OMB APPROVAL
--------------------------
OMB Number: 3235-0059
Expires: August 31, 2004
Estimated average burden
hours per response...14.73
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(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:
--------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
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):
--------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] 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:
--------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
3) Filing Party:
--------------------------------------------------------------------------------
4) Date Filed:
--------------------------------------------------------------------------------
PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
FIRST INDUSTRIAL REALTY TRUST, INC.
311 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
TO BE HELD ON MAY 14, 2003
NOTICE IS HEREBY GIVEN that the 2003 Annual Meeting of Stockholders
(the "Annual Meeting") of First Industrial Realty Trust, Inc. (the "Company")
will be held on Wednesday, May 14, 2003 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 III directors of the Company to serve until the
2006 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, 2003; 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 21,
2003 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. "Street name"
stockholders who wish to vote in person will need to obtain a duly executed
proxy form from the institution that holds their shares prior to the Annual
Meeting.
By Order of the Board of Directors
Chicago, Illinois John H. Clayton
April 9, 2003 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
----------------
PROXY STATEMENT
----------------
FOR THE 2003 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 2003
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 2003 Annual Meeting of Stockholders of the Company to
be held on Wednesday, May 14, 2003, 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 III 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, 2003. The
Board of Directors has fixed the close of business on March 21, 2003 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
38,758,192 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
III 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.
1
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 III 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. "Street
name" stockholders who wish to vote in person will need to obtain a duly
executed proxy form from the institution that holds their shares prior to the
Annual Meeting.
The Company's 2002 Annual Report, including financial statements for
the fiscal year ended December 31, 2002, 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 2006 Annual Meeting of Stockholders and until their successors are duly
elected and qualified. The Board of Directors has nominated John Rau, Robert J.
Slater and W. Ed Tyler to serve as Class III directors (the "Nominees"). Each of
the Nominees is currently serving as a Class III 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.
2
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following biographical descriptions set forth certain information
with respect to the three Nominees for election as Class III directors at the
Annual Meeting, the continuing directors whose terms expire at the Annual
Meetings of Stockholders in 2004 and 2005 and certain executive officers, based
on information furnished to the Company by such persons. The following
information is as of March 21, 2003, unless otherwise specified.
CLASS III NOMINEES FOR ELECTION AT 2003 ANNUAL MEETING - TERM TO EXPIRE IN 2006
JOHN RAU Director since 1994
Mr. Rau, 54, has been a director of the Company since June 1994. Since
December 2002, Mr. Rau has served as President and Chief Executive
Officer of Miami Corporation, an asset management firm. He is also
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. and Nicor Inc. Mr. Rau also serves on the Advisory Boards of
Financial Technology Ventures and BlueStar Ventures. 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.
ROBERT J. SLATER Director since 1994
Mr. Slater, 65, 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 the basic
manufacturing and distribution industries. He has retired as President
of Crane Co., a multinational manufacturing company.
3
W. ED TYLER Director since 2000
Mr. Tyler, 50, 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, 56, 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 (NYSE:OFC). Since March 2002, Mr.
Shidler has served as a director of Primus Guaranty, Ltd., a Bermuda
holding company of which Mr. Shidler is a founder and whose subsidiary
is a AAA-rated financial products company. 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.
JOHN L. LESHER Director since 1994
Mr. Lesher, 69, has been a director of the Company since June 1994. Mr.
Lesher is President of Jack Lesher and Associates, a management
consulting firm. From March 1999 to June 2002, he served as a Senior
Advisor of Resource Evaluation, Inc., a consulting firm specializing in
working capital management. Prior to March 1999, Mr. Lesher also served
with Resource Evaluation, Inc. as Chairman, from July 1997 to March
1999, and as President, from 1994 to July 1997. He is a director of The
Sound Shore Fund, 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.
4
J. STEVEN WILSON Director since 1994
Mr. Wilson, 59, has been a director of the Company since June 1994.
Since 1985, Mr. Wilson has been President, Chief Executive Officer and
Chairman of the Board of Directors of Riverside Group, Inc., a holding
company. From 1991 to April 2003, Mr. Wilson was 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.
CLASS II CONTINUING DIRECTORS - TERM TO EXPIRE IN 2005
MICHAEL W. BRENNAN Director since 1996
Mr. Brennan, 46, has been a director since March 1996. He has been
President and Chief Executive Officer of the Company since November
1998, prior to which time he served as Chief Operating Officer of the
Company from December 1995 to November 1998 and as Senior Vice
President--Asset Management of the Company from April 1994 to December
1995. He was a partner of The Shidler Group between 1988 and 1994 and
the President of the Brennan/Tomasz/Shidler Investment Corporation and
was in charge of asset management, leasing, project finance, accounting
and treasury functions for The Shidler Group's Chicago operations.
Between 1986 and 1988, Mr. Brennan served as The Shidler Group's
principal acquisition executive in Chicago. Prior to joining The
Shidler Group, Mr. Brennan was an investment specialist with CB
Commercial (now CB Richard Ellis, Inc.). His professional affiliations
include the Urban Land Institute ("ULI"), the National Association of
Industrial and Office Properties ("NAIOP"), 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, 68, 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.
5
KEVIN W. LYNCH Director since 1994
Mr. Lynch, 50, 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.
EXECUTIVE OFFICERS AND OTHER SENIOR MANAGEMENT
MICHAEL J. HAVALA
Mr. Havala, 43, has been Chief Financial Officer 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, information technology 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, 40, 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 Chicago Real Estate Council, ULI,
NAREIT, NAIOP and the Real Estate Investment Advisory Council.
6
DAVID P. DRAFT
Mr. Draft, 51, 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 27 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, 46, 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 22 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, 43, 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 21 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.
7
ARNE M. COOK
Mr. Cook, 43, has been Managing Director of the Central region since
January 2001, prior to which time he served as Senior Regional Director
of the Company's Minnesota region from January 2000 to December 2000,
as Regional Director of the Company's Minnesota region from April 1998
to December 1999 and as Regional Development Manager from April 1997 to
March 1998. He has 18 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, 54, 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 24 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. He served on the Board of
Directors of NAIOP's Denver Chapter from 1998 to 2001.
SCOTT A. MUSIL
Mr. Musil, 35, has been Senior Vice President of the Company since
March 2001; Controller of the Company since December 1995; Treasurer of
the Company since May 2002; and Assistant Secretary of the Company
since May 1996. In addition, he served as a Vice President of the
Company from May 1998 to March 2001. Prior to joining the Company, he
served in various capacities with Arthur Andersen & Company,
culminating as an audit manager specializing in the real estate and
finance industries. Mr. Musil is a certified public accountant. His
professional affiliations include the American Institute of Certified
Public Accountants and NAREIT.
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 III directors hold office for a
term expiring at this Annual Meeting. Class I directors hold office for a term
expiring at the Annual Meeting of Stockholders to be held in 2004. Class II
directors hold office for a term expiring at the Annual Meeting of Stockholders
to be held in 2005. 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
8
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 nine meetings during the fiscal year of
2002. Each of the directors serving in 2002 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/Corporate Governance Committee
and a Special Committee.
Audit Committee. The Audit Committee is directly responsible for the
appointment, discharge, compensation, and oversight of the work of any
independent public accountants employed by the Company for the purpose of
preparing or issuing an audit report or related work. In connection with such
responsibilities, the Audit Committee approves 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, pre-approves
audit and non-audit services provided by the independent public accountants,
reviews the independence of the independent public accountants, pre-approves
audit and non-audit fees and reviews the adequacy of the Company's internal
accounting controls. The membership of the Audit Committee currently consists of
Messrs. Rau, Lynch and Wilson, each of whom, in the judgment of the Company's
Board of Directors, is independent as required by the listing standards of The
New York Stock Exchange. The Audit Committee met two times in 2002. In addition,
Mr. Rau, as Chairman of the Audit Committee, holds a meeting on a quarterly
basis with the Company's independent public accountants to discuss the review of
quarterly information prior to the issuance of the quarterly earnings release.
On May 15, 2002, the Board of Directors, on the unanimous recommendation of the
Audit Committee, reaffirmed the Company's Audit Committee Charter. On December
4, 2002, the Board of Directors approved an amended and restated Audit Committee
Charter, a copy of which is attached hereto as Appendix A.
Compensation Committee. The Compensation Committee 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 membership of the
Compensation Committee consists of a total of not less than two independent
directors selected by the entire Board of Directors of the Company. The
Compensation Committee currently consists of Messrs. Slater, Lesher and Tyler.
The Compensation Committee met two times in 2002.
Investment Committee. The Investment Committee 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 greater than $1 million and 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
9
membership of the Investment Committee currently consists of Messrs. Shidler,
Brennan and Damone. The Investment Committee met 26 times and acted by unanimous
consent 13 times during 2002.
Nominating/Corporate Governance Committee. The Nominating/Corporate
Governance 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/Corporate Governance 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/Corporate
Governance Committee develops a new proposal. The Nominating/Corporate
Governance Committee will consider nominees recommended by stockholders of the
Company. Such recommendations must be submitted in writing to the Secretary of
the Company. In addition, the Nominating/Corporate Governance Committee develops
and oversees the Company's corporate governance policies and its Chairman
presides at meetings of non-management directors. The membership of the
Nominating/Corporate Governance Committee consists of a total of not less than
three independent directors selected by the entire Board of Directors of the
Company from among those independent directors whose term is not expiring in the
calendar year that the Nominating/Corporate Governance Committee is making its
proposal. The Nominating/Corporate Governance Committee that made the proposals
approved by the Board of Directors and set forth in this Proxy Statement
consisted of Messrs. Lesher, Lynch and Wilson. Mr. Lynch is the current Chairman
of the Nominating/Corporate Governance Committee. The Nominating/Corporate
Governance Committee met once in March 2003 to determine its nominations for
this Proxy Statement.
Special Committee. 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 under which the Company or any of
the Company's subsidiaries, including First Industrial, L.P., issues debt. The
membership of the Special Committee currently consists of Messrs. Shidler,
Brennan and Rau. The Special Committee acted by unanimous consent twice during
2002.
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 $1,000 for each committee meeting attended.
Following the Annual Meeting of Stockholders held in 2002, each of the Company's
non-employee directors received options under the 1997 Stock Plan to purchase
10,000 shares at the market price of the shares on the date of grant. Such
options granted to non-employee directors vest one year after the date of grant.
10
EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation, including
cash compensation and restricted stock and option awards, paid by the Company
with respect to the fiscal years ended December 31, 2000, 2001 and 2002 to the
Company's Chief Executive Officer and the four other most highly compensated
executive officers of the Company (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long Term
Compensation
-------------------------
Restricted Shares All Other
Name and Annual Stock Underlying Compensation
Principal Position Year Salary($) Bonus($)(1) Awards($)(2) Options(#) ($)(6)
------------------ ---- ---------- ----------- ------------ ---------- ------------
Michael W. Brennan 2002 $ 500,000 $ 247,500 $721,815 0 (5) $ 426,964
President and 2001 490,000 735,000 338,002 72,000 (4) 337,673
Chief Executive Officer 2000 375,000 600,598 281,160 75,000 (3) 256,664
Michael J. Havala 2002 $ 284,000 $ 122,500 $426,786 0 (5) $ 320,128
Chief Financial Officer 2001 275,600 440,000 372,492 64,000 (4) 248,505
2000 265,000 410,141 207,675 52,000 (3) 186,209
Johannson L. Yap 2002 $ 309,000 $ 148,500 $455,315 0 (5) $ 286,620
Chief Investment Officer 2001 300,000 480,000 372,492 70,000 (4) 216,312
2000 235,000 456,096 207,675 52,000 (3) 161,690
David P. Draft 2002 $ 278,000 $ 100,000 $334,968 0 (5) $ 167,469
Executive Vice 2001 270,000 340,000 196,593 44,100 (4) 170,645
President - Operations 2000 210,000 403,200 130,196 34,200 (3) 87,825
Ross Kirk 2002 $214,000 $ 195,007 $499,000 0 (5) $ 67,455
Managing Director 2001 208,000 308,880 115,886 25,800 (4) 40,414
2000 200,000 396,000 127,800 33,600 (3) 20,713
----------
(1) 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. Amounts
for 2001 represent bonuses awarded in February 2002 based on
performance for the year ended December 31, 2001. Amounts for 2002
represent bonuses awarded in February 2003 based on performance for the
year ended December 31, 2002.
(2) Amounts for 2000 represent restricted Common Stock awarded in March
2001. Amounts for 2001 represent restricted Common Stock awarded in
March 2002. Amounts for 2002 represent restricted Common Stock awarded
in March 2003. The dollar amount shown is approximately equal to the
product of the number of shares of restricted Common Stock granted
multiplied by the closing price of the Common Stock as reported by the
New York Stock Exchange on the date of grant ($31.95 on March 16, 2001
for 2000 amounts; $34.49 on March 15, 2002 for 2001 amounts; $29.26 on
March 20, 2003 for 2002 amounts). This valuation does not take into
account any diminution in value that results from the restrictions
applicable to such Common Stock. From
11
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, 2002 (based on the
closing price per share of Common Stock as reported on the New York
Stock Exchange on December 31, 2002 ($28.00)) is as follows: Mr.
Brennan - 48,733 shares ($1,364,524), Mr. Havala - 39,889 shares
($1,116,892), Mr. Yap - 40,804 shares ($1,142,512), Mr. Draft - 19,284
shares ($539,952) and Mr. Kirk - 10,621 shares ($297,388). Of the
29,875 shares of restricted Common Stock awarded in March 2001 to the
Named Executive Officers as part of 2000 compensation, one-third vested
in January 2002 and January 2003, as to which restrictions have been
removed, and one-third will vest in January 2004. Of the 40,460 shares
of restricted Common Stock awarded in March 2002 to the Named Executive
Officers as part of 2001 compensation, one-third vested in January
2003, as to which restrictions have been removed, and one-third will
vest in each of January 2004 and January 2005. Of the 83,318 shares of
restricted Common Stock awarded in March 2003 to the Named Executive
Officers as part of 2002 compensation, one-third will vest in each of
January 2004, January 2005 and January 2006.
(3) 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.
(4) Amounts for 2001 represent an aggregate of 275,900 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.
(5) No options were granted to the Named Executive Officers with respect to
2002.
(6) Includes premiums paid by the Company on term life insurance and long
term disability insurance ($15,510 in 2002; $15,511 in 2001; $13,421 in
2000) for the benefit of certain of the Named Executive Officers. Also
includes car allowances ($62,400 in 2002; $62,400 in 2001; $62,400 in
2000), a moving allowance ($47,000 in 2001) and personal financial
planning allowances ($8,400 in 2002; $8,400 in 2001; $8,000 in 2000)
for certain of the Named Executive Officers. Also includes benefits
accrued on units awarded to the Named Executive Officers under the
Deferred Income Plan. 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 $57,022, with the remainder of such amount paid
in cash. The amounts accrued under the Deferred Income Plan to each of
the other Named Executive Officers in 2001 were paid in cash. The
amounts accrued under the Deferred Income Plan to each of the Named
Executive Officers in 2002 were paid in cash.
12
OPTION GRANTS AND EXERCISES
Option Grants. The following table sets forth the options granted in
the fiscal year ended December 31, 2002 to the Named Executive Officers.
OPTION GRANTS IN 2002
Percent of
Number of Total Options
Options Granted to Exercise or Total Present
Granted Employees in Base Price Expiration Value as of
Name (#)(1) 2002 (%)(2) ($/sh) Date(s) Grant Date ($)(4)
----- -------- ------------- ----------- ----------- -----------------
Michael W. Brennan 72,000 8.2 30.53 (3) 140,400
Michael J. Havala 64,000 7.3 30.53 (3) 124,800
Johannson L. Yap 70,000 8.0 30.53 (3) 136,500
David P. Draft 44,100 5.0 30.53 (3) 85,995
Ross Kirk 25,800 2.9 30.53 (3) 50,310
(1) Represents an aggregate of 275,900 options granted under the 1997 Stock
Plan on January 16, 2002 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 16, 2012.
(4) Applies an option value of $1.95 per share, based on the Black-Scholes
option pricing model adapted for use in valuing stock options. The
actual value, if any, that the Named Executive Officer may receive
would depend on the excess of the stock price at the time of exercise
over the exercise or base price on the date the option is exercised.
There is no assurance that the value realized by the Named Executive
Officer would be at or near the value estimated by the Black-Scholes
model. The estimated value under the model assumes an option term of
ten years, an average volatility of the Company's common stock of
20.94%, an optimal exercise date three years from the date of grant, a
risk free rate of interest of 3.54% and an average dividend yield on
the Company's common stock of 8.28%.
13
Option Exercises and Year-End Holdings. Certain of the Named Executive
Officers exercised an aggregate of 111,000 options in 2002. The following table
sets forth information with respect to options exercised during, and the value
of options held at the end of, 2002 by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2002
AND FISCAL YEAR-END 2002 OPTION VALUES
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired on Value Options In-the-Money Options at
Name Exercise(#)(1) Realized($) at December 31, 2002(#) December 31, 2002($)(2)
---- -------------- ----------- --------------------------- ---------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Michael W. Brennan 0 0 285,000 142,000 497,500 15,000
Michael J. Havala 42,500 215,871 104,833 113,667 161,250 11,250
Johannson L. Yap 45,000 343,125 121,000 119,000 127,750 10,750
David P. Draft 15,000 90,750 70,867 76,633 32,100 7,300
Ross Kirk 8,500 61,625 15,500 52,600 11,725 3,300
----------
(1) Represents shares with respect to which options were exercised in 2002
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, 2002 ($28.00).
EMPLOYMENT AGREEMENTS
In February 1997, the Company entered into a written employment
agreement with Michael W. Brennan, who became the Company's President and Chief
Executive Officer in November 1998. The agreement provides for an initial annual
minimum base salary of $195,000, which may be increased at the discretion of the
Compensation Committee, and an annual bonus at the discretion of the
Compensation Committee. The agreement provides for an initial term of two years
and subsequent two-year periods unless otherwise terminated; provided, however,
that the agreement will expire on Mr. Brennan's 70th birthday. Upon certain
changes in control of the Company or a termination without cause, Mr. Brennan is
entitled to severance in an amount equal to two times his annual 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, 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 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
14
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, Lesher and
Tyler. None of them has served as an officer of the Company or had any other
business relationship or affiliation with the Company in 2002, 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, 2002, was
comprised of 149 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, 1997 to December 31, 2002 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, 1997 was $36.13 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.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
----------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
----------------------------------------------------------------------------------
12/97 12/98 12/99 12/00 12/01 12/02
----------------------------------------------------------------------------------
FIRST INDUSTRIAL REALTY TRUST, INC. $100 $ 80 $ 90 $121 $120 $118
NAREIT EQUITY 100 83 79 99 113 118
S & P 500 100 129 156 141 125 97
----------------------------------------------------------------------------------
16
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is composed of
three of the Company's independent outside directors, Messrs. Slater, Lesher and
Tyler. 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. restricted stock 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 awards are directly tied to the Company's actual
economic performance during the applicable fiscal year.
With respect to performance in years prior to 2002, executive
compensation has included other incentive awards (e.g. stock option grants and
deferred income awards) along with restricted stock. With respect to performance
in 2002, the Compensation Committee determined not to grant such other incentive
awards and to utilize restricted stock awards exclusively as the Company's
incentive award. In connection with such determination, the Compensation
Committee approved the cancellation, effective March 20, 2003, of all
outstanding deferred income awards in exchange for the issuance of restricted
stock. See discussion below. Currently, the Compensation Committee anticipates
that it will continue in the future to utilize restricted stock awards
exclusively as the Company's incentive award; however, it reserves the right to
utilize other incentive awards in the future if and when it determines such
would be appropriate.
Restricted stock is granted to the executives under the provisions of
the 1997 Stock Plan and will also be granted under the 2001 Stock Plan in the
future. Other incentive awards (e.g., stock options and deferred income awards)
were granted to the executives under the provisions of the 1994 Stock Plan, the
1997 Stock Plan and the Deferred Income Plan, and, if granted in the future, may
be, granted under such plans and under the 2001 Stock Plan. The Compensation
Committee determines those executives who will receive restricted stock and
other incentive awards and the size of such awards. Generally, stock options
were, and, if granted in the future, would be expected to be, 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.
Cancellation of Outstanding Deferred Income Awards. Effective March 20,
2003, the Company cancelled (the "DIP Cancellation") all of its outstanding
deferred income awards (representing approximately 1.12 million deferred income
units held by 34 employees of the Company) in exchange for 461,411 shares of
restricted stock The expected total amount accruable over the life of such
awards was approximately $23.7 million and the estimated total value of the
restricted stock issued in exchange for such units was approximately $12.5
million. To value the outstanding deferred income awards for purposes of the DIP
Cancellation, the Company discounted to present value (applying a 7% discount
rate) the expected total amount accruable over the life of the outstanding
deferred income awards and reduced that amount by 33%,
17
representing an assumed average retention factor. The restricted stock issued
pursuant to the DIP Cancellation will vest ratably over ten years beginning
January 1, 2004.
2002 Bonus and Incentive Compensation/CEO Compensation. The bonuses and
incentive awards awarded for 2002 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 2002, including (i) the Company's stock
price, including total return, (ii) earnings per share, (iii) funds from
operations, (iv) net asset value, (v) return on assets, (vi) portfolio
performance, including same store net operating income, tenant retention,
occupancy and capital expenditures, (vii) general and administrative expense,
(viii) investment/divestment activity, (ix) capital markets activity, and (x)
certain balance sheet objectives, including leverage and pay-out ratios.
Generally, bonuses and incentive awards for 2002, including those for the Chief
Executive Officer, were lower as a percentage of annual salary than in 2001, due
to the Company's performance in 2002 below some of its internal plan benchmarks
in a difficult economic environment. The 2002 annual salary for Mr. Brennan,
Chief Executive Officer of the Company, was set prior to the beginning of such
year and reflects general economic conditions prevailing at the time.
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 W. Ed Tyler
18
REPORT OF THE AUDIT COMMITTEE
Pursuant to a meeting of the Audit Committee on March 5, 2003, 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, 2002.
Submitted by the Audit Committee:
John Rau Kevin Lynch J. Steven Wilson
Chairman
CERTAIN RELATIONSHIPS AND TRANSACTIONS
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 five transactions in 2002 and one
transaction in January 2003 in which the Company sold property for approximately
$24.4 million, received $83,180 as a portion of the brokerage commission paid by
the Company to CB Richard Ellis in connection with such transactions. Management
of the Company believes the terms of brokerage services provided by CB Richard
Ellis in such transactions were as favorable to the Company as could be obtained
in arm's length transactions.
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 2002, 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) Kevin Lynch reported late on his Form 4 for
October 1, 2002 a sale of Common Stock held through his 401(k) plan; (ii) Scott
Musil filed late his Form 3; and (iii) John Lesher filed late two Form 4s, one
with respect to a transaction on October 1, 2002 and one with respect to a
transaction on January 6, 2003, and filed late his Form 5 for 2002.
19
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 21, 2003, 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 21, 2003, there were 38,758,192
shares of Common Stock and 6,811,772 Units outstanding.
Common Stock/Units
Beneficially
Owned
----------------------
Percent
Number of Class
------ --------
Names and Addresses of
5% Stockholders
----------------------
Cohen & Steers Capital Management, Inc.
757 Third Avenue
New York, New York 10017................ 3,190,635 8.2%
Security Capital Research & Management
Incorporated
11 South LaSalle Street, 2nd Floor
Chicago, Illinois 60603................. 1,936,600 5.0%
Names and Addresses of
Directors and Officers*
Jay H. Shidler (1)....................... 1,342,877 3.4%
Michael W. Brennan (2)................... 630,040 1.6%
John L. Lesher (3)....................... 61,927 **
Kevin W. Lynch (4)....................... 76,927 **
Michael G. Damone (5).................... 238,893 **
John Rau (6)............................. 87,068 **
Robert J. Slater (7)..................... 71,893 **
J. Steven Wilson (8)..................... 86,354 **
W. Ed Tyler (9).......................... 31,944 **
Michael J. Havala (10)................... 287,591 **
Johannson L. Yap (11).................... 327,386 **
David P. Draft (12)...................... 183,303 **
Ross Kirk (13)........................... 87,161 **
All directors, Named Executive
Officers and other executive officers
as a group (17 persons) (14)........... 3,786,102 9.3%
20
----------
* 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 50,000 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
$27.69 per share, 10,000 shares at an exercise price of $30.00 per share
and 10,000 shares at an exercise price of $31.05 per share. Also includes
10,000 shares that may be acquired upon the exercise of options (which will
vest in May 2003) granted under the 1997 Stock Plan at an exercise price of
$33.15 per share. Also includes 3,854 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 324,000 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, 60,000 shares at an
exercise price of $27.25 per share, 50,000 shares at an exercise price of
$33.13 per share and 24,000 shares at an exercise price of $30.53 per
share. Also includes 3,806 Units and 116,272 shares of restricted Common
Stock issued under the 1997 Stock Plan.
(3) Includes 50,000 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
$27.69 per share, 10,000 shares at an exercise price of $30.00 per share
and 10,000 shares at an exercise price of $31.05 per share. Also includes
10,000 shares that may be acquired upon the exercise of options (which will
vest in May 2003) granted under the 1997 Stock Plan at an exercise price of
$33.15 per share. Also includes 1,927 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 50,000 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
$27.69 per share, 10,000 shares at an exercise price of $30.00 per share
and 10,000 shares at an exercise price of $31.05 per share. Also includes
10,000 shares that may be acquired upon the exercise of options (which will
vest in May 2003)
21
granted under the 1997 Stock Plan at an exercise price of $33.15 per share.
Also includes 1,927 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 43,900 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, 3,000 shares at an exercise price of $25.13, 12,000 shares at an
exercise price of $27.25 per share, 6,667 shares at an exercise price of
$33.13 per share and 2,233 shares at an exercise price of $30.53 per share.
Also includes 144,296 Units. Also includes 11,007 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 50,000 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 $27.69 per share, 10,000 shares at an exercise price of
$30.00 per share and 10,000 shares at an exercise price of $31.05 per
share. Also includes 10,000 shares that may be acquired upon the exercise
of options (which will vest in May 2003) granted under the 1997 Stock Plan
at an exercise price of $33.15 per share. Also includes 2,568 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(7) Includes 50,000 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 $27.69 per
share, 10,000 shares at an exercise price of $30.00 per share and 10,000
shares at an exercise price of $31.05 per share. Also includes 10,000
shares that may be acquired upon the exercise of options (which will vest
in May 2003) granted under the 1997 Stock Plan at an exercise price of
$33.15 per share. Also includes 10,893 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 50,000 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 $27.69 per share, 10,000 shares at an exercise price of
$30.00 per share and 10,000 shares at an exercise price of $31.05 per
share. Also includes 10,000 shares that may be acquired upon the exercise
of options (which will vest in May 2003) granted under the 1997 Stock Plan
at an exercise price of $33.15 per share. Also includes 3,854 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(9) Includes 20,000 shares that may be acquired by Mr. Tyler upon the exercise
of vested options granted under the 1997 Stock Plan, consisting of 10,000
shares at an exercise price of $30.00 per share and 10,000 shares at an
exercise price of $31.05 per share. Also includes 10,000 shares that may be
acquired upon the exercise of options (which will vest in May 2003) granted
under the 1997 Stock Plan at an exercise price of $33.15 per share. Also
includes 1,944 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 143,500 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, 17,500 shares at an exercise price of $27.25 per share,
34,667 shares at an exercise price of $33.13 per share and 21,333 shares at
an exercise price of $30.53 per share. Also includes 95,098 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(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 166,000 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, 10,000 shares at an exercise
price of $25.13 per share, 43,000 shares at an exercise price of $27.25 per
share, 34,667 shares at an exercise price of $33.13 per share and 23,333
shares at an exercise price of $30.53 per share. Also includes 1,680 Units.
Also includes 88,573 shares of restricted Common Stock issued under the
1997 Stock Plan.
(12) Includes 106,700 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
22
price of $31.13 per share, 10,000 shares at an exercise price of $25.13 per
share, 14,200 shares at an exercise price of $27.25 per share, 22,800
shares at an exercise price of $33.13 per share and 14,700 shares at an
exercise price of $30.53 per share. Also includes 52,806 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(13) Includes 39,700 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, 4,700 shares at an
exercise price of $27.25 per share, 22,400 shares at an exercise price of
$33.13 per share and 8,600 shares at an exercise price of $30.53 per share.
Also includes 37,780 shares of restricted Common Stock issued under the
1997 Stock Plan.
(14) Includes 122,500 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, 25,000
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 1,365,300 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
108,333 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, 248,500
shares at an exercise price of $31.13, 119,700 shares at an exercise price
of $25.13, 60,000 shares at an exercise price of $27.69, 189,267 shares at
an exercise price of $27.25, 225,335 shares at an exercise price of $33.13,
70,000 shares at an exercise price of $30.00, 70,000 shares at an exercise
price of $31.05, 70,000 shares at an exercise price of $33.15 and 119,165
shares at an exercise price of $30.53. Also includes 501,465 Units. Also
includes 522,718 shares of restricted Common Stock issued under the 1997
Stock Plan.
23
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 5, 2003, 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 2002 financial statements and the reviews of
financial statements included in the Company's Forms 10-Q for 2002 were
approximately $289,000, including expenses.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not utilize the services of PricewaterhouseCoopers LLP
in the design or implementation of its financial information systems during
fiscal 2002.
ALL OTHER FEES
The aggregate fees billed by PricewaterhouseCoopers LLP for all other
services provided to the Company for fiscal year 2002 were approximately
$504,212, 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 2003.
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.
24
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2004 Annual
Meeting of Stockholders must be received by the Secretary of the Company no
later than December 11, 2003, 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 2004 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.
25
Appendix A
FIRST INDUSTRIAL REALTY TRUST, INC.
AUDIT COMMITTEE CHARTER
The Audit Committee (the "Committee") is a committee composed of members of the
Board of Directors. The Committee shall be directly responsible for the
appointment, discharge, compensation, and oversight of the work of any
independent auditor employed by the Company (including resolution of
disagreements between management and the auditor regarding financial reporting)
for the purpose of preparing or issuing an audit report or related work. The
Committee shall determine, and the Company shall provide, appropriate funding to
compensate any such independent auditor for its rendering an audit report or
related work. Any such independent auditor shall report directly to the
Committee. In addition, the Committee shall assist the Board in fulfilling its
oversight responsibilities by reviewing the financial information which will be
provided to the stockholders and others, the systems of internal controls which
management and the Board of Directors have established, and the audit process.
Committee members shall comply with the requirements of the Securities and
Exchange Commission and the New York Stock Exchange. The membership of the
Committee shall consist of at least three Directors, each of whom shall be
independent and shall serve at the pleasure of the Board of Directors. Other
than in his or her capacity as a Committee member or as a member of the Board of
Directors or any other Board committee, Committee members may not accept any
consulting, advisory, or other compensatory fee from the Company or be an
affiliated person of the Company or any of its subsidiaries. Committee Members
and the Committee Chairperson shall be designated by the Board of Directors.
The Committee shall establish and maintain procedures for the receipt,
retention, and treatment of complaints received by the Company regarding
accounting, internal accounting controls, or auditing matters, and for the
confidential, anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing matters.
The Committee shall have the power to conduct or authorize investigations into
any matters within the Committee's scope of responsibilities. The Committee
shall be empowered, and be provided funds by the Company, as it determines
appropriate, to retain independent counsel, accountants or other advisors, as it
determines necessary to carry out its duties or to assist it in the conduct of
any investigation.
The Committee as a whole shall meet at least two times per year, or more
frequently as circumstances require. The Committee may ask members of management
or others to attend meetings and provide pertinent information as necessary. To
the extent they determine appropriate, the Committee Members may communicate
outside such meetings with one another and with members of management and the
independent auditors.
In addition to those activities set forth in this Charter, the Committee will
perform such other activities consistent with the Company's charter and bylaws
and applicable law, as the Committee or the Board deems necessary or
appropriate.
26
In meeting its responsibilities, the Committee is expected to:
1. Pre-approve all auditing services (including providing comfort letters in
connection with securities offerings) and permitted non-audit services
(including tax services) to be performed for the Company by its independent
auditors. The authority to pre-approve such services may be delegated by
the Committee to one or more of its members. Such delegee(s) shall present
its decisions with respect to such services to the full Committee at the
Committee's scheduled meetings. Approval of any non-audit services to be
performed by the Company's independent auditors shall be disclosed in the
Company's periodic reports.
2. Provide an open avenue of communication between the independent auditors
and the Board of Directors. The independent auditors are ultimately
accountable to the Board of Directors and the Committee.
3. Review and reassess this Charter annually and submit any proposed changes
to the Board of Directors for approval.
4. Review the independence of the independent auditors, including a review of
management consulting and other non-audit services and associated fees
provided by that firm and any other relationship the auditors and its
affiliates have with the Company. As a part of such review, the Committee
shall require the independent auditors to submit on a periodic basis to the
Audit Committee a formal written statement delineating all relationships
between the independent auditors and the Company.
5. Review with management and the independent auditors significant risks or
exposures, whether from significant or unusual events or transactions or
ordinary course operations, which impact financial reporting and
operations, and assess the steps management has taken, and the adequacy and
effectiveness of the Company's internal controls, to deal with such risks
and exposures.
6. Consider and review with the independent auditors:
a. The adequacy of the Company's internal controls.
b. Any related significant findings and recommendations of the independent
auditors together with management's responses thereto.
c. Any other matters which the independent auditors determine they are
required under applicable regulations to communicate to the Committee.
7. Ensure that management has timely disclosed to the Committee and the
independent auditors (a) all significant deficiencies and material
weaknesses in the design or operation of internal controls and procedures
for financial reporting which could adversely affect the Company's ability
to record, process, summarize and report financial information required to
be disclosed by the Company in the reports that it files with or submits to
the Securities and Exchange Commission, within the specified
27
time periods, and (b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal controls and procedures for financial reporting.
8. Prior to the annual audit of financial statements for the fiscal year,
review with the independent auditors the audit plan, including the fees to
be paid for the audit and related services.
9. Review with management and the independent auditors at the completion of
the annual audit of the financial statements for the fiscal year, and prior
to the filing of such financial statements:
a. The Company's annual financial statements and related footnotes.
b. The independent auditors' audit of the financial statements and their
report thereon.
c. Any serious difficulties or disputes with management encountered during
the course of the audit.
d. Other matters related to the conduct of the audit which are to be
communicated to the Committee under generally accepted auditing
standards.
10. Review with financial management and the independent auditors the Company's
quarterly financial statements and results prior to filing with the SEC.
The Committee Chairperson or other designated Committee member may conduct
this review on behalf of the Committee.
11. Review legal and regulatory matters that may have a material impact on the
financial statements.
12. Report Committee actions to the Board of Directors with such
recommendations as the Committee may deem appropriate.
13. Prepare and file, or cause to be prepared and filed any reports or other
documents required to be prepared and filed by the Committee under any
applicable law or regulations of the Securities and Exchange Commission or
the New York Stock Exchange.
28
FIRST INDUSTRIAL REALTY TRUST, INC.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
------------------------------------------------------------------------------------------------------------------------------------
0936
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE
1. Election of three Class III Directors. 2. Ratification of FOR AGAINST ABSTAIN
(Please see reverse) the selection of / / / / / /
PricewaterhouseCoopers LLP
as the Company's independent
auditors.
FOR WITHHELD 3. In their discretion, on any
FOR WITHHELD and all other matters as may
ALL / / / / FROM ALL properly come before the
NOMINEES NOMINEES meeting.
/ /
---------------------------------------------
FOR ALL NOMINEES EXCEPT AS WRITTEN ABOVE
NOTE: Please date proxy and sign it exactly as name or names
appear to the left. All joint owners of shares should sign. State
full title when signing as executor, administrator, trustee,
guardian, et cetera. Please return signed proxy in the enclosed
envelope.
The undersigned hereby revokes any proxy or proxies heretofore
given to vote upon or act with respect to said stock and hereby
ratifies and confirms all that the proxies named herein and their
substitutes, or any of them, may lawfully do by virtue hereof.
Signature: _________________________________ Date: _____________ Signature: _________________________________ Date: _____________
DETACH HERE
--------------------------------------------------------------------------------
FIRST INDUSTRIAL REALTY TRUST, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON MAY 14, 2003
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
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 14, 2003, at 9:00 a.m., and at any and all
adjournments thereof, with all the powers the undersigned would possess if then
and there personally present, and especially (but without limiting the general
authorization and power hereby given) with the authority to vote on the reverse
side.
Nominees (term, if elected, expires 2006):
(01) John Rau, (02) Robert J. Slater, and (03) W. Ed Tyler
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.