<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Jones Lang LaSalle Incorporated
- --------------------------------------------------------------------------------
(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)(4) 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:
- --------------------------------------------------------------------------------
<PAGE> 2
JONES LANG LASALLE INCORPORATED
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
[JONES LANG LASALLE LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
------------------------
April 7, 2000
Dear Stockholder:
I would like to invite you to attend our 2000 annual meeting of
stockholders, which will be held on Monday, May 15, 2000, beginning at 1:30
p.m., local time, in the Indiana Room on Lower Level 1 of the Aon Center, 200
East Randolph Drive, Chicago, Illinois 60601.
The formal notice of the annual meeting and the proxy statement can be
found on the following pages. A copy of our 1999 annual report is enclosed for
your review. Also enclosed is a proxy card and a postage-paid return envelope.
To be sure that your shares will be voted at the meeting, please complete
and sign the enclosed proxy card and return it in the enclosed envelope as
promptly as possible. You are encouraged to specify your choices on the matters
indicated. However, it is not necessary to specify your choice on a matter if
you wish to vote in accordance with the recommendation of the Board of
Directors, in which event merely executing and returning the proxy card will be
sufficient.
I hope that you will be able to attend the annual meeting. If you do, you
may vote your shares in person even though you have returned a proxy.
/s/ Stuart L. Scott
STUART L. SCOTT
Chairman and Chief Executive Officer
<PAGE> 3
JONES LANG LASALLE INCORPORATED
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
[JONES LANG LASALLE LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 2000
------------------------
The annual meeting of stockholders of Jones Lang LaSalle Incorporated will
be held on Monday, May 15, 2000, beginning at 1:30 p.m., local time, in the
Indiana Room on Lower Level 1 of the Aon Center, 200 East Randolph Drive,
Chicago, Illinois 60601, for the following purposes:
1. To elect six Directors, two to serve until the 2001 annual meeting of
stockholders and until their successors are elected and qualify, and
four to serve until the 2003 annual meeting of stockholders and until
their successors are elected and qualify;
2. To approve an amendment to the Jones Lang LaSalle Employee Stock
Purchase Plan to increase the number of shares available thereunder to
1,000,000 from 250,000;
3. To ratify the appointment of KPMG LLP as Jones Lang LaSalle's
independent auditors for the fiscal year ending December 31, 2000; and
4. To transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 29, 2000 as
the record date for determining the stockholders entitled to receive notice of
and to vote at the annual meeting.
By Order of the Board of Directors
/s/ William E. Sullivan
WILLIAM E. SULLIVAN
Secretary
Chicago, Illinois
April 7, 2000
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. STOCKHOLDERS
WHO DO NOT INTEND TO BE PRESENT AT THE MEETING IN PERSON ARE REQUESTED TO SIGN
AND DATE THE ENCLOSED PROXY AND TO RETURN IT IN THE ACCOMPANYING ENVELOPE IN
ORDER THAT THE NECESSARY QUORUM MAY BE ASSURED. ANY PROXY MAY BE REVOKED IN THE
MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME BEFORE IT HAS
BEEN VOTED AT THE MEETING.
<PAGE> 4
JONES LANG LASALLE INCORPORATED
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
[JONES LANG LASALLE LOGO]
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 2000
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors (the "Board") of Jones Lang
LaSalle Incorporated, a Maryland corporation (the "Company"), for use at the
annual meeting of Jones Lang LaSalle's stockholders to be held on Monday, May
15, 2000, beginning at 1:30 p.m., local time, in the Indiana Room on Lower Level
1 of the Aon Center, 200 East Randolph Drive, Chicago, Illinois, and any
adjournments or postponements thereof (the "Annual Meeting"), for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders.
Jones Lang LaSalle expects to first send this Proxy Statement and the
enclosed form of proxy to stockholders on or about April 7, 2000.
ANNUAL REPORT
The Annual Report of Jones Lang LaSalle for the year ended December 31,
1999, including financial statements audited by KPMG LLP, independent auditors,
and their report thereon dated February 7, 2000, is being mailed together with
this Proxy Statement to each of Jones Lang LaSalle's stockholders of record at
the close of business on March 29, 2000 (the "Record Date"). A copy of Jones
Lang LaSalle's Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission, for the year ended December 31, 1999, will be provided to
you free of charge if you request it from Jones Lang LaSalle Incorporated,
Attention: Investor Relations Department, 200 East Randolph Drive, Chicago,
Illinois 60601, telephone: (312) 228-2430.
VOTING AT THE ANNUAL MEETING
Only stockholders of record of Jones Lang LaSalle's common stock, $.01 par
value per share (the "Common Stock"), at the close of business on the Record
Date are entitled to notice of and to vote at the Annual Meeting. Each share of
Common Stock is entitled to one vote on all matters voted upon by stockholders
and is entitled to vote for as many persons as there are Directors to be
elected. There were 30,342,018 shares of Common Stock outstanding on the Record
Date held by approximately 3,500 beneficial owners.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting. There is no cumulative voting for Directors. The affirmative vote of a
majority of the total number of votes cast by holders of Common Stock entitled
to vote at the Annual Meeting will be necessary both to approve the amendment to
the Employee Stock Purchase Plan and to ratify the appointment of KPMG LLP as
Jones Lang LaSalle's independent auditors for 2000.
1
<PAGE> 5
The presence, in person or by properly executed proxy, of the holders of a
majority of the outstanding shares of Common Stock is necessary to constitute a
quorum at the Annual Meeting. Shares of Common Stock represented in person or by
properly executed proxy will be counted for the purpose of determining whether a
quorum is present at the Annual Meeting. Shares which abstain from voting as to
a particular matter will be treated as shares that are present and entitled to
vote at the Annual Meeting for purposes of determining whether a quorum exists,
but will not be counted as votes cast on such matter. Accordingly, in
determining whether director nominees, the amendment to the Employee Stock
Purchase Plan and the ratification of KPMG LLP have received the requisite
number of affirmative votes, abstentions will have no effect on the voting.
Each valid proxy returned to Jones Lang LaSalle will be voted at the Annual
Meeting as indicated on the proxy or, if no indication is made with respect to a
proposal, in accordance with the recommendations of the Board set forth in this
Proxy Statement. Jones Lang LaSalle does not know of any matters to be presented
at the Annual Meeting other than the proposals referred to on the proxies and
described in this Proxy Statement. However, if any other matters are properly
presented at the Annual Meeting, the persons named on the enclosed form of proxy
intend to vote the shares represented by them in accordance with their best
judgment pursuant to the discretionary authority granted them in the proxies.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of Jones Lang LaSalle, before the taking of the vote at the
Annual Meeting, a written notice of revocation bearing a later date than the
proxy, or (ii) duly executing a later-dated proxy relating to the same shares
and delivering it to the Secretary of Jones Lang LaSalle. Notice of revocation
or subsequent proxy should be sent to Jones Lang LaSalle Incorporated, 200 East
Randolph Drive, Chicago, Illinois 60601, Attention: William E. Sullivan,
Secretary, or hand-delivered to the Secretary of Jones Lang LaSalle at or before
the taking of the vote at the Annual Meeting. Facsimiles will not be accepted.
STOCKHOLDER AGREEMENTS
In connection with the acquisition of the property and asset management,
advisory and other real estate businesses operated by a series of partnerships
and corporations in Europe, Asia, Australia, North America and New Zealand under
the name "Jones Lang Wootton" or "JLW" (the "JLW Companies"), each former
beneficial owner of the JLW Companies (the "JLW Shareholders") entered into a
separate stockholder agreement ("Stockholder Agreement") with Jones Lang
LaSalle. In addition, in the cases where a JLW Shareholder is not a natural
person, the employee of the JLW Companies who owns or holds an interest in such
JLW Shareholder (a "Related JLW Owner") entered into a Stockholder Agreement
along with such JLW Shareholder. Unless otherwise agreed, the term of such
Stockholder Agreements commenced upon the closing of the acquisition of the JLW
Companies (the "Closing") and will terminate on the earlier of (i) the first
business day immediately following the fifth annual meeting of stockholders
following March 11, 1999, or (ii) June 1, 2003 (the "Transition Period").
Pursuant to the Stockholder Agreements, each JLW Shareholder and Related
JLW Owner has, among other things, agreed (i) to standstill covenants and
covenants restricting activities affecting the management and corporate control
of Jones Lang LaSalle and (ii) to vote all shares of Common Stock owned by such
JLW Shareholder and Related JLW Owner in favor of persons nominated by the Board
and in accordance with the recommendation of the Board on stockholder proposals
and matters involving a sale or merger of Jones Lang LaSalle which such board
has recommended against approving.
Each former LaSalle Partners employee stockholder who is a former partner
of DEL-LPL Limited Partnership and DEL-LPAML Limited Partnership, two affiliated
employee partnerships which held approximately 7 million of Jones Lang LaSalle's
shares, has entered into a stockholder agreement (a "DEL Stockholder Agreement")
that contains all the stockholder covenants and voting provisions contained in
the Stockholder Agreements.
2
<PAGE> 6
As a result of the Stockholder Agreements and DEL Stockholder Agreements,
as long as persons who are parties or otherwise subject to such agreements own
or control a majority of the issued and outstanding shares of Common Stock
entitled to vote, all director nominees of the Board will be elected, all sale
or merger transactions opposed by the Board will not be approved and all
stockholder proposals will be decided in accordance with the Board's
recommendation. Approximately 65% of the outstanding Common Stock is currently
owned by persons who are bound by the Stockholder Agreements and the DEL
Stockholder Agreements.
PROPOSAL 1
ELECTION OF DIRECTORS
Six Directors, two of the Class I Directors and four of the Class III
Directors, are to be elected at the Annual Meeting. Class I Directors will serve
one-year terms until Jones Lang LaSalle's annual meeting of stockholders in
2001, and Class III Directors will serve three year terms until Jones Lang
LaSalle's annual meeting of Stockholders in 2003, and in each case until their
respective successors are elected and qualify, or until their earlier death,
resignation, retirement, disqualification or removal.
Pursuant to the purchase agreements relating to the acquisition of the JLW
Companies (the "Purchase Agreements"), during the Transition Period, the Board
will be composed of 14 directors. In connection with the Closing, seven of such
directors (the "LaSalle Partners Directors") were designated by Jones Lang
LaSalle and seven of such directors (the "JLW Directors") were designated by the
JLW Companies. Four of the LaSalle Partners Directors (the "LaSalle Partners
Employee Directors") were executive officers of Jones Lang LaSalle prior to the
Closing and four of the JLW Directors (the "JLW Employee Directors") were
executive officers of the JLW Companies prior to the Closing. The three
remaining LaSalle Partners Directors (the "LaSalle Partners Independent
Directors") and JLW Directors (the "JLW Independent Directors"), respectively,
are required to be independent during the Transition Period. The LaSalle
Partners Employee Directors are currently Mr. Stuart L. Scott, Mr. M.G. Rose and
Mr. Earl E. Webb. Mr. Daniel W. Cummings, who had served as the fourth LaSalle
Partners Employee Director, resigned from the Board on March 6, 2000. Ms. Lynn
C. Thurber has been nominated to stand for election as a Class III Director to
replace Mr. Cummings as a LaSalle Partners Employee Director. Mr. Rose, whose
term expires at the Annual Meeting, has been nominated to stand for election as
a Class I Director. Mr. Darryl Hartley-Leonard, Mr. Thomas C. Theobald and Mr.
John R. Walter are currently the LaSalle Partners Independent Directors. Mr.
Theobald, whose term expires at the Annual Meeting, has been nominated to stand
for election as a Class III Director. Mr. Christopher A. Peacock, Mr. Michael J.
Smith, Mr. Peter H. T. Lee and Mr. Clive J. Pickford are currently the JLW
Employee Directors. Mr. Michael J. Smith, whose term expires at the Annual
Meeting, has been nominated to stand for election as a Class I Director. Mr.
Peter H. T. Lee, whose term expires at the Annual Meeting, will not stand for
reelection, and Mr. Christopher M. G. Brown has been nominated to stand for
election as a Class III Director to replace Mr. Lee as a JLW Employee Director.
Professor Henri-Claude de Bettignies, Mr. Derek A. Higgs and Dr. David K. P. Li
are currently the JLW Independent Directors. Mr. Higgs, whose term expires at
the Annual Meeting, has been nominated to stand for election as a Class III
Director.
During the Transition Period, the LaSalle Partners Employee Directors in
office from time to time, together with two or more LaSalle Partners Independent
Directors selected by such LaSalle Partners Employee Directors, will constitute
a nominating committee (the "LaSalle Partners Nominating Committee") with the
powers and duties delegated to such committee in the bylaws of Jones Lang
LaSalle, as amended (the "Amended Bylaws"), and the JLW Employee Directors in
office from time to time, together with two or more JLW Independent Directors
selected by such JLW Employee Directors, will constitute a nominating committee
(the "JLW Nominating Committee") with the powers and duties delegated to such
committee in the Amended Bylaws. Except as otherwise set forth in the Amended
Bylaws, the LaSalle Partners Nominating Committee and the JLW Nominating
Committee (collectively, the "Nominating Committees") will exercise all power
and authority of the Board with respect to the designation of persons as
3
<PAGE> 7
the nominees of the Board for election to, or designating persons to fill
vacancies on, the Board. Any director elected by the Board to replace any JLW
Director must be nominated by the JLW Nominating Committee, and any director
elected by the Board to replace any LaSalle Partners Director must be nominated
by the LaSalle Partners Nominating Committee.
During the Transition Period, prior to each meeting of the stockholders of
Jones Lang LaSalle at which the term of office of any LaSalle Partners Director
is expiring or at which any replacement for a LaSalle Partners Director is to be
elected, the LaSalle Partners Nominating Committee may designate a nominee for
election to such position (which designee must be reasonably acceptable to the
JLW Nominating Committee), and prior to each meeting of the stockholders of
Jones Lang LaSalle at which the term of office of any JLW Director is expiring
or at which any replacement for a JLW Director is to be elected, the JLW
Nominating Committee may designate a nominee for election to such position
(which designee must be reasonably acceptable to the LaSalle Partners Nominating
Committee). At all times during the Transition Period, at least three LaSalle
Partners Directors and at least three JLW Directors must be Independent
Directors and at least one JLW Independent Director must have his primary place
of business and residence outside the United Kingdom.
Approximately 65% of the Common Stock issued and outstanding is presently
held by persons who are bound by the Stockholder Agreements and DEL Stockholder
Agreements. As long as holders of a majority of the issued and outstanding
shares of Common Stock continue to be bound by such agreements, persons
nominated by the Nominating Committees will be elected to the Board.
Each valid proxy returned to Jones Lang LaSalle will be voted at the Annual
Meeting for the six nominees listed below, unless the proxy specifies otherwise.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH OF THE SIX
NOMINEES LISTED BELOW. Biographical information for each of the nominees is set
forth under the caption "Management."
Nominees
Class I (term expiring in 2001)
M.G. Rose
Michael J. Smith
Class III (term expiring in 2003)
Christopher M. G. Brown
Derek A. Higgs
Thomas C. Theobald
Lynn C. Thurber
While the Board does not anticipate that any of the nominees will be unable
to stand for election as a Director at the Annual Meeting, if that is the case,
proxies will be voted in favor of such person or persons designated by the
Board.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Jones Lang LaSalle's Articles of Incorporation, as amended, provide for the
Board to be divided into three classes, as nearly equal in number as possible,
serving staggered terms. The Board currently consists of three Class I Directors
(Messrs. de Bettignies, Hartley-Leonard and Webb), five Class II Directors
(Messrs. Scott, Peacock, Li, Pickford and Walter) and five Class III Directors
(Messrs. Smith, Higgs, Lee, Rose and Theobald). The terms of the Class I
Directors, Class II Directors and Class III Directors will expire upon the
election and qualification of successor Directors at the annual meetings of
stockholders held during the calendar years 2001, 2002 and 2003, respectively.
4
<PAGE> 8
The following table sets forth certain information with respect to the
Directors who will continue to serve on the Board following the Annual Meeting,
the Director nominees and the executive officers of Jones Lang LaSalle. Jones
Lang LaSalle currently has a thirteen member Board, which includes six Directors
who are not employed by Jones Lang LaSalle and its subsidiaries ("Non-Executive
Directors"). The vacancy on the Board created by the March 6, 2000 resignation
of Mr. Cummings will be filled at the Annual Meeting, and Jones Lang LaSalle
will again have a fourteen member Board.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Stuart L. Scott...................... 61 Chairman of the Board of Directors, Chief Executive
Officer and Director
Christopher A. Peacock............... 54 President, Deputy Chief Executive Officer, Chief
Operating Officer and Director
Christopher M. G. Brown.............. 53 Executive Chairman of Asia Pacific and Director Nominee
Clive J. Pickford.................... 54 Chairman of Europe and Director
M.G. Rose............................ 60 Vice Chairman and Director
Michael J. Smith..................... 59 Vice Chairman and Director
Lynn C. Thurber...................... 52 Chief Executive Officer of LaSalle Investment Management
and Director Nominee
Earl E. Webb......................... 43 Chief Executive Officer of the Americas and Director
Henri-Claude de Bettignies........... 61 Director
Darryl Hartley-Leonard............... 54 Director
Derek A. Higgs....................... 55 Director
David K.P. Li........................ 61 Director
Thomas C. Theobald................... 62 Director
John R. Walter....................... 53 Director
Peter Barge.......................... 49 Chairman and Chief Executive Officer of Jones Lang
LaSalle Hotels
Gerard A. Kipling.................... 47 Chief Executive Officer of Asia
John G. Minks........................ 44 Chief Executive Officer of Global Client Services
Robert S. Orr........................ 40 Chief Executive Officer of Europe
William E. Sullivan.................. 45 Executive Vice President, Chief Financial Officer and
Secretary
Craig R. C. Williams................. 36 Chief Executive Officer of Australasia
Nicholas J. Willmott................. 39 Senior Vice President and Global Controller
</TABLE>
The following is a biographical summary of the experience of the Directors
who will continue to serve on the Board following the Annual Meeting, the
Director Nominees and the executive officers of Jones Lang LaSalle.
Stuart L. Scott. Mr. Scott has been Chairman of the Board of Directors,
Chief Executive Officer and a Director of Jones Lang LaSalle since its
incorporation in April 1997 and a member of Jones Lang LaSalle's Management
Executive Committee since March 1999. Previously, he was Chief Executive Officer
and Chairman of the Management Committee of LaSalle Partners Limited Partnership
and LaSalle Partners Management Limited Partnership (the "Predecessor
Partnerships") from December 1992 until 1997. Prior to December 1992, Mr. Scott
was President of the Predecessor Partnerships for more than 15 years and Co-
Chairman of the Management Committee from January 1990 to December 1992. Mr.
Scott originally joined
5
<PAGE> 9
Jones Lang LaSalle in 1973. He is a member of the boards of directors of
Hartmarx Corporation, a clothing manufacturing company, and LaSalle Hotel
Properties, a REIT which is advised by a subsidiary of Jones Lang LaSalle. He
holds a B.A. from Hamilton College and a J.D. from Northwestern University.
Christopher A. Peacock. Mr. Peacock has been the President, Deputy Chief
Executive Officer, Chief Operating Officer, Chairman of Jones Lang LaSalle's
Management Executive Committee and a Director of Jones Lang LaSalle since March
1999. Mr. Peacock was International Chief Executive Officer of the JLW Companies
from September 1997 through March 1999, having previously been the European
Chief Executive Officer since June 1996. From November 1992 to June 1996, Mr.
Peacock served concurrently as Managing Partner for the Continent of Europe and
as Chairman of Leasing and Agency in England. He became a member of the JLW
Companies' Executive Board for the Continent of Europe in June 1985. Mr. Peacock
originally joined JLW England as an employee in 1972 and was made a partner in
1974. Mr. Peacock is a Fellow of the Royal Institution of Chartered Surveyors.
He was educated at Wellington College, Berkshire, England.
Christopher M. G. Brown. Mr. Brown has been Executive Chairman of Asia
Pacific since January 2000 when the Asia region, of which he had been Executive
Chairman since March 1999, was combined with the Australasia region to form the
Asia Pacific region. He has been a member of Jones Lang LaSalle's Management
Executive Committee since March 1999. From 1995 to March 1999, Mr. Brown was
Chairman of JLW Singapore. From January 1989 until May 1995, Mr. Brown was
Executive Chairman of JLW Australia and Chairman of JLW Pacific Region. Mr.
Brown joined the JLW Companies in 1969 in the Sydney office. He held a number of
positions with the JLW Companies in Australia and Asia. Mr. Brown's tertiary
education was undertaken in England; he is a Fellow of the Royal Institution of
Chartered Surveyors and a Fellow of the Society of Land Economists.
Clive J. Pickford. Mr. Pickford has been Chairman of Europe and a Director
of Jones Lang LaSalle since March 1999. Previously, Mr. Pickford was Chairman of
JLW England and European Chairman of the JLW Companies from January 1991 to
March 1999 and from January 1993 to March 1999, respectively. He joined JLW
England as an employee in 1963. In addition, he has served as Chairman of the
JLW Companies' European Retail Division since January 1998. From January 1994 to
December 1997, Mr. Pickford was Chairman of the JLW Companies' European Hotels
Division. Mr. Pickford is a Fellow of the Royal Institution of Chartered
Surveyors.
M.G. Rose. Mr. Rose has been a Vice Chairman of Jones Lang LaSalle since
March 2000 and a Director of Jones Lang LaSalle since its incorporation. Mr.
Rose was Chief Executive Officer of Global Services Management and a member of
Jones Lang LaSalle's Management Executive Committee from March 1999 until
February 2000. He was President, Tenant Representation Division of LaSalle
Partners Corporate & Financial Services, Inc., an operating subsidiary of Jones
Lang LaSalle, from April 1997 until March 1999. Mr. Rose was a Managing Director
and President of the Tenant Representation Group of the Predecessor Partnerships
beginning in September 1983. He originally joined Jones Lang LaSalle in 1978.
Mr. Rose holds a mechanical engineering degree from the University of
Cincinnati.
Michael J. Smith. Mr. Smith has been a Vice Chairman since March 2000 and a
Director of Jones Lang LaSalle since March 1999. He served as Deputy Chairman
from March 1999 through February 2000. Mr. Smith was the International Chairman
of the JLW Companies from October 1997 through March 1999. From May 1995 to
October 1997, Mr. Smith was Chairman and Chief Executive Officer of the JLW
Companies in Australasia and Joint Chairman of the JLW Companies in the Asia
Pacific region. He became a member of the Executive Board of the JLW Companies
in Australasia in 1990 and served as Chairman of JLW Advisory Services Pty Ltd.
from January 1994 to May 1995. From January 1990 to December 1994, Mr. Smith was
Joint Managing Director of the JLW Company in Victoria, Australia. He is a
Fellow of the Australian Property Institute and of the Australian Institute of
Company Directors.
Lynn C. Thurber. Ms. Thurber has been the Chief Executive Officer of
LaSalle Investment Management, Jones Lang LaSalle's investment management
business, since March 2000, and from March 1999 until March 2000 she was the
Co-Chief Executive Officer of LaSalle Investment Management. She has been a
member of Jones Lang LaSalle's Management Executive Committee since March 1999
and was a Director of
6
<PAGE> 10
Jones Lang LaSalle from its incorporation until March 1999. From April 1997
until March 1999, she was Co-President of LaSalle Advisors Capital Management,
Inc. (now known as LaSalle Investment Management, Inc.), an operating subsidiary
of Jones Lang LaSalle. Ms. Thurber was a Managing Director and Co-President of
LaSalle Advisors Limited Partnership, a subsidiary of one of the Predecessor
Partnerships, from November 1994 until 1997. Ms. Thurber was Chief Executive
Officer of Alex. Brown Kleinwort Benson Realty Advisors Corporation ("ABKB")
from May 1993 to November 1994, at which time its assets were acquired by Jones
Lang LaSalle. From July 1992 to May 1993, Ms. Thurber served as Chief Operating
Officer and Director of Acquisitions of ABKB. Prior to that time, Ms. Thurber
was a Principal at Morgan Stanley & Co. Incorporated. She holds an A.B. from
Wellesley College and an M.B.A. from Harvard University.
Earl E. Webb. Mr. Webb has been Chief Executive Officer of the Americas and
a Director of Jones Lang LaSalle since May 1999. He has been a member of Jones
Lang LaSalle's Management Executive Committee since March 1999. Mr. Webb was
Co-Chief Executive Officer of the Americas from March 1999 until May 1999. Mr.
Webb also served as a Director of Jones Lang LaSalle from its incorporation
until March 1999. From April 1997 until March 1999, he was Managing Director,
Investment Banking Division of LaSalle Partners Corporate & Financial Services,
Inc., an operating subsidiary of Jones Lang LaSalle. Mr. Webb was Managing
Director of the Investment Banking Division of the Predecessor Partnerships from
January 1995 until 1997. From January 1992 to January 1995, Mr. Webb was a
Senior Vice President of the Predecessor Partnerships. Mr. Webb originally
joined Jones Lang LaSalle in 1985. Mr. Webb is a director of Players
International Inc., a multi-jurisdictional gaming company. He holds a B.S. from
the University of Virginia and an M.M. from Northwestern University.
Henri-Claude de Bettignies. Professor de Bettignies has been a Director of
Jones Lang LaSalle since March 1999. Professor de Bettignies joined the European
Institute of Business Administration, Fontainebleau, France ("INSEAD") in 1967
as an Assistant Professor and became a Full Professor in 1975. Since 1988, he
has held a joint professorship at the Stanford University Graduate School of
Business. Professor de Bettignies started and developed INSEAD's activities in
Japan and the Asia Pacific region which led to the creation in 1980 of the
Euro-Asia Centre, of which he was the Director General until 1988. At INSEAD and
Stanford, he teaches courses on international management, ethics and Japan and
the Asia Pacific region. He has created and directs several executive programs
organized in Asia and Europe, including AVIRA, a program for CEOs held in
Europe, the United States and Asia. He serves as a consultant to a number of
major organizations and has published five books and over 50 articles in
business and professional journals. Professor de Bettignies was educated at the
Sorbonne (Licence es Lettres), the Catholic University of Paris (EPP) and the
Harvard Business School (ITP).
Darryl Hartley-Leonard. Mr. Hartley-Leonard has been a Director of Jones
Lang LaSalle since the closing of the initial public offering in July 1997. He
is Chairman and Chief Executive Officer of PGI, an event production agency,
Chairman and Partner of Metropolitan Hotel Corporation, a hotel company in the
long-term stay/suite hotel business directed at the upscale market, and a
founding partner of H-LK Partners, a hotel development and management company.
Mr. Hartley-Leonard retired as Chairman of the Board of Hyatt Hotels Corporation
("Hyatt") after a 32 year career with Hyatt and its diversified affiliates. From
1994 to 1996, he served as Chairman of the Board of Directors of Hyatt, and from
1986 to 1994, he served as Chief Executive Officer/Chief Operating Officer of
Hyatt. Mr. Hartley-Leonard also serves on the boards of directors of LaSalle
Hotel Properties, a REIT advised by a subsidiary of Jones Lang LaSalle,
Brookdale Living Communities, Inc., a provider of senior and assisted living
services, and The United States Committee for UNICEF. Mr. Hartley-Leonard holds
a B.A. from Blackpool Lancashire College of Lancaster University and an honorary
doctorate of business administration from Johnson and Wales University.
Derek A. Higgs. Mr. Higgs has been a Director of Jones Lang LaSalle since
March 1999. Mr. Higgs has been Chairman of Prudential Portfolio Managers Limited
and a Director of Prudential plc since January 1996. He was employed by S.G.
Warburg & Co. Ltd. from 1972 until 1996, serving as a Director beginning in
1979, Head of Global Corporate Finance beginning in 1986 and Chairman beginning
in 1994. Mr. Higgs is a member of the Financial Reporting Council of the UK,
Deputy Chairman of the Fund Managers Association
7
<PAGE> 11
and a Trustee of The Architecture Foundation. He is a Chartered Accountant and
holds a Bachelor of Arts degree from the University of Bristol.
David K.P. Li. Dr. Li has been a Director of Jones Lang LaSalle since March
1999. Dr. Li is the Chairman and Chief Executive Officer of The Bank of East
Asia, Limited, a bank headquartered in Hong Kong. Dr. Li joined The Bank of East
Asia, Limited in 1969 and was elected Chief Executive Officer in 1981, Deputy
Chairman in 1995 and Chairman in 1997. He is a director of The Bank of East
Asia, Limited, Dow Jones & Company, Inc., Campbell Soup Company, Cable and
Wireless HKT Limited, The Hong Kong & China Gas Company Limited, Sime Darby
Berhad, South China Morning Post (Holdings) Limited and Atlas Air, Inc. Dr. Li
holds an M.A. in Economics and Law and an honorary degree of Doctor of Law from
The University of Cambridge.
Thomas C. Theobald. Mr. Theobald has been a Director of Jones Lang LaSalle
since the closing of the initial public offering in July 1997. Mr. Theobald has
served as a Managing Director at William Blair Capital Partners since September
1994. From July 1987 to August 1994, Mr. Theobald was Chairman of Continental
Bank Corporation. He currently serves on the boards of directors of Xerox
Corporation, a manufacturer of document processing products and systems, Anixter
International, a supplier of electrical apparatus and equipment, Stein Roe
Funds, a mutual fund group, LaSalle U.S. Realty Income & Growth Fund, Inc., a
REIT advised by a subsidiary of Jones Lang LaSalle, the MONY Group, a life
insurance company, Auditforce, Inc., a financial consultant, and the MacArthur
Foundation. Mr. Theobald holds an A.B. from the College of the Holy Cross and an
M.B.A. from Harvard University.
John R. Walter. Mr. Walter has been a Director of Jones Lang LaSalle since
September 1997. Mr. Walter has been the Chairman of the Board of Manpower, Inc.
since May 1999 and is the retired President and Chief Operating Officer of AT&T
Corporation (November 1996 through July 1997). Prior thereto, Mr. Walter worked
for R.R. Donnelley & Sons Company for 27 years, serving as Chairman and Chief
Executive Officer from 1989 to October 1996 and as President from 1987 to 1991.
He serves as a director of Abbott Laboratories, Celestica, Inc., Manpower, Inc.
and Deere & Company. Mr. Walter is a member of the International Advisory
Council, Singapore Economic Development Board, and a trustee of the Chicago
Symphony Orchestra and Northwestern University. He holds a B.S. from Miami
University of Ohio.
Peter Barge. Mr. Barge has been Chief Executive Officer of Jones Lang
LaSalle Hotels and a member of Jones Lang LaSalle's Management Executive
Committee since March 1999. Previously, Mr. Barge was Chief Executive Officer of
JLW TransAct, the JLW Companies' hotel business. Before the investment by the
JLW Companies in TransAct Hotel & Tourism Property Limited, Mr. Barge held
various positions with that company. Prior thereto, Mr. Barge served as
"Lecturer in Charge" of all hotel and tourism programs at Australia's
pre-eminent school of Food and Hotel Administration in Adelaide, South Australia
and worked in hotel management and tourism consulting.
Gerard A. Kipling. Mr. Kipling has been Chief Executive Officer of Asia and
a member of Jones Lang LaSalle's Management Executive Committee since March
1999. Previously, he served on the International Board of the JLW Companies and
was Managing Director of Hong Kong and Chairman of the Professional Services
division. Mr. Kipling joined the JLW Companies in 1978 and held a number of
positions with them in London and Asia. Prior to that time, he worked for the
Greater London Council.
John G. Minks. Mr. Minks has been Chief Executive Officer of Global Client
Services and a member of Jones Lang LaSalle's Management Executive Committee
since March 1999. Previously, he was a Managing Director and head of the Client
Services Group of Jones Lang LaSalle since its incorporation and of the
Predecessor Partnerships since April 1996 and, prior to that, was a Vice
President in the Client Services Group. Prior to joining Jones Lang LaSalle in
1992, Mr. Minks was a Vice President of Smith Barney's Corporate Finance Group.
Before that, he was a Manager at Touche Ross Management Consulting. Mr. Minks
holds a B.A. in economics from Stanford University and an M.B.A. from the
University of California at Los Angeles.
8
<PAGE> 12
Robert S. Orr. Mr. Orr has been Chief Executive Officer of Europe and a
member of Jones Lang LaSalle's Management Executive Committee since March 1999.
From January 1998 to March 1999, Mr. Orr was European Chief Executive of the JLW
Companies. From 1991 to 1998, he served as Country Manager for JLW Germany. Mr.
Orr joined the JLW Companies in 1980 and held a number of positions with them in
Europe.
William E. Sullivan. Mr. Sullivan has been Executive Vice President, Chief
Financial Officer and Secretary of Jones Lang LaSalle since its incorporation
and a member of Jones Lang LaSalle's Management Executive Committee since March
1999. Mr. Sullivan served as a Director of Jones Lang LaSalle from its
incorporation until March 1999. He was Executive Vice President and Chief
Financial Officer of the Predecessor Partnerships beginning in February 1997.
From September 1995 to February 1997, Mr. Sullivan was a Managing Director of
the Special Projects Group of the Predecessor Partnerships. From January 1992 to
September 1995, Mr. Sullivan was a Senior Vice President of the Special Projects
Group. Mr. Sullivan originally joined Jones Lang LaSalle in 1984. He holds a
B.S.B.A. from Georgetown University and an M.M. from Northwestern University.
Craig R. C. Williams. Mr. Williams has been Chief Executive Officer of
Australasia and a member of Jones Lang LaSalle's Management Executive Committee
since January 2000. He served as Managing Director of the New South Wales
(Australia) business of the JLW Companies from April 1997 to March 1999 and
continued in that same position with Jones Lang LaSalle from March 1999 to
December 1999. From July 1993 to March 1997, Mr. Williams served as Managing
Director of the JLW Companies' business in Indonesia. He joined the JLW
Companies in 1985 and held a number of positions in Australia and Indonesia. He
holds an Associate Diploma in Valuation and an Advanced Certificate in Real
Estate and Auctioneering from Sydney Technical College.
Nicholas J. Willmott. Mr. Willmott has been Senior Vice President and
Global Controller of Jones Lang LaSalle since December 1999. Prior to joining
Jones Lang LaSalle, he worked for Pepsi-Cola International, the international
beverages division of PepsiCo, Inc., serving as Assistant Controller,
International Field Support from January 1997 to December 1999, Division
Controller, Europe Beverages Division from July 1995 to December 1996 and Field
Services Manager, Eastern Europe from October 1993 to June 1995. From 1982 to
1993, Mr. Willmott worked for the accounting firm of Price Waterhouse, first in
England for six years and then in the United States for five years. He holds a
B.A. in accounting and financial management from the University of Sheffield and
is a Chartered Accountant in the United Kingdom.
Executive Officers. The Purchase Agreements and the Amended Bylaws provide
that through March 11, 2001, or until earlier removal, disqualification,
resignation, retirement, death or incapacity, (i) Mr. Stuart L. Scott will hold
the position of Chairman of the Board and Chief Executive Officer of Jones Lang
LaSalle and (ii) Mr. Christopher A. Peacock will hold the position of President,
Deputy Chief Executive Officer and Chief Operating Officer of Jones Lang
LaSalle. If at any time during the Transition Period, the position of Chairman
of the Board and Chief Executive Officer of Jones Lang LaSalle or President,
Deputy Chief Executive Officer and Chief Operating Officer of Jones Lang LaSalle
becomes vacant, such vacancy will be filled by a majority vote of the entire
Board. Through March 11, 2001, the Chairman of the Board and Chief Executive
Officer of Jones Lang LaSalle and President, Deputy Chief Executive Officer and
Chief Operating Officer of Jones Lang LaSalle must be selected from the
employees of Jones Lang LaSalle prior to the Closing (a "LaSalle Partners
Employee") and the employees of the JLW Companies prior to the Closing (a "JLW
Employee"). During such period, (i) if the office of the Chairman and Chief
Executive Officer of Jones Lang LaSalle is held by a LaSalle Partners Employee,
then the office of President, Deputy Chief Executive Officer and Chief Operating
Officer of Jones Lang LaSalle must be held by a JLW Employee and (ii) if the
office of Chairman of the Board and Chief Executive Officer of Jones Lang
LaSalle is held by a JLW Employee, then the office of President, Deputy Chief
Executive Officer and Chief Operating Officer of Jones Lang LaSalle must be held
by a LaSalle Partners Employee.
The Chairman of the Board and Chief Executive Officer, and the President,
Deputy Chief Executive, Officer and Chief Operating Officer of Jones Lang
LaSalle may be removed from office only by a majority vote of the entire Board,
and neither Mr. Scott nor Mr. Peacock may be removed from such respective
9
<PAGE> 13
positions with or without cause, prior to March 11, 2001, unless such removal is
approved by at least two-thirds of the entire Board.
During the Transition Period, the affirmative vote of at least 75% of the
entire Board will be required to alter or amend, or adopt any provision
inconsistent with, or repeal, in whole or in part, the articles of the Amended
Bylaws containing the foregoing provisions.
BOARD COMMITTEES AND MEETINGS
In addition to the Nominating Committees, Jones Lang LaSalle has standing
Audit and Compensation Committees of the Board. During the Transition Period,
each standing committee of the Board will have an equal number of LaSalle
Partners Directors (who will be selected by the LaSalle Partners Nominating
Committee) and JLW Directors (who will be selected by the JLW Nominating
Committee), unless otherwise determined by the affirmative vote of at least 75%
of the entire Board.
Audit Committee. The Board has established an Audit Committee. Each member
of the Audit Committee is required to be independent of management of Jones Lang
LaSalle and free from any relationship that, in the opinion of the Board, would
interfere with the exercise of independent judgment. Messrs. Hartley-Leonard and
Walter served as members of the Audit Committee during the entire year of 1999,
and Messrs. de Bettignies and Higgs joined the Audit Committee in March 1999.
The Audit Committee makes recommendations concerning the engagement of
independent public accountants, reviews with the independent public accountants
the plans and results of the audit engagement, approves other professional
services provided by the independent public accountants, reviews the
independence of the independent public accountants, including consideration of
the range of audit and non-audit fees paid to the independent public
accountants, and reviews the adequacy of Jones Lang LaSalle's internal
accounting controls. The Audit Committee met three times in 1999.
Compensation Committee. The Board has established a Compensation Committee.
Messrs. Theobald and Walter served as members of the Compensation Committee
during the entire year of 1999, and Messrs. de Bettignies and Higgs joined the
Compensation Committee in March 1999. The composition of the Compensation
Committee must satisfy the provisions of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Compensation
Committee reviews and approves the compensation of Jones Lang LaSalle's
executive officers, administers Jones Lang LaSalle's 1997 Stock Award and
Incentive Plan, Employee Stock Purchase Plan and Partial Bonus in Shares Program
and oversees Jones Lang LaSalle's compensation programs generally. See
"Executive Compensation" below. The Executive Compensation Committee met five
times in 1999.
Nominating Committees. In addition to the duties described under the
caption "Election of Directors" and other duties contained in the Amended
Bylaws, during the Transition Period, if any LaSalle Partners Director is
removed from the Board, becomes disqualified, resigns, retires, dies or
otherwise cannot continue to serve as a member of the Board, the LaSalle
Partners Nominating Committee will have the exclusive power to designate a
person to fill such vacancy, and if any JLW Director is removed from the Board,
becomes disqualified, resigns, retires, dies or otherwise cannot continue to
serve as a member of the Board, the JLW Nominating Committee will have the
exclusive authority on behalf of the entire Board to appoint a designee to fill
such vacancy, in each case subject to the approval of a majority of the
Directors then remaining in office. During 1999, the Nominating Committee took
actions by written consent and at Board meetings.
Five meetings of the full Board were held in 1999. Each Director who held
such position in 1999 attended at least 75% in the aggregate of all meetings of
the Board and any committee on which such Director served (during the period
that he served), except that Mr. de Bettignies did not attend one of two Audit
Committee meetings, one of three Compensation Committee meetings and one of
three Board meetings held during the period he served.
10
<PAGE> 14
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding the
compensation of Mr. Stuart L. Scott and the other four most highly compensated
executive officers of Jones Lang LaSalle (the "Named Executive Officers") during
1999. The table includes compensation from all sources for services rendered to
Jones Lang LaSalle and its subsidiaries during 1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------- -----------------------------------
AWARDS PAYOUTS
OTHER ------------------------- ------- ALL
ANNUAL RESTRICTED SECURITIES OTHER
COMPENSA- STOCK UNDERLYING LTIP COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) TION(3) AWARD(S)(2) OPTIONS PAYOUTS TION(4)
- --------------------------- ---- -------- ---------- --------- ------------ ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stuart L. Scott.................. 1999 $440,000 $ 198,000 -- $ 79,199 10,000 -- $351,987
Chairman of the Board of
Directors 1998 $360,000 $1,140,000 -- -- -- -- $245,181
and Chief Executive Officer 1997 $336,000 $ 754,589 $11,854 -- 75,000 -- $ 2,675
Christopher A. Peacock........... 1999 $400,000 $ 180,000 -- $ 72,004 -- -- $ 24,903
President, Deputy Chief
Executive Officer and Chief
Operating Officer
Robert S. Orr.................... 1999 $243,000 $ 270,122 -- $108,046 -- -- $ 16,722
Chief Executive Officer of
Europe
Daniel W. Cummings............... 1999 $300,000 $ 225,750 -- $ 90,296 10,000 -- $394,504
Co-Chief Executive Officer of 1998 $260,000 $ 540,000 -- -- -- -- $ 2,793
LaSalle Investment Management 1997 $260,000 $ 584,516 $ 8,862 -- 37,500 -- $ 2,675
(resigned in March 2000)
Lynn C. Thurber.................. 1999 $300,000 $ 225,750 -- $ 90,296 10,000 -- $ 2,790
Chief Executive Officer of 1998 $260,000 $ 540,000 -- -- -- -- $ 2,763
LaSalle Investment Management 1997 $260,000 $ 584,516 $ 9,742 -- 37,500 -- $ 2,675
</TABLE>
- ------------
(1) The 1997 compensation for Messrs. Scott and Cummings and Ms. Thurber
includes compensation paid by the Predecessor Partnerships for the period
preceding the closing of the initial public offering on July 22, 1997. The
1999 compensation for Messrs. Peacock and Orr includes compensation paid by
the JLW Companies for the period preceding the closing of the LaSalle/Jones
Lang Wootton transaction on March 11, 1999. Messrs. Peacock and Orr became
executive officers on March 11, 1999, and prior to that date were not
employed by Jones Lang LaSalle.
(2) The Named Executive Officers, along with certain other officers, received a
portion of their 1999 bonuses in the form of deferred shares under the
Partial Bonus in Shares Program as described below under the caption
"Partial Bonus in Shares Program." The portion of the bonus paid in deferred
shares under the Partial Bonus in Shares Program is not included in the
dollar value under Bonus, and the value (based upon the January 3, 2000
closing price upon which the number of deferred shares to be awarded was
based) of deferred shares received is listed under Restricted Stock
Award(s). The number of deferred shares received by each of the named
executive officers is as follows: 7,001 shares for Mr. Scott, 6,365 shares
for Mr. Peacock, 9,551 shares for Mr. Orr and 7,982 shares for each of Mr.
Cummings and Ms. Thurber. The Partial Bonus in Shares Program replaced the
program pursuant to which certain employees, including Mr. Scott, had a
portion of their bonuses credited to accounts under the Stock Compensation
Program for investment in Jones Lang LaSalle shares.
(3) The amounts in this column with respect to 1997 reflect "tax gross up"
payments made with respect to certain compensation.
(4) The amounts in this column with respect to 1999 reflect premiums paid on
life insurance policies ($390 for Mr. Scott, Mr. Cummings and Ms. Thurber
and $360 for Mr. Peacock and Mr. Orr), expatriate expenses and
reimbursements ($349,197 for Mr. Scott and $391,714 for Mr. Cummings),
contributions by Jones Lang LaSalle to the retirement plan (the "Retirement
Plan") qualified under Section 401(k) of
11
<PAGE> 15
the United States Internal Revenue Code ($2,400 for Mr. Scott, Mr. Cummings
and Ms. Thurber) and pension allowances ($24,543 for Mr. Peacock and $16,362
for Mr. Orr). The amounts in this column with respect to 1998 reflect
premiums paid on life insurance policies ($393 for Mr. Cummings and $363 for
Mr. Scott and Ms. Thurber), expatriate expenses and reimbursements ($242,418
for Mr. Scott) and contributions by Jones Lang LaSalle to the Retirement
Plan ($2,400 for Mr. Scott, Mr. Cummings and Ms. Thurber). The amounts in
this column with respect to 1997 reflect premiums paid on life insurance
policies ($300 for Mr. Scott, Mr. Cummings and Ms. Thurber) and
contributions by Jones Lang LaSalle to the Retirement Plan ($2,375 for Mr.
Scott, Mr. Cummings and Ms. Thurber). Amounts in this column do not reflect
payments which may be made on behalf of Mr. Scott or Mr. Cummings under the
tax equalization program pursuant to which Jones Lang LaSalle assures that
they will pay no more or less income tax than they would have paid had they
continued to have their primary office in the United States.
OPTION GRANTS
The following table sets forth certain information with respect to Options
granted under the 1997 Stock Award and Incentive Plan, as amended (the "1997
Stock Incentive Plan), to each of the Named Executive Officers who received a
grant of Options during 1999.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(3)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION -----------------------
NAME GRANTED(1) FISCAL YEAR PRICE DATE(2) 5% 10%
- ---- ---------- ------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Stuart L. Scott............... 10,000 1.01% $33.50 1/21/06 $136,379 $317,820
Daniel W. Cummings............ 10,000 1.01% $33.50 1/21/06 $136,379 $317,820
Lynn C. Thurber............... 10,000 1.01% $33.50 1/21/06 $136,379 $317,820
</TABLE>
- ------------
(1) These Options vest with respect to one-third of the shares on each of the
first three anniversary dates of the date of grant (January 21, 1999). These
options vest immediately upon the death of the grantee.
(2) These options expire 90 days after the termination of the grantee's
employment with Jones Lang LaSalle and its subsidiaries for any reason other
than retirement, permanent total disability or death.
(3) The values in these columns are based upon calculations assuming the 5% and
10% annual stock price appreciation rate specified by the Securities and
Exchange Commission. These assumed rates are not intended to forecast future
price appreciation of the Common Stock. Actual gains, if any, on stock
option exercises are dependent upon the future market performance of the
Common Stock and the date on which the options are exercised.
12
<PAGE> 16
AGGREGATED OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES
The following table sets forth certain information concerning exercises of
options during 1999, and the year-end value of options owned, by each of the
Named Executive Officers.
AGGREGATED OPTION EXERCISES IN 1999 AND
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stuart L. Scott........... 0 0 56,250 28,750 $0 $0
Christopher A. Peacock.... 0 0 0 0 $0 $0
Robert S. Orr............. 0 0 0 0 $0 $0
Daniel W. Cummings........ 0 0 28,125 19,375 $0 $0
Lynn C. Thurber........... 0 0 28,125 19,375 $0 $0
</TABLE>
- ------------
(1) The price of the Common Stock at the close of trading on the New York Stock
Exchange on December 31, 1999 was $11.875 per share.
INCENTIVE COMPENSATION
Professional and management employees, including executive officers,
receive a portion of their annual compensation in the form of incentive
compensation (i.e., a bonus). Such employees are assigned a target bonus, the
payment of which is based upon an evaluation of performance against specific
objective and subjective standards which vary from employee to employee.
Performance against these standards may lead to receiving more than, or less
than, the target bonus. Additionally, bonus payments may vary in a year when
Jones Lang LaSalle's results are above or below the year's business plan.
Certain persons previously employed by JLW Companies were not assigned target
bonuses for 1999; however, they will be assigned target bonuses for future
years. Further information regarding the executive officers' bonuses is set
forth below under the caption "Compensation Committee Report on Executive
Compensation."
1997 STOCK AWARD AND INCENTIVE PLAN
The 1997 Stock Incentive Plan provides for the grant of various types of
stock-based compensation to eligible participants. The purpose of the 1997 Stock
Incentive Plan is to promote the success of Jones Lang LaSalle's business in the
best interests of its stockholders by providing incentives to those individuals
who are or will be responsible for such success.
The 1997 Stock Incentive Plan is designed to comply with the requirements
of Regulation G (12 C.F.R. sec.207), the requirements for "performance-based
compensation" under Section 162(m) of the Internal Revenue Code of 1986 (the
"Code") and the conditions for exemption from the short-swing profit recovery
rules under Rule 16b-3 of the Exchange Act. The summary that follows is
qualified in its entirety by reference to the actual terms of the 1997 Stock
Incentive Plan.
The 1997 Stock Incentive Plan provides for the granting of stock options
("Options"), including "incentive stock options" ("ISOs") within the meaning of
Section 422 of the Code and nonqualified stock options. Options granted under
the 1997 Stock Incentive Plan may be accompanied by stock appreciation rights or
limited stock appreciation rights, or both ("Rights"). Rights may also be
granted independently of Options. The 1997 Stock Incentive Plan also provides
for the granting of restricted stock and restricted stock units ("Restricted
Awards"), dividend equivalents, performance shares and other stock- and
cash-based awards. Pursuant to the 1997 Stock Incentive Plan, certain Options
have been and will be granted to Non-Executive Directors, as more fully
described below under the caption "Director Compensation." The 1997 Stock
Incentive Plan also permits the plan's administrator to make loans to
participants in connection with the grant of awards, on terms and conditions
determined solely by the Plan Administrator. Each award is
13
<PAGE> 17
evidenced by an agreement (an "Award Agreement") setting forth the terms and
conditions applicable thereto. Certain officers received a portion of their 1999
bonuses in PB-S Shares (as described below under the caption "Partial Bonus in
Shares Program").
The 1997 Stock Incentive Plan is administered by the Compensation Committee
of the Board (sometimes referred to herein as the "Plan Administrator"). Subject
to the terms of the 1997 Stock Incentive Plan, the Plan Administrator has the
right to grant awards to eligible recipients and to determine the terms and
conditions of Award Agreements, including the vesting schedule and exercise
price of such awards. The plan provides that, unless otherwise determined by the
Plan Administrator, in the event of a change in control of Jones Lang LaSalle
(as defined in the 1997 Stock Incentive Plan) awards under the plan will, among
other things, become fully vested and valued as provided in the plan.
On March 11, 1999, the number of shares reserved for issuance under the
1997 Stock Incentive Plan was increased from 2,215,000 to 4,160,000. These
shares may be authorized but unissued shares of Common Stock or shares which
have been or may be reacquired by Jones Lang LaSalle in the open market, in
private transactions or otherwise.
Discretionary grants of awards under the 1997 Stock Incentive Plan may be
made to any Director (including Non-Executive Directors), employee or any
independent contractor of Jones Lang LaSalle or its direct and indirect
subsidiaries and affiliates who is determined by the Plan Administrator to be
eligible for participation in the plan. ISOs, however, may only be granted to
employees of Jones Lang LaSalle and its subsidiaries.
Options vest and become exercisable over the exercise period, at such times
and upon such conditions, including amount and manner of payment of the exercise
price, as the Plan Administrator determines and sets forth in the Award
Agreement. The Plan Administrator may accelerate the exercisability of any
outstanding Option at such time and under such circumstances as it deems
appropriate. Options that are not exercised within 10 years (or such shorter
term as the Plan administrator may determine) from the date of grant, however,
will expire without value. Options are exercisable during the optionee's
lifetime only by the optionee. The Award Agreements contain provisions regarding
the exercise of Options following termination of employment with or service to
Jones Lang LaSalle, including terminations due to the death, disability or
retirement of an award recipient.
The Named Executive Officers received Options in 1999 as described above
under the caption "Option Grants." Jones Lang LaSalle's Non-Executive Directors
received Options in 1999 as described below under the caption "Director
Compensation."
EMPLOYEE STOCK PURCHASE PLAN
A description of Jones Lang LaSalle's Employee Stock Purchase Plan is set
forth below under the caption "Proposal 2 -- Approval of Amendment to the
Employee Stock Purchase Plan."
PARTIAL BONUS IN SHARES PROGRAM
The Board of Directors have approved the implementation of a new Partial
Bonus in Shares Program (the "PB-S Program"), which became effective with
respect to 1999 bonuses. This new program replaced the program pursuant to which
certain employees had a portion of their bonuses credited to accounts under the
Stock Compensation Program for investment in Jones Lang LaSalle shares. The
purpose of the PB-S Program is to link the interests of the Senior Executives to
those of the shareholders.
Under the PB-S Program, executive officers, and other key officers,
received 25% of their 1999 bonuses in deferred shares ("PB-S Shares"). In future
years, the PB-S Program is expected to be expanded to include a larger group of
officers, and the amount of bonus paid in PB-S Shares may vary with the level of
the participant. Jones Lang LaSalle added an uplift of 20% to the portion of the
1999 bonuses paid in PB-S Shares. In future years the uplift will be 15%. The
PB-S Shares will vest and be issued on the following schedule: 50% of the PB-S
Shares will vest and be issued eighteen months after the end of the year to
which the bonus is attributable (i.e., July 1, 2001 with respect to 1999
bonuses), and the remaining 50% will vest and
14
<PAGE> 18
be issued thirty months after such year (i.e., July 1, 2002 with respect to 1999
bonuses). Jones Lang LaSalle, in its discretion, may pay employees cash in the
amount of the fair market value of PB-S Shares that vest rather than issue
shares to them. Dividends paid with respect to PB-S Shares prior to vesting are
reinvested in further PB-S Shares having the same vesting date, and a
participant will also receive further PB-S shares in the case of a stock split
or stock dividend. A participant who is terminated for cause (as defined in the
Stock Compensation Program) or who voluntarily resigns his employment will
forfeit any PB-S Shares which have not vested. If a participant's employment
terminates by reason of death, disability or special circumstances (as defined
by the plan administrator), PB-S Shares will continue to vest on their normal
schedule; however, in such cases the plan administrator can choose to accelerate
vesting. PB-S Shares vest immediately upon an employee's retirement.
In order to implement the PB-S Plan, the Board of Directors approved an
amendment to Jones Lang LaSalle's Stock Compensation Program and made awards
under that program and the 1997 Stock Incentive Plan. Executive officers
received awards under the Stock Compensation Program, as amended, and other
officers received awards under the 1997 Stock Incentive Plan. The terms of the
awards under the PB-S Program were identical regardless of which plan they were
made under. This summary of the PB-S Program is qualified in its entirety by
reference to the actual terms of the Stock Compensation Program, as amended.
EMPLOYMENT AGREEMENTS
Messrs. Peacock and Orr are parties to Senior Executive Service Agreements
(the "Employment Agreements") providing terms of their employment with Jones
Lang LaSalle. The Employment Agreements are in a form used with other senior
executives employed in the United Kingdom. The Employment Agreements provide for
minimum levels of base salary (L200,00 for Mr. Peacock and L150,000 for Mr.
Orr), participation in bonus arrangements established by Jones Lang LaSalle and
certain other benefits. They require Messrs. Peacock and Orr to dedicate their
whole time and attention to their work with Jones Lang LaSalle and prohibit them
from having any other employment. Additionally, they provide for certain
restrictions on their business activities following termination of employment.
The Employment Agreement may be terminated by Jones Lang LaSalle on twelve
months notice and by the covered executive on six months notice. If Jones Lang
LaSalle terminates a covered executive's employment other than for reasons
specified in the Employment Agreements, the covered executive would be entitled
to twelve months of salary and the value of other benefits provided for in the
Employment Agreements.
SEVERANCE PAY PLAN
Jones Lang LaSalle has a Severance Pay Plan for full time employees,
including executive officers, employed in the United States. In order to be
eligible to receive payments under the Severance Pay Plan, an employee must be
involuntarily terminated from employment due to a permanent reduction in work
force, job elimination or the permanent shutdown of a facility, department or
subdivision. Employees entitled to benefits receive a base severance payment
equal to one-half month of the participant's base pay (not including target
bonus) in effect at the time of the termination of employment ("Base Pay").
Additionally, an employee may receive enhanced severance pay, as well as a
prorated target bonus for the year of the termination and certain other
benefits, to the extent the employee executes a Severance Agreement and General
Release in favor of Jones Lang LaSalle. Enhanced severance payments are a
multiple of Base Pay, with multiples varying with the employee's level of target
compensation and length of service with Jones Lang LaSalle. The enhanced
severance payment for an employee with target compensation (including target
bonus) in excess of $400,000 and who has been employed by Jones Lang LaSalle for
at least one year is equal to twelve months of Base Pay plus one month of Base
Pay for each full year of continuous service in excess of 12 years, with the
maximum enhanced severance payment being 24 months of Base Pay.
Jones Lang LaSalle is obligated to make statutory payments to employees,
including executive officers, employed in the United Kingdom who are terminated
for reasons of redundancy. For an executive officer who is made redundant, the
required payment would be calculated according to a formula, set by the United
Kingdom government, based on age and length of service. In addition, the
payments provided for in the
15
<PAGE> 19
executive officer's contract of employment (including the Employment Agreements
described above under the caption "Employment Agreements") would be made.
DIRECTOR COMPENSATION
On March 11, 1998, in connection with the closing of the LaSalle/Jones Lang
Wootton transaction, the annual retainer for Non-Executive Directors was
increased from $25,000 to $40,000. In 1999, each Non-Executive Director also
received $1,000 for attendance at each meeting ($500 for special telephonic
meetings) of the Board, the Audit Committee or the Compensation Committee.
Directors who are also officers or employees of Jones Lang LaSalle are not paid
any Directors' fees. Jones Lang LaSalle reimburses all Directors for expenses
incurred in attending meetings.
In connection with the initial public offering, each Non-Executive Director
who became a Director upon the closing of the initial public offering received
an initial grant of options to purchase 5,000 shares of Common Stock at an
exercise price of $23.00 per share, the initial public offering price. Each
Non-Executive Director elected to the Board for the first time thereafter has
received or will receive upon such election an initial grant of options to
purchase 5,000 shares of Common Stock at fair market value on the date of grant.
In addition, each Non-Executive Director receives an annual grant of options to
purchase 1,000 shares on the date of each annual stockholders meeting after
which the Non-Executive Director continues in office. All of the foregoing
options have a 10 year term and vest over a 5 year period, with 20% becoming
vested on each anniversary of the date of grant. The foregoing grants of options
are made automatically under the 1997 Stock Incentive Plan. Each Non-Executive
Director may also elect, under the terms of the 1997 Stock Incentive Plan, to
receive, in lieu of the annual cash retainer, an option for a number of shares
such that the value of the option is equal to the amount of the annual retainer.
The 1997 Stock Incentive Plan was amended in 1999 to provide that the value of
these options is 33% of the exercise price for options issued with respect to
1999, 2000 and 2001. For options issued with respect to years thereafter, the
value will be based upon the Black-Scholes Option Pricing Model. The 1997 Stock
Incentive Plan was also amended so that, for options issued with respect to 1999
and years thereafter, the exercise price is equal to the average closing prices
of Jones Lang LaSalle common stock on the last trading day of each calendar
quarter during the year. Such stock options are granted on January 1 of the year
following the year in which the retainer is earned, are fully vested upon grant
and have 10 years terms.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no Compensation Committee interlocks or insider participation on
the Compensation Committee. Certain executive officers have and will attend
meetings of the Compensation Committee in order to present information and
answer questions of the members of the Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for the oversight of executive
compensation and Jones Lang LaSalle's compensation programs, including those
with respect to stock ownership. Following the closing of the LaSalle/Jones Lang
Wootton transaction on March 11, 2000, two new Directors, Henri-Claude de
Bettignies and Derek A. Higgs, joined the Compensation Committee.
Jones Lang LaSalle believes that its employee compensation system is unique
in the real estate industry. The system is designed to reward client
relationship building, teamwork and quality performance, as well as to foster
employee commitment and align employee and stockholder interests. Toward this
end, Jones Lang LaSalle compensates its professionals and managers with salary,
bonus and stock ownership programs, rather than on the commission basis which is
typical in the industry. This traditional compensation philosophy continued
after the initial public offering and after the closing of the LaSalle/Jones
Lang Wootton transaction.
Annual Compensation. The executive officers, like other Jones Lang LaSalle
professionals and managers, are assigned target annual compensation consisting
of a salary and target bonus. In general, executive officer target bonuses
constitute 60% of target compensation. The executive officers' 1999 salary and
target bonuses were set by the Compensation Committee at the beginning of the
year. Following the closing of the
16
<PAGE> 20
LaSalle/Jones Lang Wootton transaction, certain persons previously employed by
the JLW Companies became executive officers of Jones Lang LaSalle. Except for
Messrs. Peacock and Smith, these executive officers were not assigned target
bonuses in 1999; however, they will be assigned target bonuses for future years.
Target bonus levels for executive officers are set to provide compensation
levels which are sufficiently competitive to attract and retain high caliber
executives. In the past Jones Lang LaSalle has engaged a compensation consultant
to prepare an analysis of Jones Lang LaSalle's levels of executive compensation,
but did not do so in 1999.
As set forth above under the caption "Incentive Compensation," the payment
of an employee's bonus is based upon an evaluation of performance against
specific objective and subjective standards which vary from employee to
employee. For the Chairman and Chief Executive Officer (Mr. Scott), the
President, Deputy Chief Executive Officer and Chief Operating Officer (Mr.
Peacock) and the Executive Vice President and Chief Financial Officer (Mr.
Sullivan), the standards upon which they were measured in 1999 fall into two
principal categories, financial performance of Jones Lang LaSalle and
performance on individual accountabilities. The executive officers who are heads
of business units are also measured on these two standards, as well as on the
performance of their respective business units. These categories were applied to
1999 target bonuses in the following percentages:
<TABLE>
<CAPTION>
FINANCIAL
PERFORMANCE PERFORMANCE ON BUSINESS
OF THE INDIVIDUAL UNIT
COMPANY ACCOUNTABILITIES PERFORMANCE
----------- ---------------- -----------
<S> <C> <C> <C>
Chairman and Chief Executive Officer... 60% 40% n.a.
President, Deputy Chief Executive
Officer and Chief Operating
Officer.............................. 60% 40% n.a.
Executive Vice President and Chief
Financial Officer.................... 40% 60% n.a.
Executive Officers who are Business
Unit Heads........................... 20% 20% 60%
</TABLE>
Based upon an evaluation of performance, a multiplier is set for each category
and applied to the appropriate proportion of the target bonus. A multiplier of 1
is applied to the extent performance meets expectations, with a higher
multiplier to the extent performance exceeds expectations and a lower multiplier
to the extent performance is below expectations. The multiplier with respect to
financial performance of Jones Lang LaSalle, which is the same for all executive
officers, was 0 in 1999 based upon disappointing financial performance,
including the year to year decline in adjusted pro forma EBITDA per share.
Individual accountabilities vary from officer to officer and are intended to
concentrate on key matters upon which the particular officer is to focus in
addition to the general focus on Jones Lang LaSalle and business unit
performance. The Compensation Committee has encouraged management to set goals,
to the extent possible, within the individual accountabilities area in a manner
which allows objective measurement of performance, including by setting
quantitative standards where appropriate. With respect to business unit
performance, multipliers are based upon actual performance versus the plan for
the unit. In certain circumstances, business unit multipliers also take into
account that an executive officer in some cases should not be held responsible
for the underperformance of a business unit which the executive officer recently
joined.
Mr. Scott reviewed the performance of each of the other executive officers,
determined recommended compensation levels based upon the process explained
above and presented his recommendations with respect to compensation to the
Compensation Committee. The Compensation Committee reviewed these
recommendations and approved the recommended compensation. With respect to the
individual accountabilities multipliers applied to the target bonuses for
Messrs. Scott, Peacock and Sullivan, the Compensation Committee was presented
with information regarding their performance with respect to the relevant
matters involved in their respective individual accountabilities. As noted
above, certain executive officers previously employed by the JLW Companies did
not have target bonuses. Messrs. Scott and Peacock determined recommended
compensation levels based upon the performance of these individuals and
presented their recommendations in this regard to the Compensation Committee,
which approved these recommendations.
17
<PAGE> 21
Stock Plans and Programs. The executive officers are eligible to receive
Options and other awards under the 1997 Stock Incentive Plan. Certain executive
officers were granted Options in March 2000, with exercise prices equal to
$12.25 per share, the fair market value on the date of grant. These Options vest
with respect to one-third of the shares on each of the first three anniversary
dates of the date of grant and have terms of seven years. Ongoing awards under
the 1997 Stock Incentive Plan are expected to be made annually. Additionally,
awards are made to new employees as an incentive to join Jones Lang LaSalle and
to other recipients in special situations.
The Employee Purchase Plan and PB-S Program described above under the
captions "Employee Stock Purchase Plan" and "Partial Bonus in Shares Program"
also provide executive officers, as well as other employees, a means for
accumulating Jones Lang LaSalle's Common Stock. The Stock Purchase Plan provides
employees in the United States with a means to purchase stock at a 15% discount
through regular payroll deductions. Under the PB-S Program, executive officers
receive a portion of their bonuses in deferred shares of common stock as
described above under the caption "Partial Bonus in Shares Program." Other
officers at certain levels also participate in the PB-S Program.
Compensation of Chief Executive Officer. As with other executive officers,
Mr. Scott's 1999 target compensation was established by the Compensation
Committee at the beginning of the year. The 0 multiplier described above was
applied to the 60% of Mr. Scott's target bonus linked to the financial
performance of Jones Lang LaSalle. With respect to the 40% of Mr. Scott's target
bonus linked to performance on individual accountabilities, the Compensation
Committee approved a multiplier of 1 based upon, among other things, his
leadership in (i) addressing the issues leading to the earnings disappointment,
particularly with respect to the cost saving initiatives in the U.S. management
services business, (ii) establishing a plan for the future growth of Jones Lang
LaSalle and (iii) developing a strategy for growth of the investment management
business. Mr. Scott was awarded Options with respect to 40,000 shares in March
2000.
Certain Tax Matters. Tax laws limit the deduction a publicly held
corporation is allowed for compensation paid to the chief executive officer and
to the four most highly compensated executive officers other than the chief
executive officer. Generally, amounts paid in excess of $1 million to a covered
executive, other than performance compensation, cannot be deducted. Jones Lang
LaSalle considers ways to maximize the deductibility of executive compensation
but reserves the right to compensate executive officers in a manner commensurate
with performance and the competitive environment for executive talent. As a
result, some portion of executive compensation paid to an executive officer
whose compensation is subject to the deduction limits described above may not be
deductible by Jones Lang LaSalle.
Compensation Committee
Thomas C. Theobald (Chairman)
Henri-Claude de Bettignies
Derek A. Higgs
John R. Walter
18
<PAGE> 22
PERFORMANCE GRAPH
The following line graph compares Jones Lang LaSalle's cumulative
stockholder return on its Common Stock to the cumulative total return of the
Standard & Poor's 500 Stock Index ("S&P 500 Index") and an industry peer group
index ("Custom Industry Index") from July 17, 1997 (the time of Jones Lang
LaSalle's initial public offering), to December 31, 1999. The Custom Industry
Index is composed of the following other publicly traded real estate services
companies: CB Richard Ellis, Inc., Grubb & Ellis Company, Insignia Financial
Group, Inc. and Trammell Crow Company. The graph assumes the investment of $100
in Jones Lang LaSalle and each of the indices on July 17, 1997 and the
reinvestment of all dividends. The return shown on the graph is not necessarily
indicative of future performance.
[performance graph]
<TABLE>
<CAPTION>
JONES LANG LASALLE COMPOSITE S&P 500
------------------ --------- -------
<S> <C> <C> <C>
7/17/97 100.00 100.00 100.00
9/30/97 152.00 98.00 102.00
12/31/97 155.00 101.00 104.00
3/31/98 141.00 102.00 118.00
6/30/98 193.00 115.00 122.00
9/30/98 142.00 77.00 109.00
12/31/98 128.00 79.00 132.00
3/31/99 130.00 70.00 138.00
6/30/99 130.00 68.00 147.00
9/30/99 70.00 57.00 138.00
12/31/99 52.00 51.00 158.00
</TABLE>
19
<PAGE> 23
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Messrs. Scott, Rose and Cummings, as well as an entity affiliated with Mr.
Scott, are limited partners of Diverse Real Estate Holdings Limited Partnership
("Diverse"). Diverse has an ownership interest in and operates investment
assets, primarily as the managing general partner of real estate development
ventures. Prior to January 1, 1992, Jones Lang LaSalle earned fees for providing
development advisory services to Diverse as well as fees for the provision of
administrative services. Effective January 1, 1992, Jones Lang LaSalle
discontinued charging fees to Diverse for these services. At the end of 1999,
the total receivable due from Diverse in connection with such fees and interest
thereon was $.7 million. In 1992, Diverse began the process of discontinuing its
operations and disposing of its assets. In 1999, Diverse made $1.0 million in
payments to reduce the receivable due to Jones Lang LaSalle. Messrs. Scott, Rose
and Cummings directly hold an approximately 13.4%, 2.8% and .4% partnership
interest in Diverse, respectively. In addition, the Stuart Scott Trust, a trust
affiliated with Mr. Scott, has a 6.4% partnership interest in Diverse. Diverse
did not make distributions to its partners in 1999.
In addition, Jones Lang LaSalle provides property management and leasing
services to properties in which Diverse has an ownership interest. At the end of
1999, the total receivable due from these properties was $.4 million. Jones Lang
LaSalle earned $.7 million in fees from these properties in 1999. Jones Lang
LaSalle believes that the services provided to properties in which Diverse has
an ownership interest are on terms no more favorable than those given to
unaffiliated persons.
Jones Lang LaSalle provides property management and leasing and investment
management services to The Dai-ichi Mutual Life Insurance Company, a significant
beneficial owner (indirectly through various entities) of Common Stock of Jones
Lang LaSalle, and its affiliates ("Dai-ichi"). Jones Lang LaSalle earned $7.1
million in fees from Dai-ichi in 1999 with respect to such services. At the end
of 1999, Jones Lang LaSalle had receivables of $1.1 million due from Dai-ichi
with respect to such services. Jones Lang LaSalle believes that the services
provided to Dai-ichi and its affiliates are on terms no more favorable to
Dai-ichi than those available to unaffiliated persons.
In connection with the transactions pursuant to which the interests in the
Predecessor Partnerships were contributed to Jones Lang LaSalle, Jones Lang
LaSalle granted registration rights to certain Dai-ichi affiliates, as well as
certain other parties, with respect to the shares of Common Stock issued to them
in exchange for such contributions. The Directors and executive officers who are
parties to the Stockholder Agreements and the DEL Stockholder Agreements may be
given the right to register shares of Common Stock which they hold in accordance
with those agreements.
From time to time, Directors and executive officers are given an
opportunity to invest in investment vehicles managed by subsidiaries of Jones
Lang LaSalle on the same terms as other unaffiliated investors. Additionally,
executive officers and other employees have been, and in the future may be,
allowed to acquire small interests in certain investment vehicles in order that
these vehicles can satisfy certain tax requirements.
20
<PAGE> 24
SECURITY OWNERSHIP
The following table sets forth certain information concerning the
beneficial ownership of the Common Stock, which are the only outstanding voting
securities and equity securities of Jones Lang LaSalle, as of March 15, 2000
(except where otherwise noted) by: (i) each Director and Director nominee of
Jones Lang LaSalle; (ii) each of the Named Executive Officers; (iii) the
Directors, Director nominees and executive officers of Jones Lang LaSalle as a
group; and (iv) each person who is known to Jones Lang LaSalle to have been the
beneficial owner of more than five percent of the Common Stock. On March 15,
2000, there were 30,342,018 shares of Common Stock outstanding. Unless otherwise
indicated in the footnotes, all of such interests are owned directly, and the
indicated person or entity has sole voting and dispositive power.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY OWNED
--------------------
NAMES (1) NUMBER PERCENT
--------- ------ -------
<S> <C> <C>
The Dai-ichi Mutual Life Insurance Company (2).............. 2,199,162 7.2%
Stuart L. Scott (3)(4)...................................... 791,434 2.6%
Christopher A. Peacock...................................... 158,990 *
Christopher M. G. Brown (3)................................. 196,188 *
Henri-Claude de Bettignies (5).............................. 5,663 *
Darryl Hartley-Leonard (6).................................. 26,980 *
Derek A. Higgs (7).......................................... 6,200 *
Peter H. T. Lee (3)......................................... 196,347 *
David K.P. Li (8)........................................... 15,663 *
Robert S. Orr............................................... 134,679 *
Clive J. Pickford........................................... 158,990 *
M.G. Rose (9)............................................... 455,790 1.5%
Michael J. Smith (3)........................................ 117,733 *
Thomas C. Theobald (10)..................................... 60,850 *
Lynn C. Thurber (3) (11).................................... 158,033 *
John R. Walter (12)......................................... 35,480 *
Earl E. Webb (3)(13)........................................ 143,715 *
All Directors, Director nominees and executive officers as a
group (22 persons) (14)................................... 3,136,591 10.3%
</TABLE>
- -------------------------
*Less than 1%
(1) Unless otherwise indicated, the address of each person or entity is c/o
Jones Lang LaSalle Incorporated, 200 East Randolph Drive, Chicago, Illinois
60601.
(2) Information with respect to beneficial ownership of The Dai-ichi Mutual Life
Insurance Company is included herein in reliance on a Schedule 13G, dated
February 10, 1998, filed with the SEC reporting ownership as of December 31,
1997. According to the Schedule 13G, The Dai-ichi Mutual Life Insurance
Company owns 100% of the outstanding shares of capital stock of Dai-ichi
Life Property Holdings, Inc., which in turn owns 100% of the outstanding
shares of capital stock of Dai-ichi Life Investment Properties, Inc., which
in turn owns 100% of the outstanding shares of capital stock of DSA-LSPL,
Inc. and DSA-LSAM, Inc. DSA-LSPL, Inc. owns directly 1,869,288 shares of
Common Stock, and DSA-LSAM, Inc. owns directly 329,874 shares of Common
Stock. The address of The Dai-ichi Mutual Life Insurance Company is 13-1
Yurakucho, 1-chome, Tokyo, Japan 100.
(3) Shares are owned directly and by corporations of which the reporting person,
or the reporting person and the reporting person's spouse, is the sole
stockholder.
(4) Includes 59,583 shares which Mr. Scott had the right to acquire through
stock options granted under the 1997 Stock Incentive Plan which were
exercisable on March 15, 2000 or which would become exercisable within 60
days of that date. 15,000 of the shares listed are held by a trust for the
benefit of Mr. Scott's children.
21
<PAGE> 25
(5) Includes 5,663 shares which Professor de Bettignies had the right to acquire
through stock options granted under the 1997 Stock Incentive Plan which were
exercisable on March 15, 2000 or which would become exercisable within 60
days of that date.
(6) Includes 8,903 shares which Mr. Hartley-Leonard had the right to acquire
through stock options granted under the 1997 Stock Incentive Plan which were
exercisable on March 15, 2000 or which would become exercisable within 60
days of that date.
(7) Includes 1,200 shares which Mr. Higgs had the right to acquire through stock
options granted under the 1997 Stock Incentive Plan which were exercisable
on March 15, 2000 or which would become exercisable within 60 days of that
date.
(8) Includes 5,663 shares which Dr. Li had the right to acquire through stock
options granted under the 1997 Stock Incentive Plan which were exercisable
on March 15, 2000 or which would become exercisable within 60 days of that
date.
(9) Includes 31,458 shares which Mr. Rose had the right to acquire through stock
options granted under the 1997 Stock Incentive Plan which were exercisable
on March 15, 2000 or which would become exercisable within 60 days of that
date.
(10) Includes 8,903 shares which Mr. Theobald had the right to acquire through
stock options granted under the 1997 Stock Incentive Plan which were
exercisable on March 15, 2000 or which would become exercisable within 60
days of that date. 2,000 of the shares listed are held by Mr. Theobald's
wife as custodian for his daughter, and 2,000 of the shares listed are held
by Mr. Theobald as trustee of a trust for the benefit of his son. Mr.
Theobald disclaims beneficial ownership of this 4,000 shares.
(11) Includes 31,458 shares which Ms. Thurber had the right to acquire through
stock options granted under the 1997 Stock Incentive Plan which were
exercisable on March 15, 2000 or which would become exercisable within 60
days of that date.
(12) Includes 8,903 shares which Mr. Walter had the right to acquire through
stock options granted under the 1997 Stock Incentive Plan which were
exercisable on March 15, 2000 or which would become exercisable within 60
days of that date. 26,577 of the shares listed are held by Mr. Walter as
trustee of a trust for the benefit of himself, his wife and others.
(13) Includes 40,833 shares which Mr. Webb had the right to acquire through
stock options granted under the 1997 Stock Incentive Plan which were
exercisable on March 15, 2000 or which would become exercisable within 60
days of that date.
(14) See footnotes (3) through (13) above. Does not include Daniel W. Cummings,
a Named Executive Officer who has resigned, who owned no shares and had the
right to acquire 31,458 shares through the exercise of options granted
under the 1997 Stock Incentive Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Jones Lang LaSalle's Directors,
certain of Jones Lang LaSalle's officers and beneficial owners of more than 10
percent of Jones Lang LaSalle's outstanding Common Stock to file reports of
ownership and changes in ownership of Jones Lang LaSalle's Common Stock with the
Securities and Exchange Commission and to send copies of such reports to Jones
Lang LaSalle. Based solely upon a review of such reports and amendments thereto
furnished to Jones Lang LaSalle and upon written representations of certain of
such persons regarding their ownership of Common Stock, Jones Lang LaSalle
believes that no such person failed to file any such report on a timely basis
during 1999, except that the initial statement of beneficial ownership for
Peyton H. Owen was filed late.
22
<PAGE> 26
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN
On July 15, 1997, in connection with the initial public offering of the
Company's Common Stock, the stockholder of the Company adopted the Employee
Stock Purchase Plan (the "Stock Purchase Plan"). On March 1, 2000, the Board of
Directors of the Company adopted an amendment to the Stock Purchase Plan
increasing the number of shares of Common Stock which can be sold pursuant to
the Stock Purchase Plan by 750,000 shares, so that after such amendment the
total number of shares available to be sold under the Stock Purchase Plan is
1,000,000. Prior to such amendment, there remained available for sale under the
Stock Purchase Plan as at December 31, 1999 an aggregate of 23,835 shares. The
Company intends to use the shares authorized by the amendment for future
offerings under the Stock Purchase Plan. The closing price of the Common Stock
on the New York Stock Exchange on March 29, 2000 was $14.4375.
A proposal to approve the amendment to the Stock Purchase Plan will be
presented at the Annual Meeting. Each valid proxy returned to Jones Lang LaSalle
will be voted for the approval of the amendment to the Employee Stock Purchase
Plan unless the proxy specifies otherwise. THE BOARD RECOMMENDS THAT
STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT.
The following is a summary of the principal features of the Stock Purchase
Plan. This summary does not, however, purport to be a complete description of
all the provisions of the Stock Purchase Plan. Any stockholder who wishes to
obtain a copy of the plan document and amendments may do so by written request
to Jones Lang LaSalle Incorporated, 200 East Randolph Drive, Chicago, Illinois
60601, Attention: William E. Sullivan, Secretary. The plan document and
amendments have been filed with the Securities and Exchange Commission.
DESCRIPTION OF THE STOCK PURCHASE PLAN
The purpose of the Stock Purchase Plan is to provide an opportunity for
persons employed by the Company and designated subsidiaries in the United States
to purchase shares of Common Stock through voluntary automatic payroll
deductions, thereby attracting, retaining and rewarding such persons and
strengthening the mutuality of interests between such persons and the Company's
stockholders. On December 31, 1999, there were 523 employees participating in
the Stock Purchase Plan.
The Stock Purchase Plan currently provides that an aggregate of 250,000
shares of Common Stock may be sold pursuant to the Plan, subject to adjustment
in certain events.
The Stock Purchase Plan provides that, through a voluntary automatic
payroll deduction, separate accounts will be established for each participant
(the "Payroll Deduction Account"). With the amounts credited to such separate
account, each participant will have the opportunity to purchase as many shares
of Common Stock as he or she is eligible to purchase. Participants may purchase
shares only through payroll deductions, and cash contributions will not be
permitted. The purchase price for shares of Common Stock will not be less than
the lesser of (a) an amount equal to 85% of the closing price of the shares of
Common Stock at the beginning of the Offering Period (as defined below) or (b)
an amount equal to 85% of the closing price of shares of Common Stock on the
date of purchase of the shares. The Stock Purchase Plan provides that the
committee administering the Stock Purchase Plan (the "Committee") has the
authority to establish a different purchase price as long as such price complies
with the provisions of Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the Treasury regulations promulgated thereunder.
Unless otherwise determined by the Committee, the Stock Purchase Plan will
be implemented by establishing consecutive six-month offering periods (the
"Offering Period") with a new Offering Period commencing on the first trading
day on or after the first day of each January and July during the term of the
Stock Purchase Plan. The Committee will have the power to change the duration of
the Offering Periods (including the commencement dates thereof) with respect to
future offerings. The last trading day of each Offering Period prior to the
termination of the Stock Purchase Plan (or such other trading date as determined
23
<PAGE> 27
by the Committee) will constitute the purchase date on which each participant
will purchase his or her appropriate number of shares (the "Share Purchase
Date").
Notwithstanding the foregoing, the Company will not permit the exercise of
any right to purchase shares of Common Stock (a) by any employee who immediately
after the right is granted would own shares possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or any
subsidiary; or (b) which would permit an employee's rights to purchase shares
under the Stock Purchase Plan, or under any other qualified employee stock
purchase plan maintained by the Company or any subsidiary, to accrue at a rate
in excess of $25,000 in fair market value (as determined on the first day of the
offering period) for each calendar year.
Section 424(d) of the Code will be applied to determine the stock ownership
of a participant in the Plan, and the shares that a participant may purchase
under outstanding rights or options will be treated as shares owned by the
participant.
If a participant's employment is terminated for any reason, if a
participant dies, if a participant is granted a leave of absence of more than 90
days duration, or if a participant otherwise ceases to be eligible to
participate in the Stock Purchase Plan, payroll deductions will cease and any
amounts then credited to his or her Payroll Deduction Account will be refunded
to the participant as soon as practicable.
The Stock Purchase Plan may be amended at any time; provided that no such
amendment will be effective unless approved by the stockholders if such approval
is necessary to comply with either Section 423 of the Code or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Stock Purchase Plan
may be suspended or discontinued at any time. The Stock Purchase Plan is
intended to meet the requirements of Section 423 of the Code.
In 1999, Ms. Thurber purchased a total of 1,471 shares (431 shares at a
price of $24.3844 on June 30 and 1,040 shares at a price of $10.0938 on December
31) under the Stock Purchase Plan. In 1999, executive officers, including Ms.
Thurber, purchased a total of 5,686 shares (1,698 shares at a price of $24.3844
on June 30 and 3,988 shares at a price of $10.0938 on December 31) under the
Stock Purchase Plan. In 1999, employees who were not executive officers
purchased a total of total 156,303 shares (54,685 shares at a price of $24.3844
on June 30 and 101,618 shares at a price of $10.0938 on December 31) under the
Stock Purchase Plan. Non-Executive Directors may not participate in the Stock
Purchase Plan.
TAX CONSEQUENCES
The following discussion is a summary of the principal federal income tax
consequences under current federal income tax laws relating to the Stock
Purchase Plan. This summary is not intended to be exhaustive and, among other
things, does not describe state, local or foreign income and other tax
consequences. This summary assumes that participants will hold their shares of
Common Stock as "capital assets" (generally, property held for investment) under
the Code.
The plan is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Code. Certain federal income tax consequences to participants
from such status under present law are described below.
Generally, as long as the Stock Purchase Plan complies with the
requirements of Section 423 of the Code, the participant will not recognize any
taxable income on the purchase of shares of Common Stock under the Stock
Purchase Plan. If, however, the participant has severed his employment
relationship with the Company more than three months before purchasing shares of
Common Stock or the offer to purchase shares of Common Stock is deemed not to be
granted under a Section 423 plan for any other reason, the participant will
recognize as compensation income at the time of such purchase, an amount equal
to the excess of the fair market value of the stock over the purchase price.
The tax treatment of the subsequent disposition of Section 423 plan stock
depends on whether the stock is disposed of during or after the expiration of
the Section 423 statutory holding period. The Section 423
24
<PAGE> 28
statutory holding period expires upon the later of two years after the date of
offer to purchase shares or one year from the date of transfer of the shares
pursuant to an offer to purchase.
In the event of a disposition after the Section 423 statutory holding
period, pursuant to a Section 423 plan, where an offer is granted at an offer
price of less than 100% of the fair market value of the stock, then the
participant must include in taxable income, subject to tax as ordinary income,
at the time of the sale or other taxable disposition of the stock, or upon the
participant's death while still holding the stock, the lesser of (a) the amount,
if any, by which the fair market value of the stock when the offer was made
exceeds the offer price or (b) the amount, if any, by which the stock's fair
market value at the time of such disposition or death exceeds the exercise price
paid. Any further gain realized in such disposition will be subject to tax as
capital gain.
If the participant disposes of the stock before the expiration of the
Section 423 statutory holding period, then, in the year of the "disqualifying
disposition," the participant must recognize as ordinary compensation income the
excess of the fair market value of the stock disposed of as determined at the
time the offer to acquire such stock was exercised and the offer exercise price.
In addition, a participant will recognize capital gain or loss in an amount
equal to the difference between the amount realized from the disposition and the
fair market value of the stock disposed of as determined at the time that the
offer to acquire such stock was exercised.
In the event the participant disposes of shares of Common Stock after the
Section 423 statutory holding period, the Company may not claim a deduction for
federal income tax purposes, in respect of the excess of the fair market value
of the offered stock and the offered price if the offering is pursuant to a
Section 423 plan. If the participant disposes of shares of Common Stock in a
"disqualifying disposition," the Company will be entitled to claim a deduction
for an amount equal to the amount included in the ordinary income of such
participant as discussed above.
25
<PAGE> 29
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board, with the recommendation of the Audit Committee, has appointed
the firm of KPMG LLP as Jones Lang LaSalle's independent auditors for 2000. A
proposal to ratify this appointment will be presented at the Annual Meeting.
Each valid proxy returned to Jones Lang LaSalle will be voted for the
ratification of the appointment of KPMG LLP as Jones Lang LaSalle's independent
auditors for 2000 unless the proxy specifies otherwise. THE BOARD RECOMMENDS
THAT STOCKHOLDERS VOTE FOR RATIFICATION OF SUCH APPOINTMENT. The Board retains
the right to appoint substitute independent auditors at any time during 2000 for
any reason whatsoever upon the recommendation of the Audit Committee.
Jones Lang LaSalle expects that representatives of KPMG LLP will be present
at the Annual Meeting and will be available to respond to appropriate questions.
Such representatives will have the opportunity to make a statement at the Annual
Meeting if they desire to do so.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the year 2001 Annual
Meeting and included in Jones Lang LaSalle's proxy statement and form of proxy
relating to that meeting pursuant to Rule 14a-8 under the Exchange Act must be
received by Jones Lang LaSalle at Jones Lang LaSalle's principal executive
offices by December 12, 2000. In order for stockholder proposals made outside of
Rule 14a-8 under the Exchange Act to be considered "timely" within the meaning
of Rule 14a-4(c) under the Exchange Act, such proposals must be received by
Jones Lang LaSalle at Jones Lang LaSalle's principal executive offices by
February 16, 2001. The Amended Bylaws require that proposals of stockholders
made outside of Rule 14a-8 under the Exchange Act must be submitted, in
accordance with the requirements of the Amended Bylaws, not later than February
16, 2001 and not earlier than January 17, 2001.
PROXY SOLICITATION EXPENSE
The proxies being solicited by this Proxy Statement are being solicited by
the Board of Jones Lang LaSalle. Proxies may be solicited by officers, Directors
and regular employees of Jones Lang LaSalle, none of whom will receive any
compensation other than their regular compensation. Jones Lang LaSalle has
retained Morrow & Co., Inc. to aid in the solicitation. For these services,
Jones Lang LaSalle will pay Morrow & Co., Inc. a fee of approximately $1,700 and
reimburse it for certain out-of-pocket disbursements and expenses. Solicitations
may be made personally, or by mail, facsimile, telephone, telegraph or
messenger. Jones Lang LaSalle will, upon request, pay persons holding shares of
Common Stock in their names or the names of nominees, but not owning such shares
beneficially, such as brokerage houses, banks and other fiduciaries, for the
expense of forwarding solicitation materials to the beneficial owners. All of
the costs of the solicitation of proxies will be paid by Jones Lang LaSalle.
26
<PAGE> 30
PROXY JONES LANG LASALLE INCORPORATED PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS - MAY 15, 2000
The undersigned hereby appoints Stuart L. Scott, Christopher A. Peacock
and William E. Sullivan, and each of them, with full power of substitution, to
represent the undersigned and as proxies to vote all the Common Stock of Jones
Lang LaSalle Incorporated which the undersigned has power to vote, with all
powers which the undersigned would possess if personally present, at the annual
meeting of stockholders to be held on May 15, 2000, or at any adjournment or
postponement thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED. IF NO CHOICE IS
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL THE NOMINEES AND
FOR PROPOSAL NUMBER 2 AND PROPOSAL NUMBER 3.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
- --------------------------------------------------------------------------------
[JONES LANG LASALLE(SM) LOGO]
<PAGE> 31
<TABLE>
<S> <C>
JONES LANG LASALLE INCORPORATED
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
[ ]
1. ELECTION OF DIRECTORS: For Withhold For All
Nominees: 01-Christopher M.G. Brown, All All Except
02-Derek A. Higgs, [ ] [ ] [ ] 2. Amendment of the Employee Stock For Against Abstain
03-M.G. Rose, Purchase Plan. [ ] [ ] [ ]
04-Michael J. Smith,
05-Thomas C. Theobald and
06-Lynn C. Thurber. 3. Ratification of the appointment For Against Abstain
of KPMG LLP as independent auditors [ ] [ ] [ ]
for 2000.
- ------------------------------------------- 4. To vote upon any other matters that may properly be
(Except nominee(s) written above.) presented at the meeting according to their best judgment
and in their discretion.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND
OF THE PROXY STATEMENT.
Dated:______________________ , 2000
Signature(s) _______________________________________________
____________________________________________________________
Please sign exactly as your name appears. If signing as
attorney, executor, administrator, trustee or guardian or an
officer of a corporation or other entity, please give full
title. If shares are held jointly, both owners must sign.
- -----------------------------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
YOUR VOTE IS IMPORTANT.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
</TABLE>
