<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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
CABOT INDUSTRIAL TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
CABOT INDUSTRIAL TRUST
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
----------------
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
and
PROXY STATEMENT
----------------
April 2, 1999
Dear Shareholder:
You are cordially invited to attend our 1999 Annual Meeting of Shareholders,
which will be held on Monday, May 3, 1999, at 9:00 a.m. local time at State
Street Bank & Trust Company, 225 Franklin Street, Boston, Massachusetts.
The Notice of Annual Meeting and the Proxy Statement that follow describe
the business to be conducted at the Annual Meeting. We will also report on
matters of current interest to our shareholders, and there will be an
opportunity following the formal meeting for questions and answers.
Please sign and return the enclosed proxy card in the envelope provided as
soon as possible so that your shares will be represented at the meeting. This
will not prevent you from attending the meeting and voting in person or from
changing your vote by executing a subsequent proxy. 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
recommendations of the Company's Board of Trustees, in which case merely
signing, dating, and returning the proxy card will be sufficient.
On behalf of the Board of Trustees and management of Cabot Industrial Trust,
I would like to express our appreciation for your interest in the Company. We
look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Ferdinand Colloredo-Mansfeld
Ferdinand Colloredo-Mansfeld
Chairman and Chief Executive Officer
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. IF YOU DO
NOT INTEND TO BE PRESENT AT THE MEETING IN PERSON PLEASE SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE IN ORDER
THAT THE NECESSARY QUORUM MAY BE ASSURED. ANY PROXY MAY BE REVOKED AT ANY
TIME BEFORE IT HAS BEEN VOTED AT THE MEETING.
<PAGE>
CABOT INDUSTRIAL TRUST
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
----------------
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 1999
----------------
TO THE SHAREHOLDERS OF CABOT INDUSTRIAL TRUST:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Shareholders (the
"Annual Meeting") of Cabot Industrial Trust, a Maryland real estate investment
trust (the "Company"), will be held on Monday, May 3, 1999, at 9:00 a.m. local
time for the following purposes:
1. To elect two Class II Trustees to the Board of Trustees of the Company
to serve for three-year terms; and to elect one Class I Trustee to serve for
the two-year remainder of the term for Class I Trustees;
2. To ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31, 1999;
and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
The Board of Trustees has selected March 26, 1999 as the record date for the
Annual Meeting. Only those shareholders of record as of the close of business
on that date, are entitled to notice of and to vote at the Annual Meeting or
any adjournments or postponements thereof.
By Order of the Board of Trustees,
/s/ Neil E. Waisnor
Neil E. Waisnor
Senior Vice President-Finance,
Treasurer and Secretary
Boston, Massachusetts
April 2, 1999
<PAGE>
CABOT INDUSTRIAL TRUST
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
----------------
PROXY STATEMENT
FOR
1999 ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 3, 1999
----------------
Time and Location of Annual Meeting
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Cabot Industrial Trust, a Maryland real
estate investment trust (the "Company"), for use at the Company's 1999 Annual
Meeting of Shareholders to be held Monday, May 3, 1999 at 9:00 a.m. local time
at State Street Bank & Trust Company, 225 Franklin Street, Boston,
Massachusetts and any adjournments or postponements thereof (the "Annual
Meeting"), for the purposes set forth in the accompanying Notice of Annual
Meeting. This Proxy Statement and the enclosed form of proxy are first being
sent to shareholders on or about April 2, 1999.
Voting Rights and Solicitation
Only shareholders of the Company's common shares of beneficial interest, par
value $0.01 per share (the "Common Shares"), of record at the close of
business on March 26, 1999 (the "Record Date") are entitled to notice of and
to vote at the Annual Meeting. Each Common Share is entitled to one vote on
all matters to be voted upon by shareholders at the meeting. There were
40,518,271 Common Shares outstanding as of the Record Date.
The presence in person or by proxy of a majority of the outstanding shares
entitled to vote at the Annual Meeting will constitute a quorum for the
transaction of business. Each valid proxy received by the Company in response
to this soliciation will be voted at the Annual Meeting as indicated on the
proxy. If no indication is made with respect to a proposal, the proxy will be
voted for election of the Trustees named in this Proxy Statement and for the
ratification of Arthur Andersen LLP as the Company's independent public
accountants for 1999. The proxies solicited hereby also confer authority on
the proxy holders named therein to vote in accordance with their best
judgement on any other matter that may come before the Annual Meeting and may
properly be voted upon.
The nominees receiving the highest number of affirmative votes in each
class, up to the number of Trustees to be elected in that class, will be
elected Trustees of the Company. Shareholders do not have the right to
cumulate their vote in the election of Trustees. Ratification of the
appointment of the independent public accountants requires the affirmative
vote of a majority of the votes cast on that proposal at the Annual Meeting.
Abstentions and broker non-votes will be counted as present at the meeting for
determining the presence of a quorum, but will have no effect on the outcome
of the votes on the proposals described in this Proxy Statement.
Any person submitting a proxy may revoke it at any time before it is
exercised by filing with the Secretary of the Company an instrument of
revocation or a duly executed proxy bearing a later date. In addition, persons
submitting proxies may elect to attend the Annual Meeting and vote in person,
although mere attendance at the meeting will not serve to revoke a proxy.
Cost of Solicitation
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, Trustees, officers and employees of the Company, who
will not receive additional compensation for such services, may
1
<PAGE>
solicit proxies in person or by telephone or other means of communication.
Brokers, nominees, fiduciaries and other custodians will be requested to
forward soliciting materials to the beneficial owners of the Common Shares
held of record by them and will be reimbursed by the Company for their
reasonable expenses in doing so.
PRINCIPAL AND MANAGEMENT SHAREHOLDERS
The following table sets forth, as of March 10, 1999 (unless otherwise
indicated), the beneficial ownership of Common Shares of (i) each person known
by the Company to own more than 5% of the Common Shares, (ii) each Trustee and
nominee, (iii) each person named in the Summary Compensation Table herein, and
(iv) all Trustees and executive officers of the Company as a group. The table
also sets forth the number of limited partnership units ("Units") of Cabot
Industrial Properties, L.P., the Company's subsidiary operating partnership
(the "Operating Partnership"), owned by each beneficial owner of Units who,
upon exchange of Units for Common Shares, would own more than 5% of the Common
Shares, and by the persons and group specified in clauses (ii) through (iv)
above. Pursuant to the Amended and Restated Agreement of Limited Partnership
of the Operating Partnership (the "Operating Partnership Agreement"), the
Units became exchangeable for Common Shares on a one-for-one basis or the cash
equivalent thereof (as determined by the Company) beginning February 4, 1999.
Unless otherwise indicated, the persons and entities named below have sole
voting and investment power with respect to all Common Shares and Units shown
as beneficially owned by them.
<TABLE>
<CAPTION>
Percent of All Percent of All
Common Common Shares Common
Beneficial Owner(1) Shares Units and Units(2) Shares(3)
------------------- ---------- --------- -------------- --------------
<S> <C> <C> <C> <C>
Ferdinand Colloredo-Mansfeld
(4)......................... 1,050 1,419,157 3.3% 3.4%
Robert E. Patterson (5)..... 14,000 197,340 * *
Franz Colloredo-Mansfeld
(6)......................... 4,500 138,491 * *
Andrew D. Ebbott (7)........ 2,000 86,499 * *
Howard B. Hodgson, Jr. (8).. 1,000 86,499 * *
Eugene F. Reilly (7)........ -- 80,416 * *
Neil E. Waisnor (7)......... -- 86,499 * *
George M. Lovejoy, Jr. (9).. 2,000 -- * *
Christopher C. Milliken
(10)........................ 10,100 -- * *
Maurice Segall (10)......... 12,500 -- * *
W. Nicholas Thorndike (10).. 15,000 -- * *
Ronald L. Skates (10), (11). 20,000 -- * *
IBM Retirement Plan Trust
(12)........................ 10,246,244 -- 23.6% 25.3%
Pennsylvania Public School
Employes'
Retirement System (13)..... 5,502,973 -- 12.7% 13.6%
New York State Teachers' Re-
tirement System (14)........ 5,951,526 -- 13.7% 14.7%
State of Wisconsin Invest-
ment Board (15)............. 2,959,534 -- 6.8% 7.3%
Leland Stanford Jr. Endow-
ment Fund (16).............. 2,367,923 -- 5.4% 5.8%
The Prudential Insurance
Company of America (17)..... 2,505,143 -- 5.8% 6.2%
Argo Partnership II, L.P.
(18)........................ 1,586,484 -- 3.6% 3.9%
Morgan Stanley Dean Witter &
Co. (19).................... 1,016,200 -- 2.3% 2.5%
All Trustees, and executive
officers as a group (12 per-
sons)....................... 82,150 2,044,901 4.8% 5.0%
</TABLE>
- --------
* Less than 1%.
(1) Unless otherwise indicated, the address of each named person or the title
holding entity is c/o Cabot Industrial Trust, Two Center Plaza, Suite 200,
Boston, Massachusetts 02108.
(2) Assumes that all Units are exchanged for Common Shares on a one-for-one
basis, and includes options beneficially owned by the identified person or
group (and no other person) which are exercisable.
(3) Assumes that all Units beneficially owned by the identified person or
group (and no other person) are exchanged for Common Shares on a one-for-
one basis.
2
<PAGE>
(4) Includes 150,000 Units owned by family trusts with respect to which Mr.
Colloredo-Mansfeld has shared voting and investment power as a co-trustee,
451,165 Units held of record by C-M Holdings L.P. and 4,700 Units held of
record by Mr. Colloredo-Mansfeld's spouse. C-M Holdings L.P. is a limited
partnership of which Mr. Colloredo-Mansfeld owns a 97% partnership
interest. Also includes 87,500 shares issuable under exercisable options.
(5) Includes 2,000 Common Shares held by Mr. Patterson's children and 12,000
Common Shares held by trusts with respect to which he has shared voting
and investment power. Mr. Patterson disclaims beneficial ownership of
these Common Shares. Also includes 68,750 shares issuable under
exercisable options.
(6) Includes 50,000 Units owned by a family trust with respect to which Mr.
Colloredo-Mansfeld is a beneficiary and has shared voting and investment
power with his father, Ferdinand Colloredo-Mansfeld, as a co-trustee, and
4,700 Units held of record by C-M Holdings L.P. Also includes 62,500
shares issuable under exercisable options.
(7) Includes 50,000 shares issuable under exercisable options.
(8) Includes 750 Common Shares held of record by Mr. Hodgson's three children.
Also includes 50,000 shares issuable under exercisable options.
(9) Information as of March 11, 1999.
(10) Includes 10,000 shares issuable under exercisable options.
(11) Includes 2,000 Common Shares in which Mr. Skates has shared voting and
investment powers that are owned by family trusts of which Mr. Skates is
co-trustee and in which each trustee has the power without the other to
both vote and dispose of trust assets.
(12) Information based on a Schedule 13G, dated April 22, 1998, filed with the
Securities and Exchange Commission. The address of IBM Retirement Plan
Trust is 3001 Summer Street, Stamford, Connecticut 06905.
(13) The business address of Pennsylvania Public School Employes' Retirement
System is Commonwealth of Pennsylvania, Public School Employes'
Retirement System, 5 North 5th Street, Harrisburg, Pennsylvania 17108.
(14) Common Shares held of record by Ronis & Co., for the benefit of New York
State Teachers' Retirement System. The business address of these entities
is c/o Bankers Trust Company, 14 Wall Street, New York, New York 10005.
(15) Information based on a Schedule 13G/A, dated February 2, 1999, filed with
the Securities and Exchange Commission. The address of State of Wisconsin
Investment Board is P.O. Box 7842, Madison, Wisconsin 53707.
(16) The business address of Leland Stanford Jr. Endowment Fund is c/o
Director of Real Estate Investments, Stanford Management Company, 2770
Sand Hill Road, Menlo Park, California 94025.
(17) Includes 1,194 shares with respect to which The Prudential Insurance
Company of America ("Prudential") has shared voting and investment power.
Information based on a Schedule 13G/A, dated January 26, 1999, filed with
the Securities and Exchange Commission. Prudential's address is 751 Broad
Street, Newark, New Jersey, 07102-3777.
(18) Common Shares held of record by West Coast Industrial, L.L.C. which are
beneficially owned by its managing member, Argo Partnership II, L.P.,
whose business address is c/o The O'Connor Group, 399 Park Avenue, New
York, New York 10022. Information is based on a Schedule 13G, dated
February 3, 1999, filed with the Securities and Exchange Commission.
(19) Includes 1,000,000 Common Shares with respect to which Morgan Stanley
Dean Witter Investment Management, Inc. shares voting and investment
power. Common shares held of record by Morgan Stanley Dean Witter as
advisor to Stichting Bedrijspensioenfonds Voor De Metaalnijhverheid,
Stichting Pensioenfonds ABP, MS Real Estate Special Situations Inc., The
Morgan Stanley Real Estate Special Situations Funds I, L.P., The Morgan
Stanley Real Estate Special Situations Fund II, L.P. and Morgan Stanley
Real Estate Special Situations Real Estate Investors, L.P. Morgan
Stanley, Dean Witter, & Co., as the owner of all of the common stock of
Morgan Stanley Dean Witter Investment Management Inc., is
3
<PAGE>
deemed beneficially to own the Common Shares beneficially owned by these
entities. Morgan Stanley Dean Witter Investment Management Inc. maintains
its principal office at 1221 Avenue of the Americas, New York, New York
10020 and Morgan Stanley, Dean Witter & Co. maintains its principal office
at 1585 Broadway, New York, New York 10036. Morgan Stanley Dean Witter &
Co. and Morgan Stanley Dean Witter Investment Management Inc. disclaim
beneficial ownership of such Common Shares.
PROPOSAL 1. ELECTION OF TRUSTEES
The Board of Trustees consists of seven Trustees and is divided into three
classes. Under the Company's Declaration of Trust, a majority of the Board
must be persons other than officers or employees of the Company ("Independent
Trustees"). One class of Trustees is elected annually, and each Trustee in a
class serves a three-year term. The Board has nominated Ronald L. Skates and
W. Nicholas Thorndike for re-election to the Board at the Annual Meeting as
Class II Trustees to serve until the annual meeting of shareholders in 2002.
The Board has also nominated George M. Lovejoy, Jr. as a Class I Trustee to
serve until the annual meeting of shareholders in 2001. Mr. Lovejoy was
appointed by the Board to replace Noah T. Hendon who died in January 1999.
Each of the nominees has indicated his willingness to serve if elected at the
Annual Meeting. In the event that a nominee should become unwilling or unable
to serve, all duly executed proxies will be voted for the election of such
other person as may be designated by the Board of Trustees. Unless authority
to vote for a nominee is withheld, all votes represented by a properly
executed proxy will be cast in favor of Messrs. Skates, Thorndike and Lovejoy.
The Board of Trustees recommends a vote FOR each of the nominees for
Trustee.
The table below contains a brief description of the business experience and
positions held by each of the Trustees of the Company.
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business
Name Age Experience and Other Positions
---- --- ------------------------------------
<S> <C> <C>
Nominee for Election as
Class I Trustee:
George M. Lovejoy, Jr. 68 Mr. Lovejoy became a Trustee of the Company in
(1)(2)................... March 1999. Mr. Lovejoy has since 1994 been
President of Fifty Associates, a real estate
investment company of which he has been an
executive officer since 1966, and was a senior
executive officer from 1972 to 1993 of
Meredith & Grew, a real estate service company
of which he was President from 1978 to 1988
and Chairman from 1988 to 1993. He is a
Trustee of MGI Properties, Chairman of the
Investment Committee of Copley Investors
Limited Partnership and a Director or Trustee
of a number of funds in the Scudder family of
mutual funds. Mr. Lovejoy's professional
organization affiliations include Counselors
of Real Estate, the Greater Boston Building
Owners & Managers Associations and the Greater
Boston Real Estate Board, each of which
organizations he is a past President, the
International Council of Shopping Centers, the
Massachusetts and the National Associations of
Realtors and the Institute of Real Estate
Management. He is also a Trustee and a past
President of the New England Aquarium, a
Member of the Corporation of Northeastern
University, and a member of the New England
Advisory Committee of the Nature Conservancy.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business
Name Age Experience and Other Positions
---- --- ------------------------------------
<S> <C> <C>
Nominees for Election as
Class II Trustees:
Ronald L. Skates (1)....... 57 Mr. Skates has been a Trustee of the Company
since February 1998. Mr. Skates has been
President, Chief Executive Officer and a
Director of Data General Corporation since
1989. Prior to joining Data General
Corporation in 1986, Mr. Skates was a Partner
of Price Waterhouse LLP, certified public
accountants. He is a member of the American
Institute of Certified Public Accountants and
the Massachusetts Society of Certified Public
Accountants. He is also a Trustee of
Massachusetts General Hospital and a Director
of the Massachusetts High Technology Council.
W. Nicholas Thorndike 65 Mr. Thorndike has served as a Trustee of the
(1)(2).................... Company since February 1998. Mr. Thorndike
retired in 1988 from Wellington Management
Company/Thorndike, Doran, Paine and Lewis
where he was Chairman of the Board and
Managing Partner. Mr. Thorndike is a Director
of Courier Corporation, Data General
Corporation, the Providence Journal (where he
is Chairman of the Executive Committee), and
Bradley Real Estate, Inc. He also serves as a
Trustee of Massachusetts General Hospital,
having served as its Chairman of the Board
from 1987 to 1992 and President from 1992 to
1994, and serves as Trustee of Eastern
Utilities Associates, Northeastern University
and The Putnam Funds.
</TABLE>
Class III Trustees with Terms Expiring in 2000:
<TABLE>
<S> <C> <C>
Ferdinand Colloredo- 59 Ferdinand Colloredo-Mansfeld has been Chairman
Mansfeld................. of the Board of Trustees and Chief Executive
Officer of the Company since its formation in
October 1997. Mr. Colloredo-Mansfeld also
serves as the Chairman and Chief Executive
Officer of Cabot Advisors, Inc. Mr. Colloredo-
Mansfeld served as Chairman, Chief Executive
Officer and Chief Investment Officer of Cabot
Partners Limited Partnership from 1990 to
1997, having previously served in the same
positions with Cabot, Cabot & Forbes Realty
Advisors, Inc. since its formation in 1986.
Mr. Colloredo-Mansfeld previously served in
senior executive positions of Cabot, Cabot &
Forbes Company, a national real estate
development, management and construction firm,
becoming its Chief Financial Officer in 1973,
Chief Operating Officer in 1974 and Chief
Executive Officer in 1976, a position he held
until his retirement from that company 1989.
Mr. Colloredo-Mansfeld is a limited partner in
Brown Brothers Harriman & Co. and is a
Director of Data General Corporation and
Raytheon Company. He is Chairman of the Board
of Trustees of Massachusetts General Hospital.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business
Name Age Experience and Other Positions
---- --- ------------------------------------
<S> <C> <C>
Robert E. Patterson....... 54 Mr. Patterson has been President and a Trustee
of the Company since its formation in October
1997. Mr. Patterson served as Executive Vice
President, Director of Acquisitions and a
member of the Investment Committee of Cabot,
Cabot & Forbes Realty Advisors, Inc. and Cabot
Partners Limited Partnership from 1987 to
1997. Mr. Patterson is a Trustee of the Putnam
Group of Mutual Funds, a Trustee of the Sea
Education Association, and Chairman of the
Board of Trustees of the Joslin Diabetes
Center. He is a member of numerous industry
associations, including the National
Association of Real Estate Investment Trusts
and the Urban Land Institute.
Christopher C. Milliken 53 Mr. Milliken has been a Trustee of the Company
(1)(2)................... since February 1998. He has been President,
Chief Executive Officer and a Director of the
Boise Cascade Office Products Corporation
since April 1998, previously having served as
Senior Vice President, Operations from 1995 to
April 1998 and Eastern Regional Manager from
1990 to 1995. Prior to beginning his career at
Boise Cascade Office Products Corporation in
1977, Mr. Milliken served in various
merchandise management positions at Marshall
Field & Company from 1970 to 1977.
Class I Trustee with
Term Expiring in 2001:
Maurice Segall (1)(2)..... 69 Mr. Segall has been a Trustee of the Company
since February 1998. Mr. Segall has been a
senior lecturer at the MIT-Sloan School of
Management and a senior advisor to the Boston
Consulting Group since 1989. Until 1989, he
was Chairman, President and Chief Executive
Corporate Officer of Zayre Corporation, which
he joined as President and Chief Executive
Officer in 1978. Mr. Segall is a Director of
AMR Corporation and Harcourt General, Inc. He
is a Trustee of Massachusetts General Hospital
and the Boston Museum of Fine Arts.
</TABLE>
- --------
(1) Member of Audit Committee
(2) Member of Executive Compensation Committee
Meetings of the Board and Committees
The Board of Trustees held 10 meetings in 1998. The Board of Trustees has
two standing committees, the Audit and Compliance Committee and the Executive
Compensation Committee. The Company does not have a nominating committee.
Shareholder nominations must comply with the advance notice and other
requirements set forth in the Company's Bylaws.
The Audit and Compliance Committee makes recommendations concerning the
engagement of independent public accountants, reviews with the independent
public accountants the plans and results of the audit
6
<PAGE>
engagement, approves professional services provided by the independent public
accountants, reviews the independence of the independent public accountants,
considers the range of audit and non-audit fees and reviews the adequacy of
the Company's internal accounting controls. The Audit and Compliance Committee
consists solely of the Independent Trustees, with Mr. Skates as Chairman. It
held three meetings in 1998.
The Executive Compensation Committee determines compensation levels and
policies for the Company's senior executive officers and implements the
Company's Long Term Incentive Plan. The Executive Compensation Committee
consists of Messrs. Thorndike (Chairman), Lovejoy, Segall and Milliken, each
of whom is an Independent Trustee. It held four meetings in 1998.
Compensation of Trustees
Independent Trustees receive an annual retainer of $18,000 and per meeting
compensation of $1,000 for board meetings and $500 for committee meetings. The
Chairmen of the Audit Committee and the Executive Compensation Committee each
receive an additional $1,000 annually for their services in such capacities,
and each Trustee is reimbursed for out-of-town travel expenses incurred in
connection with attendance at Board and committee meetings. Each Independent
Trustee also receives, under the Company's Long Term Incentive Plan, an
initial grant of options to purchase 10,000 Common Shares on the date he or
she becomes a Trustee, and an additional grant of options to purchase 4,000
Common Shares each year on the date of the Company's annual meeting of
shareholders provided they have been reelected or are continuing to serve as
Trustees following the meeting. The exercise price per share for options
granted to Independent Trustees is the market price of a Common Share on the
date of grant. Options granted to Independent Trustees become exercisable on
the first anniversary of the date of grant.
7
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation
earned by the Company's Chief Executive Officer and each of its six other most
highly compensated executive officers (collectively, the "Named Executive
Officers") during the fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
------------------ -------------
Securities
Name and Principal Underlying All Other
Position Year Salary(1) Bonus(1) Options(#)(2) Compensation(3)
------------------ ---- --------- -------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Ferdinand Colloredo-
Mansfeld................. 1998 $240,315 $168,200 500,000 $1,800
Chairman of the Board and
Chief Executive Officer
Robert E. Patterson....... 1998 $222,178 $155,500 425,000 $1,800
President
Franz Colloredo-Mansfeld.. 1998 $158,698 $119,000 375,000 $1,800
Senior Vice President and
Chief Financial Officer
Andrew D. Ebbott.......... 1998 $158,699 $169,000 300,000 $1,800
Senior Vice President--
Director of Acquisitions
Howard B. Hodgson, Jr..... 1998 $158,699 $119,000 300,000 $1,800
Senior Vice President--
Director of Real Estate
Operations
Eugene F. Reilly.......... 1998 $158,699 $119,000 300,000 $1,800
Senior Vice President--
Director of Development
Neil E. Waisnor........... 1998 $158,699 $119,000 300,000 $1,800
Senior Vice President--
Finance, Treasurer and
Secretary
</TABLE>
- --------
(1) For the period February 4, 1998 (inception of operations) through December
31, 1998.
(2) Option grants include rights to receive distribution equivalent units
("DEUs") annually based on the extent to which the annual dividend rate on
the Company's Common Shares exceeds the average dividend rate on the
common shares of the companies comprising the Standard & Poor's 500 Stock
Index. DEUs vest on the same vesting schedule as the options to which they
relate and are to be settled in Common Shares upon exercise or termination
of the related vested options, with the number of such shares being
determined at the grant dates of the DEUs. The Common Share equivalent
amounts for DEUs granted to date are: Ferdinand Colloredo-Mansfeld,
14,455; Robert E. Patterson, 11,358; Franz Colloredo-Mansfeld, 10,325; and
Andrew D. Ebbott, Howard B. Hodgson, Jr., Eugene F. Reilly and Neil E.
Waisnor, 8,260 each.
(3) Consists of Company contribution to officer's accounts under the Company's
401(k) Plan. Does not include value attributable to DEUs granted to date.
8
<PAGE>
Option Grants
The following table provides information concerning grants of options to
purchase Units made to the Named Executive Officers during 1998.
<TABLE>
<CAPTION>
Individual Grants(1) Potential Realizable
--------------------------------------------- Value at Annual Rates
Number of of Stock Price
Securities Percent of Exercise Appreciation for
Underlying Total Options or Base Option Term(2)
Options Granted to Price per Expiration ---------------------- -------
Name Granted Employees(3) Share Date 5% 10%
- ---- ---------- ------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ferdinand Colloredo-
Mansfeld............... 350,000 11.1% $20.00 02/04/08 $4,402,262 $11,156,197
150,000 4.8% 19.78 12/17/08 1,865,930 4,728,634
Robert E. Patterson..... 275,000 8.7% 20.00 02/04/08 3,458,920 8,765,584
150,000 4.8% 19.78 12/17/08 1,865,930 4,728,634
Franz Colloredo-
Mansfeld............... 250,000 7.9% 20.00 02/04/08 3,144,473 7,968,712
125,000 4.0% 19.78 12/17/08 1,554,942 3,940,528
Andrew D. Ebbott........ 200,000 6.4% 20.00 02/04/08 2,515,579 6,374,970
100,000 3.2% 19.78 12/17/08 1,243,954 3,152,423
Howard B. Hodgson, Jr... 200,000 6.4% 20.00 02/04/08 2,515,579 6,374,970
100,000 3.2% 19.78 12/17/08 1,243,954 3,152,423
Eugene F. Reilly........ 200,000 6.4% 20.00 02/04/08 2,515,579 6,374,970
100,000 3.2% 19.78 12/17/08 1,243,954 3,152,423
Neil E. Waisnor......... 200,000 6.4% 20.00 02/04/08 2,515,579 6,374,970
100,000 3.2% 19.78 12/17/08 1,243,954 3,152,423
</TABLE>
- --------
(1) Options granted under the Company's Long Term Incentive Plan upon the
closing of the Company's initial public offering in February 1998, and
additional grants in December 1998. Options vest in four equal annual
installments beginning on the first anniversary of the date of grant,
except that all options would vest upon a change in control of the Company
(as defined in the Long Term Incentive Plan).
(2) Hypothetical gains based on assumed rates of annual compounded share price
appreciation of 5% and 10% from the date of grant over the full option
term. The 5% and 10% assumed rates of appreciation are mandated by the
rules of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of future increases in the price of its
Common Shares or the Units. Does not include values attributable to DEU's
granted to date.
(3) Based on an aggregate of options to purchase 3,145,015 Units granted to
employees during the year ended December 31, 1998.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Value
The following table provides information concerning exercised and
unexercised options held by the Named Executive Officers at December 31, 1998.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying In-the-Money
Unexercised Options Options
at December 31, 1998 at December 31, 1998(1)
------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------ ----------- ------------- ----------- -------------
Ferdinand Colloredo-
Mansfeld............... -- -- 0 500,000 0 $251,750
Robert E. Patterson..... -- -- 0 425,000 0 218,938
Franz Colloredo-
Mansfeld............... -- -- 0 375,000 0 191,563
Andrew D. Ebbott........ -- -- 0 300,000 0 153,250
Howard B. Hodgson, Jr... -- -- 0 300,000 0 153,250
Eugene F. Reilly........ -- -- 0 300,000 0 153,250
Neil E. Waisnor......... -- -- 0 300,000 0 153,250
</TABLE>
- --------
(1) Does not include values attributable to DEU's granted to date.
9
<PAGE>
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee of the Board of Trustees (the
"Committee") establishes and administers the executive compensation and
benefit policies and programs for all senior executive officers. The Committee
consists solely of Independent Trustees. The Committee considers and
recommends to the Board of Trustees an overall compensation philosophy for the
Company and its affiliates. It also considers and recommends performance or
operating goals to the Board of Trustees for participants in the Company's
incentive plans, and administers incentive compensation and equity-based
plans.
Executive Compensation Goals
The Committee considers the following goals:
. To attract, develop and retain the industry's best people
. To align shareholder and employee interests
. To create shareholder and employee wealth
. To foster a work environment which inspires continuous innovation
. To accomplish the foregoing goals in the most tax efficient manner to
employees and the Company
In order to fulfill the Committee's responsibilities in the Company's first
year, the Company engaged a nationally recognized firm to advise the Company
on compensation matters. In July 1998, this firm issued a report that provided
recommendations concerning a structured compensation program. The report
included a compensation framework which proposed the following:
. Salaries should be set principally at the median market value of the
position and assessed annually. Each benchmark position has a market
range, typically set at the 25th and 75th percentile of comparable market
levels for the position.
. Annual incentive bonuses should be clearly linked to performance. A
component of the performance standard should be linked to attainment of a
common Company-wide goal, FFO growth, and a component should be linked to
individual quantitative and qualitative goals.
. Long-term incentive grants are to be made with the objective of providing
senior executives and other employees with a capital accumulation
opportunity commensurate with increases in shareholder value. Grant levels
should be based on real estate and general industry practice.
The Executive Compensation Committee adopted the report as a guide for
establishing compensation to management and for management to apply for
establishing compensation to all other employees of the Company. The
components of the structured compensation program for senior executives are as
follows:
Base Salary
Senior executive salary levels are established on the basis of a number of
factors including management recommendations, industry comparables, individual
performance and overall Company results.
Annual Incentives
The Company's senior executive officers participate in an annual incentive
cash bonus plan. The target bonus amount is established based upon bonus
levels for positions with comparable responsibilities at other public real
estate investment trusts and recommendations contained in the consultant's
report. Up to 75% of the annual target bonus is based on pre-established goals
concerning growth in FFO. The remaining discretionary portion is awarded based
on achievement of individual goals and extraordinary contributions to the
Company's results for the past year.
10
<PAGE>
Long-Term Incentive Plan
Awards of options under the Long-Term Incentive Plan are designed to match
senior executive compensation to the creation of shareholder value and allow
the senior executives to share in the success of the Company. Awards under the
Long-Term Incentive Plan are based on recommendations provided in the
compensation report and are discretionary.
Compensation of Chief Executive Officer
For 1998, the Executive Compensation Committee evaluated the compensation of
Mr. Colloredo-Mansfeld utilizing the same philosophy and procedures as are
applied to the other senior executives of the Company. Mr. Colloredo-
Mansfeld's incentive bonus was primarily based on attainment of the Company's
1998 FFO goal. The Executive Compensation Committee also awarded options to
Mr. Colloredo-Mansfeld in accordance with the recommendation contained in the
consultant's report.
EXECUTIVE COMPENSATION COMMITTEE
W. Nicholas Thorndike, Chairman
Christopher C. Milliken
Maurice Segall
11
<PAGE>
Performance Graph
As a part of the rules concerning executive compensation disclosure, the
Company is required to provide a chart comparing the yearly percentage change
in the cumulative total stockholder return on the Common shares over a five-
year period. However, since the Common Stock has been publicly traded only
since January 30, 1998, such information is provided from that date through
December 31, 1998.
The following line graph compares the change in the Company's cumulative
stockholder return on its shares of Common Stock from January 30, 1998 to
December 31, 1998, to the cumulative total return of the Standard & Poor's 500
Stock Index ("S&P 500 Index"), the NAREIT Equity REIT Total Return Index
("NAREIT Equity Index"), and Cabot Trust's Peer Group Index(1). The line graph
starts at January 30, 1998, the date that the Company's Common Shares
commenced trading on the New York Stock Exchange. The graph assumes the
investment of $100 in the Company and each of the indices and, as required by
the Securities and Exchange Commission, the reinvestment of all distributions.
The return shown on the graph is not necessarily indicative of future
performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG CABOT INDUSTRIAL TRUST,
S&P 500 INDEX, NAREIT EQUITY INDEX AND PEER INDEX(1)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cabot Index NAREIT S&P
<S> <C> <C> <C> <C>
1/30/98 100.00 100.00 100.00 100.00
2/27/98 107.19 97.37 98.20 107.04
3/31/98 119.06 98.32 100.00 112.39
4/30/98 113.13 92.33 96.88 113.41
5/29/98 109.69 91.99 96.06 111.28
6/30/98 106.88 93.45 95.92 115.66
7/31/98 94.69 85.44 89.47 114.32
8/31/98 93.13 76.88 81.15 97.65
9/30/98 105.63 88.06 86.20 103.75
10/30/98 100.00 82.81 84.57 112.08
11/30/98 104.69 83.03 85.73 118.70
12/31/98 102.19 83.37 84.14 125.40
</TABLE>
(1) Peer index includes AMB Property Corporation, First Industrial Realty Trust,
Inc., Meridian Industrial Trust, Inc. and ProLogis Trust.
12
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
Employment Agreements
Messrs. Ferdinand Colloredo-Mansfeld, Robert E. Patterson and Franz
Colloredo-Mansfeld and each of the other Named Executive Officers have entered
into employment agreements with the Company and the Operating Partnership.
Each of the agreements with Messrs. Ferdinand Colloredo-Mansfeld, Robert E.
Patterson and Franz Colloredo-Mansfeld is for an initial term of three years,
and each year the term automatically extends an additional year unless
terminated in advance. The agreements with each of the other Named Executive
Officers are for initial terms of two years, and each year the term
automatically extends an additional year unless terminated in advance. The
agreements each provide for annual base compensation in the amounts set forth
in the Summary Compensation Table above, adjusted to reflect a full calendar
year, and an annual Company cash bonus to be determined by the Board of
Trustees or the Executive Compensation Committee. The base annual compensation
may be increased in subsequent years by action of the Board of Trustees or the
Executive Compensation Committee. In the event of a change in control of the
Company, each agreement provides the employee or the employer with the option
of terminating the agreement resulting in severance payments equal to three
times the sum of the current base salary and the annual bonus paid for the
preceding year and also provides for tax reimbursements in certain
circumstances. Each executive is required under the terms of his employment
agreement to devote substantially all of his business time to the affairs of
the Company. The agreements also prohibit each executive from engaging,
directly or indirectly, during the term of his employment in activities that
compete with those of the Company or the Operating Partnership.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Company Formation Transactions
In connection with the formation of the Company and the Operating
Partnership, certain executive officers, members of their family and certain
other persons (collectively, the "Cabot Group Participants") received a total
of 1,705,506 Units in exchange for their interests in C-M Holdings L.P. and
its affiliated partnerships (the "C-M Property Partnerships") and/or Cabot
Partners Limited Partnership ("Cabot Partners"), respectively. These Units
(representing approximately 3.9% of the common equity of the Company, assuming
all outstanding Units not held by the Company are exchanged for Common Shares
on a one-for-one basis) had a total value of approximately $34.1 million,
based on the initial public offering price of the Company's Common Shares of
$20.00 per share. The Cabot Group Participants' partnership interests in the
C-M Property Partnerships and Cabot Partners had an aggregate net book value
as of September 30, 1997 of $5.1 million. The aggregate cost to the Cabot
Group Participants for these partnership interests was $8.8 million, resulting
in an unrealized gain of approximately $25.3 million. The C-M Property
Partnerships were owned by Ferdinand Colloredo-Mansfeld, the Company's
Chairman and Chief Executive Officer, and members of his immediate family,
including Franz Colloredo-Mansfeld, the Company's Chief Financial Officer,
with Ferdinand Colloredo-Mansfeld owning a 97% partnership interest therein
and Franz Colloredo-Mansfeld and other family members holding 1% and 2%
partnership interests therein, respectively.
Of the total number of Units received by the Cabot Group Participants in
connection with the formation of the Company and the Operating Partnership,
(i) Ferdinand Colloredo-Mansfeld received 1,331,657 Units having a value,
based on the initial public offering price, of approximately $26.6 million in
exchange for his partnership interests in the C-M Property Partnerships and
Cabot Partners, which had an aggregate cost of approximately $4.7 million and
$3.9 million, respectively, (ii) Robert E. Patterson, President of the
Company, received 128,590 Units having a value, on such basis, of
approximately $2.6 million in exchange for his partnership interests in Cabot
Partners, which had an aggregate cost of $59,000 and (iii) the other executive
officers of the Company received 165,904 Units having a value, on such basis,
of approximately $3.3 million in exchange for partnership interests in the C-M
Property Partnerships and Cabot Partners, which had an aggregate cost of
$62,000. In
13
<PAGE>
addition, the Company reimbursed Cabot Partners for approximately $1.2 million
of out-of-pocket expenses incurred by Cabot Partners in connection with the
formation of the Company pursuant to the terms of the Contribution Agreement,
dated October 10, 1997, entered into in connection with the formation of the
Company.
In connection with the formation of Cabot Advisors, Inc. ("Cabot Advisors")
Cabot Partners contributed to Cabot Advisors certain advisory contracts and
other assets relating to properties that were not contributed to the Company
or the Operating Partnership. The Operating Partnership owns all of the non-
voting preferred stock of Cabot Advisors, is entitled to receive quarterly
cash dividends equal to 95% of Cabot Advisors's net operating cash flow and is
senior in liquidation or dissolution to the extent of the liquidation
preference of the preferred stock to Cabot Advisors's common equity. Ferdinand
Colloredo-Mansfeld acquired all of the voting common shares of Cabot Advisors
for a cash purchase price of $100,000 and is entitled to receive quarterly
cash dividends equal to 5% of Cabot Advisors's net operating cash flow.
Repayment of Debt
Approximately $18.3 million of indebtedness secured by the properties
contributed by the C-M Property Partnerships to the Operating Partnership was
assumed by the Operating Partnership and approximately $13.2 million of that
indebtedness was repaid from the proceeds of the Company's initial public
offering and a concurrent private placement of Common Shares.
Advisory and Property Management Services
During 1998, Cabot Advisors provided asset management and property
management services related to properties owned by Ferdinand Colloredo-
Mansfeld for which it earned $158,404 and $77,122, respectively.
The level of fees charged is consistent with rates charged by Cabot Advisors
to unrelated third parties.
Indemnification
The Company has entered into indemnification agreements with each of its
executive officers and Trustees that require that the Company indemnify such
persons to the fullest extent permitted by Maryland law and reimburse them for
legal and related expenses as incurred in connection with litigation to which
they may become subject as a result of their positions with the Company,
subject to an obligation to reimburse the Company if it is ultimately
determined that indemnification is not permitted in the circumstances.
Although the indemnification agreements provide substantially the same scope
of indemnification as that to which the Company's officers and Trustees are
entitled under the Company's Bylaws and applicable Maryland law, such
agreements may provide greater assurance to Trustees and executive officers
that indemnification will be available because, as contracts, they cannot be
modified unilaterally in the future by the Board of Trustees or the
shareholders to eliminate the rights they provide.
PROPOSAL 2. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed the firm of Arthur Andersen LLP as the Company's
independent public accountants for 1999. A proposal to ratify this appointment
will be presented at the Annual Meeting. The affirmative vote of a majority of
the votes cast at the Annual Meeting will be necessary to adopt this proposal.
If the selection is ratified, the Board may nonetheless, in its discretion,
direct the appointment of a different independent accounting firm at any time
if the Board determines that such a change would be in the best interests of
the Company and its shareholders.
The Company expects that representatives of Arthur Andersen LLP will attend
the Annual Meeting, will have the opportunity to make a statement if they
desire and will be available to respond to questions from shareholders.
14
<PAGE>
The Board of Trustees recommends a vote FOR the ratification of Arthur
Andersen LLP as the Company's independent public accountants.
OTHER MATTERS
The Board of Trustees is not aware of any matters to be presented at the
Annual Meeting other than those listed in the notice of the meeting. If any
other matters do come before the Annual Meeting, the holders of proxies
solicited hereby will vote on such other matters in their discretion in
accordance with their best judgment.
SHAREHOLDER PROPOSALS
In the event any shareholder intends to present a proposal at the annual
meeting of shareholders to be held in 2000, such proposal must be received by
the Secretary of the Company, in writing, on or before December 3, 1999, to be
considered for inclusion in the Company's proxy materials relating to that
meeting. Shareholder proposals also must comply with the advance notice and
other requirements set forth in the Company's Bylaws, including the
requirement that any such proposal must, with certain exceptions if the date
of the annual meeting is changed from that of this year's Annual Meeting, be
submitted to the Secretary of the Company at least 60 and not more than 90
days prior to the first anniversary of the 1999 Annual Meeting (May 3, 2000).
ADDITIONAL INFORMATION
The Annual Report for the year ended December 31, 1998 prepared by the
Company, accompanies this proxy statement. The Company will furnish a copy of
the Form 10-K filed by the Company with the Securities and Exchange Commission
for the year ended December 31, 1998 without charge to any stockholder
solicited hereby. The Company will also furnish to any such stockholder a copy
of the exhibits to the Form 10-K upon payment of copying costs. Requests
should be addressed to Investor Relations, Cabot Industrial Trust, Two Center
Plaza, Suite 200, Boston, Massachusetts 02108-1906.
By Order of the Board of Trustees,
/s/ Neil E. Waisnor
Neil E. Waisnor
Senior Vice President-Finance,
Treasurer and Secretary
Boston, Massachusetts
April 2, 1999
15
