 162(m) of the Code, the grant, vesting and
settlement of such award will be contingent upon achievement of one or more
preestablished performance goals. One or more of the following business criteria
for the Company must be used by the Compensation Committee in establishing such
performance goals: (1) earnings, including FFO; (2) revenues; (3) cash flow; (4)
cash flow return on investment; (5) return on assets; (6) return on investment;
(7) return on capital; (8) return on equity; (9) economic value added; (10)
operating margin; (11) net income; (12) pretax earnings; (13) pretax earnings
before interest, depreciation and amortization; (14) pretax operating earnings
after interest expense and before incentives, service fees, and extraordinary or
special items; (15) operating earnings; (16) total stockholder return; and (17)
any of the above goals as compared to the performance of a published or special
index deemed applicable by the Compensation Committee including, but not limited
to, the Standard & Poor's 500 Index. The Compensation Committee does not have
the authority to increase the amount of compensation payable under any
performance share award intended to qualify as "performance-based compensation"
to the extent such an increase would cause the amounts payable pursuant to the
performance share award to be nondeductible in whole or in part pursuant to
Section 162(m) of the Code and the regulations thereunder. SARs, restricted
stock awards and performance share awards are generally nontransferable, except
that SARs may be transferred pursuant to a certified domestic relations order
and may be exercised by the executor, administrator or personal representative
of a deceased participant within six months of the death of the participant.
Change of Control Provisions. "Change of Control" generally means the
occurrence of any one of the following events:
(i) any person (other than the Company, any of its subsidiaries, any
trustee, fiduciary or other person or entity holding securities under any
employee benefit plan of the Company or any of its subsidiaries), together
with all affiliates and associates of such person, becomes the direct or
indirect beneficial owner of securities of the Company representing 40% or
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31
more of either (A) the combined voting power of the Company's then
outstanding securities having the right to vote in an election of the
Company's Board of Directors or (B) the then outstanding shares of Common
Stock of the Company (in either such case other than as a result of
acquisition of securities directly from the Company); or
(ii) persons who, as of the effective date of the 2001 Stock
Incentive Plan, constitute the Company's Board of Directors ("Incumbent
Directors") cease for any reason to constitute at least a majority of the
Board of Directors (however, any person becoming a director of the Company
subsequent to the effective date of the 2001 Stock Incentive Plan whose
election or nomination for election was approved by a vote of at least a
majority of the Incumbent Directors will, for purposes of the 2001 Stock
Incentive Plan, be considered an Incumbent Director); or
(iii) the stockholders of the Company approve (A) any consolidation or
merger of the Company or any subsidiary where the stockholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own, directly
or indirectly, shares representing in the aggregate 50% or more of the
voting stock of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company or (C) any
plan or proposal for the liquidation or dissolution of the Company.
In general, upon the occurrence of a Change of Control, options and SARs
automatically would become fully exercisable and restrictions and conditions on
restricted stock awards, performance share awards and dividend equivalents would
automatically be deemed waived.
Amendment and Termination of the 2001 Stock Incentive Plan. The Board of
Directors may at any time amend or discontinue the 2001 Stock Incentive Plan and
the Compensation Committee may at any time amend or cancel any outstanding
award, but no such action will adversely affect rights under any outstanding
award without the holder's consent and, except in the event of changes in the
capitalization of the Company or other similar events, no amendment to any
outstanding award will reduce the exercise price of the award.
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32
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES OF THE 2001 STOCK INCENTIVE PLAN
The following discussion summarizes the principal federal income tax
consequences of the 2001 Stock Incentive Plan. This discussion is based on
current provisions of the Code, the regulations promulgated thereunder, and
administrative and judicial interpretations thereof as in effect on the date
hereof. The summary does not address any foreign, state or local tax
consequences of participation in the 2001 Stock Incentive Plan.
Stock Options. In general, the grant of an option will not be a taxable
event to the recipient and it will not result in a deduction to the Company. The
tax consequences associated with the exercise of an option and the subsequent
disposition of shares of Common Stock acquired on the exercise of such option
depend on whether the option is an incentive stock option or a nonqualified
stock option.
Upon the exercise of a nonqualified stock option, the participant will
recognize ordinary taxable income equal to the excess of the fair market value
of the shares of Common Stock received upon exercise over the exercise price.
The Company will generally be able to claim a deduction in an equivalent amount.
Any gain or loss upon a subsequent sale or exchange of the shares of Common
Stock will be capital gain or loss, long-term or short-term, depending on the
holding period for the shares of Common Stock.
Generally, a participant will not recognize ordinary taxable income at the
time of exercise of an incentive stock option and no deduction will be available
to the Company, provided the option is exercised while the participant is an
employee or within three months following termination of employment (longer, in
the case of termination of employment by reason of disability or death). If an
incentive stock option granted under the 2001 Stock Incentive Plan is exercised
after these periods, the exercise will be treated for federal income tax
purposes as the exercise of a nonqualified stock option. Also, an incentive
stock option granted under the 2001 Stock Incentive Plan will be treated as a
nonqualified stock option to the extent it (together with any other incentive
stock options granted under other plans of the Company and its subsidiaries)
first becomes exercisable in any calendar year for shares of Common Stock having
a fair market value, determined as of the date of grant, in excess of $100,000.
If shares of Common Stock acquired upon exercise of an incentive stock
option are sold or exchanged more than one year after the date of exercise and
more than two years after the date of grant of the option, any gain or loss will
be long-term capital gain or loss. If shares of Common Stock acquired upon
exercise of an incentive stock option are disposed of prior to the expiration of
these one-year or two-year holding periods (a "Disqualifying Disposition"), the
participant will recognize ordinary income at the time of disposition, and the
Company will generally be able to claim a deduction, in an amount equal to the
excess of the fair market value of the shares of Common Stock at the date of
exercise over the exercise price. Any additional gain will be treated as capital
gain, long-term or short-term, depending on how long the shares of Common Stock
have been held. Where shares of Common Stock are sold or exchanged in a
Disqualifying Disposition (other than certain related party transactions) for an
amount less than their fair
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33
market value at the date of exercise, any ordinary income recognized in
connection with the Disqualifying Disposition will be limited to the amount of
gain, if any, recognized in the sale or exchange, and any loss will be a
long-term or short-term capital loss, depending on how long the shares of Common
Stock have been held.
Although the exercise of an incentive stock option as described above would
not produce ordinary taxable income to the participant, it would result in an
increase in the participant's alternative minimum taxable income and may result
in an alternative minimum tax liability.
Restricted Stock. A participant who receives shares of restricted stock
will generally recognize ordinary income at the time the restrictions lapse. The
amount of ordinary income so recognized will be the fair market value of the
Common Stock at the time the income is recognized, determined without regard to
any restrictions other than restrictions which by their terms will never lapse.
This amount is generally deductible for federal income tax purposes by the
Company. Dividends paid with respect to unvested restricted stock will be
ordinary compensation income to the participant (and generally deductible by the
Company). Any gain or loss upon a subsequent sale or exchange of the shares of
Common Stock, measured by the difference between the sale price and the fair
market value on the date restrictions lapse, will be capital gain or loss,
long-term or short-term, depending on the holding period for the shares of
Common Stock. The holding period for this purpose will begin on the date
following the date restrictions lapse.
In lieu of the treatment described above, a participant may elect immediate
recognition of income under Section 83(b) of the Code. In such event, the
participant will recognize as income the fair market value of the restricted
stock at the time of grant (determined without regard to any restrictions other
than restrictions which by their terms will never lapse), and the Company will
generally be entitled to a corresponding deduction. Dividends paid with respect
to shares as to which a proper Section 83(b) election has been made will not be
deductible to the Company. If a Section 83(b) election is made and the
restricted stock is subsequently forfeited, the participant will not be entitled
to any offsetting tax deduction.
Stock Appreciation Rights and Other Awards. With respect to SARs and other
awards under the 2001 Stock Incentive Plan not described above, generally, when
a participant receives payment with respect to an award granted to him or her
under the 2001 Stock Incentive Plan, the amount of cash and the fair market
value of any other property received will be ordinary income to such participant
and will be allowed as a deduction for federal income tax purposes to the
Company.
Payment of Withholding Taxes. The Company may withhold, or require a
participant to remit to the Company, an amount sufficient to satisfy any
federal, state or local withholding tax requirements associated with awards
under the 2001 Stock Incentive Plan.
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Special Rules. Certain special rules apply if the exercise price for an
option is paid in shares previously owned by the optionee rather than in cash.
Limitation on Deductibility. Section 162(m) of the Code generally limits
the deductible amount of annual compensation paid (including, unless an
exception applies, compensation otherwise deductible in connection with awards
granted under the 2001 Stock Incentive Plan) by a public company to a "covered
employee" (the chief executive officer and four other most highly compensated
executive officers of the Company) to no more than $1 million. The Company
currently intends to structure stock options granted under the 2001 Stock
Incentive Plan to comply with an exception to non-deductibility under Section
162(m) of the Code.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 2001 STOCK
INCENTIVE PLAN.
32
35
PROPOSAL III
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The accounting firm of PricewaterhouseCoopers LLP (or its predecessor,
Coopers & Lybrand L.L.P.) has served as the Company's independent auditors since
the Company's formation in August 1993. On March 9, 2001, the Board of Directors
voted to appoint PricewaterhouseCoopers LLP as the Company's independent
auditors for the current fiscal year. A representative of PricewaterhouseCoopers
LLP will be present at the Annual Meeting, will be given the opportunity to make
a statement if he or she so desires and will be available to respond to
appropriate questions.
AUDIT FEES
The aggregate fees billed by PricewaterhouseCoopers LLP in connection with
the audit of the Company's 2000 financial statements and the reviews of
financial statements included in the Company's Forms 10-Q for 2000 were
approximately $222,000, including expenses.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not utilize the services of PricewaterhouseCoopers LLP in
the design or implementation of its financial information systems during fiscal
2000.
ALL OTHER FEES
The aggregate fees billed by PricewaterhouseCoopers LLP in connection with
the preparation of the Company's and its affiliates tax returns and general
accounting and tax advice provided to the Company for fiscal 2000 were
approximately $429,000, including expenses. The Audit Committee considers the
provision of such services to be compatible with maintaining
PricewaterhouseCoopers LLP's independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS
FOR FISCAL 2001.
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36
OTHER MATTERS
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
borne by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2002 Annual Meeting
of Stockholders must be received by the Secretary of the Company no later than
December 11, 2001, in order to be considered for inclusion in the proxy
statement and on the proxy card that will be solicited by the Board of Directors
in connection with the 2002 Annual Meeting of Stockholders.
In addition, the Bylaws of the Company provide that in order for a
stockholder to nominate a candidate for election as a director at an annual
meeting or propose business for consideration at such annual meeting, notice
must generally be given to the Secretary of the Company not more than 180 days
nor less than 75 days prior to the first anniversary of the preceding year's
annual meeting. The fact that the Company may not insist upon compliance with
these requirements should not be construed as a waiver by the Company of its
right to do so at any time in the future.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, it is the intention of the
persons named as proxies in the accompanying Proxy Card to vote in their
discretion all shares represented by validly executed proxies.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD
TODAY.
34
37
Appendix A
FIRST INDUSTRIAL REALTY TRUST, INC.
AUDIT COMMITTEE CHARTER
The Audit Committee (the "Committee") is a committee of the Board of Directors.
Its primary function is to assist the Board in fulfilling its oversight
responsibilities by reviewing the financial information which will be provided
to the stockholders and others, the systems of internal controls which
management and the Board of Directors have established, and the audit process.
Audit Committee Members shall meet the requirements of the New York Stock
Exchange. The membership of the Committee shall consist of at least three
Directors, all of whom shall be independent, who shall serve at the pleasure of
the Board of Directors. Committee Members and the Committee Chairperson shall be
designated by the Board of Directors.
The Committee shall have the power to conduct or authorize investigations into
any matters within the Committee's scope of responsibilities. The Committee
shall be empowered to retain independent counsel, accountants, or others to
assist it in the conduct of any investigation.
The Committee as a whole shall meet at least two times per year, or more
frequently as circumstances require. The Committee may ask members of management
or others to attend meetings and provide pertinent information as necessary. To
the extent they determine appropriate, the Committee Members may communicate
outside such meetings with one another and with members of management and the
independent auditors.
In addition to those set forth in this Charter, the Committee will perform such
other activities consistent with the Company's charter and bylaws and applicable
law, as the Committee or the Board deems necessary or appropriate.
In meeting its responsibilities, the Committee is expected to:
1. Provide an open avenue of communication between the independent auditors
and the Board of Directors. The independent auditors are ultimately
accountable to the Board of Directors and the Committee.
2. Review and reassess this Charter annually and submit any proposed changes
to the Board of Directors for approval.
A-1
38
3. Recommend to the Board of Directors the accounting firm to serve as
independent auditors, and review and approve the discharge of the
independent auditors.
4. Review the independence of the independent auditors, including a review of
management consulting and other non-audit services and associated fees
provided by that firm and any other relationship the auditors and its
affiliates have with the Company. As a part of such review, the Committee
shall require the independent auditors to submit on a periodic basis to the
Audit Committee a formal written statement delineating all relationships
between the independent auditors and the Company.
5. Review with management and the independent auditors significant risks or
exposures, whether from significant or unusual events or transactions or
ordinary course operations, which impact financial reporting and
operations, and assess the steps management has taken, and the adequacy and
effectiveness of the Company's internal controls, to deal with such risks
and exposures.
6. Consider and review with the independent auditors:
a. The adequacy of the Company's internal controls.
b. Any related significant findings and recommendations of the
independent auditors together with management's responses thereto.
c. Any other matters which the independent auditors determine they are
required under applicable regulations to communicate to the Committee.
7. Prior to the annual audit of financial statements for the fiscal year,
review with the independent auditors the audit plan, including the fees to
be paid for the audit and related services.
8. Review with management and the independent auditors at the completion of
the annual audit of the financial statements for the fiscal year, and prior
to the filing of such financial statements:
a. The Company's annual financial statements and related footnotes.
b. The independent auditors' audit of the financial statements and their
report thereon.
c. Any serious difficulties or disputes with management encountered
during the course of the audit.
d. Other matters related to the conduct of the audit which are to be
communicated to the Committee under generally accepted auditing
standards.
A-2
39
9. Review with financial management and the independent auditors the Company's
quarterly financial statements and results prior to filing with the SEC.
The Committee Chairperson or other designated Committee member may conduct
this review on behalf of the Committee.
10. Review legal and regulatory matters that may have a material impact on the
financial statements.
11. Report Committee actions to the Board of Directors with such
recommendations as the Committee may deem appropriate.
12. Prepare and file, or cause to be prepared and filed any reports or other
documents required to be prepared and filed by the Committee under any
applicable law or regulations of the Securities and Exchange Commission or
the New York Stock Exchange.
A-3
40
Appendix B
FIRST INDUSTRIAL REALTY TRUST, INC.
2001 STOCK INCENTIVE PLAN
41
TABLE OF CONTENTS
SECTION 1. General Purpose of the Plan; Definitions...................... B-2
SECTION 2. Administration of Plan; Committee Authority to Select
Participants and Determine Awards........................... B-4
SECTION 3. Shares Issuable under the Plan; Mergers; Substitution......... B-5
SECTION 4. Eligibility................................................... B-5
SECTION 5. Stock Options................................................. B-6
SECTION 6. Restricted Stock Awards....................................... B-9
SECTION 7. Performance Share Awards......................................B-10
SECTION 8. Stock Appreciation Rights.....................................B-10
SECTION 9. Dividend Equivalents..........................................B-11
SECTION 10. Performance Awards............................................B-11
SECTION 11. Tax Withholding...............................................B-12
SECTION 12. Transfer, Leave of Absence, Etc...............................B-13
SECTION 13. Amendments and Termination....................................B-13
SECTION 14. Status of Plan................................................B-13
SECTION 15. Change of Control Provisions..................................B-14
SECTION 16. General Provisions............................................B-15
SECTION 17. Effective Date of Plan........................................B-16
SECTION 18. Governing Law.................................................B-16
42
FIRST INDUSTRIAL REALTY TRUST, INC.
2001 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of the Plan; Definitions.
The name of the plan is the First Industrial Realty Trust, Inc. 2001 Stock
Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees and Directors of First Industrial Realty Trust, Inc.
(the "Company") and its Affiliates upon whose judgment, initiative and efforts
the Company largely depends for the successful conduct of its business to
acquire a proprietary interest in the Company. It is anticipated that providing
such persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Affiliate" means any entity other than the Company and its Subsidiaries
that is designated by the Board or the Committee as a participating employer
under the Plan, provided that the Company directly or indirectly owns at least
20% of the combined voting power of all classes of stock of such entity or at
least 20% of the ownership interests in such entity.
"Award" or "Awards", except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Share
Awards and Dividend Equivalents.
"Board" means the Board of Directors of the Company.
"Cause" means the participant's dismissal as a result of (i) any material
breach by the participant of any agreement to which the participant and the
Company or an Affiliate are parties, (ii) any act (other than retirement) or
omission to act by the participant, including without limitation, the commission
of any crime (other than ordinary traffic violations), which may have a material
and adverse effect on the business of the Company or any Affiliate or on the
participant's ability to perform services for the Company or any Affiliate, or
(iii) any material misconduct or neglect of duties by the participant in
connection with the business or affairs of the Company or any Affiliate.
"Change of Control" is defined in Section 15.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means any Committee of the Board referred to in Section 2.
B-2
43
"Director" means a member of the Board.
"Disability" means disability as set forth in Section 22(e)(3) of the Code.
"Dividend Equivalent" means a right, granted under Section 9, to receive
cash, Stock, or other property equal in value to dividends paid with respect to
a specified number of shares of Stock or the excess of dividends paid over a
specified rate of return. Dividend Equivalents may be awarded on a free-standing
basis or in connection with another Award, and may be paid currently or on a
deferred basis.
"Effective Date" means the date on which the Plan is approved by the
stockholders of the Company as set forth in Section 17.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related rules, regulations and interpretations.
"Fair Market Value" on any given date means the last reported sale price at
which Stock is traded on such date or, if no Stock is traded on such date, the
most recent date on which Stock was traded, as reflected on the New York Stock
Exchange or, if applicable, any other national stock exchange which is the
principal trading market for the Stock.
"Incentive Stock Option" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Parent" means a "parent corporation" as defined in Section 424(e) of the
Code.
"Performance Share Award" means Awards granted pursuant to Section 7.
"Restricted Stock Award" means Awards granted pursuant to Section 6.
"Stock" means the Common Stock, $.01 par value per share, of the Company,
subject to adjustment pursuant to Section 3.
"Subsidiary" means any corporation (other than the Company) in an unbroken
chain of corporations, beginning with the Company if each of the corporations
(other than the last corporation in the unbroken chain) owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.
B-3
44
SECTION 2. Administration of Plan; Committee Authority to Select Participants
and Determine Awards.
(a) Committee. The Plan shall be administered by a committee of not
less than two Directors, as appointed by the Board from time to time (the
"Committee"). Unless otherwise determined by the Board, each member of the
Committee shall qualify as a "non-employee director" under Rule 16b-3 issued
pursuant to the Act and an "outside director" under Section 162(m) of the Code.
(b) Powers of Committee. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the officers, employees and Directors of the
Company and Affiliates to whom Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if
any, of Incentive Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares and Dividend
Equivalents, or any combination of the foregoing, granted to any officer,
employee or Director;
(iii) to determine the number of shares to be covered by any Award
granted to an officer, employee or Director;
(iv) to determine the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award
granted to an officer, employee or Director, which terms and conditions may
differ among individual Awards and participants, and to approve the form of
written instruments evidencing the Awards;
(v) to accelerate the exercisability or vesting of all or any
portion of any Award granted to a participant;
(vi) subject to the provisions of Section 5(ii), to extend the
period in which Stock Options granted may be exercised;
(vii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an Award
granted to a participant shall be deferred either automatically or at the
election of the participant and whether and to what extent the Company
shall pay or credit amounts equal to interest (at rates determined by the
Committee) or dividends or deemed dividends on such deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments) granted to a participant; and to decide all disputes arising
in connection with and make all determinations it deems advisable for the
administration of the Plan.
B-4
45
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
SECTION 3. Shares Issuable under the Plan; Mergers; Substitution.
(a) Shares Issuable. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 2,300,000. For purposes of this
limitation, the shares of Stock underlying any Awards which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. Shares issued under the Plan may
be authorized but unissued shares or shares reacquired by the Company. Subject
to adjustment as provided in Section 3(b) below, (i) with respect to Stock
Appreciation Rights, Performance Share Awards and Restricted Stock Awards, the
maximum number of shares of Stock, in the aggregate, subject to such awards
granted under the Plan shall be 345,000 shares, (ii) the maximum number of
shares of Stock with respect to which Stock Options and Stock Appreciation
Rights may be granted during a calendar year to any participant under the Plan
shall be 500,000 shares and (iii) with respect to Performance Share Awards and
Restricted Stock Awards, the maximum number of shares of Stock subject to such
awards granted during a calendar year to any Participant under the Plan shall be
100,000 shares.
(b) Stock Dividends, Mergers, etc. In the event of any
recapitalization, reclassification, split- up or consolidation of shares of
Stock, separation (including a spin-off), dividend on shares of Stock payable in
capital stock, or other similar change in capitalization of the Company or a
merger or consolidation of the Company or sale by the Company of all or a
portion of its assets or other similar event, the Committee shall make such
appropriate adjustments in the exercise prices of Awards, including Awards then
outstanding, in the number and kind of securities, cash or other property which
may be issued pursuant to Awards under the Plan, including Awards then
outstanding, and in the number of shares of Stock with respect to which Awards
may be granted (in the aggregate and to individual participants) as the
Committee deems equitable with a view toward maintaining the proportionate
interest of the participant and preserving the value of the Awards.
(c) Substitute Awards. The Committee may grant Awards under the Plan
in substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or an Affiliate as
the result of a merger or consolidation of the employing corporation with the
Company or an Affiliate or the acquisition by the Company or an Affiliate of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.
SECTION 4. Eligibility.
Participants in the Plan will be Directors and such full or part-time
officers and other employees of the Company and its Affiliates who are
responsible for or contribute to the management, growth or profitability of the
Company and its Affiliates and who are selected from time to time by the
Committee, in
B-5
46
its sole discretion. Notwithstanding any provision of this Plan to the contrary,
an Award may be granted to a person, in connection with his or her hiring as an
employee, prior to the date the employee first performed services for the
Company or an Affiliate, provided that any such Award shall not become
exercisable or vested prior to the date the employee first performs such
services as an employee.
SECTION 5. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. To the extent that any option does not qualify
as an Incentive Stock Option, it shall constitute a Non-Qualified Stock Option.
No Incentive Stock Option may be granted under the Plan after the tenth
anniversary of the Effective Date. Incentive Stock Options may only be granted
to employees of the Company, a Parent of the Company or a Subsidiary.
The Committee in its discretion may grant Stock Options to Directors or to
employees of the Company or any Affiliate. Stock Options granted to Directors
and employees pursuant to this Section 5 shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(i) Exercise Price. The per share exercise price of a Stock
Option granted pursuant to this Section 5 shall be determined by the
Committee at the time of grant. The per share exercise price of an
Incentive Stock Option shall not be less than 100% of Fair Market Value on
the date of grant. If an employee owns or is deemed to own (by reason of
the attribution rules applicable under Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the
Company or any Subsidiary or Parent corporation and an Incentive Stock
Option is granted to such employee, the option price shall be not less than
110% of Fair Market Value on the grant date.
(ii) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Incentive Stock Option shall be exercisable more
than ten years after the date the option is granted. If an employee owns or
is deemed to own (by reason of the attribution rules of Section 424(d) of
the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Subsidiary or Parent corporation and an
Incentive Stock Option is granted to such employee, the term of such option
shall be no more than five years from the date of grant.
(iii) Exercisability; Rights of a Shareholder. Stock Options shall
become exercisable at such time or times, whether or not in installments,
as shall be determined by the Committee at or after the grant date. The
Committee may at any time accelerate the exercisability of all or any
portion of any Stock Option. An optionee shall have the rights of a
shareholder only as to shares acquired upon the exercise of a Stock Option
and not as to unexercised Stock Options.
B-6
47
(iv) Method of Exercise. Stock Options may be exercised in whole
or in part, by giving written notice of exercise to the Company, specifying
the number of shares to be purchased. Payment of the purchase price may be
made by one or more of the following methods:
(A) In cash, by certified or bank check or other instrument
acceptable to the Committee or by wire transfer to an account
designated by the Company;
(B) In the form of shares of Stock that are not then subject
to restrictions under any Company plan, if permitted by the
Committee in its discretion. Such surrendered shares shall be
valued at Fair Market Value on the exercise date; or
(C) By the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions
to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price;
provided that in the event the optionee chooses to pay the
purchase price as so provided, the optionee and the broker shall
comply with such procedures and enter into such agreements of
indemnity and other agreements as the Committee shall prescribe
as a condition of such payment procedure. Payment instruments
will be received subject to collection.
The delivery of certificates representing shares of Stock to be
purchased pursuant to the exercise of the Stock Option will be contingent
upon receipt from the Optionee (or a purchaser acting in his stead in
accordance with the provisions of the Stock Option) by the Company of the
full purchase price for such shares and the fulfillment of any other
requirements contained in the Stock Option or applicable provisions of
laws.
(v) Non-transferability of Options. No Incentive Stock Option
shall be transferable by the optionee otherwise than by will or by the laws
of descent and distribution, and all Incentive Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
Non-Qualified Stock Options granted under this Plan may be assigned or
otherwise transferred by the participant only in the following
circumstances: (i) by will or the laws of descent and distribution; (ii) by
the participant to members of his or her "immediate family," to a trust
established for the exclusive benefit of solely one or more members of the
participant's "immediate family" and/or the participant, or to a
partnership, limited liability company or corporation pursuant to which the
only partners, members or shareholders, as the case may be, are one or more
members of the participant's "immediate family" and/or the participant; or
(iii) pursuant to a certified domestic relations order. Any Non-Qualified
Stock Option held by a transferee will continue to be subject to the same
terms and conditions that were applicable to the Option immediately prior
to the transfer, except that the Option will be transferable by the
transferee only by will or the laws of descent and distribution. For
purposes hereof, "immediate family" means the participant's children,
stepchildren, grandchildren, parents, stepparents, grandparents, spouse,
siblings (including half brothers and sisters), in-laws, and relationships
arising because of legal adoption.
B-7
48
(vi) Termination by Death. If any optionee's service with the
Company and its Affiliates terminates by reason of death, the Stock Option
may thereafter be exercised, to the extent exercisable at the date of
death, by the legal representative or legatee of the optionee, for a period
of six months (or such longer period as the Committee shall specify at any
time) from the date of death, or until the expiration of the stated term of
the Option, if earlier.
(vii) Termination by Reason of Disability.
(A) Any Stock Option held by an optionee whose service with
the Company and its Affiliates has terminated by reason of
Disability may thereafter be exercised, to the extent it was
exercisable at the time of such termination, for a period of
twelve months (or such longer period as the Committee shall
specify at any time) from the date of such termination of
service, or until the expiration of the stated term of the
Option, if earlier.
(B) The Committee shall have sole authority and discretion
to determine whether a participant's service has been terminated
by reason of Disability.
(C) Except as otherwise provided by the Committee at the
time of grant or otherwise, the death of an optionee during a
period provided in this Section 5(vii) for the exercise of a
Non-Qualified Stock Option, shall extend such period for six
months from the date of death, subject to termination on the
expiration of the stated term of the Option, if earlier.
(viii) Termination for Cause. If any optionee's service with the
Company and its Affiliates has been terminated for Cause, any Stock Option
held by such optionee shall immediately terminate and be of no further
force and effect; provided, however, that the Committee may, in its sole
discretion, provide that such Stock Option can be exercised for a period of
up to 30 days from the date of termination of service or until the
expiration of the stated term of the Option, if earlier.
(ix) Other Termination. Unless otherwise determined by the
Committee, if an optionee's service with the Company and its Affiliates
terminates for any reason other than death, Disability, or for Cause, any
Stock Option held by such optionee may thereafter be exercised, to the
extent it was exercisable on the date of termination of service, for three
months (or such longer period as the Committee shall specify at any time)
from the date of termination of service or until the expiration of the
stated term of the Option, if earlier.
(x) Annual Limit on Incentive Stock Options. To the extent
required for "incentive stock option" treatment under Section 422 of the
Code, the aggregate Fair Market Value (determined as of the time of grant)
of the Stock with respect to which Incentive Stock Options granted under
this Plan and any other plan of the Company or its Subsidiaries become
exercisable for the first time by an optionee during any calendar year
shall not exceed $100,000.
B-8
49
(xi) Form of Settlement. Shares of Stock issued upon exercise
of a Stock Option shall be free of all restrictions under the Plan, except
as otherwise provided in this Plan.
SECTION 6. Restricted Stock Awards.
(a) Nature of Restricted Stock Award. The Committee may grant
Restricted Stock Awards to Directors and employees of the Company or any
Affiliate. A Restricted Stock Award is an Award entitling the recipient to
acquire, at no cost or for a purchase price determined by the Committee, shares
of stock subject to such restrictions and conditions as the Committee may
determine at the time of grant ("Restricted Stock"). Conditions may be based on
continuing service and/or achievement of pre-established performance goals and
objectives. In addition, a Restricted Stock Award may be granted to a Director
or employee by the Committee in lieu of any compensation due to such Director or
employee.
(b) Acceptance of Award. A participant who is granted a Restricted
Stock Award shall have no rights with respect to such Award unless the
participant shall have accepted the Award within 60 days (or such shorter date
as the Committee may specify) following the award date by making payment to the
Company, if required, by certified or bank check or other instrument or form of
payment acceptable to the Committee in an amount equal to the specified purchase
price, if any, of the shares covered by the Award and by executing and
delivering to the Company a written instrument that sets forth the terms and
conditions of the Restricted Stock in such form as the Committee shall
determine.
(c) Rights as a Shareholder. Upon complying with Section 6(b) above, a
participant shall have all the rights of a shareholder with respect to the
Restricted Stock including voting and dividend rights, subject to
transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Restricted Stock Award. Unless the
Committee shall otherwise determine, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company until such shares
are vested as provided in Section 6(e) below.
(d) Restrictions. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein.
(e) Vesting of Restricted Stock. The Committee at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested."
(f) Waiver, Deferral and Reinvestment of Dividends. The written
instrument evidencing the Restricted Stock Award may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Stock.
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50
SECTION 7. Performance Share Awards.
(a) Nature of Performance Shares. A Performance Share Award is an award
entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. Performance Share Awards may be granted under the Plan to Directors and
employees of the Company or any Affiliate, including those who qualify for
awards under other performance plans of the Company. The Committee in its sole
discretion shall determine whether and to whom Performance Share Awards shall be
made, the performance goals applicable under each such Award, the periods during
which performance is to be measured, and all other limitations and conditions
applicable to the awarded Performance Shares; provided, however, that the
Committee may rely on the performance goals and other standards applicable to
other performance based plans of the Company in setting the standards for
Performance Share Awards under the Plan.
(b) Restrictions on Transfer. Performance Share Awards and all rights
with respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.
(c) Rights as a Shareholder. A participant receiving a Performance
Share Award shall have the rights of a shareholder only as to shares actually
received by the participant under the Plan and not with respect to shares
subject to the Award but not actually received by the participant. A participant
shall be entitled to receive a stock certificate evidencing the acquisition of
shares of Stock under a Performance Share Award only upon satisfaction of all
conditions specified in the written instrument evidencing the Performance Share
Award (or in a performance plan adopted by the Committee).
(d) Termination. Except as may otherwise be provided by the Committee
at any time prior to termination of service, a participant's rights in all
Performance Share Awards shall automatically terminate upon the participant's
termination of service with the Company and its Affiliates for any reason
(including, without limitation, death, Disability and for Cause).
(e) Acceleration, Waiver, Etc. At any time prior to the participant's
termination of service with the Company and its Affiliates, the Committee may in
its sole discretion accelerate, waive or, subject to Section 13, amend any or
all of the goals, restrictions or conditions imposed under any Performance Share
Award; provided, however, that in no event shall any provision of the Plan be
construed as granting to the Committee any discretion to increase the amount of
compensation payable under any Performance Share Award intended to qualify as a
Performance Award under Section 10 below to the extent such an increase would
cause the amounts payable pursuant to the Performance Share Award to be
nondeductible in whole or in part pursuant to Section 162(m) of the Code and the
regulations thereunder, and the Committee shall have no such discretion
notwithstanding any provision of the Plan to the contrary.
SECTION 8. Stock Appreciation Rights.
(a) Notice of Stock Appreciation Rights. A Stock Appreciation Right
("SAR") is a right entitling the participant to receive cash or Stock having a
fair market value equal to the appreciation in the
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51
Fair Market Value of a stated number of shares from the date of grant, or in the
case of rights granted in tandem with or by reference to an Option granted prior
to the grant of such rights, from the date of grant of the related Option to the
date of exercise. SARs may be granted to Directors and employees of the Company
or any Affiliate.
(b) Terms of Awards. SARs may be granted in tandem with or with
reference to a related Option, in which event the participant may elect to
exercise either the Option or the SAR, but not both, as to the same share
subject to the Option and the SAR, or the SAR may be granted independently. In
the event of an Award with a related Option, the SAR shall be subject to the
terms and conditions of the related Option. In the event of an independent
Award, the SAR shall be subject to the terms and conditions determined by the
Committee.
(c) Restrictions on Transfer. SARs shall not be transferred, assigned
or encumbered, except that SARs may be exercised by the executor, administrator
or personal representative of the deceased participant within six months of the
death of the participant (or such longer period as the Committee shall specify
at any time) and transferred pursuant to a certified domestic relations order.
(d) Payment Upon Exercise. Upon exercise of an SAR, the participant
shall be paid the excess of the then Fair Market Value of the number of shares
to which the SAR relates over the Fair Market Value of such number of shares at
the date of grant of the SAR, or of the related Option, as the case may be. Such
excess shall be paid in cash or in Stock having a Fair Market Value equal to
such excess or in such combination thereof as the Committee shall determine.
SECTION 9. Dividend Equivalents.
The Committee is authorized to grant Dividend Equivalents to
Directors and employees of the Company or any Affiliate. The Committee may
provide, at the date of grant or thereafter, that Dividend Equivalents shall be
paid or distributed when accrued or shall be deemed to have been reinvested in
additional Shares, or other investment vehicles as the Committee may specify,
provided that Dividend Equivalents (other than freestanding Dividend
Equivalents) shall be subject to all conditions and restrictions of the
underlying Awards to which they relate.
SECTION 10. Performance Awards.
If the Committee determines that a Performance Share Award or a Restricted
Stock Award to be granted to a participant should qualify as "performance-based
compensation" for purposes of Section 162(m) of the Code, the grant, vesting
and/or settlement of such award shall be contingent upon achievement of
preestablished performance goals and other terms set forth in this Section 10.
(a) Performance Goals Generally. The performance goals for such awards
("Performance Awards") shall consist of one or more business criteria and a
targeted level or levels of performance with respect to each of such criteria,
as specified by the Committee consistent with this Section 10. Performance goals
shall be objective and shall otherwise meet the requirements of Section 162(m)
of the Code and
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52
regulations thereunder (including Regulation 1.162-27 and successor regulations
thereto). The Committee may determine that such Performance Awards shall be
granted, vested and/or settled upon achievement of any one performance goal or
that two or more of the performance goals must be achieved as a condition to
grant, vesting and/or settlement of such Performance Awards. Performance goals
may differ for Performance Awards granted to any one participant or to different
participants.
(b) Business Criteria. One or more of the following business criteria
for the Company, on a consolidated basis, and/or for specified subsidiaries or
business units of the Company (except with respect to the total stockholder
return and earnings per share criteria), shall be used by the Committee in
establishing performance goals for such Performance Awards: (1) earnings,
including FFO; (2) revenues; (3) cash flow; (4) cash flow return on investment;
(5) return on assets; (6) return on investment; (7) return on capital; (8)
return on equity; (9) economic value added; (10) operating margin; (11) net
income; (12) pretax earnings; (13) pretax earnings before interest, depreciation
and amortization; (14) pretax operating earnings after interest expense and
before incentives, service fees, and extraordinary or special items; (15)
operating earnings; (16) total stockholder return; and (17) any of the above
goals as compared to the performance of a published or special index deemed
applicable by the Committee including, but not limited to, the Standard & Poor's
500 Stock Index.
(c) Performance Period; Timing for Established Performance Goals.
Achievement of performance goals in respect of such Performance Awards shall be
measured over a performance period, as specified by the Committee. Performance
goals shall be established not later than 90 days after the beginning of any
performance period applicable to such Performance Awards, or at such other date
as may be required or permitted for "performance-based compensation" under
Section 162(m) of the Code.
(d) Settlement of Performance Awards; Other Terms. Settlement of such
Performance Awards shall be in cash, Stock or other property, in the discretion
of the Committee. The Committee may, in its discretion, reduce the amount of a
settlement otherwise to be made in connection with such Performance Awards, but
may not exercise discretion to increase any such amount payable to a participant
in respect of a Performance Award subject to this Section 10. The Committee
shall specify the circumstances in which such Performance Awards shall be paid
or forfeited in the event of a termination of employment of the participant
prior to the end of a performance period or settlement of Performance Awards.
(e) Written Determination. All determinations by the Committee as to
the establishment of performance goals or potential individual Performance
Awards and as to the achievement of performance goals relating to Performance
Awards under this Section 10 shall be made in writing in the case of any Award
intended to qualify under Section 162(m) of the Code.
SECTION 11. Tax Withholding.
(a) Payment by Participant. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includible in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any Federal, state, or local
taxes of any
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53
kind required by law to be withheld with respect to such income. The Company and
its Affiliates shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the participant.
(b) Payment in Shares. A participant may elect, subject to such rules
and limitations as may be established by the Committee from time to time, to
have such tax withholding obligation satisfied, in whole or in part, by (i)
authorizing the Company to withhold from shares of Stock to be issued pursuant
to any Award a number of shares with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due
(based on the minimum statutory rates), or (ii) transferring to the Company
shares of Stock owned by the participant with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy the withholding
amount due (based on the minimum statutory rates).
SECTION 12. Transfer, Leave of Absence, Etc.
For purposes of the Plan, the following events shall not be deemed a
termination of service:
(a) a transfer to the employment of the Company from an Affiliate or
from the Company to an Affiliate, or from one Affiliate to another; and
(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 13. Amendments and Termination.
The Board may at any time amend or discontinue the Plan and the Committee
may at any time amend or cancel any outstanding Award, but no such action shall
adversely affect rights under any outstanding Award without the holder's consent
and, except as set forth in Section 3(b) above, no amendment to any outstanding
Award shall reduce the exercise price of the Award.
SECTION 14. Status of Plan.
With respect to the portion of any Award which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
unsecured creditor of the Company unless the Committee shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet the
Company's obligations to deliver Stock or make payments with respect to Awards
hereunder, provided that the existence of such trusts or other arrangements is
consistent with the provision of the foregoing sentence.
B-13
54
SECTION 15. Change of Control Provisions.
Upon the occurrence of a Change of Control as defined in this Section 15:
(a) Each Stock Option and each Stock Appreciation Right shall
automatically become fully exercisable unless the Committee shall otherwise
expressly provide at the time of grant.
(b) Restrictions and conditions on Awards of Restricted Stock,
Performance Shares and Dividend Equivalents shall automatically be deemed
waived, and the recipients of such Awards shall become entitled to receipt of
the maximum amount of Stock subject to such Awards unless the Committee shall
otherwise expressly provide at the time of grant.
(c) Unless otherwise expressly provided at the time of grant,
participants who hold Options shall have the right, in lieu of exercising the
Option, to elect to surrender all or part of such Option to the Company and to
receive cash in an amount equal to the excess of (i) the higher of (x) the Fair
Market Value of a share of Stock on the date such right is exercised and (y) the
highest price paid for Stock or, in the case of securities convertible into
Stock or carrying a right to acquire Stock, the highest effective price (based
on the prices paid for such securities) at which such securities are convertible
into Stock or at which Stock may be acquired, by any person or group whose
acquisition of voting securities has resulted in a Change of Control of the
Company over (ii) the exercise price per share under the Option, multiplied by
the number of shares of Stock with respect to which such right is exercised.
(d) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "person", as such term is used in Sections 13(d) and
14(d) of the Act (other than the Company, any of its Subsidiaries, any
trustee, fiduciary or other person or entity holding securities under any
employee benefit plan of the Company or any of its Subsidiaries), together
with all "affiliates" and "associates" (as such terms are defined in Rule
12b-2 under the Act) of such person, shall become the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 40% or more of either
(A) the combined voting power of the Company's then outstanding securities
having the right to vote in an election of the Company's Board of Directors
("Voting Securities") or (B) the then outstanding shares of Common Stock of
the Company (in either such case other than as a result of acquisition of
securities directly from the Company); or
(ii) persons who, as of the effective date of this Plan,
constitute the Company's Board of Directors (the "Incumbent Directors")
cease for any reason, including without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at least
a majority of the Board, provided that any person becoming a director of
the Company subsequent to the effective date of this Plan whose election or
nomination for election was approved by a vote of at least a majority of
the Incumbent Directors shall, for purposes of this Plan, be considered an
Incumbent Director; or
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(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 50% or more of
the voting stock of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company or (C) any
plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Common Stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of Common Stock beneficially owned by any person
to 40% or more of the shares of Common Stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any person to 40% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any person referred to
in clause (x) or (y) of this sentence shall thereafter become the beneficial
owner of any additional shares of Common Stock or other Voting Securities (other
than pursuant to a stock split, stock dividend, or similar transaction), then a
"Change of Control" shall be deemed to have occurred for purposes of the
foregoing clause (i).
SECTION 16. General Provisions.
(a) No Distribution; Compliance with Legal Requirements. The Committee
may require each person acquiring shares pursuant to an Award to represent to
and agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof. No shares of Stock shall be issued
pursuant to an Award until all applicable securities laws and other legal and
stock exchange requirements have been satisfied. The Committee may require the
placing of such stop-orders and restrictive legends on certificates for Stock
and Awards as it deems appropriate.
(b) Delivery of Stock Certificates. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan and
the grant of Awards do not confer upon any employee any right to continued
employment with the Company or any Subsidiary.
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SECTION 17. Effective Date of Plan.
The Plan shall become effective upon approval by the stockholders of the
Company.
SECTION 18. Governing Law.
THIS PLAN SHALL BE GOVERNED BY NEW YORK LAW WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF, EXCEPT TO THE EXTENT SUCH LAW IS
PREEMPTED BY FEDERAL LAW.
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P
R FIRST INDUSTRIAL REALTY TRUST, INC.
O
X PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON MAY 16, 2001
Y SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Michael W. Brennan and Michael J. Havala, or either of
them, with full powers of substitution, as proxies of the undersigned, with the
authority to vote upon and act with respect to all shares of stock of First
Industrial Realty Trust, Inc. (the "Company"), which the undersigned is entitled
to vote, at the Annual Meeting of Stockholders of the Company, to be held at the
Sears Tower Conference Center, 233 South Wacker Drive, 33rd Floor, Lincoln Room,
Chicago, Illinois, 60606, commencing Wednesday, May 16, 2001, at 9:00 a.m., and
at any and all adjournments thereof, with all the powers the undersigned would
possess if then and there personally present, and especially (but without
limiting the general authorization and power hereby given) with the authority to
vote on the reverse side.
Nominees (term, if elected, expires 2004):
JAY H. SHIDLER JOHN L. LESHER J. STEVEN WILSON
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED HEREIN. IF THIS
PROXY DOES NOT INDICATE A CONTRARY CHOICE, IT WILL BE VOTED FOR ALL THE NOMINEES
FOR DIRECTOR AS LISTED IN ITEM 1, FOR THE APPROVAL OF THE 2001 STOCK INCENTIVE
PLAN DESCRIBED IN ITEM 2, FOR THE RATIFICATION OF AUDITORS DESCRIBED IN ITEM 3,
AND IN THE DISCRETION OF THE PERSONS NAMED AS PROXIES HEREIN WITH RESPECT TO ANY
AND ALL MATTERS REFERRED TO IN ITEM 4.
-----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
58
[X] (PLEASE MARK YOUR)
VOTES AS IN THIS
EXAMPLE.
FOR ALL
NOMINEES WITHHOLD
(except as marked AUTHORITY AUTHORITY AUTHORITY
to the contrary on to vote for all GRANTED WITHHELD
the line below) nominees FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Approval of [ ] [ ] [ ]
three Class I the 2001 Stock
Directors Incentive Plan:
(see reverse)
To withhold authority for any individual nominee or nominees, write his or their name or names in the space below:
- -------------------------------------------------------------------------------------------------------------------
AUTHORITY AUTHORITY
GRANTED WITHHELD
FOR AGAINST ABSTAIN
3. Ratification [ ] [ ] [ ]
of the selection of
PricewaterhouseCoopers LLP
as the Company's independent
auditors:
4. In their discretion, on any and all other matters as may properly
come before the meeting
NOTE: PLEASE DATE PROXY AND SIGN IT EXACTLY AS NAME OR NAMES APPEAR TO THE
LEFT. ALL JOINT OWNERS OF SHARES SHOULD SIGN. STATE FULL TITLE WHEN SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ET CETERA. PLEASE RETURN SIGNED
PROXY IN THE ENCLOSED ENVELOPE.
The undersigned hereby revokes any proxy or proxies heretofore given to vote upon
or act with respect to said stock and hereby ratifies and confirms all that the proxies
named herein and their substitutes, or any of them, may lawfully do by virtue hereof.
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Signature of Stockholder (if held jointly) DATE
* FOLD AND DETACH HERE *
