MONMOUTH REAL ESTATE INVESTMENT CORPORATION
A Real Estate Investment Trust
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C
Freehold, New Jersey 07728
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of
Shareholders of Monmouth Real Estate Investment Corporation
(the Company) will be held on Thursday, April 26, 2001, at
4:00 p.m. at the offices of the Company at Juniper Business
Plaza, 3499 Route 9 North, Suite 3-C, Freehold, New Jersey,
for the following purposes:
1. To elect nine Directors, the names of whom are set
forth in the accompanying proxy statement,to serve
for the ensuing year; and
2. To ratify the appointment of KPMG LLP as independent
auditors for the Company for the fiscal year ending
September 30, 2001; and
3. To transact such other business as may properly come
before the meeting and any adjournments thereof.
The books containing the minutes of the last Annual
Meeting of Shareholders, and the minutes of all meetings of
the Directors since the last Annual Meeting of Shareholders,
will be presented at the meeting for the inspection of the
shareholders. Only shareholders of record at the close of
business on March 14, 2001 will be entitled to vote at the
meeting and at any adjournments thereof.
IF YOU ARE UNABLE TO BE PRESENT IN PERSON, PLEASE SIGN
AND DATE THE ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE
BOARD OF DIRECTORS, AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Eugene W. Landy
EUGENE W. LANDY
President and Director
March 21, 2001
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C
Freehold, New Jersey 07728
PROXY STATEMENT
Annual Meeting of Shareholders
April 26, 2001
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Monmouth Real
Estate Investment Corporation (the Company) of proxies to be
voted at the Annual Meeting of Shareholders of the Company to
be held on April 26, 2001, and at any adjournments thereof
(Annual Meeting), for the purposes listed in the preceding
Notice of Annual Meeting of Shareholders. This Proxy
Statement and the accompanying proxy card are being
distributed on or about March 21, 2001 to shareholders of
record March 14, 2001.
A copy of the Annual Report, including financial
statements, was mailed to all shareholders of record on or
about February 16 , 2001.
Any shareholder giving the accompanying proxy has the
power to revoke it at any time before it is exercised at the
Annual Meeting by filing with the Secretary of the Company an
instrument revoking it, by delivering a duly executed proxy
card bearing a later date, or by appearing at the meeting and
voting in person. Shares represented by properly executed
proxies will be voted as specified thereon by the
shareholder. Unless the shareholder specifies otherwise,
such proxies will be voted FOR the proposals set forth in the
Notice of Annual Meeting.
The cost of preparing, assembling and mailing this Proxy
Statement and form of proxy, and the cost of soliciting
proxies related to the meeting, will be borne by the Company.
The Company does not intend to solicit proxies otherwise than
by the use of the mail, but certain Officers and regular
employees of the Company, without additional compensation,
may use their personal efforts, by telephone or otherwise, to
obtain proxies.
VOTING RIGHTS
Only holders of the Company's $.01 par value common
stock (Common Stock) of record as of the close of business on
March 14, 2001, are entitled to vote at the Annual Meeting of
Shareholders. As of the record date, there were issued and
outstanding 9,409,478 shares of Common Stock, each share
being entitled to one vote on any matter which may properly
come before the meeting. Said voting right is non-
cumulative. The holders of a majority of the outstanding
shares of Common Stock shall constitute a quorum. An
affirmative vote of a majority of the votes cast by holders
of the Common Stock is required for approval of Proposals 1
and 2.
1
PROPOSAL 1
ELECTION OF DIRECTORS
It is proposed to elect a Board of nine Directors. The
proxy will be voted for the election of the nine nominees
named herein, seven of whom are members of the present Board,
to serve for a one-year term for which they have been
nominated, unless authority is withheld by the shareholder.
The nominees have agreed to serve, if elected, for the new
term. At the Annual Meeting of Shareholders held April
27, 2000, the shareholders elected eight Directors to serve
for a one-year period. Subsequent to the 2000 Annual
Meeting, the Board of Directors appointed Matthew I. Hirsch
as Director.
Robert G. Sampson, who has served as a Director since
1968, is retiring from the Board of Directors effective on
the date of the Annual Meeting and therefore will not seek re-
election. The Board of Directors is saddened by the recent
death of Boniface DeBlasio, who also served as a Director
since 1968. The Board of Directors has nominated John R.
Sampson and Peter J. Weidhorn to serve as Directors for the
ensuing year.
If for any reason any of the nine nominees shall become
unavailable for election, the proxy will be voted for any
substitute nominee who may be selected by the Board of
Directors prior to or at the meeting, or, if no substitute is
selected by the Board of Directors, for a motion to reduce
the membership of the Board to the number of the following
nominees who are available. In the event the membership of
the Board is reduced, it is anticipated that it would be
restored to the original number at the next annual meeting.
In the event a vacancy occurs on the Board of Directors after
the Annual Meeting, the by-laws provide that any such vacancy
shall be filled for the unexpired term by a majority vote of
the remaining Directors. The Company has no knowledge that
any of the nine nominees shall become unavailable for
election.
The proxies solicited cannot be voted for a greater
number of persons than the nominees named.
Some of the nominees for Director are also Officers
and/or Directors of other companies, including Monmouth
Capital Corporation and United Mobile Homes, Inc., both
publicly-owned companies. In addition, the Officers and
Directors of the Company may engage in real estate
transactions for their own account, which transactions may
also be suitable for Monmouth Real Estate Investment
Corporation. In most respects, the activities of the
Company, United Mobile Homes, Inc. and Monmouth Capital
Corporation are not in conflict, but rather complement each
other. However, the activities of the Officers and Directors
on behalf of the other companies, or for their own account,
may on occasion conflict with those of the Company and
deprive the Company of favorable opportunities. It is the
opinion of the Officers and Directors of the Company that
there have been no conflicting transactions since the
beginning of the last fiscal year.
2
Committees of the Board of Directors and Meeting Attendance
The Board of Directors had four meetings during the last
fiscal year. No Director attended fewer than 75% of the
meetings.
The Company has a standing Audit Committee, a Stock
Option Committee and a Compensation Committee of the Board
of Directors.
The Audit Committee, which recommends to the Directors
the independent public accountants to be engaged by the
Company and reviews with management the Company's internal
accounting procedures and controls, had seven meetings,
including telephone meetings, during the last fiscal year.
Charles P. Kaempffer, Daniel D. Cronheim and Matthew I.
Hirsch, all of whom are outside Directors, serve on the Audit
Committee.
The Stock Option Committee, which administers the
Company's Stock Option Plan, had one meeting during the last
fiscal year. Daniel D. Cronheim and Matthew I. Hirsch serve
on the Stock Option Committee.
The Compensation Committee, which makes recommendations
to the Directors concerning compensation, had one meeting
during the last fiscal year. Daniel D. Cronheim and Matthew
I. Hirsch serve on the Compensation Committee.
3
NOMINEES FOR DIRECTOR
Present Position with the
Company; Business Experience
During Past Five Years; Director
Nominee; Age Other Directorships Since
Ernest V. Treasurer (1968 to present) and 1968
Bencivenga Director. Financial Consultant
(83) (1976 to present); Treasurer and
Director (1961 to present) and
Secretary (1967 to present) of
Monmouth Capital Corporation;
Director (1969 to present) and
Secretary/Treasurer (1984 to
present) of United Mobile Homes,
Inc.
Anna T. Chew Controller (1991 to present) and 1993
(42) Director. Certified Public
Accountant; Controller (1991 to
present) and Director (1994 to
present) of Monmouth Capital
Corporation; Vice President and
Chief Financial Officer (1995 to
present) and Director (1994 to
present) of United Mobile Homes,
Inc.
Daniel D. Director. Attorney at Law (1982 1989
Cronheim to present); Executive Vice
(46) President (1989 to present) and
General Counsel (1983 to present)
of David Cronheim Company.
Matthew I. Hirsch Director. Attorney at Law (1985 2000
(41) to present); Adjunct Professor
of Law (1993 to present), Widener
University School of Law.
Charles P. Director. Investor; Director 1974
Kaempffer (1970 to present) of Monmouth
(63) Capital Corporation; Director
(1969 to present) of United
Mobile Homes, Inc.; Vice Chairman
and Director (1996 to present) of
Community Bank of New Jersey.
4
NOMINEES FOR DIRECTOR (continued)
Present Position with the
Company; Business Experience
During Past Five Years; Director
Nominee; Age Other Directorships Since
Eugene W. Landy President (1968 to present) and 1968
(67) Director. Attorney at Law;
President and Director (1961 to
present) of Monmouth Capital
Corporation; Chairman of the
Board (1995 to present),
President (1969 to 1995) and
Director (1969 to present) of
United Mobile Homes, Inc.
Samuel A. Landy Director. Attorney at Law (1987 1989
(40) to present); President (1995 to
present), Vice President (1991 to
1995) and Director (1992 to
present) of United Mobile Homes,
Inc.; Director (1994 to present)
of Monmouth Capital Corporation.
John R. Sampson Senior Portfolio Manager at Fox New
(47) Asset Management, Inc. (1998 to Nominee
present); Principal at Pharos
Management and Principia Partners
LLC (1995 to 1998) specializing
in fixed income consulting and
research for the securities
industry.
Peter J. Weidhorn Director of Real Estate New
(54) Management/ Acquisitions at Nominee
Kushner Companies (2000 to
present); Director (1994 to 1997)
of Monmouth Capital Corporation;
President (1981 to 1998) of WNY
Management Corp.; Chairman of the
Board, President and Director
(1998 to 2000) of WNY Group,
Inc.; Trustee and former Chairman
of the Board of CentraState
Healthcare System; Treasurer and
Trustee of the Union of American
Hebrew Congregations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
5
PROPOSAL 2
APPROVAL OF INDEPENDENT AUDITORS
It is proposed to approve the appointment of KPMG LLP as
Independent Auditors for the Company for the purpose of
making the annual audit of the books of account of the
Company for the year ending September 30, 2001 and
shareholder approval of said appointment is requested. KPMG
LLP has served as Independent Auditors of the Company since
1994. There are no affiliations between the Company and KPMG
LLP, its partners, associates or employees, other than its
employment as Independent Auditors for the Company. KPMG LLP
informed the Company that it has no direct or indirect
financial interest in the Company. The Company does expect a
representative of KPMG LLP to be present at the Annual
Meeting either to make a statement or to respond to
appropriate questions.
The approval of the appointment of the Independent
Auditors must be by the affirmative vote of a majority of the
votes cast at the Annual Meeting. In the event KPMG LLP
does not receive an affirmative vote of the majority of the
votes cast by the holders of shares entitled to vote, then
another firm will be appointed as Independent Auditors and
the shareholders will be asked to ratify the appointment at
the next annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PRINCIPAL SHAREHOLDERS
As of March 1, 2001, no person owned of record, or was
known by the Company to own beneficially, more than five
percent (5%) of the shares of the Company.
6
INFORMATION RESPECTING DIRECTORS AND OFFICERS
As of March 1, 2001, the Directors and Officers,
individually and as a group, beneficially owned Common Stock
as follows:
Name of Shares Owned Percent of
Beneficial Owner Beneficially (1) Class
Ernest V. Bencivenga 12,014 (2) 0.13%
Anna T. Chew 21,689 (3) 0.23%
Daniel D. Cronheim 24,028 (4) 0.26%
Matthew I. Hirsch 871 (5) 0.01%
Charles P. Kaempffer 37,633 (6) 0.40%
Eugene W. Landy 445,633 (7)(10) 4.74%
Samuel A. Landy 152,764 (8) 1.62%
John R. Sampson 14,107 (9) 0.15%
Peter J. Weidhorn 1,000 0.01%
Directors & Officers
as a Group 709,739 (10) 7.55%
(1) Beneficial ownership, as defined herein, includes Common
Stock as to which a person has or shares voting and/or
investment power.
(2) Excludes 15,000 shares issuable upon exercise of stock
option.
(3) Includes (a) 14,843 shares owned jointly with Ms. Chew's
husband; and (b) 6,846 shares held in Ms. Chew's 401(k)
Plan. Excludes 15,000 shares issuable upon exercise of
stock option.
(4) Excludes 15,000 shares issuable upon exercise of stock
option.
(5) Excludes 5,000 shares issuable upon exercise of stock
option.
(6) Includes (a) 14,655 shares owned by Mr. Kaempffer's wife;
(b) 1,080 shares in joint name with Mrs. Kaempffer; and
(c) 2,425 shares held in the Charles P. Kaempffer Defined
Benefit Pension Plan of which Mr. Kaempffer is Trustee
with power to vote. Excludes 15,000 shares issuable upon
exercise of stock option.
(7) Includes (a) 93,018 shares owned by Mr. Landy's wife; (b)
153,523 shares held in the Landy & Landy Profit Sharing
Plan of which Mr. Landy is a Trustee with power to vote;
and (c) 120,688 shares held in the Landy & Landy Pension
Plan of which Mr. Landy is a Trustee with power to vote.
Excludes 37,582 shares held by Mr. Landy's adult
children in which he disclaims any beneficial interest;
and excludes 215,000 shares issuable upon exercise of
stock option.
(8) Includes (a) 4,040 shares owned by Mr. Landy's wife; (b)
49,493 shares held in custodial accounts for Mr. Landy's
minor children under the NJ Uniform Transfers to Minors
Act in which he disclaims any beneficial interest but has
power to vote; (c) 1,000 shares in the Samuel Landy
Family Limited Partnership; and (d) 19,879 shares held
in Mr. Landy's 401(k) Plan. Excludes 15,000 shares
issuable upon exercise of stock option.
(9) Includes 2,000 shares held in custodial accounts for Mr.
Sampson's minor children under the NJ Uniform Gifts to
Minors Act in which he disclaims any beneficial interest
but has power to vote.
(10) Excludes 376,980 shares (4%) owned by United Mobile
Homes, Inc. Eugene W. Landy owns beneficially
approximately 12% of the shares of United Mobile Homes,
Inc.
7
EXECUTIVE COMPENSATION
Summary Compensation Table.
The following Summary Compensation Table shows
compensation paid or accrued by the Company to its Chief
Executive Officer for services rendered during the fiscal
years ended September 30, 2000, 1999 and 1998. Because no
other executive officers received total annual salary and
bonus exceeding $100,000, only the compensation paid to the
Chief Executive Officer is to be disclosed under the
Securities and Exchange Commission disclosure requirements.
Name and Annual Compensation
Principal Position Year Salary Bonus Other
Eugene W. Landy 2000 $130,000 $80,000 $ 72,000(1)
Chief Executive 1999 $110,000 None $ 79,700
Officer 1998 $ 27,500 $55,000 $165,700
(1) Represents Director's fees of $5,500 paid to Mr. Landy,
legal fees of $32,500 paid to the firm of Landy & Landy, and
$34,000 accrual for pension and other benefits in accordance
with Mr. Landy's employment contract.
Compensation of Directors
The Directors received a fee of $800 for each Board
meeting attended. Effective April 1, 2000, this fee was
increased to $1,000 for each Board Meeting attended and an
additional fixed annual fee of $3,800 payable quarterly.
Directors appointed to house committees received $150 for
each meeting attended. Those specific committees are
Compensation Committee, Audit Committee and Stock Option
Committee.
Stock Option Plan
On April 24, 1997, the shareholders approved and
ratified the Company's 1997 Stock Option Plan authorizing the
grant to officers, directors and key employees options to
purchase up to 750,000 shares of common stock. Options may
be granted any time up to December 31, 2006. No option shall
be available for exercise beyond ten years. All options are
exercisable after one year from the date of grant. The
option price shall not be below the fair market value at date
of grant. Canceled or expired options are added back to the
"pool" of shares available under the Plan.
8
The following table sets forth, for the executive
officer named in the Summary Compensation Table, information
regarding the granting of a stock option made during the year
ended September 30, 2000:
Potential Realized
Value at Assumed
% of Total Price Annual Rates for
Option Granted to Per Expiration Option Term
Name Granted Employees Share Date 5% 10%
Eugene W. Landy 65,000 100% $5.50 4/12/05 $ 52,000 $159,250
The following table sets forth, for the executive
officer named in the Summary Compensation Table, information
regarding stock options outstanding at September 30, 2000:
Value of
Unexercised
Options
Number of Unexercised at Year-End
Shares Value Options at Year-End Exercisable/
Name Exercised Realized Exercisable/Unexercisable Unexercisable
Eugene W. Landy -0- N/A 150,000 / 65,000 $-0- / $-0-
Employment Agreement
On December 9, 1994, the Company and Eugene W. Landy
entered into an Employment Agreement under which Mr. Landy
receives an annual base compensation (management fee) of
$130,000 (as amended) plus bonuses and customary fringe
benefits, including health insurance and five weeks'
vacation. Additionally, there will be bonuses voted by the
Board of Directors. The Employment Agreement is terminable
by either party at any time subject to certain notice
requirements.
On severance of employment for any reason, Mr. Landy
will receive severance of $300,000 payable $100,000 on
severance and $100,000 on the first and second anniversaries
of severance.
In the event of disability, Mr. Landy's compensation
shall continue for a period of three years, payable monthly.
On retirement, Mr. Landy shall receive a pension of
$40,000 a year for ten years, payable in monthly
installments.
9
In the event of death, Mr. Landy's designated
beneficiary shall receive $300,000, $150,000 thirty days
after death and the balance one year after death.
The Employment Agreement terminated December 31, 2000,
and was automatically renewed and extended for a one-year
period. Thereafter, the term of the Employment Agreement
shall be automatically renewed and extended for successive
one-year periods.
Other Information
Except for specific agreements, the Company has no
retirement plan in effect for Officers, Directors or
employees and, at present, has no intention of instituting
such a plan.
Cronheim Management Services received the sum of
$199,432 in 2000 for management fees. Effective August 1,
1998, the Company entered into a new management contract with
Cronheim Management Services. Under this contract, Cronheim
Management Services receives 3% of gross rental income on
certain properties for management fees. Cronheim Management
Services provides sub-agents as regional managers for the
Company's properties and compensates them out of this
management fee. Management believes that the aforesaid fees
are no more than what the Company would pay for comparable
services elsewhere. The David Cronheim Company received
$14,347 in lease brokerage commissions in 2000.
Report of Compensation Committee on Executive Compensation
Overview and Philosophy
The Company has a Compensation Committee consisting of
two independent outside Directors. This Committee is
responsible for making recommendations to the Board of
Directors concerning compensation. The Compensation
Committee takes into consideration three major factors in
setting compensation.
The first consideration is the overall performance of
the Company. The Board believes that the financial interests
of the executive officers should be aligned with the success
of the Company and the financial interests of its
shareholders. Increases in funds from operations, the
enhancement of the Company's equity portfolio, and the
success of the Dividend Reinvestment and Stock Purchase Plan
all contribute to increases in stock prices, thereby
maximizing shareholders' return.
The second consideration is the individual achievements
made by each officer. The Company is a small real estate
investment trust (REIT). The Board of Directors is aware of
the contributions made by each officer and makes an
evaluation of individual performance based on their own
familiarity with the officer.
10
The final criteria in setting compensation is comparable
wages in the industry. In this regard, the REIT industry
maintains excellent statistics.
Evaluation
The Company's funds from operations continue to
increase. The Committee reviewed the growth of the Company
and progress made by Eugene W. Landy, Chief Executive
Officer. Mr. Landy is under an employment agreement with the
Company. His base compensation under his contract was
increased in 2000 to $130,000 per year. In fiscal 2000, Mr.
Landy was also paid a total bonus of $80,000 for his
performance for the past two years.
Compensation Committee:
Daniel D. Cronheim
Robert G. Sampson
Report of Audit Committee
The Company has an Audit Committee consisting of three
"independent" Directors, as defined by the listing standards
of the National Association of Securities Dealers (NASD).
The Audit Committee's role is to act on behalf of the Board
of Directors in the oversight of all material aspects of the
Company's reporting, internal control and audit functions. A
full description of the Audit Committee's primary
responsibilities is attached to this proxy statement as
Appendix A.
We have reviewed and discussed with management the
Company's audited financial statements as of and for the year
ended September 30, 2000.
We have discussed with the independent auditors the
matters required to be discussed by Statement on Auditing
Standards No. 61, Communication with Audit Committees.
We have received and reviewed the written disclosures
and the letter from the independent auditors required by
Independence Standard No. 1, Independence Discussions with
Audit Committees and have discussed with the auditors the
auditors' independence.
During the year ended September 30, 2000, the Company
paid the independent auditors, KPMG LLP, $33,400 for audit
services and $13,300 for non-audit services, primarily tax
return preparation.
11
Based on the reviews and discussions referred to above,
we recommend to the Board of Directors that the financial
statements referred to above be included in the Company's
Annual Report on Form 10-K for the year ended September 30,
2000.
Audit Committee:
Charles P. Kaempffer
Daniel D. Cronheim
Matthew I. Hirsch
COMPARATIVE STOCK PERFORMANCE
The following line graph compares the total return of
the Company's common stock for the last five fiscal years to
the NAREIT All REIT Total Return Index, published by the
National Association of Real Estate Investment Trusts
(NAREIT), and the S&P 500 Index for the same period. The
total return reflects stock price appreciation and dividend
reinvestment for all three comparative indices. The
information herein has been obtained from sources believed to
be reliable, but neither its accuracy nor its completeness is
guaranteed.
Monmouth
Real Estate
Investment
Year Corporation NAREIT S&P 500
1995 100 100 100
1996 114 120 120
1997 146 167 169
1998 149 143 184
1999 142 130 236
2000 146 156 267
12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors of the Company has granted Eugene
W. Landy, President, a loan of $100,000 at an interest rate
of 10% due May 23, 2001. Principal and accrued interest are
payable at maturity.
There is no family relationship between any of the
Directors or Executive Officers of the Company, except that
Samuel A. Landy, Director, is the son of Eugene W. Landy,
President and Director of the Company. Daniel D. Cronheim,
Director, is the son of Robert Cronheim, President of David
Cronheim Company, the Real Estate Advisor to the Company.
Eugene W. Landy and Samuel A. Landy are partners in the
law firm of Landy & Landy, which firm, or its predecessor
firms, have been retained by the Company as legal counsel
since the formation of the Company, and which firm the
Company proposes to retain as legal counsel for the current
fiscal year.
The New Jersey Supreme Court has ruled that the
relationship of directors also serving as outside counsel is
not per se improper, but the attorney should fully discuss
the issue of conflict with the other directors and disclose
it as part of the proxy statement so that shareholders can
consider the conflict issue when voting for or against the
attorney/director nominee.
GENERAL
The Board of Directors knows of no other matters other
than those stated in this Proxy Statement which are to be
presented for action at the Annual Meeting. If any other
matters should properly come before the Annual Meeting, it is
intended that proxies in the accompanying form will be voted
on any such matter in accordance with the judgment of the
persons voting such proxies. Discretionary authority to vote
on such matters is conferred by such proxies upon the persons
voting them.
The Company will provide, without charge, to each person
being solicited by this Proxy Statement, on the written
request of any such person, a copy of the Annual Report of
the Company on Form 10-K for the year ended September 30,
2000 (as filed with the Securities and Exchange Commission),
including the financial statements and schedules thereto.
All such requests should be directed to Monmouth Real Estate
Investment Corporation, Attention: Shareholder Relations,
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C,
Freehold, NJ 07728.
13
COMPLIANCE WITH EXCHANGE ACT FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's Officers and Directors, and
persons who own more than 10% of the Company's Common Stock,
to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Officers, Directors
and greater than 10% shareholders are required by Securities
and Exchange Commission regulations to furnish the Company
with copies of all Section 16(a) forms they file. Based
solely on review of the copies of such forms furnished to the
Company, the Company believes that, during the fiscal year,
all Section 16(a) filing requirements applicable to its
Officers, Directors and greater than 10% beneficial owners
were met.
SHAREHOLDER PROPOSALS
In order for Shareholder Proposals for the 2002 Annual
Meeting of Shareholders to be eligible for inclusion in the
Company's 2002 Proxy Statement, they must be received by the
Company at its principal office at 3499 Route 9 North, Suite
3-C, Freehold, New Jersey 07728 not later than October 30,
2001.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Eugene W. Landy
EUGENE W. LANDY
President and Director
Dated: March 21, 2001
IMPORTANT: Shareholders can help the Directors avoid the
necessity and expense of sending follow-up letters to insure
a quorum by promptly returning the enclosed proxy. The proxy
is revocable and will not affect your right to vote in person
in the event you attend the meeting. You are earnestly
requested to sign and return the enclosed proxy in order that
the necessary quorum may be present at the meeting. The
enclosed addressed envelope requires no postage and is for
your convenience.
14
APPENDIX A
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
AUDIT COMMITTEE CHARTER
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to
assist the Board in fulfilling its oversight
responsibilities. The Audit Committee's primary duties and
responsibilities are to:
. Monitor the integrity of the Company's financial reporting
process and systems of internal controls regarding finance,
accounting, and legal compliance.
. Monitor the independence and performance of the Company's
independent auditors.
. Provide an avenue of communication among the independent
auditors, management, and the Board of Directors.
The Audit Committee has the authority to conduct any
investigation appropriate to fulfilling its responsibilities
and it has direct access to the independent auditors as well
as anyone in the organization. The Audit Committee has the
ability to retain, at the Company's expense, special legal,
accounting, or other consultants or experts it deems
necessary in the performance of its duties.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
Audit Committee members shall meet the requirements of the
National Association of Securities Dealers. The Audit
Committee shall be comprised of three directors as determined
by the Board, each of whom shall be independent nonexecutive
directors, free from any relationship that would interfere
with the exercise of his or her independent judgment. All
members of the Committee shall have a basic understanding of
finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of
the Committee shall have accounting or related financial
management expertise.
Audit Committee members shall be appointed by the Board of
Directors upon recommendation by the Chairman. If an audit
committee Chair is not designated or present, the members of
the Committee may designate a Chair by majority vote of the
Committee membership.
A-1
The Committee shall meet at least two times annually, or more
frequently as circumstances dictate. The Audit Committee
Chair shall prepare and/or approve an agenda in advance of
each meeting. The Committee should meet privately in
executive session at least annually with management and the
independent auditors and as a committee to discuss any
matters that the Committee or each of these groups believe
should be discussed. The Committee may ask members of
management or others to attend meetings and provide pertinent
information as necessary. The Committee or its Chair should
communicate with management and the independent auditors
quarterly to review the Company's financial statements and
significant findings based upon the auditors limited review
procedures, as considered necessary.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
Review Procedures
1. Review and reassess the adequacy of this Charter at
least annually. Submit the charter to the Board of
Directors for approval and have the document published
at least every three years in accordance with SEC
regulations.
2. Review the Company's annual audited financial statements
prior to filing or distribution. Review should include
discussion with management and independent auditors of
significant issues regarding accounting principles,
practices and judgments.
3. In consultation with management and the independent
auditors, consider the integrity of the Company's
financial reporting processes and controls. Discuss
significant financial risk exposures and the steps
management has taken to monitor, control and report such
exposures. Review significant findings prepared by the
independent auditors together with management's
responses.
4. Review with financial management and the independent
auditors, the company's quarterly financial results
prior to the release of earnings and/or the company's
quarterly financial statements prior to filing or
distribution, as considered necessary. Discuss any
significant changes to the Company's accounting
principles and any items required to be communicated
by the independent auditors in accordance with SAS 61
(see item 9). The Chair of the Committee may represent
the entire Audit Committee for purposes of this review.
A-2
Independent Auditors
5. The independent auditors are ultimately accountable to
the Audit Committee and the Board of Directors. The
Audit Committee shall review the independence, and
performance of the auditors and annually recommend to
the Board of Directors the appointment of the
independent auditors or approve any discharge of
auditors when circumstances warrant.
6. Approve the fees and other significant compensation to
be paid to the independent auditors.
7. On an annual basis, the Committee should review and
discuss with the independent auditors all significant
relationships they have with the Company that could
impair the auditors' independence.
8. Review the independent auditors audit plan-discuss scope,
staffing, locations, reliance upon management and
general audit approach, as considered necessary.
9. Discuss certain matters required to be communicated to
audit committees in accordance with AICPA SAS 61.
10. Consider the independent auditors' judgments about the
quality and appropriateness of the Company's accounting
principles as applied in its financial reporting.
Legal Compliance
11. On at least an annual basis, review with the Company's
counsel, any legal matters that could have a significant
impact on the organization's financial statements, the
Company's compliance with applicable laws and
regulations, inquiries received from regulators or
governmental agencies.
Other Audit Committee Responsibilities
12. Annually prepare a report to shareholders as required by
the Securities and Exchange Commission. The report
should be included in the Company's annual proxy
statement.
13. Perform any other activities consistent with this
Charter, the Company's By-laws and governing law, as
the Committee or the Board deems necessary or
appropriate.
14. Maintain minutes of meetings and periodically report to
the Board of Directors on significant results of the
foregoing activities.
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PROXY PROXY
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
A Real Estate Investment Trust
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
PLEASE FILL IN, DATE AND SIGN PROXY AND RETURN PROMPTLY
The undersigned hereby appoints EUGENE W. LANDY, SAMUEL A.
LANDY and ERNEST V. BENCIVENGA, and each or any of them,
proxies of the undersigned, with full power of substitution,
to vote in their discretion (subject to any direction
indicated hereon) at the Annual Meeting of Shareholders to be
held at the Company Office at Juniper Business Plaza, 3499
Route 9 North, Suite 3-C, Freehold, New Jersey, on Thursday,
April 26, 2001, at 4:00 o'clock p.m., and at any adjournment
thereof, with all the powers which the undersigned would
possess if personally present, and to vote all shares of
stock which the undersigned may be entitled to vote at said
meeting.
The Board of Directors recommends a vote FOR items (1) and
(2), and all shares represented by this Proxy will be so
voted unless otherwise indicated, in which case they will be
voted as marked.
(1) Election of Directors - Nominees are: Ernest V.
Bencivenga, Anna T. Chew, Daniel D. Cronheim,
Matthew I. Hirsch, Charles P. Kaempffer, Eugene W.
Landy, Samuel A. Landy, John R. Sampson and Peter J.
Weidhorn.
(Instruction: To withhold authority to vote for any
individual Nominee, write that person's name on
the line below)
_____________________________________________________________
FOR all Nominees WITHHOLD AUTHORITY
except as Indicated to vote for listed Nominees
/ / / /
(2) Approval of the appointment of KPMG LLP as Independent
Auditors for the Company for the fiscal year ending
September 30, 2001.
FOR AGAINST ABSTAIN
/ / / / / /
(3) Such Other Business as may be brought before the
meeting or any adjournment thereof. The Board of
Directors at present knows of no other business
to be presented by or on behalf of the Company or
its Board of Directors at the meeting.
Receipt of Notice of Meeting and Proxy Statement is hereby
acknowledged.
Dated:_____________________________________, 2001.
Signature_________________________________________________
Signature_________________________________________________
Important: Please date this Proxy; sign exactly as your name(s)
appears hereon. When signing as joint tenants, all
parties to the joint tenancy should sign. When signing the
Proxy as attorney, executor, administrator, trustee or
guardian, please give full title as such.