SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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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 Section240.14a-12
CENTERPOINT PROPERTIES TRUST
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CENTERPOINT PROPERTIES TRUST
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
CenterPoint Properties Trust (the "Company") will be held at 1808 Swift Drive,
Oak Brook, Illinois on Wednesday, May 16, 2001 at 1:30 p.m., Central Daylight
Time, for the following purposes:
1. to elect nine trustees to serve until the next annual meeting of
shareholders or special meeting of shareholders held in place thereof and
until their respective successors are elected and have qualified;
2. to transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Trustees has fixed the close of business on March 20, 2001 as
the record date for the determination of common shareholders entitled to vote at
the meeting. Only those shareholders whose names appear on record on the books
of the Company at the close of business on such date are entitled to notice of,
and to vote at, the Annual Meeting or any adjournment or adjournments thereof.
You are cordially invited to attend the meeting in person. Whether or not
you expect to attend the meeting, please sign and date the enclosed proxy and
return it as promptly as possible in the enclosed self-addressed,
postage-prepaid envelope. If you attend the Annual Meeting of Shareholders and
wish to vote in person, your proxy will not be used.
By Order of the Board of Trustees,
/s/ Paul S. Fisher
Paul S. Fisher
SECRETARY
March 31, 2001
Oak Brook, Illinois
CENTERPOINT PROPERTIES TRUST
1808 SWIFT ROAD
OAK BROOK, ILLINOIS 60523
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 2001
This proxy statement is furnished to holders of the Common Shares ("Common
Shares" or "Shares") of Beneficial Interest, par value $.001 per share, of
CENTERPOINT PROPERTIES TRUST (hereinafter called the "Company") in connection
with the solicitation of proxies by the Board of Trustees of the Company to be
used at the Annual Meeting of Shareholders of the Company to be held at 1808
Swift Road, Oak Brook, Illinois on Wednesday, May 16, 2001 at 1:30 p.m., Central
Daylight Time, and at any adjournment or adjournments thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting of Shareholders.
If the accompanying form of proxy is executed and returned, it may
nevertheless be revoked at any time insofar as it has not yet been exercised.
Unless otherwise directed in proxies received, the persons named in the
accompanying form of proxy will vote such proxy for election to the board of the
nominees named below. It is anticipated that this proxy statement and the
enclosed proxy will be first mailed to record holders of the Company's Common
Shares on or about March 31, 2001.
The Board of Trustees has fixed the close of business on March 20, 2001 as
the record date for the determination of shareholders entitled to receive notice
of and vote at the Annual Meeting of Shareholders. As of March 20, 2001, the
Company had outstanding 22,324,454 Common Shares.
Each Common Share is entitled to one vote on each matter presented. At the
Annual Meeting, inspectors of election will determine whether there is a quorum
present. A quorum is required to conduct any business at the meeting. For a
quorum to be present, the holders of a majority of the outstanding Common Shares
must be present in person or by proxy. If you mark your proxy card "abstain," or
if your proxy is held in street name by your broker and it is not voted on all
proposals, your proxy will nonetheless be counted as present for purposes of
determining a quorum. Similarly, in the event a nominee holding shares for
beneficial owners votes on certain matters pursuant to discretionary authority
or instruction from the beneficial owners, but with respect to one or more other
matters does not receive instructions from the beneficial owners and does not
exercise discretionary authority (a so-called "non-vote"), the shares held by
the nominee will be deemed present at the meeting for quorum purposes, but will
not be deemed to have voted on such other matters.
Under the rules of the New York Stock Exchange, brokers who hold shares in
street name have the authority to vote on certain routine matters on which they
have not received voting instructions from beneficial owners. Consequently,
brokers holding Common Shares in street name who do not receive voting
instructions are entitled to vote on the election of directors of the Company.
The Company will pay all of the costs of soliciting these proxies, including
the cost of mailing the proxy solicitation material and the cost of services
rendered by Corporate Investor Communications, Inc., a proxy solicitation firm,
which are estimated at $6,000. In addition, our directors and employees may also
solicit proxies in person, by telephone or by other electronic means of
communication. The Company will not compensate these directors and employees
additionally for this solicitation, but the Company may reimburse them for any
out-of-pocket expenses that they incur in the process of soliciting the proxies.
We will arrange for brokers and other custodians, nominees and fiduciaries to
forward the solicitation materials to their principals, and the Company will
reimburse them for any out-of-pocket expenses, which they reasonably incur in
the process of forwarding the materials.
1
SHAREHOLDER PROPOSALS AND DISCRETIONARY
AUTHORITY FOR THE 2002 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the Company's 2002
Annual Meeting of Shareholders must be received by the Company for inclusion in
the proxy statement and form of proxy for that meeting no later than
December 3, 2001.
If the Company does not receive notice of any proposal to be presented at
the Company's 2001 Annual Meeting of Shareholders on or before February 15,
2002, the Company's proxy holders shall have discretionary authority to vote on
such proposal.
ELECTION OF TRUSTEES
(PROPOSAL 1)
At the meeting a Board of Trustees is to be elected. The nominees for
election as trustee are Nicholas C. Babson, Martin Barber, Norman R. Bobins,
Alan D. Feld, Paul S. Fisher, John S. Gates, Jr., Michael M. Mullen, Thomas E.
Robinson and Robert L. Stovall. John J. Kinsella has chosen not to stand for
re-election to the board. The vacancy created by his decision will not be filled
at this time. Each trustee elected is to hold office until the next annual
meeting of shareholders or special meeting of shareholders held in place
thereof, and until his successor is elected and qualified. Trustees are elected
by a plurality of the votes cast. If you are present and do not vote, or if you
send in your proxy marked "withheld," your vote will have no impact on the
election of those directors as to whom you have withheld votes. The Board of
Trustees does not contemplate that any nominee will be unable to serve as a
trustee for any reason; however, if such inability should occur prior to the
meeting, the proxy holders will select another nominee to stand for election in
his place and stead. The Board of Trustees recommends that the shareholders vote
"FOR" the election of Messrs. Babson, Barber, Bobins, Feld, Fisher, Gates,
Mullen, Robinson and Stovall.
Following is a summary of the name, age and principal occupation or
employment for the past five years of each nominee for election as a trustee and
each executive officer of the Company.
NAME AGE POSITION
---- -------- ------------------------------------------
Martin Barber............................. 56 Chairman of the Board and Trustee
Robert L. Stovall......................... 68 Vice Chairman of the Board and Trustee
John S. Gates, Jr......................... 47 President, Chief Executive Officer and
Trustee
Michael M. Mullen......................... 46 Executive Vice President, Chief Operating
Officer and Trustee
Paul S. Fisher............................ 45 Executive Vice President, Secretary, Chief
Financial Officer, General Counsel and
Trustee
Rockford O. Kottka........................ 50 Executive Vice President and Treasurer
Paul T. Ahern............................. 40 Executive Vice President, Chief Investment
Officer and Director of Portfolio
Operations
Nicholas C. Babson........................ 54 Independent Trustee
Norman R. Bobins.......................... 58 Independent Trustee
Alan D. Feld.............................. 64 Independent Trustee
Thomas E. Robinson........................ 53 Independent Trustee
MARTIN BARBER. Mr. Barber has been the Chairman of the Board of Trustees of
the Company since its formation in 1984. He has been involved in commercial real
estate since 1969, when he acquired a
2
substantial interest in Arrowcroft Investments Limited, a commercial property
development group, where he served as Managing Director until 1972, when he sold
his interest. At that time, he founded Capital and Regional Holdings Limited. In
1978, he formed Capital and Regional Properties plc (which became
publicly-traded in the London stock market in 1986) to engage in real estate and
related activities in the United Kingdom, and has served as its Chairman until
2000 when he became CEO and an outside Director took the chair. In 1984,
together with Mr. Gates, he formed the Company to engage in real estate
activities in the United States, and has also served as its Chairman since that
time. From 1984, Mr. Barber served as a Director and from 1995 as Chairman of
Primesight plc ("Primesight"), a UK based billboard company that listed on the
London Stock Exchange in 1997. During 1999 Scottish Media Group acquired
Primesight on an agreed basis and Mr. Barber retired from the Board. In 1991,
Mr. Barber was appointed a Non-Executive Director of TransEuropean Properties
(General Partner) Limited, a commingled real estate fund comprised of European
and U.S. based pension funds established to invest in European properties. He
retired from the Board in 1998 when he was appointed Chairman of PRICOA Property
Investment Management Ltd. ("PRICOA"), a wholly owned subsidiary of the
Prudential Insurance Company of America. PRICOA is a real estate fund management
group investing in continental Europe.
ROBERT L. STOVALL. Mr. Stovall has been a Trustee of the Company since
August 1993 and was appointed Vice Chairman of the Board of Trustees in
July 1997. From August 1993 to July 1997, Mr. Stovall was an Executive Vice
President and the Chief Operating Officer of the Company. From 1975 until he
joined the Company, he served as President and Chief Executive Officer of FCLS
Investors Group, Inc. ("FCLS"), a Chicago-based owner and manager of
warehouse/industrial real estate which he co-founded in 1987 and the operations
of which were consolidated in 1993 with those of the Company. Mr. Stovall began
his career as a real estate salesman in 1957 for the Great Southwest Industrial
District in Arlington-Grand Prairie, Texas. He joined J.L. Williams and
Co. Inc. ("Williams"), a Texas-based industrial developer, in 1961. In 1967, he
opened the Chicago branch office of Williams and became Executive Vice President
of the firm. In 1978, he formed Four Columns, Ltd. and purchased Williams'
Chicago operation and properties. In 1987, Four Columns, Ltd. was merged with
Stava Construction Company, another warehouse/industrial development company,
and FCLS/Stava Group was formed, where Mr. Stovall served as Chairman until he
joined the Company. He is a member of the Board of Trustees of Greater North
Pulaski Development Corporation, a not-for-profit community development
corporation. Mr. Stovall is a 1955 honors graduate of Yale University with a
Bachelors of Arts degree in American Studies. Mr. Stovall is a member of the
National Association of Industrial and Office Parks. Mr. Stovall is the
father-in-law of Mr. Mullen.
JOHN S. GATES, JR. Mr. Gates has been the President, Chief Executive
Officer and a Trustee of the Company since its formation in 1984. From 1977 to
1981, he was a leasing agent and an investment property acquisition specialist
with CB Richard Ellis Commercial, a real estate brokerage and acquisition firm.
In 1981, he co-founded the Chicago office of Jones Lang Wooton, which advised
foreign and domestic institutions on property investment throughout the Midwest.
He received his Bachelors degree in Economics from Trinity College (Hartford).
Mr. Gates is a trustee of the National Association of Real Estate Investment
Trusts and the Center for Urban Land Economics Research of the University of
Wisconsin. Mr. Gates is an active member of the Young Presidents Organization,
the Real Estate Roundtable, Urban Land Institute and the National Association of
Industrial and Office Parks.
MICHAEL M. MULLEN. Mr. Mullen was appointed a Trustee of the Company in
May1999 and has been the Executive Vice President and Chief Operating Officer of
the Company since July 1997; and, from August 1993 to July 1997, was the
Executive Vice President-Marketing and Acquisitions and Chief Investment and
Development Officer of the Company. He was a co- founder of FCLS and served as
its Vice President-Sales with responsibility for leasing, built-to-suit sales
and acquisitions since 1987. Mr. Mullen graduated from Loyola University in 1975
with a Bachelor's degree in Finance. He serves
3
on the Board of Directors of Brauvin Trust, a privately held retail REIT.
Mr. Mullen is the son-in-law of Mr. Stovall.
PAUL S. FISHER. Mr. Fisher was appointed a Trustee of the Company in
May 1999. He has been an Executive Vice President of the Company since
August 1993, the Secretary, Chief Financial Officer and General Counsel of the
Company since 1991. Between 1988 and 1991, Mr. Fisher was Vice President-
Finance and Acquisitions of Miglin-Beitler, Inc., a Chicago-based office
developer. From 1986 to 1988, Mr. Fisher was Vice President-Corporate Finance,
at The First National Bank of Chicago. From 1982 through 1985, he was Vice
President-Partnership Finance, at VMS Realty, a Chicago-based real estate
syndication company. Mr. Fisher graduated from the University of Notre Dame,
summa cum laude, with a Bachelor of Arts degree in Economics and Philosophy in
1977. Mr. Fisher received his Juris Doctorate from the University of Chicago
School of Law in 1980. He serves on the advisory board of the Guthrie Center for
Real Estate Research at the Kellogg Graduate School of Management.
ROCKFORD O. KOTTKA. Mr. Kottka has been an Executive Vice President of the
Company since July 2000 and a Senior Vice President and the Treasurer of the
Company since 1989. From 1978 to 1989, Mr. Kottka served as the Vice President
and Controller of Globe Industries, Inc., a Chicago based manufacturer of
roofing and automotive acoustical materials. Mr. Kottka graduated from St.
Joseph's Calumet College in 1975 with a Bachelor of Science degree in
Accountancy. Mr. Kottka is a certified public accountant. He is a member of the
American Institute of Certified Public Accountants and the Illinois CPA Society.
PAUL T. AHERN. Mr. Ahern has been Executive Vice President, Chief
Investment Officer and Director of Portfolio Operations since February 1999.
From June 1994 to February 1999, Mr. Ahern served as Senior Vice President of
Investments of the Company. Mr. Ahern started his career as an accountant for
Centex Homes Corporation. From June 1985 to June 1990, he was an investment
analyst, leasing agent and an investment property specialist with CB Commercial,
a real estate brokerage firm. From June 1990 to January 1993, he was an
investment property specialist for American Heritage Corporation, a real estate
investment firm. Mr. Ahern graduated from Indiana University in 1982 with a
bachelor's degree in Accounting. Mr. Ahern is a member of The Society of
Industrial and Office Realtors and the National Association of Real Estate
Investment Trusts.
NICHOLAS C. BABSON. Mr. Babson has been an independent trustee of the
Company since December 1993, when he was appointed to fill a vacancy on the
Board of Trustees. Mr. Babson currently serves as Chief Executive Officer of
Babson Holdings, Inc. an investment company serving the interests of the Babson
family. He has held this position for the past eighteen months. Prior to this
position, Mr. Babson served as Chairman and CEO of Babson Bros. Co., a worldwide
distributor and manufacturer of dairy equipment, located in Naperville,
Illinois. Mr. Babson joined Babson Brothers in 1973, following two years service
in the United States Army. Mr. Babson also serves as a member of the Board of
Trustees of the Farm Foundation and has served as a member and Past Chairman of
the National FFA Foundation. Mr. Babson's directorships for publicly traded
companies, other than CenterPoint Properties Trust, include The Gehl Company
(NASDAQ) and for private companies include Bradner Central Company and RREEF
America REIT II, Inc., both located in Chicago, Illinois. Mr. Babson is also a
member of the Board and Board Chairman of the Chicago Shakespeare Theater.
Mr. Babson graduated from the University of the South with a Bachelor of Arts
degree in Political Science (1968) and minor study concentration in Forestry
(1972). He currently serves on the Board of Regents of the University.
NORMAN R. BOBINS. In March 1998, Mr. Bobins was nominated by the Board to
fill a vacancy created by an increase in the number of trustees. Mr. Bobins is
President and Chief Executive Officer of LaSalle National Bank and LaSalle
National Corporation. He is also Chairman of LaSalle Bank N.A. and head of
Midwest Commercial Banking for ABN AMRO North America, Inc., the parent of
LaSalle Banks. LaSalle National Bank is a participating lender in the Company's
$350 million
4
unsecured credit facility and is co-lead lender in the $50 million unsecured
construction loan facility of Center Point Development Corporation, a subsidiary
of the Company. In April 1981, Mr. Bobins joined The Exchange National Bank of
Chicago (which was acquired by LaSalle National Corporation in 1990), as a
Senior Executive Vice President and Chief Lending Officer. Prior to 1981,
Mr. Bobins was Senior Vice President and held various other commercial lending
positions at American National Bank and Trust Company over fourteen years.
Mr. Bobins holds directorships with the American-Israel Chamber of Commerce &
Industry and the Anti-Defamation League of the B'nai B'rith, which honored him
with its Distinguished Service Award in 1982. In June 1995, Mayor Richard Daley
named Mr. Bobins to Chicago's School Reform Board of Trustees. Mr. Bobins also
serves as a trustee of the Public School Teachers' Pension and Retirement Fund
of Chicago and The University of Chicago Hospitals. He is Chairman of the Board
of Trustees of the Chicago Clearing House Association and a Director of the
Federal Home Loan Bank of Chicago and RREEF America REIT II, Inc. and a member
of numerous other boards. Mr. Bobins graduated from the University of Wisconsin
in 1964 with a Bachelor of Science degree and received his M.B.A. from The
University of Chicago in 1967.
ALAN D. FELD. Mr. Feld has been an independent trustee of the Company since
December 1993, when he was appointed to fill a vacancy on the Board of Trustees.
Since 1960, Mr. Feld has been associated with the law firm of Akin, Gump,
Straus, Hauer & Feld, L.P.P. in Dallas, Texas. He currently serves as a Senior
Executive Partner of the firm and sole shareholder of a professional corporation
that is a partner of the firm. Mr. Feld graduated from Southern Methodist
University with a Bachelor of Arts degree in 1957. Mr. Feld received his LL.B.
degree from the Southern Methodist University in 1960. He has served as a member
of the Texas State Bar since 1960 and a member of the District of Columbia Bar
since 1971. He has served as a member of the Board of Trustees of Brandeis
University (1986 - 1996) and presently serves on the Board of Trustees of
Southern Methodist University. He also serves on the Board of Directors of Clear
Channel Communications, Inc., a New York Stock Exchange listed company, and is a
Trustee of the AMR AAdvantage Funds (Mutual Funds).
THOMAS E. ROBINSON. Mr. Robinson has been an independent trustee of the
Company since December 1993, when he was appointed to fill a vacancy on the
Board of Trustees. Mr. Robinson is currently a Managing Director in the
Corporate Finance Real Estate Group of Legg Mason Wood Walker, an
investment-banking firm headquartered in Baltimore, Maryland, which he joined in
June 1997. Prior to joining that firm, Mr. Robinson was President and Chief
Financial Officer of Storage USA, Inc., a REIT headquartered in Columbia,
Maryland, engaged in the business of owning and operating self-storage
warehouses, which he joined in August 1994. He also serves as a director of
Tanger Factory Outlet Centers, Inc. Between August 1993 and August 1994,
Mr. Robinson was a Senior Executive of Jerry J. Moore Investments, an owner and
operator of community and neighborhood shopping centers located in Texas. Prior
to joining Jerry J. Moore Investments, Mr. Robinson served as National Trustee
of REIT Advisory Services for the national accounting firm of Coopers & Lybrand
from 1989 to 1993. From 1981 to 1989, Mr. Robinson served as Vice President and
General Counsel for the National Association of Real Estate Investment Trusts.
Mr. Robinson received his Bachelor's degree from Washington and Lee University,
his Master's degree in taxation from Georgetown University Law School, and his
Juris Doctorate degree from Suffolk University Law School.
BOARD OF TRUSTEES AND COMMITTEES
During 2000, the Board of Trustees held 16 meetings. With the exception of
John J. Kinsella, who attended approximately 62% and is not standing for
re-election, each trustee attended more than 75% of the aggregate of the
meetings of the Board of Trustees and the meetings held by Board committees on
which he served.
The Board of Trustees of the Company has standing Asset Allocation, Audit,
Compensation and Governance and Nominating Committees.
5
ASSET ALLOCATION COMMITTEE. The Asset Allocation Committee is comprised of
two trustees, Messrs. Babson and Stovall, one of whom is an independent trustee.
The Asset Allocation Committee is authorized to review investment and
disposition recommendations of management, make investment decisions for
investments under $10 million and to make recommendations to the Board of
Trustees for other investments. The Asset Allocation Committee held nine
meetings during 2000.
AUDIT COMMITTEE. The Audit Committee is comprised of three trustees,
Messrs. Barber, Bobins, and Robinson, all of whom are independent trustees. The
Audit Committee is authorized to review management's accounting and control
practices and compliance with prevailing financial reporting standards, to make
recommendations to the Board of Trustees regarding financial reporting policy,
and to oversee the Company's annual audit. The Audit Committee held six meetings
during 2000.
COMPENSATION COMMITTEE. The Compensation Committee is comprised of three
trustees, Messrs. Babson, Bobins and Feld, all of whom are independent trustees.
The Compensation Committee exercises all powers of the Board of Trustees in
connection with the compensation of executive officers, including incentive
compensation and benefit plans. The independent trustees on the Compensation
Committee also serve as the Company's Long Term Incentive Committee and, as
such, are empowered to grant share options in accordance with the 1993 Plan, the
1995 Plan, and the 2000 Omnibus Employee Retention and Incentive Plan to the
trustees, management and other employees of the Company. The Compensation
Committee held four meetings during 2000.
GOVERNANCE AND NOMINATING COMMITTEE. The Governance and Nominating
Committee is comprised of three trustees, Messrs. Barber, Feld and Robinson all
of whom are independent trustees. The Nominating and Governance Committee is
authorized to review the Company's governance practices, including the size and
composition of the Board of Trustees and to make recommendations to the Board of
Trustees concerning nominees for election as trustees. The Nominating and
Governance Committee held one meeting during 2000.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's trustees and executive officers, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file with the Securities and Exchange Commission (the
"SEC") and the New York Stock Exchange initial reports of ownership and reports
of changes in ownership of Common Shares and other equity securities of the
Company. Officers, trustees and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, the Company believes that all Section 16(a) filing
requirements applicable to its officers, trustees and greater than ten percent
beneficial owners were complied with during the fiscal year ended December 31,
2000.
6
SHARE OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth information as of March 1, 2001 with respect
to the beneficial ownership of the Common Shares of the Company by (1) each
person who is known by the Company to own beneficially more than 5% of its
Shares, (2) each trustee of the Company, (3) the Company's Chief Executive
Officer and four other executive officers and (4) the Company's trustees and
executive officers as a group.
SHARES BENEFICIALLY OWNED
------------------------------------------
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS
------------------------------------ ----------------------- ----------------
Davis Selected Advisers, L.P. ............................. 3,029,205(2) 13.4%
2949 East Elvira Road, Suite 101
Tucson, Arizona
FMR Corp. ................................................. 2,805,420(3) 12.4%
82 Devonshire Street
Boston, Massachusetts 02109
Putnam Investment Management, Inc. ........................ 2,319,109(4) 10.3%
One Post Office Square
Boston, Massachusetts 02109
Stichting Pensioenfonds ABP ............................... 1,149,910(5) 5.1%
Oude Lindestraat 70
Postbus 2889
6401 DL Heerlen
The Netherlands
Martin Barber ............................................. 98,003(6) *
(Chairman and Trustee)
10 Lower Grosvenor Place
London, England SW1W 0EN
John S. Gates, Jr. ........................................ 682,610(7) 3.0%
(President, Chief Executive Officer and Trustee)
1808 Swift Road
Oak Brook, Illinois 60523
Robert L. Stovall ......................................... 125,856(8) *
(Vice Chairman and Trustee)
1808 Swift Road
Oak Brook, Illinois 60523
Nicholas C. Babson ........................................ 26,348(9) *
(Trustee)
980 N. Michigan Ave., Suite 1400
Chicago, Illinois 60611
Norman R. Bobins .......................................... 11,034(10) *
(Trustee)
LaSalle National Bank
135 South LaSalle Street
Chicago, Illinois 60603
7
SHARES BENEFICIALLY OWNED
------------------------------------------
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS
------------------------------------ ----------------------- ----------------
Alan D. Feld .............................................. 27,794(11) *
(Trustee)
1700 Pacific Avenue
Suite 4100
Dallas, Texas 75201
John J. Kinsella .......................................... 29,880(11) *
(Trustee)
1550 N. State Parkway
Chicago, Illinois 60610
Thomas E. Robinson ........................................ 27,499(11) *
(Trustee)
Legg Mason Wood Walker
100 Light Street
34th Floor
Baltimore, Maryland 21202
Michael M. Mullen ......................................... 189,360(12) *
(Executive Vice President, Chief
Operating Officer and Trustee)
1808 Swift Road
Oak Brook, Illinois 60523
Paul S. Fisher ............................................ 210,525(13) *
(Executive Vice President
Secretary, Chief Financial Officer,
General Counsel and Trustee)
1808 Swift Road
Oak Brook, Illinois 60523
Rockford O. Kottka ........................................ 60,680(14) *
(Executive Vice President and Treasurer)
1808 Swift Road
Oak Brook, Illinois 60523
Paul T. Ahern ............................................. 25,325(15) *
Executive Vice President
Chief Investment Officer and Director
of Portfolio Operations
1808 Swift Road
Oak Brook, Illinois 60523
All trustees and executive officers as a group (12
persons)................................................. 1,514,914 6.7%
------------------------
* Less than one percent.
(1) Beneficial ownership is the direct ownership of Common Shares of the
Company including the right to control the vote or investment of or acquire
such Common Shares (for example, through the exercise of share options or
pursuant to trust agreements) within the meaning of Rule 13d-3 under the
Securities and Exchange Act of 1934. The shares owned by each person or by
the group and shares included in the total number of shares outstanding
have been adjusted in accordance with said Rule 13d-3.
8
(2) As reported on a Schedule 13G filed by Davis Selected Advisors, L.P. on
February 14, 2001, Davis Selected Advisers, L.P. has sole voting power and
sole dispositive power with respect to all 3,029,205 Common Shares.
(3) As reported on a Schedule 13G/A filed by FMR Corp. on February14, 2001, FMR
Corp. has sole voting power with respect to 1,136,400 Common Shares and has
sole dispositive power with respect to all of the 2,805,420 Common Shares.
(4) As reported on a Schedule 13G filed by Putnam Investments, LLC. on
February13, 2001, Putnam Investments, LLC. has sole voting power with
respect to none of the Common Shares and has shared dispositive power with
respect to all of the 2,319,109 Common Shares.
(5) As reported on a Schedule 13D filed by Stichting Pensioenfonds ABP on
February13, 2001, Stichting Pensioenfonds ABP has sole voting power with
respect to all of the 1,148,138 Common Shares and has shared dispositive
power with respect to all of the 1,148,138 Common Shares.
(6) Includes options to purchase 94,200 Common Shares under the Company's Stock
Option Plan exercisable within 60 days.
(7) Includes options to purchase 276,768 Common Shares under the Company's
Stock Option Plan exercisable within 60 days and 540 shares owned by an IRA
for the benefit of John S. Gates, Jr. Also includes 30,000 Common Shares
owned by the Gates Charitable Trust, under which Mr. Gates acts as trustee
and exercises voting power with respect to such Common Shares. Mr. Gates
disclaims beneficial ownership of 185 shares owned by an IRA for the
benefit of his wife.
(8) Includes options to purchase 16,000 Common Shares under the Company's Stock
Option Plan exercisable within 60 days.
(9) Includes options to purchase 23,800 Common Shares under the Company's Stock
Option Plan exercisable within 60 days.
(10) Includes options to purchase 10,204 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(11) Includes options to purchase 24,400 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(12) Includes options to purchase 112,214 Common Shares under the Company's
Stock Option Plan exercisable within 60 days and 2,000 shares owned by his
wife.
(13) Includes options to purchase 178,859 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(14) Includes options to purchase 31,220 Common Shares under the Company's
Stock Option Plan exercisable within 60 days.
(15) Includes options to purchase 1,879 Common Shares under the Company's Stock
Option Plan exercisable within 60 days.
9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation awarded
to the Company's Chief Executive Officer and four other executive officers for
the years ended December 31, 2000, December 31, 1999 and December 31, 1998.
ANNUAL COMPENSATION
------------------------------------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($)
------------------ -------- ------------ -------- ---------------
John S. Gates Jr.,.......... 2000 318,100 319,994 -0-
Chief Executive 1999 285,600 162,739 -0-
Officer 1998 244,800 150,000 -0-
Michael M. Mullen........... 2000 280,000 340,500 -0-
Executive Vice-President 1999 255,000 219,016 -0-
and Chief Operating
Officer 1998 204,000 115,000 -0-
Paul S. Fisher.............. 2000 280,000 208,350 -0-
Executive Vice-President, 1999 255,000 100,048 -0-
Secretary, Chief Financial 1998 204,000 106,800 -0-
Officer and General
Counsel
Rockford O. Kottka.......... 2000 175,000 124,500 -0-
Executive Vice-President 1999 142,600 65,031 -0-
and Treasurer 1998 132,600 68,120 -0-
Paul Ahern.................. 2000 253,667 154,880 -0-
Executive Vice-President 1999 201,917 82,950 -0-
Chief Investment Officer 1998 162,500 60,250 -0-
and Director of Portfolio
Operations
LONG TERM COMPENSATION
-----------------------------------------------
RESTRICTED SECURITIES
NAME AND SHARE UNDERLYING ALL OTHER
PRINCIPAL POSITION AWARD($)(2) OPTIONS(#) COMPENSATION($)(6)
------------------ ----------- ---------- ------------------
John S. Gates Jr.,.......... 252,423(3) 46,245 5,250
Chief Executive -0- 47,250 5,000
Officer -0- 81,480 5,000
Michael M. Mullen........... 252,423(3) 146,245 5,250
Executive Vice-President -0- 47,250 5,000
and Chief Operating
Officer -0- 81,480 5,000
Paul S. Fisher.............. -0- 192,485 5,250
Executive Vice-President, -0- 47,250 5,000
Secretary, Chief Financial -0- 81,480 5,000
Officer and General
Counsel
Rockford O. Kottka.......... 168,294(4) 30,828 5,250
Executive Vice-President -0- 22,050 5,000
and Treasurer -0- 16,296 5,000
Paul Ahern.................. 336,588(5) -0- 5,250
Executive Vice-President -0- 22,050 5,000
Chief Investment Officer -0- 38,024 -0-
and Director of Portfolio
Operations
------------------------------
(1) Includes amounts deferred at the election of the named executive officer
under the Company's 401(k) Plan.
(2) Restricted shares awarded under the 1995 Plan will vest eight years from the
date of the grant; however, restricted shares awarded under the plan may
vest earlier as follows: (i) if total shareholder return averaged over a
consecutive sixty day trading period commencing no earlier than two years
from the date of the grant is greater than a target established by the
Compensation Committee at the time of the respective award, all of the
restricted shares awarded for such year will vest; (ii) upon the death,
disability or retirement of a participant, the number of vested shares will
be determined by dividing the number of months which have elapsed from the
date of such award by 96; or (iii) in the event of a change of control of
the Company, all of the restricted shares previously awarded will vest.
Dividends are paid on the restricted shares to the same extent as on any
other Common Shares.
(3) Represents 7,225 restricted Common Shares having a market value of $341,381
on December 31, 2000.
(4) Represents 4,817 restricted Common Shares having a market value of $227,603
on December 31, 2000.
(5) Represents 9,634 restricted Common Shares having a market value of $455,207
on December 31, 2000.
(6) Represents Company's matching contribution to 401(k) Plan.
10
OPTION TABLES
The following table sets forth, for the Company's Chief Executive Officer
and each of the other executive officers named in the Summary Compensation
Table, information with respect to option grants during the last fiscal year and
potential realizable values for such option grants for the term of the options.
OPTION GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 2000
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
--------------------------------------------------------------------------------------------------------- SHARE PRICE
INDIVIDUAL GRANTS APPRECIATION FOR
NUMBER OF SECURITIES PERCENT OF TOTAL OPTIONS EXERCISE OF OPTION TERM
UNDERLYING OPTIONS GRANTED TO EMPLOYEES IN THE BASE PRICE EXPIRATION ---------------------
NAME GRANTED(#) YEAR ENDED DECEMBER 31, 2000 ($/SHARE) DATE 5%($) 10%($)
---- -------------------- ---------------------------- ----------- ---------- --------- ---------
John S. Gates, Jr........ 46,245 11% $ 34.9375 3/8/10 1,016,095 2,574,985
Michael M. Mullen........ 46,245 11% $ 34.9375 3/8/10 1,016,095 2,574,985
100,000 24% $ 41.00 7/5/10 2,578,468 6,534,344
Paul S. Fisher........... 92,485 22% $ 34.9375 3/8/10 2,032,081 5,149,692
100,000 24% $ 41.00 7/5/10 2,578,468 6,534,344
Rockford O. Kottka....... 30,828 8% $ 34.9375 3/8/10 677,353 1,716,545
Paul Ahern............... -0- 0% -- -- -- --
The following table sets forth, for the Company's Chief Executive Officer
and each of the other executive officers named in the Summary Compensation
Table, information with respect to option exercises during the last fiscal year
and option values at the end of the last fiscal year.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR ENDED DECEMBER 31, 2000
OPTION VALUES AT DECEMBER 31, 2000
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR IN-THE-MONEY OPTIONS AT
SHARES END(3)(#) FISCAL YEAR END(5)($)
ACQUIRED ------------------------ -----------------------
ON VALUE EXERCISABLE/ EXERCISABLE/
EXERCISE(#) REALIZED($) UNEXERCISABLE(4)(#) UNEXERCISABLE(4)($)
----------- ----------- ------------------------ -----------------------
John S. Gates, Jr.......................... -0- -0- 224,234/161,048 5,279,647/2,302,832
Michael M. Mullen.......................... 30,000 585,000(1) 99,926/240,579 2,101,252/2,558,394
Paul S. Fisher............................. -0- -0- 129,926/286,819 2,971,252/3,127,724
Rockford O. Kottka......................... -0- -0- 30,867/61,909 657,592/843,774
Paul Ahern................................. 1,974 52,928(2) 25,718/43,757 382,915/629,189
------------------------------
(1) Based on the difference between an exercise price of $18.25, and the closing
price of the Common Shares as reported on the New York Stock Exchange on the
date of exercise February 16, 2000 which was $37.75.
(2) Based on the difference between an exercise price of $19.50, and the closing
price of the Common Shares as reported on the New York Stock Exchange on the
date of exercise November 20, 2000 which was $46.3125.
(3) All options are for Common Shares.
(4) The first number appearing in the column refers to exercisable options, and
the second number refers to unexercisable options. Options granted under the
1993 Stock Option Plan as amended become exercisable at the rate of 20% per
year and are fully exercisable five years after the date of the grant. Upon
a change of control, all unvested options become exercisable.
(5) Based on the difference between an exercise price of $18.25, $19.50, $22.50
or $31.50 per share, as the case may be, and the closing price of the Common
Shares on December 31, 1999 of $36.375 per share as reported on the New York
Stock Exchange.
11
COMPENSATION OF TRUSTEES
Each independent trustee, i.e. a trustee who is not an employee of the
Company, is entitled to receive an annual fee of $20,000, at least 50% of which
is payable in Common Shares, and independent trustees may elect to receive up to
100% of the annual fee in Common Shares, under the Company's 1995 Director Stock
Plan, as amended. The Company also pays its independent trustees a fee of $1,000
for attendance at each meeting of the Board and $500 for participation in
telephonic meetings, and the Company reimburses independent trustees for travel
expenses incurred in connection with their activities on behalf of the Company.
Under the 1995 Director Stock Plan, as amended, each independent trustee was
awarded 528 Common Shares on May 10, 2000, except Norman Bobins and Alan Feld,
who were awarded 264 Common Shares in lieu of the cash portion of their annual
retainer fee at election. Trustees who are employees of the Company are not paid
any trustees' fees.
Independent trustees were eligible for the grant of options under the
Company's 1993 Amended and Restated Stock Option Plan (the "Stock Option Plan")
through May 10, 2000 and became eligible under the Omnibus Employee Retention
and Incentive Plan (the "2000 Plan"), which succeeded the Stock Option Plan.
Under the Stock Option Plan, each independent trustee was granted options on
May 10, 2000 to acquire 5,000 Common Shares, except Martin Barber and Robert
Stovall who were each awarded 6,500 Common Shares, at $37.8175 per share,
expiring on May 10, 2010. Under the Stock Option Plan, options become
exercisable at the rate of 20% per year and are fully exercisable five years
after the date of the grant. Upon a change of control, all unvested options
become exercisable.
EMPLOYMENT CONTRACTS
The Company's executive officers have entered into employment agreements
with the Company. Such agreements have an original term of five years (expiring
February 22, 2004), subject to earlier termination, with or without "cause" by
the Company. If the termination is within 24 months after a "change in control"
and is by the Company and without cause or is by the executive for "good reason"
(which includes a material adverse change in the executive's duties, relocation
of executive by the Company by more than 35 miles and reduction of his
compensation or benefits), the executive is entitled to receive three times his
then base salary (or if greater at the time of such change in control), three
times his prior year's cash bonus, outplacement services, 36 months of continued
health coverage and a further payment to gross up any taxes owed by him as a
result of excise taxes on such severance benefits. If termination is prior to a
change in control and by the Company without cause or because of disability, the
executive will receive one year's salary continuation and a prorated bonus based
on the prior year's bonus and all of his unvested share options and restricted
shares will vest. The agreements with the executive officers: (i) require that
substantially all of their time and effort be for the benefit of the Company
(all such executive officers are employed exclusively by the Company), (ii) set
forth their minimum salaries and initial target cash bonus and (iii) provide for
their participation in a discretionary cash bonus plan. In connection with the
execution of the employment agreements, each such executive entered into a
non-competition and non-solicitation agreement with the Company pursuant to
which he agreed not to compete with the Company or solicit or hire any employee
of the Company for a period of two years following such executive's termination
from the Company. The current base salaries of the executives are as follows:
Mr. Gates--$345,000; Mr. Mullen--$300,000; Mr. Fisher--$300,000;
Mr. Kottka--$200,000; and Mr. Ahern--$270,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee during fiscal year 2000
included Nicholas C. Babson, Norman R. Bobins, and Alan D. Feld. Mr. Feld is the
Chairman of the Committee.
During 2000, no executive officer of the Company served on the board of
trustees or directors or compensation committee (or other board committee
performing equivalent functions) of any other
12
entity any of whose executive officers served as a trustee of the Company or
member of the Company's Compensation Committee.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
MISSION OF THE COMPENSATION COMMITTEE
The Board of Trustees has delegated to the Compensation Committee strategic
and administrative responsibility for the Company's management compensation
strategy and incentive compensation plans. The Committee's basic responsibility
is to assure that the Chief Executive Officer, other officers and key management
of the Company are compensated fairly and effectively in a manner consistent
with the Company's stated compensation strategy, competitive practice,
applicable regulatory requirements and performance results.
PAY-FOR-PERFORMANCE PLAN
In July 1994, based on the report of an independent consultant, Towers
Perrin Foster, and the recommendations of the Compensation Committee, the
Company's Board of Trustees approved a pay-for-performance compensation plan
(the "Plan"). The Plan is designed to provide competitive compensation levels
within the Company's industry and incentive pay that varies based on corporate,
departmental or profit center and individual performance. To achieve this
objective, the Plan contemplates that the Company generally will maintain base
salary levels for its employees at or about the median compensation level for
persons holding similar positions within the industry, based on information
drawn from compensation surveys and compensation consultants, but that employees
will have an opportunity to receive a total compensation package significantly
greater than the median based upon their contribution to the Company's
attainment of its growth and profit objectives. For certain senior management
employees, the Plan contemplates that base salary levels will generally be
somewhat below the median, to further emphasize pay for performance through
incentives. The Plan includes three elements: a salary management system, an
annual incentive plan and a long-term incentive plan.
In October, 1997, the Board of Trustees engaged FPL Associates ("FPL"), an
affiliate of Ferguson Partners and a leading independent compensation consulting
firm in the real estate industry, to provide recommendations regarding
modifications to the Plan. The Board of Trustees adopted certain of the
recommendations of FPL to modify the long-term incentive plan, as set forth
below.
SALARY MANAGEMENT SYSTEM. Under the Plan, the Company has established a
salary structure by individual position within a range of plus or minus 25% of
the median marketplace rate for that position. Annual salary rates for specific
individuals will vary within the range for such position based on such
individual's experience and qualifications. The Board of Trustees, based on the
recommendations of the Compensation Committee, establishes a budget for
aggregate merit increases each year based on marketplace practices, the
Company's ability to pay and the attainment of the Company's overall objectives.
Individual merit increases generally are expected to range from 0% to10% of
salary, and merit increases in the aggregate generally are not expected to
exceed 4%. Annual merit increases are based on individual performance levels
gauged by performance appraisals conducted every six months.
Salary adjustments are made as of July 1 each year, effective for the
following 12 months. The average increase in executive salaries effective as of
July 1, 2000 was approximately 17.8%, including certain increases attributable
to promotions.
ANNUAL INCENTIVE PLAN. The annual incentive plan is performance-driven,
provides cash awards based on the success of the Company in any fiscal year and
provides motivation to accomplish objectives that are critical to the Company's
success. No awards will be made for any fiscal year unless the Company achieves
a threshold level of funds from operations ("FFO") for that year. The Company
13
will annually establish threshold, target and maximum award opportunities for
each position, based on satisfaction of certain criteria. The target award
opportunities will generally be established consistent with median rates for
comparable positions. Cash awards are declared and paid following completion of
the Company's annual audit in the first quarter of each year, based on
performance during the prior year.
The criteria and the relative weights assigned to the criteria vary
depending on an employee's position. For the Company's Chief Executive Officer,
(i) a 80% weighting factor is assigned to the Company's overall corporate
performance determined by reference to FFO per share, success of the Company's
processes and systems and the overall results of a tenant satisfaction survey
conducted by CEL & Associates, a leading surveyor of tenant satisfaction for the
real estate industry, under the supervision of the Compensation Committee, and
(ii) a 20% weighting factor is assigned to a non-formula assessment of
individual performance as gauged by performance appraisal results. For executive
officers with departmental functions, (i) a 50% weighting factor is assigned to
the Company's overall corporate performance determined by reference to the same
measures as described above, (ii) a 30% weighting factor is assigned to
qualitative departmental performance, and (iii) a 20% weighting factor is
assigned to a non-formula assessment of individual performance as gauged by
performance appraisal results. For executive employees in charge of property
management for particular regions, (i) a 40% weighting factor is assigned to
overall corporate performance based on the same measures as described above,
(ii) a 40% weighting factor is assigned to regional performance, determined by
comparison of regional portfolio operating income to budget, regional days
outstanding in accounts receivable and the results of a regional tenant
satisfaction survey, and (iii) a 20% weighting factor is assigned to a
non-formula assessment of individual performance as gauged by performance
appraisal results. For each class of executive employee, points will be assigned
based on achievement of performance standards within each performance category,
and points will be used to determine eligibility for threshold, target or
maximum awards.
In March 2000, the Compensation Committee assigned each executive officer a
cash incentive award opportunity for 2000, expressed as a percentage of salary,
based on the attainment of threshold, target and maximum performance levels.
Depending on position, the low range was between 50% and 100% of salary, while
the high range was between 100% and 200% of salary. In February 2001, the
Compensation Committee determined that the performance of the executive officers
entitled them to cash incentive awards ranging from approximately 73.5% to
156.3% of salary.
LONG TERM INCENTIVE PLAN. Based on an analysis of the Company's long-term
incentive plan by FPL in 1998, the Board of Trustees decided in March 1998 to
make share option grants, under a stock option plan adopted by the Company and
approved by the shareholders in 1993, as amended and restated in 1998 (the
"Stock Option Plan") the sole component of the long-term incentive plan. Also
based upon the FPL analysis of the long-term incentive plan, the Board of
Trustees directed the Compensation Committee to set higher performance standards
which would be more difficult to achieve, coupled with greater rewards if such
standards are attained. The foregoing decisions, coupled with a determination by
the Board to enlarge the class of employees eligible for share options to all
employees, resulted in a need for more options to be available for grant under
the Stock Option Plan. The Company, therefore, amended the Stock Option Plan in
1998, which amendment, among other things, increased the number of options
available for grant under the Stock Option Plan. In 2000, based on a subsequent
analysis of the Company's long-term incentive plan by FPL, the Board of Trustees
decided in March 2000 to make the long-term incentive plan consist of a
combination of share option grants and restricted share grants under a
Restricted Stock Incentive Plan adopted by the Company and approved by the
shareholders in 1995 for Company executives and consist solely of restricted
share grants for remaining employees.
The performance standards adopted by the Compensation Committee for the
awards, applicable to all employees participating in the long-term incentive
plan, is tied to material increases in shareholder value. Under the standards,
employee performance is measured based upon rate of return goals
14
established by the Company's independent trustees, with a 25% weighting factor
assigned to total shareholder return and a 75% weighting factor assigned to FFO
per share growth. For each of these factors, the Compensation Committee annually
establishes threshold, target and maximum award opportunities for each
employment position.
Like cash awards, share option and restricted share awards are made in the
first quarter of each year following completion of the annual audit, based on
performance during the prior year. In February 2001, the Board of Trustees made
share option awards based upon attainment of the standards in 2000. Based on its
evaluation of employees' attainment of these standards in 2000, the Compensation
Committee awarded share options under the Stock Option Plan for a total of
250,000 shares and share grants under the Restricted Stock Plan for 147,400
shares in February 2001.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
During 2000, the Company's Chief Executive Officer was paid a salary at the
rate of $291,200 per annum for the first six months and at a rate of $345,000
for the last six months pursuant to his employment contract. As part of a review
of the Company's salary structure in June 2000, FPL conducted a survey of the
salaries paid by the Company to executive employees. Mr. Gates' current salary
is approximately 106% of the median for the Company's industry reported in the
survey, which is within the Company's salary objectives.
In March 2000, the Compensation Committee assigned to Mr. Gates an incentive
award opportunity for 2000, expressed as a percentage of salary, based on
corporate and individual performance meeting or exceeding threshold, target or
maximum levels. As indicated above, an 80% weighting factor was assigned to
corporate performance determined by reference to FFO per share, success of the
Company's processes and systems implementation, and the overall results of an
independent tenant satisfaction survey conducted under the supervision of the
Compensation Committee. A 20% weighting factor was assigned to individual
performance, based on success in designing and implementing internal processes,
systems and organizational development initiatives designed to maintain the
highest levels of tenant satisfaction and the internal capacity and controls
necessary to sustain continuing high levels of growth. On the basis of points
awarded in each of these categories, the Compensation Committee in
February 2001 awarded Mr. Gates a cash bonus of $465,000, or 134.8% of salary.
Also in February 2001, the Compensation Committee, applying the performance
standards for long-term incentives, approved an award of 75,000 share options
and 10,359 share grants, representing an award 100% above the target level for
shareholder return and growth in FFO per share.
Alan D. Feld, Chairman
Nicholas C. Babson
Norman R. Bobins
15
BOARD AUDIT COMMITTEE REPORT
AUDIT FEES
For calendar year 2000, the total fees billed by PricewaterhouseCoopers for
the annual audit and for the review of financial statements included in the
Company's Forms 10-K and 10-Qs totaled $242,934.
ALL OTHER FEES
Fees billed for all other non-audit services, including review and audit of
subsidiary financial statements, tax compliance, and consulting totaled $634,300
during calendar year 2000. PricewaterhouseCoopers LLP did not provide any
services related to financial information system design or implementation during
2000.
AUDIT COMMITTEE REPORT
The Audit Committee provides independent oversight of the Company's
accounting functions and monitors the objectivity of the financial statements
prepared under the direction of management. In addition, the Committee reviews
major accounting policy changes by quarterly reviews, approves the scope of the
annual independent audit processes, monitors nonaudit services provided by the
independent auditors, and monitors Company activities designed to assure
compliance with the Company's ethical standards. The Committee is composed of
three trustees and operates under a written charter (included in this proxy
statement as Exhibit A) adopted by the Company's Board of Trustees. The trustees
are independent within the meaning of the New York Stock Exchange rules.
The Committee has reviewed the audited consolidated financial statements of
the Company for 2000 with management, who has represented to the Committee that
these financial statements were prepared in accordance with generally accepted
accounting principles. The Committee discussed with management the quality as
well as the acceptability of the accounting principles employed, the
reasonableness of judgments made and the clarity of the disclosures included in
the statements.
The Committee also reviewed the consolidated financial statements of the
Company for 2000 with PricewaterhouseCoopers LLP, the Company's independent
auditors for 2000, who are responsible for expressing an opinion on the
conformity of those audited financial statements with generally accepted
accounting principles. The Committee discussed with PricewaterhouseCoopers LLP
the matters required to be discussed by the Statement on Auditing Standards
No. 61, Communication with Audit Committees.
The Committee has received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independence Standards Board Standard
No. 1 (Independence Discussion with Audit Committees) and has discussed with
PricewaterhouseCoopers LLP its independence. The Committee considered the
compatibility of nonaudit services provided by PricewaterhouseCoopers LLP to the
Company with PricewaterhouseCoopers LLP independence.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Trustees, and the Board has approved, the inclusion
of the consolidated financial statements in the Annual Report on Form 10-K for
the year ended 2000 for filing with the Securities and Exchange Commission. The
Committee has recommended, and the Board has approved, the selection of
PricewaterhouseCoopers LLP as the Company's independent auditors for 2001.
Representatives from PricewaterhouseCoopers LLP will be at the annual
meeting to make a statement, if they choose, and to answer any questions of
shareholders present at the meeting.
Thomas E. Robinson, Chairman
Martin Barber
Norman R. Bobins
16
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG COMPANY,
S&P 500 INDEX AND NAREIT EQUITY TOTAL RETURN INDEX
PERFORMANCE GRAPH
The following graph compares the percentage change in cumulative total
return on the Company's Common Shares for the period December 31, 1995 through
December 31, 2000 with the percentage change in (a) the Standard & Poor's 500
index ("S&P") for the same period and (b) the Total Return Index for Equity
REITs published by The National Association of Real Estate Investment Trusts
("NAREIT") for the same period. (The NAREIT index for Equity REITs, which is
published monthly, is an index of approximately 173 REITs which includes REITs
with 75% or more of their gross invested book value of assets invested directly
or indirectly in the ownership of real property.) Cumulative total return
includes reinvestment of dividends. The historical information set forth below
is not necessarily indicative of future performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
VALUE OF $100 INVESTMENT
NAREIT EQUITY
CenterPoint Properties S&P 500 Index Total Return Index
12/31/95 $100.00 $100.00 $100.00
12/31/96 $153.20 $122.96 $135.27
12/31/97 $173.20 $163.99 $162.67
12/31/98 $175.39 $210.86 $134.20
12/31/99 $199.25 $255.20 $128.00
12/31/00 $272.01 $231.96 $161.75
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1996 1997 1998 1999 2000
------------ ------------ ------------ ------------ ------------ ------------
CenterPoint Properties
Trust..................... $100.00 $153.20 $173.20 $175.39 $199.25 $272.01
S&P 500 Index............... 100.00 122.96 163.99 210.86 255.20 231.96
NAREIT Equity Total Return
Index..................... 100.00 135.27 162.67 134.20 128.00 161.75
17
OTHER MATTERS
The Board of Trustees knows of no matters, which will be presented for
consideration at the meeting other than the matters referred to in this
statement. Should any other matters properly come before the meeting, it is the
intention of the persons named in the accompanying proxy to vote such proxy in
accordance with their best judgment.
The Company will bear the cost of this solicitation of proxies. In addition
to solicitation of proxies by mail, the Company may reimburse brokers and other
nominees for the expense of forwarding proxy materials to the beneficial owners
of shares held in their names. Trustees, officers and employees of the Company
may also solicit proxies on behalf of the Board of Trustees but will not receive
any additional compensation therefore.
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 2000 is being furnished to shareholders simultaneously with this
proxy statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, ALL
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING FORM
OF PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Trustees,
/s/ Paul S. Fisher
Paul S. Fisher
SECRETARY
18
EXHIBIT A
CENTERPOINT PROPERTIES TRUST
AUDIT COMMITTEE CHARTER
COMPOSITION. The Audit Committee shall consist of not less than two nor
more than five independent trustees, one of whom shall be designated by the
Board as the Chairman. No trustee who is an affiliate of the Company or an
officer or employee of the Company shall be qualified for audit committee
membership. In determining which trustees are "independent" for purposes of
serving on the Audit Committee, the Company shall comply with the policy
statement on audit committees issued by the New York Stock Exchange.
MEETINGS. The Audit Committee shall hold at least two meetings each fiscal
year and meetings may be called by the Chairman, any member of the Committee or
upon the request of any member of the Board of Trustees. Audit Committee
meetings may be held in person at such times and locations as may be designated
by the member calling the meeting or by conference telephone call. A majority of
the members of the Committee, but not less than two, shall constitute a quorum
for the conduct of business. The act of a majority of the members present at any
meeting at which there is a quorum shall be the act of the Audit Committee.
RECORD KEEPING. The Chairman shall designate a member to keep written
minutes of each meeting of the Committee. Such minutes shall be submitted to and
retained by the Secretary of the Company and shall be submitted to the Board at
the next Board meeting.
RESPONSIBILITIES. The Audit Committee shall assist the Board of Trustees in
fulfilling its responsibility to review the Company's accounting and financial
reporting practices and shall provide a channel of communication between the
Board of Trustees and the Company's independent auditors. To accomplish the
above purposes, the Audit Committee shall:
(i) Review with the independent auditors the scope of their annual and
interim examinations, placing particular attention where either the
Audit Committee or the auditors believe such attention should be
directed, and to direct the auditors to expand (but not to limit) the
scope of their audit whenever such action is, in the opinion of the
committee, necessary or desirable. The independent auditors shall have
sole authority to determine the scope of the audit which they deem
necessary for the formation of an opinion on financial statements;
(ii) Consult with the auditors during any annual or interim audit on any
situation which the auditors deem advisable for resolution prior to the
completion of their examination;
(iii) Meet with the auditors to appraise the effectiveness of the audit
effort. Such appraisal shall include a discussion of the overall
approach to and the scope of the examination, with particular attention
on those areas on which either the Audit Committee or the auditors
believe emphasis is necessary or desirable;
(iv) Determine through discussions with the auditors and otherwise, that no
restrictions were placed by management on the scope of the examination
or its implementation;
(v) Inquire into the effectiveness of the Company's accounting and internal
control functions through discussions with the auditors and appropriate
officers of the Company and exercise supervision of the Company's
policies which prohibit improper or illegal payments;
(vi) Review the report of the audit, or proposed report, the management
letter accompanying the report, and management's response;
A-1
(vii) Review of terms, conditions and arrangement involving related parties;
(viii) Review adequacy of insurance coverage and treasury activities regarding
the safeguarding of assets;
(ix) Review litigation that could materially affect financial results;
(x) Review with the auditors and management any registration statement which
shall be filed by the Company in connection with the public offering of
securities and such other public financial reports as the Audit
Committee or the Board of Trustees shall deem desirable;
(xi) Review and ratify audit and non-audit fees of the Company's independent
accountants;
(xii) Report to the Board of Trustees on the results of the Audit Committee's
activities and recommend to the Board of Trustees any changes in the
appointment of independent auditors which the Audit Committee may deem
to be in the best interests of the Company and its shareholders; and
(xiii) Have such other powers and perform such other duties as the Board
shall, from time to time, grant and assign to it.
A-2
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. 6231
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, IT WILL BE VOTED FOR THE ELECTION OF THE TRUSTEE
NOMINEES.
FOR WITHHELD
Election of Trustees / / / /
For, except vote withheld from the following nominee(s):
______________________________
Trustee Nominees:
01 Nicholas C. Babson
02 Martin Barber
03 Norman R. Bobins
04 Alan D. Feld
05 Paul S. Fisher
06 John S. Gates, Jr.
07 Michael M. Mullen
08 Thomas E. Robinson
09 Robert L. Stovall
SIGNATURE(S)_______________________DATE ___________
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
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CENTERPOINT PROPERTIES TRUST
Dear Stockholder:
We encourage you to vote your shares electronically this year either by
telephone or via the Internet. This will eliminate the need to return your proxy
card. You will need your proxy card and Social Security Number (where
applicable) when voting your shares electronically. The Voter Control Number
that appears in the box above, just below the perforation, must be used in order
to vote by telephone or via the Internet.
The EquiServe Vote by Telephone and Vote by Internet systems can be accessed
24-hours a day, seven days a week up until the day prior to the meeting.
TO VOTE BY TELEPHONE:
---------------------
Using a touch-tone phone call Toll-free: 1-877-PRX-VOTE (1-877-779-8683)
TO VOTE BY INTERNET:
--------------------
Log on to the Internet and go to the website: HTTP://WWW.EPROXYVOTE.COM/CNT
NOTE: IF YOU VOTE OVER THE INTERNET, YOU MAY INCUR COSTS SUCH AS
TELECOMMUNICATION AND INTERNET ACCESS CHARGES FOR WHICH YOU WILL BE
RESPONSIBLE.
THANK YOU FOR VOTING YOUR SHARES
YOUR VOTE IS IMPORTANT!
DO NOT RETURN THIS PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR THE INTERNET.
CENTERPOINT PROPERTIES TRUST
1808 SWIFT DRIVE PROXY
OAK BROOK, ILLINOIS 60523
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
CENTERPOINT PROPERTIES TRUST FOR THE
ANNUAL MEETING OF SHAREHOLDERS ON MAY 16, 2001
The undersigned hereby appoints Martin Barber, John S. Gates, Jr. and Paul
S. Fisher, or any of them, jointly and severally, as Proxies each with the
power to appoint his substitute, and hereby authorizes them to represent and to
vote, as designated on the reverse side, all of the Company's Common Shares held
in the undersigned's name and shares held by the agent in the Plan, hereafter
described, subject to the voting direction of the undersigned at the Annual
Meeting of Shareholders to be held at 1808 Swift Drive, Oak Brook, Illinois on
Wednesday, May 16, 2001 at 1:30 P.M. or any adjournment thereof and, in the
Proxies' discretion, to vote upon such other business as may properly come
before the meeting, all as more fully set forth in the Proxy Statement related
to such meeting receipt of which is hereby acknowledged.
ALL COMMON SHARES TO BE VOTED HEREBY BY THE UNDERSIGNED INCLUDE SHARES, IF
ANY, HELD IN THE NAME OF THE AGENT, FOR THE BENEFIT OF THE UNDERSIGNED, IN THE
COMPANY'S DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN.
Comments/Change of Address:
_____________________________________________________
SEE REVERSE
_____________________________________________________ SIDE
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