<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[DUKE REALTY INVESTMENTS, INC.]
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(Name of Registrant as Specified in Its Charter)
[DUKE REALTY INVESTMENTS, INC.]
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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 transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
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(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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:
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1Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE> 2
[DUKE REALTY INVESTMENTS, INC. LETTERHEAD]
March 23, 1994
Dear Shareholder:
The directors and officers of Duke Realty Investments, Inc. join me in
extending to you a cordial invitation to attend the annual meeting of our
shareholders. This meeting will be held on Thursday, April 28, 1994 at 10:00
a.m., at the Radisson Plaza Hotel, Plaza A, Keystone at the Crossing,
Indianapolis, Indiana.
We believe that both the shareholders and management of Duke Realty
Investments, Inc. can gain much through participation at these meetings. Our
objective is to make them as informative and interesting as we can. We hope
you will plan to attend.
The formal notice of this annual meeting and the proxy statement appear on
the following pages. After reading the proxy statement, PLEASE MARK, SIGN, AND
RETURN THE ENCLOSED PROXY CARD TO ENSURE THAT YOUR VOTES ON THE BUSINESS
MATTERS OF THE MEETING WILL BE RECORDED.
We hope that you will attend this meeting. Whether or not you attend, we
urge you to return your proxy promptly in the postpaid envelope provided.
After returning the proxy, you may, of course, vote in person on all matters
brought before the meeting.
We look forward to seeing you on April 28.
Sincerely,
John W. Wynne
Chairman
<PAGE> 3
DUKE REALTY INVESTMENTS, INC.
8888 KEYSTONE CROSSING
SUITE 1200
INDIANAPOLIS, INDIANA
(317) 574-3531
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1994
The annual meeting of the shareholders of Duke Realty Investments,
Inc. (the "Company") will be held at the Radisson Plaza Hotel, Plaza A,
Keystone at the Crossing, Indianapolis, Indiana on April 28, 1994, at 10:00
a.m. EST, to consider and to take action on the following matters:
1. The election of four (4) Directors of the Company;
2. Approval of independent auditors.
3. The transaction of such other business as may properly come
before the meeting and any adjournments thereof.
Only shareholders of record at the close of business on March 3, 1994 are
entitled to notice of and to vote at this meeting and any adjournments thereof.
By order of the Board of Directors,
Dayle M. Eby,
Secretary
Indianapolis, Indiana
March 23, 1994
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK, DATE,
AND SIGN YOUR PROXY, AND MAIL IT IN THE STAMPED ENVELOPE ENCLOSED FOR YOUR
CONVENIENCE. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE COMPANY OF
FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING YOUR PROXY
PROMPTLY. RETURNING THE PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON
ON ALL MATTERS BROUGHT BEFORE THE MEETING.
<PAGE> 4
DUKE REALTY INVESTMENTS, INC.
8888 KEYSTONE CROSSING
SUITE 1200
INDIANAPOLIS, INDIANA
(317) 574-3531
PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1994
The accompanying proxy is solicited by the Board of Directors of Duke
Realty Investments, Inc. (the "Company") for use at the annual meeting of
shareholders to be held April 28, 1994 and any adjournments thereof. Only
shareholders of record as of the close of business on March 3, 1994 will be
entitled to vote at the annual meeting. When the proxy is properly executed and
returned, the shares it represents will be voted at the meeting in accordance
with any directions noted on the proxy. If no direction is indicated, the proxy
will be voted in favor of the proposals set forth in the notice attached to
this proxy statement.
The election of directors will be determined by a plurality of the shares
present in person or represented by proxy. The holder of each outstanding share
of common stock is entitled to vote for as many persons as there are directors
to be elected. All other matters to come before the meeting will be determined
by a majority of the shares present in person or represented by proxy. An
abstention on any such matter will have the same effect as a vote against the
matter. Any shareholder giving a proxy has the power to revoke it at any time
before it is voted. The approximate date of mailing of this proxy statement is
March 23, 1994.
VOTING SECURITIES AND BENEFICIAL OWNERS
The Company has only one class of stock outstanding, its common stock, of
which 16,046,144 shares were outstanding as of the close of business on
February 28, 1994. The following table shows, as of February 28, 1994, the
number and percentage of shares of common stock and interests ("Units") in Duke
Realty Limited Partnership, an affiliate of the Company (the "Operating
Partnership") held by each person known to the Company who owned beneficially
more than five percent of the issued and outstanding common stock of the
Company and certain executive officers and directors. Units may not be
converted into common stock of the Company until October 4, 1994, except upon
the occurrence of certain change of control events.
<TABLE>
<CAPTION>
(1) (2) (3)
Effective Economic
Beneficial Amount and Nature of Percent of Percent of Ownership of
Owner Beneficial Ownership All Shares All Shares/Units Executive Officers
----- -------------------- ---------- ---------------- ------------------
<S> <C> <C> <C> <C>
Thomas L. Hefner 2,506,149(4) 13.65% 12.24% 870,324
Daniel C. Staton 2,119,224(5) 11.79% 10.35% 850,916
Darell E. Zink, Jr. 2,507,287(6) 13.66% 12.24% 846,064
John W. Wynne 2,038,995(7) 11.51% 9.96% 734,181
Geoffrey Button 613,592(8) 3.68% 3.00% N/A
Howard L. Feinsand 1,000 (12) (12) N/A
Philip A. Nicely 1,611(9) (12) (12) N/A
John D. Peterson 14,990(10) (12) (12) N/A
Dr. Sydney C. Reagan 4,115 (12) (12) N/A
Lee Stanfield 2,381 (12) (12) N/A
Jay J. Strauss 1,289 (12) (12) N/A
Wellington Management Company 1,860,400(11) 11.59% 9.08% N/A
Directors and Executive Officers
as a Group (23 persons) 4,880,059 24.65%(13) 23.83% N/A
</TABLE>
<PAGE> 5
(1) Assumes exchange only of Units owned by such beneficial owner for shares of
Common Stock.
(2) Assumes exchange of all outstanding Units for Common Stock.
(3) Reflects shares and Units held directly by members of family and
proportionate economic interest in shares or Units owned by
various entities.
(4) Includes 186,308 shares owned by Mr. Hefner and members of his
family and 7,775 shares owned by DRA, Inc., a corporation in which
Mr. Hefner owns 11.1% of the outstanding capital stock. Also
includes the following Units of Duke Realty Limited Partnership
which are convertible into common shares: (i) 275,736 Units owned
directly by Mr. Hefner; (ii) 473,347 owned by Duke Investment
Company, a partnership in which Mr. Hefner owns a 25.5% beneficial
interest; (iii) 52,421 Units owned by Duke Associates No. 52
Limited Partnership, a partnership in which Mr. Hefner owns a 10%
beneficial interest; (iv) 380,712 Units owned by Park 100
Investors, Inc., a corporation in which Mr. Hefner owns 12.2% of
the outstanding capital stock; and (v) 1,129,850 Units owned by
DMI Partnership, a partnership in which Mr. Hefner owns a 20.71%
beneficial interest. Mr. Hefner's percentage of beneficial
ownership of shares only, assuming no conversion of Units of Duke
Realty Limited Partnership, is 1.21%.
(5) Includes 188,059 shares owned by Mr. Staton and 7,775 shares owned by DRA,
Inc., a corporation in which Mr. Staton owns 11.1% of the outstanding
capital stock. Also includes the following Units of Duke Realty Limited
Partnership which are convertible into common shares: (i) 267,772 Units
owned directly by Mr. Staton; (ii) 473,347 owned by Duke Investment
Company, a partnership in which Mr. Staton owns a 32.5% beneficial
interest; (iii) 52,421 Units owned by Duke Associates No. 52 Limited
Partnership, a partnership in which Mr. Staton owns a 10% beneficial
interest; and (iv) 1,129,850 Units owned by DMI Partnership, a partnership
in which Mr. Staton owns a 20.71% beneficial interest. Mr. Staton's
percentage of beneficial ownership of shares only, assuming no conversion
of Units of Duke Realty Limited Partnership, is 1.22%.
(6) Includes 196,442 shares owned by Mr. Zink and members of his family and
7,775 shares owned by DRA, Inc., a corporation in which Mr. Zink owns 11.1%
of the outstanding capital stock. Also includes the following Units of Duke
Realty Limited Partnership which are convertible into common shares: (i)
266,740 Units owned directly by Mr. Zink; (ii) 473,347 owned by Duke
Investment Company, a partnership in which Mr. Zink owns a 28.2% beneficial
interest; (iii) 52,421 Units owned by Duke Associates No. 52 Limited
Partnership, a partnership in which Mr. Zink owns a 10% beneficial
interest; (iv) 380,712 Units owned by Park 100 Investors, Inc., a
corporation in which Mr. Zink owns 2.2% of the outstanding capital stock;
and (v) 1,129,850 Units owned by DMI Partnership, a partnership in which
Mr. Zink owns a 20.71% beneficial interest. Mr. Zink's percentage of
beneficial ownership of shares only, assuming no conversion of Units of
Duke Realty Limited Partnership, is 1.27%.
(7) Includes: (i) 270,843 shares owned by Mr. Wynne and members of his family;
(ii) 7,775 shares owned by DRA, Inc., a corporation in which Mr. Wynne owns
44.5% of the outstanding capital stock and, (iii) 98,475 shares owned as
trustee under the Phillip R. Duke Irrevocable Trust. Also includes the
following Units of Duke Realty Limited Partnership which are convertible
into common shares: (i) 98,919 Units owned directly by Mr. Wynne; (ii)
52,421 Units owned by Duke Associates No. 52 Limited Partnership, a
partnership in which Mr. Wynne owns a 10% beneficial interest; (iv) 380,712
Units owned by Park 100 Investors, Inc., a corporation in which Mr. Wynne
owns 32.0% of the outstanding capital stock; and (v) 1,129,850 Units owned
by DMI Partnership, a partnership in which Mr. Wynne owns a 20.71%
beneficial interest. Mr. Wynne's percentage of beneficial ownership of
shares only, assuming no conversion of Units of Duke Realty Limited
Partnership, is 2.35%.
(8) Includes 613,592 Units of Duke Realty Limited Partnership which are
convertible into common shares owned by affiliates of Wyndham Investments
Limited, a property holding Company of Allied Lyons Pension Funds, of which
Mr. Button is Executive Director.
(9) Includes 108 shares owned by Mr. Nicely as custodian for his two children.
(10) Includes: (i) 5,849 shares owned by Mr. Peterson and members of
his family; (ii) 2,000 shares owned by Mr. Peterson as Trustee for
the Peterson Family GST Investment Share Trust; and (iii) 7,141
shares owned for investment purposes by City Securities
Corporation, a firm in which Mr. Peterson serves as Chairman of
the Board and Chief Executive Officer.
(11) Wellington Management Company ("WMC"), having an address of 75
State Street Boston, Massachusetts 02109, is deemed to be the
beneficial owner of 1,860,400 shares of the Company's common stock
owned by numerous of WMC's investment advisory clients. None of
these clients, individually, is known to own a beneficial interest
in more than 5% of the Company's stock. Information about these
shareholders was obtained from a Schedule 13G provided to the
Company in December, 1993, and amended in January, 1994.
(12) Represents less that 1% of the outstanding shares.
(13) The percentage of shares only beneficially owned by the directors
and executive officers as a group, assuming no conversion of Units
of Duke Realty Limited Partnership, is 7.03%.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Four Directors are to be elected. Howard L. Feinsand, Philip A.
Nicely, Daniel C. Staton and Jay J. Strauss have been nominated for a term of
three years and until their successors are elected and qualified. All nominees
are members of the present Board of Directors. The other directors listed in
the table below will continue in office until expiration of their terms. If, at
the time of the 1994 annual meeting, any of the nominees is unable or declines
to serve, the discretionary authority provided in the proxy may be exercised to
vote for a substitute or substitutes. The Board of Directors has no reason to
believe that any substitute nominee or nominees will be required.
<PAGE> 6
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THE ELECTION OF THE
FOLLOWING NOMINEES:
<TABLE>
<CAPTION>
Name, Age, Principal Occupation(s) and Director
Business Experience During Past 5 Years Since
- ----------------------------------------- -----
<S> <C>
NOMINEES FOR TERMS EXPIRING 1997
HOWARD L. FEINSAND, Age 46 1988
Senior Vice President of Polaris Aircraft Leasing Corporation; Partner of Golenbock and
Barrell, attorneys, 1987 to 1989.
PHILIP A. NICELY, Age 52 1987
Partner of Bose McKinney & Evans, attorneys.
DANIEL C. STATON, Age 41 1993
Executive Vice President and Chief Operating Officer of the Company.
JAY J. STRAUSS, Age 58 1985
Chairman and Chief Executive Officer of Regent Realty Group, Inc.,
a general real estate and mortgage banking firm.
DIRECTORS WHOSE TERMS EXPIRE 1995
GEOFFREY BUTTON, Age 45 1993
Executive Director of Wyndham Investments Limited, a property holding company of
Allied Lyons Pension Funds; Director of Major Realty.
JOHN D. PETERSON, Age 60 1985
Chairman and Chief Executive Officer of City Securities Corporation, a securities
brokerage firm; Director of Capital Industries, Inc. and Lilly Industries, Inc.
DR. SYDNEY C. REAGAN, Age 78 1985
Professor Emeritus of Real Estate at Southern Methodist University; Owner of
Dr. Syd Reagan Real Estate, a commercial real estate investment and brokerage firm.
DARELL E. ZINK, JR., Age 47 1993
Executive Vice President, Chief Financial Officer and Assistant Secretary of
the Company; Director of Inland Mortgage Corporation.
DIRECTORS WHOSE TERMS EXPIRE 1996
LEE STANFIELD, Age 87 1985
Independent real estate developer, investor and consultant.
JOHN W. WYNNE, Age 61 1985
Chairman of the Board of the Company; Director of First Indiana Corporation;
retired from Bose McKinney & Evans, attorneys.
THOMAS L. HEFNER, Age 47 1993
President and Chief Executive Officer of the Company.
</TABLE>
The Board of Directors of the Company met 10 times during their last
fiscal year. All directors attended in excess of 75% of the aggregate of (1)
the total number of meetings of the Board of Directors of the Company held
during the time he was a Director and (2) at least 75% of the total number of
meetings held by all Company committees on which he served.
<PAGE> 7
CERTAIN COMMITTEES OF THE BOARDS OF DIRECTORS OF THE COMPANY
Among other committees, the Board of Directors of the Company has an
Audit Committee and an Executive Compensation Committee. The functions of the
Audit Committee are to evaluate audit performance, handle relations with the
Company's independent auditors, and evaluate policies and procedures related to
internal audit functions and controls. The members of the Audit Committee in
1993 were Messrs. Feinsand, Reagan, Stanfield and Strauss. The Audit Committee
includes only directors who are not officers or employees of the Company (the
"Unaffiliated Directors"). The Company's Audit Committee met once during 1993.
The functions of the Executive Compensation Committee are to review and
make recommendations to the Board of Directors with respect to the compensation
of directors, officers, and employees of the Company and to implement the
Company's stock option plan. The members of the Executive Compensation
Committee are Messrs. Button, Feinsand, Peterson, Reagan and Strauss, all of
whom are Unaffiliated Directors. The Committee met twice during 1993.
Nominees for election as a director of the Company are selected by the
Board of Directors, acting as a nominating committee. Nominees to serve as
Unaffiliated Directors are nominated by the present Unaffiliated Directors.
CERTAIN TRANSACTIONS
REORGANIZATION OF THE COMPANY
In connection with (i) the acquisition of substantially all of the
assets of a number of affiliated companies and partnerships engaged in the
development and management of commercial real estate ("Duke Associates"), (ii)
the public offering of additional shares of common stock (the "Offering"), and
(iii) the formation of certain partnerships to hold title to certain property
and to conduct certain real estate management and development activities
(collectively, the "Reorganization"), certain directors and officers and
persons who hold more than 5% of the shares of common stock of the Company (or
Units) contributed assets to (i) the Company, (ii) the Operating Partnership,
(iii) Duke Realty Services Limited Partnership, an affiliate of the Company
(the "Services Partnership") and, (iv) Duke Construction Limited Partnership,
an affiliate of the Company (the "Construction Partnership") in return for
shares of common stock in the Company, Units in the Operating Partnership, and
interests in the Services Partnership and the Construction Partnership.
These transactions include the following: (i) John W. Wynne, Thomas L. Hefner,
Daniel C. Staton and Darell E. Zink, Jr. (each an executive officer and
director of the Company) each contributed all of their respective interests in
certain properties and undeveloped land (the "Contributed Real Estate") in
return for beneficial ownership of 225,887 Units, 449,161 Units, 428,002 Units
and 414,767 Units, respectively; (ii) Gary A. Burk, Michael Coletta, David R.
Mennel, Robert D. Fessler, Donald J. Hunter, Wayne H. Lingafelter and Francis
B. Quinn (each an executive officer of the Company) each contributed all of
their respective interests in the Contributed Real Estate in return for
beneficial ownership of 107,728 Units, 43,474 Units, 96,965 Units, 6,411 Units,
4,010 Units, 2,897 Units and 1,561 Units respectively; (iii) Messrs. Wynne,
Hefner, Staton, Zink, Burk, Coletta and Mennel (collectively, the "Principal
Owners") received from certain of the operating companies of Duke Associates
dividends in the aggregate amount of $20.0 million and used the proceeds of
those dividends to purchase 833,332 unregistered shares of common stock from
the Company. Messrs. Wynne, Hefner, Staton, Zink, Burk, Coletta and Mennel
received 172,583; 172,583; 172,583; 172,583; 62,583; 17,917; and 62,500 shares,
respectively, in such transaction; (iv) DMI Partnership, an Indiana general
partnership which is wholly-owned, indirectly, by the Principal Owners,
transferred to the Operating Partnership all of its continuing contracts for
the provision of leasing, property management and construction services with
respect to the Contributed Real Estate and the properties owned by the Company
prior to the Reorganization (the "Current Properties") and certain other assets
in exchange for 1,129,850 Units, and transferred to the Services Partnership
and the Construction Partnership certain other leasing, property management,
real estate development, construction and miscellaneous tenant services
businesses, subject to all related liabilities, in exchange for limited
partnership interests in the Services Partnership and Construction Partnership;
and (v) Geoffrey Button (a director of the Company) is an Executive Director of
Wyndham Investments Limited, affiliates of which contributed all of their
interests in the Contributed Real Estate in return for 613,592 Units.
The aggregate number of shares of common stock, Units or interests in
partnerships issued or transferred in the foregoing transactions was determined
by negotiation among the Company, the Principal Owners, and the underwriters of
the stock issued in the Offering. Because of the affiliation between the
Company and Duke Associates, negotiations on behalf of the Company were
conducted by a special committee of the Unaffiliated Directors.
<PAGE> 8
In connection with the repayment of debt as part of the Reorganization,
the Principal Owners were released from certain personal guarantees on loans
respecting the Contributed Real Estate. At the time of the Reorganization, such
real estate was subject to debt obligations in the amount of $413.7 million.
Debt on certain of the Contributed Real Estate in the amount of $258.1 million
was retired by the Operating Partnership and the Principal Owners were relieved
of personal liability for $194.9 million of such debt. Debt on certain other
Contributed Real Estate in the amount of $155.6 million was assumed by the
Operating Partnership. Of the debt assumed by the Operating Partnership, the
Principal Owners were released from personal guaranties relating to $23.5
million of such debt. While the Principal Owners were not released from their
personal guaranties for $58.1 million of the assumed debt, the Operating
Partnership has indemnified them from any liability with respect to such debt.
The Services Partnership and the Construction Partnership provided and
will continue to provide management, leasing, construction and other
miscellaneous tenant related services to certain properties that were not
contributed in the Reorganization and are still owned by entities in which the
Principal Owners have interests (the "Excluded Properties"). Management fees
are generally equal to between 3% and 4% of revenue collected from the
property. Leasing fees are generally equal to between 4% and 6% of the rent
payable over the life of the lease. Construction fees are generally equal to
between 5% and 10% of construction costs. In 1993, the Services Partnership
received $654,000 for services provided to the Excluded Properties, and the
Construction Partnership received $231,000 for such services. The Company
believes that the terms of such services are at least as favorable to the
Company as those available generally in the market.
CERTAIN OTHER RELATIONSHIPS.
Prior to the Reorganization, the Current Properties were managed on a
day-to-day basis by Duke Management, Inc., an affiliate of the Company, which
also was responsible for leasing the Current Properties through an affiliated
leasing agent, Duke Realty Corp. For its services to the Company, Duke
Management, Inc. was paid in 1993, as approved by the Unaffiliated Directors, a
management fee of $381,000 and leasing fees of $277,000. The Principal Owners
are the shareholders, directors and, in certain cases, the officers, of both
Duke Management, Inc. and Duke Realty Corp. In the Reorganization, Duke
Management, Inc. and Duke Realty Corp. transferred their assets and liabilities
to DMI, the Operating Partnership began conducting the management and leasing
of the Current Properties and the Contributed Real Estate, and the Services
Partnership began offering such services to third parties on a fee basis.
During 1993, the Company also had the following relationships. The
Company leased various office space from partnerships in which the Principal
Owners have equity interests. In 1993, the aggregate rent under such leases was
approximately $124,000. The Company believes that the amounts of such rent are
comparable to the rent paid for similar space in the area. An affiliate of Duke
Associates, in which the Principal Owners have an equity interest, entered into
an agreement in May, 1993 to construct and lease a 21,000 square foot building
in Cincinnati, Ohio. Prior to the Reorganization, the Company agreed to acquire
such building and such affiliate agreed to convey such building to the Company
for the amount of $1,325,000. The Company retained the law firm of Bose
McKinney & Evans, of which Philip A. Nicely (a director of the Company) is a
partner, to render legal services and paid such firm in 1993, fees of
approximately $270,000 for general legal services and approximately $1,854,000
for legal services rendered in connection with the Reorganization. John D.
Peterson, a director of the Company, is chairman of the board and a director of
City Securities Corporation, which acted as a participating underwriter in the
Offering. Mr. Peterson did not participate in any determination of the public
offering price of the common stock sold in the Offering. The Company purchased
through City Securities Corporation's insurance agency certain casualty
insurance for which the Company paid premiums of $ 86,000 in 1993. For its
services as broker, City Securities Corporation received brokerage commissions
of $15,000 in 1993. The Company believes that the amounts of such premiums and
commissions are no greater than would be generally charged in transactions with
unrelated parties.
EXECUTIVE COMPENSATION
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
Prior to the Company's Reorganization with Duke Associates on October 4,
1993, the Company had only two employees. The total compensation for these
employees was less than $100,000 annually.
As a result of the Reorganization, the Company's assets and gross revenue
increased 5.2 times, its market capitalization increased nearly 10 times and
the number of employees increased from 2 to more than 350. In recognition of
the very
<PAGE> 9
substantial change in the size and scope of the Company, the Board of
Directors formed its Executive Compensation Committee on July 29, 1993. The
Executive Compensation Committee approves compensation policy for all employees
and sets compensation for the Company's executive officers. The Executive
Compensation Committee is comprised entirely of Unaffiliated Directors.
In assessing the appropriateness of the total compensation package for
the Company's executive officers, including the CEO, the Executive Compensation
Committee sought to (i) insure compensation was adequate to enable the Company
to attract and retain the high quality of management required and (ii) align
the financial interests of the Company's executive officers directly with those
of the Company's shareholders. This strategy was implemented by combining
relatively low base salaries for the executive officers with relatively
generous stock options. In order to reach this conclusion, the Committee
carefully reviewed the total compensation packages provided executive officers
of other publicly traded real estate investment trusts of similar size (based
upon total market capitalization), number of properties and employees, type of
properties and third party management, leasing and construction activities.
While the Committee believes the Company's performance for the fourth
quarter of 1993 (the only period relevant to this assessment) was excellent, no
bonuses were paid to the Named Executive Officers (as herein after defined) for
1993. During 1994, the Committee will study, and hopes to adopt, a policy for
directly correlating growth of Funds from Operations to incentive pay for most
of the Company's employees. The Committee will also study incentive
compensation plans for the executive officers, including the CEO, that relate
possible bonuses to both growth in Funds from Operations and the attainment of
longer-term corporate goals and objectives. In light of the relatively low
salaries of the Company's executive officers, the Committee has not developed a
position regarding the new Internal Revenue Code Provision limiting deductions
for salaries to $1.0 million per person.
COMPENSATION COMMITTEE
Geoffery Button
Howard L. Feinsand
John D. Peterson
Sydney C. Reagan
Jay J. Strauss
PERFORMANCE GRAPH
The following line graph compares, over the last five years, the yearly
percentage change in the cumulative total shareholder return on the Company's
common stock with the cumulative total return of the S&P 500 Index, the
cumulative total return of the NAREIT Equity REIT Total Return Index and the
cumulative total return of the peer group used in the Company's 1993 Proxy
Statement.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
COMPANY COMMON STOCK, S&P 500 INDEX,
NAREIT EQUITY REIT TOTAL RETURN INDEX
AND 1993 PROXY STATEMENT PEER GROUP
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
DATE: Duke Realty Investments, Inc. NAREIT EQUITY REIT Total Return S & P 500 Peer Group Used in 1993
- ---- ----------------------------- ------------------- ----------------------- ------------------------
<S> <C> <C> <C> <C>
1988 100 100 100 100
1989 95.24 108.84 131.49 95.44
1990 67.77 92.18 127.32 59.94
1991 92.58 125.02 166.21 67.5
1992 96.06 143.26 178.96 74.05
1993 146.5 171.42 196.84 88.97
</TABLE>
Assumes that the value of the investment in the Company's stock and each index
was $100 on December 31, 1988, and that all dividends were reinvested.
- -------------------------------
*Assumes that the value of the investment in the Company's stock and each index
was $100 on December 31, 1988 and that all dividends were reinvested. The
NAREIT Equity REIT Total Return Index contains performance data for real estate
investment trusts that hold equity interests in real estate. As a result of the
Reorganization, the peer group index used in the 1993 Proxy Statement may no
longer provide an accurate comparison of the Company's performance. The peer
group is no longer used by the Company because the peer group consists of seven
equity real estate investment trusts with market capitalizations at December
31, 1992 of between $30.0 million and $50.0 million. The Company, at December
31, 1993, had a market capitalization in excess of $450.0 million when
including Units convertible into common shares. The peer group index is,
nonetheless, included in the performance graph for this transitional year
pursuant to regulations adopted by the Securities and Exchange Commission. The
companies included in the peer group are The Chicago Dock and Canal Trust,
Copley Properties, Dial REIT, Eastgroup Properties, MSA Realty Corporation,
Property Capital Trust and Prudential Realty Trust.
SUMMARY
The following table sets forth the compensation awarded to, earned by,
or paid to John W. Wynne, the chief executive officer prior to the
Reorganization, and to Thomas L. Hefner, the chief executive officer after the
Reorganization (collectively, the "Named Executive Officers"). Prior to the
Reorganization on October 4, 1993, the Company did not pay
<PAGE> 10
any compensation to its chief executive officer and did not pay to any other
person compensation in excess of $100,000. During 1993, no one received from
the Company compensation in excess of $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term Compensation
Annual Compensation Awards Payouts
Restricted Securities
Name and Principal Other Annual Stock Underlying LTIP All Other
Position Year Salary ($) Bonus ($) Compensation Awards Options (#) Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JOHN W. WYNNE 1993 $40,385 0 0 0 70,500 0 $ 508(1)
Chairman of the Board 1992 0 0 0 0 0 0 0
1991 0 0 0 0 0 0 0
THOMAS L. HEFNER 1993 $40,385 0 0 0 70,500 0 $2,323(1)
President and 1992 - - - - - - -
Chief Executive Officer 1991 - - - - - - -
</TABLE>
(1) Represents allocable contributions to the Company's Profit Sharing and
Salary Deferral Plan.
STOCK OPTIONS
The following table sets forth the grants of stock options made during
fiscal year 1993 to each of the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
Number of
Securities % of Total
Underlying Options Granted Exercise or
Options to Employees in Base Price Expiration
Name Granted Fiscal Year 1993 ($/Share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
John W. Wynne 70,500 10.3% $23.75 10/2003 $1,053,000 $2,669,000
Thomas L. Hefner 70,500 10.3% 23.75 10/2003 1,053,000 2,669,000
</TABLE>
The following table sets forth, on an aggregate basis, each exercise of
stock options during fiscal year 1993 by each of the Named Executive Officers
and the 1993 year-end value of the unexercised options of each such executive
officer.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Shares Number of Securities Underlying Value of Unexercised In-the-
Acquired on Unexercised Options at FY-End Money Options at FY-EndExercise
Name (#) Value Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
John W. Wynne - - - 70,500 - 0
Thomas L. Hefner - - - 70,500 - 0
</TABLE>
COMPENSATION OF DIRECTORS
Directors receive annual compensation of $10,000 plus a fee of $1,250
for attendance at meetings of the Board of Directors and expense reimbursement.
Directors also receive compensation of $500 for participation in telephonic
meetings of the Board or for participation in committee meetings not held in
conjunction with regularly scheduled Board of Directors' meetings. Officers of
the Company who are directors are not paid any director fees. In 1993, Messrs.
Feinsand and Strauss received fees of $40,000 each for services rendered on
behalf of the Unaffiliated Directors in connection with the Reorganization.
<PAGE> 11
PROPOSAL NO. 2: APPROVAL OF APPOINTMENT OF AUDITORS
The appointment of the Company's independent auditors is being
submitted for approval by a vote of the shareholders.
The Company's financial statements for the fiscal year ended December
31, 1993, were audited by KPMG Peat Marwick ("Peat Marwick"). The Company has
selected Peat Marwick as its independent auditors for the fiscal year ending
December 31, 1994, and recommends that the shareholders approve the selection
of Peat Marwick as independent auditors for the Company.
Representatives of Peat Marwick are expected to be present at the
Meeting, with the opportunity to make a statement if they desire to do so, and
will be available to respond to appropriate questions. If shareholders do not
approve the selection of Peat Marwick, then the selection of independent
auditors will be reconsidered by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
IN FAVOR OF THIS PROPOSAL.
SHAREHOLDER PROPOSALS
Any shareholder of the Company wishing to have a proposal considered
for inclusion in the Company's 1995 proxy solicitation materials must set forth
such proposal in writing and file it with the Secretary of the Company on or
before November 23, 1994. The Board of Directors of the Company will review any
shareholder proposals that are filed as required, and will determine whether
such proposals meet applicable criteria for inclusion in its 1995 proxy
solicitation materials or consideration at the 1995 annual meeting.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than
10% of the Company's Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% shareholders are required by Securities and Exchange
Commission regulation to furnish the Company with copies of all Section 16(a)
forms they file.
Based on review of the copies of such forms furnished to the Company, the
Company believes that during 1993 all of its officers, directors and greater
than 10% beneficial owners timely filed the forms required under Section 16(a),
except the following.
Gary A. Burk, Michael Coletta, Robert D. Fessler, Thomas L. Hefner, Donald J.
Hunter, Wayne H. Lingafelter, David R. Mennel, Francis B. Quinn, Daniel C.
Staton, John W. Wynne and Darell E. Zink, Jr. each filed an amendment to their
respective Section 16(a) reports filed in connection with the Reorganization.
These officers and directors received certain shares of the Company's common
stock and Units in the Operating Partnership based upon their ownership
interests in the properties and businesses contributed by Duke Associates to
the Company. Due to the complexity of the ownership of Duke Associates and the
change in the ratio of the reverse stock split immediately preceding the
Reorganization, these officers and directors were supplied with inaccurate data
which was used in the preparation of the reports filed in connection with the
Reorganization. Upon determination of the correct ownership data, amended
reports were filed. Additionally, Geoffrey Button, a director of the Company,
failed to timely file his initial report on Form 3; Howard L. Feinsand, a
director of the Company, failed to timely file two reports on Form 4 in
connection with two related transactions; Philip A. Nicely, a director of the
Company, failed to timely file a report on Form 4 in connection with one
transaction; John W. Wynne, a director and officer of the Company, failed to
timely report one transaction in 1992 and one transaction in 1993; Darell E.
Zink, Jr., a director and officer of the Company, failed to timely report one
gift transaction; and William E. Linville, an officer of the Company, filed an
amendment correcting one transaction.
<PAGE> 12
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended December 31, 1993 has
been provided to all shareholders as of the record date. The Annual Report is
not to be considered as proxy solicitation material.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before this
annual meeting. However, if other matters should come before the meeting, it is
the intention of each person named in the proxy to vote such proxy in
accordance with his or her judgment on such matters.
EXPENSES OF SOLICITATION
The entire expense of preparing, assembling, printing and mailing the proxy
form and the material used in the solicitation of proxies will be paid by the
Company. The Company does not expect that the solicitation will be made by
specially engaged employees or paid solicitors. Although the Company might use
such employees or solicitors if it deems them necessary, no arrangements or
contracts have been made with any such employees or solicitors as of the date
of this statement. In addition to the use of the mails, solicitation may be
made by telephone, telegraph, cable or personal interview. The Company will
request record holders of shares beneficially owned by others to forward this
proxy statement and related materials to the beneficial owners of such shares,
and will reimburse such record holders for their reasonable expenses incurred
in doing so.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. Whether or not you attend
the meeting, you are urged to execute and return the proxy.
For the Board of Directors,
John W. Wynne
Chairman
March 23, 1994
<PAGE> 13
DUKE REALTY INVESTMENTS, INC.
8888 KEYSTONE CROSSING, SUITE 1200
INDIANAPOLIS, INDIANA 46240
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby appoints Thomas L. Hefner, Darell E. Zink, Jr. and
Dayle M. Eby, and each of them, attorneys-in-fact and proxies, with full power
of substitution, to vote as designated below all shares of Common Stock of Duke
Realty Investments, Inc. which the undersigned would be entitled to vote if
personally present at the annual meeting of Shareholders to be held on April
28, 1994, at 10:00 a.m., and at any adjournment thereof.
1. ELECTION OF DIRECTORS FOR A TERM OF THREE YEARS.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below)
HOWARD L. FEINSAND, PHILIP A. NICELY,
DANIEL C. STATON AND JAY J. STRAUSS
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE LINE
BELOW.)
_________________________________________________
2. PROPOSAL TO APPROVE SELECTION OF KPMG PEAT MARWICK AS INDEPENDENT
AUDITORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(continued on other side)
<PAGE> 14
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDERS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3.
The undersigned acknowledges receipt from Duke Realty Investments, Inc. prior
to the execution of this proxy, of notice of the meeting, a proxy statement,
and an annual report to shareholders.
Please sign exactly as name appears below. When shares are held as joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: __________________________________________, 1994
_______________________________________________________
(Signature)
_______________________________________________________
(Signature if held jointly)
Please mark, sign, date and return the proxy card
promptly using the enclosed envelope.
REVOCABLE PROXY
