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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Lexington Corporate Properties Trust
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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LEXINGTON CORPORATE PROPERTIES TRUST
355 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 692-7260
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 2001
------------------------
To the Shareholders of
Lexington Corporate Properties Trust:
The 2001 Annual Meeting of Shareholders of Lexington Corporate Properties
Trust (the "Company") will be held at the Chase Conference Center, 270 Park
Avenue, New York, New York 10017 on Wednesday, May 23, 2001, at 10:00 a.m., New
York City time, for the following purposes:
(1) to elect seven trustees to serve until the 2002 Annual Meeting of
Shareholders; and
(2) to transact such other business as may properly come before the 2001
Annual Meeting.
Only shareholders of record at the close of business on April 6, 2001 (the
"Shareholders") are entitled to notice of and to vote at the 2001 Annual Meeting
of Shareholders or any adjournments thereof. A list of Shareholders will be
available for inspection during normal business hours at the offices of the
Company located at 355 Lexington Avenue, New York, New York 10017, during the
ten days preceding the 2001 Annual Meeting of Shareholders.
By Order of the Board of Trustees,
PAUL R. WOOD
Vice President, Chief Accounting
Officer
and Secretary
New York, New York
April 13, 2001
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED WHETHER OR NOT YOU PLAN TO ATTEND THE 2001 ANNUAL MEETING.
THE PROXY MAY BE REVOKED BY YOU AT ANY TIME BY WRITTEN NOTICE TO THE COMPANY
PRIOR TO ITS EXERCISE. GIVING YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE MEETING AND AFFIRMATIVELY INDICATE YOUR INTENTION TO
VOTE AT SUCH MEETING.
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LEXINGTON CORPORATE PROPERTIES TRUST
355 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 692-7260
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 2001
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees of Lexington Corporate
Properties Trust (the "Company") for use at the 2001 Annual Meeting of
Shareholders, and at any adjournments thereof (the "Annual Meeting"), to be held
on Wednesday, May 23, 2001, at the Chase Conference Center, 270 Park Avenue, New
York, New York 10017 at 10:00 a.m. New York City time. This Proxy Statement and
the related proxy card are first being sent to the Shareholders of the Company
on or about April 13, 2001.
Valid proxies will be voted as specified thereon at the Annual Meeting. Any
person giving a Proxy may revoke it by written notice to the Company at any time
prior to its exercise. Attendance at the Annual Meeting will not constitute a
revocation of a proxy unless the Shareholder affirmatively indicates at the
Annual Meeting that such Shareholder intends to vote such Shareholder's shares
in person.
ANNUAL REPORT
The Annual Report to Shareholders and Form 10-K of the Company for the year
ended December 31, 2000, including financial statements audited by KPMG LLP, the
Company's independent auditors, and their report thereon dated January 23, 2001,
are being mailed together with this Proxy Statement to each Shareholder. Except
as specifically incorporated herein by reference, the Annual Report is not part
of the proxy solicitation material.
VOTING SECURITIES
The holders of record of Common Shares, par value $.0001 per share (the
"Common Shares"), and of Class A Senior Cumulative Convertible Preferred Shares
(the "Preferred Shares"), of the Company at the close of business on April 6,
2001 (the "Record Date") are entitled to vote at the Annual Meeting. On the
Record Date, there were outstanding 17,565,270 Common Shares and 2,000,000
Preferred Shares, each of which Common Shares and Preferred Shares are entitled
to one vote per share on all matters submitted to a vote of Shareholders.
Unless contrary instructions are indicated on the Proxy, all Common Shares
and Preferred Shares represented by valid proxies received pursuant to this
solicitation, unless previously revoked, will be voted at the Annual Meeting FOR
the election of the seven nominees to serve as trustees until the 2002 Annual
Meeting of Shareholders.
Assuming a quorum is present at the Annual Meeting, the affirmative vote of
the holders of a plurality of the Common Shares and Preferred Shares, considered
as a single class, entitled to be voted at the Annual Meeting will be required
for the election of trustees, and the affirmative vote of the holders of a
plurality of the Preferred Shares, voting separately as a single class, entitled
to be voted at the Annual Meeting will be required for the election of the
Preferred Trustee (as defined). For purposes of the foregoing matter, the Common
Shares and Preferred Shares will vote together as a single class, except with
respect to the election of the Preferred Trustee as to which the holders of the
Preferred Shares will vote as a separate class. The Common Shares and Preferred
Shares represented by a valid proxy which abstains with respect to any matter
will be counted in determining the number of votes cast with respect to that
matter but will not be counted as an affirmative vote in determining whether the
affirmative vote of the requisite number of shares was cast in favor of that
matter. Therefore, abstentions as to the election of trustees will not affect
the election of the
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candidates receiving a plurality of the votes cast. Abstentions as to the other
proposals will have the same effect as votes against such proposals. Broker
non-votes will be treated as un-voted for purposes of determining approval of
any such proposal and will not be counted as votes for or against such proposal.
If a Shareholder is a participant in the Company's Dividend Reinvestment Plan,
the proxy card enclosed herewith represents shares in the participant's account,
as well as shares held of record in the participant's name.
The Company knows of no business, other than that set forth above, to be
presented at the Annual Meeting which would be a proper subject for action by
the Shareholders. If any other matter should be presented at the Annual Meeting
upon which a vote properly may be taken, it is intended that any share
represented by a proxy in the accompanying form will be voted with respect
thereto in accordance with the judgment of the person or persons voting such
shares.
SHARE OWNERSHIP OF PRINCIPAL SECURITY HOLDERS,
TRUSTEES AND EXECUTIVE OFFICERS
The following table indicates, as of February 28, 2001, (a) the number of
Common Shares and Preferred Shares beneficially owned by each person known by
the Company to own in excess of five percent of the outstanding Common Shares or
Preferred Shares, each trustee and each executive officer named in the Summary
Compensation Table under "COMPENSATION OF EXECUTIVE OFFICERS" below, and by all
trustees and officers as a group, and (b) the percentage such shares represent
of the total outstanding Common Shares, Preferred Shares and voting shares. All
shares were owned directly on such date with sole voting and investment power
unless otherwise indicated.
BENEFICIAL OWNERSHIP OF
SHARES (1) PERCENT OF CLASS
--------------------------- ------------------------------
COMMON PREFERRED VOTING
NAME OF BENEFICIAL OWNER SHARES SHARES COMMON PREFERRED SHARES
------------------------ --------- --------- ------ --------- ------
Five Arrows Realty Securities L.L.C. ... -- 2,000,000(2) -- 100.00% 10.32%
c/o Rothschild Realty, Inc.
1251 Avenue of the Americas
New York, NY 10020
E. Robert Roskind....................... 2,034,525(3) -- 10.65% -- 9.64%
c/o Lexington Corporate Properties
Trust
355 Lexington Avenue
New York, NY 10017
Merrill Lynch Global Allocation Fund,
Inc. ................................. 1,923,077(11) -- 9.96% -- 9.02%
c/o The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10011
Richard J. Rouse........................ 438,521(4) -- 2.48% -- 2.23%
T. Wilson Eglin......................... 402,093(5) -- 2.28% -- 2.05%
Patrick Carroll......................... 121,067(6) -- * -- *
Stephen C. Hagen........................ 99,468(7) -- * -- *
Carl D. Glickman........................ 169,791(8) -- * -- *
Geoffrey Dohrmann....................... 1,061 -- * -- *
John D. McGurk.......................... -- 2,000,000(9) 100.00% 10.32%
c/o Rothschild Realty, Inc.
1251 Avenue of the Americas
New York, NY 10020
Seth M. Zachary......................... 46,240(10) -- * -- *
All trustees and executive officers as a
group (10 persons)(12)................ 3,345,786 2,000,000 16.86% 100.00% 24.47%
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* Represents beneficial ownership of less than 1.00%
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any shares as of a given date which such person has the right
to acquire within 60 days after such date. For purposes of computing the
percentage of outstanding shares held by each beneficial owner named above
on a given date, any security which such person or persons has the right to
acquire within 60 days after such date is deemed to be outstanding, but is
not deemed to be outstanding for the purpose of computing the percentage
ownership of any other beneficial owner.
(2) These shares are convertible into 2,000,000 Common Shares, subject to
adjustment, at any time.
(3) Includes (i) 1,408,590 limited partnership units held by Mr. Roskind and
entities controlled by Mr. Roskind in Lepercq Corporate Income Fund L.P.
and Lepercq Corporate Income Fund II L.P., each of which is a subsidiary of
the Company, which are exchangeable, on a one-for-one basis, for Common
Shares, (ii) 9,000 Common Shares owned of record by The LCP Group, L.P.,
(iii) options to purchase 305,060 Common Shares at exercise prices ranging
from $9.00 -- $12.325 per share and (iv) 70,589 Common Shares held in a
trust under a benefit program sponsored by the Company which Mr. Roskind
disclaims beneficial ownership. Does not include 89,051 Common Shares owned
of record by Mr. Roskind's wife, for which Mr. Roskind disclaims beneficial
ownership.
(4) Includes (i) 86,702 limited partnership units held by Mr. Rouse in Lepercq
Corporate Income Fund L.P. and Lepercq Corporate Income Fund II L.P., which
are exchangeable, on a one-for-one basis, for Common Shares, (ii) options
to purchase 183,302 Common Shares at exercise prices ranging from
$9.00 -- $12.325 per share, (iii) 65,500 Common Shares which secure a note
issued by Mr. Rouse and (iv) 50,992 Common Shares held under a benefit
program sponsored by the Company which Mr. Rouse disclaims beneficial
ownership.
(5) Includes (i) options to purchase 240,394 Common Shares at exercise prices
ranging from $9.00 -- $12.325 per share, (ii) 65,500 Common Shares which
secure a note issued by Mr. Eglin and (iii) 53,255 Common Shares held under
a benefit program sponsored by the Company which Mr. Eglin disclaims
beneficial ownership.
(6) Includes (i) options to purchase 83,622 Common Shares at exercise prices
ranging from $9.00 -- $12.125 per share and (ii) 31,018 Common Shares held
under a benefit program sponsored by the Company which Mr. Carroll
disclaims beneficial ownership.
(7) Includes (i) options to purchase 83,750 Common Shares at exercise prices
ranging from $9.00 -- $15.25 per share and (ii) 15,509 Common Shares held
under a benefit program sponsored by the Company which Mr. Hagen disclaims
beneficial ownership.
(8) Includes options to purchase 22,500 Common Shares at exercise prices
ranging from $9.00 -- $15.25 per share.
(9) Includes 2,000,000 Preferred Shares owned beneficially and of record by
Five Arrows Realty Securities L.L.C. Mr. McGurk, among others, has been
appointed by Rothschild Investors as a manager of Five Arrows. Mr. McGurk
is also the designee of Five Arrows to the Company's Board of Trustees. Mr.
McGurk disclaims beneficial ownership of all such Preferred Shares.
(10) Includes options to purchase 22,500 Common Shares at exercise prices
ranging from $9.00 -- $15.25 per share.
(11) Includes the Common Shares issuable at $13.00 per share on the conversion
of a $25 million exchangeable note payable.
(12) Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's trustees and executive officers to file initial reports of
ownership and reports of changes in ownership of Common Shares and other
equity securities with the Securities and Exchange Commission and the New
York Stock Exchange. Trustees and executive officers are required to
furnish the Company with copies of all Section 16 (a) forms they file.
Based on a review of the copies of such reports furnished to the Company
and written representations from the Company's trustees and executive
officers that no other reports were required, the Company believes that
during the 2000 fiscal year the Company's trustees and executive officers
complied with all Section 16(a) filing requirements applicable to them.
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PROPOSAL NO. 1
ELECTION OF TRUSTEES
BOARD OF TRUSTEES
The Board of Trustees of the Company currently consists of seven trustees,
and the entire Board is nominated to be elected at the Annual Meeting pursuant
to which this Proxy Statement is being distributed. Election of trustees
requires the affirmative vote of a plurality of the votes cast by holders of the
outstanding Common Shares and Preferred Shares, considered as a single class,
and the election of the Preferred Trustee requires the affirmative vote of a
plurality of the votes cast by holders of the outstanding Preferred Shares,
voting separately as a single class. The seven nominees for trustee are E.
Robert Roskind, Richard J. Rouse, T. Wilson Eglin, Geoffrey Dohrmann, Carl D.
Glickman, John D. McGurk and Seth M. Zachary. All of the nominees are presently
serving as trustees of the Company. Mr. McGurk is the designee of Five Arrows,
who is serving as the Preferred Trustee and is subject to re-election by the
holders of Preferred Shares voting separately as a single class. Each nominee
has consented to being named in the Proxy Statement and to serve if elected. If
elected, each nominee is expected to serve until the Company's 2002 Annual
Meeting of Shareholders and until his successor is elected. Background
information relating to the nominees for election appears below.
THE ENCLOSED PROXY, IF PROPERLY COMPLETED, SIGNED, DATED AND RETURNED, AND
UNLESS AUTHORITY TO VOTE IS WITHHELD OR A CONTRARY VOTE IS INDICATED, WILL BE
VOTED FOR THE ELECTION OF THESE SEVEN NOMINEES. In the event any such nominee
becomes unavailable for election, votes will be cast, pursuant to authority
granted by the enclosed Proxy, for such substitute nominee as may be designated
by the Board of Trustees. All trustees serve for a term of one year and until
their successors are elected.
The following information relates to the nominees for election as trustees
of the Company:
NAME BUSINESS EXPERIENCE
- ---- ------------------------------------------------------------
E. ROBERT ROSKIND.................... Mr. Roskind has served as the Chairman of the Board of
Age 56 Trustees and Co-Chief Executive Officer of the Company since
October 1993. He founded The LCP Group, L.P. ("LCP"), a real
estate advisory firm, in 1973 and has been its Chairman
since 1976. LCP has been the general partner of various
limited partnerships with which the Company has had prior
dealings. He is also the general partner of a variety of
entities that are general partners of various partnerships
that hold net leased real properties or interests in real
property. Mr. Roskind received his B.S. in 1966 from the
University of Pennsylvania and is a 1969 Harlan Fiske Stone
Graduate of the Columbia Law School. He has been a member of
the Bar of the State of New York since 1970. He is on the
Board of Directors of Clarion CMBS Value Fund, Inc.
RICHARD J. ROUSE..................... Mr. Rouse has served as Co-Chief Executive Officer and as a
Age 55 trustee of the Company since October 1993. He served as
President of the Company from October 1993 to April 1996,
and since April 1996 has served as Vice Chairman of the
Board of Trustees. Mr. Rouse graduated from Michigan State
University in 1968 and received his M.B.A. in 1970 from the
Wharton School of Finance and Commerce of the University of
Pennsylvania.
T. WILSON EGLIN...................... Mr. Eglin has served as Chief Operating Officer of the
Age 36 Company since October 1993 and as a trustee since May 1994.
He served as Executive Vice President from October 1993 to
April 1996, and since April 1996 has served as the
President. Mr. Eglin received his B.A. from Connecticut
College in 1986.
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NAME BUSINESS EXPERIENCE
- ---- ------------------------------------------------------------
GEOFFREY DOHRMANN.................... Mr. Dohrmann has served as a trustee since August 2000. He
Age 49 co- founded Institutional Real Estate, Inc., a real
estate-oriented publishing and consulting company in 1987
and is currently its Chairman and Chief Executive Officer.
He also belongs to the advisory boards for the National Real
Estate Index, The Journal of Real Estate Portfolio
Management and Center for Real Estate Enterprise Management.
He is also a fellow of the Homer Hoyt Institute and holds
the Certified Financial Planner (CFP) and Counselors of Real
Estate (CRE) designations.
CARL D. GLICKMAN..................... Mr. Glickman has served as a trustee of the Company since
Age 74 May 1994. He has been President of The Glickman
Organization, a real estate development and management firm,
since 1953. He is on the Board of Directors of Alliance Tire
& Rubber Co., Ltd., Bear Stearns Companies, Inc., Jerusalem
Economic Corporation Ltd. and OfficeMax Inc., as well as
numerous private companies.
JOHN D. McGURK....................... Mr. McGurk has served as a trustee since January 1997, as
Age 57 the designee of Five Arrows Realty Securities, L.L.C. He is
the founder and President of Rothschild Realty, Inc., the
advisor to Five Arrows. Prior to starting Rothschild Realty,
Inc. in 1981, he served as a Regional Vice President for The
Prudential Insurance Company of America where he oversaw its
New York City real estate loan portfolio, equity holdings,
joint ventures and projects under development. He is a
member of the Urban Land Institute, Pension Real Estate
Association, Real Estate Board of New York and the National
Real Estate Association, and a member of the Trustee
Committee of the Caedmon School.
SETH M. ZACHARY...................... Mr. Zachary has served as a trustee since November 1993.
Age 48 Since 1987, he has been a partner, and is currently the
Chairman, of the law firm Paul, Hastings, Janofsky & Walker
LLP, counsel to the Company.
BOARD OF TRUSTEES AND COMMITTEES OF THE BOARD OF TRUSTEES
The Board of Trustees of the Company held four meetings during the fiscal
year ended December 31, 2000. All trustees serving as members of the Board of
Trustees, as constituted at the time of each meeting, attended all meetings. The
Board of Trustees has three standing committees: the Audit Committee,
Compensation Committee and Executive Committee. The Board of Trustees does not
have a nominating committee, and the usual functions of such a committee are
performed by the entire Board of Trustees.
Audit Committee. The principal functions of the Audit Committee include
making recommendations concerning the engagement of independent public
accountants, reviewing with the independent public accountants plans and results
of the audit engagement, approving professional services provided by the
independent public accountants, reviewing the independence of the independent
public accountants, considering the range of the audit, and reviewing the
adequacy of the Company's internal accounting controls. The Audit Committee's
current members are Messrs. Dohrmann, Glickman and McGurk all of whom are
independent. The Audit Committee met four times during 2000 including quarterly
telephonic meetings with management and the independent accountants to discuss
matters concerning 2000.
Compensation Committee. The principal functions of the Compensation
Committee are to determine the compensation for the Company's executive officers
and to administer and review the Company's incentive compensation plans. The
Compensation Committee, whose current members are Messrs. Dorhmann, McGurk and
Zachary, met twice during 2000.
Executive Committee. The principal function of the Executive Committee is
to exercise the authority of the Board of Trustees regarding routine matters
performed in the ordinary course of business. The Executive
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Committee's current members are Messrs. Glickman, McGurk and Roskind. The
Executive Committee did not meet in 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company announced that it has agreed to acquire Net 1 L.P. and Net 2
L.P. (collectively, the "Net Partnerships"), in a merger transaction valued at
approximately $143.0 million.
The Net Partnerships own twenty-five properties in fifteen states, which
generate approximately $15.1 million of net rental revenue. The properties have
a remaining weighted average lease term of approximately 9.2 years and are
net-leased to eighteen tenants.
As currently proposed, the Company will issue approximately $65.0 million
of securities to the sellers and assume approximately $78.0 million of mortgage
financing with a weighted interest rate of approximately 8%. The limited
partners will receive at least 50% of their merger consideration in the
Company's 8.5% convertible subordinated debentures due 2009 with up to 50% of
the merger consideration payable in the Company's common shares issued at a
price not less than $11.00 per share and no greater than $13.00 per share. The
convertible subordinated debentures are exchangeable by the holder after four
years into the Company's common shares at $14.00 per share and may be redeemed
by the Company after five years with cash or with common shares in the event the
Company's share price exceeds $14.00.
E. Robert Roskind, the Company's Chairman and Co-Chief Executive Officer,
is the controlling shareholder of the general partners of the Net Partnerships.
The general partners will receive merger consideration valued on the same basis
as the limited partners for their 1% ownership interest in the Net Partnerships
payable in operating partnership units. The units, which will have economic
rights comparable to the economic rights of the limited partner's merger
consideration, will be convertible into the Company's common shares on a
one-for-one basis at certain points in the future.
Definitive terms of the transaction will be set forth in a joint consent
and proxy solicitation statement and prospectus being prepared by the Company
and the Net Partnerships for regulatory review. The transaction is subject to
customary closing conditions, including the approval of Company's shareholders
and the limited partners of the Net Partnerships.
During 2000 the Company issued 83,400 operating partnership units to
acquire the property management contract for the Net Partnerships. The
acquisition was made from an affiliate of E. Robert Roskind. This transaction
was approved by the independent Trustees of the Board.
During 2000, the Company sold two properties to the Net Partnerships for
$15.6 million. These transactions were approved by the independent Trustees of
the Board. In addition, the Company performed asset management services and
brokerage services for the Net Partnerships and received $91,755 and $119,600,
respectively, in related fees and were reimbursed $359,000 for expenses.
In connection with the acquisition of certain properties in 1996, the
Company assumed an obligation to pay LCP an aggregate amount of $1,778,250 for
rendering services in connection with the original acquisition of the properties
in 1980 and 1981. Simple interest is payable monthly from available net cash
flow of the respective original properties on the various unpaid principal
portions of the fees, at annual rates ranging from 12.25% to 19.00%. Monthly
installment payments are to commence at various dates to satisfy principal and
current interest payments as well as any unpaid accrued interest outstanding.
CERTAIN BUSINESS RELATIONSHIPS
Seth M. Zachary, who is presently serving as a member of the Board of
Trustees and is a nominee to serve as a trustee until the 2002 Annual Meeting of
Shareholders, is a partner of Paul, Hastings, Janofsky & Walker LLP, which is
the general counsel to the Company. The Company, including all investees, paid
Paul, Hastings, Janofsky & Walker LLP $639,920 for services during 2000. The
Company intends to continue to retain the services of Paul, Hastings, Janofsky &
Walker LLP for general, real estate, corporate and other matters.
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COMPENSATION OF EXECUTIVE OFFICERS
Summary of Cash and Certain Other Compensation. The following table sets
forth the summary compensation to the Chairman of the Board of Trustees (and
Co-Chief Executive Officer), and the four other most highly paid executive
officers of the Company for the calendar years 2000, 1999, and 1998.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL PAYOUTS
COMPENSATION ---------
------------------- AWARDS LONG
OTHER ----------------------- TERM ALL
ANNUAL RESTRICTED SECURITIES INCENTIVE OTHER
FISCAL COMPEN- SHARE UNDERLYING PLAN COMPEN-
NAME AND YEAR SALARY BONUS SATION AWARDS OPTIONS PAYOUTS SATION
PRINCIPAL POSITION ENDED ($) ($)(1) ($) ($)(2) (#)(3) ($) ($)(4)
------------------ -------- -------- -------- ------- ---------- ---------- --------- -------
E. Robert Roskind............ 12/31/00 300,000 309,297 -- 180,000 280,000 -- 835
Chairman of the Board of 12/31/99 300,000 158,000 -- 242,500 75,000 -- 720
Trustees and Co-Chief 12/31/98 250,000 133,000 -- -- 100,000 -- 720
Executive Officer
Richard J. Rouse............. 12/31/00 225,000 233,915 -- 126,000 190,000 -- 835
Vice Chairman and Co- 12/31/99 200,000 108,000 -- 169,750 45,000 -- 720
Chief Executive Officer 12/31/98 175,000 95,500 -- -- 34,500 -- 720
T. Wilson Eglin.............. 12/31/00 240,000 249,200 -- 126,000 161,250 -- 835
President and Chief 12/31/99 225,000 120,500 -- 169,750 45,000 -- 720
Operating Officer 12/31/98 200,000 108,000 -- -- 34,500 -- 720
Patrick Carroll.............. 12/31/00 190,000 198,700 -- 72,000 65,000 -- 835
Chief Financial Officer 12/31/99 175,000 78,000 -- 97,000 30,000 -- 720
and Treasurer(5) 12/31/98 112,727 72,000 -- -- 50,000 -- 720
Stephen C. Hagen............. 12/31/00 165,000 107,182 -- 36,000 50,000 -- 835
Senior Vice President 12/31/99 150,000 68,000 -- 48,500 15,000 -- 720
12/31/98 120,000 54,000 -- -- 25,000 -- 720
- ---------------
(1) Bonus amounts include amounts contributed at the election of the Company
pursuant to the Company's plan established under Section 401 (k) of the
Internal Revenue Code of 1986, as amended, and year-end awards at the
discretion of the Compensation Committee of the Board of Trustees.
(2) Restricted share awards vest ratably over 5 years and were valued at the
fair market value of the common shares on the date of grant.
(3) Options to acquire common shares at exercise prices equal to or greater than
the fair market value on the grant dates.
(4) Amount represents the dollar value of life insurance premiums paid by the
Company during the applicable fiscal year with respect to the life of the
named executive officer.
(5) Mr. Carroll became Chief Financial Officer of the Company on May 4, 1998 and
Treasurer effective January 1999.
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Stock Options. The following table sets forth certain information
concerning common share options granted during the fiscal year ended December
31, 2000 to each of the executive officers named in the Summary Compensation
Table. Since inception, the Company has not granted any share appreciation or
dividend equivalent rights.
OPTION GRANTS IN FISCAL YEAR 2000
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------- VALUE AT ASSUMED
NUMBER OF PERCENTAGE(%) OF ANNUAL RATES OF SHARE
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL 2000 ($/SHARE) DATE 5%($) 10%($)
---- ---------- ---------------- ----------- ---------- -------- ----------
E. Robert Roskind........ 280,000 33.67% 10.37 01/03/05; 803,600 1,772,400
05/25/05
Richard J. Rouse......... 190,000 22.85% 10.01 01/03/05; 526,300 1,160,900
05/25/05
T. Wilson Eglin.......... 161,250 19.39% 9.81 01/03/05; 436,988 965,888
05/25/05
Patrick Carroll.......... 65,000 7.82% 9.00 01/03/05 161,850 356,850
Stephen C. Hagen......... 50,000 6.01% 9.00 01/03/05 124,500 274,500
Option Exercises/Value of Unexercised Options. The following table sets
forth certain information concerning the exercise of share options during the
fiscal year ended December 31, 2000 by each of the executive officers named in
the Summary Compensation Table, and the year-end value of unexercised options
held by such persons.
SHARE OPTION EXERCISES IN FISCAL YEAR 2000
AND FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
---- -------- -------- ----------- ------------- ----------- -------------
E. Robert Roskind...... -- -- 379,210 212,500 212,513 210,938
Richard J. Rouse....... -- -- 248,652 132,000 150,638 210,938
T. Wilson Eglin........ -- -- 301,216 132,000 138,297 210,938
Patrick Carroll........ -- -- 31,250 113,750 45,703 137,109
Stephen C. Hagen....... -- -- 55,000 45,000 35,156 105,469
COMPENSATION OF TRUSTEES
Each non-employee trustee, with the exception of Mr. McGurk, receives an
annual fee of $20,000 for service as a trustee. In addition, such trustees
receive $1,000 for each meeting of the Board of Trustees or any committee
thereof attended by the trustee and reimbursement for expenses incurred in
attending such meetings. Pursuant to the 1994 Outside Director Stock Plan, as
amended, each non-employee trustee was required to receive not less than 50% of
such trustee's fees in Common Shares at an amount per share equal to 95% of the
fair market value of one Common Share as of the date of purchase. During 2000,
all Trustees elected to receive 100% of their fees in Common Shares with respect
to the four meetings which the Board of Trustees held in 2000. Pursuant to the
Company's 1998 Share Option Plan, non-employee trustees, with the exception of
Mr. McGurk, automatically are granted each year, on January 1, non-qualified
share options to purchase, after a one-year holding period, 5,000 Common Shares
at an exercise price equal to the fair market
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value of the Common Shares on the date of the grant. In 2000, non-employee
trustees, with the exception of Mr. McGurk, received 1,500 restricted common
shares which vest ratably over two years.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF TRUSTEES
The Audit Committee of the Board is responsible for providing independent,
objective oversight of the Trust's accounting functions and internal controls.
The Audit Committee is composed of three trustees each of whom is independent.
The Audit Committee operates under a written charter approved by the Board of
Trustees. A copy of the charter is attached to this Proxy Statement as Appendix
A.
Management is responsible for the Trust's internal controls and financial
reporting process. The independent accountants are responsible for performing an
independent audit of the Trust's consolidated financial statements in accordance
with auditing standards generally accepted in the United States of America and
to issue a report thereon. The Audit Committee's responsibility is to monitor
and oversee these processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants, to review and discuss the December
31, 2000 financial statements. The Audit Committee has discussed with the
independent accountants the matters required to be discussed by Statement of
Auditing Standards No. 61. The Audit Committee also received written disclosures
from the independent accountants required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the Audit
Committee discussed with the independent accountants that firm's independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the representations
of management and the independent accountants, the Audit Committee recommended
that the Board of Trustees include the audited consolidated financial statements
in the Trust's Annual Report on Form 10-K for the year ended December 31, 2000,
to be filed with the Securities and Exchange Commission.
During 2000, the Company paid its independent accountants for the following
services:
"Audit Fees" -- $88,000
"Financial Information, Systems and Implementation Fees" -- $0
"All Other Fees" -- $141,333 which consisted primarily of tax return
preparation services and non-recurring accounting services.
The Audit Committee considered whether the non-audit services provided by
the independent accountants are compatible with maintaining the accountants'
independence.
Audit Committee of the Board of
Trustees
Geoffrey Dohrmann
Carl D. Glickman
John D. McGurk
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 2000, the Compensation Committee
consisted of Messrs. Dohrmann, McGurk and Zachary. None of such persons are or
have been executive officers of the Company. Mr. Zachary is a partner of Paul,
Hastings, Janofsky & Walker LLP, which is the general counsel to the Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF TRUSTEES
For the fiscal year ended December 31, 2000, all matters concerning
executive compensation for the Co-Chief Executive Officers and other executive
officers were considered and acted upon by the Compensation Committee of the
Board of Trustees.
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Compensation Philosophy. The Company's compensation program for executive
officers is based upon a desire to achieve both its short- and long-term
business goals and strategies with a view to enhancing shareholder value. To
achieve its goals, the Company recognizes that it must adopt a compensation
program which will attract, retain and motivate qualified and experienced
executive officers and that its compensation program should align the financial
interests of its executive officers with those of its shareholders. In 2000, the
Company retained an independent third party to assist in determining the
reasonableness and competitiveness of its compensation program for its executive
officers.
Compensation of Executive Officers (other than the Co-Chief Executive
Officers). In approving the annual salary for Messrs. Eglin, Carroll and Hagen,
the Board of Trustees considered several factors, including the scope of the
individual's responsibilities, the cost of living, the historical financial
results of the Company and the anticipated financial performance of the Company.
The compensation determination for each individual was largely subjective and no
specific weight was given to any particular factor. In addition to their base
salaries, these executive officers of the Company receive discretionary bonuses
tied to their individual performances and the overall performance of the
Company. The Board of Trustees has established specific performance goals for
the payment of discretionary bonuses which are the per share growth in funds
from operations, cash available for distributions, and funds available for
distributions coupled with total annual shareholder return.
Compensation of Co-Chief Executive Officers. As with the other executive
officers, the Board of Trustees determined the annual salaries for the Co-Chief
Executive Officers based upon a number of factors and criteria, including the
historical financial results of the Company, the anticipated financial
performance of the Company and the requirements of such Co-Chief Executive
Officers. The compensation determination for each of the Co-Chief Executive
Officers was largely subjective, and no specific weight was given to any
particular factor. The Co-Chief Executive Officers of the Company are also
eligible to receive discretionary bonuses tied to their individual and overall
performances. The Board of Trustees has established specific performance goals
for the payment of discretionary bonuses which are the same as the other
executive officers of the Company.
1998 Share Option Plan. The Company believes that providing executive
officers with opportunities to acquire significant equity stakes in its growth
and prosperity through the grant of common share options will enable the Company
to attract and retain qualified and experienced executive officers. Common share
options represent a valuable portion of the compensation program for the
Company's executive officers. Common share options may be awarded to executive
officers at the time they join the Company and periodically thereafter. The
exercise price of common share options has been tied to the fair market value of
the Company's Common Shares on the date of the grant and the options will only
have value as the value of the Company's Common Shares increases. Grants of
common share options to executive officers generally are made by the
Compensation Committee upon the recommendation of senior management and are
based upon the level of each executive officer's position with the Company, an
evaluation of the executive officer's past and expected future performance and
the number of outstanding and previously granted options.
Compensation Committee of the Board of
Trustees
Geoffrey Dohrmann
John D. McGurk
Seth M. Zachary
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PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative total
shareholder return on the Company's Common Shares for the period of December 31,
1995 through December 31, 2000 with the NAREIT Equity REIT Total Return Index,
which includes all tax-qualified equity REITs listed on the New York Stock
Exchange, the American Stock Exchange and the NASDAQ National Market System, the
Morgan Stanley REIT Index, and the S&P 500 Index for the same period. The graph
and table assume an investment of $100 in the Common Shares of the Company and
in each index on December 31, 1995 (and the reinvestment of all dividends).
THE PERIOD OF DECEMBER 31, 1995 THROUGH DECEMBER 31, 2000
[PERFORMANCE GRAPH]
- ----------------------------------------------------------------------------------------------------------------
Company/ Index Name 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
- ----------------------------------------------------------------------------------------------------------------
Lexington Corporate Properties
Trust $100.00 $142.79 $163.60 $144.72 $117.29 $168.28
NAREIT Equity REIT Total Return
Index $100.00 $135.75 $161.36 $130.99 $122.50 $154.21
Morgan Stanley REIT Index $100.00 $135.63 $160.83 $133.65 $127.50 $161.69
S&P 500 Index $100.00 $122.96 $163.99 $210.86 $255.20 $231.96
FINANCIAL AND OTHER INFORMATION
Information required by this item is incorporated by reference to the
material appearing under the headings "Selected Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Financial Statements and Supplementary Data" in the Company's Form 10-K.
OTHER MATTERS
The Board of Trustees is not aware of any business to come before the
Annual Meeting other than the election of trustees. However, if any other
matters should properly come before the Annual Meeting, including matters
relating to the conduct of the Annual Meeting, it is intended that proxies in
the accompanying form will be voted in respect thereof in accordance with the
judgment of the person or persons voting the proxies.
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APPOINTMENT OF INDEPENDENT AUDITORS
Independent Public Accountants, KPMG LLP, was engaged to perform the annual
audit of the books of account of the Company for the calendar year ended
December 31, 2000. There are no affiliations between the Company and its
partners, associates or employees, other than as pertain to its engagement as
independent auditors for the Company in previous years. Representatives of KPMG
LLP are expected to be present at the Annual Meeting and will be given the
opportunity to make a statement if they so desire and to respond to appropriate
questions.
The Audit Committee of the Board of Trustees will submit its recommendation
with respect to the engagement of independent public accountants at the meeting
of the full Board of Trustees, which is expected to take place during the
Company's second fiscal quarter. KPMG LLP has been the Company's independent
public accountants since 1993.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Company. The
Company expects to retain ChaseMellon Shareholder Services, L.L.C., an outside
proxy solicitation firm, in connection with the Annual Meeting. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy material to the beneficial
owners of Common Shares. In addition to solicitations by mail, trustees,
officers and regular employees of the Company may solicit proxies personally or
by telegraph or telephone without additional compensation.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the office of the Company located at
355 Lexington Avenue, New York, New York 10017, no later than December 15, 2001.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934, as amended.
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APPENDIX A
LEXINGTON CORPORATE PROPERTIES TRUST
AUDIT COMMITTEE CHARTER
MISSION STATEMENT
The Audit Committee will assist the Board of Trustees in fulfilling its
oversight responsibilities. The Audit Committee will review the financial
reporting process, the system of internal control, the audit process, and the
Trust's process for monitoring compliance with laws and regulations. In
performing its duties, the committee will maintain effective working
relationships with the board of trustees, management, and the independent
accountants. To effectively perform his role, each committee member will obtain
an understanding of the detailed responsibilities of committee membership as
well as the Trust's business.
ROLES AND RESPONSIBILITIES
FINANCIAL REPORTING
- Review the annual financial statements and determine whether they are
complete and consistent with the information known to committee members,
and assess whether the financial statements reflect appropriate
accounting principles.
- Seek periodic briefings from management and the independent accountants
on developments affecting financial reporting, including pronouncements
from the FASB, SEC or other standard-setting or regulatory authorities.
- Provide oversight with respect to the financial reporting process, the
system of internal controls and the audit process.
- Prior to the annual audit, review the plans of the independent
accountants and attempt to identify unusual and new risk factors in order
to determine areas requiring special attention.
- Ensure that the independent accountants keep the audit committee informed
about any fraud, illegal acts or deficiencies in internal control that
they uncover.
- Be briefed on how management develops and summarizes quarterly financial
information and the extent to which the independent accountants review
quarterly financial information.
- Meet with management and independent accountants, either telephonically
or in person, to review the interim financial results prior to earnings
release and filing of Form 10-Q.
INTERNAL CONTROLS
- Through review and communication with management and the independent
accountants, review the adequacy of the internal control structure.
- Gain an understanding of whether internal control recommendations made by
the independent accountants have been implemented by management.
INDEPENDENT ACCOUNTANTS
- Recommend to the Board of Trustees, based upon input from management, on
an annual basis the selection of the Company's independent accountants,
who are ultimately responsible to the Board of Trustees and the Audit
Committee.
- Review the audit findings of the independent accountants, including any
management letter and management's responses thereto.
- Review the independence and performance of the independent accountants
and their fee arrangements.
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- Require that the independent accountants communicate certain required
matters to the committee.
- Consider management's handling of proposed audit adjustments identified
by the independent accountants.
- Obtain from the independent accountants on a periodic basis a formal
written statement setting forth all relationships with the Company.
COMPLIANCE
- Review and reassess the adequacy of the Charter at least annually and
require it to be filed in accordance with SEC and NYSE regulations.
- Review the Company's controls and procedures designed to maintain its
real estate investment trust status.
- Review the findings of any examinations by regulatory agencies such as
the Securities and Exchange Commission.
- Be satisfied that all regulatory compliance matters have been considered
in the preparation of the financial statements.
OTHER
- Review, with the Company's legal counsel, legal matters that could have a
significant impact on the Company's financial statements.
- Annually prepare a report to shareholders as required by the SEC and
include in the proxy.
- Maintain minutes of all meetings.
- Perform such other oversight functions as may be requested by the Board
of Trustees.
- Review annually significant related party transactions or any other
significant conflicts of interest with management.
- Report on its activities to the Board of Trustees on a regular basis.
The Audit Committee may cause an investigation to be made into any matter
within the scope of its responsibilities and, with the approval of the Board of
Trustees, the Committee may engage appropriate outside professional advisors
relating to such matters.
MEMBERSHIP:
The Audit Committee shall meet the requirements of the New York Stock
Exchange and be comprised solely of independent trustees. At least three
independent trustees shall serve on the Committee. The Chairman of the Audit
Committee will be appointed by the Board of Trustees annually. All members shall
have a basic understanding of finance and accounting, and at least one member
shall have accounting or related financial management expertise.
FREQUENCY OF MEETINGS:
The Audit Committee shall meet no less than two times each year. At a
meeting early in the year the Audit Committee will review audit results and
receive other required communications from the independent accountants. At a
second meeting in the fall the Audit Committee may review the plans for the
upcoming annual audit and review the fee arrangements for the independent
accountants. Other matters may be considered at either of such meetings, and the
other meeting shall be scheduled as desired by the Audit Committee. The
Committee (or its Chair) should communicate with management and independent
accountants quarterly to discuss quarterly results.
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(1) to elect seven trustees to serve until the 2002 Annual Meeting of
Shareholders;
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all
to the contrary) nominees listed to the right
[ ] [ ]
Election of Trustees include:
E. Robert Roskind, Richard J. Rouse, T. Wilson Eglin, Carl D. Glickman, John D.
McGurk, Geoffrey Dohrmann, Seth M. Zachary
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
(2) to transact such other business as may properly come before the 2001 Annual
Meeting.
Please sign exactly as your name appears on
this Proxy Card. When signing as attorney,
executor, administrator, trustee, guardian
or corporate or partnership official, please
give full title as such and the full name of
the entity on behalf of whom you are
signing. If a partnership, please sign in
partnership name by authorized person.
Dated: _______________________________, 2001
Signature _______________________________
Signature _______________________________
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
LEXINGTON CORPORATE PROPERTIES TRUST
The undersigned hereby appoints Patrick Carroll and Paul R. Wood proxies,
with power to act without the other and with power of substitution, and hereby
authorizes them to represent and vote, as designated on the other side, all the
shares of Lexington Corporate Properties Trust standing in the name of the
undersigned with all powers which the undersigned would possess if present at
the Annual Meeting of Shareholders of the Company to be held May 23, 2001 or any
adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
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