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OMB APPROVAL |
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3235-0059 |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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ý Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
FIRST INDUSTRIAL REALTY
TRUST, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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ý No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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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): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o 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. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (02-02) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
FIRST
INDUSTRIAL REALTY TRUST, INC.
311 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
To Be Held On May 16,
2007
NOTICE IS HEREBY GIVEN that the 2007 Annual Meeting of
Stockholders (the Annual Meeting) of First
Industrial Realty Trust, Inc. (the Company) will be
held on Wednesday, May 16, 2007 at 9:00 a.m. at The
Chicago Club, Robert Todd Lincoln Room
2nd floor, 81 East Van Buren, Chicago,
Illinois 60605 for the following purposes:
1. To elect three Class I Directors of the Company to
serve until the 2010 Annual Meeting of Stockholders and
until their respective successors are duly elected and qualified;
2. To approve Amendment No. 2 to the Companys
2001 Stock Incentive Plan;
3. To ratify the appointment of PricewaterhouseCoopers LLP
as the Companys independent registered public accounting
firm for the fiscal year ending December 31, 2007; and
4. 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 20, 2007 as the record date for the Annual Meeting.
Only stockholders of record of the Companys common stock,
$.01 par value per share, at the close of business on that
date will be entitled to notice of and to vote at the Annual
Meeting and at any adjournments or postponements thereof.
You are requested to fill in and sign the enclosed Proxy Card,
which is being solicited by the Board of Directors, and to mail
it promptly in the enclosed postage-prepaid envelope. Any proxy
may be revoked by delivery of a later dated proxy. Stockholders
of record who attend the Annual Meeting may vote in person, even
if they have previously delivered a signed proxy. Street
name stockholders who wish to vote in person will need to
obtain a duly executed proxy form from the institution that
holds their shares prior to the Annual Meeting.
By Order of the Board of Directors
John H. Clayton
Secretary
Chicago, Illinois
April 9, 2007
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.
FIRST
INDUSTRIAL REALTY TRUST, INC.
311 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
To Be Held On May 16,
2007
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 2007 Annual Meeting of Stockholders of the Company to be
held on Wednesday, May 16, 2007, 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 I Directors of the Company, to
approve Amendment No. 2 to the Companys 2001 Stock
Incentive Plan, to ratify the appointment of
PricewaterhouseCoopers LLP as the Companys independent
registered public accounting firm for the current fiscal year
and to act on any other matters properly brought before them.
This Proxy Statement and the accompanying Notice of Annual
Meeting and Proxy Card are first being sent to stockholders on
or about April 9, 2007. The Board of Directors has fixed
the close of business on March 20, 2007 as the record date
for the Annual Meeting (the Record Date). Only
stockholders of record of the Companys 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 45,378,060 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 I
Directors of the Company named in this Proxy Statement,
(ii) FOR the approval of Amendment No. 2 to the
Companys 2001 Stock Incentive Plan, (iii) FOR the
ratification of the appointment of PricewaterhouseCoopers LLP as
the Companys independent registered public accounting firm
for the current fiscal year and (iv) in their own
discretion with respect to any other business that may properly
come before the stockholders at the Annual Meeting or at any
adjournments or postponements thereof. It is not anticipated
that any matters other than those set forth in the Proxy
Statement will be presented at the Annual Meeting.
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 directors, the approval of Amendment No. 2 to
the Companys 2001 Stock Incentive Plan and the
ratification of the appointment of the Companys
independent registered public accounting
PROXY STATEMENT
firm. Abstentions and broker non-votes will not be counted as
votes cast and, accordingly, will have no effect on the majority
vote required, although they will be counted for quorum purposes.
A stockholder of record may revoke a proxy at any time before it
has been exercised by filing a written revocation with the
Secretary of the Company at the address of the Company set forth
above, by filing a duly executed proxy bearing a later date, or
by appearing in person and voting by ballot at the Annual
Meeting. Any stockholder of record as of the Record Date
attending the Annual Meeting may vote in person whether or not a
proxy has been previously given, but the presence (without
further action) of a stockholder at the Annual Meeting will not
constitute revocation of a previously given proxy. Street
name stockholders who wish to vote in person will need to
obtain a duly executed proxy form from the institution that
holds their shares prior to the Annual Meeting.
In the pages preceding this Proxy Statement is a Letter to
Stockholders from the Companys President and Chief
Executive Officer. Also, Appendix B to this Proxy Statement
contains the Companys 2006 Annual Report, including the
Companys financial statements for the fiscal year ended
December 31, 2006 and certain other information required by
the rules and regulations of the Securities and Exchange
Commission (the SEC). Neither the Letter to
Stockholders from the Companys President and Chief
Executive Officer nor the Companys 2006 Annual Report,
however, are part of the proxy solicitation material. See
Other Matters-Incorporation by Reference herein.
PROPOSAL I
ELECTION OF DIRECTORS
Pursuant to the Articles of Amendment and Restatement of the
Company, as amended (the Articles), the maximum
number of members allowed to serve on the Companys Board
of Directors is 12. The Board of Directors of the Company
currently consists of nine seats and is divided into three
classes, with the directors in each class serving for a term of
three years and until their successors are duly elected and
qualified. The term of one class expires at each Annual Meeting
of Stockholders. Pursuant to the Amended and Restated Bylaws of
the Company, vacancies on the Board of Directors may be filled
by a majority vote of the directors, and directors elected to
fill vacancies shall hold office until the next Annual Meeting
of Stockholders.
At the Annual Meeting, three directors will be elected to serve
as Class I Directors until the 2010 Annual Meeting of
Stockholders and until their successors are duly elected and
qualified. The Board of Directors has nominated Jay Shidler, J.
Steven Wilson and Robert D. Newman to serve as Class I
Directors (the Nominees). Each of the Nominees is
currently serving as a Class I Director of the Company.
Each of the Nominees 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.
INFORMATION
REGARDING NOMINEES AND DIRECTORS
The following biographical descriptions set forth certain
information with respect to the three Nominees for election as
Class I Directors at the Annual Meeting, the continuing
directors whose terms expire at the Annual Meetings of
Stockholders in 2008 and 2009 and certain executive officers,
based on information furnished to the Company by such persons.
The following information is as of March 20, 2007, unless
otherwise specified.
2
PROXY STATEMENT
Class I
Nominees for Election at 2007 Annual Meeting Term to
Expire in 2010
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Jay H.
Shidler |
Director
since 1993
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Mr. Shidler, 60, 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 35 years
of experience in real estate investment and has acquired and
managed properties involving several billion dollars in
aggregate value. Since 1970, Mr. Shidler has been directly
involved in the acquisition and management of over 1,000
properties in 40 states and Canada. Mr. Shidler is the
Chairman of the Board of Trustees of Corporate Office Properties
Trust (NYSE:OFC). From 1998 through 2005, Mr. Shidler
served as a director of Primus Guaranty, Ltd. (NYSE:PRS), a
Bermuda company of which Mr. Shidler is a founder and whose
subsidiary is a AAA-rated financial products company.
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J. Steven
Wilson |
Director
since 1994
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Mr. Wilson, 63, has been a director of the Company since
June 1994. Since February 2003, Mr. Wilson has been owner
and President of Advanced Building Products & Services,
LLC, a building product supply company located in Jacksonville,
Florida. Since 1985, Mr. Wilson has been President, Chief
Executive Officer and Chairman of the Board of Directors of
Riverside Group, Inc., a holding company. From 1991 to April
2003, Mr. Wilson was Chairman of the Board of Directors and
Chief Executive Officer of Wickes Inc.
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Robert D.
Newman |
Director
since 2006
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Mr. Newman, 45, has been a director of the Company since
July 2006. Mr. Newman is also a principal and a member of
the executive committee of William Blair & Company,
L.L.C., a Chicago-based investment firm offering investment
banking, asset management, equity research, institutional and
private brokerage, and private capital to individual,
institutional, and issuing clients. Since 2001, he has served as
that firms director of equity research, managing its
equity research department. He joined William Blair &
Company, L.L.C. in 1989 as a securities analyst in its
investment management services department, became a principal in
the firm in 1993 and, from 1999 to 2001, served as director of
research of its investment management services department.
Before joining William Blair & Company, L.L.C.,
Mr. Newman was a senior financial analyst in the business
development and corporate planning groups for the Quaker Oats
Company. He is a chartered financial analyst and a certified
public accountant and his professional affiliations include the
American Institute of Certified Public Accountants and the
Investment Analysts Society of Chicago.
Class II
Continuing Directors Term to Expire in
2008
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Michael
W. Brennan |
Director
since 1996
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Mr. Brennan, 50, has been a director since March 1996. He
has been President and Chief Executive Officer of the Company
since November 1998, prior to which time he served as Chief
Operating Officer of the Company from December 1995 to November
1998 and as Senior Vice President Asset Management
of the Company from April 1994 to December 1995. He was a
partner of The Shidler Group between 1988 and 1994 and the
President of the Brennan/Tomasz/Shidler Investment Corporation
and was in charge of asset management, leasing, project finance,
accounting and treasury functions for The Shidler Groups
Chicago operations. Between 1986 and 1988, Mr. Brennan
served as The Shidler Groups principal acquisition
executive in Chicago. Prior to joining The Shidler Group,
Mr. Brennan was an investment specialist with CB Commercial
(now CB Richard Ellis, Inc.). Mr. Brennan is a director of
Strategic Hotels & Resorts, Inc. (NYSE: BEE). His
professional affiliations include the Urban Land Institute
(ULI), The Real Estate Roundtable, the National
Association of Real Estate Investment Trusts
(NAREIT), the Young Presidents Organization and the
Economic Club of Chicago.
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PROXY STATEMENT
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Michael
G. Damone |
Director
since 1994
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Mr. Damone, 72, is Director of Strategic Planning for the
Company and has been a director of the Company since June 1994.
Between 1973 and 1994, Mr. Damone was Chief Executive
Officer of Damone/Andrew, a full service real estate
organization, which developed several million square feet of
industrial, warehouse, distribution and research and development
buildings. Prior to co-founding Damone/Andrew in 1973,
Mr. Damone was the executive vice president of a privately
held, Michigan based real estate development and construction
company, where he was responsible for the development of
industrial/business parks. His professional affiliations include
the Society of Industrial and Office Realtors
(SIOR), the National Association of Realtors
(NAR), the Michigan Association of Realtors and the
Detroit Area Commercial Board of Realtors.
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Kevin W.
Lynch |
Director
since 1994
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Mr. Lynch, 54, has been a director of the Company since
June 1994. Mr. Lynch is the co-founder and Principal of The
Townsend Group (Townsend), an institutional real
estate consulting firm, which provides real estate consulting
for pension funds and institutional investors. In his capacity
as Principal, Mr. Lynch is responsible for strategic
development and implementation of client real estate portfolios.
Mr. Lynch is also responsible for new product development.
Prior to founding Townsend, Mr. Lynch was associated with
Stonehenge Capital Corporation, where he was involved in the
acquisition of institutional real estate properties and the
structuring of institutional real estate transactions.
Mr. Lynch is a director of Lexington Corporate Properties
Trust (NYSE: LXP). He is a member of the National Real Estate
Advisory Board for the Real Estate Center at New York
University, the National Council of Real Estate Investment
Fiduciaries, and the Pension Real Estate Association.
Class III
Continuing Directors Term to Expire in
2009
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John
Rau |
Director
since 1994
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Mr. Rau, 58, has been a director of the Company since June
1994. Since December 2002, Mr. Rau has served as President
and Chief Executive Officer and as a director of Miami
Corporation, a private asset management firm. From January 1997
to March 2000, he was a director, President and Chief Executive
Officer of Chicago Title Corporation, a New York Stock
Exchange listed company, and its subsidiaries, Chicago Title and
Trust Co., Chicago Title Insurance Co., Ticor
Title Insurance Co. and Security Union Title Insurance
Co. Mr. Rau is a director of LaSalle Bank, N.A., Nicor Inc.
and Wm. Wrigley Jr. Company. 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 Jim Edgar. From 1990 to 1993, he was
Chairman of the Banking Research Center Board of Advisors and a
Visiting Scholar at Northwestern Universitys 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.
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Robert J.
Slater |
Director
since 1994
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Mr. Slater, 69, has been a director of the Company since
June 1994. Since 1988, Mr. Slater has been President of
Jackson Consulting, Inc., a private investment and consulting
company that specializes in advising manufacturing and
distribution companies on strategic, organizational, and
economic planning. He retired as President, Chief Operating
Officer and Director of Crane Co., a multinational
manufacturing, distribution, and aerospace company, after
serving the company from 1969 to 1988. Mr. Slater also held
several executive level positions at Crane Co. subsidiaries
including CF&I Corporation, Medusa Corporation, and Huttig
Sash & Door Co. Mr. Slater has served on the
boards of directors of a number of public companies during his
career. Most recently, he was a director of Southdown, Inc. and
National Steel Corporation.
4
PROXY STATEMENT
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W. Ed
Tyler |
Director
since 2000
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Mr. Tyler, 54, has been a director of the Company since
March 2000. Mr. Tyler was appointed CEO of Ideapoint
Ventures in 2002. Ideapoint Ventures is an early stage venture
fund that focuses on nanotechnologies. Prior to joining
Ideapoint Ventures, Mr. Tyler served as Chief Executive
Officer and a director of Moore Corporation Limited, a provider
of data capture, information design, marketing services, digital
communications and print solutions, from 1998 to 2000. Prior to
joining Moore Corporation, Mr. Tyler served in various
capacities at R.R. Donnelley & Sons Company, most
recently as Executive Vice President and Chief Technology
Officer, from 1997 to 1998, and as Executive Vice President and
Sector President of Donnelleys Networked Services Sector,
from 1995 to 1997.
INFORMATION
REGARDING EXECUTIVE OFFICERS AND OTHER SENIOR
MANAGEMENT
Michael
J. Havala
Mr. Havala, 47, has been Chief Financial Officer of the
Company since April 1994. He joined The Shidler Group in 1989,
and was Chief Financial Officer for The Shidler Groups
Midwest region with responsibility for accounting, finance,
information technology and treasury functions. With The Shidler
Group, Mr. Havala structured joint ventures, obtained and
refinanced project financing, developed and implemented
management information systems and directed all financial
aspects of a several million square foot portfolio located in
various states throughout the Midwest. Prior to joining The
Shidler Group, Mr. Havala was a Senior Tax Consultant with
Arthur Andersen & Company, where he specialized in real
estate, banking and corporate finance. Mr. Havala is a
certified public accountant. His professional affiliations
include NAREIT.
Johannson
L. Yap
Mr. Yap, 44, has been the Chief Investment Officer of the
Company since February 1997. From April 1994 to February 1997,
he served as Senior Vice President Acquisitions of
the Company. Prior to joining the Company, Mr. Yap joined
The Shidler Group in 1988 as an acquisitions associate, and
became Vice President in 1991, with responsibility for
acquisitions, property management, leasing, project financing,
sales and construction management functions. Between 1988 and
1994, he participated in the acquisition, underwriting and due
diligence of several hundred million dollars of commercial
properties. His professional affiliations include ULI, NAREIT
and the Council of Logistics Management.
David P.
Draft
Mr. Draft, 55, has been Executive Vice
President Operations of the Company since January
2001, prior to which time he served as Managing Director of the
Companys Central region from December 1998 to January 2001
and as Senior Regional Director of the Companys Michigan
and Northern Ohio regions from March 1996 to December 1998. He
has 29 years experience in real estate brokerage, sales,
leasing and asset management. Between 1994 and March 1996,
Mr. Draft was Co-Founder and Principal of Draft &
Gantos Properties, L.L.C., where he was responsible for real
estate management, construction and development. From 1990 to
1994, Mr. Draft was Director of Development and Operations
for Robert Grooters Development Company where he was responsible
for land acquisitions, development project planning, financing
and construction of industrial property. From 1977 to 1990, he
was with First Real Estate, Inc., serving in the capacity of
chief operating officer.
Arne M.
Cook
Mr. Cook, 46, has been Managing Director of the
Companys Central region since January 2001, prior to which
time he served as Senior Regional Director of the Companys
Minnesota region from January 2000 to December 2000, as Regional
Director of the Companys Minnesota region from April 1998
to December 1999 and as Regional Development Manager from April
1997 to March 1998. He has 20 years of experience in the
office and industrial real estate industry. From January 1988 to
March 1997, Mr. Cook served in various capacities,
most recently as Senior Director of Real Estate Development,
with Opus Northwest LLC, a member of the Opus Group of
5
PROXY STATEMENT
Companies, where he was responsible for the development, sales,
financing and asset management of office and industrial
properties throughout the Midwest. His professional affiliations
include the National Association of Industrial and Office
Properties (NAIOP), NAREIT, ULI, the Minnesota
Commercial Association of Realtors and the University of
Wisconsin Real Estate Alumni Association.
Gregory
S. Downs
Mr. Downs, 58, has been Managing Director of the
Companys Gulf/Mountain region since July 2001, prior to
which time he served as a Senior Regional Director from January
2000 to July 2001 and as a Regional Director from June 1998 to
December 1999 of the Companys Denver region. From November
1997 to June 1998, he served as a Regional Development Officer
of the Company. Mr. Downs has over 25 years of real
estate experience. Between June 1994 and November 1997, he was
Vice President of Development for Pacifica Holding Company, a
full-service real estate company operating in Denver.
Mr. Downs professional affiliations include NAIOP and
SIOR.
Robert
Cutlip
Mr. Cutlip, 57, has been Managing Director of the
Companys East region since March 2006. From September 2003
to February 2006, he served as Senior Vice President of
Highwoods Properties, Inc. (NYSE: HIW), a real estate investment
trust. From April 2001 to September 2003, Mr. Cutlip served
as Vice President of Real Estate Operations for Progress Energy
(NYSE: PGN), a diversified energy company, prior to which time,
from 1999 to 2001, he served as Executive Vice President of
Duke-Weeks Realty Corp. (NYSE: DRE), a real estate investment
trust. Mr. Cutlip has over 25 years of real estate
experience. His professional affiliations include NAIOP.
Scott A.
Musil
Mr. Musil, 39, has been Chief Accounting Officer of the
Company since March 2006; Senior Vice President of the Company
since March 2001; Controller of the Company since December 1995;
Treasurer of the Company since May 2002; and Assistant Secretary
of the Company since May 1996. In addition, he served as a Vice
President of the Company from May 1998 to March 2001. Prior to
joining the Company, he served in various capacities with Arthur
Andersen & Company, culminating as an audit manager
specializing in the real estate and finance industries.
Mr. Musil is a certified public accountant. His
professional affiliations include the American Institute of
Certified Public Accountants and NAREIT.
THE BOARD
OF DIRECTORS AND CORPORATE GOVERNANCE
The Board of Directors. The Board of Directors
of the Company is currently comprised of nine members, a
majority of whom are independent as affirmatively determined by
the Board of Directors. In determining the independence of its
members, the Board of Directors applied the following standards:
1) The member must meet the definition of Independent
Director contained in the Companys Articles, which
requires that he or she be neither an employee of the Company
nor a member of The Shidler Group.
2) After taking into account all relevant facts and
circumstances, the Board must determine that the member has no
material relationships with the Company (either directly or as a
partner, shareholder or officer of an organization that has a
relationship with the Company). Relationships to be considered
include commercial, industrial, banking, consulting, legal,
accounting, charitable and familial relationships.
3) The member must satisfy the independence tests set forth
in Section 303A.02(b) of the Listed Company Manual of the
New York Stock Exchange (the NYSE).
Applying such standards, the Board of Directors has
affirmatively determined that its current independent directors
are Messrs. Lynch, Newman, Rau, Slater, Tyler and Wilson.
Pursuant to the terms of the Companys Articles, the
directors are divided into three classes. Class I
Directors, Messrs. Shidler, Wilson and Newman, hold office
for a term expiring at this Annual Meeting. Class II
Directors,
6
PROXY STATEMENT
Messrs. Brennan, Damone and Lynch, hold office for a term
expiring at the Annual Meeting of Stockholders to be held in
2008. Class III Directors, Messrs. Rau, Slater and
Tyler, hold office for a term expiring at the Annual Meeting of
Stockholders to be held in 2009. Each director will hold office
for the term to which he is elected and until his successor is
duly elected and qualified. At each Annual Meeting of
Stockholders, the successors to the class of directors whose
term expires 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 11 meetings and acted three times by
unanimous consent during 2006. Each of the directors serving in
2006 attended at least 75% of the total number of meetings of
the Board of Directors and of the respective committees of the
Board of Directors of which he was a member. Although the
Company does not have a formal policy regarding director
attendance at Annual Meetings of Stockholders, all of the
directors then serving attended the 2006 Annual Meeting of
Stockholders.
The Board of Directors has adopted Corporate Governance
Guidelines to reflect the principles by which it operates. These
guidelines, as well as the charters of the Audit Committee,
Compensation Committee and Nominating/Corporate Governance
Committee of the Board of Directors, are accessible at the
investor relations pages of the Companys website at
www.firstindustrial.com. The Company has adopted a Code of
Business Conduct and Ethics which includes the principles by
which the Company expects its employees, officers and directors
to conduct Company business and which is accessible at the
investor relations pages of the Companys website at
www.firstindustrial.com. The Company intends to post on its
website amendments to, or waivers from, any provision of the
Companys Code of Business Conduct and Ethics.
The Board of Directors has appointed an Audit Committee, a
Compensation Committee, an Investment Committee, a
Nominating/Corporate Governance Committee and a Special
Committee.
Audit Committee. The Audit Committee is
directly responsible for the appointment, discharge,
compensation, and oversight of the work of any independent
public accountants employed by the Company for the purpose of
preparing or issuing an audit report or related work. In
connection with such responsibilities, the Audit Committee
approves the engagement of independent public accountants,
reviews with the independent public accountants the audit plan,
the audit scope, and the results of the annual audit engagement,
pre-approves audit and non-audit services provided by the
independent public accountants, reviews the independence of the
independent public accountants, pre-approves audit and non-audit
fees and reviews the adequacy of the Companys internal
accounting controls.
The membership of the Audit Committee currently consists of
Messrs. Rau, Lynch and Wilson, each of whom, in the
judgment of the Companys Board of Directors, is
independent as required by the listing standards of the NYSE and
the rules of the SEC. In the judgment of the Companys
Board of Directors, each member is financially literate as
required by the listing standards of the NYSE. Further, in the
judgment of the Companys Board of Directors, Mr. Rau
is an audit committee financial expert, as such term
is defined in the SEC rules, and has accounting or related
financial management expertise, as defined in the listing
standards of the NYSE. See Mr. Raus biography above.
The Audit Committee met 11 times in 2006.
Compensation Committee. The Compensation
Committee has overall responsibility for approving and
evaluating the compensation plans, policies and programs
relating to the executive officers of the Company. The
Compensation Committee administers, and has authority to grant
awards under, the First Industrial Realty Trust, Inc. 1994 Stock
Incentive Plan (the 1994 Stock Plan), the First
Industrial Realty Trust, Inc. 1997 Stock Incentive Plan (the
1997 Stock Plan), the First Industrial Realty Trust,
Inc. Deferred Income Plan (the Deferred Income Plan)
and the First Industrial Realty Trust, Inc. 2001 Stock Incentive
Plan (the 2001 Stock Plan). The Compensation
Committee currently consists of Messrs. Slater and Tyler,
each of whom, in the judgment of the Companys Board of
Directors, is independent as required by the listing standards
of the NYSE. The Compensation Committee met seven times and
acted once by unanimous consent in 2006.
7
PROXY STATEMENT
Investment Committee. The Investment Committee
provides oversight and discipline to the investment process.
Investment opportunities are described in written reports based
on detailed research and analyses in a standardized format
applying appropriate underwriting criteria. The Investment
Committee meets with the Companys acquisition personnel,
reviews each submission thoroughly and approves acquisitions of
land having a total investment of greater than $5 million
and all other acquisitions and development projects having a
total investment of greater than $15 million. The
Investment Committee makes a formal recommendation to the Board
of Directors for all acquisitions and development projects with
a total investment in excess of $30 million. The membership
of the Investment Committee currently consists of
Messrs. Shidler, Brennan, Damone, Tyler and Wilson. The
Investment Committee met 37 times and acted twice by unanimous
consent in 2006.
Nominating/Corporate Governance Committee. The
Nominating/Corporate Governance Committee recommends 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 recommended by the Nominating/Corporate
Governance Committee or rejects all of the nominations in whole,
but not in part. In the event that the Board of Directors as a
whole by a majority vote rejects the recommended nominations,
the Nominating/Corporate Governance Committee develops a new
recommendation. In addition, the Nominating/Corporate Governance
Committee develops and oversees the Companys corporate
governance policies. The current Nominating/Corporate Governance
Committee consists of Messrs. Lynch, Slater and Wilson,
each of whom, in the judgment of the Companys Board of
Directors, is independent as required by the listing standards
of the NYSE. Mr. Lynch is the current Chairman of the
Nominating/Corporate Governance Committee and also presides at
meetings of non-management directors. The Nominating/Corporate
Governance Committee met twice during 2006 and met in February
2007 to determine its nominations for this Proxy Statement.
The Nominating/Corporate Governance Committee will consider
nominees recommended by stockholders of the Company. In order
for a stockholder to nominate a candidate for election as a
director at an Annual Meeting, notice must be given in
accordance with the Bylaws of the Company to the Secretary of
the Company not more than 180 days nor less than
75 days prior to the first anniversary of the preceding
years Annual Meeting. The fact that the Company may not
insist upon compliance with the requirements contained in its
Bylaws should not be construed as a waiver by the Company of its
right to do so at any time in the future.
In general, it is the Nominating/Corporate Governance
Committees policy that, in its judgment, its recommended
nominees for election as members of the Board of Directors of
the Company, at a minimum, have business experience of a
breadth, and at a level of complexity, sufficient to understand
all aspects of the Companys business and, through either
experience or education, have acquired such knowledge as is
sufficient to qualify as financially literate. In addition,
recommended nominees must be persons of integrity and be
committed to devoting the time and attention necessary to
fulfill their duties to the Company.
The Nominating/Corporate Governance Committee may identify
nominees for election as members of the Board of Directors of
the Company through its own sources (including through
nominations by stockholders made in accordance with the
Companys Bylaws), through sources of other directors of
the Company, and through the use of third-party search firms.
The Company has previously engaged a third party search firm to
identify potential nominees and may do so again in the future.
Subject to the foregoing minimum standards, the
Nominating/Corporate Governance Committee will evaluate each
nominee on a
case-by-case
basis, assessing each nominees judgment, experience,
independence, understanding of the Companys business or
that of other related industries, and such other factors as the
Nominating/Corporate Governance Committee concludes are
pertinent in light of the current needs of the Companys
Board of Directors.
Special Committee. The Special Committee is
authorized, within limits specified by the Board of Directors,
to approve the terms under which the Company issues Common
Stock, preferred stock or depository shares representing
fractional interests in preferred stock, or under which the
Company or any of the Companys subsidiaries, including
First Industrial, L.P., issues debt. The membership of the
Special Committee currently
8
PROXY STATEMENT
consists of Messrs. Shidler, Brennan and Rau. The Special
Committee acted by unanimous consent twice during 2006.
Communications by Stockholders. Stockholders
of the Company may send communications to the Board of Directors
as a whole, its individual members, its committees or its
non-management members as a group. Communications to the Board
of Directors as a whole should be addressed to The Board
of Directors; communications to any individual member of
the Board of Directors should be addressed to such individual
member; communications to any committee of the Board of
Directors should be addressed to the Chairman of such committee;
and communications to non-management members of the Board of
Directors as a group should be addressed to the Chairman of the
Nominating/Corporate Governance Committee. In each case,
communications should be further addressed c/o First
Industrial Realty Trust, Inc., 311 South Wacker Drive,
Suite 4000, Chicago, Illinois 60606. All
communications will be forwarded to their respective addressees
and, if a stockholder marks his or her communication
Confidential, will be forwarded directly to the
addressee.
DIRECTOR
COMPENSATION
Directors of the Company who are also employees, namely Michael
W. Brennan and Michael G. Damone, receive no additional
compensation for their services as a director. Compensation of
non-employee directors is reviewed annually by the Compensation
Committee of the Board of Directors, which makes any
recommendations of compensation changes to the entire Board of
Directors. In 2006, the Compensation Committee retained Towers
Perrin and FPL Associates, outside consultants, to review the
appropriateness of directors compensation. Currently,
non-employee directors of the Company receive an annual
directors fee equivalent in value to $40,000. At least 50%
of the value of such fee must be taken in the form of restricted
Common Stock but directors can elect to receive a greater
proportion of their fee in restricted Common Stock. The Chairman
of the Audit Committee receives an additional fee of $20,000 for
his service as Chairman of the Audit Committee; the Chairman of
the Compensation Committee receives an additional fee of $10,000
for his service as Chairman of the Compensation Committee; and
the Chairman of the Nominating/Corporate Governance Committee
receives an additional fee of $5,000 for his service as Chairman
of the Nominating/Corporate Governance Committee. Each
non-employee director also receives $2,000 for each in-person
meeting of the Board of Directors attended, $1,500 for each
telephonic Board meeting participated in, $2,000 for each
in-person committee meeting attended and $1,500 for each
telephonic committee meeting participated in. Following the 2006
Annual Meeting of Stockholders, each of the Companys
non-employee directors also received 1,500 shares of
restricted Common Stock under the 2001 Stock Plan. Shares of
restricted Common Stock issued to directors receive dividends at
the same rate as the Companys Common Stock. Non-employee
directors are not entitled to retirement benefits, incentive
compensation or perquisites, although they are reimbursed for
their
out-of-pocket
expenses for meeting attendance.
9
PROXY STATEMENT
DIRECTOR
COMPENSATION SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
or Paid in
|
|
|
Stock
|
|
|
All Other
|
|
|
Total
|
|
Name
|
|
Cash ($)(1)
|
|
|
Awards ($)(2)
|
|
|
Compensation ($)(3)
|
|
|
Compensation ($)
|
|
|
Jay H. Shidler
|
|
$
|
66,500
|
|
|
$
|
62,948
|
(4)
|
|
$
|
27,661
|
|
|
$
|
157,109
|
|
Kevin W. Lynch
|
|
$
|
29,750
|
|
|
$
|
54,045
|
(5)
|
|
$
|
19,934
|
|
|
$
|
103,729
|
|
James F. Millar(6)
|
|
$
|
33,250
|
|
|
$
|
10,279
|
(6)
|
|
$
|
3,292
|
|
|
$
|
46,821
|
|
Robert D. Newman
|
|
$
|
7,000
|
|
|
$
|
404
|
(7)
|
|
$
|
161
|
|
|
$
|
7,565
|
|
John Rau
|
|
$
|
64,250
|
|
|
$
|
56,629
|
(8)
|
|
$
|
22,517
|
|
|
$
|
143,396
|
|
Robert J. Slater
|
|
$
|
34,000
|
|
|
$
|
87,184
|
(9)
|
|
$
|
47,441
|
|
|
$
|
168,625
|
|
W. Ed Tyler
|
|
$
|
56,500
|
|
|
$
|
57,302
|
(10)
|
|
$
|
22,294
|
|
|
$
|
136,096
|
|
J. Steven Wilson
|
|
$
|
66,000
|
|
|
$
|
62,948
|
(11)
|
|
$
|
27,661
|
|
|
$
|
156,609
|
|
|
|
|
(1) |
|
Does not include that portion of non-employee directors
annual director fees paid in the form of Stock Awards. See under
Stock Awards in the adjacent column. |
|
(2) |
|
All reported awards are of shares of restricted Common Stock and
amounts reported represent the amount of expense recognized by
the Company during 2006 under Statement of Financial Accounting
Standard No. 123R (Share-Based Payments)
(FAS 123R) for grants made in 2006 and prior
years. The grant date fair value of each stock award granted in
2006 to a director is reflected in the footnotes below. The
grant date fair value determined under FAS 123R for each
award 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 NYSE on the
applicable date of grant ($40.00 on January 6, 2006; $41.58
on April 5, 2006; $37.78 on July 7, 2006; $45.33 on
October 6, 2006). |
|
(3) |
|
Amounts represent dividends on shares of unvested restricted
Common Stock. Amounts do not include dividends/distributions
paid on original shares of Common Stock issued in connection
with the Companys initial public offering, shares of
Common Stock purchased subsequently in the open market or by
exercise of options, shares of formerly restricted Common Stock
after such stock has vested or on limited partnership units of
First Industrial, L.P. (which generally are exchangeable on a
one-for-one
basis, subject to adjustments, for Common Stock). |
|
(4) |
|
Mr. Shidler received grants of stock during 2006 with the
following grant date fair values: $7,800; $7,318; $66,664; and
$10,290. As of December 31, 2006, Mr. Shidler held
10,438 shares of unvested restricted Common Stock. |
|
(5) |
|
Mr. Lynch received grants of stock during 2006 with the
following grant date fair values: $7,800; $7,318; $66,664; and
$10,290. As of December 31, 2006, Mr. Lynch held
7,688 shares of unvested restricted Common Stock. |
|
(6) |
|
Mr. Millar received grants of stock during 2006 with the
following grant date fair values: $3,880; $7,318; $66,664; and
$10,290. As of December 31, 2006, Mr. Millar held
2,264 shares of unvested restricted Common Stock.
Mr. Millar resigned as a Director of the Company
January 26, 2007, at which time he vested in
2,477 shares of restricted Common Stock having a value as
of the date of vesting of approximately $116,766 (based on the
closing price of the Common Stock ($47.14) on that date, as
reported by the NYSE). |
|
(7) |
|
Mr. Newman received a grant of stock during 2006 with the
following grant date fair value: $10,290. As of
December 31, 2006, Mr. Newman held 227 shares of
unvested restricted Common Stock. |
|
(8) |
|
Mr. Rau received grants of stock during 2006 with the
following grant date fair values: $3,880; $3,659; $61,657; and
$5,168. As of December 31, 2006, Mr. Rau held
8,435 shares of unvested restricted Common Stock. |
|
(9) |
|
Mr. Slater received grants of stock during 2006 with the
following grant date fair values: $7,800; $7,318; $66,664; and
$10,290. As of December 31, 2006, Mr. Slater held
17,477 shares of unvested restricted Common Stock. |
10
PROXY STATEMENT
|
|
|
(10) |
|
Mr. Tyler received grants of stock during 2006 with the
following grant date fair values: $7,800; $7,318; $66,664; and
$10,290. As of December 31, 2006, Mr. Tyler held
8,528 shares of unvested restricted Common Stock and 30,000
options. |
|
(11) |
|
Mr. Wilson received grants of stock during 2006 with the
following grant date fair values: $7,800; $7,318; $66,664; and
$10,290. As of December 31, 2006, Mr. Wilson held
10,438 shares of unvested restricted Common Stock and
60,000 options. |
EXECUTIVE
COMPENSATION DISCUSSION AND ANALYSIS
OVERVIEW
OF COMPENSATION PROGRAM OBJECTIVES AND
DESIGN
The Compensation Committee of the Companys Board of
Directors (the Committee) has overall responsibility
for approving and evaluating the compensation plans, policies
and programs relating to the executive officers of the Company.
The Company maintains the philosophy that compensation of its
executive officers and other employees should serve the best
interests of the Companys stockholders. Accordingly, the
Company believes its executive compensation program should not
only serve to attract and retain talented, capable individuals,
but also to provide them with proper incentives linked to
performance criteria that are designed to maximize the
Companys overall performance. To this end, the
Companys compensation program consists of a mix of
compensation that is intended to compensate executive officers
for their contributions during the year and to reward them for
achievements that lead to increased Company performance and
increases in stockholder value.
THE
EXECUTIVE COMPENSATION PROCESS AND THE ROLE OF EXECUTIVE
OFFICERS IN COMPENSATION DECISIONS
The Compensation Committee typically begins the process of
formulating executive compensation in the December before the
upcoming applicable fiscal year by setting that years
salaries for each of the Named Executive Officers and target
maximum cash and equity bonus for each of the Named Executive
Officers other than the Managing Directors. (As discussed below,
beginning with 2006, the Managing Directors are subject to the
Managing Director 2006 Incentive Compensation Plan.) Then,
typically, in the first quarter of the applicable fiscal year,
the Compensation Committee adopts, and the full Board of
Directors ratifies, the performance criteria to be used to
determine the Chief Executive Officers and other Named
Executive Officers (other than the Managing
Directors) incentive compensation for that year. Then,
after the end of the applicable fiscal year, the Compensation
Committee meets to determine incentive compensation to be paid
to the Named Executive Officers (other than the Managing
Directors) with respect to that year. At that time, the
Compensation Committee also reviews the calculations per the
Managing Director 2006 Incentive Compensation Plan of the
Managing Directors incentive compensation with respect to
that year. Per such determination/review, the Company pays cash
bonuses, typically in February, and issues restricted stock,
typically in March. In the case of the Named Executive
Officers 2006 incentive compensation, the Compensation
Committee determined/reviewed both the cash and equity
components of incentive compensation at a meeting on
January 30, 2007 and by a unanimous written consent dated
as of February 23, 2007. Cash bonuses were paid on
February 28, 2007 and restricted stock awards were granted
on March 12, 2007. The restricted stock awards were granted
when administratively convenient, and the number of shares to be
awarded was based on the closing price of the Companys
Common Stock on January 23, 2007, the day prior to the
submission of award information and recommendations to the
Compensation Committee for purposes of its January 30, 2007
meeting.
Periodically, though not every year, the Company and the
Compensation Committee engage the services of outside
consultants to evaluate the Companys executive
compensation program. In 2006, the Compensation Committee
retained FPL Associates, an outside consultant, to review the
appropriateness of the compensation of the Companys Chief
Executive Officer, Chief Financial Officer, Chief Investment
Officer and Executive Vice President Operations, and
of the Managing Director 2006 Incentive Compensation Plan. As
part of its review,
11
PROXY STATEMENT
the outside consultant surveyed a range of real estate companies
that included not only the Companys industrial peers, but
similarly sized companies and companies with similar operating
strategies from other sectors of the REIT industry. The
Compensation Committee used such survey not as a benchmark, per
se, but rather to gauge generally the appropriateness of the
Companys executive compensation programs.
The Companys Chief Executive Officer and Chief Financial
Officer participate in meetings with the Compensation Committee
at various times throughout the year. In December of each year,
they meet with the Compensation Committee to present and discuss
recommendations with respect to the upcoming fiscal years
salaries for the Named Executive Officers and target maximum
cash and equity bonus for the Named Executive Officers other
than the Managing Directors. In the first quarter of each year,
they meet with the Compensation Committee to present and discuss
recommendations with respect to incentive compensation for the
year just ended. They also meet with the Compensation Committee
regarding employment agreements that the Company has entered
into and assist the Compensation Committee in providing
compensation information to outside consultants engaged to
evaluate the Companys compensation programs.
EXECUTIVE
COMPENSATION COMPONENTS
The components of the Companys executive compensation
program are base salary, incentive bonuses (both cash and equity
awards) and benefits/perquisites (including premiums paid by the
Company on term life insurance and long-term disability
insurance, car allowances, personal financial planning
allowances, 401(k) matching contributions and standard health,
life and disability insurance).
Each component of the Companys executive compensation
program serves to attract and retain talented, capable
individuals to the Companys management ranks. Incentive
bonuses serve the added purpose of providing such individuals
with proper incentives linked to performance criteria that are
designed to maximize the Companys overall performance.
The Company considers base salary, incentive bonuses and
benefits/perquisites as independent components of the
Companys executive compensation program. Base salary and
benefits/perquisites are intended to compensate Named Executive
Officers for services rendered and increases to their base
salary are a function of individual performance and general
economic conditions. Incentive bonuses, by contrast, are linked
to, and are a function of the achievement of, performance
criteria that are designed to maximize the Companys
overall performance. Base salary and benefits/perquisites
constitute approximately 1/3 of executive officers
compensation in a typical year, while incentive bonus makes up
approximately 2/3. This allocation between base salary and
incentive compensation is consistent with the Compensation
Committees compensation philosophy that executive
officers compensation should be largely tied to
performance criteria designed to maximize the Companys
overall performance.
The Compensation Committee does not have a specific policy
regarding the mix of cash and non-cash compensation awarded to
its executive officers, although it believes that a significant
portion of executive officer compensation should be paid in the
form of equity. The mix of target maximum cash and non-cash
incentive compensation our executive officers are entitled to
receive is set forth in their respective employment agreements.
Depending on the individual, non-cash compensation makes up
approximately 40% of the executive officers potential
incentive compensation. With respect to allocating between cash
and non-cash incentive compensation for the Companys
Managing Directors, the Managing Director 2006 Incentive
Compensation Plan calls for incentive compensation to be paid
60% in cash and 40% in restricted stock awards.
When granting non-cash compensation to the executive officers
and Managing Directors, the Compensation Committee uses
restricted stock awards. Typically, such restricted stock awards
vest ratably over 3 years and are denominated based on the
closing price of the Companys Common Stock on the day
prior to the submission of award information and recommendations
to the Compensation Committee for purposes of its award
determinations. The Compensation Committee believes that
restricted stock awards play an important role in aligning
managements interests with those of the Companys
stockholders in that restricted stock (other than the vesting
and transfer restrictions applicable to it) is economically
identical to stockholders common stock. For this reason,
restricted stock awards have been and, the Company expects, will
continue to be a significant part of executive compensation.
12
PROXY STATEMENT
SETTING
EXECUTIVE COMPENSATION
Base
Salary
The Company provides the Named Executive Officers with base
salary to compensate them for services rendered during the
fiscal year. The base salaries of the Companys Chief
Executive Officer, Chief Financial Officer, Chief Investment
Officer and Executive Vice President Operations are
a function of the minimum base salaries specified in their
employment agreements and the increases to such base salaries
approved by the Compensation Committee. Base salaries for the
Companys Managing Directors are a function of the base
salaries negotiated and approved by the Compensation Committee
at the time each Managing Director was hired or promoted to that
position and the increases to such base salaries approved by the
Compensation Committee. In setting the base salaries of the
Companys Chief Executive Officer, Chief Financial Officer,
Chief Investment Officer and Executive Vice
President Operations that are specified in their
employment agreements, as well as the base salaries of the
Managing Directors, the Compensation Committee consulted with
outside compensation consultants. In determining increases to
such base salaries for the following year, the Compensation
Committee considers individual performance of the Named
Executive Officers in the year just past, including
organizational and management development and sales leadership
exhibited from
year-to-year.
The Compensation Committee also considers general economic
conditions prevailing at the end of such year when the increases
for the following year are typically determined. The increases
in base salaries for 2006 were relatively modest and reflect a
cost of living increase.
Incentive
Bonuses
The Company provides the Named Executive Officers with incentive
compensation, which currently includes cash and equity awards in
the form of restricted stock, to incentivize and reward them for
Company and individual performance in specified areas that
serves the best interests of the Companys stockholders.
Our Chief Executive Officer, Chief Financial Officer, Chief
Investment Officer and Executive Vice President
Operations each participate in an incentive compensation plan
(the Executive Officer Bonus Plan) which derives
from the Companys strategic plan, while our Managing
Directors participate in the 2006 Managing Director Incentive
Plan.
The Executive Officer Bonus Plan seeks to tie executive officer
compensation to achievement of the Companys business plan
and individual goals. Under the Executive Officer Bonus Plan,
awards are made in cash and restricted stock based on a target
maximum cash and equity bonus, expressed as a percentage of
participants base salaries. The target maximum cash and
equity bonus are based on targets required by participants
employment agreements and are subject to increase by the
Compensation Committee. The target maximum bonus for 2006 for
the Named Executive Officers that participated in the Executive
Officer Bonus Plan were as follows:
|
|
|
|
|
|
|
|
|
|
|
Target Maximum
|
|
|
Target Maximum
|
|
Named Executive Officer
|
|
Cash Bonus
|
|
|
Equity Bonus
|
|
|
Michael W. Brennan
|
|
|
225
|
%
|
|
|
187
|
%
|
Michael J. Havala
|
|
|
200
|
%
|
|
|
187
|
%
|
Johannson L. Yap
|
|
|
200
|
%
|
|
|
187
|
%
|
David P. Draft
|
|
|
200
|
%
|
|
|
187
|
%
|
13
PROXY STATEMENT
When granting awards under the Executive Officer Bonus Plan, the
Compensation Committee evaluates five broad performance
categories designed to reward different areas of executive
officer performance. These categories include earnings growth,
growth in stockholder value, customer base growth, personnel
excellence and competitiveness. Under these five broad
categories are more specific goals and objectives: for example,
under the broad category earnings growth there is a
funds from operations (or
FFO(1)()
growth percentage target, among other targets; under
growth in stockholder value there is a target total
stockholder return, among other targets; under customer
base growth there is a tenant retention target, among
other targets; under personnel excellence there is a
target percentage for employee satisfaction, among other
targets; under competitiveness there is a target
percentage for portfolio occupancy to exceed market occupancy,
among other targets.
The Compensation Committee sets targets based on the
above-described criteria at the beginning of each year and
evaluates whether the Company met, exceeded or failed to meet
each of these more specific goals and objectives. Based on this
evaluation, the Compensation Committee assigns an overall
grade to each of the broad categories. An overall
weighted average grade, expressed as a percentage, is then
established based on the weight the Compensation Committee has
assigned to each of the broad categories: currently 50% to
earnings growth and 12.5% to each of customer base growth,
personnel excellence, competitiveness and growth in stockholder
value. Earnings growth is given the greatest weight in this
calculation because the Compensation Committee believes this
category represents the most important goal for our executive
officers.
For 2006, the Compensation Committee assigned a high grade to
the earnings growth category. This grade was primarily based on
FFO per share growth of 14%, compared to a target of 11%. In
addition to the grade for earnings growth, the Compensation
Committee assigned high grades for customer base growth,
personnel excellence, and growth in stockholder value and an
average grade for competitiveness. The overall weighted average
grade is then applied to the applicable officers target
maximum cash and equity bonus to compute the executive
officers estimated cash and non-cash bonus payout.
Once the Compensation Committee has determined the estimated
cash and non-cash bonus payout for each executive officer, it
has the discretion to increase or decrease such amounts, and to
alter the mix of cash versus non-cash compensation. Based on the
achievement of these and other factors and on the Compensation
Committees evaluation of certain other qualitative
factors, including organizational and management development and
sales leadership exhibited from
year-to-year,
the Compensation Committee awarded bonuses to the Named
Executive Officers that participate in the Executive Officer
Bonus Plan ranging from 70% to 72% of the executive
officers target cash bonus award and 116% to 143% of the
executive officers target equity bonus. For 2006, the
Compensation Committee approved equity bonuses for the Named
Executive Officers in excess of the target
((1) FFO is a non-GAAP measure that the Company defines as
net income available to common stockholders, plus depreciation
and amortization of real estate, minus accumulated depreciation
and amortization on real estate sold. Investors in and analysts
following the real estate industry utilize FFO, variously
defined, as a supplemental performance measure. The Company
considers FFO, given its wide use by and relevance to investors
and analysts, an appropriate supplemental performance measure.
FFO, reflecting the assumption that real estate asset values
rise or fall with market conditions, principally adjusts for the
effects of GAAP depreciation/amortization of real estate assets.
In addition, FFO is commonly used in various ratios, pricing
multiples/yields and returns and valuation calculations used to
measure financial position, performance and value. FFO does not
represent cash generated from operating activities in accordance
with GAAP and is not necessarily indicative of cash available to
fund cash needs, including the repayment of principal on debt
and payment of dividends and distributions. FFO should not be
considered as a substitute for net income available to common
stockholders (calculated in accordance with GAAP) as a measure
of results of operations or cash flows (calculated in accordance
with GAAP) as a measure of liquidity. FFO as calculated by the
Company may not be comparable to similarly titled, but
differently calculated, measures of other REITs or to the
definition of FFO published by NAREIT. Please see the
reconciliation of FFO to net income available to common
stockholders contained in our Current Report on
Form 8-K
dated February 21, 2007.
14
PROXY STATEMENT
maximum equity bonus it previously set in order to reduce the
cash bonus the Company would have otherwise paid with respect to
a year in which the Company achieved strong performance.
Our Managing Directors, including Mr. Cook, are eligible to
participate in a bonus plan created specifically for Managing
Directors. The plan is designed to reward the Companys
Managing Directors for profitable development, sale and lease
transactions consummated in their regions and to increase their
ownership in the Company. Under the Managing Director 2006
Incentive Compensation Plan each Managing Director is eligible
to receive (i) an amount equal to 7% of the new business
generation incentive compensation paid to officers of the
Managing Directors region and (ii) an additional 20%
of the new business generation incentive compensation paid to
officers of the Managing Directors region on certain types
of transactions. Losses from comparable transactions will offset
gains for the purpose of determining compensation payable under
the plan. In addition, each Managing Director may receive
compensation up to $300,000 upon the achievement of
profitability and sales leadership goals and acquisitions and
development projects. Managing Directors have no target maximum
cash and equity bonus under the Managing Director 2006 Incentive
Compensation Plan.
For 2006, Mr. Cook received an award of $510,011 in cash
and 12,708 shares of restricted Common Stock. The following
table indicates the contribution of the various components of
the Managing Director 2006 Incentive Compensation Plan to this
award:
|
|
|
|
|
Managing Director 2006 Incentive Compensation Plan
Components
|
|
Value (%)
|
|
|
7% of the new business generation
incentive compensation paid to officers of the Managing
Directors region
|
|
|
26
|
|
Additional 20% of the new business
generation incentive compensation paid to officers of the
Managing Directors region on certain types of transactions
|
|
|
54
|
|
Achievement of profitability and
sales leadership goals and acquisitions and development projects
|
|
|
20
|
|
Benefits/Perquisites
The Company provides the Named Executive Officers with certain
benefits/perquisites, which, depending on the officer, include
premiums paid by the Company on term life insurance and
long-term disability insurance, car allowances and personal
financial planning allowances. The Named Executive Officers,
along with all of the Companys other full time employees,
also receive 401(k) matching contributions and standard health,
life and disability insurance. To the extent provided, premiums
paid by the Company on term life insurance and long-term
disability insurance and personal financial planning allowances
are specified in the employment agreements of the Companys
Chief Executive Officer, Chief Financial Officer, Chief
Investment Officer and Executive Vice President
Operations. Current car allowances were set in 2000 and 2001 and
are a function of the then prevailing market rates to lease and
operate an executive class vehicle. 401(k) matching payments are
a function of each Named Executive Officers contribution
to his 401(k) account during the year and the percentage match
which management determines to apply to the Companys
401(k) Plan for that year. Standard health, life and disability
insurance benefits are a function of the group benefit packages
the Company is able to negotiate with third party providers.
Termination
and
Change-in-Control
Triggers
Each of the Companys Chief Executive Officer, Chief
Financial Officer, Chief Investment Officer and Executive Vice
President Operations have employment agreements and
all of the Named Executive Officers have agreements in respect
of their restricted stock awards pursuant to the Companys
stock incentive plans, and such agreements specify certain
events, including involuntary termination and
change-in-control,
which trigger the payment of cash
and/or
vesting in restricted stock awards. The Company believes having
such events as triggers for the payment of cash
and/or
vesting in restricted stock awards promotes stability and
continuity of management. See Potential Payments Upon
Termination or Change of Control below for more
information on the payments triggered by such events.
15
PROXY STATEMENT
TAX AND
ACCOUNTING IMPLICATIONS
Deductibility
of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the Code), generally limits the deductible
amount of annual compensation paid by a public company to a
covered employee (the chief executive officer and
four other most highly compensated executive officers of the
Company) to no more than $1 million. The Company does not
believe that Section 162(m) of the Code is applicable to
its current arrangements with its executive officers.
Accounting
for Restricted Stock
Effective January 1, 2006 the Company adopted
FAS 123R, using the modified prospective application
method, which requires measurement of compensation cost for the
Companys restricted stock awards at fair value on the date
of grant and recognition of compensation over the service period
for awards expected to vest. Although the Compensation Committee
has considered the impacts of FAS 123R, it has not altered
its equity award practices as a result of it.
COMPENSATION
COMMITTEE REPORT
The Compensation Committee of the Board of Directors of the
Company has reviewed, and discussed with management, the
Compensation Discussion and Analysis included above in this
Proxy Statement. Based on such review and discussions, the
Compensation Committee recommended to the Board of Directors of
the Company that the Compensation Discussion and Analysis be
included in the Companys annual report on
Form 10-K
for the Companys fiscal year ended December 31, 2006.
Submitted by the Compensation Committee:
Robert J. Slater, Chairman
W. Ed Tyler
16
PROXY STATEMENT
EXECUTIVE
COMPENSATION SUMMARY
The Summary Compensation Table below sets forth the aggregate
compensation, including cash compensation and amortization
expenses of, and ordinary dividends with respect to, restricted
stock awards, paid by the Company to its Chief Executive
Officer, its Chief Financial Officer and its three other most
highly compensated executive officers (the Named Executive
Officers) for the fiscal year ended December 31,
2006. The Grants of Plan Based Awards Table following the
Summary Compensation Table provides additional information
regarding the cash compensation paid and restricted stock
awarded by the Company to Named Executive Officers.
The Companys Chief Executive Officer, Chief Financial
Officer, Chief Investment Officer and Executive Vice
President Operations have employment agreements
which provide for an annual base salary, subject to increase or
decrease at the discretion of the Compensation Committee, an
annual cash
and/or
equity bonus at the discretion of the Board of Directors and as
may be determined by the Committee
and/or the
Board, and certain other benefits.
Base salary of the Named Executive Officers accounted for only
approximately 20% of the aggregate total compensation of the
Named Executive Officers for 2006. This is consistent with the
Companys compensation philosophy, which is to weight
compensation towards incentive compensation to better align
executive compensation with the Companys actual economic
performance during the applicable fiscal year.
Restricted Common Stock granted to the Named Executive Officers
typically vests in three approximately equal installments on
each January 1st following the year of grant. From and
after the date of issuance, holders of the restricted Common
Stock are entitled to vote such Common Stock and receive
dividends at the same rate applicable to unrestricted shares of
Common Stock.
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
Stock
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(e)
|
|
|
(g)
|
|
|
(i)
|
|
|
(j)
|
|
|
Michael W. Brennan
|
|
|
2006
|
|
|
$
|
530,000
|
|
|
$
|
1,061,425
|
|
|
$
|
850,000
|
|
|
$
|
301,104
|
|
|
$
|
2,742,529
|
|
President and CEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael J. Havala
|
|
|
2006
|
|
|
$
|
315,000
|
|
|
$
|
682,314
|
|
|
$
|
450,500
|
|
|
$
|
210,887
|
|
|
$
|
1,658,701
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Johannson L. Yap
|
|
|
2006
|
|
|
$
|
334,000
|
|
|
$
|
594,722
|
|
|
$
|
467,500
|
|
|
$
|
199,208
|
|
|
$
|
1,595,430
|
|
Chief Investment Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David P. Draft
|
|
|
2006
|
|
|
$
|
300,000
|
|
|
$
|
543,297
|
|
|
$
|
391,000
|
|
|
$
|
145,247
|
|
|
$
|
1,379,544
|
|
Executive Vice
President Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arne M. Cook
|
|
|
2006
|
|
|
$
|
240,000
|
|
|
$
|
342,995
|
|
|
$
|
510,011
|
|
|
$
|
84,931
|
|
|
$
|
1,177,937
|
|
Managing Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amount reflected is the cost recognized by the Company in
2006 under FAS 123R for all restricted stock grants to the
executive in 2006 and prior years. |
|
(2) |
|
Amounts represent cash incentive compensation awarded in
February 2007 based on performance for the year ended
December 31, 2006. |
|
(3) |
|
Includes premiums paid by the Company on term life insurance and
long-term disability insurance, car allowances, personal
financial planning allowances and 401(k) matching payments. Term
life insurance premiums paid on behalf of Mr. Brennan in
2006 aggregated $15,800. Also includes dividends on shares of
unvested restricted Common Stock of: $263,679 for
Mr. Brennan, $187,160 for Mr. Havala, $176,113 for
Mr. Yap, $128,997 for Mr. Draft and $72,031 for
Mr. Cook. Does not include dividends/distributions paid on
original shares of Common Stock issued in connection with the
Companys initial public offering, shares of Common Stock
purchased subsequently in the open market or by exercise of
options, shares of formerly |
17
PROXY STATEMENT
|
|
|
|
|
restricted Common Stock after such stock has vested or on
limited partnership units of First Industrial, L.P. (which
generally are exchangeable on a
one-for-one
basis, subject to adjustments, for Common Stock). |
GRANTS OF
PLAN BASED AWARDS TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts Under
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
Under Non-Equity Incentive Plan Awards
|
|
|
Equity Incentive Plan Awards
|
|
|
of Stock
|
|
|
|
Grant
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Awards
|
|
Name
|
|
Date
|
|
|
Approval
|
|
|
($)
|
|
|
($)(4)
|
|
|
($)
|
|
|
($)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)(6)
|
|
(a)
|
|
(b)
|
|
|
Date
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
Michael W. Brennan
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
938,588
|
|
|
|
1,192,500
|
|
|
|
(2
|
)
|
|
|
810,867
|
|
|
|
991,100
|
|
|
|
1,417,680
|
|
Michael J. Havala
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
564,000
|
|
|
|
630,000
|
|
|
|
(2
|
)
|
|
|
548,174
|
|
|
|
589,050
|
|
|
|
751,349
|
|
Johannson L. Yap
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
597,840
|
|
|
|
668,000
|
|
|
|
(2
|
)
|
|
|
581,060
|
|
|
|
624,580
|
|
|
|
779,703
|
|
David P. Draft
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
411,840
|
|
|
|
540,000
|
|
|
|
(2
|
)
|
|
|
444,763
|
|
|
|
561,000
|
|
|
|
652,154
|
|
Arne M. Cook
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
391,500
|
|
|
|
(3)
|
|
|
|
(3
|
)
|
|
|
371,762
|
|
|
|
(3)
|
|
|
|
586,855
|
|
|
|
|
(1) |
|
On December 6, 2005, the Compensation Committee determined
2006 salaries for the named executive officers and set maximum
percentages applicable to the cash and equity bonuses for
Messrs. Brennan, Havala, Yap and Draft. The Compensation
Committee adopted performance criteria for 2006 bonus
eligibility on March 8, 2006. Cash and equity incentive
awards bonuses for Named Executive Officers for 2006 were
determined at a meeting on January 30, 2007 and by a
unanimous written consent dated as of February 23, 2007.
Cash bonuses for Named Executive Officers were paid
February 28, 2007, and shares of restricted Common Stock
were issued on March 12, 2007. |
|
(2) |
|
Bonus payments for Messrs. Brennan, Havala, Yap and Draft
do not have threshold amounts. |
|
(3) |
|
Under the Managing Director 2006 Incentive Compensation Plan
(described above), Mr. Cook is not subject to any threshold
amount or any limit on his cash or equity incentive compensation. |
|
(4) |
|
The Company has no incentive bonus targets, per se. Amounts
shown are the aggregate dollar values of the cash and equity
incentive bonuses paid for the year ended December 31, 2005. |
|
(5) |
|
The Company does not express its maximum payout in numbers of
shares, but rather as a dollar value based on a percentage of
salary (187% in the case Messrs. Brennan, Havala, Yap and
Draft). |
|
(6) |
|
The Company typically grants shares of restricted Common Stock
in March of each year as compensation for the prior years
performance. On March 12, 2007, the Company granted shares
of restricted Common Stock to the named executive officers as
follows: 30,699 to Mr. Brennan; 16,270 to Mr. Havala;
16,884 to Mr. Yap; 14,122 to Mr. Draft; and 12,708 to
Mr. Cook. The dollar amount shown represents closing price
of the Companys Common Stock as reported by the NYSE on
March 12, 2007 ($46.18). |
18
PROXY STATEMENT
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number
|
|
|
Market Value
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Of Share
|
|
|
of Shares or
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Or Units
|
|
|
Units of
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
Of Stock
|
|
|
Stock
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
That Have
|
|
|
That Have
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Not Vested
|
|
|
Not Vested
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)(6)
|
|
|
Michael W. Brennan(1)
|
|
|
60,000
|
|
|
|
0
|
|
|
|
31.13
|
|
|
|
5-14-08
|
|
|
|
93,836
|
|
|
|
4,399,970
|
|
|
|
|
75,000
|
|
|
|
0
|
|
|
|
33.13
|
|
|
|
1-23-11
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
|
0
|
|
|
|
30.53
|
|
|
|
1-16-12
|
|
|
|
|
|
|
|
|
|
Michael J. Havala(2)
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
66,604
|
|
|
|
3,123,062
|
|
Johannson L. Yap(3)
|
|
|
52,000
|
|
|
|
0
|
|
|
|
33.13
|
|
|
|
1-23-11
|
|
|
|
62,675
|
|
|
|
2,938,831
|
|
David P. Draft(4)
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
45,907
|
|
|
|
2,152,579
|
|
Arne M. Cook(5)
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
25,637
|
|
|
|
1,202,119
|
|
|
|
|
(1) |
|
Of the shares of unvested restricted Common Stock reported in
column (g), 29,401 vested in January 2007, as to which
restrictions have been removed, 20,691 vest in January 2008,
14,252 vest in January 2009 and 29,492 vest in approximately
equal installments in January 2010, 2011, 2012 and 2013. |
|
(2) |
|
Of the shares of unvested restricted Common Stock reported in
column (g), 19,227 vested in January 2007, as to which
restrictions have been removed, 14,197 vest in January 2008,
10,356 vest in January 2009 and 22,824 vest in approximately
equal installments in January 2010, 2011, 2012 and 2013. |
|
(3) |
|
Of the shares of unvested restricted Common Stock reported in
column (g), 16,925 vested in January 2007, as to which
restrictions have been removed, 14,021 vest in January 2008,
10,289 vest in January 2009 and 21,440 vest in approximately
equal installments in January 2010, 2011, 2012 and 2013. |
|
(4) |
|
Of the shares of unvested restricted Common Stock reported in
column (g), 15,003 vested in January 2007, as to which
restrictions have been removed, 10,538 vest in January 2008,
7,092 vest in January 2009 and 13,274 vest in approximately
equal installments in January 2010, 2011, 2012 and 2013. |
|
(5) |
|
Of the shares of unvested restricted Common Stock reported in
column (g), 9,434 vested in January 2007, as to which
restrictions have been removed, 6,392 vest in January 2008,
4,484 vest in January 2009 and 5,326 vest in approximately equal
installments in January 2010, 2011, 2012 and 2013. |
|
(6) |
|
The dollar amounts shown in column (h) are approximately
equal to the product of the number of shares of restricted
Common Stock reported in column (g) multiplied by the
closing price of the Common Stock as reported by the NYSE on
December 29, 2006, the last trading day of the year
($46.89). This valuation does not take into account any
diminution in value that results from the restrictions
applicable to such Common Stock. |
19
PROXY STATEMENT
OPTION
EXERCISES AND STOCK VESTED
In 2006, no options were exercised by the Named Executive
Officers and an aggregate of 91,204 shares of restricted
Common Stock held by the Named Executive Officers vested.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
|
Acquired on
|
|
|
Value Realized
|
|
|
Acquired on
|
|
|
Realized
|
|
|
|
Exercise
|
|
|
on Exercise
|
|
|
Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)(1)
|
|
|
($)(2)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
Michael W. Brennan
|
|
|
0
|
|
|
|
|
|
|
|
30,740
|
|
|
|
1,211,770
|
|
Michael J. Havala
|
|
|
0
|
|
|
|
|
|
|
|
19,437
|
|
|
|
766,207
|
|
Johannson L. Yap
|
|
|
0
|
|
|
|
|
|
|
|
17,179
|
|
|
|
677,196
|
|
David P. Draft
|
|
|
0
|
|
|
|
|
|
|
|
15,036
|
|
|
|
592,719
|
|
Arne M. Cook
|
|
|
0
|
|
|
|
|
|
|
|
8,812
|
|
|
|
347,369
|
|
|
|
|
(1) |
|
The shares of Common Stock reported in column (d) vested on
January 1, 2006. |
|
(2) |
|
The dollar amounts shown in column (e) are approximately
equal to the product of the number of shares of Common Stock
reported in column (d) multiplied by the closing price of
the Common Stock as reported by the NYSE on January 3,
2006, the first trading following the date of vesting of such
award ($39.42). |
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
Employment
Agreements
The Company has entered into written employment agreements with
Messrs. Brennan, Havala, Yap and Draft. These employment
agreements may require the Company to make payments and provide
benefits to these executives in the event of a termination of
their employment or of a change of control. Severance amounts
payable to Messrs. Havala, Yap and Draft upon their
termination will be reduced if such amounts become payable after
their respective 67th birthdays. In addition to their
rights under the standard grant agreements under our stock
incentive plans, Messrs. Havala, Yap and Draft are entitled
to the accelerated vesting of their restricted stock and stock
options in the event their employment is terminated without
cause.
In addition to the events of termination of employment
identified in the following table, the employment agreements
provide for payments in the event of an executives death
or disability. Mr. Brennans agreement provides that,
upon a termination related to disability, Mr. Brennan is
entitled to receive his current annual base salary for five
years after termination and to the continuation of his health
benefits or comparable health coverage for a period of up to
five years. Upon a work-related disability, each of
Mr. Havala, Mr. Yap and Mr. Draft is entitled to
severance in an amount equal to three times his annual base
salary, plus 75% of his maximum bonus potential for the
then-current year prorated through the date of termination. Upon
death, each executive is entitled to such base salary and unused
vacation pay that has accrued and remains unpaid through the
date of death and 75% of the maximum cash bonus for which he
would have been eligible, prorated through the date of his death.
The employment agreements also contain important non-financial
provisions that apply in the event of a termination of
employment or of a change of control. Benefits payable upon a
merger, acquisition or other changes in control are payable upon
consummation of such transactions regardless of whether the
executive is terminated. Each of Mr. Havala, Mr. Yap
and Mr. Draft has agreed to a one-year covenant not to
compete after his termination, except in connection with certain
changes in control of the Company. Each of Mr. Havala,
Mr. Yap and Mr. Draft has agreed to a six-month
covenant not to compete in connection with certain changes in
control of the Company. In the event of termination,
Mr. Brennan has agreed to a one-year covenant not to
compete and a two-year covenant (one year in the case of a
change of control) not to solicit Company employees after
termination.
20
PROXY STATEMENT
Stock
Incentive Plans
Under the 1994, 1997 and 2001 Stock Plans, unvested restricted
Common Stock fully vests in the event of a change of control or
involuntary termination. Assuming that the triggering event
occurred on December 31, 2006, Messrs. Brennan,
Havala, Yap, Draft and Cook, would have vested in restricted
Common Stock having a value at the time of vesting of
$4,399,970, $3,123,062, $2,938,831, $2,152,579 and $1,202,119,
respectively (based on the closing price of the Companys
Common Stock on December 29, 2006 ($46.89), the last
trading day of the year).
The following table includes estimated payments owed and
benefits required to be provided to the applicable Named
Executive Officer under the employment agreements and stock
incentive plans described above, exclusive of benefits available
on a non-discriminatory basis generally, in each case assuming
that the triggering event occurred on December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated
|
|
|
Medical
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Insurance
|
|
|
|
|
|
Severance
|
|
|
Awards
|
|
|
Premiums
|
|
Name
|
|
Triggering Event
|
|
(1)($)
|
|
|
(3)($)
|
|
|
(4)($)
|
|
|
Michael W. Brennan
|
|
Change of Control
|
|
|
4,421,198
|
|
|
|
4,399,970
|
|
|
|
22,596
|
|
|
|
Termination w/o Cause(2)
|
|
|
4,421,198
|
|
|
|
4,399,970
|
|
|
|
22,596
|
|
|
|
Non-renewal of Agreement
|
|
|
3,724,676
|
|
|
|
4,399,970
|
|
|
|
22,596
|
|
|
|
Termination for Cause
|
|
|
0
|
|
|
|
4,399,970
|
|
|
|
0
|
|
Michael J. Havala
|
|
Change of Control
|
|
|
2,520,000
|
|
|
|
3,123,062
|
|
|
|
33,895
|
|
|
|
Termination w/o Cause(2)
|
|
|
1,370,250
|
|
|
|
3,123,062
|
|
|
|
33,895
|
|
|
|
Termination for Cause
|
|
|
0
|
|
|
|
3,123,062
|
|
|
|
0
|
|
Johannson L. Yap
|
|
Change of Control
|
|
|
2,672,000
|
|
|
|
2,938,831
|
|
|
|
33,895
|
|
|
|
Termination w/o Cause(2)
|
|
|
1,503,000
|
|
|
|
2,938,831
|
|
|
|
33,895
|
|
|
|
Termination for Cause
|
|
|
0
|
|
|
|
2,938,831
|
|
|
|
0
|
|
David P. Draft
|
|
Change of Control
|
|
|
2,220,000
|
|
|
|
2,152,579
|
|
|
|
23,397
|
|
|
|
Termination w/o Cause(2)
|
|
|
1,305,000
|
|
|
|
2,152,579
|
|
|
|
23,397
|
|
|
|
Termination for Cause
|
|
|
0
|
|
|
|
2,152,579
|
|
|
|
0
|
|
Arne M. Cook
|
|
Change of Control
|
|
|
0
|
|
|
|
1,202,119
|
|
|
|
0
|
|
|
|
Termination w/o Cause
|
|
|
0
|
|
|
|
1,202,119
|
|
|
|
0
|
|
|
|
Termination for Cause
|
|
|
0
|
|
|
|
1,202,119
|
|
|
|
0
|
|
|
|
|
(1) |
|
Each Named Executive other than Mr. Cook is entitled to a
supplemental payment of one months base salary in addition
to amounts reflected if requisite notice is not provided prior
to termination of employment by the Company. |
|
(2) |
|
Includes constructive discharge under the terms of the
employment agreement of each Named Executive Officer other than
Mr. Cook. |
|
(3) |
|
For purposes of estimating the value of awards of restricted
stock for which restrictions lapse the Company has assumed a
price per share of its Common Stock of $46.89, which was the
closing price of its Common Stock on the NYSE on
December 29, 2006, the last trading day of the year. |
|
(4) |
|
Present value of estimated premiums required to be paid by the
Company or cash payments in lieu of benefits required to be
provided. |
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Slater and
Tyler. Neither of them has served as an officer of the Company
nor, except for his service as a director, had any other
business relationship or affiliation with the Company in 2006
requiring disclosure by the Company under Item 404 of
Regulation S-K.
21
PROXY STATEMENT
REPORT OF
THE AUDIT COMMITTEE
Pursuant to a meeting of the Audit Committee on
February 26, 2007, the Audit Committee reports that it has:
(i) reviewed and discussed the Companys audited
financial statements with management; (ii) discussed with
the independent registered public accounting firm the matters
(such as the quality of the Companys accounting principles
and internal controls) required to be discussed by Statement on
Auditing Standards No. 61; and (iii) received written
confirmation from PricewaterhouseCoopers LLP that it is
independent and written disclosures regarding such independence
as required by Independence Standards Board No. 1, and
discussed with PricewaterhouseCoopers LLP its independence.
Based on the review and discussions referred to in items
(i) through (iii) above, the Audit Committee
recommended to the Board of Directors that the audited financial
statements be included in the Companys annual report for
the Companys fiscal year ended December 31, 2006.
Submitted by the Audit Committee:
John Rau, Chairman
Kevin W. Lynch
J. Steven Wilson
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL
PERSONS
Transactions with Related Persons. The Company
often engages in transactions for which CB Richard Ellis, Inc.
(CBRE) acts as a broker. CBRE is among the largest
real estate brokerage companies in the world. The brother of
Michael W. Brennan, the President and Chief Executive Officer
and a director of the Company, is an employee of CBRE and a
member of CBREs national Single Tenant Net Lease
Properties Group. In 2006, in five transactions in which the
Company sold property for approximately $88.5 million,
$114.3 million, $10.6 million, $4.6 million and
$12.5 million, Mr. Brennans brother received
$79,650, $139,242, $52,750, $23,125 and $46,588, respectively,
as a portion of the brokerage commissions paid by the Company to
CBRE in connection with such transactions. In January 2007, in
one transaction in which the Company sold property for
approximately $48.8 million, Mr. Brennans
brother received $116,750, as a portion of the brokerage
commissions paid by the buyer to CBRE in connection with such
transactions. Management of the Company believes the terms of
brokerage services provided by CBRE in such transaction were as
favorable to the Company as could be obtained in arms
length transactions.
Review, Approval or Ratification of Transactions with Related
Persons. Transactions involving the Company and
its executive officers and directors that are reportable under
Item 404 of
Regulation S-K
are required by the Companys written policies to be
reported to and approved by the Nominating/Corporate Governance
Committee of the Board of Directors. The Nominating/Corporate
Governance Committee addresses such transactions on a
case-by-case
basis, after considering the relevant facts and circumstances.
The Companys engagement in transactions involving CBRE and
Mr. Brennans brother (e.g. as discussed above) was
approved by the Board of Directors prior to the implementation
of such policies.
COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (as
amended, the Exchange Act) requires the
Companys officers and directors, and persons who own more
than ten percent of a registered class of the Companys
equity securities, to file reports of ownership and changes in
ownership with the SEC and the NYSE. 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 2006, all of the Companys officers,
directors and greater than ten-percent stockholders
timely filed all reports required to be filed by
Section 16(a) of the Exchange Act.
22
PROXY STATEMENT
SECURITY
OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table presents information concerning the
ownership of Common Stock of the Company and limited partnership
units (Units) of First Industrial, L.P. (which
generally are exchangeable on a
one-for-one
basis, subject to adjustments, for Common Stock) by all
directors, the Named Executive Officers, the directors and
executive officers of the Company as a group and persons and
entities, if any, known to the Company to be beneficial owners
of more than 5% of the Companys Common Stock. The
information is presented as of March 20, 2007, unless
otherwise indicated, and is based on representations of officers
and directors of the Company and filings received by the Company
on Schedule 13G under the Exchange Act. As of
March 20, 2007, there were 45,378,060 shares of Common
Stock and 6,550,492 Units outstanding.
|
|
|
|
|
|
|
|
|
|
|
Common Stock/Units
|
|
|
|
Beneficially Owned
|
|
|
|
|
|
|
Percent
|
|
Names and Addresses of 5% Stockholders
|
|
Number
|
|
|
of Class
|
|
|
ING Groep N.V.
|
|
|
3,370,100
|
|
|
|
7.4
|
%
|
Amstelveenseweg 500
|
|
|
|
|
|
|
|
|
1081 KL Amsterdam(1)
|
|
|
|
|
|
|
|
|
Barclays Global Investors Japan
Limited
|
|
|
3,295,312
|
|
|
|
7.3
|
%
|
Ebisu Prime Square Tower,
8th Floor
|
|
|
|
|
|
|
|
|
1-1-39 Hiroo Shibuya-Ku
|
|
|
|
|
|
|
|
|
Tokyo
150-8402
Japan(2)
|
|
|
|
|
|
|
|
|
The Vanguard Group, Inc.
|
|
|
2,601,394
|
|
|
|
5.7
|
%
|
100 Vanguard Blvd.
|
|
|
|
|
|
|
|
|
Malvern, PA 19355(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Names and Addresses of Directors and Officers*
|
|
|
|
|
|
|
|
Jay H. Shidler(4)
|
|
|
1,350,771
|
|
|
|
3.0
|
%
|
Michael W. Brennan(5)
|
|
|
558,681
|
|
|
|
1.2
|
%
|
Michael G. Damone(6)
|
|
|
214,213
|
|
|
|
**
|
|
Kevin W. Lynch(7)
|
|
|
8,901
|
|
|
|
**
|
|
Robert D. Newman(8)
|
|
|
440
|
|
|
|
**
|
|
John Rau(9)
|
|
|
9,542
|
|
|
|
**
|
|
Robert J. Slater(10)
|
|
|
19,690
|
|
|
|
**
|
|
W. Ed Tyler(11)
|
|
|
39,741
|
|
|
|
**
|
|
J. Steven Wilson(12)
|
|
|
81,026
|
|
|
|
**
|
|
Michael J. Havala(13)
|
|
|
134,418
|
|
|
|
**
|
|
Johannson L. Yap(14)
|
|
|
242,748
|
|
|
|
**
|
|
David P. Draft(15)
|
|
|
95,251
|
|
|
|
**
|
|
Arne M. Cook(16)
|
|
|
49,305
|
|
|
|
**
|
|
All directors, Named Executive
Officers and other executive officers as a group
(16 persons)(17)
|
|
|
2,903,699
|
|
|
|
6.3
|
%
|
|
|
|
|
*
|
The business address for each of the directors and executive
officers of the Company is 311 South Wacker Drive,
Suite 4000, Chicago, Illinois 60606.
|
|
|
|
(1) |
|
Pursuant to a Schedule 13G filed February 14, 2007 by
ING Groep N.V. (ING Groep). ING Groep has the sole
power to vote and dispose of all 3,370,100 shares reported.
According to the Schedule 13G, the shares held by ING Groep
include the ownership interests separately reported by ING
Clarion Real Estate |
23
PROXY STATEMENT
|
|
|
|
|
Securities L.P., a wholly-owned indirect subsidiary of ING
Groep, in a Schedule 13G filed with the Commission on
February 13, 2007. |
|
(2) |
|
Pursuant to a Schedule 13G dated February 14, 2007
filed by Barclays Global Investors Japan Trust and Banking
Company Limited (BGIJ). BGIJ has the sole power to
dispose of all 2,298,963 shares reported, but has the sole
power to vote only 2,102,977 of such shares. |
|
(3) |
|
Pursuant to a Schedule 13G dated February 14, 2007
filed by The Vanguard Group Inc. (Vanguard).
Vanguard has the sole power to dispose of all
2,601,394 shares reported, but has the sole power to vote
only 75,421 of such shares. |
|
(4) |
|
Includes 910,660 shares held by Shidler Equities, L.P., a
Hawaii limited partnership owned by Mr. Shidler and
Mrs. Shidler, 20,000 shares owned by
Mrs. Shidler, 68,020 Units held by Mr. Shidler
directly, 254,541 Units held by Shidler Equities, L.P., 1,223
Units held by Mr. and Mrs. Shidler jointly, and 22,079
Units held by Holman/Shidler Investment Corporation. Also
includes 10,333 shares of restricted Common Stock issued
under the 1997 and 2001 Stock Plans. |
|
(5) |
|
Includes 167,000 shares that may be acquired by
Mr. Brennan upon the exercise of vested options granted
under the 1997 Stock Plan, consisting of 60,000 shares at
an exercise price of $31.13 per share, 75,000 shares
at an exercise price of $33.13 per share and
32,000 shares at an exercise price of $30.53 per
share. Also includes 3,806 Units and 95,138 shares of
restricted Common Stock issued under the 1997 and 2001 Stock
Plans. |
|
(6) |
|
Includes 7,500 shares held by a trust for the benefit of
Mr. Damones wife. Also includes 6,700 shares
that may be acquired upon the exercise of vested options granted
under the 1997 Stock Plan at an exercise price of
$30.53 per share. Also includes 144,296 Units. Also
includes 8,717 shares of restricted Common Stock issued
under the 1997 Stock Plan. |
|
(7) |
|
Includes 8,901 shares of restricted Common Stock issued
under the 1997 and 2001 Stock Plans. |
|
(8) |
|
Includes 440 shares of restricted Common Stock issued under
the 2001 Stock Plan. |
|
(9) |
|
Includes 8,383 shares of restricted Common Stock issued
under the 1997 and 2001 Stock Plans. |
|
(10) |
|
Includes 10,264 shares of restricted Common Stock issued
under the 1997 and 2001 Stock Plans. |
|
(11) |
|
Includes 30,000 shares that may be acquired by
Mr. Tyler upon the exercise of vested options granted under
the 1997 Stock Plan, consisting of 10,000 shares at an
exercise price of $30.00 per share, 10,000 shares at
an exercise price of $31.05 per share and
10,000 shares at an exercise price of $33.15 per
share. Also includes 8,741 shares of restricted Common
Stock issued under the 1997 and 2001 Stock Plans. |
|
(12) |
|
Includes 60,000 shares that may be acquired upon the
exercise of vested options granted under the 1997 Stock Plan,
consisting of 10,000 shares at an exercise price of
$30.50 per share, 10,000 shares at an exercise price
of $31.13 per share, 10,000 shares at an exercise
price of $27.69 per share, 10,000 shares at an
exercise price of $30.00 per share, 10,000 shares at
an exercise price of $31.05 per share and
10,000 shares at an exercise price of $33.15 per
share. Also includes 10,333 shares of restricted Common
Stock issued under the 1997 and 2001 Stock Plans. |
|
(13) |
|
Includes 2,100 shares held in custodial accounts for
Mr. Havalas children. Also includes
63,647 shares of restricted Common Stock issued under the
1997 and 2001 Stock Plans. |
|
(14) |
|
Includes 52,000 shares that may be acquired by Mr. Yap
upon the exercise of vested options granted under the 1997 Stock
Plan at an exercise price of $33.13 per share. Also
includes 1,680 Units. Also includes 62,636 shares of
restricted Common Stock issued under the 1997 and 2001 Stock
Plans. |
|
(15) |
|
Includes 45,028 shares of restricted Common Stock issued
under the 1997 and 2001 Stock Plans. |
|
(16) |
|
Includes 28,910 shares of restricted Common Stock issued
under the 1997 and 2001 Stock Plans. |
|
(17) |
|
Includes 315,700 shares in the aggregate that may be
acquired by directors and executive officers upon the exercise
of vested options granted under the 1997 Stock Plan, consisting
of 10,000 shares at an exercise price of $30.50,
70,000 shares at an exercise price of $31.13,
10,000 shares at an exercise price of $27.69,
127,000 shares at an exercise price of $33.13,
20,000 shares at an exercise price of $30.00,
20,000 shares at an |
24
PROXY STATEMENT
|
|
|
|
|
exercise price of $31.05, 20,000 shares at an exercise
price of $33.15 and 38,700 shares at an exercise price of
$30.53. Also includes 495,645 Units. Also includes
417,145 shares of restricted Common Stock issued under the
1997 and 2001 Stock Plans. |
PROPOSAL II
APPROVAL OF AMENDMENT NO. 2 TO THE 2001 STOCK INCENTIVE
PLAN
At its meeting on February 28, 2007, the Board of Directors
of the Company adopted Amendment No. 2 (the Amendment
No. 2) to the First Industrial Realty Trust, Inc.
2001 Stock Incentive Plan (as amended by Amendment No. 1,
the Plan) and directed that Amendment No. 2 be
submitted to the stockholders for their approval. As previously
adopted by the Board of Directors of the Company and approved by
the Companys stockholders, the Plan provides for the
issuance of a total of 2,300,000 shares of Common Stock but
has a
sub-limit
for the number of shares of Common Stock specifically available
for grants of stock appreciation rights, performance share
awards and restricted stock awards of 950,000 shares for
all participants for the life of the Plan and has a further
sub-limit
for the number of shares of Common Stock specifically available
for grants of performance share awards and restricted stock
awards to 100,000 to any one participant in any one calendar
year. In 2002, the Company discontinued issuing options to
employees and directors and, since then, has used restricted
stock awards exclusively as its equity incentive award. As the
Company intends to continue using restricted stock awards
exclusively as its equity incentive award, it will need the
current
sub-limit on
the number of shares of Common Stock available under the Plan
for grants of stock appreciation rights, performance share
awards and restricted stock awards to be increased. The purpose
of Amendment No. 2 is to effect an increase in such
sub-limits
by (i) making the maximum number of shares available for
grant under the Plan available for any type of award authorized
under the Plan and (ii) increasing to 250,000 shares
the maximum number of shares of Common Stock subject to
performance share awards and restricted stock awards that may be
granted during a calendar year to any participant under the
Plan. The total number of shares issuable under the Plan,
however, remains unchanged at 2,300,000. The Board of
Directors of the Company believes that the adoption of Amendment
No. 2 is in the best interests of the stockholders and the
Company because the continuing ability to grant restricted stock
awards under the Plan is an important factor in attracting,
motivating and retaining qualified personnel.
The Board
of Directors recommends a vote FOR approval of Amendment
No. 2 to
the 2001 Stock Incentive Plan.
Below are summaries of the Plan incorporating the proposed
amendment and the federal income tax consequences of the Plan.
As reported on the NYSE, the closing price per share of the
Companys Common Stock on April 2, 2007 was $45.67.
SUMMARY
OF THE PROVISIONS OF THE 2001 STOCK INCENTIVE PLAN
General. The purpose of the Plan is to
encourage and enable the officers, employees and directors of
the Company and its affiliates (approximately 489 employees,
including two employee directors, and seven non-employee
directors), upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its
business, to acquire a proprietary interest in the Company. The
Plan provides for the grant of incentive stock options, within
the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the Code), to employees of the
Company and for the grant of nonstatutory stock options, stock
appreciation rights (SARs), restricted stock awards,
performance share awards and dividend equivalents to officers,
employees and directors of the Company. The Board of Directors
has authorized, and stockholders have approved,
2,300,000 shares of Common Stock for issuance under the
Plan. The maximum number of shares of Common Stock issuable with
respect to SARs and stock options that may be granted during a
calendar year to any participant under the Plan is
500,000 shares. Also, with respect to performance share
awards and restricted stock awards, the maximum number of shares
of Common Stock issuable with respect to such awards granted
during a calendar year to any participant under the Plan is
250,000 shares. In the event of any recapitalization,
reclassification,
split-up or
consolidation of
25
PROXY STATEMENT
shares of stock, separation (including a spin-off), dividend on
shares of stock payable in capital stock, or other similar
change in capitalization of the Company or a merger or
consolidation of the Company or sale by the Company of all or a
portion of its assets or other similar event, appropriate
adjustments will be made to the shares, including the number
thereof, subject to the Plan and to any outstanding awards.
Shares of Common Stock underlying any awards which are
forfeited, canceled, reacquired by the Company, satisfied
without the issuance of Common Stock or otherwise terminated
(other than by exercise) will be added back to the shares of
Common Stock available for issuance under the Plan.
Administration. The 2001 Stock Incentive Plan
is administered by the Compensation Committee of the Board of
Directors of the Company. Subject to the provisions of the Plan,
the Compensation Committee determines the persons to whom grants
of options, SARs, restricted stock awards, performance share
awards and dividend equivalents are to be made, the number of
shares of Common Stock to be covered by each grant and all other
terms and conditions of the grant. If an option is granted, the
Compensation Committee will determine whether the option is an
incentive stock option or a nonstatutory stock option, the
options term, vesting and exercisability, and the other
terms and conditions of the grant. The Compensation Committee
also determines the terms and conditions of SARs, restricted
stock awards, performance share awards and dividend equivalents.
The Compensation Committee has the responsibility to interpret
the Plan and to make determinations with respect to all awards
granted under the Plan. All determinations of the Compensation
Committee are binding on all persons, including the Company and
plan participants. The costs and expenses of administering the
Plan are borne by the Company.
Eligibility. Participants in the Plan are
directors and the full or part-time officers and other employees
of the Company and its affiliates who are responsible for or
contribute to the management, growth or profitability of the
Company and its affiliates and who are selected from time to
time by the Compensation Committee, in its sole discretion.
Terms and Conditions of Option Grants. Each
option granted under the Plan will be evidenced by a written
agreement in a form that the Compensation Committee may from
time to time approve, will be subject to the terms and
conditions of the Plan and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as may
be determined by the Compensation Committee. The per share
exercise price of an incentive stock option may not be less than
100% of the fair market value of a share of Common Stock on the
date of the options grant and the term of any such option
shall expire on the tenth anniversary of the date of the
options grant. In addition, the per share exercise price
of any incentive stock option granted to a person who at the
time of the grant owns stock possessing more than 10% of the
total combined voting power or value of all classes of stock of
the Company must be at least 110% of the fair market value of a
share of the Companys Common Stock on the date of grant
and the option must expire no later than five years after the
date of its grant. Generally, options may be exercised by the
payment by the optionee or the optionees broker of the
exercise price in cash, certified check or wire transfer, or,
subject to the approval of the Compensation Committee, through
the tender of shares of the Companys Common Stock owned by
the optionee having a fair market value not less than the
exercise price. Options granted under the Plan will become
exercisable at such times as may be specified by the
Compensation Committee, subject to various limitations on
exercisability in the event the optionees employment or
service with the Company terminates. Options are generally
nontransferable by the optionee other than by will or by the
laws of descent and distribution and are exercisable during the
optionees lifetime only by the optionee, except that
non-qualified options may be transferred to one or more members
of the optionees immediate family, to certain entities for
the benefit of the optionees immediate family members or
pursuant to a qualified domestic relations order.
Terms and Conditions of Other Awards. Each
SAR, restricted stock award and performance share award made
under the Plan will be evidenced by a written agreement in a
form and containing such terms, restrictions and conditions as
may be determined by the Compensation Committee, consistent with
the requirements of the Plan. A SAR may be granted separately or
in conjunction with the grant of an option. If the Compensation
Committee determines that a restricted stock award or a
performance share award to be granted to a participant should
qualify as performance-based compensation for
purposes of Section 162(m) of the Code, the grant, vesting
and settlement of such award will be contingent upon achievement
of one or more pre-established performance goals. One or more of
the following business criteria for the Company must be used by
the Compensation Committee in establishing
26
PROXY STATEMENT
such performance goals: (1) earnings, including Funds From
Operations; (2) revenues; (3) cash flow; (4) cash
flow return on investment; (5) return on assets;
(6) return on investment; (7) return on capital;
(8) return on equity; (9) economic value added;
(10) operating margin; (11) net income;
(12) pretax earnings; (13) pretax earnings before
interest, depreciation and amortization; (14) pretax
operating earnings after interest expense and before incentives,
service fees, and extraordinary or special items;
(15) operating earnings; (16) total stockholder
return; and (17) any of the above goals as compared to the
performance of a published or special index deemed applicable by
the Compensation Committee including, but not limited to, the
Standard & Poors 500 Stock Index. The
Compensation Committee does not have the authority to increase
the amount of compensation payable under any performance share
award intended to qualify as performance-based
compensation to the extent such an increase would cause
the amounts payable pursuant to the performance share award to
be nondeductible in whole or in part pursuant to
Section 162(m) of the Code and the regulations thereunder.
SARs, restricted stock awards and performance share awards are
generally nontransferable, except that SARs may be transferred
pursuant to a certified domestic relations order and may be
exercised by the executor, administrator or personal
representative of a deceased participant within six months of
the death of the participant.
Change of Control Provisions. Change of
Control generally means the occurrence of any one of the
following events:
(i) any person (other than the Company, any of its
subsidiaries, any trustee, fiduciary or other person or entity
holding securities under any employee benefit plan of the
Company or any of its subsidiaries), together with all
affiliates and associates of such person, becomes the direct or
indirect beneficial owner of securities of the Company
representing 40% or more of either (A) the combined voting
power of the Companys then outstanding securities having
the right to vote in an election of the Companys Board of
Directors or (B) the then outstanding shares of Common
Stock of the Company (in either such case other than as a result
of acquisition of securities directly from the Company); or
(ii) persons who, as of the effective date of the Plan,
constitute the Companys Board of Directors
(Incumbent Directors) cease for any reason to
constitute at least a majority of the Board of Directors
(however, any person becoming a director of the Company
subsequent to the effective date of the Plan whose election or
nomination for election was approved by a vote of at least a
majority of the Incumbent Directors will, for purposes of the
Plan, be considered an Incumbent Director); or
(iii) the stockholders of the Company approve (A) any
consolidation or merger of the Company or any subsidiary where
the stockholders of the Company, immediately prior to the
consolidation or merger, would not, immediately after the
consolidation or merger, beneficially own, directly or
indirectly, shares representing in the aggregate 50% or more of
the voting stock of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent
corporation, if any), (B) any sale, lease, exchange or
other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all
or substantially all of the assets of the Company or
(C) any plan or proposal for the liquidation or dissolution
of the Company.
In general, upon the occurrence of a Change of Control, options
and SARs automatically would become fully exercisable and
restrictions and conditions on restricted stock awards,
performance share awards and dividend equivalents would
automatically be deemed waived.
Amendment and Termination of the Plan. The
Board of Directors may at any time amend or discontinue the Plan
and the Compensation Committee may at any time amend or cancel
any outstanding award, but no such action will adversely affect
rights under any outstanding award without the holders
consent and, except in the event of changes in the
capitalization of the Company or other similar events, no
amendment to any outstanding award will reduce the exercise
price of the award.
27
PROXY STATEMENT
SUMMARY
OF FEDERAL INCOME TAX CONSEQUENCES OF
THE 2001 STOCK INCENTIVE PLAN
The following discussion summarizes the principal federal income
tax consequences of the Plan. This discussion is based on
current provisions of the Code, the regulations promulgated
thereunder, and administrative and judicial interpretations
thereof as in effect on the date hereof. The summary does not
address any foreign, state or local tax consequences of
participation in the Plan.
Stock Options. In general, the grant of an
option will not be a taxable event to the recipient and it will
not result in a deduction to the Company. The tax consequences
associated with the exercise of an option and the subsequent
disposition of shares of Common Stock acquired on the exercise
of such option depend on whether the option is an incentive
stock option or a nonqualified stock option.
Upon the exercise of a nonqualified stock option, the
participant will recognize ordinary taxable income equal to the
excess of the fair market value of the shares of Common Stock
received upon exercise over the exercise price. The Company will
generally be able to claim a deduction in an equivalent amount.
Any gain or loss upon a subsequent sale or exchange of the
shares of Common Stock will be capital gain or loss, long-term
or short-term, depending on the holding period for the shares of
Common Stock.
Generally, a participant will not recognize ordinary taxable
income at the time of exercise of an incentive stock option and
no deduction will be available to the Company, provided the
option is exercised while the participant is an employee or
within three months following termination of employment (longer,
in the case of termination of employment by reason of disability
or death). If an incentive stock option granted under the Plan
is exercised after these periods, the exercise will be treated
for federal income tax purposes as the exercise of a
nonqualified stock option. Also, an incentive stock option
granted under the Plan will be treated as a nonqualified stock
option to the extent it (together with any other incentive stock
options granted under other plans of the Company and its
subsidiaries) first becomes exercisable in any calendar year for
shares of Common Stock having a fair market value, determined as
of the date of grant, in excess of $100,000.
If shares of Common Stock acquired upon exercise of an incentive
stock option are sold or exchanged more than one year after the
date of exercise and more than two years after the date of grant
of the option, any gain or loss will be long-term capital gain
or loss. If shares of Common Stock acquired upon exercise of an
incentive stock option are disposed of prior to the expiration
of these one-year or two-year holding periods (a
Disqualifying Disposition), the participant will
recognize ordinary income at the time of disposition, and the
Company will generally be able to claim a deduction, in an
amount equal to the excess of the fair market value of the
shares of Common Stock at the date of exercise over the exercise
price. Any additional gain will be treated as capital gain,
long-term or short-term, depending on how long the shares of
Common Stock have been held. Where shares of Common Stock are
sold or exchanged in a Disqualifying Disposition (other than
certain related party transactions) for an amount less than
their fair market value at the date of exercise, any ordinary
income recognized in connection with the Disqualifying
Disposition will be limited to the amount of gain, if any,
recognized in the sale or exchange, and any loss will be a
long-term or short-term capital loss, depending on how long the
shares of Common Stock have been held.
Although the exercise of an incentive stock option as described
above would not produce ordinary taxable income to the
participant, it would result in an increase in the
participants alternative minimum taxable income and may
result in an alternative minimum tax liability.
Restricted Stock. A participant who receives
shares of restricted stock will generally recognize ordinary
income at the time the stock vests. The amount of ordinary
income so recognized will be the fair market value of the Common
Stock at the time the income is recognized, determined without
regard to any restrictions other than restrictions which by
their terms will never lapse. This amount is generally
deductible for federal income tax purposes by the Company.
Dividends paid with respect to unvested restricted stock will be
ordinary compensation income to the participant (and generally
deductible by the Company). Any gain or loss upon a subsequent
sale or exchange of the shares of Common Stock, measured by the
difference between the sale price and the fair market value on
the date restrictions lapse, will be capital gain or loss,
long-term or short-term, depending on the holding
28
PROXY STATEMENT
period for the shares of Common Stock. The holding period for
this purpose will begin on the date following the date the stock
vests.
In lieu of the treatment described above, a participant may
elect immediate recognition of income under Section 83(b)
of the Code. In such event, the participant will recognize as
income the fair market value of the restricted stock at the time
of grant (determined without regard to any restrictions other
than restrictions which by their terms will never lapse), and
the Company will generally be entitled to a corresponding
deduction. Dividends paid with respect to shares as to which a
proper Section 83(b) election has been made will not be
deductible to the Company. If a Section 83(b) election is
made and the restricted stock is subsequently forfeited, the
participant will not be entitled to any offsetting tax deduction.
Stock Appreciation Rights and Other
Awards. With respect to SARs and other awards
under the Plan not described above, generally, when a
participant receives payment with respect to an award granted to
him or her under the Plan, the amount of cash and the fair
market value of any other property received will be ordinary
income to such participant and will be allowed as a deduction
for federal income tax purposes to the Company.
Payment of Withholding Taxes. The Company may
withhold, or require a participant to remit to the Company, an
amount sufficient to satisfy any federal, state or local
withholding tax requirements associated with awards under the
Plan.
Special Rules. Certain special rules apply if
the exercise price for an option is paid in shares previously
owned by the optionee rather than in cash.
Limitation on
Deductibility. Section 162(m) of the Code
generally limits the deductible amount of annual compensation
paid (including, unless an exception applies, compensation
otherwise deductible in connection with awards granted under the
Plan) by a public company to a covered employee (the
chief executive officer and four other most highly compensated
executive officers of the Company) to no more than
$1 million. The Company does not believe that
Section 162(m) of the Internal Revenue Code is applicable
to its current arrangements with its executive officers.
EQUITY
COMPENSATION PLAN INFORMATION(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
Weighted-Average
|
|
|
Number of Securities
|
|
|
|
to be Issued Upon
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|
|
Exercise Price of
|
|
|
Remaining Available
|
|
|
|
Exercise of
|
|
|
Outstanding
|
|
|
for Further Issuance
|
|
|
|
Outstanding Options,
|
|
|
Options, Warrants
|
|
|
Under Equity
|
|
Plan Category
|
|
Warrants and Rights
|
|
|
and Rights
|
|
|
Compensation Plans
|
|
|
Equity Compensation Plans Approved
by Security Holders
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|
|
|
|
|
|
|
|
|
|
2,178,868
|
(2)
|
Equity Compensation Plans Not
Approved by Security Holders(3)
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|
|
381,976
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|
|
$
|
31.65
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|
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93,340
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Total
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381,976
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|
|
$
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31.65
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|
|
|
2,272,208
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|
|
(1) |
|
Information as of December 31, 2006. |
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(2) |
|
As of March 20, 2007, 1,736,860 shares of Common Stock
were available for issuance under the 2001 Stock Plan. Of those
shares, without giving effect to the proposed Amendment
No. 2 to the 2001 Stock Plan, 386,860 shares were
available for issuance in the form of restricted Common Stock. |
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(3) |
|
The Companys 1997 Stock Plan authorizes (i) the grant
of stock options that qualify as incentive stock options under
Section 422 of the Code, (ii) the grant of stock
options that do not so qualify, (iii) restricted stock
awards, (iv) performance share awards and (v) dividend
equivalent rights. The exercise price of the stock options is
determined by the Compensation Committee. Special provisions
apply to awards granted under the 1997 Stock Plan in the event
of a change in control in the Company. The outstanding stock
options under the 1997 Stock Plan vested within one to three
years of issuance and expire ten years after issuance. The
outstanding restricted Common Stock under the 1997 Stock Plan
vests over periods from one to ten years. The vesting schedule
of restricted Common Stock available for issuance under the 1997
Stock Plan will be determined by the Compensation Committee at
the time of issuance. |
29
PROXY STATEMENT
PROPOSAL III
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The accounting firm of PricewaterhouseCoopers LLP (or its
predecessor, Coopers & Lybrand L.L.P.) has served as
the Companys independent auditors since the Companys
formation in August 1993. On February 26, 2007, the Audit
Committee of the Board of Directors appointed
PricewaterhouseCoopers LLP as the Companys independent
registered public accounting firm for the current fiscal year. A
representative of PricewaterhouseCoopers LLP will be present at
the Annual Meeting, will be given the opportunity to make a
statement if he or she so desires and will be available to
respond to appropriate questions.
AUDIT
FEES
The aggregate fees billed by PricewaterhouseCoopers LLP for
fiscal years ended December 31, 2006 and 2005 for
professional services rendered in connection with (i) the
audit of the Companys annual financial statements,
(ii) the review of the financial statements included in the
Companys Quarterly Reports on
Form 10-Q
for the quarters ended March 31, June 30, and
September 30, (iii) consents and comfort letters
issued in connection with debt and equity offerings and
registration statements were $1,329,160 and $994,735,
respectively.
AUDIT-RELATED
FEES
The aggregate fees billed by PricewaterhouseCoopers LLP for
assurance and related services, including
Rule 3-14
audit work, joint venture audits and an employee benefit plan
audit, for 2006 were approximately $414,633, including expenses.
The aggregate fees billed by PricewaterhouseCoopers LLP for
assurance and related services, including
Rule 3-14
audit work, joint venture audits and an employee benefit plan
audit, for 2005 were approximately $268,336, including expenses.
TAX
FEES
Tax Compliance. The aggregate fees billed by
PricewaterhouseCoopers LLP for tax compliance, including tax
return preparation, in 2006 were approximately $591,322,
including expenses. The aggregate fees billed by
PricewaterhouseCoopers LLP for tax compliance, including tax
return preparation, in 2005 were approximately $312,514,
including expenses.
Tax Consulting. The aggregate fees billed by
PricewaterhouseCoopers LLP for tax advice and tax planning
services, including 1031 Exchange consultation, REIT compliance
consultation, state audit consultation, transaction
consultation, return of capital review, federal and state
regulation consultation, federal and state entity structuring
and taxable REIT subsidiary consultation in 2006 were
approximately $259,903, including expenses. The aggregate fees
billed by PricewaterhouseCoopers LLP for tax advice and tax
planning services, including 1031 Exchange consultation, REIT
compliance consultation, state audit consultation, transaction
consultation, return of capital review, federal and state
regulation consultation, federal and state entity structuring
and taxable REIT subsidiary consultation in 2005 were
approximately $172,521, including expenses.
ALL OTHER
FEES
During fiscal 2006 and 2005, PricewaterhouseCoopers LLP did not
provide any services to the Company other than those in the
categories noted above.
30
PROXY STATEMENT
PRE-APPROVAL
OF SERVICES
The Audit Committee pre-approves all audit, audit-related, tax
and other services proposed to be provided by the Companys
independent registered public accounting firm. Consideration and
approval of such services generally occur at the Audit
Committees regularly scheduled meetings. In situations
where it is impractical to wait until the next regularly
scheduled meeting, the Audit Committee has delegated the
authority to approve the audit, audit-related, tax and other
services to each of its individual members. Approvals of audit,
audit-related, tax and other services pursuant to the
above-described delegation of authority must be reported to the
full Audit Committee at its next regularly scheduled meeting.
The Board
of Directors recommends a vote FOR ratification of the
appointment of
PricewaterhouseCoopers LLP as the Companys
independent
registered public accounting firm for fiscal 2007.
31
PROXY STATEMENT
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.
Georgeson Shareholder Services, Inc. acts as the Companys
proxy solicitor at a cost of $7,500, plus reasonable
out-of-pocket expenses, including a telephone solicitation
campaign approved by the Company.
STOCKHOLDER
PROPOSALS
Stockholder proposals intended to be presented at the 2007
Annual Meeting of Stockholders must be received by the Secretary
of the Company no later than December 11, 2007, 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 2007 Annual Meeting of Stockholders.
INCORPORATION
BY REFERENCE
In the pages preceding this Proxy Statement is a Letter to
Stockholders from the Companys President and Chief
Executive Officer. Appendix B to this Proxy Statement is
the Companys 2006 Annual Report, which includes its
consolidated financial statements and managements
discussion and analysis of financial condition and results of
operations, as well as certain other financial and other
information required by the rules and regulations of the SEC.
Information contained in the Letter to Stockholders or
Appendix B to this Proxy Statement shall not be deemed to
be filed or soliciting material, or
subject to liability for purposes of Section 18 of the
Exchange Act to the maximum extent permitted under the Exchange
Act.
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.
32
APPENDIX A
AMENDMENT
NO. 2
TO THE
FIRST INDUSTRIAL REALTY TRUST, INC.
2001 STOCK INCENTIVE PLAN
AMENDMENT NO. 2 (the Amendment), to the First
Industrial Realty Trust, Inc. 2001 Stock Incentive Plan (the
Plan) established and maintained by First Industrial
Realty Trust, Inc., a Maryland corporation (the
Company). Capitalized terms used herein and not
defined shall have the meanings set forth in the Plan.
WHEREAS, the Plan makes available for issuance a maximum of
2,300,000 shares of the Stock, up to 950,000 of which are
available for issuance under the Plan with respect to Stock
Appreciation Rights, Performance Share Awards and Restricted
Stock Awards;
WHEREAS, the Plan currently provides that the maximum number of
shares of Stock subject to Performance Share Awards and
Restricted Stock Awards granted during a calendar year to any
Participant under the Plan shall be 100,000 shares;
WHEREAS, Section 13 of the Plan reserves to the Board the
right to amend the Plan at any time;
WHEREAS, the Board has approved making the maximum number of
shares available for grant under the Plan available for any type
of Award authorized under the Plan; and
WHEREAS, the Board has approved increasing to
250,000 shares the maximum number of shares of Stock
subject to Performance Share Awards and Restricted Stock Awards
that may be granted during a calendar year to any Participant
under the Plan.
SECTION 1. Amendment
to Plan.
The fourth sentence of Section 3(a) of the Plan is
hereby amended and restated as follows:
Subject to adjustment as provided in Section 3(b)
below, (i) the maximum number of shares of Stock with
respect to which Stock Options and Stock Appreciation Rights may
be granted during a calendar year to any participant under the
Plan shall be 500,000 shares and (ii) with respect to
Performance Share Awards and Restricted Stock Awards, the
maximum number of shares of Stock subject to such awards granted
during a calendar year to any participant under the Plan shall
be 250,000 shares.
SECTION 2. Effective
Date of the Amendment; Ratification and Confirmation.
This Amendment shall become effective upon approval by the
stockholders of the Company. In all other respects, the Plan is
hereby ratified and confirmed.
SECTION 3. Governing
Law.
THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF, EXCEPT TO
THE EXTENT SUCH LAW IS PREEMPTED BY FEDERAL LAW.
A-1
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Using
a black ink pen, mark your votes with an X as shown in
this example. Please do not write outside the designated areas.
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Annual Meeting Proxy Card
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6 PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6
A
Proposals The Board of Directors recommends a vote
FOR all the nominees listed and FOR
Proposals 2 and 3.
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1. Election of Class I Directors: |
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Withhold |
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For |
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Withhold |
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01 - Jay H. Shidler* |
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02 - J. Steven Wilson* |
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03 - Robert D. Newman* |
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* Each term, if elected, expires in 2010. |
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For
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Abstain
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Abstain |
2.
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Approval of Amendment No. 2 to the 2001 Stock
Incentive Plan.
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3. |
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Ratification of the appointment of PricewaterhouseCoopers
LLP as the Companys
independent registered public accounting firm.
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4.
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In their discretion, on any and all other matters that may |
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properly come before the meeting. |
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B
Authorized
Signatures This section must be completed for your vote to be
counted. Date and Sign Below |
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Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give
full title.
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Date (mm/dd/yyyy) Please print date below. |
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Signature 1 Please keep signature within the box. |
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Signature 2 Please keep signature within the box. |
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/ |
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n
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C 1234567890
1 U P X
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J N T
0 1 3 1 5 5 2
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MR A SAMPLE (THIS AREA IS SET UP TO
ACCOMMODATE 140 CHARACTERS) MR A
SAMPLE AND MR A SAMPLE AND MR A SAMPLE
AND MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE
AND MR A SAMPLE AND MR A SAMPLE AND
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6 PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6
Proxy FIRST INDUSTRIAL REALTY TRUST, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON MAY 16, 2007
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Michael W. Brennan and Michael J. Havala, or either of them, with
full powers of substitution, as proxies of the undersigned, with the authority to vote upon and act
with respect to all shares of stock of First Industrial Realty Trust, Inc. (the Company), which
the undersigned is entitled to vote, at the Annual Meeting of Stockholders of the Company, to be
held at The Chicago Club, Robert Todd Lincoln Room 2nd Floor, 81 East Van Buren, Chicago,
Illinois 60605, commencing Wednesday, May 16, 2007, at 9:00 a.m., and at any and all adjournments
thereof, with all the powers the undersigned would possess if then and there personally present,
and especially (but without limiting the general authorization and power hereby given) with the
authority to vote on the reverse side.
The undersigned hereby revokes any proxy or proxies heretofore given to vote upon or act with
respect to said shares and hereby confirms all that the proxies named herein and their substitutes,
or any of them, may lawfully do by virtue hereof.
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 nominees
for director listed in Item 1, for
the approval of Amendment No. 2 to the 2001 Stock Incentive Plan
described in Item 2, for the
ratification of the independent registered public accounting firm in Item 3, and in the discretion
of the persons named as proxies herein with respect to any and all matters referred to in Item 4.
PLEASE VOTE, DATE AND SIGN THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.