UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
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[ ] Soliciting Material Under Rule 14a-12
W. P. CAREY & CO. LLC
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(Name of Registrant as Specified in its Charter)
W. P. CAREY & CO. LLC
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[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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pursuant to Exchange Act Rule 0-11: (Set forth the amount on which the
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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[WPCAREY LOGO]
April 30, 2004
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, JUNE 10, 2004
Dear W. P. Carey & Co. LLC Shareholder:
The 2004 Annual Meeting of Shareholders of W. P. Carey & Co. LLC will be
held at The Waldorf-Astoria Hotel, 301 Park Avenue, New York, New York on
Thursday, June 10, 2004 at 10:30 a.m. for the following purposes:
- To elect three Class I directors, each to hold office for a three-year
term and until their respective successors are elected and qualified.
- To transact such other business as may properly come before the meeting.
Only shareholders who owned stock at the close of business on April 12,
2004 are entitled to vote at the meeting. W. P. Carey & Co. LLC mailed this
Proxy Statement, proxy and its Annual Report to shareholders on or about April
30, 2004.
By Order of the Board of Directors
/s/ Susan C. Hyde
SUSAN C. HYDE
Executive Director and Secretary
WHETHER OR NOT YOU ATTEND THE ANNUAL MEETING, IT IS IMPORTANT THAT YOUR SHARES
BE REPRESENTED AND VOTED AT THE MEETING. YOU CAN VOTE YOUR SHARES BY USING THE
TELEPHONE OR THROUGH THE INTERNET. INSTRUCTIONS FOR USING THESE SERVICES ARE SET
FORTH ON THE ENCLOSED PROXY. YOU MAY ALSO VOTE YOUR SHARES BY MARKING YOUR VOTES
ON THE ENCLOSED PROXY, SIGNING AND DATING IT AND MAILING IT IN THE BUSINESS
REPLY ENVELOPE PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR
PROXY AND VOTE IN PERSON.
W. P. CAREY & CO. LLC
------------------------
PROXY STATEMENT
APRIL 30, 2004
------------------------
QUESTIONS & ANSWERS
WHO IS SOLICITING MY PROXY?
We, the directors of W. P. Carey & Co. LLC, are sending you this Proxy Statement
and enclosed proxy.
WHO IS ENTITLED TO VOTE?
W. P. Carey & Co. LLC's shareholders as of the close of business April 12, 2004
(the "Record Date") are entitled to vote at the Annual Meeting.
HOW DO I VOTE?
You may vote your shares either by attending the Annual Meeting, by telephone,
through the Internet, or by completing the enclosed proxy card. To vote by
telephone, call the specially designated telephone number set forth on the
enclosed proxy card. To vote through the Internet, use the Internet voting site
listed on the enclosed proxy card. To vote by proxy, sign and date the enclosed
proxy card and return it in the enclosed envelope. If you return your proxy but
fail to mark your voting preference, your shares will be voted FOR each of the
nominees. We suggest that you return a proxy even if you plan to attend the
meeting.
MAY I REVOKE MY PROXY?
Yes, you may revoke your proxy at any time before the meeting by notifying W. P.
Carey & Co. LLC's Secretary or submitting a new proxy, or by voting in person at
the meeting. The mailing address is 50 Rockefeller Plaza, New York, New York
10020. You should mail your notice of revocation of proxy to that address.
HOW MANY SHARES MAY VOTE?
At the close of business on the Record Date, April 12, 2004, W. P. Carey & Co.
LLC had 37,369,069 listed shares outstanding and entitled to vote. Every
shareholder is entitled one vote for each share held.
WHAT IS A "QUORUM?"
A "quorum" is the presence, either in person or represented by proxy, of a
majority of the shares entitled to vote at the meeting. There must be a quorum
for the meeting to be held. A nominee must receive the affirmative vote of a
majority of the votes cast at the meeting to be elected to the Board of
Directors.
HOW WILL VOTING ON SHAREHOLDER PROPOSALS BE CONDUCTED?
We do not know of other matters that are likely to be brought before the
meeting. However, in the event that any other matters properly come before the
Annual Meeting, your signed proxy gives authority to the persons named in the
enclosed proxy to vote your shares on such matters in accordance with their best
judgment.
WHO WILL PAY THE COST FOR THIS PROXY SOLICITATION AND HOW MUCH WILL IT COST?
W. P. Carey & Co. LLC will pay the cost of preparing, assembling and mailing
this Proxy Statement, the Notice of Meeting and the enclosed proxy. In addition
to the solicitation of proxies by mail, we may utilize some of the officers and
employees of our wholly-owned subsidiary, Carey Asset Management Corp. (who will
receive no compensation in addition to their regular salaries) to solicit
proxies personally and by telephone. Currently, we do not intend to retain a
solicitation firm to assist in the solicitation of proxies, but if sufficient
proxies are not returned to us, we may retain an outside firm to assist in proxy
solicitation for a fee estimated not to exceed $10,000, plus out-of-pocket
expenses. We may request banks, brokers and other custodians, nominees and
fiduciaries to forward copies of the proxy statement to their principals and to
request authority for the execution of proxies, and will reimburse such persons
for their expenses in so doing.
WHEN ARE SHAREHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING DUE?
We must receive any proposal that a shareholder intends to present at W. P.
Carey & Co. LLC's 2005 Annual Meeting of shareholders no later than December 15,
2004 in order to be included in the Proxy Statement and form of proxy relating
to that meeting.
References in this Proxy Statement to W. P. Carey & Co. LLC refer to W. P. Carey
& Co. LLC and its subsidiaries.
W. P. CAREY & CO. LLC WILL PROVIDE SHAREHOLDERS, WITHOUT CHARGE, A COPY OF
W. P. CAREY & CO. LLC'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 2003, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES ATTACHED THERETO, UPON WRITTEN REQUEST TO MS.
SUSAN C. HYDE, DIRECTOR OF INVESTOR RELATIONS, AT W. P. CAREY & CO. LLC, 50
ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020.
ELECTION OF DIRECTORS
W. P. Carey & Co. LLC has a classified Board of Directors currently
consisting of three Class I directors, four Class II directors and four Class
III directors, who will serve until the Annual Meetings of Shareholders to be
held in 2004, 2005 and 2006, respectively, and until their respective successors
are duly elected and qualified. Directors in a class are elected for a term of
three years to succeed the directors in such class whose terms expire at such
annual meeting.
NOMINATING PROCEDURES
The Nominating and Corporate Governance Committee considers candidates for
Board membership suggested by its members and other Board members, as well as
management and shareholders. A shareholder who wishes to recommend a prospective
nominee for the Board should notify our Corporate Secretary or any member of the
Nominating and Corporate Governance Committee in writing with the information
required by our Bylaws, which is set forth in more detail in "Shareholder
Proposals and Other Communications," below.
Once the Nominating and Corporate Governance Committee has identified a
prospective nominee, the committee makes an initial determination as to whether
to conduct a full evaluation of the candidate. This initial determination is
based on whatever information is provided to the committee with the
recommendation of the prospective candidate, as well as the committee's own
knowledge of the prospective candidate, which may be supplemented by inquiries
to the person making the recommendation or others. The preliminary determination
is based primarily on the need for additional Board members to fill vacancies or
expand the size of the Board and the likelihood that the prospective nominee can
satisfy the evaluation factors described below. If the Committee determines, in
consultation with the Chairman of the Board and other Board members as
appropriate, that additional consideration is warranted, it may request a search
firm to gather additional information about the prospective nominee's background
and experience and to report its findings to the committee. The committee then
evaluates the prospective nominee's qualifications. As set forth in our
Corporate Governance Guidelines, there are no firm prerequisites to qualify as a
candidate for the Board, although the Board seeks a group of candidates who
possess the background, skills, expertise, characteristics and time to make a
significant contribution to the Board, to W. P. Carey & Co. LLC and its
shareholders. At least annually, the Nominating and Corporate Governance
Committee reviews the qualifications and backgrounds of the Directors, as well
as the overall composition of the Board.
The committee also considers such other relevant factors as it deems
appropriate, including the balance of management and independent directors, the
need for Audit Committee or other expertise and the
2
evaluations of other prospective nominees. In connection with this evaluation,
the committee determines whether to interview the prospective nominee, and if
warranted, one or more members of the committee, and others as appropriate,
interview prospective nominees in person or by telephone. After completing this
evaluation and interview, the committee makes a recommendation to the full Board
as to the persons who should be nominated by the Board, and the Board determines
the nominees after considering the recommendation and report of the committee.
NOMINEES FOR THE BOARD OF DIRECTORS
Nominees for election as Class I directors are Gordon F. DuGan, Ralph F.
Verni and Reginald Winssinger. If elected, the nominees will serve as directors
until the Annual Meeting of W. P. Carey & Co. LLC in 2007, and until their
successors are elected and qualified. Unless otherwise specified, proxies will
be voted for the election of the named nominees. If a nominee is unavailable for
election, the Board may reduce its size or designate a substitute. If a
substitute is designated, proxies voting on the original nominee will be cast
for the substituted nominee. No circumstances are presently known that would
render the nominees unavailable. Each of the nominees is now a member of the
Board of Directors.
Detailed information on each member of the Board of Directors, including
each Class I nominee to be elected at the meeting, is provided below.
CLASS I NOMINEES TO SERVE UNTIL THE YEAR 2007
GORDON F. DUGAN
AGE: 37
Director Since: 1997
Mr. DuGan, President and Co-CEO of W. P. Carey & Co. LLC, joined W. P.
Carey & Co. as Assistant to the Chairman in 1988 and in 1995 was elevated to
Senior Vice President in the Acquisitions Department. From October 1995 until
February 1997 he was chief financial officer of a Colorado-based wireless
communications equipment manufacturer. Mr. DuGan rejoined W. P. Carey & Co. as
Deputy Head of Acquisitions in February 1997, and was elected to Executive Vice
President and Managing Director in June 1997, and was elevated to President in
1999 and elevated to Co-CEO in 2002. Mr. DuGan serves as Vice Chairman and
Co-CEO of CIP(R), CPA(R):12, CPA(R):14, CPA(R):15 and CPA(R):16 - Global and as
Trustee of the W. P. Carey Foundation. He also serves on the Board of the New
York Pops and the Hewitt School and is a member of the Young Presidents
Organization. Mr. DuGan received his B.S. in Economics from the Wharton School
at the University of Pennsylvania.
RALPH F. VERNI*
AGE: 61
Director Since: 2003
Mr. Verni was elected to the Board of Directors of W. P. Carey & Co. LLC in
December 2003. He served as an non-voting advisory member of W. P. Carey's
Investment Committee during 2003. Mr. Verni is currently serving on the Advisory
Board of Commonwealth Capital Ventures, L.P. I, II and III, venture capital
funds. In addition he serves on the Board of Directors and Compensation
Committee for the Macgregor Group, a Boston-based computer software firm serving
the investment management industry. He is also a member of Zurich Financial's
four-person Investment Advisory Board and the Board and Audit Committee of First
Pioneer Farm Credit, ACA, an agricultural lending institution chartered under
the Federal Farm Credit System. Mr. Verni also served as a Director of CIP(R),
CPA(R):12 and CPA(R):15 from 2001 until 2003. Until 2000, he served as
President, CEO and Director of Redwood Investment Systems, a start-up software
firm developing web-based and wireless solutions for investment professionals.
Prior to his service at Redwood Investment Systems, Mr. Verni was President and
CEO of State Street Research & Management, Metropolitan Life's investment
management subsidiary located in Boston. Mr. Verni joined State Street Research
in 1992 after serving 10 years as Executive Vice President, Board member and
Chief Investment Officer of The New England Mutual Life Insurance Company. While
at The New England, he founded and
3
served as President and Chief Executive Officer of New England Investment
Companies (CDC-NVEST today), a holding company of over ten money management
firms. At State Street Research and The New England, Mr. Verni served as
Chairperson of their various mutual funds. Prior to joining The New England, he
spent sixteen years in a variety of information systems and investment
management positions at The Equitable Life Assurance Society of the United
States (part of AXA Group today). Mr. Verni received a B.A. from Colgate
University, and M.B.A. from Columbia University, and Advanced Professional
Certificate in Finance from the NYU Graduate School of Business, a Certificate
from the AIMR/Harvard Investment Management Workshop, and is a Chartered
Financial Analyst. He is an Emeritus Trustee of Colgate University's Board of
Directors and former Chairman of its Investment Committee, where he currently
serves as an Advisory Member. He is an Emeritus Member of the Advisory Committee
for the MIT Center for Real Estate, having served as its first Chairperson.
Currently he is a member of the Boston Economic Club, the Commercial Club of
Boston, the New York Society of Security Analysts and the Association for
Investment Management and Research.
REGINALD WINSSINGER*
AGE: 61
Director Since: 1998
Mr. Winssinger was elected to the Board of Directors of W. P. Carey & Co.
LLC in 1998. Mr. Winssinger is founder and Chairman of National Portfolio, Inc.
(NPI), an Arizona-based firm involved in acquisition, financing, management and
construction of commercial, multi-family, industrial and land development real
estate projects. He represents the third generation of a respected real estate
family in Belgium, which is well known in Europe for its real estate appraisal,
construction and management capabilities. He spent ten years at the Winssinger
family real estate company in Belgium before coming to the United States in 1979
to expand their investment activity. Over a 20-year period he created and
managed a $500 million portfolio of U.S. real estate investment for U.S. and
European investors. He later formed Horizon Real Estate Group, Inc., doing
business as NAI Horizon in Phoenix, Arizona, a full service real estate firm
providing brokerage, property management, construction management and real
estate consulting services. That group has now expanded its activity to the Las
Vegas market. Mr. Winssinger currently manages multiple companies with real
estate investments primarily in Arizona, California and Texas. He also serves as
a director of Pierce-Eislen, Inc., and is the Honorary Consul of Belgium to
Arizona. He attended the Sorbonne and is an alumnus of the University of
California at Berkeley.
CLASS II DIRECTORS CONTINUING TO SERVE UNTIL THE YEAR 2005
FRANCIS J. CAREY
AGE: 78
Director Since: 1996
Mr. Carey was elected in 2000 as Vice Chairman of the Board of Directors
and Chairman of the Executive Committee of the Board of Directors of W. P. Carey
& Co. LLC. Mr. Carey served as Chairman, Chief Executive Officer and a Director
of Carey Diversified LLC from 1997 to 2000. From 1987 to 1997, Mr. Carey held
various positions with affiliates of W. P. Carey & Co., Inc., including
President of W. P. Carey & Co., Inc., and President and Director of CPA(R):10,
CIP(R) and CPA(R):12. Mr. Carey also served as Director of W. P. Carey & Co.,
Inc. from its founding in 1973 until 1997. Prior to 1987, he was senior partner
in Philadelphia, head of the real estate department nationally and a member of
the executive committee of Reed Smith LLP, counsel for W. P. Carey & Co. LLC. He
is currently President and Director of Livho Corporation, a subsidiary of W. P.
Carey & Co. LLC, served as a member of the executive committee and Board of
Managers of the Western Savings Bank of Philadelphia from 1972 until its
takeover by another bank in 1982, and is a former chairman of the Real Property,
Probate and Trust Section of the Pennsylvania Bar Association. He served as a
member of the Board of Overseers of the School of Arts and Sciences at the
University of Pennsylvania from 1983 to 1990. He has also served as a member of
the Board of Trustees and executive committee of the Investment Program
Association from 1990 to 2000, and as its Chairman from 1998 to 2000, and served
on the Business Advisory Council of the Business Council for the United Nations
from 1994 to 2002. He currently serves on the Board of Trustees of the Maryland
Historical
4
Society. He holds A.B. and J.D. degrees from the University of Pennsylvania and
completed executive programs in corporate finance and accounting at Stanford
University Graduate School of Business and the Wharton School of the University
of Pennsylvania. Mr. Carey is the brother of Wm. Polk Carey.
EBERHARD FABER, IV*
AGE: 67
Director Since: 1998
Mr. Faber was elected to the Board of Directors of W. P. Carey & Co. LLC in
1998 and is currently Chairman of the Board of King's College, Wilkes-Barre, PA.
Mr. Faber held various posts with Eberhard Faber Inc., the worldwide
manufacturer of writing products and art supplies, serving as Chairman and CEO
from 1973 until 1987, when the company merged into Faber-Castell Corporation. He
served as a Director of the Federal Reserve Bank of Philadelphia from 1980 to
1986, chairing its Budget and Operations Committee, and was Chairman of the
Board of Citizen's Voice Newspaper from 1992 to 2002. Currently, he is a member
of the Northeast Pennsylvania Advisory Board of PNC Bank, N.A., where he served
as a Director from 1994 to 1998, Trustee of the Geisinger Wyoming Valley
Hospital and the Eberhard L. Faber Foundation, and a Borough Councilman of Bear
Creek Village. In addition to graduating from Princeton University magna cum
laude, he was a member of Phi Beta Kappa while serving as Chairman of The Daily
Princetonian, and was a Fulbright Scholar and teaching fellow at the University
of Caen in France.
GEORGE E. STODDARD
AGE: 87
Director Since: 2000
Mr. Stoddard was appointed to the Board of Directors of W. P. Carey & Co.
LLC in 2000 and serves as Chairman of the Investment Committee. From 1979 to
2000, Mr. Stoddard was Chairman of the Investment Committee of W. P. Carey &
Co., Inc. Mr. Stoddard was until 1979 officer-in-charge of the Direct Placement
Department of The Equitable Life Assurance Society of the United States
("Equitable"), with responsibility for all activities related to Equitable's
portfolio of corporate investments acquired through direct negotiation. Mr.
Stoddard was associated with Equitable for over 30 years. He holds an A.B.
degree from Brigham Young University, an M.B.A. from Harvard Business School and
an LL.B. from Fordham University Law School. Mr. Stoddard is also a director of
CIP(R), CPA(R):12, CPA(R):14 and CPA(R):15.
KARSTEN VON KOLLER*
AGE: 64
Director Since: 2003
Mr. von Koller was elected to the Board of Directors of W. P. Carey & Co.
LLC in December 2003. Dr. von Koller is the former Chairman and Member of the
Board of Managing Directors of Eurohypo AG. Prior to this, from 1984 through
2001, he was a member of the Board of Managing Directors of RHEINHYP Rheinische
Hypothekenbank AG (Commerzbank group) where he was responsible for the bank's
commercial real estate lending activities outside Germany. Dr. von Koller was an
Executive Vice President of Berliner Handels-und Frankfurter Bank (BHF-BANK),
Frankfurt, and was responsible for the bank's corporate customer business in
northern and western Germany and in western industrial countries from 1981
through 1984. Before holding this position, from 1977 through 1980, he served as
Senior Vice President and co-manager of the New York branch of BHF-BANK. From
1971 through 1976, he served in the syndicated loan and investment banking
department of BHF-BANK, Frankfurt am Main. Dr. von Koller studied law at the
Universities of Bonn and Munich and is a graduate of Harvard Business School.
CLASS III DIRECTORS CONTINUING TO SERVE UNTIL THE YEAR 2006
WM. POLK CAREY
AGE: 73
Director Since: 1996
Mr. Carey, Chairman of the Board of Directors and Co-Chief Executive
Officer of W. P. Carey & Co. LLC, has been active in lease financing since 1959
and a specialist in net leasing of corporate real estate
5
property since 1964. Before founding W. P. Carey & Co., Inc. in 1973, he served
as Chairman of the executive committee of Hubbard, Westervelt & Mottelay (now
Merrill Lynch Hubbard), head of Real Estate and Equipment Financing at Loeb
Rhoades & Co. (now Lehman Brothers), head of Real Estate and Private Placements,
director of Corporate Finance and Vice Chairman of the Investment Banking Board
of duPont Glore Forgan Inc. A graduate of the University of Pennsylvania's
Wharton School, Mr. Carey also received his Sc.D. honoris causa from Arizona
State University and is a Trustee of The John Hopkins University and of other
educational and philanthropic institutions. He serves as Chairman of the Penn
Institute for Economic Research (PIER). Mr. Carey also serves as Chairman of the
Board and Chief Executive Officer of CIP(R), CPA(R):12, CPA(R):14, CPA(R):15 and
CPA(R):16 - Global. Mr. Carey is the brother of Francis J. Carey.
DR. LAWRENCE R. KLEIN*
AGE: 83
Director Since: 1998
Dr. Klein was elected to the Board of Directors of W. P. Carey & Co. LLC in
1998 and is Benjamin Franklin Professor Emeritus of Economics and Finance at the
University of Pennsylvania and its Wharton School, having joined the faculty of
the University in 1958. He is a holder of earned degrees from the University of
California at Berkeley, the Massachusetts Institute of Technology, and has been
awarded the Alfred Nobel Memorial Prize in Economic Sciences, as well as a
number of honorary degrees. Founder of Wharton Econometric Forecasting
Associates, Inc., Dr. Klein has been counselor to various corporations,
governments and government agencies, including WealthEffect.com, the Federal
Reserve Board and the President's Council of Economic Advisers. Dr. Klein joined
W. P. Carey & Co., Inc. in 1984 as Chairman of the Economic Policy Committee and
as a Director. He also serves as a Trustee of the W. P. Carey Foundation.
NATHANIEL S. COOLIDGE*
AGE: 65
Director Since: 2002
Mr. Coolidge was elected to the Board of Directors of W. P. Carey & Co. LLC
in 2002 and currently serves as Chairman of its Audit Committee. Mr. Coolidge,
former Senior Vice President of John Hancock Mutual Life Insurance Company,
retired in 1996 after 23 years of service. From 1986 to 1996, Mr. Coolidge
headed the Bond and Corporate Finance Department, which was responsible for
managing its entire fixed income investments portfolio. Prior to 1986, Mr.
Coolidge served as Second Vice President and Vice President. Mr. Coolidge is a
graduate of Harvard University and served as a U.S. naval officer.
CHARLES C. TOWNSEND, JR.*
AGE: 76
Director Since: 1998
Mr. Townsend was elected to the Board of Directors of W. P. Carey & Co. LLC
in 1998 and currently serves as Chairman of its Compensation Committee and as a
member of its Audit Committee. Mr. Townsend is an Advisory Director of Morgan
Stanley & Co., having held such position since 1979. He is also Chairman of the
Board of HTI Voice Solutions Inc., and a director of Cass County Iron Co. Mr.
Townsend was a Partner and a Managing Director of Morgan Stanley & Co. from 1963
to 1978 and served as Chairman of Morgan Stanley Realty Corporation from 1977 to
1982. Mr. Townsend holds a B.S.E.E. from Princeton University and an M.B.A. from
Harvard University. He is also the current Treasurer of the Princeton Healthcare
System Foundation, a non-profit organization. Mr. Townsend served as a director
of CIP(R) and CPA(R):14 until 2000.
* Independent Director
6
EXECUTIVE OFFICERS OF W. P. CAREY & CO. LLC
W. P. Carey & Co. LLC's executive officers are elected annually by the
Board of Directors. Detailed information regarding the executive officer who is
not a director is set forth below.
JOHN J. PARK
AGE: 39
Mr. Park is a Managing Director and Chief Financial Officer of W. P. Carey
& Co. LLC. Mr. Park became a First Vice President of W. P. Carey & Co. in April
1993 and a Senior Vice President in October 1995. Mr. Park joined W. P. Carey &
Co., Inc. as an Investment Analyst in December 1987 and became a Vice President
in July 1991. Mr. Park received a B.S. in Chemistry from Massachusetts Institute
of Technology in 1986 and an M.B.A. in Finance from the Stern School of New York
University in 1991. Mr. Park is also Managing Director and Chief Financial
Officer of CIP(R), CPA(R):12, CPA(R):14, CPA(R):15 and CPA(R):16 - Global.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of shares as of the April 12, 2004 record date by each of W. P. Carey
& Co. LLC's directors, Chief Executive Officer and the executive officers named
in the summary compensation table below. The business address of the individuals
listed is 50 Rockefeller Plaza, New York, NY 10020. Wm. Polk Carey beneficially
owns 35.73% of the shares, Francis J. Carey beneficially owns 1.37% and Gordon
F. DuGan beneficially owns 1.67% of the shares, respectively, of W. P. Carey &
Co. LLC. No other director or officer beneficially owns more than 1% of the
shares of W. P. Carey & Co. LLC. The directors and all executive officers as a
group own approximately 40.17% of the shares.
<Table>
<Caption>
AMOUNT OF SHARES
NAME BENEFICIALLY OWNED(1) PERCENTAGE
- ---- --------------------- ----------
Francis J. Carey(2)......................................... 513,071 1.37%
Wm. Polk Carey(3)........................................... 13,350,986 35.73%
Gordon F. DuGan(4).......................................... 625,279 1.67%
Eberhard Faber, IV(5)(6).................................... 23,441 *
Lawrence R. Klein........................................... 6,753 *
Nathaniel S. Coolidge(10)................................... 2,583 *
Charles C. Townsend, Jr.(6)(9).............................. 17,090 *
Reginald Winssinger(6)...................................... 18,975 *
George E. Stoddard(7)....................................... 95,313 *
Karsten von Koller.......................................... 1,511 *
Ralph F. Verni.............................................. 1,511 *
John J. Park(8)............................................. 356,204 *
All Directors and Executive Officers as a Group (12
individuals).............................................. 15,012,717 40.17%
</Table>
- ---------------
* Less than 1%
(1) Beneficial ownership has been determined in accordance with the rules of
the Securities and Exchange Commission. Except as noted, and except for any
community property interest owned by spouses, the listed individuals have
sole investment power and sole voting power as to all shares which they are
identified as being the beneficial owners.
(2) The amount shown includes 363,500 shares which Mr. Carey has the right to
acquire through the exercise of stock options within 60 days after May 31,
2004 under the 1997 Listed Share Incentive Plan.
(3) Includes 5,733,476.32 shares held by W. P. Carey & Co., Inc. for which Mr.
Carey is deemed to be the beneficial owner. This amount also includes
271,816 shares which Mr. Carey has the right to acquire
7
through the exercise of stock options within 60 days after May 31, 2004
under the 1997 Listed Share Incentive Plan. This amount also includes
3,010,730 shares which W. P. Carey & Co., Inc. has the right to acquire
through the exercise of stock options. See "Certain Transactions."
(4) Includes 50,000 shares which Mr. DuGan has the right to acquire through the
exercise of stock options within 60 days after May 31, 2004 under the 1997
Listed Share Incentive Plan.
(5) Includes 4,675 shares held by the Faber Family Trust, of which Mr. Faber is
a trustee and a beneficiary. Does not include 1,590 shares held by the
Faber Foundation.
(6) The amount shown includes 4,000 shares which each of these directors has
the right to acquire pursuant to stock options exercisable within 60 days
of May 31, 2004 under the W. P. Carey & Co. LLC Non-Employee Director Plan.
(7) The amounts shown include 25,000 shares which Mr. Stoddard has the right to
acquire through the exercise of stock options within 60 days after May 31,
2004 under the 1997 Listed Share Incentive Plan.
(8) The amounts shown include 24,666 shares which Mr. Park has the right to
acquire through the exercise of stock options within 60 days after May 31,
2004 under the 1997 Listed Share Incentive Plan. This amount also includes
50,978 shares held indirectly by his wife and 500 shares held indirectly by
his son.
(9) The amount shown includes 2,100 shares held in trust for the benefit of Mr.
Townsend's children and grandchildren, with respect to which Mr. Townsend
disclaims beneficial ownership.
(10) The amount shown includes 1,333 shares which Mr. Coolidge has the right to
acquire pursuant to stock options exercisable within 60 days of May 31,
2004 under the W. P. Carey & Co. LLC Non-Employee Director Plan.
COMMITTEES OF THE BOARD OF DIRECTORS
Members of the Board of Directors have been appointed to serve on various
committees of the Board of Directors. The Board of Directors has currently
established four committees: (i) the Executive Committee; (ii) the Compensation
Committee; (iii) the Audit Committee; and (iv) the Nominating and Corporate
Governance Committee.
- EXECUTIVE COMMITTEE. The Executive Committee may authorize the execution
of contracts and agreements, including those related to the borrowing of
money by W. P. Carey & Co. LLC. The Executive Committee will exercise,
during intervals between meetings of the Board of Directors and subject
to certain limitations, all of the powers of the full Board of Directors
and will monitor and advise the Board of Directors on strategic business
planning for W. P. Carey & Co. LLC. There were fifteen Executive
Committee meetings held during 2003.
- COMPENSATION COMMITTEE. The Compensation Committee is responsible for
assuring that the officers and key management personnel of W. P. Carey &
Co. LLC are effectively compensated in terms of salaries, supplemental
compensation and benefits which are internally equitable and externally
competitive. The Compensation Committee reviews annually the compensation
and allowances for directors, reviews and approves distribution of
incentive compensation or bonuses and the design of any new supplemental
compensation program and reviews and approves the number of shares, price
per share and period of duration for stock grants under any approved
share incentive plan. There were twelve Compensation Committee meetings
held during 2003.
- AUDIT COMMITTEE. The Audit Committee has been established to engage
independent public accountants, review with the independent public
accountants the plans and results of the audit engagement, approve
professional services provided by the independent public accountants,
review the independence of the independent public accountants and
consider the range of audit and non-audit fees. The Committee also
reviews and discusses with management, the internal auditors and the
8
independent public accountants, the company's internal controls and the
results of the internal audit program. There were eight Audit Committee
meetings held during 2003.
- NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. The Nominating and
Corporate Governance Committee is responsible for developing and
implementing policies and practices relating to corporate governance,
including monitoring implementation of W. P. Carey & Co. LLC's corporate
governance policies. In addition, the Committee develops and reviews
background information for candidates for the Board of Directors,
including those recommended by shareholders, and makes recommendations to
the Board regarding such candidates. The Nominating and Corporate
Governance Committee met four times during fiscal 2003.
The Board has adopted written charters for each of the Compensation, Audit
and Nominating and Corporate Governance Committees, each of which can be viewed
on our website, www.wpcarey.com, under the heading "WPC Investor Relations."
Written copies of each may also be obtained upon a request submitted to our
Investor Relations department.
BOARD MEETINGS AND DIRECTORS' ATTENDANCE
There were four Board meetings held in 2003. No incumbent director attended
fewer than 75% of the total number of Board meetings in 2003 held during the
time each incumbent was a director. Under our Corporate Governance Guidelines,
each director is required to make every effort to attend each Board meeting and
applicable Committee meetings, except in unavoidable circumstances. Five of our
directors attended our 2003 Annual Meeting.
The independent directors, at the Board of Directors' meeting in June 2004,
will select a Lead Director whose primary responsibility will be to preside over
periodic executive sessions of the Board in which affiliated directors and other
members of management will not participate. The Lead Director will serve in this
position for a one-year term.
BOARD COMMITTEE MEMBERSHIP ROSTER
<Table>
<Caption>
NOMINATING AND
NAME EXECUTIVE COMPENSATION AUDIT CORPORATE GOVERNANCE
- ---- --------- ------------ ----- --------------------
Wm. Polk Carey............................ X
Francis J. Carey.......................... X*
Gordon F. DuGan........................... X
George E. Stoddard........................ X
Charles C. Townsend, Jr................... X* X
Eberhard Faber, IV........................ X X X*
Nathaniel S. Coolidge..................... X*
Reginald Winssinger....................... X X
Lawrence R. Klein......................... X
Karsten von Koller........................
Ralph F. Verni............................ X**
</Table>
- ---------------
* Chairman of Committee
** Financial Expert
The Board of Directors has determined that all directors who serve on the
Compensation, Audit and Nominating and Corporate Governance Committees are
"independent" as defined in the New York Stock Exchange listing standards. That
is, the Board of Directors has determined that none of such directors has a
relationship to W. P. Carey & Co. LLC that may interfere with his independence
from W. P. Carey & Co. LLC and its management.
9
COMPENSATION OF THE BOARD OF DIRECTORS
W. P. Carey & Co. LLC pays its directors who are not its officers fees for
their services as directors. Such directors receive annual compensation of
$65,000. The annual compensation is paid with $7,500 in cash payable quarterly,
$7,500 payable quarterly in the form of restricted shares or options to purchase
shares and a $1,250 cash fee per meeting attended. Messrs. Townsend, Coolidge
and Faber each receive an additional $10,000 for serving as the Chairman of the
Compensation, Audit and Nominating and Corporate Governance Committees,
respectively. Officers or employees of W. P. Carey & Co. LLC or its subsidiaries
who are directors are not paid any director fees. Directors who are members of
the Investment Committee of Carey Asset Management Inc., a subsidiary of the
Company, receive a fee of $1,000 per Investment Committee Meeting. The
Non-Employee Directors' Plan authorizes the issuance of up to 300,000 shares.
EXECUTIVE COMPENSATION
All management functions of W. P. Carey & Co. LLC are provided by its
wholly-owed subsidiary, Carey Asset Management Corp. All policy-making functions
are carried out by executive officers of Carey Asset Management Corp. who hold
the same titles as officers of W. P. Carey & Co. LLC. The following tables set
forth the compensation earned by and option information relating to Mr. Wm. Polk
Carey and Mr. DuGan, W. P. Carey & Co. LLC's Co-Chief Executive Officers during
2003 and the three next highest paid executive officers who performed
policy-making functions for W. P. Carey & Co. LLC during 2003.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG TERM COMPENSATION
------------------------------
NUMBER OF
ANNUAL COMPENSATION VALUE OF SECURITIES
------------------------------ RESTRICTED STOCK UNDERLYING
YEAR SALARY BONUS AWARDS OPTIONS
---- -------- ---------- ---------------- ----------
Wm. Polk Carey..................... 2003 $250,000 $1,000,000
Chairman & Chief Executive 2002 250,000 1,000,000 -- --
Officer 2001 250,000 250,000 -- 182,725
Gordon F. DuGan(1)................. 2003 500,000 1,000,000 -- 100,000
President and Co-CEO 2002 237,500 1,237,500 -- --
2001 200,000 793,600 -- 75,000
Francis J. Carey................... 2003 250,000 300,000 -- --
Vice Chairman and Former Chief 2002 212,500 300,000 -- --
Executive Officer 2001 250,000 165,000 $460,000 --
George E. Stoddard................. 2003 250,000 300,000 -- --
Chief Investment Officer 2002 250,000 300,000 -- --
2001 250,000 300,000 230,000 --
John J. Park(2).................... 2003 200,000 500,000 594,000 50,000
Managing Director and Chief 2002 200,000 450,000 -- --
Financial Officer 2001 200,000 300,000 69,000 37,000
</Table>
- ---------------
(1) In February 2004 the Compensation Committee approved a grant of 100,000
options in partial payment of 2003 compensation to Mr. DuGan, exercisable in
years five to nine from the date of the grant.
(2) In February 2004 the Compensation Committee approved a grant of 20,000
restricted shares and 50,000 options in partial payment of 2003 compensation
to Mr. Park. The options are exercisable in years seven and eight from the
date of the grant.
10
OPTIONS GRANTED IN FISCAL YEAR 2003
No options were granted to the five executive officers of the Company
during 2003.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2003
AND FISCAL YEAR-END OPTION VALUES
<Table>
<Caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
ACQUIRED ON VALUE ---------------------------- ----------------------------
EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ ---------- ----------- ------------- ----------- -------------
Wm. Polk Carey....... 160,908 171,817 $1,684,028 $1,529,064
Francis J. Carey..... 313,500 50,000 3,822,020 613,000
Gordon F. DuGan...... 49,845 $1,089,113 25,000 50,000 188,000 376,000
George E. Stoddard... 25,000 0 356,750 0
John J. Park......... 19,948 $ 451,250 12,333 24,667 92,744 185,496
</Table>
EQUITY COMPENSATION PLAN INFORMATION
<Table>
<Caption>
WEIGHTED-
AVERAGE EXERCISE
NUMBER OF SECURITIES PRICE OF
TO BE ISSUED UPON OUTSTANDING NUMBER OF SECURITIES
EXERCISE OF OPTIONS, REMAINING AVAILABLE FOR
OUTSTANDING OPTIONS, WARRANTS AND FUTURE ISSUANCE UNDER
PLAN CATEGORY WARRANTS AND RIGHTS RIGHTS EQUITY COMPENSATION PLANS
- ------------- -------------------- ----------------- -------------------------
Equity compensation plans approved by
security holders.................... 2,185,372 $22.16 3,280,683
</Table>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is comprised entirely of independent directors
and is responsible for acting on behalf of the Board with respect to (i) general
compensation and benefit practices of W. P. Carey & Co. LLC, (ii) reviewing and
making recommendations to the Board of Directors of salaries and other
compensation actions for Wm. Polk Carey, Francis J. Carey, George E. Stoddard,
Gordon F. DuGan and John J. Park, and (iii) adopting, administering and
approving or recommending the approval by the Board of Directors of awards under
annual and long-term incentive compensation plans.
Compensation Philosophy
The Compensation Committee is committed to a compensation philosophy that
rewards employees on the basis of W. P. Carey & Co. LLC's success in attaining
corporate financial objectives as well as on the basis of the employees' success
in attaining individual financial and qualitative performance objectives. W. P.
Carey & Co. LLC's compensation program is designed to:
- Attract, motivate, reward and retain highly qualified executives.
- Align shareholder and employee interests.
- Reward long-term career contributions to W. P. Carey & Co. LLC.
- Emphasize the variable portion of total compensation (cash and stock) as
an individual's level of responsibility increases.
11
- Provide fully competitive compensation opportunities consistent with
performance.
- Encourage teamwork.
During 2003, the Compensation Committee conducted a review of W. P. Carey &
Co. LLC's executive compensation programs, assessing the effectiveness of the
programs and relative competitiveness versus identified companies of similar
size and business characteristics to W. P. Carey & Co. LLC. This comparable
group included companies from both the real estate investment trust and
diversified financial marketplace representing the most direct competitors for
executive talent.
Key Elements of Compensation
The key elements of W. P. Carey & Co. LLC's executive compensation program
are base salary, employee benefits, annual bonus and long-term stock incentives.
As an executive's level of responsibility increases, a greater portion of total
compensation is based on long-term performance-based incentive compensation and
less on salary and employee benefits, creating the potential for greater
variability in the individual's compensation level from year to year. The mix,
level and structure of performance-based incentive elements is intended to
reflect industry practices as well as the executive's role and relative impact
on the business. The Compensation Committee believes that company performance
should be measured on the basis of both quantitative and qualitative
assessments. Quantitative measures include performance in areas such as growth
in funds from operations (FFO), cash flow from operations, net operating income
growth, operating margins, return on invested capital and market value.
Qualitative measures include performance in the areas such as asset quality,
asset management, risk management and tenant retention. These quantitative and
qualitative measures are not formally weighted for purposes of determining
salaries or incentive awards.
Section 162(m) of the Internal Revenue Code denies a deduction for
compensation in excess of $1 million paid to certain executive officers, unless
certain performance, disclosure, and stockholder approval requirements are met.
Option and restricted stock grants under the W. P. Carey & Co. LLC 1997 Listed
Share Incentive Plan are intended to qualify as "performance-based" compensation
not subject to the Section 162(m) deduction limitation.
Submitted by the Compensation
Committee:
Charles C. Townsend, Jr., Chairman
Eberhard Faber, IV
Reginald Winssinger
12
AUDIT COMMITTEE REPORT
The following Audit Committee Report does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other W. P. Carey & Co. LLC filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent W. P. Carey & Co. LLC
specifically incorporates this Report by reference therein.
The Audit Committee of the Board of Directors reports as follows with
respect to the audit of W. P. Carey & Co. LLC's fiscal 2003 audited financial
statements.
The audit functions of the Committee focus on the adequacy of W. P. Carey &
Co. LLC's internal controls and financial reporting procedures, the performance
of W. P. Carey & Co. LLC's internal audit functions and the independence and
performance of W. P. Carey & Co. LLC's independent auditors,
PricewaterhouseCoopers LLP. The Committee meets periodically with management to
consider the adequacy of internal controls and the objectivity of W. P. Carey &
Co. LLC's financial reporting. The Committee discusses these matters with
appropriate internal financial personnel as well as independent auditors. W. P.
Carey & Co. LLC has also engaged KPMG to manage its internal audit function. The
Committee held four regularly scheduled quarterly meetings during 2003, and also
met four additional times prior to each of W. P. Carey & Co. LLC's four earnings
releases.
Management has primary responsibility for W. P. Carey & Co. LLC's financial
statements and the overall reporting process, including W. P. Carey & Co. LLC's
system of internal controls. The independent auditors audit the annual financial
statements prepared by management, express an opinion on the conformity of the
audited financial statements with accounting principles generally accepted in
the United States of America and discuss with the Committee any issues they
believe should be raised with us. The Committee monitors these processes,
relying without independent verification on the information provided to us and
on the representations made by management and the independent auditors.
The Committee has reviewed and discussed the audited financial statements
with the management of W. P. Carey & Co. LLC. The directors who serve on the
Audit Committee are all "independent" as defined in the New York Stock Exchange
listing standards and applicable rules of the Securities and Exchange
Commission. That is, the Board of Directors has determined that none of us has a
relationship to W. P. Carey & Co. LLC that may interfere with our independence
from W. P. Carey & Co. LLC and its management.
The Committee has discussed with the independent auditors, the matters
required to be discussed by Statement on Auditing Standards No. 61. The
Committee has received written disclosures and the letter from the independent
auditors required by Independence Standards Board Standard No. 1 and has
discussed with the auditors the auditors' independence from W. P. Carey & Co.
LLC and, based on review and discussions of the audited financial statements of
W. P. Carey & Co. LLC with management and discussions with the independent
auditors, the Audit Committee recommended to the Board of Directors that the
audited financial statements for the fiscal year ended December 31, 2003 be
included in the Annual Report on Form 10-K for filing with the Securities and
Exchange Commission. The Board of Directors has adopted a formal written charter
for the Audit Committee.
Submitted by the Audit Committee:
Nathaniel S. Coolidge, Chairman
Eberhard Faber, IV
Charles C. Townsend, Jr.
Ralph F. Verni
13
FINANCIAL EXPERT
The Board of Directors has determined that Ralph F. Verni, an independent
director and member of the Audit Committee, is a "financial expert" as defined
in Item 401 of Regulation S-K under the Securities Act of 1933, as amended.
FEES BILLED BY PRICEWATERHOUSECOOPERS LLP DURING FISCAL YEARS 2003 AND 2002
The following table sets forth the approximate aggregate fees billed to W.
P. Carey & Co. LLC during fiscal years 2003 and 2002 by PricewaterhouseCoopers
LLP, categorized in accordance with SEC definitions and rules:
<Table>
<Caption>
2003 2002
---------- ----------
Audit Fees(1)............................................... $ 508,900 $ 243,500
Audit Related Fees(2)....................................... 53,200 40,000
Tax Fees(3)................................................. 1,094,100 799,500
All Other Fees(4)........................................... -- --
---------- ----------
Total Fees................................................ $1,656,200 $1,083,000
</Table>
- ---------------
(1) AUDIT FEES: This category consists of fees for professional services
rendered for the audit of W. P. Carey & Co. LLC's fiscal 2003 and 2002
financial statements included in the Annual Reports on Form 10-K, the review
of the financial statements included in the Quarterly Reports on Form 10-Q
for the quarters ended March 31, June 30, and September 30, 2003 and 2002,
and other audit services including certain statutory audits and SEC
registration statement review and the related issuance of comfort letters
and consents.
(2) AUDIT RELATED FEES: This category consists of audit related services
performed by PricewaterhouseCoopers LLP and includes primarily accounting
consultations in connection with transactions and the audit of the benefit
plan.
(3) TAX FEES: This category consists of fees billed to W. P. Carey & Co. LLC by
PricewaterhouseCoopers LLP for tax compliance and consultation services.
(4) ALL OTHER FEES: No fees were billed for other services rendered by
PricewaterhouseCoopers LLP for the years ended 2003 and 2002.
PRE-APPROVAL POLICIES
The Audit Committee's policy is to pre-approve all audit and permissible
non-audit services provided by the independent auditors. These services may
include audit services, audit-related services, tax services and other services.
Pre-approval is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services. The independent
auditor and management are required to report periodically to the Audit
Committee regarding the extent of services provided by the independent auditor
in accordance with this pre-approval, and the fees for the services performed to
date. The Audit Committee may also pre-approve particular services on a
case-by-case basis. For fiscal year 2003, pre-approved non-audit services
included all of those services described above for "Audit Related Fees" and "Tax
Fees."
SHAREHOLDER PROPOSALS AND OTHER COMMUNICATIONS
SHAREHOLDER PROPOSALS
The date by which shareholder proposals must be received by W. P. Carey &
Co. LLC for inclusion in proxy materials relating to the 2005 Annual Meeting of
Shareholders is December 15, 2004.
14
In order to be considered at the 2005 Annual Meeting, shareholder
proposals, including shareholder nominations for director, must comply with the
advance notice and eligibility requirements contained in W. P. Carey & Co. LLC's
By-Laws. The By-Laws provide that shareholders are required to give advance
notice to W. P. Carey & Co. LLC of any business to be brought by a shareholder
before an annual shareholders' meeting. For business to be properly brought
before an annual meeting by a shareholder, the shareholder must give timely
written notice thereof to the Secretary of W. P. Carey & Co. LLC. In order to be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Company not fewer than 90 days nor more
than 120 days prior to the first anniversary of the preceding year's annual
meeting. In the event that the date of the annual meeting is advanced by more
than 30 days or delayed by more than 60 days from such anniversary date, notice
by the shareholder to be timely must be delivered not earlier than the 120th day
prior to such annual meeting and not later than the close of business on the
later of the 90th day prior to such annual meeting or the tenth day following
the day on which public announcement of the date of such meeting is first made.
The notice shall set forth (a) as to each person whom the shareholder proposes
to nominate for election or reelection as a director, all information relating
to such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (including
such person's written consent to being named in the proxy statement as a nominee
and to serving as a director if elected); (b) as to any other business that the
Shareholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
shareholder and of the beneficial owner, if any, on whose behalf the proposal is
made; and (c) as to the shareholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made, (i) the name and
address of such shareholder, as they may appear on the Company's books, and of
such beneficial owner and (ii) the class and number of shares of W. P. Carey &
Co. LLC which are owned beneficially and of record by such shareholder and such
beneficial owner.
A copy of the Company's Bylaws is available upon request. Such requests and
any shareholder proposals should be sent to Susan C. Hyde, Secretary, W. P.
Carey & Co. LLC, 50 Rockefeller Plaza, New York, NY 10020. These procedures
apply to any matter that a shareholder wishes to raise at the 2005 Annual
Meeting, including those matters raised other than pursuant to 17 C.F.R.
ss.240.14a-8 of the rules and regulations of the SEC. A shareholder proposal
that does not meet the above requirements will be considered untimely, and any
proxy solicited by W. P. Carey & Co. may confer discretionary authority to vote
on such proposal.
COMMUNICATION WITH THE BOARD
Shareholders who wish to send communications on any topic to the Board, the
lead director or the independent directors as a group may do so by writing to
the Lead Director, or if one is not in place, the Chairman of the Nomination and
Corporate Governance Committee, W. P. Carey & Co. LLC, 50 Rockefeller Plaza, New
York, NY 10020. The Nominating and Corporate Governance Committee has approved a
process for handling communications to the Board in which the Corporate
Secretary, Susan C. Hyde, monitors communications from shareholders and provides
copies or summaries of such communications to the directors as she considers
appropriate. Generally, communications are forwarded to all directors or to a
specifically addressed director if they relate to important substantive matters
and include suggestions or comments that Ms. Hyde considers to be important to
the directors to know. In general, communications relating to corporate
governance and long-term corporate strategy are more likely to be forwarded than
communications relating to ordinary business affairs, personal grievances and
matters as to which we tend to receive repetitive or duplicative communications.
All communications will be retained, and member of the Board will have access to
all communications if they so request. The Board will give appropriate attention
to written communications that are submitted by shareholders, and will respond
if and as appropriate.
15
PERFORMANCE GRAPH
The graph below provides an indicator of cumulative shareholder returns for
W. P. Carey & Co. LLC as compared with the S&P 500 Stock Index and the National
Association of Real Estate Investment Trusts (NAREIT) Index.
(PERFORMANCE GRAPH)
<Table>
<Caption>
WPC S&P 500 NAREIT INDEX
--- ------- ------------
01/01/98 100 100 100
12/31/98 106.71 128.58 82.5
12/31/99 100.88 155.62 78.69
12/31/00 119.21 139.84 99.43
12/31/01 165.63 122.75 113.29
12/31/02 189.54 95.62 117.61
12/31/03 247.99 123.05 161.29
</Table>
DIRECTOR INDEPENDENCE
In March 2004, the Board of Directors adopted W. P. Carey & Co. LLC's
Corporate Governance Guidelines. The Guidelines adopted by the Board meet or
exceed the new listing standards adopted during the year by the New York Stock
Exchange. The Guidelines can be found in the "WPC Investor Relations" section of
our website (www.wpcarey.com). A copy may also be obtained upon request from our
Secretary.
Pursuant to the Guidelines, the Board undertook its annual review of
director independence in March 2004. During this review, the Board considered
transactions and relationships between each director or any member of his or her
immediate family and W. P. Carey & Co. LLC and its subsidiaries and affiliates,
including those reported under "Certain Relationships and Related Transactions"
below. The Board also examined transactions and relationships between directors
or their affiliates and members of our senior management or their affiliates. As
provided in the Guidelines, the purpose of this review was to determine whether
any such relationships or transactions were inconsistent with a determination
that the director is independent.
The New York Stock Exchange also requires that the board of directors
determine whether a director is "independent" for purposes of the Exchange's
Listing Standards. The Nominating and Corporate Governance Committee has asked
each director to specify in writing the nature of any material relationships the
director may have with the Company, including, but not limited to, any
relationships that would specifically preclude a finding of "independence" under
the Listing Standards. Upon review of these disclosures, the Board has
affirmatively determined that none of the directors noted as "independent" in
this proxy statement has a material relationship with W. P. Carey & Co. LLC that
would preclude such director's independence.
As a result of this review, the Board affirmatively determined that Messrs.
Coolidge, Faber, Klein, Townsend, Verni, von Koller and Winssinger are
independent of the Company and its management under the standards set forth in
the Corporate Governance Guidelines. Messrs. Wm. Carey, Francis Carey, DuGan and
Stoddard are considered affiliated directors because of their relationship to or
employment as senior executives of W. P. Carey & Co. LLC and its affiliates.
16
CODES OF ETHICS
The Company's Board of Directors has adopted a Code of Ethics which sets
forth the standards of business conduct and ethics applicable to all of our
employees, including our principal executive officers and directors. The Board
of Directors has also adopted a Code of Ethics for Chief Executive Officers and
Senior Financial Officers, which contain additional standards for senior
officers. Both of these codes are available on the Company's website
(www.wpcarey.com) in the "WPC Investor Relations" section. We also intend to
post amendments to or waivers from the Code of Ethics (to the extent applicable
to our co-chief executive officers, principal financial officer and principal
accounting officer) or to the Code of Ethics for Chief Executive Officers and
Senior Financial Officers at this location on the website.
CERTAIN TRANSACTIONS
AMOUNTS PAID TO W. P. CAREY & CO. LLC FROM AFFILIATES
In connection with the acquisition of the operations of Carey Management
LLC in June 2000, the purchase agreement between the Company and Carey
Management LLC provides for a total of up to 2,000,000 shares to be issued to
senior members of Carey Management LLC over four years if certain performance
criteria are achieved. During 2004, 500,000 shares were issued in connection
with W. P. Carey & Co. LLC meeting the performance criteria for the applicable
period ended during 2003. To date, 1,900,000 of the 2,000,000 possible shares
have been earned and paid.
W. P. Carey & Co. LLC earns fees as the Advisor to the five affiliated
CPA(R) REITs. Under the advisory agreements with the CPA(R) REITs, W. P. Carey &
Co. LLC performs services related to the day-to-day management of the CPA(R)
REITs and transaction-related services. In addition, W. P. Carey & Co. LLC's
broker-dealer subsidiary earns fees in connection with the on-going "best
efforts" public offering of CPA(R):16 - Global. W. P. Carey & Co. LLC earns an
asset management fee of 1/2 of 1% per annum of Average Invested Assets, as
defined in the Agreements, for each CPA(R) REIT and, based upon certain
performance criteria for each CPA(R) REIT, may be entitled to receive a
performance fee of 1/2 of 1% of Average Invested Assets (for CPA(R):16 - Global,
W. P. Carey & Co. LLC earns no performance fee, but earns an asset management
fee of 1% of Average Invested Assets, one-half of which is subject to certain
performance criteria). W. P. Carey & Co. LLC is reimbursed for the cost of
personnel provided for the administration of the CPA(R) REITs. For the
twelve-month period ended December 31, 2003, asset-based fees and reimbursements
earned were $53,103,035. For the twelve-month period ended December 31, 2003, W.
P. Carey & Co. LLC earned transaction fees of $34,956,905 in connection with
structuring and negotiating real estate acquisitions and mortgage financing for
the CPA(R) REITs.
LIVHO, INC. TRANSACTION
In connection with the consolidation of the nine CPA(R) partnerships, W. P.
Carey & Co. LLC obtained a hotel in Livonia, Michigan which was not subject to a
lease. W. P. Carey & Co. LLC would be taxed as a corporation if it received more
than a small percentage of its income from the operation of a hotel. In order to
avoid taxation as a corporation, W. P. Carey & Co. LLC leased the hotel to Livho
Inc., a corporation wholly-owned by Francis J. Carey, its chairman, pursuant to
a two-year lease. Livho Inc.'s rent for 2003 was $1,800,000. Livho, Inc.'s net
loss for 2003 was approximately $242,000. Francis J. Carey, as sole shareholder,
did not receive a dividend payment from Livho, as excess cash flow was applied
to rental arrearages due to W. P. Carey & Co. LLC. It is not anticipated that
Livho will pay any dividends until such rental arrearage, which totaled
$1,344,000 as of December 31, 2003, is paid in full.
17
REGINALD WINSSINGER INVESTMENTS
W. P. Carey & Co. LLC director Reginald Winssinger and members of his
family are co-investors with W. P. Carey & Co. LLC in several of the Company's
properties that are located in France. Specifically, Mr. Winssinger and/or his
family members purchased, at the time of and on the same terms as the purchase
of the properties by W. P. Carey & Co. LLC, (i) a 7.2% ownership interest in the
properties leased to multiple tenants in Pantin, France for an original
investment of $139,000, (ii) a 7.2% ownership interest in the property leased to
Tellit Assurances for an original investment of $76,289, (iii) a 7.2% ownership
interest in the property leased to Direction Regional Des Affaires Sanitaires et
Sociales for an original investment of $39,552, (iv) a 5.8% ownership interest
in the property leased to Societe de Traitements DSM Food Specialties for an
original investment of $45,826 and (v) a 15% ownership interest in the
properties leased to Bouyges Telecom SA for an original investment of $525,383.
These properties were purchased between May 1998 and December 2001.
OTHER TRANSACTIONS
W. P. Carey International LLC ("WPCI") is an investment banking firm that
structures net lease transactions outside of the United States of America,
France and the United Kingdom and is majority owned by W. P. Carey & Co. LLC.
Prior to April 1, 2003, WPCI was 10% owned by W. P. Carey & Co. LLC and 90%
owned by Wm. Polk Carey, Chairman of W. P. Carey & Co. LLC. Effective April 1,
2003, Mr. Carey withdrew as a member of WPCI, leaving W. P. Carey & Co. LLC as
the remaining sole member. Upon his withdrawal, Mr. Carey received the return of
his initial capital contribution in WPCI, 492,881 Listed Shares of W. P. Carey &
Co. LLC plus dividends paid on those shares to WPCI of $1,472,482.16 since the
date of the contribution. In July 2003, WPCI issued membership interests equal
to 15% of WPCI in the aggregate to two officers of WPCI.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of its records and written representations, W. P. Carey &
Co. LLC believes that during 2003, its officers and directors complied with the
beneficial ownership reporting requirements of the Securities Exchange Act,
except that each of Messrs. Townsend, Klein, Winssinger and Faber received 299
shares of W. P. Carey & Co. LLC on May 14, 2003 but, due to an administrative
error, did not file their respective Form 4s in a timely fashion. A Form 4
disclosing these issuances was filed for each such director on June 23, 2003.
INDEPENDENT PUBLIC ACCOUNTANTS
From W. P. Carey & Co. LLC's inception, it has engaged the firm of
PricewaterhouseCoopers LLP as its independent public accountants. It has
selected PricewaterhouseCoopers LLP as auditors for 2004. A representative of
PricewaterhouseCoopers LLP will be present at the Annual Meeting to respond to
questions.
18
VOTE BY INTERNET-WWW.PROXYVOTE.COM
MELLON INVESTORS SERVICES Use the Internet to transmit your voting
85 CHALLENGER ROAD instructions and for electronic delivery of
RIDGEFIELD, NJ 07663 information up until 11:59 P.M. Eastern Time
the day before the cut-off date or meeting
date. Have your proxy card in hand when you
access the web site and follow the
instructions to obtain your records and to
create an electronic voting instruction
form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit
your voting instructions up until 11:59 P.M.
Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in
hand when you call and then follow the
instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and
return it in the postage-paid envelope we've
provided or return to W. P. Carey & Co. LLC,
c/o ADP, 51 Mercedes Way, Edgewood, NY
11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
WPCRY1 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
W. P. CAREY & CO. LLC
Vote on Directors
1. To elect three Class I directors, each to hold office for a three-year
term and until their respective successors are elected and qualified.
Nominee: 01) Gordon F. DuGan,
02) Ralph F. Verni
03) Reginald Winssinger
To transact such other business as may properly come before the meeting.
For comments, please check this box and write the changes on the back where
indicated [ ]
YES NO
Please indicate if you plan to attend this meeting [ ] [ ]
HOUSEHOLDING ELECTION - Please indicate if
you consent to receive certain future investor
communications in a single package per household [ ] [ ]
- --------------------------------- --------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
FOR WITHHOLD FOR ALL TO withhold authority to vote, mark "For All
Except" and write the nominee's number on
ALL ALL EXCEPT the line below.
[ ] [ ] [ ] --------------------------------------------
YES NO
Please indicate if you wish to view meeting
materials electronically via the Internet
rather than receiving a hard copy, please
note that you will continue to receive a
proxy card for voting purposes only [ ] [ ]
- --------------------------------- --------------------------
Signature [Joint Owners] Date
W. P. CAREY & CO. LLC
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
JUNE 10, 2004
The shareholder(s) hereby appoint(s) John J. Park and Claude Fernandez, and each
of them, with full power of substitution, as proxy to vote all listed shares of
W. P Carey & Co. LLC that the shareholder(s) is/are entitled to vote at the
2004 Annual Meeting of Shareholders of W. P. Carey & Co. LLC to be held at The
Waldorf-Astoria Hotel, 301 Park Avenue, New York, New York on Thursday, June 10,
2004 at 10:30 a.m., and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
REPLY ENVELOPE
Comments
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- --------------------------------------------------------------------------------
(If you noted any Comments above, please mark corresponding box on the reverse
side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE