SCHEDULE 14A
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 Section 240.14a-12
First Industrial Realty Trust, Inc.
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(Name of Registrant as Specified in Its Charter)
N/A
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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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(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
----------------
TO BE HELD ON MAY 15, 2002
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Stockholders
(the "Annual Meeting") of First Industrial Realty Trust, Inc. (the "Company")
will be held on Wednesday, May 15, 2002 at 9:00 a.m. at the offices of the
Company located at 311 South Wacker Drive, 40th Floor, Chicago, Illinois 60606
for the following purposes:
1. To elect three Class II directors of the Company to serve until the
2005 Annual Meeting of Stockholders and until their respective successors are
duly elected and qualified;
2. To ratify the Board of Directors' selection of
PricewaterhouseCoopers LLP as the Company's independent auditors for the fiscal
year ending December 31, 2002; and
3. 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,
2002 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, 2002 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.
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 2002 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 2002
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 2002 Annual Meeting of Stockholders of the Company to
be held on Wednesday, May 15, 2002, 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 II directors of the Company, 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, 2002. The
Board of Directors has fixed the close of business on March 20, 2002 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
39,254,795 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
II DIRECTORS OF THE COMPANY NAMED IN THIS PROXY STATEMENT, (II) FOR THE
RATIFICATION OF THE BOARD OF DIRECTORS' SELECTION OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR AND (III) 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 II directors 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 2001 Annual Report, including financial statements for
the fiscal year ended December 31, 2001, 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 2005 Annual Meeting of Stockholders and until their successors are duly
elected and qualified. The Board of Directors has nominated Michael W. Brennan,
Michael G. Damone and Kevin W. Lynch to serve as Class II directors (the
"Nominees"). Each of the Nominees is currently serving as a Class II 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 II directors at the
Annual Meeting, the continuing directors whose terms expire at the Annual
Meetings of Stockholders in 2003 and 2004 and certain executive officers, based
on information furnished to the Company by such persons. The following
information is as of March 20, 2002, unless otherwise specified.
CLASS II NOMINEES FOR ELECTION AT 2002 ANNUAL MEETING - TERM TO EXPIRE IN 2005
MICHAEL W. BRENNAN Director since 1996
Mr. Brennan, 45, 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 National Association of Real Estate Investment Trusts
("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, 67, 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 Detroit Area Commercial Board
of Realtors.
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KEVIN W. LYNCH Director since 1994
Mr. Lynch, 49, 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, 53, 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. and Divine, Inc. Mr. Rau also serves on the Advisory
Boards of Financial Technology Ventures, BlueStar Ventures and
Electronic Knowledge Interchange. 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, 64, 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, 49, 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) and the United Way of
Lake County.
CLASS I CONTINUING DIRECTORS - TERM TO EXPIRE IN 2004
JAY H. SHIDLER Director since 1993
Mr. Shidler, 55, 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). From June 1997 to
July 2001, Mr. Shidler served as Chairman of the Board of Directors of
CGA Group, Ltd., a holding company whose subsidiary is a AA-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 NAREIT.
JOHN L. LESHER Director since 1994
Mr. Lesher, 68, 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
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Fund, Mondial Ltd. and Trimark Inc. 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.
J. STEVEN WILSON Director since 1994
Mr. Wilson, 58, 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 a building and supply
company with revenues of $1 billion with distribution and manufacturing
facilities located primarily in the Midwest and Northeast regions of
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.
EXECUTIVE OFFICERS AND OTHER SENIOR MANAGEMENT
MICHAEL J. HAVALA
Mr. Havala, 42, 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.
JOHANNSON L. YAP
Mr. Yap, 39, 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. 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 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 Urban Land Institute ("ULI"),
NAREIT, the National Association of Industrial and Office Properties
("NAIOP") and the Real Estate Investment Advisory Council.
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DAVID P. DRAFT
Mr. Draft, 50, 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 has 26 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.
ROSS KIRK
Mr. Kirk, 45, 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 to December
1999. Mr. Kirk has over 20 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.
TIMOTHY E. GUDIM
Mr. Gudim, 42, 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. Mr. Gudim has 20 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.
ARNE M. COOK
Mr. Cook, 41, 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
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1998. 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, NAREIT, ULI, the Minnesota Commercial
Association of Realtors and the University of Wisconsin Real Estate
Alumni Association.
GREGORY S. DOWNS
Mr. Downs, 53, has been Managing Director of the Company's
Gulf/Mountain region since July 2001, prior to which time he served as
a Senior Regional Director from January 2000 to July 2001 and as a
Regional Director from June 1998 to December 1999 of the Company's
Denver region. From November 1997 to June 1998, he served as a Regional
Development Officer of the Company. Mr. Downs has over 23 years of real
estate experience. Between June 1994 and November 1997, he was Vice
President of Development for Pacifica Holding Company, a full-service
real estate company operating in Denver. Mr. Downs' professional
affiliations include NAIOP and SIOR.
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 II directors hold office for a
term expiring at this Annual Meeting. Class III directors hold office for a term
expiring at the Annual Meeting of Stockholders to be held in 2003. Class I
directors hold office for a term expiring at the Annual Meeting of Stockholders
to be held in 2004. 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 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 seven meetings during the fiscal year of
2001. Each of the directors serving in 2001 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.
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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 two times in 2001. 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 to
discuss the review of quarterly information prior to its issuance. On May 16,
2001, the Board of Directors, on the unanimous recommendation of the Audit
Committee, reaffirmed Company's Audit Committee Charter.
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 the First Industrial Realty Trust, Inc. 2001 Stock Incentive
Plan (the "2001 Stock Plan"). The Compensation Committee met two times in 2001.
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 40 times during 2001.
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
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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 2002 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 one time during 2001.
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 $1,000 for each committee meeting attended.
Following the Annual Meeting of Stockholders held in 2001, each of the Company's
non-employee directors received options under the 1997 Stock Plan to purchase
10,000 shares at the market price of the shares on the date of grant. Such
options granted to non-employee directors vest one year after the date of grant.
Following this Annual Meeting the Company intends to grant 10,000 options under
the 1997 Stock Plan to each of the Company's non-employee directors. Such
options will be granted at the market price of the shares on the date of grant
and will vest one year after the date of grant.
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EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation, including
cash compensation and restricted stock and option awards, paid by the Company
with respect to the fiscal years ended December 31, 1999, 2000 and 2001 to the
Company's Chief Executive Officer and the four other most highly compensated
executive officers of the Company (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long Term
Compensation
---------------------------
Restricted Shares All Other
Name and Annual Stock Underlying Compensation
Principal Position Year Salary($) Bonus($)(1) Awards($)(2) Options(#) ($)(6)
------------------ ---- ------------ ------------ -------------- ---------- ------------
Michael W. Brennan 2001 $ 490,000 $ 735,000 $ 338,002 72,000 (5) $ 337,673
President and 2000 375,000 600,598 281,160 75,000 (4) 256,664
Chief Executive Officer 1999 320,000 0 875,044 60,000 (3) 181,964
Michael J. Havala 2001 $ 275,600 $ 440,000 $ 372,492 64,000 (5) $ 248,505
Chief Financial Officer, 2000 265,000 410,141 207,675 52,000 (4) 186,209
Treasurer and Secretary 1999 247,500 160,000 420,744 45,000 (3) 119,856
Johannson L. Yap 2001 $ 300,000 $ 480,000 $ 372,492 70,000 (5) $ 216,312
Chief Investment Officer 2000 235,000 456,096 207,675 52,000 (4) 161,690
1999 214,000 0 776,440 43,000 (3) 97,592
David P. Draft 2001 $ 270,000 $ 340,000 $ 196,593 31,500 (5) $ 170,645
Executive Vice 2000 210,000 403,200 130,196 34,200 (4) 87,825
President - Operations 1999 200,000 80,000 493,019 29,200 (3) 61,207
Ross Kirk 2001 $ 208,000 $ 308,880 $ 115,886 25,800 (5) $ 40,414
Managing Director 2000 200,000 396,000 127,800 33,600 (4) 20,713
1999 115,932 2,448 270,515 13,200 (3) 9,338
(1) 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 and Yap in
consideration for the purchase of all of such executives' stock in First
Industrial Development Services, Inc. (f/k/a FR Development Services, Inc.)
in connection with that entity's conversion to a wholly-owned taxable REIT
subsidiary. See "Certain Relationships and Transactions." Amounts for 2001
represent bonuses awarded in February 2002 based on performance for the year
ended December 31, 2001.
(2) Amounts for 1999 represent restricted Common Stock awarded in February 2000.
Amounts for 2000 represent restricted Common Stock awarded in March 2001.
Amounts for 2001 represent restricted Common Stock awarded in March 2002.
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
11
the New York Stock Exchange on the date of grant ($25.8125 on February 15,
2000 for 1999 amounts; $31.95 on March 16, 2001 for 2000 amounts; $34.49 on
March 15, 2002 for 2001 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, 2001 (based on the
closing price per share of Common Stock as reported on the New York Stock
Exchange on December 31, 2001 ($31.10)) is as follows: Mr. Brennan - 72,928
shares ($2,268,061), Mr. Havala - 50,975 shares ($1,585,323), Mr. Yap -
50,149 shares ($1,559,634), Mr. Draft - 24,309 shares ($756,010) and Mr.
Kirk - 12,087 shares ($375,906). Of the 109,860 shares of restricted Common
Stock awarded in February 2000 to the Named Executive Officers, one-third
vested in January 2001 and January 2002, as to which restrictions have been
removed, and one-third will vest in January 2003. Of the 29,875 shares of
restricted Common Stock awarded in March 2001 to the Named Executive
Officers, one-third vested in January 2002, as to which restrictions have
been removed, and one-third will vest in each of January 2003 and January
2004. Of the 40,460 shares of restricted Common Stock awarded in March 2002
to the Named Executive Officers, one-third will vest in each of January
2003, January 2004 and January 2005.
(3) Amounts for 1999 represent an aggregate of 190,400 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 vest in three equal
installments on the first, second and third year anniversary of January 25,
2000.
(4) Amounts for 2000 represent an aggregate of 246,800 options granted
to the Named Executive Officers 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.
(5) Amounts for 2001 represent an aggregate of 263,300 options granted to the
Named Executive Officers under the 1997 Stock Plan on January 16, 2002 at an
exercise price equal to $30.53 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 ($15,511 in 2001; $13,421 in 2000; $7,434 in
1999) for the benefit of certain of the Named Executive Officers. Also
includes car allowances ($62,400 in 2001; $62,400 in 2000; $30,988 in 1999),
a moving allowance ($47,000 in 2001) and personal financial planning
allowances ($8,400 in 2001; $8,000 in 2000; $9,000 in 1999) for certain of
the Named Executive Officers. 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 Messrs.
Brennan and Draft in 1999 was 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. A portion of the amount accrued under
the Deferred Income Plan to Mr. Draft in 2001 was used to acquire Common
Stock having a value at the time of acquisition of $57,022, with the
remainder of such amount paid in cash. The amounts accrued under the
Deferred Income Plan to each of the other Named Executive Officers in 2001
were paid in cash.
12
OPTION GRANTS AND EXERCISES
Option Grants. The following table sets forth the options granted in
the fiscal year ended December 31, 2001 to the Named Executive Officers.
OPTION GRANTS IN 2001
Percent of
Number of Total Options
Options Granted to Exercise or Total Present
Granted Employees in Base Price Expiration Value as of
Name (#)(1) 2001 (%)(2) ($/sh) Date(s) Grant Date (4)
---- ---------- ------------- ----------- ---------- --------------
Michael W. Brennan 75,000 7.8 $ 33.13 (3) $188,250
Michael J. Havala 52,000 5.4 33.13 (3) 130,520
Johannson L. Yap 52,000 5.4 33.13 (3) 130,520
David P. Draft 34,200 3.6 33.13 (3) 85,842
Ross Kirk 33,600 3.5 33.13 (3) 84,336
----------
(1) Represents an aggregate of 246,800 options granted under the 1997 Stock Plan
on January 23, 2001 to the Named Executive Officers. The options vest in
three equal installments on the first, second and third year anniversary of
the date of grant.
(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 expire January 23, 2011.
(4) Applies an option value of $2.51 per share, based on the Black-Scholes
option pricing model adapted for use in valuing stock options. The actual
value, if any, that the Named Executive Officer may receive would depend on
the excess of the stock price at the time of exercise over the exercise or
base price on the date the option is exercised. There is no assurance that
the value realized by the Named Executive Officer would be at or near the
value estimated by the Black-Scholes model. The estimated value under the
model assumes an option term of ten years, an average volatility of the
Company's common stock of 20.76%, an optimal exercise date three years from
the date of grant, a risk free rate of interest of 4.92% and an average
dividend yield on the Company's common stock of 8.22%.
13
Option Exercises and Year-End Holdings. Certain of the Named Executive
Officers exercised an aggregate of 22,500 options in 2001. The following table
sets forth information with respect to options exercised during, and the value
of options held at the end of, 2001 by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2001
AND FISCAL YEAR-END 2001 OPTION VALUES
Number of Securities Underlying Value of Unexercised
Shares Options Unexercised In-the-Money
Acquired on Value at December 31, 2001(#) Options at
Name Exercise(#)(1) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------- ------------- --------------------------------- ------------------------------
Michael W. Brennan 0 0 240,000 115,000 $933,100 $154,000
Michael J. Havala 10,000 $69,950 115,000 82,000 $331,650 $115,500
Johannson L. Yap 12,500 $128,250 134,333 80,667 $424,082 $110,368
David P. Draft 0 0 64,733 53,667 $111,572 $74,948
Ross Kirk 0 0 8,400 42,400 $40,820 $33,880
(1) Represents shares with respect to which options were exercised in 2001 by
the Named Executive Officers.
(2) Based on the closing price per share of Common Stock as reported on the New
York Stock Exchange on December 31, 2001 ($31.10).
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 base 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.
In March 2002, the Company entered into written employment agreements
with Michael J. Havala, the Company's Chief Financial Officer, Secretary and
Treasurer, Johannson L. Yap, the Company's Chief Investment Officer, and David
P. Draft, the Company's Executive Vice President - Operations. Mr. Havala's and
Mr. Yap's agreements amend and restate their prior employment agreements with
the Company. The agreements provide for a minimum annual base salary of $284,000
for Mr. Havala, $309,000 for Mr. Yap and $278,000 for Mr. Draft, which amounts
may be increased at the recommendation of the Chief Executive
14
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 a continuous and self-renewing
two-year "evergreen" term unless earlier terminated; provided, however, that the
agreements will expire on Mr. Havala's, Mr. Yap's and Mr. Draft's respective
70th birthdays. Upon his termination without cause, through constructive
discharge, or upon a work-related disability, each of Mr. Havala, Mr. Yap and
Mr. Draft is entitled to severance in an amount equal to three times his annual
base salary, plus 75% of his maximum bonus potential for the then-current year
prorated through the date of termination. Upon certain changes in control of the
Company, each of Mr. Havala, Mr. Yap and Mr. Draft is entitled to severance in
an amount equal to two times his annual base salary, plus 100% of his maximum
cash bonus for the then-current year prorated through the date of termination,
plus two times the product of his annual base 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 his termination other
than for cause, each of Mr. Havala's and Mr. Yap's options and awards under the
1994 Stock Plan, the 1997 Stock Plan, the 2001 Stock Plan, the Deferred Income
Plan and any subsequent similar plan will fully vest, and his health insurance
benefits will continue for a period of three years. Severance amounts payable to
Mr. Havala, Mr. Yap and Mr. Draft upon their termination will be reduced if such
amounts become payable after their respective 67th birthdays. Each of Mr.
Havala, Mr. Yap and Mr. Draft has agreed to a one-year covenant not to compete
after his termination, except in connection with certain changes in control of
the Company. Each of Mr. Havala, Mr. Yap and Mr. Draft has agreed to a six-month
covenant not to compete in connection with certain changes in control of the
Company.
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 or had any other
business relationship or affiliation with the Company in 2001, except his
service as a director.
15
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, 2001, was
comprised of 151 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, 1996 to December 31, 2001 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 31, 1996 was $30.375
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.
16
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
-------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
-------------------------------------------------------------------------------------------------------
12/96 12/97 12/98 12/99 12/00 12/01
-------------------------------------------------------------------------------------------------------
FIRST INDUSTRIAL REALTY TRUST, INC. $100 $127 $101 $114 $153 $152
NAREIT EQUITY 100 120 99 95 120 136
S & P 500 100 133 171 208 189 166
-------------------------------------------------------------------------------------------------------
17
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 Company maintains the
philosophy that compensation of its executive officers and other employees
should serve the best interests of the Company's stockholders. Accordingly, the
Compensation Committee has designed its compensation policy to provide
management proper incentives, directly and materially linked to operating
performance, to maximize the Company's overall performance. Consistent with
this, executive compensation is weighted towards bonuses and incentive awards
(e.g. stock option grants, restricted stock awards and deferred income awards)
paid or granted on the basis of the Company's and each executive'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.
Stock options, together with other incentive awards (e.g., restricted
stock and deferred income awards), are granted to the executives under the
provisions of the 1997 Stock Plan and the Deferred Income Plan, and will also be
granted under the 2001 Stock Plan in the future. The Compensation Committee
determines those executives who will receive stock options and other incentive
awards and the size of such awards. Generally, stock options are granted at the
market price of the Common Stock at the date of grant so that executives and the
Company's stockholders are similarly benefited by appreciation in the price of
the Common Stock. In the case of 2000 stock options, such options were granted
at approximately 94% of market prices as additional compensation to the
recipients.
2001 Bonus and Incentive Compensation/CEO Compensation. The bonuses and
incentive awards awarded for 2001 performance to each of the Chief Executive
Officer and the other executive officers of the Company were based on the
Company's internal plan benchmarks for 2001, including (i) the Company's stock
price, including total return, (ii) funds from operations ("FFO"), (iii) return
on assets, (iv) portfolio performance, including same store net operating income
and tenant retention and occupancy, (v) general and administrative expense, (vi)
investment/divestment activity, (vii) capital markets activity, and (viii)
certain balance sheet objectives, including leverage and pay-out ratios.
Generally, bonuses and incentive awards for 2001, including those for the Chief
Executive Officer, were lower as a percentage of annual salary than in 2000, due
to the Company's performance in 2001 below some of its internal plan benchmarks,
including FFO, in a difficult economic environment. The 2001 annual salary for
Mr. Brennan, Chief Executive Officer of the Company, was set prior to the
beginning of such year and reflects, in addition to general economic conditions
prevailing at the time, Mr. Brennan's leadership in developing and implementing
the Company's strategy.
18
Compensation Committee Procedures. The Compensation Committee annually
evaluates the Company's performance, as well as the personal performance of the
Chief Executive Officer and the other executive officers of the Company. Company
performance is evaluated by quantitative factors based on the Company's internal
plan benchmarks for the applicable year. Personal performance is evaluated both
by qualitative factors, including organizational and management development
exhibited from year to year, and by quantitative factors based on the Company's
internal plan benchmarks for the applicable 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
REPORT OF THE AUDIT COMMITTEE
Pursuant to a meeting of the Audit Committee on March 7, 2002, 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, 2001.
Submitted by the Audit Committee:
John Rau Kevin Lynch J. Steven Wilson
Chairman
19
CERTAIN RELATIONSHIPS AND TRANSACTIONS
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 and Yap and Gary H. Heigl (formerly Chief
Operating Officer of the Company) for approximately $1,262,633 in the aggregate,
in connection with FRDS' election to become a 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 and Yap have been included in the total Bonus amounts
for 2000 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 2001, in one transaction in which the
Company sold property for approximately $3,025,000, received $17,293 as a
portion of the brokerage commission paid by the Company 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 transaction 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 2001, 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 March 2001, (ii) John Lesher filed one Form 4 late with
respect to a transaction in July 2001 and (iii) each of John Lesher, Kevin
Lynch, Jay Shidler, Robert Slater, Ed Tyler and Steven Wilson filed one Form 4
late with respect to a transaction in October 2001. In addition, Timothy Gudim
reported late on his Form 4 for March 2001 transactions with respect to 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.
20
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, if any, 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, 2002, 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, 2002, there were 39,254,795
shares of Common Stock and 6,964,315 Units outstanding.
Common Stock/Units
Beneficially
Owned
--------------------------
Names and Addresses of Percent
Directors and Officers* Number of Class
-----------------------
Jay H. Shidler (1).................................. 1,332,239 3.4%
Michael W. Brennan (2).............................. 453,768 1.1%
John L. Lesher (3).................................. 51,608 **
Kevin W. Lynch (4).................................. 67,126 **
Michael G. Damone (5)............................... 233,332 **
John Rau (6)........................................ 76,430 **
Robert J. Slater (7)................................ 61,255 **
J. Steven Wilson (8)................................ 75,716 **
W. Ed Tyler (9)..................................... 21,306 **
Michael J. Havala (10).............................. 182,839 **
Johannson L. Yap (11)............................... 234,984 **
David P. Draft (12)................................. 106,513 **
Ross Kirk (13)...................................... 31,738 **
All directors, Named Executive
Officers and other executive officers
as a group (16 persons) (14)...................... 3,031,963 7.4%
21
----------
* 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) 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 40,000 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, 10,000 shares at an exercise price of
$26.94 per share and 10,000 shares at an exercise price of $30.00 per
share. Also includes 10,000 shares that may be acquired upon the exercise
of options (which will vest in May 2002) granted under the 1997 Stock Plan
at an exercise price of $31.05 per share. Also includes 3,216 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(2) 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 255,000 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, 40,000 shares at an
exercise price of $27.25 per share and 25,000 shares at an exercise price
of $33.13 per share. Also includes 3,806 Units and 48,733 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(3) Includes 40,000 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, 10,000 shares at an exercise price of
$26.94 per share and 10,000 shares at an exercise price of $30.00 per
share. Also includes 10,000 shares that may be acquired upon the exercise
of options (which will vest in May 2002) granted under the 1997 Stock Plan
at an exercise price of $31.05 per share. Also includes 1,608 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(4) 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 40,000 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, 10,000 shares at an exercise price of
$26.94 per share and 10,000 shares at an exercise price of $30.00 per
share. Also includes 10,000 shares that may be
22
acquired upon the exercise of options (which will vest in May 2002) granted
under the 1997 Stock Plan at an exercise price of $31.05 per share. Also
includes 1,608 shares of restricted Common Stock issued under the 1997
Stock Plan.
(5) 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 43,333 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, 8,000 shares at an exercise price of $27.25 per share and 3,333
shares at an exercise price of $33.13 per share. Also includes 144,296
Units. Also includes 3,570 shares of restricted Common Stock issued under
the 1997 Stock Plan.
(6) 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 40,000 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, 10,000 shares at an
exercise price of $26.94 per share and 10,000 shares at an exercise price
of $30.00 per share. Also includes 10,000 shares that may be acquired upon
the exercise of options (which will vest in May 2002) granted under the
1997 Stock Plan at an exercise price of $31.05 per share. Also includes
1,930 shares of restricted Common Stock issued under the 1997 Stock Plan.
(7) Includes 40,000 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, 10,000 shares at an exercise price of $26.94 per
share and 10,000 shares at an exercise price of $30.00 per share. Also
includes 10,000 shares that may be acquired upon the exercise of options
(which will vest in May 2002) granted under the 1997 Stock Plan at an
exercise price of $31.05 per share. Also includes 10,255 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(8) 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 40,000 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, 10,000 shares at an
exercise price of $26.94 per share and 10,000 shares at an exercise price
of $30.00 per share. Also includes 10,000 shares that may be acquired upon
the exercise of options (which will vest in May 2002) granted under the
1997 Stock Plan at an exercise price of $31.05 per share. Also includes
3,216 shares of restricted Common Stock issued under the 1997 Stock Plan.
(9) Includes 10,000 shares that may be acquired by Mr. Tyler upon the exercise
of vested options granted under the 1997 Stock Plan at an exercise price of
$30.00 per share. Also includes 10,000 shares that may be acquired upon the
exercise of options (which will vest in May 2002) granted under the 1997
Stock Plan at an exercise price of $31.05 per share. Also includes 1,306
shares of restricted Common Stock issued under the 1997 Stock Plan.
(10) 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 89,833 shares that may be acquired
by Mr. Havala upon the exercise of vested options granted under the 1997
Stock Plan, consisting of 15,000 shares at an exercise price of $30.38 per
share, 40,000 shares at an exercise price of $31.13 per share, 15,000
shares at an exercise price of $25.13 per share, 2,500 shares at an
exercise price of $27.25 per share and 17,333 shares at an exercise price
of $33.13 per share. Also includes 39,889 shares of restricted Common Stock
issued under the 1997 Stock Plan. Does not include 1,000 shares of
Preferred Stock.
(11) 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 141,000 shares that may be acquired by Mr.
Yap upon the exercise of vested options granted under the 1997 Stock Plan,
consisting of 15,000 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
23
per share, 28,667 shares at an exercise price of $27.25 per share and
17,333 shares at an exercise price of $33.13 per share. Also includes 1,680
Units. Also includes 40,804 shares of restricted Common Stock issued under
the 1997 Stock Plan.
(12) Includes 70,867 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, 4,467 shares at an exercise price of $27.25 per share and
11,400 shares at an exercise price of $33.13 per share. Also includes
19,284 shares of restricted Common Stock issued under the 1997 Stock Plan.
(13) Includes 15,500 shares that may be acquired by Mr. Kirk upon the exercise
of vested options granted under the 1997 Stock Plan, consisting of 4,000
shares at an exercise price of $25.13 per share, 300 shares at an exercise
price of $27.25 per share and 11,200 shares at an exercise price of $33.13
per share. Also includes 10,621 shares of restricted Common Stock issued
under the 1997 Stock Plan.
(14) 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 996,632 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
105,000 shares at an exercise price of $30.38, 60,000 shares at an exercise
price of $30.50, 25,000 shares at an exercise price of $24.00, 244,500
shares at an exercise price of $31.13, 154,200 shares at an exercise price
of $25.13, 60,000 shares at an exercise price of $26.94, 100,600 shares at
an exercise price of $27.25, 107,332 shares at an exercise price of $33.13,
70,000 shares at an exercise price of $30.00 and 70,000 shares at an
exercise price of $31.05. Also includes 501,465 Units. Also includes
210,611 shares of restricted Common Stock issued under the 1997 Stock Plan.
Does not include 1,000 shares of Preferred Stock in the aggregate owned by
certain executive officers and directors of the Company.
24
PROPOSAL II
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 8, 2002, 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 2001 financial statements and the reviews of
financial statements included in the Company's Forms 10-Q for 2001 were
approximately $228,270, 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 2001.
ALL OTHER FEES
The aggregate fees billed by PricewaterhouseCoopers LLP for all other
services provided to the Company for fiscal year 2001 were approximately
$504,021, 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 2002.
25
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 2003 Annual
Meeting of Stockholders must be received by the Secretary of the Company no
later than December 10, 2002, 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 2003 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.
26
FIRST INDUSTRIAL REALTY TRUST, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON MAY 15, 2002
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 offices of the Company, 311 South Wacker Drive, 40th Floor, Chicago, Illinois 60606, commencing Wednesday, May 15, 2002, 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
reserve side.
Nominees (term, if elected, expires 2005):
Michael W. Brennan Michael G. Damone Kevin W. Lynch
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 RATIFICATION OF AUDITORS DESCRIBED IN ITEM 2, AND IN THE
DISCRETION OF THE PERSONS NAMED AS PROXIES HEREIN WITH RESPECT TO ANY AND ALL MATTERS REFERRED TO IN ITEM 3.
SEE REVERSE
SIDE
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FOLD AND DETACH HERE
Please mark your
[X] votes as in
this example.
FOR ALL
NOMINEES WITHHOLD
(except as indicated AUTHORITY
to the contrary on to vote for FOR AGAINST ABSTAIN
on the line below) all nominees
1. Election of three line below) 2. Ratification of the selection of
Class II Directors [ ] [ ] PricewaterhouseCooper LLP as the [ ] [ ] [ ]
(see reverse) Company's independent auditors.
To withhold authority for any individual nominee or nominees, 3. In their discretion, on any and all other matters as may
write his or their name or names in the space below: properly come before the meeting.
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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.
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Signature of Stockholder (if held jointly) DATE
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FOLD AND DETACH HERE