SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ]Preliminary Proxy Statement
[ ]Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AMLI RESIDENTIAL PROPERTIES TRUST
----------------------------------------------
(Name of Registrant as Specified In Its Charter)
----------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ]No fee required.
[ ]$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
AMLI RESIDENTIAL PROPERTIES TRUST
125 South Wacker Drive, Suite 3100
Chicago, Illinois 60606
___________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
and
PROXY STATEMENT
___________
March 23, 2005
Dear Shareholder:
You are invited to attend our annual meeting of shareholders, which
will be held on Monday, April 25, 2005, beginning at eleven o'clock a.m.,
Chicago time, at 1 Bank One Plaza (20 South Clark), 57th Floor, Chicago,
Illinois.
The formal notice of the annual meeting, and the proxy statement
describing the matters on which you may vote, can be found on the following
pages. A copy of our annual report on 2004 financial results is enclosed
for your review. Also enclosed is a proxy card and a postage-paid return
envelope.
So that your shares will be voted at the meeting, please complete and
sign the enclosed proxy card and return it in the enclosed envelope as
promptly as possible. You are encouraged to specify your choices on the
matters indicated. However, it is not necessary to specify your choice on
a matter if you wish to vote in accordance with the recommendation of the
Board of Trustees; in such event, merely executing and returning the proxy
card will be sufficient.
I hope that you will be able to attend the annual meeting. If you
do, you may vote your shares in person even though you have returned a
proxy.
/S/ ALLAN J. SWEET
ALLAN J. SWEET
President
AMLI RESIDENTIAL PROPERTIES TRUST
125 South Wacker Drive, Suite 3100
Chicago, Illinois 60606
___________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 25, 2005
___________
The 2004 annual meeting of shareholders of AMLI Residential
Properties Trust will be held at 1 Bank One Plaza (20 South Clark) 57th
Floor, Chicago, Illinois on Monday, April 25, 2005, at eleven o'clock a.m.,
Chicago time, for the following purposes:
1. To elect one Trustee to serve for a remaining two year term
and three Trustees to serve for a three year term and
until their successors are elected and qualify;
2. To amend the Declaration of Trust to eliminate the
classification of the Board of Trustees; and
3. To ratify the appointment of KPMG LLP as the Company's
independent auditors for the fiscal year ending December 31,
2005.
To transact such other business as may properly come before
the meeting or any adjournments or postponements thereof.
The Board of Trustees has fixed the close of business on March 4,
2005 as the record date for determining the shareholders entitled to
receive notice of and to vote at the annual meeting.
By Order of the Board of Trustees
GREGORY T. MUTZ
Chairman of the Board and
Chief Executive Officer
Chicago, Illinois
March 23, 2005
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON.
SHAREHOLDERS WHO DO NOT INTEND TO BE PRESENT AT THE MEETING IN PERSON ARE
REQUESTED TO SIGN AND DATE THE ENCLOSED PROXY AND TO RETURN IT IN THE
ACCOMPANYING ENVELOPE IN ORDER THAT THE NECESSARY QUORUM MAY BE ASSURED.
ANY PROXY MAY BE REVOKED IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY
STATEMENT AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE MEETING.
PROXY PROXY
AMLI RESIDENTIAL PROPERTIES TRUST
This Proxy is Solicited by and on Behalf of the Board of Trustees
Annual Meeting of Shareholders
To Be Held April 25, 2005
The undersigned hereby appoints each of John E. Allen, Gregory T.
Mutz, Allan J. Sweet, and Philip N. Tague with full power of substitution,
to represent the undersigned at the annual meeting of shareholders of AMLI
Residential Properties Trust to be held on April 25, 2005, and at any
adjournments or postponements thereof, and to cast at such meeting the
votes that the undersigned would be entitled to cast if present at such
meeting, in accordance with the following instructions. If no instructions
are indicated, the shares represented by this Proxy will be voted FOR
Items 1, 2 and 3 on the reverse hereof.
The undersigned acknowledges receipt of the Notice of Annual Meeting
and the Proxy Statement together with this Proxy.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on the reverse side.)
PROXY CARD
AMLI RESIDENTIAL PROPERTIES TRUST
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER
USING DARK INK ONLY. [ X ]
1. ELECTION OF TRUSTEES:
Nominees:
Bruce P. Bickner
Laura D. Gates
Marc S. Heilweil For All (Except
Gregory T. Mutz Nominee(s) whose
_________________________ FOR WITHHOLD name(s) appear
All All below)
[ ] [ ]
________________
________________
________________
2. To amend the Declaration of Trust to eliminate the classification of
the Board of Trustees.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To ratify the appointment of KPMG LLP as the Company's independent
auditors for the fiscal year ending December 31, 2005.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Such other business that may properly come before the meeting or any
adjournment thereof.
Trustees recommend: a FOR Vote on Proposals 1, 2 and 3
Dated: ______________________________, 2005
Signature: ________________________________________
Signature, if jointly held_______________________________
NOTE: Please sign exactly as your name(s) appears. For joint
accounts, each owner should sign. When signing as executor,
administrator, attorney, trustee or guardian, etc., please give
your full title.
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
CONTENTS
--------
Page
----
. Introduction . . . . . . . . . . . . . . . . . . . . 1
. Annual Report. . . . . . . . . . . . . . . . . . . . 1
. Voting of Proxies. . . . . . . . . . . . . . . . . . 1
. Proposal 1 - Election of Trustees. . . . . . . . . . 2
. Management . . . . . . . . . . . . . . . . . . . . . 3
. Board Committees, Meetings and
Corporate Governance . . . . . . . . . . . . . . . . 8
. Audit Committee Report . . . . . . . . . . . . . . . 9
. Summary Compensation Table . . . . . . . . . . . . . 10
. Aggregated Option Exercises in 2004 and
Year-End Option Values . . . . . . . . . . . . . . . 13
. Long-term Incentive Plan Awards and Payouts. . . . . 14
. Equity Compensation Table. . . . . . . . . . . . . . 14
. Option Plan. . . . . . . . . . . . . . . . . . . . . 14
. Restricted Share Plan. . . . . . . . . . . . . . . . 15
. Performance Incentive Plan . . . . . . . . . . . . . 16
. Executive Share Purchase Plan. . . . . . . . . . . . 16
. Senior Officer Loan Share Purchase Program . . . . . 17
. Incentive Compensation . . . . . . . . . . . . . . . 18
. Retirement Savings Plan. . . . . . . . . . . . . . . 18
. Compensation of Trustees and
Trustee Share Compensation Plan. . . . . . . . . . . 18
. Non-Competition Agreements, Employment
Agreements, and Termination of Employment. . . . . . 19
. Compensation Committee Interlocks and
Insider Participation. . . . . . . . . . . . . . . . 19
. Executive Compensation Committee
Report on Executive Compensation . . . . . . . . . . 19
. Nominating and Governance Committee. . . . . . . . . 23
. Communicating with the Board . . . . . . . . . . . . 24
. Attendance by Members of the Board of Trustees
at the Annual Meeting of Shareholders. . . . . . . . 24
. Performance Graph. . . . . . . . . . . . . . . . . . 25
i
Page
----
. Certain Relationships and
Related Transactions . . . . . . . . . . . . . . . . 26
. Relationships with Independent Accountants . . . . . 27
. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . . 28
. Section 16(a) Beneficial Ownership
Reporting Compliance . . . . . . . . . . . . . . . . 30
. Proposal 2 - Trustees' Proposal to Eliminate the
Classification of the Board of Trustees. . . . . . . 31
. Proposal 3 - Ratification of Appointment
of Independent Auditors. . . . . . . . . . . . . . . 33
. Shareholder Proposals. . . . . . . . . . . . . . . . 33
. Proxy Solicitation Expense . . . . . . . . . . . . . 33
. Exhibit A - Articles of Amendment to
AMLI Residential Properties Trust Articles
of Amendment and Restatement . . . . . . . . . . . . 34
ii
AMLI RESIDENTIAL PROPERTIES TRUST
125 South Wacker Drive, Suite 3100
Chicago, Illinois 60606
___________
PROXY STATEMENT
___________
Annual Meeting of Shareholders
To Be Held Monday, April 25, 2005
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by and on behalf of the Board of Trustees (the "Board") of AMLI
Residential Properties Trust, a Maryland real estate investment trust
("AMLI"), for use at the annual meeting of AMLI's shareholders to be held
on Monday, April 25, 2005, at 1 Bank One Plaza (20 S. Clark) 57th Floor,
Chicago, Illinois, at eleven o'clock a.m., Chicago time, and any
adjournments or postponements thereof (the "Annual Meeting"), for the
purposes set forth in the accompanying Notice of Annual Meeting.
This Proxy Statement and the enclosed form of proxy are first being
mailed or given to shareholders on or about March 23, 2005.
ANNUAL REPORT
AMLI's Annual Report for the year ended December 31, 2004, including
a copy of AMLI's Annual Report on Form 10-K for the year ended December 31,
2004, as filed with the Securities and Exchange Commission, is being mailed
together with this Proxy Statement to each of AMLI's shareholders of record
at the close of business on March 4, 2005 (the "Record Date").
Alternatively, AMLI's Annual Report on Form 10-K may be accessed on-line
through AMLI's website www.amli.com.
VOTING OF PROXIES
Only shareholders of record of AMLI's common shares of beneficial
interest, $.01 par value per share (the "Common Shares"), at the close of
business on the Record Date are entitled to notice of and to vote at the
Annual Meeting. Each Common Share is entitled to one vote on all matters
voted upon by shareholders. There were 25,433,347 Common Shares
outstanding on the Record Date. A majority of the outstanding Common
Shares represented in person or by proxy will constitute a quorum at the
meeting.
Each validly executed proxy returned to AMLI will be voted at the
Annual Meeting as indicated on the proxy or, if no indication is made with
respect to a proposal, in favor of each proposal in accordance with the
recommendations of the Board set forth in this Proxy Statement. AMLI knows
of no matters to be presented at the Annual Meeting other than the
proposals referred to on the proxy card and described in this Proxy
Statement. However, if any other matters are properly presented at the
Annual Meeting, the persons named on the enclosed proxy intend to vote the
Common Shares represented by them pursuant to the discretionary authority
granted them in the proxy.
Any person submitting a proxy may revoke it at any time before it is
exercised by so notifying AMLI in writing or by delivering a duly executed
proxy bearing a later date to the Secretary of AMLI. In addition, persons
submitting proxies may elect to vote their shares in person at the Annual
Meeting, although mere attendance at the Annual Meeting will not serve to
revoke a proxy.
PROPOSAL 1
ELECTION OF TRUSTEES
Four Trustees, constituting one Class I Trustee and all three
Class II Trustees, are to be elected at the Annual Meeting. Unless
Proposal 2 is approved, the Class I Trustee will serve for the last two
years of a three-year term until AMLI's annual meeting of shareholders in
2007, and the Class II Trustees will serve for three-year terms until
AMLI's annual meeting of shareholders in 2008 and until their respective
successors are elected and qualify, or until earlier death, resignation or
removal. Assuming the presence of a quorum, Trustees will be elected by a
plurality of the votes cast at the Annual Meeting. There is no cumulative
voting for Trustees. For purposes of the election of Trustees, abstentions
will not be counted as votes cast and will have no effect on the result of
the vote, although they will count toward the presence of a quorum.
The Board of Trustees has nominated Bruce P. Bickner for the Class I
position and three members of the class of Trustees whose terms are
expiring in 2005 to serve for new terms. Each validly executed proxy
returned to the Company will be voted at the Annual Meeting for the four
nominees listed below, unless the proxy specifies otherwise. Each of the
nominees listed below is a member of the present Board. Biographical
information for each of the nominees is set forth under the caption
"Management."
NOMINEES
Bruce P. Bickner
Laura D. Gates
Marc S. Heilweil
Gregory T. Mutz
If any nominee should unexpectedly become unavailable for service,
proxies will be voted for another person selected by the Board, unless the
proxy specifies otherwise.
MANAGEMENT
TRUSTEES AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to
AMLI's Trustees and executive officers. AMLI has a nine-member Board of
Trustees. The Board of Trustees has determined that a majority (presently
five Trustees) are not affiliated with AMLI Realty Co. and its affiliates
and successors and are independent as determined by the New York Stock
Exchange (each an "Independent Trustee"). The basis for determination of
the independence of each Independent Trustee has been specific inquiry and
Board consideration of the responses thereto. There is no circumstance or
fact known by the Board which causes it to believe that the Independent
Trustees are not, in fact, independent. Messrs. Mutz, Allen and Sweet have
been Trustees since the organization of AMLI. Messrs. Heilweil, McConahey
and Schreiber have been Trustees since February 28, 1994. Mr. Tague and
Ms. Gates have been Trustees since March 14, 1995. Mr. Bichner has been a
Trustee since October 7, 2004, when he was appointed to the Board to become
Chairman of the Audit Committee and the Committee's designated Financial
Expert. Each of the other individuals named below as an executive officer
of the Company accepted his or her position upon formation of AMLI, except
Messrs. Tague and Kraft, who accepted their positions in September 1994;
Mr. Chapman, who accepted his positions in December 1997; Mr. Small, who
accepted his position in January 2002; and Mr. Hallsey who accepted his
position in July 2003. As of March 1, 2005, except for Mr. Allen, no AMLI
officer holds any position with AMLI Realty Co. and its affiliates.
Mr. Sweet and Mr. Tague shared the responsibilities of the Chief
Executive Officer from January 1, 1999 until February 2, 2004, on which
date Mr. Mutz re-assumed the responsibility he had as Chief Executive
Officer from AMLI's inception through 1998. Mr. Sweet and Mr. Tague
continue in their prior roles as President and Executive Vice President,
respectively. Mr. Allen retired as an AMLI employee effective January 1,
2005. Mr. Tague has been a full-time employee of the Company since 1997.
NAME AGE POSITION
- ---- --- --------
Gregory T. Mutz 59 Chairman of the Board
and, as of February 2, 2004, CEO
(term expires in 2005)
John E. Allen 68 Vice-Chairman of the Board
(term expires in 2007)
Allan J. Sweet 57 President (Co-CEO until February 2, 2004)
and Trustee
(term expires in 2006)
Philip N. Tague 56 Executive Vice President
(Co-CEO until February 2, 2004)
and Trustee
(term expires in 2007)
Bruce P. Bickner* 61 Trustee (term expires in 2007)
Laura D. Gates* 54 Trustee (term expires in 2005)
Marc S. Heilweil* 59 Trustee (term expires in 2005)
Stephen G. McConahey* 61 Trustee (term expires in 2006)
John G. Schreiber* 58 Trustee (term expires in 2006)
Robert J. Chapman 57 Executive Vice President/Chief Financial
Officer
Steven F. Hallsey 51 Executive Vice President - Property
Management and CEO of AMLI Management
Company
Charles C. Kraft 57 Senior Vice President and Treasurer/
Principal Accounting Officer
Gregory A. O'Berry 44 President
AMLI Management Company
Stephen C. Ross 47 Executive Vice President - Development
Steven L. Small 49 Executive Vice President/Chief Information
Officer
____________________
* Independent Trustee.
The following is a biographical summary of the experience of AMLI's
Trustees and executive officers and certain other significant employees:
Gregory T. Mutz. Mr. Mutz is Chairman of the Board (and, effective
February 2, 2004, Chief Executive Officer) of AMLI, a successor company to
AMLI Realty Co., which he co-founded in 1980. Mr. Mutz is a Director of
the ABN-AMRO Alleghany Family of Mutual Funds and serves on the Board of
the National Multifamily Housing Council. Mr. Mutz had been CEO of AMLI
until November 1998 and thereafter co-CEO of AMLI until January 1, 2002.
From November 1998 until June 30, 2003 Mr. Mutz was President and CEO of
UICI, a diversified Dallas-based insurance and financial services company
which is the parent company of AMLI Realty Co., and was Vice Chairman of
the Board of UICI during the six months ended December 31, 2003. Prior to
founding AMLI, Mr. Mutz was an officer with White, Weld & Co.,
Incorporated, a New York investment-banking firm (1976-1978) and was
associated with the Chicago law firm of Mayer, Brown, Rowe & Maw LLP (1973-
1976). He received a B.A. from DePauw University in 1967 and a J.D. from
the University of Michigan Law School in 1973. Mr. Mutz served as an
infantry lieutenant in Vietnam from 1968 to 1969.
John E. Allen. Mr. Allen is Vice-Chairman of AMLI's Board and is
President and a Director of AMLI Realty Co., which he co-founded in 1980.
Prior to co-founding AMLI Realty Co., he was a partner at the Chicago law
firm of Mayer, Brown, Rowe & Maw LLP, with which he had been associated
since 1964. Mr. Allen received a B.S. in Business from Indiana University
in 1961 and a J.D. from the Indiana University School of Law in 1964.
Allan J. Sweet. Mr. Sweet is AMLI's President and, with Mr. Tague,
had been AMLI's Co-CEO from January 1, 1999 until February 2, 2004. He has
been associated with AMLI since its inception and, prior to that time, with
AMLI Realty Co. since 1985. Prior to joining AMLI Realty Co., Mr. Sweet
was a Partner in the Chicago law firm of Schiff Hardin & Waite, with which
he had been associated since 1978. He received a B.B.A. from the
University of Michigan in 1968 and a J.D. from the University of Michigan
Law School in 1973. From 1980 to 1983, Mr. Sweet was a trustee of American
Equity Investment Trust, an over-the-counter equity REIT. He is a Director
of the National Multifamily Housing Council, serves on the Board of
Directors of the Association of Foreign Investors in Real Estate, and is a
member of the Pension Real Estate Association and NAREIT.
Philip N. Tague. Mr. Tague is AMLI's Executive Vice President and,
with Mr. Sweet, had been AMLI's Co-CEO from January 1, 1999 through
February 2, 2004. He has been associated with the Company since its
inception and with AMLI Realty Co. since 1981. Prior to joining AMLI
Realty Co., Mr. Tague was associated with the Chicago law firm of Mayer,
Brown, Rowe & Maw LLP (1977-1981). He received a B.A. from Northwestern
University in 1971 and a J.D. from Ohio State University College of Law in
1977. He is an officer and/or member of a number of industry groups
including the Atlanta Apartment Association, the Georgia Apartment
Association, ULI, NAIOP, REIAC, CORE NET and the National Multifamily
Housing Council.
Bruce P. Bickner. Mr. Bickner currently chairs the Audit Committees
of the boards of directors of Nicor, Inc. and Nicor Gas Company (Natural
Gas Distribution). He also serves on the boards of directors of Gel Med
Sciences, Inc. (Biotechnology) and PlantGenix, Inc. (Biotechnology). He
was employed by DEKALB Genetics Corporation (Agricultural Seed and
Biotechnology) from 1988 to 2000 where he served as Chairman and Chief
Executive Officer and by DEKALB Energy Company (Oil and Gas Exploration)
where he held various management positions from 1975 to 1986 and then
served as Chairman and Chief Executive Officer from 1986 to 1995. Mr.
Bickner was also employed by Monsanto Company (Agribusiness) as Executive
Vice President for Competitor Strategy (2000-2001) and Co-President, Global
Seed Group (1998-1999). Additionally, he was associated with the law firm
of Sidley & Austin (1968-1975), most recently as a partner specializing in
antitrust and securities/commodities matters. Mr. Bickner has also served
on the boards of directors for Heinold Commodities, Inc. (Commodity
Brokerage), Heinold Hog Markets, Inc. (Live Hog Marketing), Lindsay
Manufacturing Company (Irrigation Equipment Manufacturer), Pride Oil Well
Services, Inc. (Oil/Gas Well Servicing), Arizona Feeds, Inc. (Animal Feed)
and Dynapol, Inc. (Food Additives). Mr. Bickner has a JD from the
University of Michigan School of Law (1968) and a BA (Political Science)
from DePauw University (1965). His experience in higher education also
includes being the Acting Chief Executive Officer and Chair of Board of
Trustees of North Park University, a member of the President's Advisory
Council, Chair of the Law School Capital Campaign Committee and member of
the Law School Committee of Visitors of the University of Michigan, and a
member of the Board of Visitors of DePauw University and the Board of
Advisors, Northern Illinois University School of Nursing.
Laura D. Gates. Ms. Gates is an Independent Consultant since 2000.
From 1994 to 2000 she was Vice President for Museum Affairs and later Vice
President, International at the Field Museum of Natural History in Chicago.
Prior thereto she was a principal of McKinsey & Company, Inc. from 1986 to
1993 and an Associate in that firm from 1980 to 1985. Ms. Gates received a
B.A. from Wellesley College in 1972 and an M.B.A. from the Harvard
University Graduate School of Business Administration in 1976.
Marc S. Heilweil. Mr. Heilweil has been President of Spectrum
Advisory Services, Inc., an investment counseling company based in Atlanta,
Georgia since 1991. He is also the portfolio manager of Marathon Value
Portfolio, an equity mutual fund registered under the Investment Company
Act of 1940. Previously, he was President of Heilweil Hollander
Jacobs, Inc. from 1986 to 1991 and worked as an investment counselor from
1977 to 1986. Mr. Heilweil practiced law from 1974 to 1977. Mr. Heilweil
received a B.A. from Yale University in 1967 and a J.D. from Yale
University Law School in 1974.
Stephen G. McConahey. Mr. McConahey is currently Chairman of SGM
Capital, a private investment company. Until October 1999, Mr. McConahey
held the position of President and Chief Operating Officer of EVEREN
Securities, Inc. and EVEREN Capital Corporation, where he was responsible
for the day to day operations of the firm, chaired the operating committee
and served as a member of the board of directors. EVEREN was purchased by
First Union Corporation in October 1999. Prior to EVEREN, Mr. McConahey
was Senior Vice President of corporate and international development at
Kemper Corporation and Executive Vice President at Kemper Financial
Services. Prior to Kemper, Mr. McConahey was Chairman and Chief Executive
Officer of Boettcher and Company, a regional securities brokerage firm
headquartered in Denver, Colorado. Mr. McConahey received his bachelor's
degree from the University of Wisconsin and MBA from the Harvard University
Graduate School of Business Administration. Earlier in his career, Mr.
McConahey received a White House Fellowship and subsequently served as
Special Assistant to President Gerald Ford. Prior to his fellowship, Mr.
McConahey was with the consulting firm of McKinsey and Company.
John G. Schreiber. Mr. Schreiber is President of Centaur Capital
Partners, Inc., a family investment firm. He is also Co-Founder and
Partner of Blackstone Real Estate Advisors, L.P., which manages large real
estate private equity funds. Mr. Schreiber is a Director of a number of
mutual funds advised by T. Rowe Price Associates, Inc. Mr. Schreiber is
also a Director of The Brickman Group, Ltd., and JMB Realty Corporation and
a number of its affiliates. Prior to his retirement as an officer of JMB
Realty Corporation in 1990, Mr. Schreiber was Chairman of JMB/Urban
Development Co. and an Executive Vice President of JMB Realty Corporation.
Mr. Schreiber received a B.B.A. from Loyola University in Chicago in 1968
and an M.B.A. from Harvard University Graduate School of Business in 1970.
Robert J. Chapman. Mr. Chapman is AMLI's Executive Vice President
and Chief Financial Officer. Mr. Chapman joined AMLI in December of 1997.
Previously, Mr. Chapman was Managing Director of Heitman Capital Management
Corporation (1994-97), Managing Director and Chief Financial Officer of JMB
Institutional Realty Corporation (1994) and Managing Director and Chief
Financial Officer of JMB Realty Corporation (1976-94). He was also
associated with KPMG LLP (1972-76). Mr. Chapman received a B.B.A. in 1970
and an M.B.A. in 1971 from the University of Cincinnati and is a CPA. Mr.
Chapman is or has been a member of the Association of Foreign Investors in
Real Estate, the Mortgage Bankers Association, the National Association of
Real Estate Investment Trusts, the National Multi Housing Council, the Real
Estate Investment Advisory Council, the Pension Real Estate Association,
the Urban Land Institute, the International Council of Shopping Centers,
The American Institute of Certified Public Accountants and the Illinois CPA
Society. In addition to having been a National Association of Securities
Dealers registered representative, he served as a Board Member of the
National Association of Real Estate Companies and the Real Estate Advisory
Council of the University of Cincinnati.
Steven F. Hallsey. Mr. Hallsey is Executive Vice President of AMLI
and Chairman of the Board and Chief Executive Officer of AMLI Management
Company, a subsidiary of AMLI which provides property management, leasing
and corporate homes services to the AMLI portfolio. Prior to joining AMLI,
Mr. Hallsey was associated with Charles E. Smith Residential, a division of
Archstone-Smith Trust, as Executive Vice President (2001-2003). His
responsibilities included managing a 25,000-unit apartment portfolio in
five major markets. Prior to that, Mr. Hallsey was Senior Vice President
of Asset Management at Glenborough Realty Trust (1998-2001); President and
COO of Western National Group (1995-1998); President of Harbor Group
International (1994-1995); Senior Vice President at Balcor-American Express
(1990-1994) and Senior Executive Vice President at Clark Financial
Corporation (1983-1990).
Charles C. Kraft. Mr. Kraft is AMLI's Senior Vice President,
Treasurer, and Principal Accounting Officer and had been associated with
AMLI Realty Co. from 1983 through 1996. Mr. Kraft is responsible for
financial reporting, tax planning, treasury and cash management operations.
Prior to joining AMLI Realty Co., he was associated with the Chicago office
of KPMG LLP (1968-1982) in that firm's national real estate practice. Mr.
Kraft received an A.B. from Wabash College in 1968. He is a past Director
of the Chicago Board of Realtors and is a CPA. Mr. Kraft is a member of
The American Institute of Certified Public Accountants and the Illinois CPA
Society.
Gregory A. O'Berry. Mr. O'Berry is President of AMLI Management
Company and has been with the Company since April 1995. He has overall
responsibility for revenue management, procurement, asset maintenance, and
various ancillary services provided to all AMLI-managed communities. He was
previously associated with Lincoln Property Company (1985-1995), most
recently as Vice President - Finance and Administration (Midwest) in
Chicago, Illinois. Mr. O'Berry received a B.S. in Accounting from the
University of Illinois in 1982 and is a CPA. He is past President and is
currently a member of the Board of Directors and the Executive Committee of
the Chicagoland Apartment Association.
Stephen C. Ross. Mr. Ross is Executive Vice President - Development
of AMLI and has been with AMLI since its inception; prior thereto he was
with AMLI Realty Co. since 1989. Mr. Ross is responsible for development
activities in Chicago and other regions. Prior to joining AMLI Realty Co.,
he was associated with JMB Realty Corporation in Chicago and New York City
where he had certain portfolio management and acquisition responsibilities.
Mr. Ross received a B.S. from the University of Rochester in 1978 and an
M.B.A. from the University of Chicago in 1981. He is a member of the Urban
Land Institute and was a founding Director of the Central Region of REIAC.
Steven L. Small. Mr. Small is AMLI's Executive Vice President and
Chief Information Officer. Mr. Small joined AMLI in September 2000 and is
responsible for AMLI's technology infrastructure including its wide area
network, ERP financial and reporting systems, and technical support
operations. Prior to joining AMLI, he owned a company that designed and
installed voter registration databases for large municipalities such as
Chicago and Phoenix. Mr. Small graduated from the University of Illinois
in 1977 with a Bachelor of Science Degree in Computer Engineering.
OTHER SENIOR OFFICERS
- ---------------------
Mark T. Alfieri. Mr. Alfieri is Senior Vice President of
Acquisitions responsible for acquisition activities in Texas and Colorado.
Prior to joining AMLI in 1999, he was a Vice President with FultsOncor
Investment Services (1997-1999) who specialized in the sale of office,
industrial and multifamily properties to real estate investors. He was
President and Founder of Revest Group, Inc. (1992-1997), an asset
management company, and Vice President with Performance Properties
Corporation (1987-1991). Mr. Alfieri holds a B.B.A. in Marketing from
Texas A&M University. He is a licensed real estate broker in Texas.
Peggy D. Butterworth. Ms. Butterworth is Executive Vice President of
AMLI Management Company. Prior to joining AMLI in 1994, she had been
associated with AMLI Realty Co. since 1988. Prior to joining AMLI Realty
Co., she was Divisional Vice President for the Trammell Crow Company (1979-
1988). Ms. Butterworth attended the Virginia Polytechnic Institute and
State University.
Mark T. Evans. Mr. Evans is President of AMLI Residential
Construction LLC. He has overall responsibility for the allocation of
personnel, resources and systems relating to the Company's multifamily land
development and construction activities and is actively involved in the
planning, development and product selection for the Company's communities.
Joining the Company in 1994, Mr. Evans was previously associated with
Peachtree Residential Properties as Director of Purchasing (1992-1994);
Roberts Properties (1990-1992); Grove Construction (1986-1990); and AMLI
Realty Co. (1983-1986). Mr. Evans graduated from the University of Florida
in 1982.
Rosita A. Lina. Ms. Lina is AMLI's Senior Vice President and
Controller. Prior to joining AMLI in 1994, she had been associated with
AMLI Realty Co. since 1985. Ms. Lina is responsible for the Company's
accounting operations. Prior to joining AMLI Realty Co., she was
Accounting Manager for four years with Urban Investment and Development Co.
in Chicago, Illinois. Ms. Lina received a B.B.A. from the University of
the East in Manila, Philippines in 1965 and is a CPA. She is a member of
The American Institute of Certified Public Accountants and the Illinois CPA
Society.
Fred N. Shapiro. Mr. Shapiro is Senior Vice President of
Acquisitions. Prior to joining the Company in 1994, he had been associated
with AMLI Realty Co. since 1984. He is responsible for acquisition
activities in the Midwest. Mr. Shapiro received a B.A. from New York
University in 1971 and a J.D. from John Marshall Law School in 1978.
Leslie S. Sterman is Senior Vice President, Human Resources. Ms.
Sterman joined AMLI in November 1999 and leads the Human Resources
department in servicing employees in all aspects of employment. Prior to
joining AMLI, she was employed with Edelman Public Relations as Vice
President Human Resources for their U.S. division (1998-1999). She also
worked at American Express Travel Related Services (1984-1998) for the
Travel and Card divisions in various Human Resource positions. Ms. Sterman
graduated in 1981 with a B.A. from Ohio State University and received her
M.S. from Syracuse University in 1983. She is a member of the Society of
Human Resource Management, the Society of Human Resource Professionals and
a member of the National Multi-housing Council's HR Forum.
BOARD COMMITTEES, MEETINGS AND CORPORATE GOVERNANCE
AMLI has standing Audit, Executive Compensation, and Nominating &
Governance Committees of the Board. Each such Committee has a written
charter which is available on AMLI's website at www.amli.com.
Messrs. Bickner (Chairman), Heilweil and McConahey constitute the
Audit Committee. The Board has determined that Mr. Bickner is the Audit
Committee "Financial Expert" within the meaning of that term as described
in Item 401 of Regulation S-K. Each member of the Audit Committee is an
independent Trustee. The Audit Committee is responsible for the engagement
of independent public accountants. The Audit Committee reviews with the
independent public accountants the plans and results of the audit
engagement, approves professional services provided by the independent
public accountants, reviews the independence of the independent public
accountants, considers the range of and pre-approves audit and non-audit
services, including fees, reviews AMLI's internal audit function, and
reviews the adequacy of AMLI's internal accounting controls. The Audit
Committee met 13 times during the year 2004 and met once each in January
and February 2005 to carry out its responsibilities as detailed in its
charter which was adopted on May 1, 2000, and which was amended in 2003 to
reflect expanded responsibilities undertaken by the Audit Committee in
2003.
Messrs. Schreiber (Chairman) and McConahey, and Ms. Gates constitute
the Executive Compensation Committee. Each member of the Executive
Compensation Committee is a "non-employee trustee" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and all members of the Executive Compensation Committee
are Independent Trustees. The Executive Compensation Committee determines
the compensation of AMLI's three officers who are also Trustees and the
Chief Financial Officer, and administers AMLI's option plan, executive
share purchase plan, restricted share plan, forgivable loan plan and
certain other employee benefit plans. See "Option Plan," "Executive Share
Purchase Plan," "Restricted Share Plan," "Incentive Compensation,"
"Retirement Savings Plan," "Non-Competition Agreements, Employment
Agreements, and Termination of Employment," and "Executive Compensation
Committee Report on Executive Compensation" below. The Executive
Compensation Committee met six times in 2004, and one time in January 2005
regarding compensation matters for 2004.
Ms. Gates (Chairman) and Messrs. Heilweil and Schreiber constitute
the Nominating & Governance Committee. Each member of the Nominating &
Governance Committee is an Independent Trustee. This committee was formed
late in 2002 to identify individuals qualified to become Board members, and
to recommend that the Board select the trustee nominees to be voted on at
the annual meetings of shareholders; to develop and recommend to the Board
the Corporate Governance Guidelines applicable to the Company; and to
review any plan of succession for the position of Chief Executive Officer.
The Nominating & Governance Committee met once during 2004 and again in
January 2005.
Executive sessions of non-management Trustees are held at the end of
each regularly-scheduled quarterly Board Meeting. On April 26, 2004 Mr.
McConahey was appointed Lead Trustee and, in such capacity, among other
things, presides over each such executive session.
Seven meetings of the full Board were held in 2004. AMLI expects
that each Trustee will attend all Board Meetings. Each Trustee who held
such position in 2004 attended at least 80% in the aggregate of all
meetings of the Board and any committee on which such Trustee served.
The Board has adopted Corporate Governance Guidelines and a Code of
Business Conduct which are available on AMLI's website at www.amli.com.
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed with management and
with AMLI's independent auditors AMLI's audited financial statements for
the year ended December 31, 2004. These discussions included matters
required to be discussed by Statement on Auditing Standards No. 61, which
includes, among other things, (1) methods used to account for significant
or unusual transactions; (2) the effect of significant accounting policies
in emerging areas for which there is a lack of authoritative guidance; (3)
the process used by management in formulating sensitive accounting
estimates and the basis for the auditor's conclusions regarding the
reasonableness of those estimates; and (4) any disagreements with
management over the application of accounting principles, the basis for
management's accounting estimates, and the disclosures in the financial
statements.
The Audit Committee has received the written disclosures and the
letter from our independent auditors, KPMG LLP, as required by Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," and has discussed with the independent auditors the issue of
their independence from the Company. The Audit Committee has considered
whether the provision of non-audit services by KPMG LLP to AMLI for the
fiscal year ended December 31, 2004, as described in this Proxy Statement
under "Relationships with Independent Accountants," is compatible with
maintaining KPMG LLP's independence.
The Audit Committee has established confidential and anonymous
procedures for receipt of accounting, internal control and auditing
concerns.
Based on its review of the audited financial statements and
discussions related thereto, the Audit Committee has recommended to the
Board of Trustees that the audited financial statements be included in
AMLI's Annual Report on Form 10-K for the year ended December 31, 2004.
Bruce P. Bickner, Chairman
Marc S. Heilweil
Stephen G. McConahey
<table>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding the compensation of Mr. Mutz, CEO of the
Company, and the Company's four other most highly compensated executive officers during 2004, 2003 and 2002. The
table includes compensation from all sources for services rendered to the Company and its subsidiaries during
these years.
<caption>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------- ----------------------------------
AWARDS PAYOUTS
----------------------- -------
OTHER RESTRICTED SECURITIES
ANNUAL SHARE UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (1) ($)(2) (NUMBER) ($) (3) ($) (4)
- ------------------ ---- ------- --------- ------------ ---------- ---------- ------- ------------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Gregory T. Mutz
CEO and Chairman
of the Board of
Trustees (5) . . . 2004 $297,917 $ 51,667 $ 66,617 -- -- -- $ 2,204
2003 $ 40,000 $ -- -- -- 4,000 -- --
2002 $ 40,000 $ -- -- -- -- 72,965 --
Allan J. Sweet
President and
Trustee (5). . . . 2004 $300,000 $ 43,917 $108,564 256,000 -- -- $ 2,204
2003 $300,000 $199,500 $147,105 107,200 -- -- $12,738
2002 $285,000 $169,500 $ 29,945 -- 60,000 $ 72,965 $ 9,823
Philip N. Tague
Executive Vice
President and
Trustee (5). . . . 2004 $300,000 $ 43,917 $ 80,839 256,000 -- -- $ 2,204
2003 $300,000 $199,500 $144,841 107,200 -- -- $12,738
2002 $285,000 $169,500 $ 12,535 -- 60,000 $ 72,965 $ 9,810
Robert J. Chapman
Executive Vice
President -
Chief Financial
Officer. . . . . . 2004 $262,500 $ 36,167 $ 82,117 192,000 -- -- $ 2,204
2003 $262,500 $ 99,750 $ 45,474 88,440 -- -- $ 9,993
2002 $250,000 $ 84,750 $ 26,255 -- 40,000 -- $ 7,583
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------- ----------------------------------
AWARDS PAYOUTS
----------------------- -------
OTHER RESTRICTED SECURITIES
ANNUAL SHARE UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (1) ($)(2) (NUMBER) ($) (3) ($) (4)
- ------------------ ---- ------- --------- ------------ ---------- ---------- ------- ------------
Stephen Hallsey
Executive Vice
President -
Property
Management (5) . . 2004 $230,000 $ 75,000 $ 17,429 80,000 -- -- $ 2,204
2003 $112,500 $ 40,000 $ 4,320 120,600 -- -- $20,000
<fn>
(1) During 2003 AMLI paid $90,000 in compensation to each of Mr. Sweet and Mr. Tague in full satisfaction of
AMLI's obligations regarding its pre-existing split dollar life insurance policies covering the lives of
Mr. Sweet and Mr. Tague. The Company pays the cost of personal income tax preparation services for
Mr. Mutz ($7,746 for 2004) Mr. Sweet ($2,627, $2,264 and $2,413 for 2004, 2003 and 2002, respectively)
and for Mr. Chapman ($3,000, $3,000 and $2,900 for 2004, 2003 and 2002, respectively).
During 2004, 2003 and 2002 compensation based on the 15% discount under the Executive Share Purchase Plan
was as follows:
2004 2003 2002
------- ------- -------
Mr. Mutz $14,997 -- --
Mr. Sweet 14,998 14,999 14,997
Mr. Tague -- 14,999 --
Mr. Chapman 14,997 15,000 14,998
Mr. Hallsey 3,989 -- --
During 2004, 2003 and 2002, compensation resulting from scheduled forgiveness of loans was as follows:
2004 2003 2002
------- ------- -------
Mr. Mutz $43,874 25,071 12,535
Mr. Sweet 67,899 34,082 12,535
Mr. Tague 67,899 34,082 12,535
Mr. Chapman 46,264 22,722 8,357
Mr. Hallsey -- -- --
During 2004 and 2003 cash compensation resulting from distribution equivalents paid on restricted shares
was as follows:
2004 2003
------- -------
Mr. Mutz $ 0 0
Mr. Sweet 23,040 5,760
Mr. Tague 23,040 5,760
Mr. Chapman 17,856 4,752
Mr. Hallsey 13,440 4,320
(2) The values in the table are based on AMLI's closing share value on December 31, 2003 ($26.80) and on
December 31, 2004 ($32.00). Restricted shares awarded in 2003 and 2004 vest one-third at the beginning of
each of the third, fourth and fifth years following the date of each award.
The total value of restricted shares held by each executive officer at December 31, 2004, based on the
closing $32 value of AMLI shares at December 31, 2004, was as follows:
Number
of
Shares Value
------ --------
Mr. Mutz 0 $ 0
Mr. Sweet 12,000 $384,000
Mr. Tague 12,000 $384,000
Mr. Chapman 9,300 $297,600
Mr. Hallsey 7,000 $224,000
On January 31, 2005 the Board of Trustees approved an additional award of restricted shares as follows:
8,282 restricted shares to Mr. Mutz, 7,040 restricted shares each to Mr. Sweet and Mr. Tague, 5,797
restricted shares to Mr. Chapman, and 4,500 restricted shares to Mr. Hallsey. The January 31, 2005
award of restricted shares will vest one-third on each of January 31, 2006, 2007 and 2008.
(3) LTIP Payouts include amounts earned as distribution equivalents and reported as "all other compensation"
in previous periods.
(4) The employer contributions by AMLI under the Retirement Savings Plan for Messrs. Mutz, Sweet, Tague,
Chapman and Hallsey were $2,000 each in 2004 and 2003 and $1,000 each in 2002. See "Retirement Savings
Plan" below. The Company paid an annual premium each year ($204 in 2004) to provide long-term disability
and $50,000 of group term life and Accidental Death insurance for each of the named executive officers.
During 2003 and 2002, Messrs. Sweet and Tague were each credited with $11,539 and $8,512, respectively;
and Mr. Chapman was credited with $8,794 and $6,384, respectively; in Performance Units (as defined under
"Performance Incentive Plan" below) as distribution equivalents corresponding to the amount of
distributions made on the number of units of limited partnership interest ("Units") in AMLI Residential
Properties, L.P. (the "Operating Partnership") underlying the Performance Units respectively held by each
of them. In 2004 the Performance Units were cancelled and the credits disclosed and included in the table
above for 2003 and 2002 were never (and will not be at any future date) realized. See "Long-Term
Incentive Plan Awards" and "Performance Incentive Plan" below. During 2002 Mr. Sweet received $112 and
Mr. Tague received $99 and $352, respectively, in taxable income relating to split dollar life insurance
policies maintained jointly by the Company and these officers. AMLI's participation in these policies
terminated early in 2002. Mr. Hallsey was paid a $20,000 moving allowance following commencement of his
employment in July 2003.
(5) On February 2, 2004 Gregory T. Mutz succeeded Messrs. Sweet and Tague as CEO; the amount reported as 2004
salary for Mr. Mutz is based on an annual rate of $325,000 for 2004.
Mr. Hallsey commenced employment on July 1, 2003; the amount reported as 2003 salary for Mr. Hallsey is
based on an annual rate of $225,000 for 2003.
</table>
<table>
OPTION GRANTS
During 2004 no Options were granted to any named executive officers or any key employees and officers of the
Company and its subsidiaries. On January 31, 2005 a total of 446,640 Options with an exercise price of $28.57
each were awarded to key employees, officers and Trustees, including 231,140 awarded to the five most highly
compensated officers named in the following table.
AGGREGATED OPTION EXERCISES IN 2004 AND YEAR-END OPTION VALUES
The following table sets forth certain information concerning exercises of options during 2004 by each of
the executive officers named in the summary compensation table above and the year-end value of unexercised options
owned by such executive officers.
<caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SECURITIES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT YEAR-END YEAR-END (3) ($)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (NUMBER)(1) ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<s> <c> <c> <c> <c> <c> <c>
Gregory T. Mutz 16,729 $ 480,372 14,334 4,000 $154,239 $ 35,632
Allan J. Sweet 36,740 $1,102,888 26,666 131,667 $237,753 $1,283,857
Philip N. Tague 24,781 $ 720,389 102,333 131,667 $951,467 $1,283,857
Robert J. Chapman 19,810 $ 612,124 63,333 91,667 $561,387 $ 890,298
Steve Hallsey 0 $ 0 0 0 $ 0 $ 0
<fn>
___________
(1) Shown net of shares deemed tendered upon "seasoned share" exercises.
(2) Computed as the number of options exercised multiplied by the difference between fair value per share
at date of exercise and the exercise price per share.
(3) Calculated based on the year-end share value of $32.00 per share.
</table>
LONG-TERM INCENTIVE PLAN AWARDS AND PAYOUTS
From 1995 to 2001, 116,200 Performance Units (as defined under
"Performance Incentive Plan" below) were awarded to key employees and
officers of the Operating Partnership and the Service Companies pursuant to
AMLI's performance incentive plan. All such Performance Units outstanding
at December 31, 2003 were redeemed for cash or cancelled in 2004. The
Performance Units held by each of the executive officers named in the
Summary Compensation Table were cancelled.
EQUITY COMPENSATION TABLE
The following summarizes as of December 31, 2004 AMLI's equity
compensation plans, all of which have been approved by shareholders:
(c)
Number of
securities
remaining
(a) available
Number of for future
securities to (b) issuance under
be issued upon Weighted-average equity com-
exercise of exercise price pensation plans
outstanding of outstanding (excluding secur-
options, warrants options, warrants ities reflected
and rights and rights in column (a))
----------------- ----------------- -----------------
Option Plan 1,143,499 $22.36 1,504,052
Restricted
Share Plan 109,800 -- 160,200
Trustee Share
Acquisition Plan 0 -- 18,337
Executive Share
Purchase Plan 0 -- 352,705
The January 31, 2005 award of 446,640 options has increased the
number of shares to be issued under the Option Plan to 1,590,139. The
January 31, 2005 award of 72,809 restricted shares has increased the number
of shares issued under the Restricted Plan from 109,800 to 182,609.
Each of AMLI's equity compensation plans is described in detail in
the paragraphs which follow.
OPTION PLAN
In 1994 AMLI adopted the Option Plan to provide incentives to attract
and retain Trustees, officers and key employees and service providers. The
summary of the Option Plan set forth below is qualified in its entirety by
the text of the Option Plan.
The Option Plan provides for the grant of options to purchase a
specified number of Common Shares or Units ("Options"). Under the Option
Plan, the maximum number of Common Shares available for grant and available
to be issued upon exchange of Units issued under the Option Plan is equal
to 3,450,000 (increased from 1,000,000 in 1998 and from 2,000,000 in 2000
and from 2,850,000 in 2002 pursuant to amendment to the Plan).
Participants in the Option Plan, who may be AMLI Trustees, officers
or employees, or AMLI service providers to, AMLI, its subsidiaries or
designated affiliates, will be selected by the Executive Compensation
Committee. Approximately 50 Trustees, officers and employees are currently
eligible to participate in the Option Plan. The Executive Compensation
Committee will also determine the terms of Options granted under the Option
Plan including, among other things, the exercise price of Options, whether
Incentive Share Options ("ISOs") or non-qualified Options shall be granted,
the number of Common Shares or Units subject to each Option and the vesting
schedule applicable to each such Option. AMLI Trustees are also eligible
to participate but, in the case of Trustees who are not also employees of
AMLI, only pursuant to automatic grants set forth in the Option Plan and
described under "Compensation of Trustees" below.
The Executive Compensation Committee may amend any award previously
granted, prospectively or retroactively. However, options granted may not
be subsequently amended to provide for any change in exercise price. No
such amendment may impair the rights of any participant under any award
without the consent of such participant (except for any amendment made to
cause the Option Plan to qualify for an exemption provided by Rule 16b-3
under the Exchange Act). The Option Plan authorizes the Executive
Compensation Committee to grant Options at an exercise price determined by
the Executive Compensation Committee. Such price cannot be less than 100%
of the fair market value of the Common Shares or Units on the trading date
immediately preceding the date on which the Option in respect thereof is
granted. Subject to certain limitations regarding real estate investment
trust ("REIT") qualification and taxes, with respect to any individual, the
aggregate fair market value (determined at the time the Option is granted)
of Common Shares with respect to which ISOs may be granted under the Option
Plan, which Options are exercisable for the first time during any calendar
year, may not exceed $100,000. No Option may be granted or exercised if
the grant or exercise of such Option could cause the Company to fail to
qualify as a REIT for Federal income tax purposes or to incur additional
taxes under Section 857 of the Internal Revenue Code of 1986, as amended
(the "Code"). The exercise price is payable in cash or, pursuant to a 2003
amendment to the Option Plan, a deemed tender of shares held at least one
year. The vesting provisions of the Options will be determined by the
Executive Compensation Committee, except with regard to Options received by
Independent Trustees as described under "Compensation of Trustees" below.
The right of any participant to exercise an Option may not be
transferred in any way other than by will or the laws of descent and
distribution.
Through December 31, 2004, AMLI's CEO and the four most highly
compensated executive officers have received Options under the Option Plan
as follows: Mr. Mutz, 222,000; Mr. Sweet, 437,000; Mr. Tague, 419,500;
Mr. Chapman, 231,000; and Mr. Hallsey, none. No Options were granted to
such executive officers in 2003 or 2004, but additional options were
awarded to each of these executive officers on January 31, 2005 (see
Executive Compensation Committee Report on Executive Compensation). AMLI's
Independent Trustees have received Options as described under "Compensation
of Trustees" below.
RESTRICTED SHARE PLAN
In 2003 AMLI adopted Amendment No. 1 to its Senior Officer Share
Acquisition Plan, which it has subsequently renamed the Restricted Share
Plan. Awards under this plan have replaced awards pursuant to the Senior
Officer Loan Share Purchase Program. Subject only to continued employment
during the vesting period, employees receiving restricted share awards in
2003 or 2004 vest one-third each at the end of the third, fourth and fifth
years following each annual award. Employees participating in the award
made on January 31, 2005 vest one-third each at the end of the first,
second and third years following the award. Participants receive cash
compensation equal to dividends that they would have received had the
shares not been restricted. Participants are not entitled to vote
restricted shares until vesting occurs.
PERFORMANCE INCENTIVE PLAN
On January 30, 1995, the Board adopted a performance incentive plan
(the "Performance Incentive Plan") pursuant to which performance units
("Performance Units") may be awarded to employees of the Operating
Partnership and the Service Companies. The Performance Incentive Plan is a
form of phantom equity plan, with each Performance Unit awarded under the
plan intended to be equal in value to a Unit, the value of which
corresponds to the value of a Common Share. The Executive Compensation
Committee selects the employees eligible to participate in the Performance
Incentive Plan, determines the number of Performance Units, if any, to
award to a participant and the terms and conditions of the award, and
administers the Performance Incentive Plan. The number of Performance
Units held by an employee will be increased proportionally to reflect
distributions made with respect to Units, which distributions correspond to
dividends paid with respect to Common Shares. Performance Units will
become payable to the employee upon determination by the Executive
Compensation Committee that the particular performance objectives specified
by the Executive Compensation Committee have been met or upon a "change in
control" (as defined in the Performance Incentive Plan). Payment on
Performance Units will be made in a number of Units equal to the number of
eligible Performance Units held by an employee on the payment date, except
that Performance Units held by an employee who is subject to Section 16 of
the Exchange Act with respect to AMLI will be payable in an amount of cash
equal to the fair market value of the Units which would otherwise be paid
to such employee. Under the Performance Incentive Plan, the total number
of Performance Units available for grant and the total number of Common
Shares available to be issued upon exchange of Units issued under the
Performance Incentive Plan will be equal to 250,000.
No Performance Units were awarded to employees and officers of the
Operating Partnership and the Service Companies in 2003 or 2002, and AMLI
does not anticipate making any future awards of units pursuant to this
Plan.
In December 2003 AMLI agreed to pay cash to all but the five most
senior participants in the PIP, in exchange for termination of any future
rights and benefits that these thirty participants had pursuant to the PIP.
On January 15, 2004 AMLI paid these thirty plan participants $1,197,000 in
full satisfaction of any and all future liabilities of AMLI under the PIP,
except those with respect to Mr. Mutz, Mr. Allen, Mr. Sweet, Mr. Tague and
Mr. Chapman. AMLI had recorded expense totalling $700,000 over the years
1998 through 2003 for the potential liability under the PIP to these five
individuals. As of September 30, 2004 it became apparent that it was very
unlikely that the performance criteria would ever be met, and Messrs. Mutz,
Allen, Sweet, Tague and Chapman agreed to give up any future rights on
benefits under the PIP as of that date.
EXECUTIVE SHARE PURCHASE PLAN
The "Executive Share Purchase Plan" was adopted by the Board
effective May 1, 1996 and was approved at the 1996 annual meeting of
shareholders. All Trustees who are not employees of AMLI were eligible to
participate in the Executive Share Purchase Plan through 1999. Other
eligible participants are officers and employees of AMLI, the Operating
Partnership and the Service Companies, designated by AMLI's Executive
Compensation Committee.
Eligible participants who are AMLI officers or employees may elect to
purchase Common Shares, and eligible participants who are employees of the
Operating Partnership or Service Companies may elect to purchase Units
(which the participant is required to exchange immediately for an equal
number of Common Shares), during quarterly window periods. A "window
period" is the ten business day period commencing on the third business day
following AMLI's quarterly public release of earnings. Participants may
only purchase Common Shares or Units during one window period in any
calendar year. The maximum value of Common Shares or Units which may be
purchased is the lesser of $100,000 or 50% of the participant's base
salary. The purchase price per Common Share or Unit is 85% of the fair
market value of a Common Share or Unit on the trading day immediately
preceding the date of purchase.
Prior to July 2002, participants electing to make purchases under the
Executive Share Purchase Plan could elect to receive a loan for up to 80%
of the purchase price, provided that, in no event could a participant have
more than $200,000 principal amount of loans outstanding under this Plan at
any time. These loans bear interest at a fixed rate of 150 basis points
over the then current ten-year Treasury bond rate. The Plan has now been
amended to preclude the Company from providing or arranging any financings
of shares issued pursuant to the Plan subsequent to July 2002.
The Common Shares may not be sold, assigned, transferred or pledged
(except to secure a loan) during the period ending on the earlier of
(i) the fifth anniversary of the purchase date, (ii) the date of a Change
in Control of AMLI, or (iii) the date that the participant terminates
employment or service on the Board, as applicable. In addition, the Common
Shares may not be transferred while they are serving as collateral for a
loan under the Executive Share Purchase Plan. Generally, a Change in
Control will be deemed to occur upon acquisition of more than 20% of AMLI's
voting stock by any party (other than by certain related parties), a
merger, sale of substantially all of AMLI's assets, the liquidation of the
Company, or the election of Trustees constituting a majority of the Board
who were not recommended by the incumbent Trustees.
During 2004, seven officers acquired a total of 19,249 Common Shares
pursuant to this Plan. Total expense recorded in 2004 for the 15%
discount, including the Service Companies' shares, was $80,776. At
December 31, 2004, the aggregate outstanding balance of recourse loans made
pursuant to this Plan was $16,012. See "Security Ownership of Certain
Beneficial Owners and Management" below.
SENIOR OFFICER LOAN SHARE PURCHASE PROGRAM
The Senior Officer Loan Share Purchase Program was replaced in 2002
by the Restricted Share Plan.
Since 1997, the Executive Compensation Committee of the Board has
approved a total of $9,830,795 in recourse loans to the three officers who
are also Trustees and sixteen other officers to enable them to acquire on
the open market a total of 442,794 of the Company's Common Shares. All
442,794 shares had been acquired by February 28, 2002. These loans bear
interest at rates ranging from 3.91% to 6.23% and generally have terms of
nine years. The aggregate remaining balances of these loans totalled
$1,961,201 at December 31, 2004 and the remaining unpaid amounts of each
officer's loans are included in the amounts set forth in the footnotes to
the security ownership table. No additional loans will be made by AMLI
pursuant to this program.
Since 1999, the Company has made $3,098,000 of additional loans to 22
Senior Officers of the Company which they used to acquire Company shares on
the open market (62,100 shares for $1,297,000 in 1999, 39,876 shares for
$881,000 in 2000, and 36,805 shares for $920,000 in 2001). These loans are
subject to forgiveness over the five year period commencing December 1999,
2000 or 2001 (based solely on each employee's continued employment with
AMLI), as follows: 10% following the end of the second year, an additional
20% following the end of the third year, an additional 35% following the
end of the fourth year, and the final 35% at the end of the fifth year.
See "Security Ownership of Certain Beneficial Owners and Management" below.
The aggregate remaining balances of these loans totalled $1,438,041 at
December 31, 2004 ($752,835 at March 1, 2005). No additional loans will be
made by AMLI pursuant to this program.
INCENTIVE COMPENSATION
A bonus incentive compensation plan (the "Bonus Plan") is in place
for executive and key officers. This program awards bonuses to executive
officers and certain other key officers covered under the plan based on the
achievement of specified targets and goals for AMLI and the individual
officer. The primary targets are based upon annual Funds from Operations
(defined as income (loss) before minority interest of Unit holders in the
Operating Partnership and extraordinary items plus certain non-cash items,
primarily depreciation) per share, Common Share price performance compared
to performance of the share price of selected competitors and benchmarking
against the economic performance of selected competitors. The amount of
bonus is based on a formula determined for each officer based on a range of
up to 100% of base compensation. The Executive Compensation Committee may
also grant discretionary bonuses to certain officers based upon an
assessment of such an officer's performance.
Bonuses for 2004, 2003 and 2002 for AMLI's most highly compensated
executive officers are set forth in the summary compensation table. See
"Summary Compensation Table" above.
RETIREMENT SAVINGS PLAN
AMLI and its affiliates have adopted a joint retirement savings plan
(the "Retirement Savings Plan") for their full-time employees. The
Retirement Savings Plan is a qualified plan pursuant to Sections 401(a) and
401(k) of the Internal Revenue Code. Employees of AMLI, the Operating
Partnership and the Service Companies are generally eligible to participate
in the Retirement Savings Plan after one full year of service. Eligible
employees may contribute each year up to 15% of their compensation to the
Retirement Savings Plan. AMLI or such entity matches each participating
employee's annual contributions, to a maximum of $2,000 per employee.
Employees are not vested in AMLI's or such entity's contributions until the
third anniversary of their employment.
As of January 1, 1995 the Retirement Savings Plan was amended to
provide for an additional contribution by the Company, the Operating
Partnership or one of the Service Companies, as applicable, equal to a
percentage determined by management of each eligible employee's
compensation. No such contributions were made for any of the three years
ended December 31, 2004.
The employer contributions by AMLI under the Retirement Savings Plan
during 2004, 2003 and 2002 for the CEO and the four other most highly
compensated executive officers of the Company are set forth in footnote
(4) to the summary compensation table. See "Summary Compensation Table"
above.
COMPENSATION OF TRUSTEES AND TRUSTEE SHARE COMPENSATION PLAN
In 2004 the Company paid its Independent Trustees at the annual rate
of $16,000 (of which $12,000 was represented by newly-issued Common Shares
following each dividend record date pursuant to the terms of the Company's
Trustee Share Compensation Plan) plus $1,000 for each Board meeting or
committee meeting attended. Each independent Trustee also receives 2,000
Options annually. Effective in 2004, Mr. McConahey receives an additional
$3,000 quarterly in his capacity as Lead Independent Trustee, and Mr.
Bickner receives an additional $2,500 quarterly in his capacity as Chairman
of the Audit Committee and the Board's designated Financial Expert. Mr.
Allen, the Vice-Chairman of the Board, was paid compensation of $30,000
($12,000 in cash and $18,000 represented by newly-issued Common Shares), in
his capacity as Vice-Chairman of the Board. Mr. Allen also receives 3,000
Options annually. In addition, AMLI reimburses all Trustees for expenses
incurred in attending meetings. Messrs. Mutz, Sweet and Tague are not paid
any Trustees' fees.
Pursuant to the Option Plan (described above), Messrs. Heilweil,
McConahey and Schreiber and Ms. Gates were each granted, effective as of
the time they became Trustees, a ten-year Option to acquire 2,000 Common
Shares at fair market value on the trading day immediately preceding the
date of the grant (in the case of Messrs. Heilweil, McConahey and
Schreiber, the initial public offering price of $20.50 per share, and in
the case of Ms. Gates, $18.00 per share. A Trustee's initial Options are
not exercisable until after the first anniversary of the date of grant.
The exercise price is payable in cash or, pursuant to a 2003 amendment to
the Option Plan, a deemed tender of shares held for at least one year.
NON-COMPETITION AGREEMENTS, EMPLOYMENT AGREEMENTS AND TERMINATION
OF EMPLOYMENT
The three officers who are also Trustees and 17 other AMLI officers
have each entered into an employment agreement which includes a non-
competition provision. The non-competition provision of each employment
agreement prohibits each officer from engaging directly or indirectly in
the multifamily residential property business (as defined) other than on
behalf of AMLI during the period the officer is an employee of AMLI and for
a period of either 12 months, 18 months, or 24 months from termination of
employment. Upon both a change in control of AMLI and a change in
circumstance of the employee (as such terms are defined in the agreements),
the employment agreements provide for immediate vesting of all previously
unvested Options, cash payment equal to one, two or three times average
compensation (as defined) and additional cash compensation to each employee
who might be subject to excise taxes under Section 4999 of the Internal
Revenue Code so that the Employee receives that amount before the
application of income taxes that he would receive if he were not subject to
such excise taxes.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no Executive Compensation Committee interlocks or insider
participation on the Executive Compensation Committee.
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Board consists of three
Trustees who are not employees of the Company, the Operating Partnership or
a Service Company, and who are Independent Trustees. The Executive
Compensation Committee reviews and approves all remuneration arrangements
for the three senior officers who are also trustees, and for the Chief
Financial Officer (the "Senior Executives"), and administers the Option
Plan, the Executive Share Purchase Plan, the Restricted Share Plan, and the
Bonus Plan. The Executive Compensation Committee also reviews and adopts
or recommends to shareholders the adoption of new employee benefit plans or
modifications to existing plans. The Executive Compensation Committee met
six times in 2004 and once in January 2005 regarding 2004 compensation
matters.
AMLI's executive compensation program is intended to attract,
incentivize, reward and retain experienced and motivated executives who
contribute to AMLI's growth. The goal of the Executive Compensation
Committee in setting Senior Executive compensation is to align the
interests of the executives with those of AMLI's shareholders, focusing on
long-term growth of Funds From Operations ("FFO") and increases in
shareholder value. The Executive Compensation Committee, in administering
AMLI's executive compensation program, considers recommendations from
management and extensive available data concerning executive compensation
at other equity real estate investment trusts and companies in other
businesses. The Executive Compensation Committee periodically discusses
with senior management the cost and desirability of engaging an independent
compensation consultant, and elected to do so in 2003 to obtain information
relative to administering executive compensation for 2003 and 2004. The
Executive Compensation Committee expects to continue to review this
decision annually.
For 2004 and beyond, the Committee has discretion to authorize
subjective cash bonuses. The Committee has also established incentives for
objective cash bonuses that are contingent upon, among other things, AMLI's
achieving certain FFO targets.
AMLI's executive compensation currently consists of an executive's
base salary, cash bonus, discounted purchases under the Executive Share
Purchase Plan, Options to acquire Common Shares under the Option Plan, and
restricted Common Shares under the Amended Senior Officer Share Acquisition
Plan.
BASE SALARY. Executive salary levels are designed to reward Company
employees for performing their normal duties. Salary levels are
established on the basis of a number of factors including management
recommendations, prior salary history with the Company, industry
comparables, individual performance and overall Company results. The
salaries of the President and the Executive Vice President - Development
are being maintained at $300,000 in 2005, the same salaries they were paid
in 2004, and in 2003 when they were also co-CEO's. On February 2, 2004 Mr.
Mutz was elected CEO at an annual salary rate of $325,000, which is also
his salary in 2005.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. For 2004 the Executive
Compensation Committee determined the compensation of Mr. Mutz as follows:
Discretionary cash bonuses are awarded based on the Company's FFO for
the year as well as its relative performance compared to its peers.
For 2004 Mr. Mutz received a cash bonus of $51,667 based on actual
FFO per Share of $2.01. He received no bonus based on AMLI's FFO per
Share relative to that of its peers.
Long-term incentive compensation is awarded based on the returns
earned by the Company's shareholders, the Company's return
performance compared to that of its peers, and a discretionary
component. On January 31, 2005 Mr. Mutz was awarded 8,282 restricted
common shares and 59,160 options to acquire common shares at an
exercise price of $28.57 per share. Approximately 53% of his award
was based on the total return to the Company's shareholders exceeding
the 15% maximum target shareholder return in 2004, approximately 38%
was based on the total return to the Company's shareholders relative
to AMLI's peer group over the past three and five years, and
approximately 9% was discretionary and was based on Mr. Mutz's
overall performance during the year.
BONUSES. AMLI's executive officers participate in the Bonus Plan. A
portion of the bonus each year is based on pre-established goals concerning
FFO and benchmarking Company FFO and share price performance against those
of other multifamily real estate investment trusts. A discretionary
portion is also based on achievement of individual job goals and for
extraordinary contributions to the Company's results for the past year. A
cash bonus of $51,667 each was paid to the CEO for 2004. Cash bonuses paid
to other Senior Executives in 2005 for 2004 performance averaged 14.4% of
2004 base salary.
OPTIONS. Awards of Options under the Option Plan had been designed
to utilize the award of interests in AMLI and the Operating Partnership in
order to tie Senior Executive compensation to the creation of shareholder
value and allow the Senior Executives to share in AMLI's success. See
"Long-Term Incentive Plan Awards" above for a description of the vesting
provisions of Performance Units awarded in prior years. No options were
awarded during 2004 except for 2,000 Options awarded to each of AMLI's five
independent Trustees and 3,000 Options awarded to the Vice Chairman of the
Board. On January 31, 2005 the Committee approved the award of 446,640
additional options, including 59,160 to the CEO and 171,980 to the four
next most highly compensated officers.
RESTRICTED SHARES. In 2003 the Committee approved the award of
46,900 restricted Common Shares, and on February 2, 2004 approved the award
of 76,050 additional restricted Common Shares under the Amended and
Restated Senior Officer Share Acquisition Plan ("Restricted Share Plan") in
recognition of the continuing desirability of aligning the interests of
management and shareholders. On January 31, 2005 the Committee approved
the award of 72,809 additional restricted Common Shares, including 8,282 to
the CEO and 24,377 to the four next most highly compensated officers.
It is the Executive Compensation Committee's intention that, so long
as it is consistent with the Company's overall compensation objectives, all
executive compensation be deductible for Federal income tax purposes.
Section 162(m) of the Internal Revenue Code limits the tax deduction for
compensation paid to the Company's Chief Executive Officers and the four
most highly compensated officers who are employed at fiscal year end to
$1 million per year, unless certain requirements are met. The Company's
ability to meet the REIT distribution requirements, and the portion of the
Company's distributions which constitute taxable dividend income, rather
than return of capital, may be impacted by Section 162(m).
The Executive Compensation Committee does not believe that any
compensation paid by the Company in 2004 would meet the tests under
Section 162(m) for a disallowance of compensation deductions; nor does it
presently intend that any such deductions be disallowed in the future.
However, the Executive Compensation Committee, in setting future Senior
Executive compensation, will continue to consider the long-run interests of
the Company, balancing any non-deductibility under Section 162(m) against
the need for the Company to adequately compensate its executive officers
for services rendered.
EXECUTIVE COMPENSATION COMMITTEE
John G. Schreiber, Chairman
Laura D. Gates
Stephen G. McConahey
For a shareholder to submit a candidate for consideration by the
Nominating and Governance Committee, a shareholder must notify AMLI's
Secretary. In addition, AMLI's Bylaws permit shareholders to nominate
directors at a shareholder meeting. To make a director nomination at the
2006 Annual Meeting, a shareholder must notify the Company's Secretary not
less than 60 days nor more than 90 days prior to the first anniversary of
the preceding year's annual meeting, unless the date of the annual meeting
is advanced by more than 30 days or delayed by more than 60 days from the
anniversary date, in which event notice must be delivered not less than 60
days nor more than 90 days prior to the 2005 Annual Meeting date or the
tenth day following the day on which public announcement of the Annual
Meeting date is first made. Notices should be sent to: Secretary, AMLI
Residential, 125 S. Wacker Drive, Suite 3100, Chicago, Illinois 60606. In
either case, the notice must meet all of the requirements contained in our
Bylaws.
The notice must set forth:
. the name, age, business address and residence address of the
proposed nominee;
. the principal occupation or employment of the proposed nominee;
. any other information relating to the proposed nominee that
would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of
proxies for election of Trustees pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder;
. any other information the shareholder believes is relevant
concerning the proposed nominee;
. a written consent of the proposed nominee(s) to being named as
a nominee and to serve as a Trustee if elected;
. whether the proposed nominee is going to be nominated at the
annual meeting of shareholders or is only being provided for
consideration by the Nominating & Governance Committee;
. the name and record address of the shareholder who is
submitting the notice;
. the class or series and number of AMLI voting shares which
are owned of record or beneficially by the shareholder who is
submitting the notice;
. a description of all arrangements or understandings between the
shareholder who is submitting the notice and any other person
(naming such person) pursuant to which the nomination is being
made by the shareholder who is submitting the notice;
. if the shareholder who is submitting the notice intends to
nominate the proposed nominee at the annual meeting of
shareholders, a representation that the shareholder intends to
appear in person or by proxy at the Annual Meeting to nominate
the proposed nominee named in the notice; and
. any other information relating to the shareholder that would be
required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies
for election of Trustees pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
NOMINATING AND GOVERNANCE COMMITTEE
NOMINATION OF TRUSTEES
- ----------------------
Trustees may be nominated by the Board of Trustees or by shareholders
in accordance with the Bylaws of AMLI. The Nominating & Governance
Committee reviews the qualifications of various persons to determine
whether they might make good candidates for consideration for membership on
the Board of Trustees. The Nominating and Governance Committee will review
all proposed nominees for the Board of Trustees, including those proposed
by shareholders, in accordance with its mandate contained in its charter.
This will include a review of the person's judgment, experience,
independence, understanding of AMLI's business or other related industries
and such other factors as the Nominating & Governance Committee determines
are relevant in light of the needs of the Board of Trustees and the
company. The Nominating & Governance Committee will select qualified
candidates and review its recommendations with the Board of Trustees, which
will decide whether to invite the candidate to be a nominee for election to
the Board of Trustees.
AMLI does not pay a fee to any third party to identify or assist in
identifying or evaluating potential nominees.
Each nominee for election as a Trustee is either an AMLI executive
officer or is standing for reelection, except that Mr. Bickner was
appointed to the Board on October 7, 2004, and is standing for election for
the first time. If the Nominating and Governance Committee receives a
nominee recommendation from a shareholder or group of shareholders that has
beneficially owned more than 5% of the company's voting common shares for
at least 1 year as of the date of the recommendation, the name of the
candidate, the name(s) of the shareholder(s) who recommended the candidate
and whether the Nominating & Governance Committee chose to nominate the
candidate must be provided, if the consent of both the shareholder and the
candidate has been received.
NOMINATING AND GOVERNANCE COMMITTEE
Laura D. Gates, Chairman
Marc S. Heilweil
John G. Schreiber
COMMUNICATING WITH THE BOARD
Shareholders may communicate directly with the Board of Trustees and
may also direct such communications solely to non-management Trustees or
the Lead Trustee. All communications should be directed to AMLI's
Secretary at: Secretary, AMLI Residential, 125 S. Wacker Drive, Suite
3100, Chicago, Illinois 60606 and should prominently indicate on the
outside of the envelope that it is intended for the Board of Trustees, for
non-management trustees, or for the Lead Trustee. Each communication
intended for the Board of Trustees and received by the Secretary which is
related to AMLI's operations and is not otherwise commercial in nature will
be promptly forwarded to the specified party following its clearance
through normal security procedures. The communication will not be opened,
but rather will be forwarded unopened to the intended recipient.
ATTENDANCE BY MEMBERS OF THE BOARD OF TRUSTEES
AT THE ANNUAL MEETING OF SHAREHOLDERS
AMLI encourages each member of the Board of Trustees to attend each
annual meeting of shareholders. All trustees attended the annual meeting
of shareholders held on April 25, 2004.
PERFORMANCE GRAPH
The following line graph compares the change in the Company's
cumulative shareholder return on its Common Shares to the cumulative total
return of the Standard & Poor's 500 Stock Index ("S&P 500 Index") and the
NAREIT Equity REIT Total Return Index ("NAREIT Index") from December 31,
1999 to December 31, 2004. The graph assumes the investment of $100 in the
Company and each of the indices on December 31, 1999 and the reinvestment
of all dividends. The return shown on the graph is not necessarily
indicative of future performance.
[PERFORMANCE GRAPH]
December 31,
------------------------------------------------------
1999 2000 2001 2002 2003 2004
------- ------- ------- ------- ------- -------
AMLI
Residential
Properties
Trust. . . . . $100.00 $132.47 $146.64 $134.31 $183.70 $234.37
NAREIT
Index. . . . . $100.00 $126.37 $143.97 $149.47 $204.98 $269.70
S&P 500
Index. . . . . $100.00 $ 90.90 $ 80.09 $ 62.39 $ 80.29 $ 89.02
A $100.00 investment in the Company at December 31, 1999, increased
to $132.47 at December 31, 2000, increased to $146.64 at December 31, 2001,
decreased to $134.31 at December 31, 2002, increased to $183.70 in 2003 and
increased again to $234.37 at December 31, 2004.
The NAREIT Index, adjusted to $100.00 at December 31, 1999 increased
to $126.37 at December 31, 2000, increased to $143.97 at December 31, 2001,
increased to $149.47 at December 31, 2002, increased to $204.98 at
December 31, 2003 and increased again to $269.70 at December 31, 2004.
The S&P 500 Index, adjusted to $100.00 at December 31, 1999,
decreased to $90.90 at December 31, 2000, Decreased to $80.09 at
December 31, 2001, decreased to $62.39 at December 31, 2002, increased to
$80.29 at December 31, 2003 and increased to $89.02 at December 31, 2004.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CORPORATE SERVICES AGREEMENT
Pursuant to a corporate services agreement among the Management
Company, AIA, Amrescon ("the Service Companies"), the Operating Partnership
and AMLI, the Operating Partnership and the Management Company provide
various managerial, administrative, accounting, investor relations, and
other services related to the operations and administration of the
Management Company, AIA, Amrescon, the Operating Partnership and AMLI. The
corporate services agreement provides for the parties to reimburse the
Operating Partnership and the Management Company quarterly for costs
incurred with respect to this agreement. AMLI, the Management Company and
Amrescon paid $0, $486,316 and $369,164, respectively, to the Operating
Partnership pursuant to the corporate services agreement in 2004. AMLI,
the Operating Partnership and Amrescon paid $0, $1,746,130 and $693,769,
respectively, to the Management Company pursuant to the corporate services
agreement in 2004.
Unless the Management Company acts in bad faith, is grossly
negligent, recklessly disregards its duty, or engages in willful
misconduct, the Management Company will have no liability to AMLI or the
Operating Partnership resulting from the performance of its duties under
the corporate services agreement. The Management Company is required to
indemnify AIA, Amrescon, AMLI and the Operating Partnership for any damages
arising out of the Management Company's default under the corporate
services agreement or as a result of the Management Company's gross
negligence. Similarly, AIA, Amrescon, AMLI and the Operating Partnership
are obligated to indemnify the Management Company for any damages arising
out of their respective defaults under the corporate services agreement or
as a result of their gross negligence.
RELATIONSHIPS WITH INDEPENDENT ACCOUNTANTS
KPMG LLP has been the independent accounting firm that audits the
financial statements of AMLI and its subsidiaries since AMLI's inception in
1994.
The Audit Committee has adopted policies and procedures for pre-
approving all audit and non-audit work performed by KPMG LLP.
The following table presents fees for professional audit services
rendered by KPMG LLP for the audit of AMLI's annual financial statements
for 2004, 2003 and 2002, and fees billed for other services rendered by
KPMG LLP.
2004 2003 2002
---------- ---------- ----------
Audit Fees . . . . . . . . $1,127,450 769,600 686,200
Audit-Related Fees . . . . 51,000 7,500 7,000
Tax Fees . . . . . . . . . 288,800 285,400 292,100
All Other Fees . . . . . . -- -- --
---------- ---------- ----------
Total Fees . . . . . . $1,467,250 1,062,500 985,300
========== ========== ==========
In the above table, "audit fees" is comprised of amounts billed by KPMG LLP
for professional services for the audit of AMLI's consolidated financial
statements included in Form 10-K and review of financial statements
included in Form 10-Q's, including all services required to comply with
Generally Accepted Auditing Standards, comfort letters, audits of co-
investment partnerships and review of documents filed with the SEC
(including in 2004 such costs attributable to additional services performed
resulting from the requirements of the Sarbanes-Oxley Act); "audit-related
fees" are fees billed by KPMG LLP for audit and related services that are
traditionally performed by KPMG LLP including our employee benefit plan
audit, audit services that are not required by statute or regulation and
other items reasonably related to the performance of the audit or review of
our financial statements; "tax fees" are fees for tax compliance, tax
advice and tax planning including services provided to co-investment
partnerships.
The $357,850 increase in "Audit Fees" from 2003 to 2004 is primarily
attributable to services performed relating to complying with the
attestation requirements of Section 404 of the Sarbanes-Oxley Act, net of
resultant costs savings for the Annual Audit.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Common
Shares as of March 1, 2005 for (1) each person who is known to AMLI to have
been the beneficial owner of more than five percent of the Common Shares
outstanding on March 1, 2005, (2) each Trustee of AMLI and each executive
officer of AMLI named in the summary compensation table and (3) AMLI's
Trustees and executive officers as a group. The number of Common Shares
beneficially owned by a person includes the number of Common Shares into
which Units or Series B Preferred Shares beneficially owned by the person
are exchangeable and convertible and the number of Common Shares for which
a person holds an option, exercisable within sixty days of March 1, 2005,
to acquire.
COMMON SHARES PERCENT OF ALL
NAME AND ADDRESS BENEFICIALLY COMMON SHARES
OF BENEFICIAL OWNER (1) OWNED (2) (2)
- ---------------------- ------------- --------------
Security Capital Preferred Growth
Inc. (3). . . . . . . . . . . . . . . . . 3,125,000 10.9%
Security Capital Research and
Management, Incorporated (3). . . . . . . 2,631,500 10.3%
Deutsche Bank AG (4). . . . . . . . . . . . 2,381,372 9.4%
Cohen and Steers Capital
Management, Inc. (5). . . . . . . . . . . 3,467,400 13.6%
Clarion CRA Securities (6). . . . . . . . . 1,623,400 6.4%
Gregory T. Mutz (7) . . . . . . . . . . . . 400,846 1.6%
John E. Allen (8) . . . . . . . . . . . . . 128,112 0.5%
Allan J. Sweet (9). . . . . . . . . . . . . 203,782 0.8%
Philip N. Tague (10). . . . . . . . . . . . 276,265 1.1%
Bruce P. Bickner (11) . . . . . . . . . . . 2,198 0.0%
Laura D. Gates (12) . . . . . . . . . . . . 32,445 0.1%
Marc S. Heilweil (13) . . . . . . . . . . . 23,248 0.1%
Stephen G. McConahey (14) . . . . . . . . . 20,978 0.1%
John G. Schreiber (15). . . . . . . . . . . 35,720 0.1%
Robert J. Chapman (16). . . . . . . . . . . 180,931 0.7%
Steve F. Hallsey (17) . . . . . . . . . . . 1,770 0.0%
All Trustees and executive officers
as a group (15 persons) . . . . . . . . . 1,456,295 5.7%
- ----------
(1) Unless otherwise noted, the address for each of the persons or
entities is 125 South Wacker Drive, Suite 3100, Chicago, Illinois
60606.
(2) Assumes that all Units and Series B Preferred Shares held by the
person are exchanged and converted for Common Shares and that none of
the Units or Series B Preferred Shares held by other persons are so
exchanged or converted and that all options exercisable within sixty
days of March 1, 2005 to acquire Common Shares held by the person are
exercised and no options to acquire Common Shares held by other
persons are exercised.
(3) Information with regard to Security Capital Preferred Growth,
Incorporated, 11 South LaSalle Street, Chicago, IL 60603 is based on
Amendment No. 2 to Schedule 13G, dated February 14, 2005. Total
shares reported are AMLI's entire issue of 3,125,000 Series B
Cumulative Convertible Redeemable Preferred Shares of Beneficial
Interest. The Series B Preferred Shares were issued at a price of
$24 per share, are convertible to Common Shares on a one-for-one
basis, are non-callable until 2007, and carry an annual dividend
equal to the greater of $1.80 per share or the current annual
dividend rate on Common Shares, which is currently $1.92 per share.
The Series B Preferred shares do not have voting rights.
Information with regard to Security Capital Research and Management
Incorporated, (a registered investment adviser), 11 South LaSalle
Street, Chicago, IL 60603, is based solely on Amendment No. 3 to
Schedule 13G, dated January 10, 2005.
(4) Information with regard to Deutsche Bank AG, Taunusanlage 12,
D-60325, Frankfurt au Main, Federal Republic of Germany, is based
solely on Schedule 13G filed on February 8, 2005 and includes the
following:
Deutsche Bank AG . . . . . . . . . . . . . 2,307,300
Deutsche Bank Trust Company
Americas . . . . . . . . . . . . . . . . 25,682
Deutsche Asset Management Inc. . . . . . . 38,990
---------
2,381,372
=========
(5) Information with regard to Cohen & Steers Capital Management, Inc.
(an Investment Adviser registered under Section 203 of the Investment
Advisers Act of 1940), 757 Third Avenue, New York, New York 10017, is
based solely on Schedule 13G filed on February 14, 2005.
(6) Information with regard to Clarion CRA Securities is based solely on
Schedule 13G dated February 2005.
(7) Mr. Mutz, directly and through various trusts and other affiliates,
beneficially owned 375,688 Common Shares and 10,824 Units and held
14,334 currently exercisable Options to acquire Common Shares.
Starting in November 1996, Mr. Mutz has financed the acquisition of
116,935 Common Shares with recourse loans from the Company. The
maximum loan balances between January 1, 2004 and March 1,
2005 was $43,874; the loan balance is $0 as of January 1, 2005.
(8) Mr. Allen, directly and through affiliates, beneficially owned
123,678 Common Shares and 1,434 Units and held 3,000 currently
exercisable Options to acquire Common Shares.
(9) Mr. Sweet, directly and through various trusts and other affiliates,
beneficially owned 201,949 Common Shares and 1,833 Units and held
no currently exercisable Options to acquire Common Shares.
Starting in November 1996, Mr. Sweet has financed the acquisition of
110,685 Common Shares with recourse loans from the Company. The
maximum aggregate loan balances between January 1, 2004 and March 1,
2005 were $605,971; such loan balances totalled $481,900 at March 1,
2005 and bear interest at fixed rates ranging from 3.91% to 5.88%.
(10) Mr. Tague beneficially owned 173,932 Common Shares and held 102,333
currently exercisable Options to acquire Common Shares. Starting in
November 1996, Mr. Tague has financed the acquisition of 106,274
Common Shares with recourse loans from the Company. The maximum
aggregate loan balances between January 1, 2004 and March 1, 2005
were $605,971; such loan balances totalled $481,900 at March 1, 2005,
and bear interest at fixed rates ranging from 3.91% to 5.88%.
(11) Mr. Bickner beneficially owned 198 Common Shares and held 2,000
currently exercisable options to acquire Common Shares.
(12) Ms. Gates beneficially owned 18,600 Common Shares and held 13,845
currently exercisable Options to acquire Common Shares.
(13) Mr. Heilweil beneficially owned 9,403 Common Shares and held 13,845
currently exercisable Options to acquire Common Shares.
(14) Mr. McConahey beneficially owned 16,978 Common Shares and held 4,000
currently exercisable Options to acquire Common Shares.
(15) Mr. Schreiber beneficially owned 21,875 Shares and held 13,845
currently exercisable Options to acquire Common Shares.
(16) Mr. Chapman beneficially owned 117,598 Common Shares and held 63,333
currently exercisable options to acquire Common Shares. Starting in
December 1997, Mr. Chapman has financed the acquisition of 73,465
Common Shares with recourse loans from the Company. The maximum
aggregate loan balances between January 1, 2004 and March 1, 2005
were $622,978; such loan balances totalled $526,262 at March 1, 2005
and bear interest at fixed rates ranging from 3.91% to 5.88%.
(17) Mr. Hallsey beneficially owned 1,770 Common Shares.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's Trustees,
certain of the Company's officers, and beneficial owners of more than 10
percent of the Company's outstanding Common Shares, to file reports of
ownership and changes in ownership of the Company's Common Shares with the
Securities and Exchange Commission and to send copies of such reports to
the Company. Based solely upon a review of such reports and amendments
thereto furnished to the Company and upon written representations of
certain of such persons that they were not required to file certain of such
reports, the Company believes that no such person failed to file any such
report on a timely basis during 2003, except that
PROPOSAL 2
TRUSTEES' PROPOSAL TO ELIMINATE THE CLASSIFICATION
OF THE BOARD OF TRUSTEES
AMENDMENT OF DECLARATION OF TRUST
Article 5, Section 1 of our Articles of Amendment and Restatement
(the "Charter") provides that the Board of Trustees be divided into three
classes, as nearly equal in number as possible, with members of each class
serving three-year terms. This system for electing directors was adopted
in 1994. To implement an annual election of trustees, our Charter must be
amended. This amendment requires approval by the affirmative vote of at
least a majority of the outstanding common shares as of the record date.
Abstentions and broker non-votes will count as votes against this proposal.
The Board of Trustees has unanimously adopted resolutions, subject to
shareholder approval, approving and declaring the advisability of an
amendment to Article 5, Section 1 of our Charter to declassify the Board of
Trustees. The proposal would allow for the annual election of all trustees
in the manner described below. Our Charter allows us to fix the number of
trustees and later change the number from time to time, but the number of
trustees cannot exceed fifteen or be less than three. The current number
is nine trustees. The proposal would not change the present number of
trustees and the trustees will retain the authority to change that number
and to fill any vacancies or newly created trusteeships.
Classified or staggered boards have been widely adopted and have a
long history in corporate law. Proponents of classified boards assert they
promote the independence of trustees or directors because having been
elected for multi-year terms, they are less subject to outside influence.
Proponents of a staggered system for the election of trustees also believe
it provides continuity and stability in the management of the business and
affairs of a company because a majority of trustees always have prior
experience as trustees of the company. This continuity and long-term focus
is particularly important to organizations, such as ours, where investments
are long-term. Proponents further assert that classified boards may
enhance stockholder value by forcing an entity seeking control of a target
company to initiate arms-length discussions with the board of a target
company because the entity is unable to replace the entire board in a
single election.
On the other hand, some investors view classified boards as having
the effect of reducing the accountability of trustees to shareholders
because classified boards limit the ability of shareholders to evaluate and
elect all trustees on an annual basis. The election of trustees is a
primary means for shareholders to influence corporate governance policies
and to hold management accountable for implementing those policies. In
addition, opponents of classified boards assert that a staggered structure
for the election of trustees may discourage proxy contests in which
shareholders have an opportunity to vote for a competing slate of nominees
and therefore may erode shareholder value.
We have not received any shareholder proposals to declassify the
Board of Trustees. This proposal is being presented for the first time to
our shareholders. The Nominating and Governance Committee and the full
Board of Trustees has considered carefully the advantages and disadvantages
of maintaining a classified board structure, and the Board of Trustees,
upon the recommendation of the Nominating and Governance Committee, has
decided that it is an appropriate time to propose declassifying the Board.
The Board is committed to principles of corporate democracy and this
determination by the Board is in furtherance of its goal of ensuring that
the company's corporate governance policies maximize management
accountability to stockholders and would, if adopted, allow stockholders
the opportunity each year to register their views on the performance of the
entire Board of Trustees.
The Board of Trustees has unanimously approved the proposed amendment
declassifying our Board of Trustees. If approved by the requisite vote of
shareholders, our Charter will be amended to allow for the annual election
of all trustees.
If the proposed amendment is approved by our shareholders, the terms
for all of our trustees will end at our 2006 annual meeting. Beginning
with the 2006 annual meeting, all trustees would be elected for one-year
terms at each annual meeting.
The proposed amendment to our Charter is set forth in Appendix A, and
we have shown the proposed deletions to the relevant section of Article 5
resulting from the amendment. If approved, this proposal will become
effective upon the filing of Articles of Amendment to our Charter with the
Secretary of State of the State of Maryland, which the Company would do
promptly after the annual meeting.
YOUR BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND
THE CHARTER OF THE COMPANY TO DECLASSIFY THE BOARD OF TRUSTEES.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has selected the firm of KPMG LLP as the
Company's independent auditors for 2005. A proposal to ratify this
appointment will be presented at the Annual Meeting. The affirmative vote
of a majority of the votes cast at the Annual Meeting will be necessary to
adopt this proposal. For purposes of the vote on this matter, abstentions
and broker non-votes will not be counted as votes cast and will have no
effect on the result of the vote, although they will be counted toward the
presence of a quorum.
Each valid proxy returned to the Company will be voted for the
ratification of the appointment of KPMG LLP as the Company's independent
auditors for 2005 unless the proxy specifies otherwise. The Board
recommends that shareholders vote FOR the ratification of such appointment.
The Company expects that representatives of KPMG LLP will be present
at the Annual Meeting and will be available to respond to appropriate
questions. Such representatives will have the opportunity to make a
statement at the Annual Meeting if they desire to do so.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the Annual Meeting
of shareholders to be held in the year 2006 must be received by AMLI at its
principal executive offices on or before November 23, 2005 for inclusion in
the Company's proxy statement and form of proxy relating to that meeting.
Shareholder proposals intended to be presented at the annual meeting
of shareholders to be held in the year 2006, but not included in its Annual
Meeting proxy statement, must be received by the Company's Secretary at its
principal executive offices not less than 60 days nor more than 90 days
prior to the first anniversary of the 2005 Annual Meeting of Shareholders,
unless the date of the Annual Meeting is advanced by more than 30 days or
delayed by more than 60 days from the anniversary date, in which event
notice must be delivered not less than 60 days nor more than 90 days prior
to the 2006 Annual Meeting date or the tenth day following the day on which
public announcement of the Annual Meeting date is first made. For 2006,
these proposals must be received between January 25, 2006 and February 24,
2006.
PROXY SOLICITATION EXPENSE
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited personally, or
by telephone, facsimile transmission or other electronic means, by officers
or employees of the Company. The Company will also request persons, firms
and corporations holding shares beneficially owned by others to send proxy
material to, and obtain proxies from, the beneficial owners of such shares
and will, upon request, pay the holders' reasonable expenses for doing so.
EXHIBIT A
ARTICLES OF AMENDMENT TO
AMLI RESIDENTIAL PROPERTIES TRUST
ARTICLES OF AMENDMENT AND RESTATEMENT
Amli Residential Trust, a Maryland real estate investment trust (the
"Trust"), hereby certifies to the State Department of assessments and
Taxation of Maryland ("SDAT") that:
1. The Trust desires to and does amend its charter as currently in
effect and as hereinafter provided.
2. Article 5, Section 1 is hereby amended by deleting the
following:
"SECTION 1. NUMBER, TERMS, QUALIFICATION, COMPENSATION
AND NAMES OF TRUSTEES. There shall be not less than
three nor more than fifteen Trustees (referred to as the
"Trustees" or the "Board of Trustees"). The number of
Trustees shall be determined from time to time by
resolution of the Trustees. Except for the initial terms
of Class I and Class II Trustees, as set forth on
Schedule A hereto, the term of office of each Trustee
shall be three years and until the election and
qualification of his successor. Trustees may succeed
themselves in office. Trustees shall be individuals who
are at least 21 years old and not under legal disability.
No person shall qualify as a Trustee until he shall have
agreed in writing to be bound by this Declaration of
Trust. No Trustee shall be required to give bond, surety
or securities to secure the performance of his duties or
obligations hereunder. Whenever a vacancy in the number
of Trustees shall occur, until such vacancy is filled as
provided in Section 3 of this Article 5, the Trustees or
Trustee continuing in office, regardless of their number,
shall have all the powers granted to the Trustees and
shall discharge all the duties imposed upon the Trustees
by this Declaration of Trust. The Trustees shall receive
such fees for their services and expenses as they shall
deem reasonable and proper. Immediately after the
closing of the Initial Public Offering (as such term is
defined in Article 3), the Board of Trustees shall
include a majority of Trustees ("Disinterested Trustees")
who are not affiliated with Amli Realty Co., a Delaware
corporation, and its affiliates and successors.
The Trustees shall be divided into three classes,
designated Class I, Class II and Class III. Each class
shall consist, as nearly as may be possible, of one-third
of the total number of Trustees constituting the entire
board of Trustees. The initial Class I Trustees shall be
elected for a one-year term, the initial Class II
Trustees for a two-year term and the initial Class III
Trustees for a three-year term. At each succeeding
annual meeting of Shareholders, beginning with the annual
meeting in 1995, successors to the class of Trustees
whose term expires at that annual meeting shall be
elected for a three-year term. If the authorized number
of Trustees is changed, any increase or decrease shall be
apportioned among the classes so as to maintain the
number of Trustees in each class as nearly equal as
possible, and any additional Trustee of any class elected
to fill a vacancy resulting from an increase in such
class, subject to Section 3 of this Article 5, shall hold
office for a term that shall coincide with the remaining
term of that class, but in no case will a decrease in the
number of Trustees shorten the term of any incumbent
Trustee. A Trustee shall hold office until the annual
meeting for the year in which his or her term expires and
until his or her successor shall be elected and shall
qualify, subject, however, to prior death, resignation or
removal from office. A majority of the entire Board of
Trustees shall constitute a quorum for the transaction of
business, PROVIDED that, if less than a majority of such
Trustees are present at said meeting, a majority of the
Trustees present may adjourn the meeting from time to
time without further notice, and PROVIDED further that,
if, pursuant to this Declaration of Trust or the Bylaws,
the vote of a majority of a particular group of Trustees
is required for action, a quorum must also include a
majority of such group. The name, address and class of
each of the initial Trustees (and all subsequent
Trustees) shall be set forth on Schedule A attached
hereto as it may be revised from time to time."
and replacing it with the following:
"SECTION 1. NUMBER, TERMS, QUALIFICATION, COMPENSATION
AND NAMES OF TRUSTEES. There shall be not less than
three nor more than fifteen Trustees (referred to as the
"Trustees" or the "Board of Trustees"). The number of
Trustees shall be determined from time to time by
resolution of the Trustees. Trustees may succeed
themselves in office. Trustees shall be individuals who
are at least 21 years old and not under legal disability.
No person shall qualify as a Trustee until he shall have
agreed in writing to be bound by this Declaration of
Trust. No Trustee shall be required to give bond, surety
or securities to secure the performance of his duties or
obligations hereunder. Whenever a vacancy in the number
of Trustees shall occur, until such vacancy is filled as
provided in Section 3 of this Article 5, the Trustees or
Trustee continuing in office, regardless of their number,
shall have all the powers granted to the Trustees and
shall discharge all the duties imposed upon the Trustees
by this Declaration of Trust. The Trustees shall receive
such fees for their services and expenses as they shall
deem reasonable and proper.
If the authorized number of Trustees is changed,
any additional Trustee elected shall hold office until
the next annual meeting of shareholders, but in no case
shall a decrease in the number of Trustees constituting
the Board shorten the term of any incumbent Trustee. A
majority of the entire Board of Trustees shall constitute
a quorum for the transaction of business, PROVIDED that,
if less than a majority of such Trustees are present at
said meeting, a majority of the Trustees present may
adjourn the meeting from time to time without further
notice, and PROVIDED further that, if, pursuant to this
Declaration of Trust or the Bylaws, the vote of a
majority of a particular group of trustees is required
for action, a quorum must also include a majority of such
group. The name, address and class of each of the
Trustees (and all subsequent Trustees) shall be set forth
on Schedule A attached hereto as it may be revised from
time to time."
3. The foregoing amendment has been duly advised by the Trust's
Board of Trustees and approved by the Trust's shareholders in accordance
with the applicable provisions of law.
4. The undersigned President acknowledges these Articles of
Amendment to be the act of the Trust and as to all matters or facts
required to be verified under oath, the undersigned President acknowledges
that, to the best of his knowledge, information and belief, these matters
and facts are true in all material respects and that this statement is made
under the penalties of perjury.
IN WITNESS WHEREOF, the Trust has caused these Articles of Amendment
to be signed in its name and on its behalf as of __________ ____, 2005, by
its President and attested to by its Secretary.
AMLI RESIDENTIAL PROPERTIES TRUST
By:
------------------------------
Name:
Title: President
By:
------------------------------
Name:
Title: Secretary