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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No.__)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 14a-11(c) or Section 14a-12
First Industrial Realty Trust, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $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)(l) 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:
_________________________________________________________________________
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FIRST INDUSTRIAL REALTY TRUST, INC.
150 North Wacker Drive
Suite 150
Chicago, Illinois 60606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1997
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of First Industrial Realty Trust, Inc. (the "Company") will
be held on Wednesday, May 14, 1997 at 9:00 a.m. at the Union League Club, 65 W.
Jackson, 5th Floor, Chicago, Illinois 60604 for the following purposes:
1. To elect three Class III directors of the Company to serve until the 2000
Annual Meeting of Stockholders and until their respective successors are duly
elected and qualified;
2. To ratify the Board of Directors' selection of Coopers & Lybrand L.L.P. as
the Company's independent auditors for the fiscal year ending December 31,
1997; and
3. To consider and act upon any other matters that may properly be brought
before the Annual Meeting and at any adjournments or postponements thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on the
date specified above, or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned, or to which the Annual
Meeting may be postponed.
The Board of Directors has fixed the close of business on March 14, 1997 as
the record date for the Annual Meeting. Only stockholders of record of the
Company's common stock, $.01 par value per share, at the close of business on
that date will be entitled to notice of and to vote at the Annual Meeting and
at any adjournments or postponements thereof.
You are requested to fill in and sign the enclosed Proxy Card, which is being
solicited by the Board of Directors, and to mail it promptly in the enclosed
postage-prepaid envelope. Any proxy may be revoked by delivery of a later
dated proxy. Stockholders of record who attend the Annual Meeting may vote in
person, even if they have previously delivered a signed proxy.
By Order of the Board of Directors
Chicago, Illinois Michael J. Havala
April 14, 1997 Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU
WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE> 3
FIRST INDUSTRIAL REALTY TRUST, INC.
150 North Wacker Drive
Suite 150
Chicago, Illinois 60606
PROXY STATEMENT
FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of First Industrial Realty Trust, Inc. (the
"Company") for use at the 1997 Annual Meeting of Stockholders of the Company to
be held on Wednesday, May 14, 1997, and at any adjournments or postponements
thereof (the "Annual Meeting"). At the Annual Meeting, stockholders will be
asked to vote on the election of three Class III directors of the Company, to
ratify the Board of Directors' selection of Coopers & Lybrand L.L.P. as the
Company's independent auditors for the current fiscal year and to act on any
other matters properly brought before them.
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to stockholders on or about April 14, 1997. The
Board of Directors has fixed the close of business on March 14, 1997 as the
record date for the Annual Meeting (the "Record Date"). Only stockholders of
record of the Company's common stock, par value $.01 per share (the "Common
Stock"), at the close of business on the Record Date will be entitled to notice
of and to vote at the Annual Meeting. As of the Record Date, there were
30,051,117 shares of Common Stock outstanding and entitled to vote at the
Annual Meeting. Holders of Common Stock outstanding as of the close of
business on the Record Date will be entitled to one vote for each share held by
them on each matter presented to the Stockholders at the Annual Meeting.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE- PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY CARD RECEIVED PRIOR
TO THE VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL
MEETING AS DIRECTED ON THE PROXY CARD. IF A PROPERLY EXECUTED PROXY CARD IS
SUBMITTED AND NO INSTRUCTIONS ARE GIVEN, THE PERSONS DESIGNATED AS PROXY
HOLDERS ON THE PROXY CARD WILL VOTE (i) FOR THE ELECTION OF THE THREE NOMINEES
FOR CLASS III DIRECTORS OF THE COMPANY NAMED IN THIS PROXY STATEMENT, (ii) FOR
THE RATIFICATION OF THE BOARD OF DIRECTORS' SELECTION OF COOPERS & LYBRAND
L.L.P. AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR AND
(iii) IN THEIR OWN DISCRETION WITH RESPECT TO ANY OTHER BUSINESS THAT MAY
PROPERLY COME BEFORE THE STOCKHOLDERS AT THE ANNUAL MEETING OR AT ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF. IT IS NOT
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ANTICIPATED THAT ANY MATTERS OTHER THAN THOSE SET FORTH IN THE PROXY STATEMENT
WILL BE PRESENTED AT THE ANNUAL MEETING.
The presence, in person or by proxy, of holders of at least a majority of the
total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. The affirmative vote of the holders of a majority of the votes cast
with a quorum present at the Annual Meeting is required for the election of
Class III directors and the ratification of the selection of the Company's
auditors. Abstentions and broker non-votes will not be counted as votes cast
and, accordingly, will have no effect on the majority vote required.
A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Company at
the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not a proxy has been previously
given, but the presence (without further action) of a stockholder at the Annual
Meeting will not constitute revocation of a previously given proxy.
The Company's 1996 Annual Report, including financial statements for the
fiscal year ended December 31, 1996, is being mailed to stockholders
concurrently with this Proxy Statement. The Annual Report, however, is not
part of the proxy solicitation material.
PROPOSAL I
ELECTION OF A CLASS OF DIRECTORS
Pursuant to the Articles of Amendment and Restatement of the Company (the
"Articles"), the maximum number of members allowed to serve on the Company's
Board of Directors is twelve (12). Currently, the Board of Directors of the
Company consists of nine members and is divided into three classes, with the
directors in each class serving for a term of three years and until their
successors are duly elected and qualified. The term of one class expires at
each annual meeting of stockholders.
At the Annual Meeting, three directors will be elected to serve until the
2000 annual meeting of stockholders and until their successors are duly elected
and qualified. The Board of Directors has nominated John Rau, Robert J. Slater
and Michael T. Tomasz to serve as Class III directors (the "Nominees"). Each
of the Nominees is currently serving as a Class III director of the Company and
has consented to be named as a nominee in this Proxy Statement. The Board of
Directors anticipates that each of the Nominees will serve as a director if
elected. However, if any person nominated by the Board of Directors is unable
to accept election, the proxies will vote for the election of such other person
or persons as the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.
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INFORMATION REGARDING NOMINEES AND DIRECTORS
The following biographical descriptions set forth certain information with
respect to the three Nominees for election as Class III directors at the Annual
Meeting, the continuing directors whose terms expire at the annual meetings of
stockholders in 1998 and 1999, the executive officers and other senior
management, based on information furnished to the Company by such persons. The
following information is as of March 14, 1997, unless otherwise specified.
CLASS III NOMINEES FOR ELECTION AT 1997 ANNUAL MEETING - TERM TO EXPIRE IN 2000
JOHN RAU Director since 1994
Mr. Rau, 48, has been a director of the Company since June 1994. Mr. Rau is
President and Chief Executive Officer of Chicago Title and Trust Co. and
Chicago Title Insurance Co., and President and Chief Executive Officer of
Ticor Title Insurance Co. and Security Union Title Insurance Co.,
subsidiaries of Chicago Title and Trust Co. Mr. Rau is a member of the
combined Board of Directors of Chicago Title and Trust Co. and Chicago Title
Insurance Co., as well as Chairman of the Board of Directors of Ticor Title
Insurance Co. and Security Union Title Insurance Co. He is also a Director
of LaSalle National Bank and a member of the Board of Overseers of the CARE
Foundation. From July 1993 until November 1996, Mr. Rau was Dean of the
Indiana University School of Business. From 1991 to 1993, Mr. Rau served as
Chairman of the Illinois Economic Development Board and as special advisor to
Illinois Governor James Edgar. From 1990 to 1993, he was Chairman of the
Banking Research Center Board of Advisors and a Visiting Scholar at
Northwestern University's J.L. Kellogg Graduate School of Management. During
that time he also served as Special Consultant to McKinsey & Company, a
worldwide strategic consulting firm. From 1989 to 1991, Mr. Rau served as
President and Chief Executive Officer of LaSalle National Bank. From 1979 to
1989, he was associated with The Exchange National Bank, serving as President
from 1983 to 1989, at which time The Exchange National Bank merged with
LaSalle National Bank. Prior to 1979, he was associated with First National
Bank of Chicago. Mr. Rau also served as Chairman of the Board of Trustees of
the CARE Foundation.
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ROBERT J. SLATER Director since 1994
Mr. Slater, 59, has been a director of the Company since June 1994. Since
1985, Mr. Slater has been President of Jackson Consulting, Inc., a private
consulting company specializing in advising basic industries. Mr. Slater is
presently a director of Southdown, Inc., a major cement and cement product
manufacturing company. Prior to 1985, Mr. Slater had been associated with
Crane Co. for 17 years. Crane Co. is a diversified company involved in the
distribution and manufacturing of building products, steel, cement and
aerospace products. He served as President and Chief Operating Officer and a
director of Crane Co. from 1980 to 1985. He became Vice Chairman of that
company in 1985. Prior to that, he was President of Crane Co.'s largest
subsidiary, CF&I Steel Corporation, from 1976 to 1980. While President of
Crane Co., Mr. Slater also served as Chairman and director of Medusa
Corporation, Chairman of the Executive Committee and a director of Huttig
Sash and Door Co., Director, Chairman and Chief Executive Officer of CF&I
Steel Corporation and director of Crane Co.'s European, Australian, Canadian
and Mexican operations.
MICHAEL T. TOMASZ Director since 1994
Mr. Tomasz, 54, has been President, Chief Executive Officer and a director of
the Company since April 1994. He joined The Shidler Group in 1986, where he
was managing partner of the Chicago office and was involved in the
acquisition, financing, leasing, managing and disposition of over $270
million of commercial property. Prior to joining The Shidler Group, Mr.
Tomasz was a commercial real estate broker with CB Commercial (formerly
Coldwell Banker) from 1974 to 1985 in which capacity he was involved in the
sale and leasing of over $200 million of industrial property. In 1979, Mr.
Tomasz was named the "Commercial Salesperson of the Year" by the Chicago Real
Estate Board and, in 1996, he was named "Industrial Property Executive of the
Year" by Commercial Property News. His professional affiliations include the
Society of Industrial and Office Realtors, the Urban Land Institute, the
Association of Industrial Real Estate Brokers and the National Association of
Real Estate Investment Trusts ("NAREIT").
CLASS I CONTINUING DIRECTORS - TERM TO EXPIRE IN 1998
JAY H. SHIDLER Director since 1993
Mr. Shidler, 50, has been Chairman of the Board of Directors since the
formation of the Company in August 1993. He is the founder and managing
partner of The Shidler Group. A nationally acknowledged expert in the field
of real estate investment and finance, Mr. Shidler has over 25 years of
experience in real estate investment and has acquired and managed properties
involving
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over $3 billion in aggregate value. Since 1970, Mr. Shidler has been
directly involved in the acquisition and management of over 700 properties in
40 states and Canada. He serves on the boards of directors of several
private companies and is active as a trustee of several charitable
organizations, including The Shidler Family Foundation. Mr. Shidler is also
a founder and member of the Board of Directors of TriNet Corporate Realty
Trust, Inc., where he served as Co-Chairman of the Board of Directors from
March 1993 through May 1996. Mr. Shidler is a member of the Urban Land
Institute and NAREIT.
JOHN L. LESHER Director since 1994
Mr. Lesher, 63, has been a director of the Company since June 1994. Since
April 1994, Mr. Lesher has been President of Resource Evaluation, Inc., a
consulting firm specializing in working capital management. He is a director
of REL Consultancy Group, the parent of Resource Evaluation, Inc., and a
director of The Sound Shore Fund. From 1990 to 1993, he was a Managing
Director of Korn/Ferry International, an executive recruiting organization.
From 1985 to 1989, he was Vice President of the New York financial services
practice of Cresap, McCormick & Paget, a management consulting organization;
President of Home Group Financial Services, a subsidiary of Home Insurance
Company; and President of Mars & Company, an international strategic planning
and consulting firm. Prior to 1985, he served for 24 years in various
capacities at Booz, Allen & Hamilton, including from 1976 to 1985 as its
President.
J. STEVEN WILSON Director since 1994
Mr. Wilson, 53, has been a director of the Company since June 1994. Since
1991, Mr. Wilson has been Chairman of the Board of Directors, President and
Chief Executive Officer and a director of Wickes Lumber Company, which is one
of the largest lumber yard chains in the United States. For more than five
years, Mr. Wilson has been President, Chief Executive Officer and a director
of Riverside Group, Inc., an insurance holding company with operations in
real estate and mortgage banking. He is also a director of Atlantic Group,
Inc., a supplier of building materials, a director of Circle Investors, Inc.,
and President and Chief Executive Officer of Wilson Financial Corp., a real
estate and investment firm.
CLASS II CONTINUING DIRECTORS - TERM TO EXPIRE IN 1999
MICHAEL G. DAMONE
Director since 1994
Mr. Damone, 62, is Director of Strategic Planning for the Company and has
been a director of the Company since June 1994. Between 1973 and 1994, Mr.
Damone was Chief Executive Officer of Damone/Andrew, a full service real
estate organization, which developed more than
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three million square feet of industrial, warehouse, distribution and research
and development buildings. Prior to co-founding Damone/Andrew in 1973, Mr.
Damone was for over six years the executive vice president of a
privately-held, Michigan based real estate development and construction
company, where he was responsible for the development of industrial business
parks. His professional affiliations include the Society of Industrial and
Office Realtors, the National Association of Realtors, the Michigan
Association of Realtors and the South Oakland County Board of Realtors.
KEVIN W. LYNCH Director since 1994
Mr. Lynch, 44, has been a director of the Company since June 1994. Mr. Lynch
is the Co-founder and Principal of The Townsend Group ("Townsend"), an
institutional real estate consulting firm founded in 1983 which provides real
estate consulting for pension funds and institutional investors. In his
capacity as Principal, Mr. Lynch is responsible for the development of client
portfolio strategic planning, investment planning, oversight of
advisor/manager real estate compliance and monitoring portfolios on behalf of
Townsend's clients. Prior to founding Townsend, Mr. Lynch was associated
with Stonehenge Capital Corporation where he was involved in the acquisition
of institutional real estate properties and the structuring of institutional
real estate transactions. He is a member of the National Real Estate
Advisory Board for the Real Estate Center at New York University. Mr.
Lynch's professional affiliations include the National Council of Real Estate
Investment Fiduciaries, the Pension Real Estate Association, the American
Society for Real Estate Research, the Urban Land Institute and NAREIT.
MICHAEL W. BRENNAN Director since 1996
Mr. Brennan, 40, has been a director since March 1996. He has been Chief
Operating Officer of the Company since December 1995, prior to which time he
was Senior Vice President, Asset Management of the Company since April 1994.
He was a partner of The Shidler Group between 1988 and 1994 and the president
of the Brennan/Tomasz/Shidler Investment Corporation and was in charge of
asset management, leasing, project finance, accounting and treasury functions
for The Shidler Group's Chicago operations. Between 1986 and 1988, Mr.
Brennan served as The Shidler Group's principal acquisition executive, with
responsibility for the acquisition of over $70 million of commercial
properties. Prior to joining The Shidler Group, Mr. Brennan was an
investment specialist with CB Commercial (formerly Coldwell Banker). His
professional affiliations include the Society of Industrial and Office
Realtors, the Urban Land Institute, the National Association of Office and
Industrial Parks, NAREIT and the Chicago Union League Club Real Estate Group.
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EXECUTIVE OFFICERS AND OTHER SENIOR MANAGEMENT
MICHAEL J. HAVALA
Mr. Havala, 37, has been Chief Financial Officer, Treasurer and Secretary of
the Company since April 1994. He joined The Shidler Group in 1989, and was
Chief Financial Officer for The Shidler Group's midwest region with
responsibility for accounting, finance and treasury functions. With The
Shidler Group, Mr. Havala structured joint ventures, obtained and refinanced
project financing, developed and implemented management information systems
and coordinated all financial aspects of a three million square foot
portfolio located in various states throughout the Midwest. Prior to joining
The Shidler Group, Mr. Havala was a Senior Tax Consultant with Arthur
Andersen & Company, where he worked in both the tax and audit areas,
specializing in real estate, banking and corporate finance. Mr. Havala is a
certified public accountant. His professional affiliations include NAREIT and
the Illinois CPA Society.
GARY H. HEIGL
Mr. Heigl, 41, has been Senior Vice President, Capital Markets of the Company
since December 1995. Over the last 18 years, Mr. Heigl has specialized in
commercial real estate finance, arranging project debt totaling in excess of
$6 billion. During 1994 and 1995, Mr. Heigl was Senior Vice
President--Director New Business Development for ITT Real Estate Services,
Inc. From 1991 through 1993, he operated his own real estate consulting
firm. From 1984 through 1990, Mr. Heigl served in various project finance
capacities at VMS Realty Partners culminating as Senior Vice
President--Finance and Dispositions. Prior to 1984, he served in lending
officer positions for the commercial real estate groups of ITT Financial and
Aid Association for Lutherans. Mr. Heigl's professional affiliations include
the Urban Land Institute and NAREIT.
JOHANNSON L. YAP
Mr. Yap, 34, has been the Chief Investment Officer of the Company since
February 1997. From April 1994 to February 1997, he was Senior Vice
President, Acquisitions of the Company. He joined The Shidler Group in 1988
and became a Vice President in 1991, with responsibility for acquisitions,
property management, leasing, financing, sales and construction management
functions. Between 1988 and 1994, Mr. Yap has assisted in the acquisition,
underwriting and due diligence of over $300 million of commercial properties.
His professional affiliations include the Urban Land Institute, the Chicago
Real Estate Council, NAREIT and the National Association of Industrial and
Office Parks.
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ANTHONY MUSCATELLO
Mr. Muscatello, 48, has been President of FI Development Services Corporation
since September 1996, prior to which he had served as a Senior Regional
Director for Pennsylvania, Nashville and Atlanta since June 1994. Over the
last 25 years, he has been responsible for the leasing, management and/or
development of over two million square feet of office, industrial and
residential real estate. From 1987 to 1994, he served as Managing General
Partner of the central Pennsylvania operations of Rouse & Associates, where
he was responsible for day-to-day operations, including profit and loss,
marketing, leasing, acquisition, financing, construction and asset management
functions. From 1982 to 1987, he served in various capacities with Rouse &
Associates. From 1969 to 1982, Mr. Muscatello worked for several real estate
development firms, where his responsibilities included land acquisition,
market analysis and marketing, sales, financing and construction of single
family and multi-family homes. He is an active member in the National
Association of Industrial and Office Parks and the Industrial Real Estate
Brokers of Metropolitan New York.
JAN A. BURMAN
Mr. Burman, 45, has been a Senior Regional Director of the Company for Long
Island and northern New Jersey since January 1997. He oversees acquisitions,
developments, build-to-suits, asset management and lease negotiations for the
nearly three million square foot regional portfolio. Mr. Burman has 19 years
of experience in real estate executive management. Prior to joining the
Company, he was a partner and president of Lazarus Burman Associates, a full
service real estate company with in-house leasing, management, construction
and design capabilities that First Industrial acquired through an UPREIT
transaction in January 1997. Under Mr. Burman's leadership, Lazarus Burman
Associates tripled in size and dramatically expanded the scope of its
activities and operations. Before joining Lazarus Burman Associates, Mr.
Burman began his career as a certified public accountant working in the tax
and audit departments of Touche Ross & Co. He is president of the
Association for a Better Long Island and a member of Syracuse University's
School of Management Corporate Advisory Council.
DAVID F. DRAFT
Mr. Draft, 45, has been a Senior Regional Director of the Company for the
Detroit and Grand Rapids regions since March 1996. Over the last 24 years,
Mr. Draft has been responsible for leasing, management and/or development of
over four million square feet of industrial real estate. Between 1994 and
March 1996, Mr. Draft was Co-Founder and Principal of Draft & Gantos
Properties, L.L.C., where he was responsible for real estate management,
construction and development. From 1990 to 1994, Mr. Draft was Director of
Development and Operations for Robert Grooters Development Company where he
was responsible for the development and
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management of industrial properties. Mr. Draft is a licensed real estate
broker and member of the National Association of Realtors and the Michigan
Association of Realtors.
DUANE H. LUND
Mr. Lund, 33, has been a Senior Regional Director of the Company for the
Minneapolis and St. Paul regions since April 1994. In 1989, he joined The
Shidler Group's Minneapolis office where he was involved in coordinating the
underwriting and due diligence for over $200 million of commercial property.
In 1991 and 1992, Mr. Lund served as Senior Vice President of Asset
Management, where he oversaw the management and leasing of a real estate
portfolio of three million square feet located in four states. Prior to
joining The Shidler Group's Minneapolis office, Mr. Lund was a tax consultant
with Peat Marwick Main & Company from 1986 to 1988. He is a certified public
accountant. His professional affiliations include NAREIT, the National
Association of Industrial and Office Parks, the Minneapolis Area Association
of Realtors and the Urban Land Institute. He is also on the Board of
Directors of the Wisconsin Real Estate Alumni Association, Inc., and the KPMG
Peat Marwick Alumni Association.
PETER F. MURPHY
Mr. Murphy, 31, has been a Senior Regional Director of the Company for
Indiana and Ohio since March 1996. Between 1991 and March 1996, Mr. Murphy
was a Vice President of First Highland Management and Development Corporation
where he was responsible for the acquisition, development, management and
leasing activities for a 2 million square foot portfolio of properties in
Indiana and Ohio. Mr. Murphy is a member of the Indianapolis Economic
Development Commission.
CHRIS M. SCHNEIDER
Mr. Schneider, 35, has been Vice President, Finance and Accounting of the
Company since March 1996, prior to which time he had been Financial Manager
of the Company since December 1994. From 1991 through 1994, he was
Controller for The Shidler Group's midwest region with responsibility for its
accounting, tax and treasury functions. From 1989 to 1991, Mr. Schneider was
a tax consultant with Arthur Andersen & Co., where he specialized in real
estate and partnership tax. From 1983 to 1989, he was Asset Manager for two
residential and commercial property management firms. Mr. Schneider is a
certified public accountant and a member of NAREIT, the Illinois CPA Society
and the Minnesota Society of Certified Public Accountants.
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CINDY L. THORSON
Ms. Thorson, 34, has been Vice President, Investor Relations of the Company
since July 1995. From 1992 to 1995, she was the Investor Relations Manager
for Chicago and North Western Transportation Company. Ms. Thorson managed
marketing and consulting projects for Sears and The NutraSweet Company from
1990 to 1992. From 1985 to 1989, she held various positions with the
Institute of Real Estate Management and the National Association of Realtors.
Ms. Thorson is a member of NAREIT and the National Investor Relations
Institute.
RANDALL L. AXELSON
Mr. Axelson, 38, has been Vice President, Operations and Research of the
Company since March 1996 and was Assistant Vice President, Asset Management
of the Company from August 1995 until March 1996. Between 1984 and July
1995, he held various positions with Travelers Realty Investment Company,
most recently as Assistant Vice President--Investment Administration where he
directed and oversaw an 80-property, $900 million commercial portfolio and
was responsible for all financial matters related to sales of two national
portfolios with an aggregate value of nearly $1 billion. From 1981 to 1984,
Mr. Axelson was an accountant at Homart Development Company. He is a
certified public accountant and a member of NAREIT, the Urban Land Institute
and the Illinois CPA Society.
SCOTT A. MUSIL
Mr. Musil, 29, has been Controller of the Company since December 1995. From
1988 to August 1995, Mr. Musil served in various capacities with Arthur
Andersen & Co., culminating as an audit manager specializing in the real
estate and finance industries. He is a certified public accountant and a
member of the American Institute of Certified Public Accountants, the
Illinois CPA Society and NAREIT.
EILEEN MILLAR
Ms. Millar, 57, has been Vice President of Administration of the Company
since December 1996, and is responsible for directing the Company's training
and integration initiatives. From 1977 to 1988, Ms. Millar was with The
Shidler Group in Honolulu where she held a number of positions with
increasing responsibilities, which included partner of support systems, asset
management, property acquisitions and corporate marketing. From 1988 to
1997, she owned her own real estate company and invested in real estate for
her own account.
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THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company is currently managed by a nine member Board of Directors, a
majority of whom are independent of both The Shidler Group and the Company's
management. The current independent directors are Messrs. Lesher, Wilson,
Lynch, Rau and Slater. Pursuant to the terms of the Company's Articles, the
directors are divided into three classes. Class I directors hold office for a
term expiring at the Annual Meeting of Stockholders to be held in 1998. Class
II directors hold office for a term expiring the Annual Meeting of Stockholders
to be held in 1999. Class III directors hold office for a term expiring at
this Annual Meeting. Each director will hold office for the term to which he
is elected and until his successor is duly elected and qualified. At each
annual meeting of the stockholders of the Company, the successors to the class
of directors whose terms expire at that meeting will be elected to hold office
for a term continuing until the annual meeting of stockholders held in the
third year following the year of their election and the election and
qualification of their successors.
The Board of Directors held seven meetings during fiscal year of 1996. Each
of the directors attended at least 75% of the total number of meetings of the
Board of Directors and of the committees of the Board of Directors of which he
was a member.
The Board of Directors has appointed an Audit Committee, a Compensation
Committee, an Investment Committee and a Nominating Committee.
Audit Committee. The Audit Committee, which consists of Messrs. Rau, Lynch
and Wilson, makes recommendations concerning the engagement of independent
public accountants, reviews with the independent public accountants the plans
and results of the audit 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
Committee met two times in 1996.
Compensation Committee. The Compensation Committee, which consists of
Messrs. Slater and Lesher, makes recommendations and exercises all powers of
the Board of Directors in connection with certain compensation matters,
including incentive compensation and benefit plans. The Compensation Committee
administers, and has authority to grant awards under, the First Industrial
Realty Trust, Inc. 1994 Stock Incentive Plan (the "1994 Stock Plan") and the
newly adopted First Industrial Realty Trust, Inc. 1997 Stock Incentive Plan
(the "1997 Stock Plan"). The Compensation Committee met five times in 1996.
Investment Committee. The Investment Committee, which consists of Messrs.
Shidler, Tomasz, Brennan and Damone, provides oversight and discipline to the
acquisition and new investment process. New investment opportunities are
described in written reports based on detailed research and analyses in
11
<PAGE> 14
a standardized format applying appropriate underwriting criteria. The
Investment Committee meets with the Company's acquisition personnel, reviews
each submission thoroughly and makes a formal recommendation to the Board of
Directors for all acquisitions and development projects with a total investment
in excess of $15 million. The Investment Committee met nine times during 1996.
Nominating Committee. The Nominating Committee proposes individuals for
election as directors at the Annual Meeting of Stockholders of the Company and
in connection with any vacancy that may develop on the Board of Directors. The
Board of Directors, in turn, as a whole by a majority vote either approves all
of the nominations so proposed by the Nominating Committee or rejects all of
the nominations in whole, but not in part. In the event that the Board of
Directors as a whole by a majority vote rejects the proposed nominations, the
Nominating Committee develops a new proposal. The Nominating Committee will
consider nominees recommended by stockholders of the Company. Such
recommendations shall be submitted in writing to the Secretary of the Company.
The membership of the Nominating Committee consists of a total of four
directors which includes (i) the Chairman of the Board of the Company, (ii) the
President of the Company, and (iii) two other directors selected by the entire
Board of Directors of the Company from among those directors who are not
officers of the Company and whose term is not expiring in the calendar year
that the Nominating Committee is making its proposal. The Nominating Committee
that made the proposals approved by the Board of Directors and set forth in
this Proxy Statement consisted of Messrs. Shidler, Tomasz, Lesher and Wilson.
The Nominating Committee met once during 1996.
DIRECTOR COMPENSATION
Directors of the Company who are also employees receive no additional
compensation for their services as a director. Non-employee directors of the
Company receive an annual director's fee of $16,000. Each non-employee
director also receives $1,000 for each regular quarterly meeting of the Board
of Directors attended, $500 for each special meeting of the Board attended,
$500 for each substantive special telephonic Board meeting participated in and
$500 for each committee meeting attended. Under the 1994 Stock Plan, upon
election to the Board and following each annual meeting of stockholders, each
of the Company's non-employee directors receives an option to purchase 7,500
shares at the market price of the shares on the date of grant. All options
granted to non-employee directors will vest one year after the date of grant.
12
<PAGE> 15
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate compensation, including cash
compensation and option awards, paid by the Company with respect to the fiscal
years ended December 31, 1994, 1995 and 1996 to the Company's Chief Executive
Officer and the four other most highly compensated executive officers of the
Company (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Shares All Other
Name and Annual Restricted Stock Underlying Compensation
Principal Position Year Salary($)(1) Bonus($)(2) Awards($)(3) Options(#)(4) ($)(5)
- ------------------ ---- ------------- ----------- ------------ ------------ ------------
-
<S> <C> <C> <C> <C> <C> <C>
Michael T. Tomasz 1996 $250,000 $375,000 $75,000 30,000 $39,663
President and 1995 200,000 290,000 -- 70,000 11,924
Chief Executive 1994 100,000 75,000 -- 132,000 350
Officer
Michael W. Brennan 1996 $190,000 $285,000 $65,000 20,000 $13,046
Chief Operating 1995 145,000 155,000 -- 30,000 1,717
Officer 1994 72,500 40,000 -- 75,000 350
Michael J. Havala 1996 $175,000 $236,241 $50,000 14,000 $12,626
Chief Financial 1995 145,000 109,000 -- 30,000 2,032
Officer, Treasurer and 1994 72,500 40,000 -- 75,000 350
Secretary
Johannson L. Yap 1996 $140,000 $238,510 $40,000 12,500 $7,285
Chief Investment 1995 100,000 100,000 -- 20,000 263
Officer 1994 50,000 25,000 -- 30,000 263
Anthony Muscatello 1996 $125,000 $209,250 -- 10,000 $10,756
President of FI 1995 100,000 125,000 -- 20,000 3,687
Development Services 1994 50,000 25,000 -- 30,000 263
Corporation
</TABLE>
13
<PAGE> 16
_____________
(1) Amounts for 1994 reflect actual base salary earned during the Company's
period of operation since the Company's initial public offering of Common
Stock in June 1994 (the "Initial Public Offering"). They are based on the
following annual base salary rates for 1994: $200,000 for Mr. Tomasz,
$145,000 for each of Messrs. Brennan and Havala, and $100,000 for each of
Messrs. Yap and Muscatello.
(2) Amounts for 1994 represent bonuses awarded in March 1995 based on
performance for the six months ended December 31, 1994. Amounts for 1995
represent bonuses awarded in February 1996 based on performance for the
year ended December 31, 1995. Amounts for 1996 represent bonuses awarded
in February 1997 based on performance for the year ended December 31,
1996 and include bonus amounts awarded in 1996 in conjunction with the
Company's profitability incentive plan.
(3) The Compensation Committee determined in February 1997 to award the Named
Executive Officers restricted Common Stock as part of their annual bonus
with respect to their 1996 performance. Although such restricted Common
Stock has not yet been issued, it is anticipated to vest on January 31,
1998 (subject to earlier vesting upon a change of control of the Company,
certain terminations of employment assuming certain performance targets are
achieved or upon the Compensation Committee's consent). The dollar amount
shown is approximately equal to the product of the number of shares of
restricted Common Stock granted multiplied by the closing price of the
Common Stock as reported by the New York Stock Exchange on the date of
grant ($29.75 on February 14, 1997). This valuation does not take into
account any diminution in value which results from the restrictions
applicable to such Common Stock. From and after the date of issuance,
holders of the restricted Common Stock will be entitled to vote such Common
Stock and receive dividends at the same rate applicable to unrestricted
shares of Common Stock. The total number of shares of restricted Common
Stock to be issued to each Named Executive Officer is as follows: Mr.
Tomasz - 2,521 shares, Mr. Brennan - 2,185 shares, Mr. Havala - 1,681
shares and Mr. Yap - 1,345 shares.
(4) Amounts for 1994 represent options granted in connection with the Initial
Public Offering on June 23, 1994 under the 1994 Stock Plan at an exercise
price equal to $23.50 per share. These options vested in three equal
installments on December 23, 1994, June 23, 1995 and June 23, 1996.
Amounts for 1995 represent options granted on July 17, 1995 under the 1994
Stock Plan at an exercise price equal to $20.25 per share. These options
vested in two equal installments on January 17, 1996 and July 17, 1996.
Amounts for 1996 represent options granted on July 11, 1996 under the 1994
Stock Plan at an exercise price equal to $22.75 per share. These options
vest in two equal installments on January 11, 1997 and July 11, 1997.
(5) Includes premiums paid by the Company on term life insurance for the
benefit of the Named Executive Officers. Amounts reported for 1996 also
include benefits accrued on units awarded in 1996 to the Named Executive
Officers under the Deferred Income Plan (as defined and described below).
Generally, amounts accrued under the Deferred Income Plan vest in equal
quarterly installments over three years and are paid out (in cash or Common
Stock at the discretion of the Compensation Committee) in three annual
installments, commencing on the January 31st after the date of grant.
Amounts accrued under the Deferred Income Plan to each Named Executive
Officer in 1996 were as follows: Mr. Tomasz - $23,498, Mr. Brennan -
$10,071, Mr. Havala - $10,071, Mr. Yap - $6,714 and Mr. Muscatello -
$6,714.
14
<PAGE> 17
OPTION GRANTS AND EXERCISES
Option Grants. The following table sets forth the options granted
with respect to the fiscal year ended December 31, 1996 to the Named Executive
Officers.
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------
Percent of
Number of Total Options
Options Granted to Exercise or Total Present
Granted Employees in Base Price Expiration Value as
Name (#)(1) 1996 (%)(2) ($/sh)(3) Date of Grant
---------------------- ------------ --------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Michael T. Tomasz 30,000 13.3% $22.75 7/11/2006 $72,900
Michael W. Brennan 20,000 8.9% 22.75 7/11/2006 48,600
Michael J. Havala 14,000 6.2% 22.75 7/11/2006 34,020
Johannson L. Yap 12,500 5.5% 22.75 7/11/2006 30,375
Anthony Muscatello 10,000 4.4% 22.75 7/11/2006 24,300
</TABLE>
_________________
(1) Represents options granted on July 11, 1996 under the 1994 Stock Plan
and which vest in two equal installments on January 11, 1997 and July
11, 1997.
(2) Percentages do not take into account 45,000 options in the aggregate
granted to non-employee Directors of the Company.
(3) The closing price per share as reported on the New York Stock Exchange
on July 11, 1996 (the date of grant).
(4) Based on the Black-Scholes option pricing model adapted
for use in valuing stock options. The actual value, if any, that
the named officer may receive will depend on the excess of the stock
price at the time of exercise over the exercise or base price on the
date the option is exercised. There is no assurance that the value
realized by the named officer will be at or near the value estimated
by the Black-Scholes model. The estimated values under the model are
based on certain assumptions, such as interest rates, stock price
volatility and future dividend yields.
Option Exercises and Year-End Holdings. No options were exercised in
1996 by any of the Named Executive Officers. The following table sets forth
the value of options held at the end of 1996 by the Named Executive Officers.
15
<PAGE> 18
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND FISCAL YEAR-END 1996 OPTION VALUES
<TABLE>
<CAPTION> Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options In-the-Money Options at
Acquired at Fiscal Year-End (#) December 31, 1996 (1)
on Value ---------------------- -----------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
----------------- -------- -------- ----------- ------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Michael T. 0 0 202,000 30,000 1,616,250 228,750
Tomasz
Michael W. 0 0 105,000 20,000 819,375 152,500
Brennan
Michael J. 0 0 105,000 14,000 819,375 106,750
Havala
Johannson L. Yap 0 0 50,000 12,500 408,750 95,313
Anthony 0 0 50,000 10,000 408,750 76,250
Muscatello
</TABLE>
_________________
(1) Based on the closing price per share as reported on the New York Stock
Exchange on December 31, 1996 ($30.38).
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (as amended, the
"Exchange Act") requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange.
Officers, directors and "greater than ten- percent" stockholders are required
by SEC regulations to furnish the Company with copies of all Section 16(a)
forms so filed.
Based solely on review of the copies of such forms furnished to the
Company for 1996, all Section 16(a) filing requirements applicable to the
Company's officers, directors and "greater than ten-percent" stockholders were
complied with, except that (i) each of Peter Murphy and David Draft filed his
Form 3 late, (ii) Gary Heigl filed one Form 4 late relating to his open market
purchase of 5,000 shares of Common Stock in February 1996, (iii) Michael
Brennan filed one Form 4 late relating to his open market purchase of 380
shares of Series A Preferred Stock in March 1996, and (iv) Michael Tomasz filed
two Forms 4 late relating to his open market purchases of 1,000 shares and
1,400 shares of Commo n Stock in July and September 1996, respectively.
EMPLOYMENT AGREEMENTS
In December 1996, the Company entered into a written employment
agreement with Michael T. Tomasz, its Chief Executive Officer. The agreement
provides for an initial annual salary of $250,000, subject to annual review by
the Compensation Committee, and an annual bonus at the discretion of the
Compensation Committee. The agreement provides for an initial term of three
years and subsequent three-year periods unless otherwise terminated; provided,
however, that the agreement will expire on Mr. Tomasz's 70th birthday. Upon
certain changes in control of the Company or a termination without cause, Mr.
Tomasz is entitled to severance in an amount equal to three times his annual
salary, plus three times his average bonus over the prior three years. In
addition, upon termination, Mr. Tomasz's options and awards under the 1994
Stock Plan, the 1997 Stock Plan and the Deferred Income Plan will fully vest
and
16
<PAGE> 19
his other benefits will continue for a period of three years. Severance
amounts payable to Mr. Tomasz upon termination will be reduced if such amounts
become payable after Mr. Tomasz's 67th birthday. Mr. Tomasz has agreed to a
three-year covenant not to compete after termination.
In February 1997, the Company entered into a written employment
agreement with Michael W. Brennan, its Chief Operating Officer. The agreement
provides for an initial annual salary of $195,000, subject to annual review by
the Compensation Committee, and an annual bonus at the discretion of the
Compensation Committee. The agreement provides for an initial term of two
years and subsequent two year periods unless otherwise terminated; provided,
however, that the agreement will expire on Mr. Brennan's 70th birthday. Upon
certain changes in control of the Company or a termination without cause, Mr.
Brennan is entitled to severance in an amount equal to two times his annual
salary, plus two times his average bonus over the prior two years. In
addition, upon termination, Mr. Brennan's options and awards under the 1994
Stock Plan, the 1997 Stock Plan and Deferred Income Plan will fully vest and
his other benefits will continue for a period of two years. Severance amounts
payable to Mr. Brennan upon termination will be reduced if such amounts become
payable after Mr. Brennan's 67th birthday. Mr. Brennan has agreed to a
two-year covenant not to compete after termination.
In June 1994 in connection with the Initial Public Offering, the
Company entered into a written employment agreement with Anthony Muscatello
which will expire in June 1997. The agreement provides for an annual minimum
salary of $100,000 and such bonus and other incentive compensation as approved
by the Compensation Committee from time to time. The Company is obligated to
maintain a $500,000 term life insurance policy for Mr. Muscatello.
STOCK PERFORMANCE GRAPH
The incorporation by reference of this Proxy Statement into any
document filed with the SEC by the Company shall not be deemed to include the
following performance graph unless such graph is specifically stated to be
incorporated by reference into such document.
The following graph provides a comparison of the cumulative total
stockholder return among the Company, the Standard & Poor's 500 Index ("S&P
500") and the NAREIT Equity REIT Total Return Index (the "NAREIT Index"), an
industry index of 172 tax-qualified equity REITs (including the Company). The
comparison is for the period from May 31, 1994 (for the S&P 500 and the NAREIT
Index) and June 23, 1994 (for the Company, the date of the Initial Public
Offering) to December 31, 1996 and assumes the reinvestment of any dividends.
The initial price of the Company's Common Stock shown in the graph below is
based upon the price to the public of $23.50 per share in the Initial Public
Offering on June 23, 1994. The Common Stock of the Company was first listed
for quotation on the New York Stock Exchange on June 24, 1994. The closing
price quoted on the New York Stock Exchange at the close of business on June
24, 1994 was $23-5/8 per share. The NAREIT Index includes REITs with 75% or
more of their gross invested book value of assets invested directly or
indirectly in the equity ownership of real estate. Upon written request, the
Company will provide stockholders with a list of the REITs included in the
NAREIT Index. The historical information set forth below is not necessarily
indicative of future performance. The following graph was prepared at the
Company's request by Research Holdings Limited, San Francisco, California.
17
<PAGE> 20
[PERFORMANCE GRAPH]
Cumulative Total Return
<TABLE>
<CAPTION>
6/24/94 6/30/94 12/31/94 6/30/95 12/31/95 6/30/96 12/31/96
<S> <C> <C> <C> <C> <C> <C> <C>
Company $100 $101 $ 87 $ 96 $110 $120 $158
S&P 500 $100 $ 98 $102 $123 $133 $155 $173
NAREIT Index $100 $ 98 $ 96 $101 $106 $118 $150
</TABLE>
18
<PAGE> 21
DEFERRED INCOME PLAN
The Compensation Committee approved, effective as of January 1, 1996,
the First Industrial Realty Trust, Inc. Deferred Income Plan (the "Deferred
Income Plan"), which provides that key officers and employees designated by the
Compensation Committee may be granted "units" under the Deferred Income Plan.
Each such unit entitles the holder to an amount equivalent to the dividend paid
with respect to a share of the Company's Common Stock, provided the base
dividend amount indicated in the applicable grant is equalled or exceeded.
Deferred income benefit amounts credited each fiscal quarter are then
reinvested in additional units under the Deferred Income Plan. The benefits
under the Deferred Income Plan vest pro rata over a three-year period and are
paid no later than January 31st following the calendar year in which such
benefit vests or in which the participant dies (if earlier). In the event of
certain change of control transactions or the sale of all or substantially all
of the Company's assets, the deferred income benefits are immediately payable
whether or not vested. The Compensation Committee has the option to pay the
vested benefits in either cash or Company Common Stock. In the event a
participant's service with the Company is terminated for cause, all deferred
income benefits immediately terminate, even if previously vested.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is composed of
two of the Company's independent outside directors, Messrs. Slater and Lesher.
The Compensation Committee is responsible for administering the policies which
govern the Company's executive compensation.
Objectives of Executive Compensation. The Compensation Committee has
designed its compensation policy to provide the proper incentives to management
to maximize the Company's performance in order to serve the best interests of
its stockholders. As a result, the Compensation Committee intends to focus on
incentive awards, such as stock option grants, restricted stock awards and
deferred income awards (as described below) as opposed to large salary
increases to emphasize performance related incentive compensation. The
Compensation Committee grants stock option awards under the 1994 Stock Plan and
will in the future grant stock options and other incentive awards under the
newly adopted 1997 Stock Plan. To further its goals of providing appropriate
incentives to the Company's executive officers, the Compensation Committee
adopted the Deferred Income Plan in 1996.
The bonuses and incentive awards awarded for 1996 performance to the
Chief Executive Officer and the other executive officers were based on the
Company's Funds from Operations ("FFO"), an industry recognized measure of a
REIT's performance, and officer specific performance objectives, such as
individual performance related to same property net operating income growth and
acquisition goals.
19
<PAGE> 22
The Company maintains the philosophy that compensation of its
executive officers and others should be directly and materially linked to
operating performance. To achieve this linkage, executive compensation is
weighted towards bonuses paid and incentive awards granted on the basis of the
Company's performance. Thus, while annual salary increases are based on
personal performance of the executive officers and general economic conditions,
annual bonuses and incentive award grants are directly tied to the Company's
actual economic performance during the applicable fiscal year.
Stock options are granted to the executives under the provisions of
the 1994 Stock Plan and will also be granted, together with other incentive
awards, such as restricted stock and stock appreciation rights, under the 1997
Stock Plan. Such incentive awards are granted to provide incentive to improve
stockholder value over the long-term and to encourage and facilitate executive
stock ownership. Stock options are granted at the market price of the Common
Stock at the date of grant to ensure that executives can only be rewarded for
appreciation in the price of the Common Stock when the Company's stockholders
are similarly benefitted. The Compensation Committee determines those
executives who will receive incentive award grants and the size of such awards.
Compensation Committee Procedures. The Compensation Committee will
annually evaluate the personal performance of the Chief Executive Officer and
the other executive officers of the Company, as well as the Company's
performance. In setting the salary levels for compensation, the Compensation
Committee compares the total annual compensation and stock ownership of the
Chief Executive Officer and the other executive officers to the executive
compensation of executive officers of other publicly-held REITs. Personal
performance can include such qualitative factors as organizational and
management development exhibited from year to year. Generally the
Compensation Committee will meet at the beginning of each year to review
performance and approve incentive awards for the preceding fiscal year, and to
approve base salary and performance targets for the current year.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
limits the deductibility on the Company's tax return of compensation over $1
million to any of the named executive officers of the Company unless, in
general, the compensation is paid pursuant to a plan which is
performance-related, non-discretionary and has been approved by the Company's
stockholders. The Compensation Committee's policy with respect to Section
162(m) is to make reasonable efforts to ensure that compensation is deductible
to the extent permitted while simultaneously providing Company executives with
appropriate rewards for their performance.
The Compensation Committee believes that it has designed and
implemented a compensation structure which provides appropriate awards and
incentives for the Company's executive officers as they work to sustain and
improve the Company's overall performance.
Submitted by the Compensation Committee:
Robert J. Slater John L. Lesher
20
<PAGE> 23
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Slater and Lesher.
Neither of them has served as an officer of the Company or has any other
business relationship or affiliation with the Company, except his service as a
director.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company leases office space in Chicago, Illinois from an affiliate
of The Shidler Group at an aggregate annual cost of $131,000. Management of
the Company believes the terms of this lease are as favorable or more favorable
to the Company as could be obtained in an arm's length transaction. The
Company intends to terminate such lease and move the Company's corporate
headquarters to office space in a building owned by an unaffiliated third
party.
The Company often obtains title insurance coverage for its properties
from Chicago Title Insurance Company ("CTIC"). Mr. Rau, a Director of the
Company, became the President, Chief Executive Officer and a Director of CTIC
in 1996. Management of the Company believes the terms of the title insurance
provided by CTIC to the Company and the premiums therefor are as favorable to
the Company as could be obtained from other title insurance companies.
On September 1, 1992, two partnerships, Indian Village Shopping Center
Investment Company and 4118 Eastwood Investment Company, commenced proceedings
under Chapter 11 of the United States Bankruptcy Court for the District of
Arizona. Mr. Shidler is an officer and a shareholder of the corporate general
partner of each such partnership. Both partnerships' cases were resolved by
settlement with the major secured lender and dismissed by order of the
Bankruptcy Court in May 1993. On January 25, 1993, Western Suburban Industrial
Investments Limited Partnership commenced proceedings under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of Illinois. Both Messrs. Shidler and Tomasz are officers
and shareholders of the corporate general partner of such partnership. The
bankruptcy case was fully resolved by settlement with creditors and dismissed
by order of the Bankruptcy Court in June 1993. On April 22, 1993, the Florida
Department of Insurance filed a court petition seeking the appointment of a
receiver for the liquidation of Dependable Insurance Company, Inc.
("Dependable"), a subsidiary of Riverside Group, Inc., of which Mr. Wilson is
the President, Chief Executive Officer and a director. The petition was
withdrawn on January 11, 1994, pursuant to a settlement between the Florida
Department of Insurance and Dependable.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table presents information concerning the ownership of
Common Stock of the Company and limited partnership units ("Units") of First
Industrial, L.P. (which generally are exchangeable on a one-for-one basis,
subject to adjustments, for Common Stock) by all directors, the Named Executive
Officers, the directors and executive officers as a group and persons or
entities known to the Company to
21
<PAGE> 24
be beneficial owners of more than 5% of the Company's Common Stock on March 14,
1997, unless otherwise indicated, based on representations of officers and
directors of the Company and filings received by the Company on Schedules 13D
and 13G or Form 13F under the Exchange Act.
<TABLE>
<CAPTION>
Common Stock/Units
Beneficially
Owned
---------------------------
Percent
Number of Class
----------- -------------
Names and Addresses of
5% Stockholders
---------------
<S> <C> <C>
FMR Corp.(1)
82 Devonshire Street
Boston, Massachusetts 02109 . . . . 3,757,300 12.5%
Glickenhaus & Co.(2)
Six East 43rd Street
New York, New York 10017-4641 . . . 1,738,400 5.8%
Names and Addresses of
Directors and Officers*
-----------------------
Jay H. Shidler(3)(5) . . . . . . . . 1,276,121 4.2%
Michael T. Tomasz(4) . . . . . . . . 382,404 1.3%
John L. Lesher(5) . . . . . . . . . . 22,500 **
Kevin W. Lynch(6) . . . . . . . . . . 23,018 **
Michael G. Damone(7) . . . . . . . . 202,046 **
John Rau(5) . . . . . . . . . . . . . 24,500 **
Robert J. Slater(5) . . . . . . . . . 23,500 **
J. Steven Wilson(5) . . . . . . . . . 22,500 **
Michael W. Brennan(8) . . . . . . . . 213,015 **
Michael J. Havala(9) . . . . . . . . 133,331 **
Johannson L. Yap(10) . . . . . . . . 75,184 **
Anthony Muscatello(11) . . . . . . . 136,986 **
All directors, Named Executive
Officers and other executive
officers 3,370,121 10.5%
as a group (17 persons)(12) . . . .
</TABLE>
22
<PAGE> 25
* The business address for each of the Directors and executive officers
of the Company is 150 North Wacker Drive, Suite 150, Chicago, Illinois
60606.
** Less than 1%
(1) Pursuant to a Schedule 13G dated February 11, 1997 filed by FMR Corp.,
FMR Corp. has the sole power to dispose of all 3,757,300 shares
reported, but has the sole power to vote only 537,700 of such shares.
(2) Includes 290,700 shares for which Glickenhaus & Co., an investment
advisor, has no voting power, as reported in a Schedule 13G dated
March 18, 1996.
(3) Includes 910,660 shares held by Shidler Equities L.P., a Hawaii
limited partnership owned by Mr. Shidler and Wallette Shidler, 65,118
limited partnership units ("Units") in First Industrial, L.P., which
are exchangeable one-for-one for shares of Common Stock, held by Mr.
Shidler directly, 254,541 Units held by Shidler Equities, L.P., 1,223
Units held by Mr. and Mrs. Shidler jointly, and 22,079 Units held by
Holman/Shidler Investment Corporation.
(4) Includes 4,000 shares held by a trust for the benefit of Mr. Tomasz's
spouse and 3,800 shares held by a trust for the benefit of Mr.
Tomasz's daughters. A relative of Mr. Tomasz is the sole trustee of
each of such trusts. Also includes 217,000 shares which may be
acquired by Mr. Tomasz upon the exercise of options granted under the
1994 Stock Plan, consisting of 132,000 shares at an exercise price of
$23.50 per share, 70,000 shares at an exercise price of $20.25 per
share and 15,000 shares at an exercise price of $22.75 per share.
Also includes 23,868 Units. Does not include 2,521 shares of
restricted Common Stock to be issued under the 1997 Stock Plan.
(5) Includes 7,500 shares which may be acquired by such person upon the
exercise of vested options granted under the 1994 Stock Plan at an
exercise price of $23.50 per share, an additional 7,500 shares which
may be acquired by such person upon the exercise of vested options
granted under the 1994 Stock Plan at an exercise price of $18.25 per
share and 7,500 shares which may be acquired by such person upon the
exercise of options (which will vest in May 1997) granted under the
1994 Stock Plan at an exercise price of $23.50 per share.
(6) Includes 7,500 shares which may be acquired by such person upon the
exercise of vested options granted under the 1994 Stock Plan at an
exercise price of $23.50 per share and 7,500 shares which may be
acquired by such person upon the exercise of options (which will vest
in May 1997) granted under the 1994 Stock Plan at an exercise price of
$23.50 per share.
(7) Includes 3,000 shares held by a trust for the benefit of Mr. Damone's
wife. Also includes 53,750 shares which may be acquired by Mr.
Damone upon the exercise of options granted under the 1994 Stock Plan,
consisting of 30,000 shares at an exercise price of $23.50 per share,
20,000 shares at an exercise price of $20.25 per share and 3,750
shares at an exercise price of $22.75 per share. Also includes
144,296 Units.
(8) Includes 115,000 shares which may be acquired by Mr. Brennan upon the
exercise of options granted under the 1994 Stock Plan, consisting of
75,000 shares at an exercise price of $23.50 per share, 30,000 shares
at an exercise price of $20.25 per share and 10,000 shares at an
exercise price of
23
<PAGE> 26
$22.75 per share. Also includes 7,587 Units. Does not include 2,185
shares of restricted Common Stock to be issued under the 1997 Stock
Plan or 380 shares of Preferred Stock.
(9) Includes 834 shares held in custodial accounts for Mr. Havala's
children. Also includes 112,000 shares which may be acquired by Mr.
Havala upon the exercise of options granted under the 1994 Stock Plan,
consisting of 75,000 shares at an exercise price of $23.50 per share,
30,000 shares at an exercise price of $20.25 per share and 7,000
shares of which at an exercise price of $22.75 per share. Does not
include 1,681 shares of restricted Common Stock to be issued under the
1997 Stock Plan or 500 shares of Preferred Stock.
(10) Includes 940 shares held in a custodial account for the benefit of Mr.
Yap's children. Also includes 56,250 shares which may be acquired by
Mr. Yap upon the exercise of options granted under the 1994 Stock
Plan, consisting of 30,000 shares at an exercise price of $23.50 per
share, 20,000 shares at an exercise price of $20.25 per share and
6,250 shares at an exercise price of $22.75 per share. Does not
include 1,345 shares of restricted Common Stock to be issued under the
1997 Stock Plan.
(11) Includes 55,000 shares which may be acquired by Mr. Muscatello upon
the exercise of options granted under the 1994 Stock Plan, consisting
of 30,000 shares at an exercise price of $23.50 per share, 20,000
shares at an exercise price of $20.25 per share and 5,000 shares at an
exercise price of $22.75 per share. Also includes 81,654 Units.
(12) Includes 807,500 shares in the aggregate which may be acquired by
directors or executive officers upon the exercise of options granted
under the 1994 Stock Plan, consisting of 447,000 shares at an exercise
price of $23.50 per share, 37,500 shares at an exercise price of
$18.25 per share, 210,000 shares at an exercise price of $20.25 per
share and 113,000 shares at an exercise price of $22.75 per share.
Also includes 1,343,384 Units. Does not include 8,572 shares of
restricted Common Stock to be issued under the 1997 Stock Plan or 880
shares of Preferred Stock in the aggregate owned by certain executive
officers and directors of the Company.
PROPOSAL II
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The accounting firm of Coopers & Lybrand L.L.P. has served as the Company's
independent auditors since the Company's formation in August 1993. On March 4,
1997, the Board of Directors voted to appoint Coopers & Lybrand L.L.P. as the
Company's independent auditors for the current fiscal year. A representative
of Coopers & Lybrand L.L.P. will be present at the Annual Meeting, will be
given the opportunity to make a statement if he or she so desires and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT
AUDITORS FOR FISCAL 1997.
24
<PAGE> 27
OTHER MATTERS
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
borne by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
The Company has retained MacKenzie Partners, Inc. to assist, as necessary, in
the solicitation of proxies, for a fee estimated to be approximately $5,000
plus reasonable out-of-pocket expenses.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1998 Annual Meeting of
Stockholders must be received by the Secretary of the Company no later than
December 12, 1997, in order to be considered for inclusion in the proxy
statement and on the proxy card that will be solicited by the Board of
Directors in connection with the 1998 Annual Meeting of Stockholders.
In addition, the Bylaws of the Company provide that in order for a stockholder
to nominate a candidate for election as a director at an annual meeting or
propose business for consideration at such annual meeting, notice must
generally be given to the Secretary of the Company not more than 90 days nor
less than 60 days prior to the first anniversary of the preceding year's annual
meeting. The fact that the Company may not insist upon compliance with these
requirements should not be construed as a waiver by the Company of its right to
do so at any time in the future.
OTHER MATTERS
The Board of Directors does not know of any matters other than those described
in this Proxy Statement that will be presented for action at the Annual
Meeting. If other matters are presented, it is the intention of the persons
named as proxies in the accompanying Proxy Card to vote in their discretion all
shares represented by validly executed proxies.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY
CARD TODAY.
25
<PAGE> 28
FIRST INDUSTRIAL REALTY TRUST, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON MAY 14, 1997
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R The undersigned appoints Michael T. Tomasz and Michael J. Havala, or either
O of them, with full powers of substitution, as proxies of the undersigned,
X with the authority to vote upon and act with respect to all shares of stock
Y of First Industrial Realty Trust, Inc. (the "Company"), which the
undersigned is entitled to vote, at the Annual Meeting of Stockholders of
the Company, to be held at the Union League Club, 65 W. Jackson, 5th Floor,
Chicago, Illinois, 60604, commencing Wednesday, May 14, 1997, at 9:00 a.m.,
and at any and all adjournments thereof, with all the powers the
undersigned would possess if then and there personally present, and
especially (but without limiting the general authorization and power hereby
given) with the authority to vote on the election of three Class III
Directors as follows:
Nominees (term, if elected, expires 2000):
JOHN RAU ROBERT J. SLATER MICHAEL T. TOMASZ
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED HEREIN. IF
THIS PROXY DOES NOT INDICATE A CONTRARY CHOICE, IT WILL BE VOTED FOR ALL
THE NOMINEES FOR DIRECTOR AS LISTED ABOVE, FOR THE RATIFICATION OF AUDITORS
DESCRIBED IN ITEM 2. BELOW, AND IN THE DISCRETION OF THE PERSONS NAMED AS
PROXIES HEREIN WITH RESPECT TO ANY AND ALL MATTERS REFERRED TO IN ITEM 3.
BELOW.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE
PROXIES NAMED HEREIN CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN
THIS CARD.
SEE REVERSE
SIDE
<TABLE>
<S><C>
[ X ] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
FOR ALL WITHHOLD
NOMINEES AUTHORITY
(except as marked to vote for all
to the contrary on nominees
the line below) listed below
1. Election of [ ] [ ]
three Class III
Directors
Withhold authority for the following nominee(s):
_______________________________________________
AUTHORITY AUTHORITY
GRANTED WITHHELD
FOR AGAINST ABSTAIN
2. Ratification of the [ ] [ ] [ ]
selection of
Coopers & Lybrand L.L.P.
as the Company's
independent
auditors
AUTHORITY AUTHORITY
GRANTED GRANTED
FOR AGAINST ABSTAIN
3. In their discretion, [ ] [ ] [ ]
on any and all
other matters as
may properly
come before the
meeting
NOTE: PLEASE DATE PROXY AND SIGN IT EXACTLY AS NAME OR NAMES
APPEAR ABOVE. ALL JOINT OWNERS OF SHARES SHOULD SIGN. STATE
FULL TITLE WHEN SIGNING AS EXECUTOR, ADMINISTRATOR, TRUSTEE,
GUARDIAN, ET CETERA. PLEASE RETURN SIGNED PROXY IN THE
ENCLOSED ENVELOPE.
The undersigned hereby revokes any proxy or proxies heretofore
given to vote upon or act with respect to said stock and hereby
ratifies and confirms all that the proxies named herein and
their substitutes, or any of them, may lawfully do by virtue
hereof.
___________________________________________________________
Signature of Stockholder
___________________________________________________________
Signature of Stockholder (if held jointly) Date
</TABLE>
