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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 ( Amendment No. )
Filed by the Registrantx
Filed by a Party other than the Registranto
Check the appropriate box: | ||
o Preliminary Proxy Statement | o Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Under Rule 14a-12
LIBERTY PROPERTY TRUST
Payment of Filing Fee (Check the appropriate box):
x No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(1) Amount previously paid:
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1. | To elect four Class III trustees to hold office until the Annual Meeting of Shareholders to be held in 2009 and until their successors are duly elected and qualified; | |
2. | To ratify the selection of Ernst & Young LLP as the Trust’s independent registered public accounting firm for 2006; | |
3. | To consider and vote on a proposal to amend the Liberty Property Trust Amended and Restated Share Incentive Plan, including an amendment to increase the number of shares available for awards thereunder by 1,400,000 shares to 12,826,256 shares; and | |
4. | To transact such other business as may properly come before the meeting. |
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Number of Shares | Percent | |||||||
Beneficial Owners | Beneficially Owned | of Class | ||||||
William P. Hankowsky | 291,878 | (1) | * | |||||
Robert E. Fenza | 544,978 | (2) | * | |||||
George J. Alburger, Jr. | 585,335 | (3) | * | |||||
James J. Bowes | 281,676 | (4) | * | |||||
Michael T. Hagan | 125,401 | (5) | * | |||||
Frederick F. Buchholz | 51,676 | (6) | * | |||||
Thomas C. DeLoach, Jr. | 30,609 | (7) | * | |||||
Daniel P. Garton | 11,208 | (8) | * | |||||
J. Anthony Hayden | 106,388 | (9) | * | |||||
M. Leanne Lachman | 52,619 | (10) | * | |||||
David L. Lingerfelt | 71,317 | (11) | * | |||||
Jose A. Mejia | 711 | * | ||||||
John A. Miller | 49,754 | (12) | * | |||||
Stephen B. Siegel | 47,619 | (13) | * | |||||
Cohen & Steers Capital Management, Inc. | 6,894,960 | (14) | 7.8 | % | ||||
Barclays Global Investors, NA | 6,446,963 | (15) | 7.3 | % | ||||
ING Clarion Real Estate Securities, L.P. | 5,018,986 | (16) | 5.7 | % | ||||
All trustees and executive officers as a group (14 persons) | 2,251,169 | (17) | 2.5 | % |
* | Represents less than one percent of class. |
(1) | Includes 215,967 common shares subject to options exercisable within 60 days after March 16, 2006. | |
(2) | Includes 322,251 common shares subject to options exercisable within 60 days after March 16, 2006 and 195,043 common shares issuable upon exchange of units of limited partnership interest (“Units”) of Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, together with the Trust, the “Company”) which, as of December 31, 2005, was 96.2% owned by the |
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Trust. Also includes 700 common shares, held by Mr. Fenza as custodian for his children, or owned directly by such children, as to which Mr. Fenza disclaims beneficial ownership. | ||
(3) | Includes 492,837 common shares subject to options exercisable within 60 days after March 16, 2006. | |
(4) | Includes 260,626 common shares subject to options exercisable within 60 days after March 16, 2006. Also includes 40 common shares held by Mr. Bowes’ child, as to which Mr. Bowes disclaims beneficial ownership. | |
(5) | Includes 85,389 common shares subject to options exercisable within 60 days after March 16, 2006 and 14,491 common shares issuable upon exchange of Units. | |
(6) | Includes 28,500 common shares subject to options exercisable within 60 days after March 16, 2006. | |
(7) | Includes 1,000 common shares subject to options exercisable within 60 days after March 16, 2006. | |
(8) | Includes 8,500 common shares subject to options exercisable within 60 days after March 16, 2006. | |
(9) | Includes 33,500 common shares subject to options exercisable within 60 days after March 16, 2006. |
(10) | Includes 23,500 common shares subject to options exercisable within 60 days after March 16, 2006. |
(11) | Includes 33,500 common shares subject to options exercisable within 60 days after March 16, 2006 and 30,674 common shares issuable upon exchange of Units. Also includes 987 common shares held by trusts for the benefit of Mr. Lingerfelt’s children, as to which Mr. Lingerfelt disclaims beneficial ownership. |
(12) | Includes 37,000 common shares subject to options exercisable within 60 days after March 16, 2006. |
(13) | Includes 38,500 common shares subject to options exercisable within 60 days after March 16, 2006. |
(14) | As of December 31, 2005, Cohen & Steers Capital Management, Inc. (“Cohen & Steers”) had sole dispositive power and sole voting power over 6,867,689 and 6,545,589 common shares, respectively. This information is based solely on a review of a Schedule 13G filed by Cohen & Steers with the Securities and Exchange Commission. Cohen & Steers’ address is 280 Park Avenue, 10th Floor, New York, NY 10017. |
(15) | As of December 31, 2005, Barclays Global Investors Japan Trust and Banking Company Limited and certain of its affiliates (“Barclays”) had sole dispositive power and sole voting power over 6,446,963 and 5,927,296 common shares, respectively. These entities expressly disclaim “group” status, as defined in Rule 13d-1 under the Exchange Act. This information is based solely on a review of a Schedule 13G filed by Barclays with the Securities and Exchange Commission. Barclays’ address is Ebisu Prime Square, Tower 8th Floor, 1-1-39 Hiroo Shibuya-ku, Tokyo 150-0012 Japan. |
(16) | As of December 31, 2005, ING Clarion Real Estate Securities, L.P. had sole dispositive power and sole voting power over 5,018,986 common shares. This information is based on a telephone conference with ING on March 28, 2006. ING’s address is 259 N. Radnor Chester Road, Suite 205, Radnor, PA 19087. |
(17) | Includes 1,581,820 common shares subject to options exercisable within 60 days after March 16, 2006 and 240,208 common shares issuable upon exchange of Units. |
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Long-Term | |||||||||||||||||||||||||||||
Compensation Awards | |||||||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||||||
Restricted | Securities | ||||||||||||||||||||||||||||
Other Annual | Share | Underlying | All Other | ||||||||||||||||||||||||||
Name and Principal Position | Year | Salary | Bonus(1) | Compensation(2) | Awards(1) | Options/SARs | Compensation(3) | ||||||||||||||||||||||
William P. Hankowsky | 2005 | $ | 459,000 | $ | — | — | $ | 2,015,342 | (4) | 14,982 | $ | 1,500 | |||||||||||||||||
President and Chief | 2004 | 425,000 | 70,125 | — | 702,148 | 30,550 | 1,260 | ||||||||||||||||||||||
Executive Officer | 2003 | 375,003 | 500 | — | 952,843 | 49,172 | 1,260 | ||||||||||||||||||||||
Robert E. Fenza | 2005 | $ | 327,974 | $ | 200,433 | — | $ | 132,318 | 6,423 | $ | 1,500 | ||||||||||||||||||
Executive Vice President | 2004 | 303,680 | 500 | — | 383,468 | 12,899 | 1,260 | ||||||||||||||||||||||
and Chief Operating Officer | 2003 | 291,998 | 177,677 | — | 285,120 | 23,603 | 1,260 | ||||||||||||||||||||||
George J. Alburger, Jr. | 2005 | $ | 320,112 | $ | 500 | — | $ | 363,315 | 6,269 | $ | 1,500 | ||||||||||||||||||
Executive Vice President | 2004 | 296,400 | 500 | — | 1,159,404 | (5) | 12,590 | 1,260 | |||||||||||||||||||||
and Chief Financial Officer | 2003 | 285,003 | 500 | — | 473,388 | 22,083 | 1,260 | ||||||||||||||||||||||
James J. Bowes | 2005 | $ | 280,800 | $ | 171,676 | — | $ | 113,286 | 5,499 | $ | 1,500 | ||||||||||||||||||
General Counsel | 2004 | 260,000 | 137,780 | — | 162,565 | 11,044 | 1,260 | ||||||||||||||||||||||
2003 | 249,998 | 165,425 | — | 234,000 | 19,371 | 1,229 | |||||||||||||||||||||||
Michael T. Hagan | 2005 | $ | 200,000 | $ | 500 | — | $ | 226,992 | 3,917 | $ | 1,292 | ||||||||||||||||||
Chief Investment Officer | 2004 | 182,580 | 500 | — | 224,638 | 5,071 | 1,576 | ||||||||||||||||||||||
2003 | 179,000 | 500 | — | 228,000 | 8,940 | 1,570 |
(1) | A portion of the restricted share award reflects the election by certain Named Executive Officers to receive common shares in lieu of cash for all or part of annual performance bonus compensation. The remainder represents an award of restricted shares as a portion of the long-term incentive compensation to be paid to the Named Executive Officers. Consistent with a policy adopted by the Trust’s Compensation Committee with respect to employee annual performance bonus compensation, Messrs. Hankowsky, Alburger, and Hagan elected to receive common shares in lieu of cash for all or part of their bonus compensation for 2005. By making such election, such persons received shares equal to 120% of the cash value of such bonus or portion thereof, less applicable withholding tax (the “Bonus Value”). Each executive received the number of common shares able to be purchased with the dollar amount of the Bonus Value based on the closing price per share of the common shares on March 16, 2006 ($48.54). The dollar amounts of Bonus Values are reflected under the Restricted Share Awards column. Pursuant to these elections, Messrs. Hankowsky, Alburger and Hagan were awarded 5,712, 3,396 and 2,122 common shares, respectively. Dividends will be paid on the common shares issued pursuant to such awards, and the restrictions related to such awards will expire on March 16, 2007. |
A portion of the long-term incentive compensation for 2005 paid to the Named Executive Officers was made by an award of restricted shares. The Compensation Committee awarded restricted shares to Messrs. Hankowsky, Fenza, Alburger, Bowes, and Hagan in the amount of 6,358, 2,726, 2,661, 2,334 and 1,662 common shares, respectively. The aggregate dollar values of the grants based on the closing price per share of the common shares on March 16, 2006 were $308,617, $132,320, $129,165, $113,292 and $80,673, respectively. Such shares will vest ratably over a five-year period beginning with the anniversary date of the grant (i.e., 20% will vest on the anniversary date of the grant). Dividends will be paid on the full amount of the shares, without regard to vesting. See “Report of the Compensation Committee on Executive Compensation.” |
(2) | Did not exceed the lesser of $50,000 or 10% of the total annual salary and bonus for any Named Executive Officer. |
(3) | Consists of amounts paid by the Company to purchase term life insurance policies for the respective Named Executive Officers. |
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(4) | In 2005, Mr. Hankowsky received 30,000 restricted common shares as a retention award. The shares will vest on Mr. Hankowsky’s 62nd birthday. See “Severance Plan and Retention Awards” beginning on page 11 for additional information regarding this award. |
(5) | In 2004, Mr. Alburger was awarded 20,291 restricted common shares under the Share Incentive Plan. The restrictions on these shares will lapse as to all such shares on Mr. Alburger’s sixty-second (62nd) birthday, provided that Mr. Alburger continues to be employed by, or is in the service of, the Trust as of such date. The shares would also vest upon Mr. Alburger’s death or disability (as defined in the Share Incentive Plan), should either occur prior to the date described in the preceding sentence. Dividends will be paid on the full amount of the shares, without regard to vesting, from the date of grant, and will be automatically reinvested, through the Trust’s Dividend Reinvestment and Share Purchase Plan, in common shares, which will also be subject to the restrictions described above. |
Individual Grants | Potential Realizable Value | |||||||||||||||||||||||
at Assumed | ||||||||||||||||||||||||
Number of | Percent of Total | Annual Rates of | ||||||||||||||||||||||
Securities | Options/SARs | Share Price Appreciation | ||||||||||||||||||||||
Underlying | Granted to | Exercise | for Option Term(4) | |||||||||||||||||||||
Options/SARs | Employees for | or Base Price | Expiration | |||||||||||||||||||||
Name | Granted(1) | Fiscal Year | ($ per Share)(2) | Date(3) | 5% | 10% | ||||||||||||||||||
William P. Hankowsky | 14,982 | 14.3 | % | $ | 48.54 | 03/16/16 | $ | 457,349 | $ | 1,159,011 | ||||||||||||||
Robert E. Fenza | 6,423 | 6.1 | % | $ | 48.54 | 03/16/16 | 196,072 | 496,885 | ||||||||||||||||
George J. Alburger, Jr. | 6,269 | 6.0 | % | $ | 48.54 | 03/16/16 | 191,371 | 484,971 | ||||||||||||||||
James J. Bowes | 5,499 | 5.2 | % | $ | 48.54 | 03/16/16 | 167,865 | 425,404 | ||||||||||||||||
Michael T. Hagan | 3,917 | 3.7 | % | $ | 48.54 | 03/16/16 | 107,034 | 271,245 |
(1) | Represents options granted on March 16, 2006 with respect to the fiscal year ended December 31, 2005. Such options become exercisable up to 20% after the first year, 50% after two years and 100% after three years. |
(2) | Exercise price is equal to the fair market value of the common shares on the date of grant. |
(3) | The options are subject to early termination in the event of termination of employment for cause or upon voluntary termination, but would vest in their entirety upon the optionee’s death or disability (both as defined in the Amended and Restated Share Incentive Plan or the award agreement, as applicable). |
(4) | Potential realizable value is reported net of option exercise price but before taxes associated with exercise. These amounts represent assumed rates of appreciation only. Actual gains, if any, on the options are dependent upon the future performance of the common shares, and the amounts reflected in the table will not necessarily be achieved. |
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Number of Securities | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||||||||||
Options/SARs at | In-the-Money Options/SARs | |||||||||||||||||||||||
Shares | Fiscal Year-End | at Fiscal Year-End(1) | ||||||||||||||||||||||
Acquired | Value | |||||||||||||||||||||||
Name | on Exercise | Realized(1) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
William P. Hankowsky | — | — | 177,651 | 87,342 | $ | 2,231,361 | $ | 279,371 | ||||||||||||||||
Robert E. Fenza | — | — | 313,088 | 45,665 | 4,659,271 | 193,718 | ||||||||||||||||||
George J. Alburger, Jr. | 25,600 | $ | 432,384 | 470,869 | 43,081 | 8,200,138 | 180,624 | |||||||||||||||||
James J. Bowes | 20,000 | 375,500 | 244,547 | 34,600 | 3,986,577 | 121,342 | ||||||||||||||||||
Michael T. Hagan | 67,096 | 1,222,831 | 78,193 | 15,723 | 1,217,142 | 53,383 |
(1) | Value is reported net of option exercise price, but before taxes associated with exercise. |
Number of Securities | ||||||||||||
Remaining Available | ||||||||||||
for Future Issuance | ||||||||||||
Under Equity | ||||||||||||
Number of Securities | Weighted-Average | Compensation Plans | ||||||||||
to be Issued Upon Exercise | Exercise Price of | (Excluding Securities | ||||||||||
of Outstanding Options, | Outstanding Options, | Reflected in Column 1 of | ||||||||||
Plan Category | Warrants and Rights(1) | Warrants and Rights | this table)(1) | |||||||||
Equity Compensation Plans Approved by Security Holders | 3,521,129 | $ | 29.31 | 1,935,258 | ||||||||
Equity Compensation Plans Not Approved by Security Holders | — | — | — | |||||||||
Total | 3,521,129 | $ | 29.31 | 1,935,258 | ||||||||
(1) | Does not reflect restricted shares and options awarded in 2006 with respect to the fiscal year ended December 31, 2005. Taking into account restricted stock and options awarded with respect to the fiscal year ended December 31, 2005 on March 16, 2006, the amounts listed above would be as follows: 3,618,386 (number of securities to be issued); $29.86 (weighted-average price); and 1,733,805 (number of securities remaining available). The remaining weighted-average term of the issued shares, including those awarded on March 16, 2006, is 5.37 years. |
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2000 | ||||
Dec. 31 | ||||
Liberty Property Trust | $ | 100.00 | ||
NAREIT Index(1) | 100.00 | |||
S&P 500 | 100.00 | |||
Russell 2000(2) | 100.00 |
2001 | ||||||||||||||||
Mar. 31 | June 30 | Sept. 30 | Dec. 31 | |||||||||||||
Liberty Property Trust | $ | 100.92 | $ | 107.83 | $ | 106.67 | $ | 113.22 | ||||||||
NAREIT Index(1) | 100.39 | 111.45 | 108.53 | 113.93 | ||||||||||||
S&P 500 | 88.14 | 93.30 | 79.61 | 88.11 | ||||||||||||
Russell 2000(2) | 93.49 | 106.85 | 84.64 | 102.49 |
2002 | ||||||||||||||||
Mar. 31 | June 30 | Sept. 30 | Dec. 31 | |||||||||||||
Liberty Property Trust | $ | 124.56 | $ | 137.48 | $ | 124.14 | $ | 130.35 | ||||||||
NAREIT Index(1) | 123.34 | 129.52 | 117.80 | 118.29 | ||||||||||||
S&P 500 | 88.36 | 76.52 | 63.30 | 68.64 | ||||||||||||
Russell 2000(2) | 106.57 | 97.67 | 76.77 | 81.49 |
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2003 | ||||||||||||||||
Mar. 31 | June 30 | Sept. 30 | Dec. 31 | |||||||||||||
Liberty Property Trust | $ | 130.18 | $ | 146.43 | $ | 159.09 | $ | 170.00 | ||||||||
NAREIT Index(1) | 119.08 | 134.70 | 147.52 | 162.21 | ||||||||||||
S&P 500 | 66.48 | 76.71 | 78.74 | 88.33 | ||||||||||||
Russell 2000(2) | 77.83 | 96.07 | 104.79 | 121.94 |
2004 | ||||||||||||||||
Mar. 31 | June 30 | Sept. 30 | Dec. 31 | |||||||||||||
Liberty Property Trust | $ | 199.31 | $ | 180.81 | $ | 181.95 | $ | 200.13 | ||||||||
NAREIT Index(1) | 181.70 | 171.15 | 185.23 | 213.43 | ||||||||||||
S&P 500 | 89.83 | 91.37 | 89.67 | 97.94 | ||||||||||||
Russell 2000(2) | 129.57 | 130.18 | 126.46 | 144.29 | �� |
2005 | ||||||||||||||||
Mar. 31 | June 30 | Sept. 30 | Dec. 31 | |||||||||||||
Liberty Property Trust | $ | 183.74 | $ | 211.41 | $ | 206.03 | $ | 210.53 | ||||||||
NAREIT Index(1) | 198.38 | 227.05 | 235.75 | 239.39 | ||||||||||||
S&P 500 | 95.83 | 97.14 | 100.65 | 102.75 | ||||||||||||
Russell 2000(2) | 136.58 | 142.48 | 149.16 | 150.86 |
(1) | The NAREIT Index (consisting of 197 real estate investment trusts with an equity market capitalization of approximately $330 billion at December 31, 2005) is maintained by the National Association of Real Estate Investment Trusts, Inc., is published monthly, and is based on the last closing prices of the preceding month. |
(2) | The Russell 2000 Index is a popular measure of the stock price performance of small companies. Russell Indexes are market capitalization weighted indexes. The Russell 1000 Index is comprised of the 1,000 largest U.S. stocks in terms of market capitalization. The Russell 2000 Index is comprised of the next 2,000 largest U.S. stocks in terms of market capitalization. |
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Malvern, Pennsylvania 19355
SEE REVERSE | ||
SIDE |
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1. | Election of four Class III trustees to hold office until 2009. |
Nominees: | (01)William P. Hankowsky, (02) David L. Lingerfelt,(03) Jose A. Mejiaand (04)John A. Miller | |||||||||||
FOR | WITHHELD | |||||||||||
o | o | |||||||||||
FOR ALL NOMINEES, EXCEPT AS NOTED ABOVE. |
2. | Approval of the proposal to ratify the selection of Ernst & Young LLP as the Trust’s independent registered public accounting firm for 2006. |
FOR | AGAINST | ABSTAIN | ||||
o | o | o |
3. | Approval of the proposal to amend the Trust’s Amended and Restated Share Incentive Plan, including an amendment to increase the number of shares available for awards thereunder by 1,400,000 shares to 12,826,256 shares. |
FOR | AGAINST | ABSTAIN | ||||
o | o | o |
MARK HERE FOR ADDRESSo CHANGE AND NOTE AT LEFT |
The undersigned hereby acknowledges receipt of the notice of annual meeting, the proxy statement furnished in connection therewith and the annual report to shareholders and hereby ratifies all that the said attorneys |
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and proxies may do by virtue hereof. | ||
NOTE: Please mark, date and sign this proxy card and return it in the enclosed envelope. Please sign as your name appears hereon. If shares are registered in more than one name, all owners should sign. If signing in a fiduciary or representative capacity, please give full title and attach evidence of authority. Corporations please sign with full corporate name by a duly authorized officer and affix corporate seal. |
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