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
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
AMB PROPERTY CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(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:
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[ ] 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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[AMB LOGO]
March 30, 2001
Dear Stockholder:
You are cordially invited to attend the 2001 Annual Meeting of
Stockholders of AMB PROPERTY CORPORATION. The Annual Meeting will be held on May
17, 2001, at 2:30 p.m., local time, at AMB Property Corporation's new
headquarters, which are located at Pier 1, Bay 1, San Francisco, California
94111. Information about the Annual Meeting and the various matters on which the
stockholders will act is included in the Notice of Annual Meeting of
Stockholders and Proxy Statement that follow. Also included is a proxy card and
return envelope.
Our 2000 Annual Report is also enclosed. We encourage you to read our
Annual Report and hope you will find it interesting and useful.
It is important that your shares be represented at the meeting. Whether
or not you plan to attend, please complete and return your proxy card in the
enclosed envelope as promptly as possible. Returning your proxy does not deprive
you of your right to attend the meeting and vote your shares in person.
Sincerely,
/s/ HAMID R. MOGHADAM
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HAMID R. MOGHADAM
Chairman of the Board and
Chief Executive Officer
AMB PROPERTY CORPORATION
Pier 1, Bay 1
San Francisco, California 94111
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2001
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To the Stockholders of AMB Property Corporation:
TIME 2:30 p.m., local time, on Thursday, May 17, 2001
PLACE AMB Property Corporation
Pier 1, Bay 1
San Francisco, California 94111
ITEMS OF (1) To elect nine directors to our Board of Directors to
BUSINESS serve until the next annual meeting of ITEMS OF BUSINESS
stockholders and until their successors are duly elected
and qualified.
(2) To transact such other business as may properly come
before the Annual Meeting or any adjournment or
postponement thereof.
RECORD DATE Holders of shares of our Common Stock of record at the close of
business on March 20, 2001 are entitled to notice of and to vote
at the Annual Meeting.
ANNUAL REPORT Our 2000 Annual Report, which is not a part of the proxy
solicitation material, is enclosed.
PROXY VOTING It is important that your shares be represented and voted at the
Annual Meeting. You can vote your shares by one of the following
methods: vote by proxy over the Internet or by telephone using
the instructions on the enclosed proxy card (if these options
are available to you) OR mark, sign, date and promptly return
the enclosed proxy card in the postage paid envelope furnished
for that purpose. Any proxy may be revoked in the manner
described in the accompanying proxy statement at any time prior
to its exercise at the Annual Meeting.
By Order of the Board of Directors,
/s/ TAMRA D. BROWNE
------------------------------------
TAMRA D. BROWNE
Vice President, General Counsel
and Secretary
March 30, 2001
San Francisco, California
AMB PROPERTY CORPORATION
PIER 1, BAY 1
SAN FRANCISCO, CALIFORNIA 94111
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2001
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PROXY STATEMENT
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INTRODUCTION
GENERAL
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of AMB Property Corporation, a Maryland corporation, of
proxies from the holders of our issued and outstanding shares of Common Stock to
be voted at the Annual Meeting of Stockholders and at any adjournment(s) or
postponement(s) thereof. The Annual Meeting will be held on May 17, 2001 at our
new headquarters, which are located at Pier 1, Bay 1, San Francisco, California
94111, beginning at 2:30 p.m., local time (the "Annual Meeting").
At the Annual Meeting, the items of business that you will be asked to
consider and vote upon are:
1. The election of nine directors to serve until the next annual meeting
of stockholders and until their successors are duly elected and qualify; and
2. Such other business as may properly come before the Annual Meeting.
This proxy statement and accompanying form of proxy are being sent to
holders of our Common Stock at the close of business on the record date, which
is March 20, 2001. This proxy statement and accompanying form of proxy are first
being mailed to you on or about March 30, 2001.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT AND, IF GIVEN
OR MADE, SUCH INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED AND
THE DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF AMB PROPERTY
CORPORATION SINCE THE DATE OF THIS PROXY STATEMENT.
Our executive offices are located at Pier 1, Bay 1, San Francisco,
California 94111, telephone (415) 394-9000. References herein to "we," "us" and
"our" refer to AMB Property Corporation and its subsidiaries, unless the context
otherwise requires.
VOTING AND REVOCATION OF PROXIES
YOUR VOTE IS IMPORTANT. Because most of our stockholders cannot attend
the Annual Meeting in person, it is necessary for a large number to be
represented by proxy. Most stockholders have a choice of voting by proxy over
the Internet, by using a toll-free telephone number or by completing a proxy
card and mailing it in the postage-paid envelope provided. Check your proxy card
or the information forwarded by your bank, broker or other holder of record to
see which options are available to you. If you vote by proxy over the Internet,
please be aware that you may incur costs such as telecommunications and Internet
access charges for which you will be responsible. The Internet and telephone
proxy voting facilities for stockholders of record will close at noon,
California time, on May 16, 2001.
The Internet and telephone proxy voting procedures are designed to
authenticate stockholders by use of a control number and to allow stockholders
to confirm that their instructions have been properly recorded. The method by
which you vote will in no way limit
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your right to vote at the Annual Meeting if you later decide to attend in
person. If your shares of Common Stock are held in the name of a bank, broker or
other holder of record, you must obtain a proxy, executed in your favor, from
the holder of record, to be able to vote in person at the Annual Meeting.
You may revoke your proxy at any time before it is exercised by writing
to Tamra D. Browne, the Secretary of AMB Property Corporation, by timely
delivery of a properly executed, later-dated proxy (including an Internet or
telephone vote) or by voting by ballot at the Annual Meeting. Mere attendance at
the Annual Meeting will not revoke a proxy.
AMB Property Corporation is a corporation organized under the laws of
the State of Maryland. Section 2-507 of the Maryland General Corporation Law
authorizes the granting of proxies by telephone or over the Internet.
Accordingly, proxies granted by telephone or over the Internet, in accordance
with the procedures set forth on the proxy card, will be valid under Maryland
law.
All shares of Common Stock entitled to vote and represented by properly
completed proxies received prior to the Annual Meeting and not revoked will be
voted in accordance with your instructions. IF NO INSTRUCTIONS ARE INDICATED ON
A PROPERLY COMPLETED PROXY, THE SHARES OF COMMON STOCK REPRESENTED BY THAT PROXY
WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
If any other matters are properly presented at the Annual Meeting for
consideration, including, among other things, consideration of a motion to
adjourn the Annual Meeting to another time or place, the persons named as
proxies and acting thereunder will have discretion to vote on those matters
according to their best judgment to the same extent as the person delivering the
proxy would be entitled to vote. At the time this proxy statement went to press,
we did not anticipate that any other matters would be raised at the Annual
Meeting.
STOCKHOLDERS ENTITLED TO VOTE
Stockholders at the close of business on the record date, March 20,
2001, are entitled to notice of and to vote at the Annual Meeting. As of March
20, 2001, there were 84,222,341 shares of our Common Stock outstanding. Each
share of Common Stock is entitled to one vote on each matter properly brought
before the Annual Meeting.
REQUIRED VOTE
A majority of the shares of Common Stock outstanding must be
represented, in person or by proxy, at the Annual Meeting to constitute a quorum
for the transaction of business at the Annual Meeting. Abstentions and broker
"non-votes" are counted as present and entitled to vote for purposes of
determining a quorum. A broker "non-vote" occurs when a nominee holding shares
of our Common Stock for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that item and has not received instructions from the beneficial
owner.
A plurality of the votes cast is required for the election of directors
(i.e., the nominees receiving the greatest number of votes will be elected).
Abstentions and broker "non-votes" are not counted for purposes of the election
of directors and do not have an effect on the result of the vote for the
election of directors.
COST OF PROXY SOLICITATION
The cost of soliciting proxies will be paid by us. Proxies may be
solicited on our behalf by our directors, officers or employees in person or by
telephone, facsimile or other electronic means. These people will not be
specially compensated for their solicitation of proxies.
In accordance with the regulations of the Securities and Exchange
Commission and the New York Stock Exchange, we will also reimburse brokerage
firms and other custodians, nominees and fiduciaries for their expenses incurred
in sending proxies and proxy materials to the beneficial owners of shares of our
Common Stock.
ADVANCE NOTICE PROCEDURES
Deadline for Submitting Stockholder Proposals for Inclusion in Our 2002
Proxy Statement. Rule 14a-8 of the Securities Exchange Act of 1934 provides that
certain stockholder proposals must be included in the proxy statement for our
annual meeting. For a
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stockholder proposal to be considered for inclusion in the proxy statement for
our 2002 annual meeting of stockholders, it must be received by us no later than
December 1, 2001.
Deadline for Submitting Nominations for Director and Other Stockholder
Proposals Outside of Rule 14a-8. Under our Bylaws, nominations for director may
be made only by the Board or a committee of the Board, or by a stockholder
entitled to vote who delivered notice to us not less than 50 days nor more than
75 days prior to the meeting; provided, however, that in the event that less
than 65 days notice or prior public disclosure of the date of the meeting is
given or made to stockholders, then, for notice to be timely, the stockholder
must deliver it to us not later than the close of business of the 15th day
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made.
Our Bylaws also provide that no business may be brought before an annual
meeting except as specified in the notice of the meeting or as otherwise brought
before the meeting by or at the direction of the Board of Directors or by a
stockholder entitled to vote who has delivered notice to us (containing certain
information specified in our Bylaws) within the time limits described above for
delivering notice of a nomination for the election of a director. These
requirements apply to any matter that a stockholder wishes to raise at an annual
meeting other than pursuant to the procedures in Rule 14a-8.
A copy of the full text of our Bylaws may be obtained by writing to our
Secretary at Pier 1, Bay 1, San Francisco, California 94111.
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THE DATE OF THIS PROXY STATEMENT IS MARCH 30, 2001.
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PROPOSAL 1: ELECTION OF DIRECTORS
Our Board of Directors consists of nine directors. A majority of the
Board must be independent directors. In general, an independent director is a
director who is not, and has not been for a period of at least three years, an
employee, officer or affiliate of AMB Property Corporation or a subsidiary or a
division thereof, or a relative of an executive officer, and who is not an
individual member of an organization acting as an advisor, consultant or legal
counsel, receiving compensation on a continuing basis from us in addition to
director's compensation; provided, however, that if a director is an individual
member of such an organization, the Board may determine, in its business
judgment, that such relationship does not interfere with the director's exercise
of independent judgment and deem such director to be an independent director.
Six of the nine presently elected directors are independent directors. All
members of the Board serve a one-year term, which expires at the following
annual meeting of stockholders when their successors are duly elected and
qualified.
The shares represented by the enclosed proxy will be voted for the
election of each of the nominees named below, unless you indicate in the proxy
that your vote should be withheld from any or all of them. Each nominee elected
as a director will continue in office until his or her successor has been duly
elected and qualified, or until the earliest of his or her resignation,
retirement or death.
The Board of Directors has proposed the following nominees for election
as directors at the Annual Meeting: Hamid R. Moghadam, T. Robert Burke, W. Blake
Baird, Daniel H. Case III, David A. Cole, Lynn M. Sedway, Jeffrey L. Skelton,
Ph.D., Thomas W. Tusher and Caryl B. Welborn, Esq. Other than W. Blake Baird,
each of the nominees is currently serving as a director of AMB Property
Corporation. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES FOR ELECTION AS DIRECTORS.
Each of the nominees has consented to be named in this proxy statement
and to serve as a director if elected. The principal occupation and certain
other information regarding the nominees is set forth below. Information about
each nominee's share ownership can be found on page 19.
NOMINEES FOR DIRECTOR
DIRECTOR POSITION(S) CURRENTLY
NOMINEES FOR DIRECTOR SINCE HELD WITH THE COMPANY
- --------------------- ----- ---------------------
Hamid R. Moghadam 1997 Chairman of the Board and Chief Executive Officer
T. Robert Burke 1997 Director
W. Blake Baird N/A President and Nominee for Election as Director
Daniel H. Case III 1997 Director
David A. Cole 2000 Director
Lynn M. Sedway 1997 Director
Jeffrey L. Skelton, Ph.D. 1997 Director
Thomas W. Tusher 1997 Director
Caryl B. Welborn, Esq. 1997 Director
HAMID R. MOGHADAM, age 44, one of the founders (in 1983) of the
predecessor to AMB Property Corporation, is the Chairman of the Board of
Directors and the Chief Executive Officer of AMB Property Corporation. Mr.
Moghadam is also a member of the Executive Committee of the Board. Mr. Moghadam
has over 20 years of experience in real estate. Mr. Moghadam holds bachelor's
and master's degrees in engineering from the Massachusetts Institute of
Technology and an M.B.A. degree from the Graduate School of Business at Stanford
University. He is a founding member of the Real Estate Roundtable, is a member
of the Young Presidents' Organization, has served on various committees of the
Massachusetts Institute of Technology, is a member of the board of directors of
Plum Creek Timber Company, Brand Farm, Inc. and Marketengine Corporation, and is
a Trustee of the Bay Area Discovery Museum. In addition, Mr. Moghadam is a
member of the Board of Stanford Management Company.
T. ROBERT BURKE, age 58, one of the founders (in 1983) of the
predecessor to AMB Property Corporation, is a director of AMB Property
Corporation. From November 1997 to December 1999, Mr. Burke was our Chairman of
the Board. He was formerly a senior real estate partner with Morrison & Foerster
LLP and, for two years, served as that firm's Managing Partner for Operations.
Mr. Burke graduated from Stanford University and holds a J.D. degree from
Stanford Law School. He is a former member of the Board of Governors of the
National Association of Real Estate Investment Trusts, is on the Board of
Institutional Housing Partners, a
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private entity, and is a Trustee of Stanford University. He is also a member of
the Urban Land Institute and is the former Chairman of the Board of Directors of
the Pension Real Estate Association.
W. BLAKE BAIRD, age 40, is a nominee to become a director of AMB
Property Corporation and is our President. From January 1999 until December
1999, he served as our Chief Investment Officer. Prior to joining us in January
1999, Mr. Baird was a Managing Director of Morgan Stanley Dean Witter & Co.,
most recently as head of Real Estate Investment Banking for the Western United
States. Mr. Baird spent 15 years at Morgan Stanley Dean Witter, the last 11
focusing on real estate. Mr. Baird holds a B.S. in Economics from the Wharton
School, from which he graduated magna cum laude, and a B.A. in History from the
College of Arts and Sciences at the University of Pennsylvania from which he
graduated magna cum laude. He also holds an M.B.A. from New York University. Mr.
Baird is a former member of the Board of Directors of the National Association
of Real Estate Investment Trusts, a member of the Board of The Center for Real
Estate Enterprise Management, a member of Lambda Alpha International, a charter
member of the Advisory Board of the Steven L. Newman Real Estate Institute at
Baruch College, a member of the Urban Land Institute and serves on the Policy
Advisory Board for the Center for Real Estate and Urban Economics of the
University of California at Berkeley.
DANIEL H. CASE III, age 43, is a director of AMB Property Corporation
and is Chairman and Chief Executive Officer of J.P. Morgan H&Q, an affiliate of
J.P. Morgan Chase & Co. Mr. Case was named co-director of Mergers and
Acquisitions of Corporate Finance of Hambrecht & Quist in 1986, and became a
Managing Director and Head of Investment Banking in December 1987. In October
1991 he was elected to the board of directors. In April 1992, he was elected
President and Co-Chief Executive Officer. He became President and Chief
Executive Officer in October 1994 and Chairman in January 1998. Mr. Case is a
member of the Executive Committee of the Board of Technology Network and the
Nominating Committee of the New York Stock Exchange. He also serves as a
director of Electronic Arts, the Bay Area Council and the National Science and
Technology Medal Foundation. Mr. Case was named one of Silicon Valley's "25
Power Brokers" by Business Week, one of the "100 Global Leaders for Tomorrow" by
the World Economics Forum and one of the "Top 50 Innovators in Technology" by
Time Magazine. He has a bachelor's degree in economics and public policy from
Princeton University and studied management at the University of Oxford as a
Rhodes Scholar.
DAVID A. COLE, age 58, is a director of AMB Property Corporation and is
Chairman of Kurt Salmon Associates, Inc. Mr. Cole was named Chairman of the
Board and Chief Executive Officer of Kurt Salmon and Associates in January 1988
and he retired as Chief Executive Officer in December 1998. Mr. Cole holds a
bachelor's degree from Auburn University and has successfully completed the
Advanced Management Program from Harvard Business School. Mr. Cole is also a
member of the board of directors of QRS Corporation, a publicly traded company,
Transtech, Inc., a private company, Junior Achievement of Georgia and Goizueta
Business School.
LYNN M. SEDWAY, age 59, is a director of AMB Property Corporation. She
is the President and founder of the Sedway Group, a 22-year old real estate
economics firm headquartered in San Francisco, which is now a CB Richard Ellis
company. She currently directs and has ultimate responsibility for the
activities of the Sedway Group, including market analysis, property valuation,
development and redevelopment analysis, acquisition and disposition strategies,
and public policy issues. Ms. Sedway received her bachelor's degree in economics
at the University of Michigan and an M.B.A. degree from the University of
California at Berkeley, Walter A. Haas School of Business, where she is also a
guest lecturer. She is a trustee and Vice President of the Urban Land Institute
and a board member of Bridge Housing, the Counselors of Real Estate, Lambda
Alpha, the Swig Company, and Alexander & Baldwin and its affiliate companies.
Ms. Sedway is a member of the Policy Advisory Board of the Fisher Center for
Real Estate and the International Council of Shopping Centers. In addition, Ms.
Sedway serves on the Advisory Board of Hunting Gate, a privately held investment
firm, and the Real Estate Advisory Board of the Trust for Public Land.
JEFFREY L. SKELTON, PH.D., age 51, is a director of AMB Property
Corporation. He is President and Chief Executive Officer of Symphony Asset
Management, the asset management subsidiary of BARRA, Inc., a financial software
company. Prior to joining BARRA, Inc. in 1994, he was with Wells Fargo Nikko
Investment Advisors from January 1984 to December 1993, where he served in a
variety of capacities, including Chief Research Officer, Vice Chairman, Co-Chief
Investment Officer and Chief Executive of Wells Fargo Nikko Investment Advisors
Limited in London. Dr. Skelton has a Ph.D. in Mathematical Economics and Finance
and an M.B.A. degree from the University of Chicago, and was an Assistant
Professor of Finance at the University of California at Berkeley, Walter A. Haas
School of Business.
THOMAS W. TUSHER, age 59, is a director of AMB Property Corporation. He
was President and Chief Operating Officer of Levi Strauss & Co. from 1984
through 1996, when he retired. Previously, he was President of Levi Strauss
International from 1976 to 1984. Mr. Tusher began his career at Levi Strauss in
1969. He was a director of the publicly-held Levi Strauss & Co. from 1978 to
1985, and was named a director of the privately-controlled Levi Strauss & Co. in
1989, although he no longer serves in this capacity.
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Prior to joining Levi Strauss & Co., Mr. Tusher was with Colgate Palmolive from
1965 to 1969. Mr. Tusher has a bachelor's degree from the University of
California at Berkeley and an M.B.A. degree from the Graduate School of Business
at Stanford University. He is a director of Cakebread Cellars and Dash America
(Pearl Izumi). He is a former director of Great Western Financial Corporation
and the San Francisco Chamber of Commerce. He is also Chairman Emeritus and a
member of the Advisory Board of the Walter A. Haas School of Business at the
University of California at Berkeley. Mr. Tusher is also a director of the World
Wildlife Fund and a member of the Advisory Council of Stanford University's
Graduate School of Business.
CARYL B. WELBORN, ESQ., age 50, is a director of AMB Property
Corporation. She is a commercial real estate attorney in San Francisco and,
prior to starting her own firm in 1995, she was a partner with Morrison &
Foerster LLP from 1982 to 1995. Ms. Welborn has a bachelor's degree from
Stanford University and a J.D. degree from the Law School at the University of
California at Los Angeles. She is the President of the American College of Real
Estate Lawyers and has held leadership positions in the American Bar
Association's Real Property, Probate and Trust Section. Ms. Welborn is a program
chair and frequent lecturer on real estate issues nationally and has published
numerous articles in professional publications.
BOARD OF DIRECTORS MEETINGS AND ATTENDANCE
Pursuant to the Maryland General Corporation Law and our Bylaws, our
business, property and affairs are managed under the direction of the Board of
Directors. Members of the Board are kept informed of our business through
discussions with the Chairman of the Board and our officers, by reviewing
materials provided to them and by participating in meetings of the Board and its
committees.
During 2000, the Board held four meetings. No director attended fewer
than 75% of either of (a) the total number of meetings of the Board while they
were on the Board, except for Mr. Tusher, who attended two of the meetings, and
(b) the total number of meetings of the committees of the Board on which such
directors served, except for (i) Mr. Tusher, who attended two of the meetings of
the Compensation Committee and (ii) Mr. Case, who attended one meeting of the
Executive Committee.
BOARD COMMITTEES
The Board of Directors of AMB Property Corporation has an Audit
Committee, a Compensation Committee, an Executive Committee and a Nominating and
Governance Committee.
Audit Committee. The Audit Committee currently consists of three
independent directors, as defined by the New York Stock Exchange's rules: Ms.
Welborn, the Chair, Ms. Sedway and Dr. Skelton. The Audit Committee makes
recommendations concerning the engagement of independent accountants, reviews
with the independent accountants the scope and results of the audit engagement,
reviews professional services provided by the independent accountants, reviews
the independence of the independent accountants, reviews audit and non-audit
fees and reviews the adequacy of our internal accounting controls. The Audit
Committee operates under a written charter adopted by the Board of Directors, a
copy of which is included in this proxy statement as Exhibit A. The Audit
Committee held four meetings during 2000.
Compensation Committee. The Compensation Committee currently consists of
three independent directors: Mr. Tusher, the Chair, Mr. Cole and Ms. Sedway. The
function of the Compensation Committee is to determine compensation for our
executive officers, to review and make recommendations concerning proposals by
management with respect to compensation, bonus, employment agreements and other
benefits and policies respecting such matters for our executive officers, and to
implement the Second Amended and Restated 1997 Stock Option and Incentive Plan,
the Deferred Compensation Plan and any other incentive programs. The
Compensation Committee held three meetings during 2000.
Executive Committee. The Executive Committee currently consists of Mr.
Burke, the Chair, Dr. Skelton, and Messrs. Moghadam and Case. The Executive
Committee has the authority, within certain parameters, to acquire, dispose of
and finance investments for us (including the issuance by AMB Property, L.P. of
additional limited partnership units or other equity interests) and approve the
execution of contracts and agreements including those related to the borrowing
of money by us and generally exercise all other powers of the Board except as
prohibited by law. The Executive Committee held two meetings during 2000.
Nominating and Governance Committee. The Nominating and Governance
Committee was formed in May 2000 and currently consists of Mr. Cole, the Chair,
Mr. Burke, Mr. Case and Ms. Welborn. The Nominating and Governance Committee
submits nominations for directors to the Board, recommends the composition of
the committees of the Board, reviews the size and
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composition of the Board, reviews guidelines for corporate governance, and
conducts annual reviews of the Board and the Chief Executive Officer. The
Nominating and Governance Committee held one meeting during 2000.
COMPENSATION OF DIRECTORS
During 2000, each non-employee director received $1,500 for each meeting
of the Board of Directors and $1,000 for each meeting of a committee of the
Board of Directors attended, and each Chair of any committee of the Board
received $2,500 per annum. Each non-employee director is also reimbursed for
reasonable expenses incurred to attend director and committee meetings. In
addition, each non-employee director currently receives, upon initial election
to the Board, an initial option grant to purchase up to 20,000 shares of our
Common Stock. Upon re-election, each non-employee director currently can elect
to receive either (i) a subsequent option grant to purchase up to 15,000 shares
of our Common Stock or (ii) a subsequent option grant to purchase up to 6,000
shares of our Common Stock and a grant of 1,000 shares of our restricted Common
Stock. All of such options and shares of restricted stock vest fully on the date
of the next annual meeting of stockholders, except that all options granted to
the non-employee directors in connection with our initial public offering vested
immediately upon grant. If re-elected at the Annual Meeting, the non-employee
directors will be granted additional options and/or shares of restricted stock.
All stock options are issued pursuant to the Second Amended and Restated 1997
Stock Option and Incentive Plan at an exercise price equal to the fair market
value of our Common Stock on the date of grant. The Board of Directors examines
from time to time the size of the foregoing option and restricted stock grants
in light of competitive director compensation practices of publicly traded real
estate investment trusts having total market capitalizations comparable to us,
as well as changes in our Black-Scholes value, and may make changes to such
grant levels from time to time based on such examination. Our officers who are
also members of our Board of Directors are not paid any director's fees or
granted options as directors.
VOTE REQUIRED
A plurality of the votes cast is required for the election of directors
(i.e., the nominees receiving the greatest number of votes will be elected).
Abstentions and broker "non-votes" are not counted for purposes of the election
of directors and do not have an effect on the result of the vote for the
election of directors. THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NINE
DIRECTOR NOMINEES TO SERVE UNTIL THE NEXT ANNUAL MEETING OF STOCKHOLDERS AND
UNTIL THEIR RESPECTIVE SUCCESSORS ARE DULY ELECTED AND QUALIFY.
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CERTAIN INFORMATION WITH RESPECT TO EXECUTIVE OFFICERS
The following table sets forth certain current information with respect
to our executive officers:
NAME AGE POSITION(S)
---- --- -----------
Hamid R. Moghadam ........... 44 Chairman of the Board and Chief Executive Officer
W. Blake Baird .............. 40 President and Nominee for Election as Director
Douglas D. Abbey ............ 51 Chairman and Chief Executive Officer of AMB Investment Management, Inc.
Luis A. Belmonte ............ 60 Executive Vice President, Development
Michael A. Coke ............. 33 Executive Vice President and Chief Financial Officer
Bruce H. Freedman ........... 52 Executive Vice President, Head of Real Estate Operations
David S. Fries .............. 37 Executive Vice President, Strategic Initiatives and Corporate Affairs
Guy F. Jaquier .............. 42 Executive Vice President, Chief Investment Officer
John T. Roberts, Jr ......... 37 President of AMB Investment Management, Inc.
The following is a biographical summary of the experience of our
executive officers:
HAMID R. MOGHADAM has served as our Chief Executive Officer since
November 1997 and as Chairman of the Board since January 2000. Biographical
information regarding Mr. Moghadam is set forth under "Proposal 1: Election of
Directors -- Nominees For Director."
W. BLAKE BAIRD has served as our President since January 2000. From
January 1999 until December 1999, he served as our Chief Investment Officer.
Biographical information regarding Mr. Baird is set forth under "Proposal 1:
Election of Directors -- Nominees For Director."
DOUGLAS D. ABBEY, age 51, one of the founders (in 1983) of the
predecessor to AMB Property Corporation, is Chairman of the Board and Chief
Executive Officer of AMB Investment Management, Inc. Mr. Abbey has served as a
director of AMB Property Corporation since 1997; although he has decided not to
stand for re-election at the Annual Meeting of Stockholders. Mr. Abbey has over
25 years of experience in asset management, acquisitions and real estate
research. He is a graduate of Amherst College and has a master's degree in city
planning from the University of California at Berkeley. He is a trustee of the
Urban Land Institute, serves on the Policy Advisory Board for the Center for
Real Estate and Urban Economics at the University of California at Berkeley and
is a Trustee of Golden Gate University.
LUIS A. BELMONTE, age 60, is our Executive Vice President, Development.
He specializes in industrial property development and redevelopment. He joined
us in 1990 and has over 30 years of experience in development, redevelopment,
finance, construction and management of commercial and industrial projects.
Prior to joining us, he was a partner with Lincoln Property Company, where he
built a portfolio of 18 million square feet. Mr. Belmonte received his
bachelor's degree from the University of Santa Clara. He is a member of the
Urban Land Institute, an associate member of the Society of Industrial Realtors,
and former President of the San Francisco chapter of the National Association of
Industrial and Office Parks.
MICHAEL A. COKE, age 33, is an Executive Vice President and our Chief
Financial Officer. Mr. Coke joined us in 1997 after seven years with Arthur
Andersen LLP, where he most recently served as an audit manager. At Arthur
Andersen, he primarily served public and private real estate companies,
including several public real estate investment trusts, and specialized in real
estate auditing and accounting, mergers, initial public offerings and business
acquisition due diligence. Mr. Coke received a bachelor's degree in business
administration and accounting from California State University at Hayward. He is
a Certified Public Accountant.
BRUCE H. FREEDMAN, age 52, is our Executive Vice President, Real Estate
Operations. He joined us in 1995 and has over 30 years of experience in real
estate finance and investment. Before joining us, he served as President of
Allmerica Realty Advisors from 1993 to 1995 and as Principal of Aldrich, Eastman
& Waltch from 1986 to 1992. Mr. Freedman is a cum laude graduate of Babson
College.
8
He is a member of the Urban Land Institute, the Real Estate Finance Association
and the National Association of Real Estate Investment Advisors, and holds the
CRE designation from the American Society of Real Estate Counselors. He is also
a member of the Executive Committee of the National Association of Industrial
and Office Parks and is an Advisory Board member of the Babson Center for Real
Estate. His charitable and community services activities include being a
founding member of the Bullfinch Society of Massachusetts General Hospital, a
member of the President's Forum of Children's Hospital of Boston and a member of
the President's Society of Boston College.
DAVID S. FRIES, age 37, is our Executive Vice President, Strategic
Initiatives and Corporate Affairs. Prior to joining us in 1998, he was a real
estate partner with the international law firms of Orrick, Herrington &
Sutcliffe LLP and Morrison & Foerster LLP, where he focused on the real estate,
securities and financing issues affecting real estate investment trusts, the
acquisition of large real estate portfolios and the negotiation of complex joint
venture agreements. Mr. Fries holds a bachelor's degree in political science
from the University of Pennsylvania and a J.D. degree from Stanford Law School.
He is a member of the Board of Directors of PhatPipe, Inc., a private company,
and of the Data Consortium, a non-profit organization. In addition, Mr. Fries is
a member of the Management Committee of Constellation Real Technologies, LLC and
a member of the State Bar of California and the National Association of Real
Estate Investment Trusts.
GUY F. JAQUIER, age 42, joined us in June 2000 as an Executive Vice
President and our Chief Investment Officer. He also serves as the Vice Chairman
of AMB Investment Management, Inc. Mr. Jaquier has over 17 years of experience
in real estate finance and investments. Between 1998 and June 2000, Mr. Jaquier
served as Senior Investment Officer for real estate at the California Public
Employees' Retirement System. Prior to that, Mr. Jaquier spent 14 years at Lend
Lease Real Estate Investments and its predecessor, Equitable Real Estate, where
he held various transactions and management positions, including overseeing its
western states operations. He holds a B.S. in Building Construction Management
from the University of Washington and an M.B.A. from the Harvard Graduate School
of Business Administration. Mr. Jaquier is a member of the Urban Land Institute,
the Pension Real Estate Association, the National Association of Real Estate
Investment Trusts, and the Advisory Board of the University of California at
Berkeley.
JOHN T. ROBERTS, JR., age 37, is the President of AMB Investment
Management, Inc., and has over 15 years of experience in real estate finance and
investment. Mr. Roberts joined us in 1997 after spending six years at Ameritech
Pension Trust, where he held the position of Director, Real Estate Investments.
His responsibilities included managing a $1.6 billion real estate portfolio and
developing and implementing the trust's real estate program. Prior to that, he
worked for Richard Ellis, Inc. and has experience in leasing and sales. Mr.
Roberts received a bachelor's degree from Tulane University in New Orleans and
an M.B.A. degree in finance and accounting from the Graduate School of Business
at the University of Chicago.
9
EXECUTIVE COMPENSATION
The following table sets forth the estimated annual base salary rates
and other compensation paid for the years ended December 31, 2000, 1999 and 1998
to the Chief Executive Officer and our four most highly compensated executive
officers other than the Chief Executive Officer, on an annualized basis, who
were serving as executive officers at the end of 2000 (collectively, the "Named
Executive Officers").
LONG-TERM
COMPENSATION
----------------------------
ANNUAL COMPENSATION ($) SECURITIES
-------------------------------------- UNDERLYING
RESTRICTED ANNUAL
OTHER ANNUAL STOCK OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION AWARD(S)(#) GRANTED(2)
--------------------------- ---- ------- ---------- ------------ ----------- ----------
Hamid R. Moghadam
Chairman of the Board and
Chief Executive
Officer 2000 385,500 656,489(3) (4) 15,000(5) 262,500(7)
1999 360,000 483,000(3) (4) 24,750(6) 288,750(8)
1998 360,000 425,000(3) (4) -- 252,486(9)
W. Blake Baird(10)
President 2000 335,500 412,923(11) (4) 15,000(5) 90,000(7)
1999 294,375 285,521(11) (4) 100,000(12) 261,200(13)
1998 -- -- -- -- --
Bruce H. Freedman
Executive Vice President,
Real Estate Operations 2000 260,500 312,671(14) (4) 12,000(5) 60,000(7)
1999 210,000 166,108 (4) 17,500(6) 35,600(8)
1998 210,000 141,458(14) (4) -- 49,757(9)
David S. Fries(15)
Executive Vice President,
Strategic Initiatives and
Corporate Affairs 2000 260,500 297,037(16) (4) 12,000(5) 50,000(7)
1999 222,500 175,313(16) (4) 17,500(6) 52,000(8)
1998 144,333 91,361(16) (4) -- 109,393(9)
Michael A. Coke
Executive Vice President and
Chief Financial Officer 2000 235,500 267,350(17) (4) 10,000(5) 50,000(7)
1999 167,625 120,000(17) (4) 10,000(6) 21,750(8)
1998 146,929 99,113(17) (4) -- 22,308(9)
- ----------
(1) The amount of any such bonus has been determined by the Compensation
Committee of the Board of Directors. At the option of the Named
Executive Officer, the officer may receive his bonus in cash, restricted
shares of our Common Stock (valued at 125% of the cash bonus, with a
three-year vesting period) or options to purchase shares of our Common
Stock (valued at 150% of the cash bonus based on our Black-Scholes
value, with a three-year vesting period on options in excess of the 100%
cash bonus value). The bonuses for 2000 were paid in 2001. The bonuses
for 1999 were paid in 2000.
(2) Restricted shares of our Common Stock and options to purchase an
aggregate of 6,916,855 shares of our Common Stock (net of forfeitures)
have been granted to our directors, executive officers and other
employees as of February 27, 2001. An additional 2,033,145 shares (not
including shares that have already been issued and options that have
been granted) of our Common Stock are reserved for issuance under the
Second Amended and Restated 1997 Stock Option and Incentive Plan as of
February 27, 2001.
(3) In lieu of receiving his 2000 bonus in cash, Mr. Moghadam elected to
receive an option to purchase up to 159,625 shares of our Common Stock
and a grant of 26,275 restricted shares of our Common Stock. In lieu of
receiving his 1999 bonus in cash, Mr. Moghadam elected to receive an
option to purchase up to 229,824 shares of our Common Stock and a grant
of 12,261 restricted shares of our Common Stock. In lieu of receiving
his 1998 bonus in cash, Mr. Moghadam elected to receive an option to
purchase up to 263,430 shares of our Common Stock.
(4) The aggregate amount of the perquisites and other personal benefits,
securities or property for each of the Named Executive Officers is less
than the lesser of either $50,000 or 10% of his salary and bonus paid in
such year.
10
(5) Based on 2000 performance, the Named Executive Officers received a grant
of restricted shares of our Common Stock in February 2001. The grants of
restricted shares were made under the Second Amended and Restated 1997
Stock Option and Incentive Plan and vest annually in five equal
installments, beginning on January 1, 2002.
(6) Based on 1999 performance, the Named Executive Officers received a grant
of restricted shares of our Common Stock in February 2000. The grants of
restricted shares were made under the Second Amended and Restated 1997
Stock Option and Incentive Plan and vest annually in five equal
installments, beginning on January 1, 2001.
(7) Based on 2000 performance, the Named Executive Officers received options
to purchase shares of our Common Stock in February 2001. All of these
options become exercisable in three equal annual installments, beginning
on January 1, 2002, and have a term of not more than 10 years. The
option exercise price is equal to the fair market value of our Common
Stock on the date of grant.
(8) Based on 1999 performance, the Named Executive Officers received options
to purchase shares of our Common Stock in February 2000. All of these
options become exercisable in three equal annual installments, beginning
on January 1, 2001, and have a term of not more than 10 years. The
option exercise price is equal to the fair market value of our Common
Stock on the date of grant.
(9) Based on 1998 performance, the Named Executive Officers received options
to purchase shares of our Common Stock in December 1998. All of these
options become exercisable in three equal annual installments, beginning
on December 31, 1999, and have a term of not more than 10 years. The
option exercise price is equal to the fair market value of our Common
Stock on the date of grant.
(10) Mr. Baird joined us on January 20, 1999.
(11) In lieu of receiving his 2000 bonus in cash, Mr. Baird elected to
receive a grant of 20,982 restricted shares of our Common Stock. In lieu
of receiving his 1999 bonus in cash, Mr. Baird elected to receive a
grant of 17,679 restricted shares of our Common Stock.
(12) Mr. Baird purchased 100,000 restricted shares of our Common Stock at a
purchase price of $1.00 per share on his first day of employment. The
purchase of restricted shares was made under the Second Amended and
Restated 1997 Stock Option and Incentive Plan and vests in five equal
annual installments, beginning on January 20, 2000.
(13) Mr. Baird received an initial option grant to purchase up to 200,000
shares of our Common Stock when he became employed by us on January 20,
1999. This option becomes exercisable in four equal annual installments,
beginning on January 20, 2000 and has a term of 10 years. Based on 1999
performance, Mr. Baird received an option to purchase up to 61,200
shares of our Common Stock in February 2000. This option becomes
exercisable in three equal annual installments, beginning on January 1,
2001, and has a term of 10 years. The option exercise price for both
options is equal to the fair market value of our Common Stock on the
date of grant.
(14) In lieu of receiving all of his 2000 bonus in cash, Mr. Freedman elected
to receive $150,000 in cash and a grant of 8,266 restricted shares of
our Common Stock. In lieu of receiving his 1998 bonus in cash, Mr.
Freedman elected to receive a grant of 8,177 restricted shares of our
Common Stock.
(15) Mr. Fries joined us on May 1, 1998.
(16) In lieu of receiving all of his 2000 bonus in cash, Mr. Fries elected to
receive $50,000 in cash, an option to purchase up to 25,000 shares of
our Common Stock and a grant of 11,443 restricted shares of our Common
Stock. In lieu of receiving all of his 1999 bonus in cash, Mr. Fries
elected to receive $50,000 in cash and a grant of 7,759 restricted
shares of our Common Stock. In lieu of receiving his 1998 bonus in cash,
Mr. Fries elected to receive a grant of 5,281 restricted shares of our
Common Stock.
(17) In lieu of receiving all of his 2000 bonus in cash, Mr. Coke elected to
receive $133,675 in cash and a grant of 6,792 restricted shares of our
Common Stock. In lieu of receiving all of his 1999 bonus in cash, Mr.
Coke elected to receive $96,000 in cash and an option to purchase up to
19,355 shares of our Common Stock. In lieu of receiving his 1998 bonus
in cash, Mr. Coke elected to receive an option to purchase up to 61,434
shares of our Common Stock.
11
OPTION GRANTS RELATING TO THE LAST FISCAL YEAR
The following table shows certain information relating to options to
purchase shares of our Common Stock granted to the Named Executive Officers in
connection with performance in 2000.
INDIVIDUAL GRANTS(1) POTENTIAL
-------------------------------------- REALIZABLE
NUMBER OF PERCENT OF VALUE OF ASSUMED
SHARES OF TOTAL ANNUAL RATES OF
COMMON OPTIONS COMMON SHARE PRICE
STOCK GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES IN EXERCISE OPTION TERM(3)
OPTIONS FISCAL PRICE PER EXPIRATION -----------------------------
NAME GRANTED(#) YEAR(2) SHARE($) DATE 5% 10%
---------------------- ---------- ------------ --------- ---------- ----------- -----------
Hamid R. Moghadam .... 262,500 9.7 24.60 02/27/11 $ 4,061,087 $10,291,592
W. Blake Baird ....... 90,000 3.3 24.60 02/27/11 1,392,373 3,528,546
Bruce H. Freedman .... 60,000 2.2 24.60 02/27/11 928,248 2,352,364
David S. Fries ....... 50,000 1.8 24.60 02/27/11 773,540 1,960,303
Michael A. Coke ...... 50,000 1.8 24.60 02/27/11 773,540 1,960,303
- ----------
(1) All options granted with respect to 2000 to Named Executive Officers
become exercisable in three equal annual installments (rounded to the
nearest whole share of our Common Stock). All options granted with
respect to 2000 to Named Executive Officers begin vesting on January 1,
2002 and have a term of not more than ten years. The option exercise
price is equal to the fair market value of the Common Stock on the date
of grant.
(2) The total number of shares of Common Stock underlying such options used
in such calculation is as of February 27, 2001, the grant date of the
annual options relating to 2000 performance.
(3) In accordance with the rules promulgated by the Securities and Exchange
Commission, these amounts are the hypothetical gains or "option spreads"
that would exist for the respective options based on assumed rates of
annual compound share price appreciation of 5% and 10% from the date the
options were granted over the full option term. No gain to the optionee
is possible without an increase in the price of Common Stock, which
would benefit all stockholders. Such amounts have been calculated as the
exercise price multiplied by the respective annual assumed growth rate
(compounded), less the exercise price of the underlying option,
multiplied by the number of options granted.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth certain information concerning exercised
and unexercised options held by the Named Executive Officers at December 31,
2000.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT
DECEMBER 31, 2000 DECEMBER 31, 2000(1)
SHARES ACQUIRED VALUE ---------------------------- ----------------------------
NAME EXERCISE PRICE ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- --------------- ------------ ----------- ------------- ----------- -------------
Hamid R. Moghadam .. $21.0000 N/A N/A 375,000 125,000 $1,804,688 $ 601,563
21.6250 N/A N/A 373,214 142,702 1,562,834 597,565
20.1875 N/A N/A 153,216 365,358 861,840 2,055,139
W. Blake Baird ..... $22.5625 N/A N/A 50,000 150,000 162,500 487,500
20.1875 N/A N/A -- 61,200 -- 344,250
Bruce H. Freedman .. $21.0000 N/A N/A 97,500 32,500 469,219 156,406
21.6250 N/A N/A 33,172 16,585 138,908 69,450
20.1875 N/A N/A -- 35,600 -- 200,250
David S. Fries ..... $23.0000 N/A N/A 32,500 32,500 91,406 91,406
21.6250 N/A N/A 29,596 14,797 123,933 61,962
20.1875 N/A N/A -- 52,000 -- 292,500
Michael A. Coke .... $21.0000 N/A N/A 22,500 7,500 108,281 36,094
21.6250 N/A N/A 62,654 21,088 262,364 88,306
20.1875 N/A N/A 12,904 28,201 72,585 158,631
- ----------
(1) Based on a price per share of our Common Stock of $25.8125, the closing
price per share on the New York Stock Exchange on December 29, 2000.
12
SECOND AMENDED AND RESTATED 1997 STOCK OPTION AND INCENTIVE PLAN
The Second Amended and Restated 1997 Stock Option and Incentive Plan was
adopted by the Board of Directors and approved by the stockholders to enable
executive officers, key employees and directors of AMB Property Corporation and
certain subsidiaries to participate in the ownership of AMB Property
Corporation. The plan is designed to attract and retain our executive officers,
other key employees and directors, and to provide incentives to such persons to
maximize our performance and cash flow available for distribution. The plan
currently covers an aggregate of 8,950,000 shares of Common Stock and will
expire in 2007.
Employees and consultants of AMB Property Corporation and certain
subsidiaries, and directors of AMB Property Corporation and AMB Investment
Management, Inc. and their subsidiaries may receive stock payments, performance
awards, restricted stock, dividend equivalents and deferred stock under the
plan. Our employees and consultants also may receive stock appreciation rights
under the plan. In addition, Non-Employee Directors (as defined in the plan) and
our employees and consultants may receive options to purchase shares of Common
Stock under the plan.
401(k) PLAN
Effective November 26, 1997, we established our Section 401(k)
Savings/Retirement Plan to cover our eligible employees. The 401(k) Plan
currently permits our eligible employees to defer up to 20% of their annual
compensation, subject to certain limitations imposed by the Internal Revenue
Code. The employees' elective deferrals are immediately vested and
non-forfeitable upon contributions to the 401(k) Plan. We currently make
matching contributions to the 401(k) Plan in an amount equal to 50% of the first
5.5% of annual compensation deferred by each employee; however, we have reserved
the right to make greater matching contributions or discretionary profit sharing
contributions in the future. Participants employed by us prior to January 1,
2000 vest immediately in the matching contributions, whereas participants
employed by us on or after January 1, 2000 vest fully in the matching
contributions on the anniversary date of the commencement of their employment
with us. We made no discretionary contributions to the 401(k) Plan in 2000. Our
employees are eligible to participate in the 401(k) Plan if they meet certain
requirements concerning minimum period of credited service. In connection with
the 401(k) Plan, we have accrued approximately $0.3 million with respect to our
matching contribution for the year ended December 31, 2000. The 401(k) Plan
qualifies under Section 401 of the Internal Revenue Code so that contributions
by employees to the 401(k) Plan, and income earned on plan contributions, are
not taxable to employees until withdrawn from the 401(k) Plan.
DEFERRED COMPENSATION PLAN
During 1999, we established a Non-Qualified Deferred Compensation Plan
for our officers and the officers of certain of our affiliates. The Deferred
Compensation Plan enables participants to defer up to 25% of their annual base
pay and up to 100% of their annual bonuses on a pre-tax basis. We have reserved
the right to make discretionary matching contributions to participant accounts
from time to time. We made no discretionary contributions in 2000. The
participants' elective deferrals and any matching contributions are immediately
100% vested. We pay all the administrative costs of the plan.
EMPLOYMENT AGREEMENTS; CHANGE IN CONTROL AND NONCOMPETITION AGREEMENTS
Currently, there are no employment agreements between us and any of the
Named Executive Officers. However, each of the Named Executive Officers has
entered into a Change in Control and Noncompetition Agreement with us which,
other than in the case of Messrs. Baird and Coke, became effective on November
26, 1998 and which replaced the employment agreements that generally had been
entered into at the time of our initial public offering. Mr. Baird entered into
such an agreement with us on January 20, 1999, his first day of employment, and
Mr. Coke entered into such an agreement with us on January 1, 2000. Such
agreements have an initial term of four years, other than Messrs. Baird's and
Coke's, the initial terms of which end on November 26, 2002, and are subject to
automatic one-year extensions following the expiration of the initial terms. The
agreements provide for severance payments during the term of the agreement and,
upon the occurrence of a "change in control," for 24 months thereafter in the
event of a termination of the Named Executive Officer's employment resulting
from death, disability or a "change in control." A "change in control" will be
deemed to have occurred if (i) our stockholders approve a plan of complete
liquidation of AMB Property Corporation or an agreement for the sale or
disposition by AMB Property Corporation of all or substantially all of our
assets, or we dispose of more than 50% of our interest in the operating
partnership; (ii) any person becomes the beneficial owner, directly or
indirectly, of our securities representing 40% or more of the combined voting
power of our then outstanding securities; (iii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
our Board of Directors, and any new director whose election by the Board or
nomination for election by our stockholders was approved by a vote of at least
two-thirds of the directors then still in office
13
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors; or (iv) our
stockholders approve a merger or consolidation of AMB Property Corporation with
any other corporation or other entity, other than (A) a merger or consolidation
which would result in our voting securities outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of AMB Property Corporation or
such surviving entity outstanding immediately after such merger or consolidation
or (B) where more than 50% of the directors of AMB Property Corporation or the
surviving entity after such merger or consolidation were directors of AMB
Property Corporation immediately before such merger or consolidation. Upon death
or disability, severance benefits include base compensation and bonus based on
the most recent amount paid. In the event of a "change in control," severance
benefits, payable over a period of two years following the "change in control,"
include an amount equal to twice (i) base compensation and (ii) bonus based on
the most recent amount paid, as well as certain continuing insurance and other
benefits.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no Compensation Committee interlocks and none of our employees
participate on the Compensation Committee.
Notwithstanding anything to the contrary set forth in any of AMB
Property Corporation's or AMB Property, L.P.'s previous filings under the
Securities Act of 1933 or the Securities Exchange Act of 1934, that might
incorporate future filings, including this proxy statement, in whole or in part,
the following Compensation Committee Report on Executive Compensation, the Stock
Performance Graph and the Audit Committee Report shall not be deemed to be
incorporated by reference into any such filings and shall not otherwise be
deemed to be filed under such Acts.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consists of the
independent directors listed below. The committee determines base compensation
for the executive officers and reviews and makes recommendations concerning
proposals by our management with respect to compensation, bonuses, employment
agreements and other benefits and policies respecting such matters for our
employees, including our executive officers. The committee also administers the
Second Amended and Restated 1997 Stock Option and Incentive Plan, under which
grants of stock options, share appreciation rights, shares of restricted stock
and other awards may be made to our employees, including the executive officers.
The purposes of our executive compensation program are to attract and retain
qualified employees, provide incentives to create value for our stockholders and
to establish and maintain a performance and achievement-oriented environment
throughout the organization. Through the executive compensation program, the
Compensation Committee intends to maintain strong links between the compensation
of our executive officers and corporate performance.
Based on the advice of independent compensation consultants, we have
adopted a formal organization-wide incentive program known as the Performance
Pay Program. The Performance Pay Program is designed to attract and retain
qualified employees, encourage teamwork and innovation, focus attention on
specific business objectives and award the achievement of these objectives. Our
overall compensation philosophy is to provide total compensation at the 75th
percentile level for the position at comparative companies for "target" level
performance, which "target" levels are set above the median level. The
compensation of most employees, including that of all officers, consists of two
components: base salary, which is intended to be competitive in the market for
the scope and responsibilities of the job performed and which is targeted at or
above the median level of compensation in the market for similar positions, and
performance pay, which is determined based on the achievement of various
performance goals and objectives. In addition, our employees are eligible to
receive annual stock option and restricted stock grants based on their
individual performance for that year.
For services performed in 2000, executive compensation consisted of base
salary, performance pay and grants of stock options and restricted stock under
our Second Amended and Restated 1997 Stock Option and Incentive Plan. Each of
these components is discussed below.
BASE SALARIES
Base salaries for executive officers are targeted at or slightly above
the median level of compensation paid for the position at comparative companies
and are reviewed annually by the committee.
14
PERFORMANCE PAY
Most employees, including all officers, are eligible to receive
performance pay provided that certain performance objectives are met.
Performance pay is paid once a year, after assessing our financial, operational
and strategic performance, the performance of the group in which the employee
works (if applicable) and the employee's individual performance. Our Chief
Executive Officer retains the discretion to adjust each individual's performance
pay by plus or minus 20% in exceptional circumstances. The Committee evaluates
the individual performance of the Chief Executive Officer and determines his
aggregate performance pay award and approves the goals and objectives that
determine the performance pay awards of the other executive officers. Officers
may choose to receive all or a portion of their bonuses in cash, shares of
restricted stock (valued at 125% of the cash bonus, with three year vesting),
stock options (valued at 150% of the cash bonus based on our Black-Scholes
value, with three year vesting on the portion attributable to the value above
100% of the cash bonus), or any combination of the foregoing, subject to certain
limits on the aggregate number of options elected. This feature, which permits
officers to take all or a portion of their bonuses in restricted stock or stock
options, is designed to further align the interests of our executive officers
and other officers with the interests of our stockholders and to encourage the
retention of officers. Annual performance pay provides executive officers with
the opportunity to earn cash compensation in excess of the 75th percentile level
for the position at comparative companies, but only in the event that corporate
and individual goals have been exceeded.
During 2000, bonuses for each executive officer were weighted
differently among the corporate and individual performance objectives.
Generally, the bonuses of executive officers were weighted more heavily toward
the achievement of corporate performance level. Corporate performance was
determined based on the satisfaction of certain pre-established performance
objectives for us as a whole. Individual performance was measured on the basis
of quantitative and qualitative performance objectives that measure an
individual's contribution to our success.
STOCK OPTIONS AND RESTRICTED STOCK GRANTS
To provide officers and other employees with incentives to maximize our
long-term performance and to promote the interests of our stockholders, officers
and other employees are also eligible to receive stock option and restricted
stock grants. The Second Amended and Restated 1997 Stock Option and Incentive
Plan, which has been approved by the stockholders, authorizes the Compensation
Committee to grant stock options, stock appreciation rights, restricted stock
and other awards to our officers and other employees. Awards are granted
primarily on the basis of the officer's performance with respect to his or her
individual objectives for that year. Generally, stock options are granted on an
annual basis with an exercise price set at 100% of the then current market value
of our stock and will only be of value to the officer if our stock price
increases over time. All such stock options granted to executive officers with
respect to performance during 2000 vest over a period of three years at a rate
of one-third of such grant at the beginning of each year, thereby encouraging
the retention of officers. All shares of restricted stock, other than shares of
restricted stock issued in lieu of a cash bonus, granted to officers in 2000
vest over a period of five years at a rate of one-fifth of such grant at the
beginning of each year, thereby encouraging the retention of officers.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
For performance during 2000, the compensation of Mr. Moghadam was
determined on the same general basis as discussed above for other officers. In
2000, Mr. Moghadam received a base salary of $385,500. With respect to
performance during 2000, Mr. Moghadam's performance payment was determined based
on the Compensation Committee's determination of both our corporate performance
and Mr. Moghadam's satisfaction of certain pre-established individual goals and
objectives. Mr. Moghadam was awarded a performance payment in the amount of
$656,489, which amount he chose to receive entirely in stock options and shares
of restricted stock, equating to an option to purchase up to 159,625 shares of
Common Stock applying a Black-Scholes value of $1.31 per share and 26,275
restricted shares of Common Stock based on a share price of $24.60 per share. In
addition, Mr. Moghadam was awarded an annual stock option to purchase up to
262,500 shares of Common Stock and also received 15,000 shares of restricted
stock. Mr. Moghadam's base salary, performance pay and awards granted pursuant
to the Second Amended and Restated 1997 Stock Option and Incentive Plan are
reviewed annually by the Compensation Committee. Mr. Moghadam does not
participate in or otherwise influence the decisions of the Compensation
Committee with respect to his compensation.
SECTION 162(m)
Section 162(m) of the Internal Revenue Code limits the tax deduction for
compensation paid to our Chief Executive Officer and the additional four most
highly compensated officers who are employed at fiscal year-end to $1.0 million
per year, subject to certain performance, disclosure and stockholder
requirements. Grants of stock options and restricted stock under the Second
Amended and
15
Restated 1997 Stock Option and Incentive Plan are intended to qualify as
performance based compensation, which is not subject to the Section 162(m)
deduction limitation. The Compensation Committee presently intends that, so long
as it is consistent with our overall compensation objectives and to the extent
reasonable, all executive compensation will be deductible for federal income tax
purposes and, for the year ended December 31, 2000, there were no exceptions.
The committee, however, may design programs that recognize a full range of
performance criteria important to our success, even where compensation payable
under such programs may not be deductible.
Respectfully,
Thomas W. Tusher, Chair
P David A. Cole
Lynn M. Sedway
16
STOCK PERFORMANCE GRAPH
As a part of the rules concerning executive compensation disclosure, we
are obligated to provide a chart comparing the yearly percentage change in the
cumulative total stockholder return on our Common Stock over a five-year period.
However, since our Common Stock has been publicly traded only since November 21,
1997, such information is provided from that date through December 31, 2000.
The following line graph compares the change in our cumulative
stockholder return on shares of our Common Stock from our initial public
offering at $21.00 per share on November 21, 1997 to December 31, 2000, to the
cumulative total return of the Standard & Poor's 500 Stock Index and the NAREIT
Equity REIT Total Return Index from November 30, 1997 to December 31, 2000. The
line graph starts at November 21, 1997, the date that our shares of Common Stock
commenced trading on the New York Stock Exchange; however, the beginning value
of each of the NAREIT Equity Index and the S&P 500 Index is as of November 30,
1997, as each index is calculated only on a monthly basis. The graph assumes the
investment of $100 in the Common Stock of AMB Property Corporation and each of
the indices and, as required by the Securities and Exchange Commission, the
reinvestment of all distributions. The return shown on the graph is not
necessarily indicative of future performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG AMB PROPERTY CORPORATION,
S&P 500 INDEX AND NAREIT EQUITY INDEX
MEASUREMENT PERIOD AMB PROPERTY NAREIT EQUITY
(FISCAL YEAR COVERED) CORPORATION INDEX S&P 500 INDEX
--------------------- ----------- ------------- -------------
11/21/97 100.0 100.0 100.0
12/97 120.3 104.6 106.4
12/98 111.8 86.3 136.8
12/99 108.4 82.3 165.6
12/00 149.5 104.0 150.6
- ----------
(1) Beginning value of each of the NAREIT Equity Index and the S&P 500 Index
is as of November 30, 1997, as each index is calculated only on a
monthly basis.
17
AUDIT COMMITTEE REPORT
MEMBERSHIP AND ROLE OF THE AUDIT COMMITTEE
The Audit Committee is currently comprised of Ms. Welborn, Ms. Sedway
and Dr. Skelton. Ms. Welborn serves as Chair of the committee. Each of the
members of the Audit Committee is independent as defined in our Bylaws and
Section 303 of the New York Stock Exchange's Listing Standards. In addition, the
Board of Directors has determined that the each of members of the Audit
Committee meets the requirements of the New York Stock Exchange regarding
financial literacy and financial expertise. The Audit Committee operates under a
written charter adopted by the Board of Directors, a copy of which is included
in this proxy statement as Exhibit A.
The Audit Committee provides assistance to the Board of Directors in
fulfilling the Board's oversight responsibilities regarding our accounting
system and system of internal controls, the quality and integrity of our
financial reports and the independence and performance of our independent
accountants. Management has the primary responsibility for our financial
statements and financial reporting process, including our system of internal
controls. Our independent accountants are responsible for performing an
independent audit of our financial statements in accordance with auditing
standards generally accepted in the United States and for expressing an opinion
on the conformity of our audited financial statements with accounting principles
generally accepted in the United States.
REVIEW OF OUR AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
DECEMBER 31, 2000
The Audit Committee has reviewed and discussed with management our
audited consolidated financial statements as of and for the year ended December
31, 2000. The Audit Committee has also discussed with Arthur Andersen LLP, our
independent public accountants, the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit Committees, as
amended, by the Auditing Standards Board of the American Institute of Certified
Public Accountants.
In addition, the Audit Committee has received and reviewed the written
disclosures and the letter from Arthur Andersen LLP required by Independence
Standards Board, Standard No. 1, Independence Discussions with Audit Committees,
as amended, and the Audit Committee has discussed the independence of Arthur
Andersen LLP with that firm.
Based on the reviews and discussions noted above, the Audit Committee
recommended to the Board of Directors that our audited consolidated financial
statements be included in our Annual Report on Form 10-K for the year ended
December 31, 2000 for filing with the Securities and Exchange Commission. In
addition, the Audit Committee has recommended, and the Board of Directors has
approved, the selection of Arthur Andersen LLP as our independent accountants
for 2001.
2000 FEES PAID TO ARTHUR ANDERSEN LLP
During 2000, we retained Arthur Andersen LLP as our independent
accountants to provide services in the following categories and amounts:
Audit Fees ......................... $ 250,700
Financial Information Systems Design
& Implementation Fees ............ --
All Other Fees ..................... 1,327,800
----------
Total ........................ $1,578,500
==========
Audit Fees include amounts related to professional services rendered in
connection with the audit of our annual financial statements for the year ended
December 31, 2000 and the reviews of our quarterly financial statements. A
substantial amount of All Other Fees relates to services traditionally provided
by independent accountants, such as registration statements, comfort letters,
tax and other services. The Audit Committee has considered whether the provision
of non-audit services by Arthur Andersen LLP is compatible with maintaining
their independence.
Respectfully,
Caryl B. Welborn, Chair
Lynn M. Sedway
Jeffrey L. Skelton
18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 20, 2001,
regarding the beneficial ownership of Common Stock and limited partnership units
for (i) each person known by us to be the beneficial owner of five percent or
more of our outstanding Common Stock or the operating partnership's outstanding
units ("Units"), (ii) each director and each Named Executive Officer and (iii)
our directors and Named Executive Officers as a group. Except as indicated
below, all of such Common Stock and limited partnership units are owned directly
and the indicated person has sole voting and investment power with respect to
all of the shares of Common Stock and limited partnership units beneficially
owned by such person.
PERCENTAGE OF
OUTSTANDING
NUMBER OF SHARES OF PERCENTAGE OF NUMBER OF PERCENTAGE OF SHARES
COMMON STOCK OUTSTANDING SHARES UNITS OUTSTANDING OF COMMON STOCK
NAME OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED OF COMMON STOCK BENEFICIALLY OWNED UNITS AND UNITS
- ---------------------------- ------------------- ------------------ ------------------ ------------- ---------------
Hamid R. Moghadam(2) ....... 2,761,255 3.2% 388,126 6.7% 3.5%
W. Blake Baird(3) .......... 276,061 0.3 25,569 0.4 0.3
Bruce H. Freedman(4) ....... 281,349 0.3 25,868 0.4 0.3
David S. Fries(5) .......... 149,863 0.2 15,257 0.3 0.2
Michael A. Coke(6) ......... 144,077 0.2 8,439 0.1 0.2
Douglas D. Abbey(7) ........ 1,511,018 1.8 312,071 5.4 2.0
T. Robert Burke(8) ......... 1,054,039 1.2 235,506 4.1 1.4
Daniel H. Case III(9) ...... 109,250 0.1 -- -- 0.1
David A. Cole(10) .......... 38,000 * -- -- *
Lynn M. Sedway(11) ......... 59,402 * -- -- *
Jeffrey L. Skelton,
Ph.D.(12) ................ 49,202 * -- -- *
Thomas W. Tusher(11) ....... 82,202 0.1 -- -- *
Caryl B. Welborn, Esq.(13) 64,202 * -- -- *
Cohen & Steers Capital
Management, Inc.(14) ..... 6,602,507 7.8 -- -- 7.3
European Investors Inc.(15) 4,552,537 5.4 -- -- 5.1
All Directors and
Named Executive
Officers as a group
(13 persons)(16) ......... 6,579,920 7.6 1,010,836 17.5 8.2
Allmerica .................. -- -- 559,628 9.7 0.6
Campanelli Companies ....... -- -- 974,295 16.2 1.1
Holbrook W. Goodale ........ -- -- 426,582 7.4 0.5
Charles R. Wichman ......... -- -- 426,582 7.4 0.5
Frederick B. Wichman ....... -- -- 426,582 7.4 0.5
- ----------
* Represents less than 0.1% of outstanding shares of Common Stock or
limited partnership units, based on 84,222,341 shares of Common Stock
and 5,789,248 limited partnership units outstanding as of March 20,
2001.
(1) Unless otherwise indicated, the address for each of the persons listed
is c/o AMB Property Corporation, Pier 1, Bay 1, San Francisco,
California 94111.
(2) Includes options to purchase up to 1,052,486 shares of Common Stock,
which are exercisable within 60 days of March 20, 2001.
(3) Includes options to purchase up to 120,400 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001.
(4) Includes options to purchase up to 142,539 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001.
19
(5) Includes options to purchase up to 95,680 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001.
(6) Includes options to purchase up to 114,285 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001.
(7) Includes options to purchase up to 314,491 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001.
(8) Includes options to purchase up to 198,750 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001.
(9) Includes options to purchase up to 56,250 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001. Pursuant to a Form 4
for January 1999, filed with the Securities and Exchange Commission,
10,000 shares are held by Mr. Case's wife and he has disclaimed
beneficial ownership of these securities. In addition, 8,000 shares are
held by certain relatives of Mr. Case and he has disclaimed beneficial
ownership of these securities.
(10) Includes options to purchase up to 20,000 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001. Pursuant to a Form 4
for March 2001, 8,000 shares are held by Mr. Cole's children.
(11) Includes options to purchase up to 56,250 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001.
(12) Includes options to purchase up to 47,250 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001.
(13) Includes options to purchase up to 56,250 shares of Common Stock, which
are exercisable within 60 days of March 20, 2001. With respect to 5,952
shares, Ms. Welborn has shared voting power with her husband and, with
respect to 7,952 shares, Ms. Welborn has shared investment power with
her husband.
(14) Based upon information contained in a Schedule 13G, which was filed with
the Securities and Exchange Commission on February 12, 2001. With
respect to 2,107,207 shares, Cohen & Steers Capital Management, Inc. has
shared voting power. The address of Cohen & Steers Capital Management,
Inc. is 757 Third Avenue, New York, New York 10017.
(15) Based upon information contained in a Schedule 13G, which was filed with
the Securities and Exchange Commission on March 2, 2001. European
Investors Inc. holds 1,068,027 shares of our Common Stock. With respect
to 197,000 shares, European Investors Inc. has shared voting power and,
with respect to 127,200 shares, European Investors Inc. has shared
dispositive power. EII Realty Securities Inc., a wholly owned subsidiary
of European Investors Inc., holds 3,484,510 shares of our Common Stock.
With respect to 131,158 shares, EII Realty Securities Inc. has shared
dispositive power. The address of European Investors Inc. and EII Realty
Securities Inc. is 667 Madison Avenue, New York, New York 10021.
(16) Includes options to purchase up to 2,330,881 shares of Common Stock,
which are exercisable within 60 days of March 20, 2001.
20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have engaged in the following transactions and relationships with
certain of our executive officers, directors and persons who hold more than 5%
of the outstanding shares of our Common Stock.
FORMATION TRANSACTIONS
At the time of our initial public offering, 4,237,750 shares of our
Common Stock, known as performance shares, were placed in escrow by certain of
our investors, which were subject to advisory agreements with our predecessor
that included incentive fee provisions. On January 7, 2000, 2,771,824 shares of
our Common Stock were released from escrow to these investors and 1,465,926
shares of our Common Stock were returned to us and cancelled. The cancelled
shares of Common Stock represent indirect interests in the AMB Property, L.P.
that were reallocated from us (thereby decreasing the number of shares of Common
Stock outstanding) to other unitholders, substantially all of whom had an
ownership interest in our predecessor, including certain of our executive
officers (thereby increasing the number of limited partnership units owned by
partners other than us). The total number of outstanding limited partnership
units did not change as a result of this reallocation. This reallocation did not
change the amount of fully diluted shares of Common Stock and limited
partnership units outstanding. In addition, AMB Investment Management has
collected, on behalf of some of our executive officers who were principals in
our predecessor, certain investment management fees paid in connection with
certain of the properties contributed in our formation transactions. During the
year ended December 31, 2000, AMB Investment Management paid approximately $2.1
million to these officers in respect of such investment management fees.
OTHER RELATED TRANSACTIONS
Upon consummation of our initial public offering, the intercompany
agreement between us and AMB Investments, Inc. was modified so that it applies
only to the office space and certain office equipment leased by AMB Investments,
Inc., which is used by us and AMB Investment Management, respectively, for fees
equal to an allocation of AMB Investments, Inc.'s cost thereof. Pursuant to this
agreement, we reimbursed AMB Investments, Inc. $1.4 million for occupancy costs
in 2000. Under this agreement, certain entities that were affiliated with us
prior to our initial public offering are continuing to use the name "AMB"
pursuant to royalty-free license arrangements with us.
In November 1997, we and AMB Investment Management entered into an
agreement pursuant to which we agreed to provide to AMB Investment Management
certain acquisition related services and agreed to share the services of, and
certain employment obligations of, certain employees. During the year ended
December 31, 2000, the total amount paid to us by AMB Investment Management for
shared employees and other overhead costs was approximately $1.8 million.
We have commercial and investment banking relationships with J.P. Morgan
Chase & Co. and certain of its affiliates. The fees for these services are
determined on an arms-length basis. Mr. Case, one of our directors, is the
Chairman and Chief Executive Officer of J.P. Morgan H&Q, an affiliate of J.P.
Morgan Chase & Co. CB Richard Ellis from time to time provides us with property
management, leasing and investment sales services with respect to certain of our
properties. In addition, CB Richard Ellis has entered into a one-year sublease
with us for a portion of our former corporate headquarters. The annual rent for
the space is approximately $1,025,000. The fees for these services and the
sublease are determined on an arms-length basis. Ms. Sedway, one of our
directors, is the President of the Sedway Group, a member of the CB Richard
Ellis group of companies. The Board has determined, in its business judgment,
that the relationships described in this paragraph do not interfere with Mr.
Case's or Ms. Sedway's exercise of independent judgment and have deemed Mr. Case
and Ms. Sedway to be independent directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our executive officers and
directors, and persons who own more than 10% of a registered class of our equity
securities, to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of our Common Stock and other
of our equity securities. Insiders are required by regulation of the Securities
and Exchange Commission to furnish us with copies of all Section 16(a) forms
they file.
To our knowledge, based solely on review of the copies of such reports
furnished to us or written representations that no other reports were required,
during the year ended December 31, 2000, all of these executive officers and
directors complied with all Section 16(a) filing requirements applicable to
them.
21
AUDITORS
Subject to its discretion to appoint alternative auditors if it deems
such action appropriate, our Board of Directors has retained Arthur Andersen LLP
as our auditors for 2001. The Board has been advised that Arthur Andersen LLP is
independent with regard to us within the meaning of the Securities Act of 1933
and the applicable published rules and regulations thereunder. Representatives
of Arthur Andersen LLP are expected to be present at the Annual Meeting and will
have the opportunity to make statements if they desire and to respond to
appropriate questions from stockholders.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, file reports, proxy
statements and other information with the Securities and Exchange Commission.
Reports, proxy statements and other information filed by us may be inspected
without charge and copies obtained upon payment of prescribed fees from the
Public Reference Section of the Securities and Exchange Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or at the
Securities and Exchange Commission's regional offices located at 7 World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60621-2511, or by way of the
Securities and Exchange Commission's Internet address, http://www.sec.gov.
We will provide without charge to each person to whom a copy of the
proxy statement is delivered, upon the written or oral request of any such
persons, additional copies of our Annual Report on Form 10-K for the period
ended December 31, 2000. Requests for such copies should be addressed to: AMB
Property Corporation, Pier 1, Bay 1, San Francisco, California 94111, Attn:
Investor Relations, telephone (415) 394-9000.
OTHER MATTERS
The Board of Directors does not know of any other matter that will be
brought before the Annual Meeting. However, if any other matter properly comes
before the Annual Meeting, or any adjournment or postponement thereof, which may
properly be acted upon, the proxies solicited hereby will be voted on such
matter in accordance with the discretion of the proxy holders named therein.
March 30, 2001
By Order of the Board of Directors,
/s/ TAMRA D. BROWNE
--------------------------------------
TAMRA D. BROWNE
Vice President,
General Counsel and Secretary
22
EXHIBIT A
AMB PROPERTY CORPORATION
Audit Committee Charter
Originally Adopted March 1999
Amended February 2001
I. PURPOSE
The Audit Committee is a committee of the Board of Directors. Its primary
function is to assist the Board in fulfilling its oversight responsibilities by
monitoring the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting and legal compliance,
and monitoring the independence and performance of the Company's independent
auditors (hereafter called the "auditor").
II. COMPOSITION
- - The Audit Committee, and its Chair, shall be appointed by the Board on
the recommendation of the Nominating and Governance Committee.
- - The Committee shall be composed of at least three, but no more than
five, directors. Only independent directors may be members of the Audit
Committee. Independence shall be defined according to the Bylaws of the
Company, as well as the rules and regulations of the New York Stock
Exchange.
- - Each member of the Committee must have a basic understanding of finance
and accounting and be able to read and understand fundamental financial
statements, and at least one member must have accounting or related
financial management expertise, as such qualifications are interpreted
by the Board.
III. POWERS AND GENERAL RESPONSIBILITIES
The powers and general responsibilities of the Committee shall be as follows:
- - The Committee shall meet four times per year, or more frequently if
circumstances indicate. The Chair shall schedule and provide a written
agenda in advance of all meetings. The Committee may ask members of
management or others to attend its meetings and provide pertinent
information. The Committee may meet in executive session or separately
with the auditor and management, at such times as it considers
appropriate.
- - The Committee shall maintain minutes of its meetings and shall report
its actions to the full Board with such recommendations as the Committee
may deem appropriate.
- - The Committee shall provide an open avenue of communication between the
Board, management and the auditor.
- - The Committee shall have unrestricted access to members of management
and all information relevant to its responsibilities and shall have
authority to conduct or authorize investigations into any matters within
the Committee's scope of responsibilities.
- - The Committee shall have authority to retain independent counsel,
accountants or others, at the Company's expense, to assist in the
performance of any of its responsibilities.
- - The Committee shall review and reassess annually the adequacy of its
charter, and shall submit its charter to the Board annually so that the
Board may affirm the adequacy of the Committee's charter.
- - The Committee shall prepare for inclusion in the Company's annual proxy
statement a report to stockholders as required by the Securities and
Exchange Commission.
- - The Committee shall perform such other functions assigned by law, the
Company's organizational documents or Bylaws, or the Board.
The Committee is responsible for the duties set forth in this Charter, but is
not responsible for planning or conducting audits, determining that the
Company's financial statements are complete and accurate and have been
A-1
prepared in accordance with accounting principles generally accepted in the
United States, or monitoring the effectiveness of the Company's internal
controls. This is the responsibility of management and the auditors. The
Committee also is not responsible for ensuring compliance with laws and
regulations or with the Company's code of ethical conduct. In carrying out its
responsibilities, the Committee believes its policies and procedures should
remain flexible in order to best react to changing environments.
IV. SPECIFIC RESPONSIBILITIES
A. INTERNAL CONTROLS AND RISK ASSESSMENT
The Committee shall:
- - Review with management and the auditor significant financial reporting
risk exposures of the Company and the steps management has taken to
monitor, control and manage such exposures.
- - Review with management and the auditor the significant risks related to
and the adequacy of the Company's internal controls, including
management information systems and other information technology and
security, and the adequacy of the accounting group.
B. ENGAGING THE AUDITOR
The Committee shall:
- - Recommend for the Board's determination the selection, compensation,
evaluation and any replacement of the auditors.
- - Review the scope and approach of the audit plan with the auditor,
including staffing and the reliance on management.
- - Review the auditor's process of identifying and responding to key audit
and internal control risks.
- - Instruct the auditor to identify directly to the Committee any business
or financial risks or exposure, any difficulties in performing its
services, and any material disagreements with management, and review
such issues.
- - Review the independence of the auditor by discussing, at least annually,
its relationships with the Company, and any other relationships that may
adversely affect the independence of the auditor, and recommend to the
Board any appropriate action in response thereto.
- - Obtain and review a periodic analysis from the auditor on changes in
accounting and financial reporting practices applicable to the industry
generally and to the specific activities of the Company.
- - Review fees and other significant compensation to be paid to the
auditor.
In connection with these responsibilities, it is understood that the auditors
are ultimately accountable to the Committee and the Board.
C. REVIEWING AUDITS AND FINANCIAL STATEMENTS
The Committee shall:
- - Review with management and the auditor at the completion of the annual
examination:
- - Prior to their release, the Company's year-end earnings and annual
financial statements, and any significant issues regarding accounting
principles, practices and judgment; together with the existence of
significant estimates and judgments underlying the financial statements
(including the rationale behind those estimates) and details on material
accruals and reserves.
- - The auditor's judgments about the quality and appropriateness, not just
the acceptability, of the Company's accounting principles and financial
disclosures, including the consistency of the Company's policies and
their application, the clarity and completeness of its financial
statements and related disclosures, and the
A-2
degree to which the Company's accounting principles and underlying
estimates are aggressive or conservative.
- Other matters related to the conduct of the audit that are to be
communicated to the Committee under general accepted auditing
standards, including SAS 61.
- - Review with the auditor and, as appropriate, management, the quality and
acceptability of the Company's quarterly financial results prior to
their filing or distribution, including the impact of significant
events, transactions and changes in accounting principles or other items
required to be communicated by the auditor under SAS 61. The Chair may
represent the entire Committee for purposes of this review.
- - Review and assess with management and the auditor, at least quarterly,
the effect of risks and related controls on the quality of the Company's
quarterly and other financial reporting.
- - Review significant findings at such times as they are prepared by the
auditor, together with management's responses.
D. INTERNAL AUDITOR
The Company does not currently have an internal auditor but uses internal
resources and the auditor to perform certain reviews of processes, internal
controls and external financial reporting functions. The Committee may review,
at its discretion, any reports issued as a result of this activity. Further,
should a formal internal audit function be established, the Committee's charter
will be modified as necessary to provide oversight over these activities.
E. COMPLIANCE WITH LAWS AND REGULATIONS
The Committee shall:
- - At least annually, review with the Company's counsel the Company's
process for determining risks from asserted and unasserted claims and
from noncompliance with laws and regulations.
- - At least annually, review with the Company's counsel any legal and
regulatory matters that may have a significant impact on the Company's
operations or financial statements, the Company's compliance with laws
and regulations, and inquiries received from regulators.
F. CODE OF ETHICAL CONDUCT
The Committee shall:
- - Review the Company's adoption of and processes for administering a code
of ethical conduct.
- - Annually review policies and practices as well as audit results with
respect to officers' and directors' expense accounts and perquisites.
- - Annually review a summary of director and officer related party
transactions and potential conflicts of interest.
A-3
Dear Stockholder:
Please take note of the important information enclosed with this proxy. There
are a number of issues related to our operations that require your immediate
attention.
Your vote counts and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy in the enclosed
postage paid envelope.
Alternatively, you can vote by proxy over the Internet or by telephone. See the
reverse side for instructions. AMB Property Corporation is a corporation
organized under the laws of the State of Maryland. Section 2-507 of the Maryland
General Corporation Law authorizes the granting of proxies over the Internet or
by telephone. Accordingly, proxies granted over the Internet or by telephone, in
accordance with the procedures set forth on this proxy card, will be valid under
Maryland law.
Sincerely,
AMB Property Corporation
DETACH HERE
- --------------------------------------------------------------------------------
PROXY
AMB PROPERTY CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of AMB Property Corporation acknowledges receipt of
a copy of the Annual Report and the Proxy Statement, each dated March 30, 2001,
and, revoking any proxy heretofore given, hereby appoints Hamid R. Moghadam, W.
Blake Baird, Michael A. Coke and David S. Fries, and each of them, as proxies
for the undersigned, and hereby authorizes each of them to vote all the shares
of Common Stock of AMB Property Corporation held of record by the undersigned on
March 20, 2001, at the Annual Meeting of Stockholders to be held on May 17,
2001, or any adjournment or postponement thereof, and otherwise to represent the
undersigned at the meeting with all powers possessed by the undersigned as if
personally present at the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS INDICATED, IT
WILL BE
VOTED FOR THE NOMINEES FOR DIRECTOR LISTED IN THE PROXY STATEMENT.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- --------------------------------------------------------------------------------
VOTE BY TELEPHONE VOTE BY INTERNET
It's fast, convenient, and immediate! It's fast, convenient, and your vote is
Call Toll-Free on a Touch-Tone Phone immediately confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683)
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy Statement 1. Read the accompanying Proxy Statement
and Proxy Card. and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). For http://www.eproxyvote.com/amb
stockholders residing outside the United
States call collect on a touch-tone phone 3. Enter your 14-digit Voter Control Number
1-201-536-8073. located on your Proxy Card above your name.
4. Follow the instructions provided.
3. Enter your 14-digit Voter Control Number
located on your Proxy Card above
your name.
4. Follow the recorded instructions.
YOUR VOTE IS IMPORTANT! YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/amb anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET.
- --------------------------------------------------------------------------------
[X] Please mark votes as in this example.
1. Election of Directors
Nomineees:
Hamid R. Moghadam, T. Robert Burke, W. Blake Baird, Daniel H. Case III,
David A. Cole, Lynn M. Sedway, Jeffrey L. Skelton, Ph.D., Thomas W.
Tusher, Caryl B. Welborn, Esq.
FOR WITHHELD
[ ] [ ]
[ ]
--------------------------------------
For all nominees except as noted above
2. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting.
I AM A STOCKHOLDER MARK HERE
100 MAIN STREET FOR ADDRESS
ANYTOWN USA, 10000 CHANGE AND [ ]
NOTE AT LEFT
Please sign exactly as your
name appears hereon. Joint
owners should each sign.
Executors, administrators,
trustees, guardians or other
fiduciaries should give full
title as such. If signing for a
corporation, please sign in
full corporate name by a duly
authorized officer.
Signature:_________________________________ Date:_____________________________