-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ED7uJTihtpopto/8YoV/9/03oBGEPXhqh8cciEY8zszedKGQZ5X5LiYHAPQLKrsH bZMf6ql2ByIwtgfoRCQc+A== 0000892626-01-000127.txt : 20010326 0000892626-01-000127.hdr.sgml : 20010326 ACCESSION NUMBER: 0000892626-01-000127 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010323 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMLI RESIDENTIAL PROPERTIES TRUST CENTRAL INDEX KEY: 0000914724 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363925916 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-12784 FILM NUMBER: 1577534 BUSINESS ADDRESS: STREET 1: 125 S WACKER DR STREET 2: STE 3100 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124431477 FORMER COMPANY: FORMER CONFORMED NAME: AMLI RESIDENTIAL PROPERTIES INC DATE OF NAME CHANGE: 19931112 DEF 14A 1 0001.txt SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [ X ] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ]Preliminary Proxy Statement [ ]Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ X ]Definitive Proxy Statement [ ]Definitive Additional Materials [ ]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 AMLI RESIDENTIAL PROPERTIES TRUST ---------------------------------------------- (Name of Registrant as Specified In Its Charter) ---------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [ X ]No fee required. [ ]$500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: AMLI RESIDENTIAL PROPERTIES TRUST 125 South Wacker Drive, Suite 3100 Chicago, Illinois 60606 ___________ NOTICE OF ANNUAL MEETING OF SHAREHOLDERS and PROXY STATEMENT ___________ March 26, 2001 Dear Shareholder: You are invited to attend our 2001 annual meeting of shareholders, which will be held on Monday, April 30, 2001, beginning at eleven o'clock a.m., Chicago time, at 111 West Monroe Street (west side-37th floor), Chicago, Illinois. The formal notice of the annual meeting, and the proxy statement describing the matters on which you may vote, can be found on the following pages. A copy of our 2000 annual report is enclosed for your review. Also enclosed is a proxy card and a postage-paid return envelope. So that your shares will be voted at the meeting, please complete and sign the enclosed proxy card and return it in the enclosed envelope as promptly as possible. You are encouraged to specify your choices on the matters indicated. However, it is not necessary to specify your choice on a matter if you wish to vote in accordance with the recommendation of the Board of Trustees; in such event, merely executing and returning the proxy card will be sufficient. I hope that you will be able to attend the annual meeting. If you do, you may vote your shares in person even though you have returned a proxy. /S/ ALLAN J. SWEET ALLAN J. SWEET President and Co-Chief Executive Officer AMLI RESIDENTIAL PROPERTIES TRUST 125 South Wacker Drive, Suite 3100 Chicago, Illinois 60606 ___________ NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held April 30, 2001 ___________ The 2001 annual meeting of shareholders of AMLI Residential Properties Trust will be held at 111 West Monroe Street (west side-37th floor), Chicago, Illinois on Monday, April 30, 2001, at eleven o'clock a.m., Chicago time, for the following purposes: 1. To elect three Trustees to serve until the third subsequent annual meeting of shareholders and until their successors are elected and qualify; 2. To ratify the appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending December 31, 2001; and 3. To transact such other business as may properly come before the meeting or any adjournments or postponements thereof. The Board of Trustees has fixed the close of business on March 9, 2001 as the record date for determining the shareholders entitled to receive notice of and to vote at the annual meeting. By Order of the Board of Trustees GREGORY T. MUTZ Chairman and Co-Chief Executive Officer Chicago, Illinois March 26, 2001 ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. SHAREHOLDERS WHO DO NOT INTEND TO BE PRESENT AT THE MEETING IN PERSON ARE REQUESTED TO SIGN AND DATE THE ENCLOSED PROXY AND TO RETURN IT IN THE ACCOMPANYING ENVELOPE IN ORDER THAT THE NECESSARY QUORUM MAY BE ASSURED. ANY PROXY MAY BE REVOKED IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE MEETING. PROXY PROXY AMLI RESIDENTIAL PROPERTIES TRUST This Proxy is Solicited by and on Behalf of the Board of Trustees Annual Meeting of Shareholders To Be Held April 30, 2001 The undersigned hereby appoints each of John E. Allen, Gregory T. Mutz Allan J. Sweet, and Philip N. Tague with full power of substitution, to represent the undersigned at the 2001 annual meeting of shareholders of AMLI Residential Properties Trust to be held on April 30, 2001, and at any adjournments or postponements thereof, and to cast at such meeting the votes that the undersigned would be entitled to cast if present at such meeting, in accordance with the following instructions. If no instructions are indicated, the shares represented by this Proxy will be voted FOR Items 1 and 2 on the reverse hereof. The undersigned acknowledges receipt of the Notice of Annual Meeting and the Proxy Statement together with this Proxy. PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. (Continued and to be signed on the reverse side.) PROXY CARD AMLI RESIDENTIAL PROPERTIES TRUST PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X] 1. ELECTION OF TRUSTEES: Nominees: John E. Allen, Philip N. Tague, Quintin E. Primo III For All (Except Nominee(s) whose _________________________ FOR WITHHOLD name(s) appear All All below) [ ] [ ] [ ] 2. Ratification of the appointment of KPMG LLP as independent auditors for 2001. FOR AGAINST ABSTAIN [ ] [ ] [ ] 3. Such other business that may properly come before the meeting or any adjournment thereof. Trustees recommend: a FOR Vote on Proposals 1 and 2 Dated: ______________________________, 2001 Signature: ________________________________________ Signature, if jointly held_______________________________ NOTE: Please sign exactly as your name(s) appears. For joint accounts, each owner should sign. When signing as executor, administrator, attorney, trustee or guardian, etc., please give your full title. YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE AMLI RESIDENTIAL PROPERTIES TRUST 125 South Wacker Drive, Suite 3100 Chicago, Illinois 60606 ___________ PROXY STATEMENT ___________ Annual Meeting of Shareholders To Be Held April 30, 2001 INTRODUCTION This Proxy Statement is furnished in connection with the solicitation of proxies by and on behalf of the Board of Trustees (the "Board") of AMLI Residential Properties Trust, a Maryland real estate investment trust (the "Company"), for use at the 2001 annual meeting of the Company's shareholders to be held on Monday, April 30, 2001, at 111 West Monroe Street (west side-37th floor), Chicago, Illinois, at eleven o'clock a.m., Chicago time, and any adjournments or postponements thereof (the "Annual Meeting"), for the purposes set forth in the accompanying Notice of Annual Meeting. This Proxy Statement and the enclosed form of proxy are first being mailed or given to shareholders on or about March 26, 2001. ANNUAL REPORT The Annual Report of the Company for the year ended December 31, 2000, including financial statements audited by KPMG LLP, independent auditors, and their report thereon dated February 24, 2001, is being mailed together with this Proxy Statement to each of the Company's shareholders of record at the close of business on March 9, 2001 (the "Record Date"). In addition, a copy of the Company's Annual Report on Form 10-K for the year ended December 31, 2000, as filed with the Securities and Exchange Commission, will be sent to any shareholder, without charge, upon written request to AMLI Residential Properties Trust, 125 South Wacker Drive, Suite 3100, Chicago, Illinois 60606, attention: Secretary, which is the location of the Company's executive offices. VOTING OF PROXIES Only shareholders of record of the Company's common shares of beneficial interest, $.01 par value per share (the "Common Shares"), at the close of business on the Record Date are entitled to notice of and to vote at the Annual Meeting. Each Common Share is entitled to one vote on all matters voted upon by shareholders. There were 17,830,754 Common Shares outstanding on the Record Date. A majority of the outstanding Common Shares represented in person or by proxy will constitute a quorum at the meeting. Each valid proxy returned to the Company will be voted at the Annual Meeting as indicated on the proxy or, if no indication is made with respect to a proposal, in favor of such proposal in accordance with the recommendations of the Board set forth in this Proxy Statement. The Company does not know of any matters to be presented at the Annual Meeting other than the proposals referred to on the proxies and described in this Proxy Statement. However, if any other matters are properly presented at the Annual Meeting, the persons named on the enclosed form of proxy intend to vote the Common Shares represented by them in accordance with their best judgment pursuant to the discretionary authority granted them in the proxies. Any person submitting a proxy may revoke it at any time before it is exercised by so notifying the Company in writing or by delivering to the Secretary of the Company a duly executed proxy bearing a later date. In addition, persons submitting proxies may elect to vote their shares in person at the Annual Meeting, although mere attendance at the Annual Meeting will not serve to revoke a proxy. PROPOSAL 1 ELECTION OF TRUSTEES Three Trustees, constituting all of the Class III Trustees, are to be elected at the Annual Meeting. Such Trustees will serve for a three-year term until the Company's third annual meeting of shareholders subsequent to the Annual Meeting and until their respective successors are elected and qualify, or until earlier death, resignation or removal. Trustees will be elected by a plurality of the votes cast at the Annual Meeting. There is no cumulative voting for Trustees. For purposes of the election of Trustees, abstentions will not be counted as votes cast and will have no effect on the result of the vote, although they will count toward the presence of a quorum. The Board of Trustees has nominated three members of the class of Trustees whose terms are expiring in 2001 to serve for new terms. Each valid proxy returned to the Company will be voted at the Annual Meeting for the three nominees listed below, unless the proxy specifies otherwise. Each of the nominees listed below is a member of the present Board. Biographical information for each of the nominees is set forth under the caption "Management." NOMINEES John E. Allen Philip N. Tague Quintin E. Primo III If any nominee should unexpectedly become unavailable for service, proxies will be voted for another person selected by the Board, unless the proxy specifies otherwise. MANAGEMENT TRUSTEES AND EXECUTIVE OFFICERS The following table sets forth certain information with respect to the Trustees and executive officers of the Company. The Company has a nine-member Board of Trustees which includes, as required by the Company's Declaration of Trust, a majority of the Board (presently five Trustees) who are not affiliated with AMLI Realty Co. and its affiliates and successors (each an "Independent Trustee"). Messrs. Mutz, Allen and Sweet have been Trustees since the organization of the Company. Messrs. Primo, Heilweil, McConahey and Schreiber have been Trustees since February 28, 1994. Mr. Tague and Ms. Gates have been Trustees since March 14, 1995. Each of the individuals named below as an executive officer of the Company accepted his or her position upon formation of the Company, except Messrs. Tague and Kraft, who accepted their positions in September 1994; Mr. Aisner, who accepted his position in 1996; and Messrs. Chapman, Cranor and Thomas, who accepted their positions in December 1997. Each of the officers of the Company named below, other than Messrs. Mutz, Allen and Tague, holds no positions with AMLI Realty Co. and its affiliates (other than AMLI Management Company (the "Management Company"), AMLI Institutional Advisors, Inc. ("AIA") and AMLI Residential Construction ("Amrescon", a wholly-owned subsidiary of AMC since March 2000) (each such entity a "Service Company"). Messrs. Mutz and Allen plan to retain positions with AMLI Realty Co. and its affiliates. In November 1998, the Company announced the formation of the Office of the Chairman consisting of Messrs. Mutz, Sweet and Tague. Mr. Mutz continues to provide strategic direction, motivation and resources to the Company. As President and Executive Vice President, respectively, Mr. Sweet and Mr. Tague share the day-to-day responsibilities of the Chief Executive Officer. Mr. Mutz and Mr. Allen no longer devote a majority of their business time to the activities of the Company. Mr. Tague has been a full-time employee of the Company since 1997. NAME AGE POSITION - ---- --- -------- Gregory T. Mutz 55 Chairman of the Board and Co-CEO (term will expire in 2002) John E. Allen 64 Vice-Chairman of the Board (term would expire in 2001) Allan J. Sweet 53 President, Co-CEO and Trustee (term will expire in 2003) Philip N. Tague 52 Executive Vice President, Co-CEO and Trustee (term would expire in 2001) Laura D. Gates* 50 Trustee (term will expire in 2002) Marc S. Heilweil* 55 Trustee (term will expire in 2002) Stephen G. McConahey* 57 Trustee (term will expire in 2003) Quintin E. Primo III* 46 Trustee (term would expire in 2001) John G. Schreiber* 54 Trustee (term will expire in 2003) Robert S. Aisner 54 Executive Vice President - Property Management Robert J. Chapman 53 Executive Vice President/Chief Financial Officer Stephen C. Ross 43 Executive Vice President - Development Charles C. Kraft 53 Senior Vice President and Treasurer/ Principal Accounting Officer Brian K. Cranor 45 Senior Vice President - Co-Investments James E. Thomas, Jr. 40 Senior Vice President - Development Fred N. Shapiro 52 Senior Vice President - Acquisitions - -------------------- * Independent Trustee. The following is a biographical summary of the experience of the Trustees and executive officers of the Company and certain other significant employees of the Company: Gregory T. Mutz. Mr. Mutz is Chairman of the Board, Co-CEO, and shares the Office of the Chairman of AMLI Residential Properties Trust with Mr. Sweet and Mr. Tague, and he is also Chairman of the Board of AMLI Commercial Properties Trust, both successor companies to AMLI Realty Co., which he co-founded in 1980. He is also President & CEO of UICI (NYSE: UCI) and Chairman of the Board of Directors of Excell Global Services, Inc. Mr. Mutz is also a Director of Alleghany Funds. Prior to founding AMLI, Mr. Mutz was an officer with White, Weld & Co., Incorporated, a New York investment banking firm (1976-1978) and associated with the Chicago law firm of Mayer, Brown & Platt (1973-76). He received a B.A. from DePauw University in 1967 and a J.D. from the University of Michigan Law School in 1973. Mr. Mutz served as an infantry lieutenant in Vietnam from 1968 to 1969. John E. Allen. Mr. Allen is Vice-Chairman of the Board of AMLI Residential Properties Trust, Vice Chairman of the Board of AMLI Commercial Properties Trust, and President and a Director of AMLI Realty Co., which he co-founded in 1980. Mr. Allen is also a member of the Board of Directors of Excell Global Services, Inc. Prior to co-founding AMLI Realty Co., he was a partner at the Chicago law firm of Mayer, Brown & Platt, with which he had been associated since 1964. Mr. Allen received a B.S. in Business from Indiana University in 1961 and a J.D. from the Indiana University School of Law in 1964. Allan J. Sweet. Mr. Sweet is President, Co-CEO and shares the Office of the Chairman of AMLI Residential Properties Trust with Mr. Mutz and Mr. Tague. He has been associated with the Company since its inception and, prior to that time, with AMLI Realty Co. since 1985. Prior to joining AMLI Realty Co., Mr. Sweet was a Partner in the Chicago law firm of Schiff Hardin & Waite, with which he had been associated since 1978. He received a B.B.A. from the University of Michigan in 1968 and a J.D. from the University of Michigan Law School in 1973. From 1980 to 1983, Mr. Sweet was a trustee of American Equity Investment Trust, an over-the-counter equity REIT. He is a Director of the National Multifamily Housing Council and a member of the Pension Real Estate Association and NAREIT. Philip N. Tague. Mr. Tague is Executive Vice President, Co-CEO and shares the Office of the Chairman of AMLI Residential Properties Trust with Mr. Mutz and Mr. Sweet. He has been associated with the Company since its inception and with AMLI Realty Co. since 1982. Mr. Tague has overall responsibility for the Company's development activities. Prior to joining AMLI Realty Co., Mr. Tague was associated with the Chicago law firm of Mayer, Brown & Platt (1977-81). He received a B.S. from Northwestern University in 1971 and a J.D. from Ohio State University College of Law in 1977. He is an officer and/or member of a number of industry groups including the Atlanta Apartment Association, the Georgia Apartment Association, ULI, NAIOP, REIAC, IDRC and the National Multifamily Housing Council. Laura D. Gates. Ms. Gates has been an Independent Consultant since 2000. From 1994 to 2000 she was Vice President for Museum Affairs and later Vice President, International at the Field Museum of Natural History in Chicago. Prior thereto she was a Principal of McKinsey & Company, Inc. from 1986 to 1993 and an Associate in that firm from 1980 to 1985. Ms. Gates received a B.A. from Wellesley College in 1972 and an M.B.A. from the Harvard University Graduate School of Business Administration in 1976. Marc S. Heilweil. Mr. Heilweil has been President of Spectrum Advisory Services, Inc., an investment counseling company based in Atlanta, Georgia since 1991. He is also the portfolio manager of Marathon Value Portfolio, an equity mutual fund. Previously, he was President of Heilweil Hollander Jacobs, Inc. from 1986 to 1991 and worked as an investment counselor from 1977 to 1986. Mr. Heilweil practiced law from 1974 to 1977. Mr. Heilweil received a B.A. from Yale University in 1967 and a J.D. from Yale University Law School in 1974. Stephen G. McConahey. Mr. McConahey is currently President of SGM Family Properties, LLC, a private investment company. Until October 1999, Mr. McConahey held the position of President and Chief Operating Officer of EVEREN Securities, Inc. and EVEREN Capital Corporation, where he was responsible for the day to day operations of the firm, chaired the operating committee and served as a member of the board of directors. EVEREN was purchased by First Union Corporation in October 1999. Prior to EVEREN, Mr. McConahey was Senior Vice President of corporate and international development at Kemper Corporation and Executive Vice President at Kemper Financial Services. Prior to Kemper, Mr. McConahey was Chairman and Chief Executive Officer of Boettcher and Company, a regional securities brokerage firm headquartered in Denver, Colorado. Mr. McConahey received his bachelor's degree from the University of Wisconsin and MBA from the Harvard University Graduate School of Business Administration. Earlier in his career, Mr. McConahey received a White House Fellowship and subsequently served as Special Assistant to President Gerald Ford. Prior to his fellowship, Mr. McConahey was with the consulting firm of McKinsey and Company. Quintin E. Primo III. Mr. Primo is Co-Chairman of Capri Capital, L.P., a real estate investment advisory firm, a position he has held since 1992. Prior thereto, Mr. Primo was Managing Director and co-founder of Q. Primo & Company, Inc., a real estate investment banking firm, from 1988 to 1992. Prior thereto, he was Vice President of Citicorp Real Estate, Inc. Mr. Primo received a B.S. from Indiana University in 1977 and an M.B.A. from the Harvard University Graduate School of Business Administration in 1979. John G. Schreiber. Mr. Schreiber is President of Centaur Capital Partners, Inc., a family investment firm. He is also Senior Advisor and Partner of Blackstone Real Estate Advisors, L.P., which manages large real estate private equity funds. Mr. Schreiber is a Director of Host Marriott Corporation and a Director of a number of mutual funds advised by T. Rowe Price Associates, Inc. Mr. Schreiber is also a Director of The Brickman Group, Ltd. and of JMB Realty Corporation and a member of its affiliates. In addition, Mr. Schreiber is a candidate for election to the Board of Directors of the Rouse Company. Prior to his retirement as an officer of JMB Realty Corporation in 1990, Mr. Schreiber was Chairman of JMB/Urban Development Co. from its inception in 1988 until 1990 and an Executive Vice President of JMB Realty Corporation from 1979 to 1990. Mr. Schreiber received a B.B.A. from Loyola University of Chicago in 1968 and an M.B.A. from the Harvard University Graduate School of Business Administration in 1970. Robert S. Aisner. Mr. Aisner is Executive Vice President of AMLI Residential Properties Trust and President of AMLI Management Company. Mr. Aisner has overall responsibility for the Company's property management operations and currently oversees the Company's development activities in Dallas, Houston and Austin. Prior to joining the Company in 1996, he was Vice President of HRW Resources, a privately held Hartford, CT real estate company. He was responsible for the development, construction and management activities of HRW's Kansas portfolio, which was acquired by the Company in October 1994. Mr. Aisner graduated from Colby College (B.A.) in 1968 and received his M.B.A. from the University of New Hampshire in 1976. He is a Director of the National Multifamily Housing Council, a Director of the Apartment Association of Greater Dallas and a member of the Texas Apartment Association and the National Association of Homebuilders. Robert J. Chapman. Mr. Chapman is Executive Vice President and Chief Financial Officer of AMLI Residential Properties Trust. Mr. Chapman joined the Company in December of 1997. He has responsibility for the Company's debt and equity financing activities, as well as overall responsibility for the Company's Accounting, Treasury and MIS operations. Prior to joining the Company, Mr. Chapman was Managing Director of Heitman Capital Management Corporation (1994-97), Managing Director and Chief Financial Officer of JMB Institutional Realty Corporation (1994) and Managing Director and Chief Financial Officer of JMB Realty Corporation (1976-94). He was also associated with KPMG LLP (1972-76). He received a B.B.A. in 1970 and an M.B.A. in 1971 from the University of Cincinnati and is a CPA and National Association of Securities Dealers Registered Representative. Mr. Chapman is or has been a member of the Pension Real Estate Association, the Urban Land Institute, the International Council of Shopping Centers, The American Institute of Certified Public Accountants and the Illinois CPA Society. He served as a Director of the National Association of Real Estate Companies and the Real Estate Advisory Council of the University of Cincinnati. Stephen C. Ross. Mr. Ross is Executive Vice President of AMLI Residential Properties Trust and has been with the Company since its inception; prior thereto he was with AMLI Realty Co. since 1989. Mr. Ross is responsible for development activities in Chicago. Prior to joining AMLI Realty Co., he was associated with JMB Realty Corporation in Chicago and New York City where he had certain portfolio management and acquisition responsibilities. Mr. Ross received a B.S. from the University of Rochester in 1978 and an M.B.A. from the University of Chicago in 1981. He is a member of the Urban Land Institute and is a Director of the Central Region of REIAC. Charles C. Kraft. Mr. Kraft is Senior Vice President and Treasurer of AMLI Residential Properties Trust and had been associated with AMLI Realty Co. from 1983 through 1996. Mr. Kraft is responsible for financial reporting, tax planning, treasury and cash management operations. Prior to joining AMLI Realty Co., he was associated with the Chicago office of KPMG LLP (1968-82) in that firm's national real estate practice. Mr. Kraft received an A.B. from Wabash College in 1968. He is a past Director of the Chicago Board of Realtors and is a CPA. Mr. Kraft is a member of The American Institute of Certified Public Accountants and the Illinois CPA Society. Brian K. Cranor. Mr. Cranor is Senior Vice President of AMLI Residential Properties Trust and Executive Vice President of AMLI Institutional Advisors, Inc. He joined the Company early in 1998 following the Company's purchase of Trammell Crow Residential - Midwest ("TCR"). Mr. Cranor's primary responsibilities include capital raising for the Company's co-investment activities. He joined TCR in 1989 where he was Partner & Chief Financial Officer, overseeing financing and accounting activity for TCR's Midwest operations. Prior to his association with TCR, Mr. Cranor was Vice President of Oxford Development Company (1984-89) and a Tax Senior (real estate) with Arthur Andersen and Company. Mr. Cranor received an undergraduate degree from Ball State University and an M.B.A. (Accounting) from the University of Houston in 1980. He is a CPA and a member of the Indiana CPA Society and the American Institute of Certified Public Accountants. He also serves as a board member for the Apartment Association of Indiana. James E. Thomas, Jr. Mr. Thomas is Senior Vice President of AMLI Residential Properties Trust and Executive Vice President of AMLI Residential Construction LLC. He joined the Company late in 1997 following the Company's purchase of TCR. Mr. Thomas is responsible for development activities in Indianapolis and Kansas City. He joined TCR in 1989 where he was Partner-Acquisitions & Development for markets in the lower Midwest. Prior to his association with TCR, Mr. Thomas was with the Kirkland Group in Boston, MA (1985-89) where he had similar operating responsibilities. Mr. Thomas received a B.S. in 1983 and an M.A. in 1985 from the School of Architecture and Planning of Massachusetts Institute of Technology and an M.S. in Real Estate Development from M.I.T's Center for Real Estate Development in 1985. Mark T. Alfieri. Mr. Alfieri is Senior Vice President of Acquisitions of AMLI Residential Properties Trust. Prior to joining the Company in 1999, he was associated with FultsOncor Investment Services (1997-99) as Vice President where he acted as a broker specializing in the sale of office, industrial and multifamily properties to real estate investors. He was President and Founder of Revest Group, Inc. (1992-1997), an asset management company, and Vice President with Performance Properties Corporation (1987-91). Mr. Alfieri holds a B.B.A. in Marketing from Texas A&M University. He is a licensed real estate broker in Texas. Peggy D. Butterworth. Ms. Butterworth is Executive Vice President of AMLI Management Company. Prior to joining the Company in 1994, she had been associated with AMLI Realty Co. since 1988. Prior to joining AMLI Realty Co., she was Vice President-Marketing and Human Resources and Divisional Vice President for the Trammell Crow Company (1979-88). Ms. Butterworth attended the Virginia Polytechnic Institute and State University and is a candidate for the Certified Property Manager designation with the Institute of Real Estate Management. She is a member of IREM. Mark T. Evans. Mr. Evans is Executive Vice President and National Director of Construction for AMLI Residential Construction LLC. He has overall responsibility for the allocation of personnel, resources and systems relating to the Company's multifamily land development and construction activities and is actively involved in the planning, development and product selection for the Company's communities. Joining the Company in 1994, Mr. Evans was previously associated with Peachtree Residential Properties as Director of Purchasing (1992-94); Roberts Properties (1990-92); Grove Construction (1986-90); and AMLI Realty Co. (1983-86). Mr. Evans graduated from the University of Florida in 1982. Rosita A. Lina. Ms. Lina is Senior Vice President and Controller of AMLI Residential Properties Trust. Prior to joining the Company in 1994, she had been associated with AMLI Realty Co. since 1985. Ms. Lina is responsible for the Company's accounting operations. Prior to joining AMLI Realty Co., she was Accounting Manager for four years with Urban Investment and Development Co. in Chicago, Illinois. Ms. Lina received a B.B.A. from the University of the East in Manila, Philippines in 1965 and is a CPA. She is a member of The American Institute of Certified Public Accountants and the Illinois CPA Society. Gregory A. O'Berry. Mr. O'Berry is Executive Vice President of AMLI Management Company. Mr. O'Berry has been with the Company since April 1995. He is responsible for asset management of the Company's multifamily investments, as well as for the operations of AMLI Corporate Homes. He was previously associated with Lincoln Property Company (1985-95), most recently as Vice President - Finance and Administration (Midwest) in Chicago, Illinois. Mr. O'Berry received a B.S. in Accounting from the University of Illinois in 1982 and is a CPA. He is past President and is currently a member of the Board of Directors and the Executive Committee of the Chicagoland Apartment Association. Fred N. Shapiro. Mr. Shapiro is Senior Vice President of AMLI Residential Properties Trust. Prior to joining the Company in 1994, he had been associated with AMLI Realty Co. since 1984. He is responsible for acquisition efforts in the Midwest region and for coordinating efforts to minimize real estate tax assessments. Mr. Shapiro received a B.A. from New York University in 1971 and a J.D. from John Marshall Law School in 1978. Steven L. Small. Mr. Small is Senior Vice President and Chief Information Officer of AMLI Residential Properties Trust. Mr. Small joined AMLI in September 2000 and is responsible for AMLI's technology infrastructure including its wide area network, ERP financial and reporting systems, and technical support operations. Prior to joining AMLI, he owned a company that designed and installed voter registration databases for large municipalities such as Chicago and Phoenix. Mr. Small graduated from the University of Illinois in 1977 with a Bachelor of Science Degree in Computer Engineering. BOARD COMMITTEES AND MEETINGS The Company has standing Audit, Executive Compensation and Real Estate Committees of the Board and does not have a standing nominating committee. Ms. Gates and Messrs. Heilweil and McConahey constitute the Audit Committee. Pursuant to the Company's by-laws, each member of the Audit Committee must be independent of management of the Company and free from any relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment as a member of the Audit Committee. The Audit Committee makes recommendations concerning the engagement of independent public accountants, reviews with the independent public accountants the plans and results of the audit engagement, approves professional services provided by the independent public accountants, reviews the independence of the independent public accountants, considers the range of audit and non-audit fees and reviews the adequacy of the Company's internal accounting controls. The Audit Committee met four times during the year 2000 and has met twice in January 2001 and once in March 2001 to carry out its responsibilities as detailed in its charter (Exhibit A) which was adopted on May 1, 2000. Effective January 31, 2000, the Securities and Exchange Commission adopted new rules relating to the disclosure of information about companies' audit committees. The Company's Audit Committee Charter was adopted pursuant to these new rules and recommendations. Messrs. Heilweil, McConahey, Primo and Schreiber and Ms. Gates constitute the Executive Compensation Committee. Pursuant to the Company's by-laws, each member of the Executive Compensation Committee must be a "disinterested person" within the meaning of former Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and a majority of the members of the Executive Compensation Committee must be Independent Trustees. The Executive Compensation Committee determines the compensation of the Company's four officers who are also Trustees and the Executive Vice Presidents - Property Management and Chief Financial Officer, and administers the Company's option plan, performance incentive plan, executive share purchase plan, senior officer loan share purchase program, forgivable loan plan and certain other employee benefit plans. See "Option Plan," "Performance Incentive Plan," "Executive Share Purchase Plan," "Senior Officer Loan Share Purchase Program," "Incentive Compensation," "Retirement Savings Plan," "Non-Competition Agreements, Employment Agreements, and Termination of Employment," and "Executive Compensation Committee Report on Executive Compensation" below. The Executive Compensation Committee met once each in January, March, and October 2000. Since 1997, the Executive Compensation Committee has approved the following increases in base compensation for the four Officer/Trustees listed below:
1998 Increase 1999 Increase 2000 Increase 2001 Salary (Decrease) Salary (Decrease) Salary (Decrease) Salary -------- -------- -------- --------- -------- ---------- --------- John E. Allen . . . $125,000 $(75,000) $ 50,000 $(20,000) $ 30,000 $ 0 $ 30,000 Gregory T. Mutz . . $125,000 $ 0 $125,000 $(85,000) $ 40,000 $ 0 $ 40,000 Allan J. Sweet. . . $220,000 $ 30,000 $250,000 $ 25,000 $275,000 $ 10,000 $285,000 Philip N. Tague . . $220,000 $ 30,000 $250,000 $ 25,000 $275,000 $ 10,000 $285,000 Mr. Allen's and Mr. Mutz's decreases are based on the decreased amount of time being spent on the Company's business. The increases Mr. Sweet and Mr. Tague received as of January 1999 are partially in recognition of their promotions to Co-CEO in the Office of the Chairman.
Messrs. Mutz, Allen, Sweet, Primo and Schreiber constitute the Real Estate Committee. Messrs. Heilweil and McConahey are alternate members of the Real Estate Committee, serving in the event that Mr. Primo or Mr. Schreiber is unavailable for a meeting. Action by the Real Estate Committee requires approval of a majority of the members voting on any matter, and such majority must include any one of Messrs. Primo, Schreiber, Heilweil and McConahey. The Real Estate Committee is authorized to, among other things, approve, subject to certain limitations, the acquisition or development of additional apartment communities and the financing, refinancing or sale of the Company's existing apartment communities and other apartment communities acquired by the Company. The Real Estate Committee met four times during 2000. Four meetings of the full Board were held in 2000. Each Trustee who held such position in 2000 attended at least 75% in the aggregate of all meetings of the Board and any committee on which such Trustee served. REPORT OF THE AUDIT COMMITTEE The Audit Committee has reviewed and discussed with management and with the Company's independent auditors the Company's audited financial statements for the year ended December 31, 2000. These discussions included matters required to be discussed by the Statements on Auditing Standards, which include, among other things, (1) methods used to account for significant or unusual transactions; (2) the effect of significant accounting policies in emerging areas for which there is a lack of authoritative guidance; (3) the process used by management in formulating sensitive accounting estimates and the basis for the auditor's conclusions regarding the reasonableness of those estimates; and (4) any disagreements with management over the application of accounting principles, the basis for management's accounting estimates, and the disclosures in the financial statements. The Audit Committee has received the written disclosures and the letter from our independent auditors, KPMG LLP, as required by Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees," and has discussed with the independent auditors the issue of their independence from the Company. The Audit Committee has considered whether the provision of non-audit services by KPMG LLP to the Company for the fiscal year ended December 31, 2000, as described in this Proxy Statement under "Relationship with Independent Accountants," is compatible with maintaining KPMG LLP's independence. Based on its review of the audited financial statements and discussions related thereto, the Audit Committee has recommended to the Board of Trustees that the audited financial statements be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. Marc S. Heilweil, Chairman Laura D. Gates Stephen G. McConahey EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth certain information regarding the compensation of Messrs. Mutz, Sweet and Tague, the Co-CEOs of the Company, Mr. Allen, and the Company's five other most highly compensated executive officers during 2000, 1999 and 1998. The table includes compensation from all sources for services rendered to the Company and its subsidiaries during these years.
ANNUAL COMPENSATION LONG-TERM COMPENSATION ----------------------------- ---------------------------------- AWARDS PAYOUTS ----------------------- ------- OTHER RESTRICTED SECURITIES ANNUAL SHARE UNDERLYING LTIP ALL OTHER NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS PAYOUTS COMPENSATION PRINCIPAL POSITION YEAR ($) ($) ($) (2) ($) (NUMBER) ($) ($) (3) - ------------------ ---- ------- ------ ------------ ---------- ---------- ------- ------------ Gregory T. Mutz Chairman of the Board of Trustees and Co-CEO . . . . . 2000 $ 40,000 -- $ -- -- 4,000 $113,321 $20,198 1999 $125,000 -- $18,655 -- 35,000 -- $25,765 1998 $125,000 -- $17,359 -- 20,000 -- $25,688 John E. Allen Vice Chairman of the Board of Trustees . . . . . . 2000 $ 30,000 -- $ -- -- 3,000 $113,321 $15,144 1999 $ 50,000 $35,000 $ 7,925 -- 30,000 -- $21,430 1998 $125,000 -- $15,702 -- 20,000 -- $21,804 Allan J. Sweet President, Co-CEO, and Trustee. . . . . . . 2000 $275,000 -- $ 1,444 -- 95,000 $113,321 $23,706 1999 $250,000 $62,390 $ 8,305 -- 57,000 -- $29,152 1998 $220,000 $30,000 $16,434 -- 25,000 -- $23,339 ANNUAL COMPENSATION LONG-TERM COMPENSATION ----------------------------- ---------------------------------- AWARDS PAYOUTS ----------------------- ------- OTHER RESTRICTED SECURITIES ANNUAL SHARE UNDERLYING LTIP ALL OTHER NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS PAYOUTS COMPENSATION PRINCIPAL POSITION YEAR ($) ($) ($) (2) ($) (NUMBER) ($) ($) (3) - ------------------ ---- ------- ------ ------------ ---------- ---------- ------- ------------ Philip N. Tague Executive Vice President, Co-CEO, and Trustee. . . . . . . 2000 $275,000 -- $ -- 95,000 $113,321 $23,713 1999 $250,000 $62,390 $ -- -- 57,000 -- $29,142 1998 $220,000 $30,000 $14,999 -- 25,000 -- $23,331 Robert S. Aisner Executive Vice President - Property Management. 2000 $240,000 -- $ -- 75,000 -- $14,785 1999 $220,000 $54,090 -- -- 46,000 -- $12,942 1998 $187,500 $25,000 $17,520 -- 17,500 -- $ 9,745 Robert J. Chapman Executive Vice President - Chief Financial Officer. . . . . . . 2000 $240,000 -- $17,499 75,000 -- $11,992 1999 $220,000 $54,090 $17,498 -- 46,000 -- $10,438 1998 $200,000 $25,000 $19,279 -- 17,500 -- $ 2,096 (1) Stephen C. Ross Executive Vice President - Development. . . . . 2000 $220,000 $10,000 $ -- 35,000 $32,377 $17,918 1999 $200,000 $49,400 -- -- 16,000 -- $18,235 1998 $175,000 $25,000 $ 3,403 -- 15,000 -- $14,611 ANNUAL COMPENSATION LONG-TERM COMPENSATION ----------------------------- ---------------------------------- AWARDS PAYOUTS ----------------------- ------- OTHER RESTRICTED SECURITIES ANNUAL SHARE UNDERLYING LTIP ALL OTHER NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS PAYOUTS COMPENSATION PRINCIPAL POSITION YEAR ($) ($) ($) (2) ($) (NUMBER) ($) ($) (3) - ------------------ ---- ------- ------ ------------ ---------- ---------- ------- ------------ Brian K. Cranor Senior Vice President. . . . . . 2000 $205,000 $10,000 $ 8,203 -- 35,000 -- $11,780 1999 $185,000 $47,750 $12,825 -- 16,000 -- $10,299 (1) 1998 $137,885 $25,000 -- -- 30,000 -- $ 4,846 James E. Thomas, Jr. Senior Vice President. . . . . . 2000 $205,000 $10,000 $ -- -- 35,000 $11,780 1999 $185,000 $47,750 $ 9,619 -- 16,000 -- $10,299 1998 $150,000 $25,000 $11,249 -- 30,000 -- $ 7,396 - -------------------- (1) Represents prorated annual salary. The annualized salary for Mr. Cranor was $150,000 in 1998. (2) The Company pays the cost of personal income tax preparation services for Mr. Sweet ($1,444, $1,499 and $1,435 in 2000, 1999 and 1998, respectively) and for Mr. Chapman ($2,500, $2,500 and $4,280 in 2000, 1999 and 1998, respectively), and, until 1999, for 50% of the cost of personal income tax preparation services for Mr. Mutz ($3,656 and $2,360 in 1999 and 1998, respectively) and for Mr. Allen ($907 and $703 in 1999 and 1998, respectively). During 1998, Mr. Aisner received $12,500 in payment of club dues. Messrs. Mutz, Allen and Sweet received $0, $0 and $0, respectively, in 2000; $14,999, $7,018 and $6,806, respectively, in 1999, and Messrs. Mutz, Allen, Sweet and Tague each received $14,999 in 1998 in compensation based on the 15% discount under the Executive Share Purchase Plan. Mr. Tague received no compensation in the form of discount under the Executive Share Purchase Plan in 2000 or 1999. Messrs. Aisner, Chapman, Ross, Cranor and Thomas received $0, $14,999, $0, $8,203 and $0, respectively, in 2000; $0, $14,998, $0, $12,825 and $9,619, respectively, in 1999; and $5,020, $14,999, $3,403, $0 and $11,249, respectively, in 1998, in compensation based on the 15% discount under the Executive Share Purchase Plan. (3) The employer contributions by the Company under the Retirement Savings Plan for Messrs. Mutz, Allen, Sweet, Tague, Aisner, Chapman, Ross, Cranor and Thomas were $0, $0, $5,250, $5,250, $5,250, $5,250, $5,213, $5,250 and $5,250, respectively, during 2000; $0, $0, $5,300, $5,300, $5,300, $5,300, $5,300, $5,300 and $5,300, respectively, during 1999; and $4,700, $4,700, $5,300, $5,300, $5,300, $0, $5,300, $2,750 and $5,300, respectively, during 1998. See "Retirement Savings Plan" below. The Company paid a $96 annual premium in 2000, a $96 annual premium in 1999 and a $77 premium in 1998 to provide up to $50,000 of group term life insurance for each of its employees, including the named executive officers. During 2000, 1999 and 1998, Mr. Mutz was credited with $20,102, $25,669 and $20,911, respectively; Messrs. Allen, Sweet and Tague were each credited with $18,170 ($15,048 in the case of Mr. Allen), $23,578 ($21,334 in the case of Mr. Allen), and $17,794 ($17,027 in the case of Mr. Allen), respectively; Mr. Aisner was credited with $9,439, $7,546 and $4,368, respectively; Mr. Chapman was credited with $6,646, $5,042 and $2,019, respectively; Mr. Ross was credited with $12,609, $12,839 and $9,234, respectively; and Messrs. Cranor and Thomas were each credited with $6,434, $4,903 and $2,019, respectively, in Performance Units (as defined under "Performance Incentive Plan" below) as distribution equivalents corresponding to the amount of distributions made on the number of units of limited partnership interest ("Units") in AMLI Residential Properties, L.P. (the "Operating Partnership") underlying the Performance Units respectively held by each of them. See "Long-Term Incentive Plan Awards" and "Performance Incentive Plan" below. During 2000, 1999 and 1998, Mr. Sweet received $190, $178 and $168, respectively, and Mr. Tague received $197, $168 and $160, respectively, in taxable income relating to split dollar life insurance policies maintained jointly by the Company and these officers.
OPTION GRANTS On October 30, 2000, options for 634,250 Units were granted to 44 key employees and officers of the Company and its subsidiaries at an exercise price of $23.1562. Each Unit is exchangeable for one Common Share. The following table sets forth certain information with respect to individual grants of options in 2000 to each of the executive officers named in the summary compensation table above.
INDIVIDUAL GRANTS ------------------------------------------------------ POTENTIAL REALIZABLE SECURITIES PERCENT OF ANNUAL RATES OF SHARE UNDERLYING TOTAL OPTIONS PRICE APPRECIATION FOR OPTIONS GRANTED TO EXERCISE OR OPTION TERM GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ----------------------- NAME (NUMBER)(1) 2000 ($/SHARE) DATE (2) 5% ($) 10% ($) - ---- ----------- ------------- ----------- ---------- ---------- ---------- Gregory T. Mutz 4,000 0.63% $23.1562 10/30/2010 $ 58,251 $ 147,620 John E. Allen 3,000 0.47% $23.1562 10/30/2010 $ 43.688 $ 110,715 Allan J. Sweet 95,000 14.98% $23.1562 10/30/2010 $1,383,467 $3,505,977 Philip N. Tague 95,000 14.98% $23.1562 10/30/2010 $1,383,467 $3,505,977 Robert S. Aisner 75,000 11.82% $23.1562 10/30/2010 $1,092,211 $2,767,876 Robert J. Chapman 75,000 11.82% $23.1562 10/30/2010 $1,092,211 $2,767,876 Stephen C. Ross 35,000 5.52% $23.1562 10/30/2010 $ 509,698 $1,291,676 Brian K. Cranor 35,000 5.52% $23.1562 10/30/2010 $ 509,698 $1,291,676 James E. Thomas, Jr. 35,000 5.52% $23.1562 10/30/2010 $ 509,698 $1,291,676 __________ (1) Represents aggregate options to purchase Units. Such options vest one-third each on October 30, 2003, 2004 and 2005, or immediately in the event of the holder's death, disability, termination without cause or a change in control of the Operating Partnership. (2) Subject to earlier expiration twelve months after termination of the holder's employment with the Company and its affiliates.
AGGREGATED OPTION EXERCISES IN 2000 AND YEAR-END OPTION VALUES The following table sets forth certain information concerning exercises of options during 2000 by each of the executive officers named in the summary compensation table above and the year-end value of unexercised options owned by such executive officers.
NUMBER OF SECURITIES VALUE OF UNEXERCISED SECURITIES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT ACQUIRED ON VALUE OPTIONS AT YEAR-END YEAR-END (2) ($) EXERCISE (1) REALIZED --------------------------------------------------- NAME (NUMBER) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---- ------------ -------- ----------- ------------- ----------- ------------- Gregory T. Mutz 0 -- 135,000 79,000 $525,626 $239,251 John E. Allen 0 -- 126,666 71,334 $499,168 $216,365 Allan J. Sweet 0 -- 121,666 195,334 $478,230 $478,120 Philip N. Tague 0 -- 102,499 197,001 $395,156 $480,100 Robert S. Aisner 0 -- 24,166 149,334 $ 81,120 $368,307 Robert J. Chapman 0 -- 4,166 146,834 $ 7,682 $365,339 Stephen C. Ross 0 -- 67,166 76,834 $292,745 $182,680 Brian K. Cranor 0 -- 5,000 76,000 $ 7,500 $179,346 James E. Thomas, Jr. 0 -- 5,000 76,000 $ 7,500 $179,346 ___________ (1) None of the options held by such executive officers was exercised through February 28, 2001. (2) Calculated based on the year-end share value of $24.6875 per share.
LONG-TERM INCENTIVE PLAN AWARDS Since January 30, 1995, 112,900 Performance Units (as defined under "Performance Incentive Plan" below), of which 80,000 original Performance Units remain outstanding as of February 28, 2001, were awarded to key employees and officers of the Operating Partnership and the Service Companies pursuant to the Company's performance incentive plan. Of this total, 3,500 Performance Units were awarded on October 30, 2000 (none of which were awarded to the executive officers named in the summary compensation table above) and the remainder were awarded in years prior to 2000. In February 2001, Mr. Mutz received $98,967, Mr. Allen received $51,080, Mr. Sweet received $51,080, Mr. Tague received $51,080, and Mr. Ross received $39,906 as cash compensation in full satisfaction of the Performance Units these officers had been awarded in 1996. In February 2000, Messrs. Mutz, Allen, Sweet and Tague each received cash compensation payments of $113,321 and Mr. Ross received a cash compensation payment of $32,377, in full satisfaction of the Performance Units these officers had been awarded in 1995. See "Performance Incentive Plans" below. Each Performance Unit is payable in one Unit. Performance Units will generally become payable upon the determination that the relevant performance objectives set by the Executive Compensation Committee have been met. The performance objective applicable to these Performance Units is the achievement by the Company of 4% compound annual growth in Funds from Operations (as defined under "Incentive Compensation" below) during the five- to ten-calendar year period immediately following each award. Calculation of the Company's compound annual growth in Funds from Operations will initially be made as soon as practicable after the fiscal year end five years following each award, and if the performance objective has not been met at such calculation date, it will again be calculated as soon as practicable after each of the next five fiscal year ends until the performance objective has been met. If the performance objective has not been met during the ten-year period following the award, such Performance Units will expire and none of the participants in the Performance Incentive Plan will receive any payments in respect thereof. If at any such calculation date it is determined by the Executive Compensation Committee that the performance objective has been met, payments will be made to each eligible participant in an amount equal to one Unit for each Performance Unit (or cash equal to the fair market value of such number of Units in lieu thereof with respect to each Performance Unit held). Payment will be made for each eligible Performance Unit upon the determination by the Executive Compensation Committee that the performance objective has been met or exceeded. No payment will be made if the performance objective has not been met. OPTION PLAN In 1994, the Company adopted the Option Plan to provide incentives to attract and retain Trustees, officers and key employees and service providers. The summary of the Option Plan set forth below is qualified in its entirety by the text of the Option Plan. The Option Plan provides for the grant of options to purchase a specified number of Common Shares or Units ("Options"). Under the Option Plan, the maximum number of Common Shares available for grant and available to be issued upon exchange of Units issued under the Option Plan is equal to 2,850,000 (increased from 1,000,000 in 1998 and from 2,000,000 in 2000 pursuant to amendment to the Plan). Upon certain extraordinary events, the Executive Compensation Committee may make such adjustments in the aggregate number and kind of Common Shares or Units reserved for issuance, the number and kind of Common Shares or Units covered by outstanding awards and the exercise prices specified therein as it determines to be appropriate. Participants in the Option Plan, who may be directors, officers or employees of, or service providers to, the Company, its subsidiaries or designated affiliates, will be selected by the Executive Compensation Committee. Approximately 48 Trustees, officers and employees are currently eligible to participate in the Option Plan. The Executive Compensation Committee will also determine the terms of Options granted under the Option Plan including, among other things, the exercise price of Options, whether Incentive Share Options ("ISOs") or non-qualified Options shall be granted, the number of Common Shares or Units subject to each Option and the vesting schedule applicable to each such Option. Trustees of the Company are also eligible to participate but, in the case of Trustees who are not also employees of the Company, only pursuant to automatic grants under a specified formula set forth in the Option Plan and described under "Compensation of Trustees" below. The Executive Compensation Committee may amend any award previously granted, prospectively or retroactively. No such amendment may impair the rights of any participant under any award without the consent of such participant (except for any amendment made to cause the Option Plan to qualify for an exemption provided by Rule 16b-3 under the Exchange Act). The Option Plan authorizes the Executive Compensation Committee to grant Options at an exercise price determined by the Executive Compensation Committee. Such price cannot be less than 100% of the fair market value of the Common Shares or Units on the trading date immediately preceding the date on which the Option in respect thereof is granted. Subject to certain limitations regarding real estate investment trust ("REIT") qualification and taxes, with respect to any individual, the aggregate fair market value (determined at the time the Option is granted) of Common Shares with respect to which ISOs may be granted under the Option Plan, which Options are exercisable for the first time during any calendar year, may not exceed $100,000. No Option may be granted or exercised if the grant or exercise of such Option could cause the Company to fail to qualify as a REIT for Federal income tax purposes or to incur additional taxes under Section 857 of the Internal Revenue Code of 1986, as amended (the "Code"). The exercise price is payable in cash. The vesting provisions of the Options will be determined by the Executive Compensation Committee, except with regard to Options received by Independent Trustees as described under "Compensation of Trustees" below. Notwithstanding the foregoing references to the Executive Compensation Committee, the authority to grant and administer Options awarded to Service Company employees or service providers who are not also Trustees or officers of the Company subject to Section 16(a) of the Exchange Act is vested in the board of directors, or a committee of two or more directors, of the respective Service Company. The right of any participant to exercise an Option may not be transferred in any way other than by will or the laws of descent and distribution. On October 30, 2000, Options for 634,250 Units were granted to 44 key employees and officers of the Company and its affiliates at an exercise price equal to $23.1562 per Unit. On November 1, 1999, Options for 412,500 Units were granted to 44 key employees and officers of the Company and its affiliates at an exercise price equal to $20.8125 per Unit. The Co-CEOs, the Vice Chairman of the Board of Trustees, and the five most highly compensated executive officers of the Company have received Options under the Option Plan as follows: Mr. Mutz, 214,000; Mr. Allen, 198,000; Mr. Sweet, 317,000; Mr. Tague, 299,500; Mr. Aisner, 173,500; Mr. Chapman, 151,000; Mr. Ross, 144,000; Mr. Cranor, 81,000; and Mr. Thomas, 81,000. For Options granted to such executive officers in 2000, see "Option Grants" above. The Company's Independent Trustees have received Options as described under "Compensation of Trustees" below. The Company's executive officers as a group have received an aggregate of 1,659,000 Options under the Option Plan and current employees of the Company and the Service Companies as a group (excluding executive officers of the Company) have received an aggregate of 505,500 Options under the Option Plan. PERFORMANCE INCENTIVE PLAN On January 30, 1995, the Board adopted a performance incentive plan (the "Performance Incentive Plan") pursuant to which performance units ("Performance Units") may be awarded to employees of the Operating Partnership and the Service Companies. The Performance Incentive Plan is a form of phantom equity plan, with each Performance Unit awarded under the plan intended to be equal in value to a Unit, the value of which corresponds to the value of a Common Share. The Executive Compensation Committee selects the employees eligible to participate in the Performance Incentive Plan, determines the number of Performance Units, if any, to award to a participant and the terms and conditions of the award, and administers the Performance Incentive Plan. The number of Performance Units held by an employee will be increased proportionally to reflect distributions made with respect to Units, which distributions correspond to dividends paid with respect to Common Shares. Performance Units will become payable to the employee upon determination by the Executive Compensation Committee that the particular performance objectives specified by the Executive Compensation Committee have been met or upon a "change in control" (as defined in the Performance Incentive Plan). Payment on Performance Units will be made in a number of Units equal to the number of eligible Performance Units held by an employee on the payment date, except that Performance Units held by an employee who is subject to Section 16 of the Exchange Act with respect to the Company will be payable in an amount of cash equal to the fair market value of the Units which would otherwise be paid to such employee. Under the Performance Incentive Plan, the total number of Performance Units available for grant and the total number of Common Shares available to be issued upon exchange of Units issued under the Performance Incentive Plan will be equal to 250,000. Upon certain extraordinary events, the Executive Compensation Committee may make such adjustments in the aggregate number of Performance Units which may be awarded and the aggregate number of Common Shares reserved for issuance upon exchange of Units issued under the Performance Incentive Plan as it determines to be appropriate. On October 30, 2000, 3,500 Performance Units were awarded to 21 key employees and officers of the Operating Partnership and the Service Companies for services performed in 2000. On November 1, 1999, 9,250 Performance Units were awarded to 24 key employees and officers of the Operating Partnership and the Service Companies for services performed in 1999. Messrs. Mutz, Allen, Sweet, Tague and the Company's five next most highly compensated officers received none of these Performance Units. See "Long-Term Incentive Plan Awards" above. EXECUTIVE SHARE PURCHASE PLAN The "Executive Share Purchase Plan" was adopted by the Board effective May 1, 1996 and was approved at the 1996 annual meeting of shareholders. All Trustees who are not employees of the Company were eligible to participate in the Executive Share Purchase Plan through 1999. Other eligible participants will be Trustees, officers and employees of the Company, the Operating Partnership and the Service Companies, designated by the Executive Compensation Committee of the Company or, in the case of Service Company employees, by the board of directors, or a committee of at least two Directors, of the applicable Service Company. Eligible participants who are Trustees, officers or employees of the Company may elect to purchase Common Shares, and eligible participants who are employees of the Operating Partnership or Service Companies may elect to purchase Units (which the participant is required to exchange immediately for an equal number of Common Shares), during quarterly window periods. A "window period" is the ten business day period commencing on the third business day following the Company's quarterly public release of earnings. Participants may only purchase Common Shares or Units during one window period in any calendar year. The number of Common Shares or Units which may be purchased is (i) for Trustees, the number of Common Shares with a fair market value, on the trading day immediately preceding the date of purchase, of $100,000 and (ii) for participants who are not Trustees, the number of Common Shares or Units, as applicable, with a fair market value, on the trading day immediately preceding the date of purchase, of the lesser of $100,000 or 50% of the participant's base salary. The purchase price per Common Share or Unit is 85% of the fair market value of a Common Share or Unit on the trading day immediately preceding the date of purchase. Participants electing to make purchases under the Executive Share Purchase Plan may receive a loan for up to 80% of the purchase price, provided that, in no event may a participant have more than $200,000 principal amount of loans outstanding under this Plan at any time. All loans shall have a term of no more than 10 years and shall be secured by the Common Shares purchased or received in exchange for Units purchased with full recourse to the participant. All principal and interest under any loans will become due and payable (i) 60 days after the date the participant's employment with the Company, the Operating Partnership and the Service Companies terminates for any reason other than death, retirement on or after attainment of age 62, or following a Change in Control of the Company (as described in the following paragraph), or (ii) 180 days after the date the participant's employment with the Company, the Operating Partnership and the Service Companies terminates by reason of death, retirement on or after attainment of age 62, or following a Change in Control of the Company. The loans will bear interest at a fixed rate of 150 basis points over the then current ten-year Treasury bond rate. The Common Shares may not be sold, assigned, transferred or pledged (except to secure a loan under the Executive Share Purchase Plan) during the period ending on the earlier of (i) the fifth anniversary of the purchase date, (ii) the date of a Change in Control of the Company, or (iii) the date that the participant terminates employment or service on the Board, as applicable. In addition, the Common Shares may not be transferred while they are serving as collateral for a loan under the Executive Share Purchase Plan. Generally, a Change in Control will be deemed to occur upon acquisition of more than 20% of the Company's voting stock by any party (other than by certain related parties), a merger, sale of substantially all of the Company's assets, the liquidation of the Company, or the election of Trustees constituting a majority of the Board who were not recommended by the incumbent Trustees. During 2000 and 1999, six Trustees and eight key officers and employees acquired a total of 11,421 and 37,271 Common Shares, respectively, pursuant to this Plan. Total expense recorded in 2000 and 1999 for the 15% discount, including the Service Companies' shares, was $37,000 and $116,947, respectively. At December 31, 2000, the aggregate outstanding balance of recourse loans made pursuant to this Plan for the acquisition of 130,523 of the Company's shares was $1,563,000. In February 2001, three key employees acquired an additional 6,750 Common Shares pursuant to this Plan. The amounts of the Trustees' and officers' loans are included in the total loans set forth in the footnotes to the security ownership table. See "Security Ownership of Certain Beneficial Owners and Management" below. SENIOR OFFICER LOAN SHARE PURCHASE PROGRAM Since 1997, the Executive Compensation Committee of the Board has approved a total of $10,828,041 in recourse loans to the four officers who are also Trustees and fifteen other officers to enable them to acquire on the open market a total of 492,659 of the Company's Common Shares. All 492,659 shares had been acquired by February 28, 2001. These loans bear interest at rates ranging from 4.45% to 6.06% and generally have terms of nine years. The remaining unpaid amounts of each officer's loans are included in the amounts set forth in the footnotes to the security ownership table. The $996,285 of such loans made in December 2000 and the $1,297,406 of such loans made in December 1999 are subject to forgiveness over the five year period commencing December 1999 (based solely on each employee's continued employment with the Company), as follows: 10% at the end of the second year, an additional 20% at the end of the third year, an additional 35% at the end of the fourth year, and the final 35% at the end of the fifth year. See "Security Ownership of Certain Beneficial Owners and Management" below. INCENTIVE COMPENSATION A bonus incentive compensation plan (the "Bonus Plan") is in place for executive and key officers. This program awards bonuses to executive officers and certain other key officers covered under the plan based on the achievement of specified targets and goals for the Company and the individual officer. The primary targets are based upon annual increases in Funds from Operations (defined as income (loss) before minority interest of Unit holders in the Operating Partnership and extraordinary items plus certain non-cash items, primarily depreciation) per share, Common Share price performance compared to performance of the share price of selected competitors and benchmarking against the economic performance of selected competitors. The amount of bonus is based on a formula determined for each officer based on a range of up to 50% of base compensation. The Executive Compensation Committee may also grant discretionary bonuses to certain officers based upon an assessment of such an officer's performance. Bonuses for 2000, 1999 and 1998 for the most highly compensated executive officers of the Company are set forth in the summary compensation table. See "Summary Compensation Table" above. RETIREMENT SAVINGS PLAN The Company and its affiliates have adopted a joint retirement savings plan (the "Retirement Savings Plan") for their full-time employees. The Retirement Savings Plan is a qualified plan pursuant to Sections 401(a) and 401(k) of the Internal Revenue Code. Employees of the Company, the Operating Partnership and the Service Companies are generally eligible to participate in the Retirement Savings Plan after one full year of service. Eligible employees may contribute each year up to 15% of their compensation to the Retirement Savings Plan. At the end of each year, the Company or such entity will match up to 50% of each participating employee's contribution, to a maximum of $1,000 per employee. Employees are not vested in the Company's or such entity's contributions until the third anniversary of their employment. As of January 1, 1995 the Retirement Savings Plan was amended to provide for an additional contribution by the Company, the Operating Partnership or one of the Service Companies, as applicable, equal to a percentage (2.5% for 2000 and 3% for 1999 and 1998) of each eligible employee's compensation. All such contributions are invested in Common Shares. The employer contributions by the Company under the Retirement Savings Plan during 2000, 1999 and 1998 for the most highly compensated executive officers of the Company are set forth in footnote (3) to the summary compensation table. See "Summary Compensation Table" above. COMPENSATION OF TRUSTEES In 2000, the Company paid its Independent Trustees at the annual rate of $20,000, consisting of $8,000 in cash and $12,000 in Common Shares acquired in quarterly open market purchases following each dividend record date. Messrs. Mutz, Allen, Sweet and Tague are not paid any Trustees' fees. In addition, the Company reimburses all Trustees for expenses incurred in attending meetings. Pursuant to the Option Plan (described above), Messrs. Primo, Heilweil, McConahey and Schreiber and Ms. Gates were each granted, effective as of the time they became Trustees, and each future Independent Trustee will also be granted, effective as of the Trustee's initial election or appointment, a ten-year Option to acquire 2,000 Common Shares at fair market value on the trading day immediately preceding the date of the grant (in the case of Messrs. Primo, Heilweil, McConahey and Schreiber, the initial public offering price of $20.50 per share). Additionally, each Independent Trustee has been annually granted a ten-year Option for a number of Common Shares equal to $10,000 divided by the fair market value of a Common Share on the trading day immediately preceding the date of the grant. A Trustee's initial Options are not exercisable until after the first anniversary of the date of grant; a Trustee's Options awarded periodically thereafter vest immediately. The exercise price is payable in cash. Starting in the year 2000, each Independent Trustee receives 2,000 Options annually. NON-COMPETITION AGREEMENTS, EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT The four officers who are also Trustees and 11 other officers of the Company have each entered into an employment agreement with the Company, which includes a non-competition provision. The non-competition provision of each employment agreement prohibits each officer from engaging directly or indirectly in the multifamily residential property business other than on behalf of the Company during the period the officer is an employee of the Company and for a period of either 12 months, 18 months, or 24 months from termination of employment. Upon both a change in control of the Company and a change in circumstance of the employee (as such terms are defined in the agreements), the employment agreements provide for immediate vesting of all previously unvested Options and Performance Units, cash payment equal to one, two or three times average compensation (as defined) and additional cash compensation to each employee who might be subject to excise taxes under Section 4999 of the Internal Revenue Code so that the Employee receives that amount before the application of income taxes that he would receive if he were not subject to such excise taxes. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION There are no Executive Compensation Committee interlocks or insider participation on the Executive Compensation Committee. EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Executive Compensation Committee of the Board consists of all five members of the Board who are not employees of the Company, the Operating Partnership or a Service Company. The Executive Compensation Committee reviews and approves all remuneration arrangements for Mr. Mutz, Mr. Allen, and the four most highly compensated officers of the Company (the "Senior Executives"), and administers the Option Plan, the Performance Incentive Plan, the Executive Share Purchase Plan, the Senior Officer Loan Share Purchase Program, and the Bonus Plan. The Executive Compensation Committee also reviews and adopts or recommends to shareholders the adoption of new employee benefit plans or modifications to existing plans. The Executive Compensation Committee met in January, March and October 2000 in connection with 2000 compensation matters. The Company's executive compensation program is intended to attract, incentivize, reward and retain experienced and motivated executives who contribute to the Company's growth. The goal of the Executive Compensation Committee in setting Senior Executive compensation is to align the interests of the executives with those of the Company's shareholders, focusing on long-term growth of Funds From Operations ("FFO") and increases in shareholder value. The Executive Compensation Committee, in administering the Company's executive compensation program, considers recommendations from management and extensive available data concerning executive compensation at other equity real estate investment trusts and companies in other businesses. The Executive Compensation Committee periodically discusses with senior management the cost and desirability of engaging an independent compensation consultant, but elected not to do so in 2000. The Executive Compensation Committee reviewed this decision in 2000 and expects to continue to review this decision annually. The Committee has approved additional grants of Options, Performance Units, and recourse loans for the purchase of Common Shares in recognition of the continuing desirability of aligning the interests of management and shareholders. For 2001, the Committee has discretion to authorize subjective cash bonuses and has established incentives for objective cash bonuses that are contingent upon the Company's achieving a 9.5% increase in FFO over the $2.75 per share recorded for 2000. The Company's executive compensation currently consists of an executive's base salary, cash bonus, Options under the Option Plan, discounted purchases under the Executive Share Purchase Plan, and Performance Units under the Performance Incentive Plan. BASE SALARY. Executive salary levels are designed to reward Company employees for performing their normal duties. Salary levels are established on the basis of a number of factors including management recommendations, prior salary history with the Company, industry comparables, individual performance and overall Company results. For 2001, the salaries of the Chairman and the Vice Chairman were left unchanged and salary increases adopted by the Executive Compensation Committee for each of the President and the Executive Vice President - Development were $10,000 or 3.6%. The other Senior Executives' salary increases in 2001 averaged 4.9%. BONUSES. The Company's executive officers participate in the Bonus Plan. A portion of the bonus each year is based on pre-established goals concerning growth in FFO and benchmarking Company FFO and stock price performance against those of a group of other multifamily real estate investment trusts. A discretionary portion is also based on achievement of individual job goals and for extraordinary contributions to the Company's results for the past year. No cash bonus was paid to the Chairman, the Vice Chairman, the President/Co-CEO or the Executive Vice President/Co-CEO for 2000. Cash bonuses paid to other Senior Executives in 2001 for 2000 performance averaged 5% of 2000 base salary. OPTIONS AND PERFORMANCE UNITS. Awards of Options under the Option Plan and of Performance Units under the Performance Incentive Plan are designed to utilize the award of interests in the Company and the Operating Partnership in order to tie Senior Executive compensation to the creation of shareholder value and allow the Senior Executives to share in the success of the Company. As with cash bonuses, a portion of the awards under the Option Plan are based on predetermined FFO and stock price performance in both absolute and comparative terms and a portion are discretionary. Awards of Performance Units under the Performance Incentive Plan are discretionary, but their vesting generally depends on continued employment with the Company and FFO growth experience over the five years following their award. See "Long-Term Incentive Plan Awards" above for a description of the vesting provisions of Performance Units awarded in November 1999 and October 2000. A total of 365,000 Options and 2,000 Performance Units were awarded in 2000 to 14 officers making more than $100,000 per year. COMPENSATION OF CO-CHIEF EXECUTIVE OFFICERS. For 2000, the Executive Compensation Committee evaluated the compensation of Mr. Mutz utilizing the same philosophy and procedures as are applied to other Senior Executives of the Company. Mr. Mutz's base salary was left unchanged as of January 2001 as described above. As detailed under "Option Grants" and "Long-Term Incentive Plan Awards," the Executive Compensation Committee also awarded Mr. Mutz Options under the Option Plan based on his contributions to the Company's 2000 performance. The Committee awarded no cash bonus to Mr. Mutz. The increases Mr. Sweet and Mr. Tague received as of January 2001 represented 3.6% increases over their 2000 base compensation levels. It is the Executive Compensation Committee's intention that, so long as it is consistent with the Company's overall compensation objectives, all executive compensation be deductible for federal income tax purposes. Section 162(m) of the Internal Revenue Code limits the tax deduction for compensation paid to the Company's chief executive officer and the four most highly compensated officers who are employed at fiscal year end to $1 million per year, unless certain requirements are met. The Company's ability to meet the REIT distribution requirements, and the portion of the Company's distributions which constitute taxable dividend income, rather than return of capital, may be impacted by Section 162(m). The Executive Compensation Committee does not believe that any compensation paid by the Company in 1999 would meet the tests under Section 162(m) for a disallowance of compensation deductions; nor does it presently intend that any such deductions be disallowed in the future. However, the Executive Compensation Committee, in setting future Senior Executive compensation, will continue to consider the long-run interests of the Company, balancing any non-deductibility under Section 162(m) against the need for the Company to adequately compensate its executive officers for services rendered. EXECUTIVE COMPENSATION COMMITTEE Laura D. Gates Marc S. Heilweil Stephen G. McConahey Quintin E. Primo III John G. Schreiber PERFORMANCE GRAPH The following line graph compares the change in the Company's cumulative shareholder return on its Common Shares to the cumulative total return of the Standard & Poor's 500 Stock Index ("S&P 500 Index") and the NAREIT Equity REIT Total Return Index ("NAREIT Index") from December 31, 1995, the effective date of the Company's initial public offering, to December 31, 2000. The graph assumes the investment of $100 in the Company and each of the indices on December 31, 1995 and the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance. [PERFORMANCE GRAPH] December 31, ---------------------------------------------------- 1995 1996 1997 1998 1999 2000 ------- ------- ------- ------- ------- ------- AMLI Residential Properties Trust. . . . . $100.00 $126.88 $130.61 $141.25 $139.53 $184.82 NAREIT Index. . $100.00 $135.27 $162.67 $134.20 $128.00 $161.75 S&P 500 Index . $100.00 $122.96 $163.99 $210.86 $255.20 $231.96 A $100.00 investment in the Company on December 31, 1995, increased to $126.88 at December 31, 1996, increased to $130.61 at December 31, 1997, increased to $141.25 at December 31, 1998, decreased to $139.53 at December 31, 1999, and increased to $184.82 at December 31, 2000. The NAREIT Index, adjusted to $100.00 at December 31, 1995, increased to $135.27 at December 31, 1996, increased to $162.67 at December 31, 1997, decreased to $134.20 at December 31, 1998, decreased again to $128.00 at December 31, 1999 and increased to $161.75 at December 31, 2000. The S&P 500 Index, adjusted to $100.00 at December 31, 1995, increased to $122.96 at December 31, 1996, increased to $163.99 at December 31, 1997, increased to $210.86 at December 31, 1998, increased to $255.20 at December 31, 1999, and decreased to $231.96 at December 31, 2000. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS THE SERVICE COMPANIES Ninety-five percent of the voting common stock of each of the Service Companies is owned by AMLI Realty Co., which enables AMLI Realty Co. to control the election of such companies' directors, the majority of which, in the case of each Service Company, cannot by charter be officers, directors or employees of AMLI Realty Co. The Operating Partnership owns 5% of the voting common stock and all of the nonvoting preferred stock of each of the Service Companies. The nonvoting preferred stock of each Service Company is generally entitled to dividends equal to 95% of all distributions made by the relevant company. The Management Company provides management and leasing services to each of the apartment communities owned by the Company or in which the Company owns an interest. The Company paid the Management Company management fees totaling $2,822,000 in 2000 with respect to the communities owned by the Company; affiliated partnerships paid the Management Company management fees totaling $4,935,000 in 2000 with respect to other communities in which the Company owns an interest. The master property management agreement with respect to the communities owned by the Company or in which the Company owns an interest had an initial term of three years, and was renewed for an additional three years on February 16, 2000; it may be terminated earlier by either the Management Company or the Operating Partnership upon an event of default by the other party. During 2000, the Company accrued or paid to the Service Companies $186,000 in general contractor fees, $545,000 in interest expense, and $2,060,000 for costs associated with landscaping and grounds maintenance; unconsolidated co-investment partnerships also engaged the Services of the Service Companies during 2000. During 2000, the Company earned or received from the $4,595,000 of interest on notes and advances to the Service Companies and earned or received various fees from unconsolidated co-investment partnerships. CORPORATE SERVICES AGREEMENT Pursuant to a corporate services agreement among the Management Company, AIA, Amrescon, the Operating Partnership and the Company, the Operating Partnership and the Management Company provide various managerial, administrative, accounting, investor relations, and other services related to the operations and administration of the Management Company, AIA, Amrescon, the Operating Partnership and the Company. The corporate services agreement provides for the parties to reimburse the Operating Partnership and the Management Company quarterly for costs incurred with respect to this agreement. The Company, the Management Company, AIA and Amrescon paid $0, $163,499, $181,566 and $32,881, respectively, to the Operating Partnership pursuant to the corporate services agreement in 2000. The Company, the Operating Partnership, AIA and Amrescon paid $0, $1,145,579, $225,361 and $263,029, respectively, to the Management Company pursuant to the corporate services agreement in 2000. The corporate services agreement may be renewed each year for consecutive one-year terms, provided that the Company, the Operating Partnership, Amrescon, AIA and the Management Company mutually consent to each such renewal at least 60 days before the expiration of the then-current term. Each such entity has so consented to a renewal for a term until March 31, 2002. The corporate services agreement may be terminated earlier in the event that the Operating Partnership no longer owns more than 50% of the preferred stock of the Management Company, in the event of a material default by the Management Company, AIA, Amrescon, the Operating Partnership or the Company (which is not cured within certain specified time periods), or in the event of the voluntary or involuntary bankruptcy of the Management Company. Unless the Management Company acts in bad faith, is grossly negligent, recklessly disregards its duty, or engages in willful misconduct, the Management Company will have no liability to the Company or the Operating Partnership resulting from the performance of its duties under the corporate services agreement. The Management Company is required to indemnify AIA, Amrescon, the Company and the Operating Partnership for any damages arising out the Management Company's default under the corporate services agreement or as a result of the Management Company's gross negligence. Similarly, AIA, Amrescon, the Company and the Operating Partnership are obligated to indemnify the Management Company for any damages arising out of their respective defaults under the corporate services agreement or as a result of their gross negligence. RELATIONSHIPS WITH INDEPENDENT ACCOUNTANTS KPMG LLP has been the independent accounting firm that audits the financial statements of the Company and its subsidiaries since inception of the Company in 1994. Amounts billed to the Company and its consolidated affiliates in connection with services performed relating to the year ended December 31, 2000 totalled $211,500 for audit services and $121,400 for non-audit services, all of which were compliance, planning, and consulting services relating to income taxes. Additional amounts aggregating approximately $1,250,000 were billed to unconsolidated affiliates by KPMG LLC for audit and non-audit related services. In 2000, such additional services included audit and tax services provided to unconsolidated co-investment partnerships and information technology consulting services and extended audit services in connection with internal audit functions provided to the Management Company. No non-audit related services to unconsolidated affiliates are planned for 2001 except compliance, planning and consulting services regarding income taxes. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the beneficial ownership of the Common Shares as of February 28, 2001 for (1) each person who is known to the Company to have been the beneficial owner of more than five percent of the Common Shares outstanding on February 28, 2001, (2) each Trustee of the Company and each executive officer of the Company named in the summary compensation table and (3) the Company's Trustees and executive officers as a group. The number of Common Shares beneficially owned by a person includes the number of Common Shares into which Units and Series A Cumulative Convertible Preferred Shares of Beneficial Interest ("Series A Preferred Shares") beneficially owned by the person are exchangeable and convertible and the number of Common Shares for which a person holds an option, exercisable within sixty days of February 28, 2001, to acquire. The percent of Common Shares beneficially owned by a person assumes that all Units and Series A Preferred Shares held by the person are exchanged and converted for Common Shares and that none of the Units or Series A Preferred Shares held by other persons are so exchanged or converted and that all options exercisable within sixty days of February 28, 2001 to acquire Common Shares held by the person are exercised and no options to acquire Common Shares held by other persons are exercised. In addition to the holders shown below, Security Capital Preferred Growth Incorporated, 11 South LaSalle Street, Chicago, IL 60603 owns AMLI's entire issue of 3,125,000 Series B Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest (the "Series B Preferred Shares"). The Series B Preferred Shares were issued at a price of $24 per share, are convertible into Common Shares on a one-for-one basis, are non-callable until 2007, and carry an annual dividend equal to the greater of $1.80 per share or the annual dividend rate on the Common Shares, which is currently $1.88 per share. COMMON SHARES PERCENT OF ALL NAME AND ADDRESS BENEFICIALLY COMMON SHARES OF BENEFICIAL OWNER (1) OWNED (2) (2) - ---------------------- ------------- -------------- UICI (3). . . . . . . . . . . . . . . . . . 2,550,986 13.0% Morgan Stanley Dean Witter & Co. (4). . . . 2,132,757 12.0% Gregory T. Mutz (5) . . . . . . . . . . . . 426,473 2.4% John E. Allen (6) . . . . . . . . . . . . . 214,269 1.2% Allan J. Sweet (7). . . . . . . . . . . . . 258,451 1.4% Philip N. Tague (8) . . . . . . . . . . . . 203,822 1.1% Laura D. Gates (9). . . . . . . . . . . . . 23,949 0.1% Marc S. Heilweil (10) . . . . . . . . . . . 17,730 0.1% Stephen G. McConahey (11) . . . . . . . . . 21,297 0.1% Quintin E. Primo III (12) . . . . . . . . . 10,083 0.0% John G. Schreiber (13). . . . . . . . . . . 27,453 0.2% Robert S. Aisner (14) . . . . . . . . . . . 71,754 0.4% Robert J. Chapman (15). . . . . . . . . . . 66,912 0.4% Stephen C. Ross (16). . . . . . . . . . . . 91,926 0.5% Brian K. Cranor (17). . . . . . . . . . . . 42,180 0.2% James E. Thomas, Jr. (18) . . . . . . . . . 47,680 0.3% All Trustees and executive officers as a group (16 persons) . . . . . . . . . 1,605,715 8.7% - ---------- (1) Unless otherwise noted, the address for each of the persons or entities is 125 South Wacker Drive, Suite 3100, Chicago, Illinois 60606. (2) Assumes that all Units and Series A Preferred Shares held by the person are exchanged and converted for Common Shares and that none of the Units or Series A Preferred Shares held by other persons are so exchanged or converted and that all options exercisable within sixty days of February 28, 2001 to acquire Common Shares held by the person are exercised and no options to acquire Common Shares held by other persons are exercised. (3) UICI is a publicly-traded (NYSE: UCI) insurance and financial services company headquartered at 4001 McEwen, Suite 200, Dallas, Texas 75244. Directly and through wholly or majority-owned affiliates, UICI beneficially owned 728,900 Common Shares, 100,000 Series A Preferred Shares, and 1,722,086 Units, as follows: The MEGA Life and Health Insurance Company. . . . . . . . .1,722,086 Units The MEGA Life and Health Insurance Company. . . . . . . . . 109,000 Common Shares United Group Reinsurance, Inc. . . . 266,965 Common Shares United Group Reinsurance, Inc. . . . 100,000 Preferred Shares National Managers Life Insurance Company, Inc.. . . . . . 114,962 Common Shares Financial Services Reinsurance Ltd. . . . . . . . . . . . . . . . 104,273 Common Shares U.S. Managers Life Insurance Company, Ltd.. . . . . . . . . . . 13,800 Common Shares Midwest National Life Insurance Company. . . . . . . . . 73,900 Common Shares Chesapeake Life Insurance Company. . . . . . . . . . . . . . 46,000 Common Shares --------- 2,550,986 ========= (4) Information with regard to Morgan Stanley Dean Witter & Co. is based solely on Amendment No. 1 to Schedule 13G, dated January 17, 2000. Morgan Stanley Dean Witter & Co. is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940. (5) Mr. Mutz, directly and through various trusts and other affiliates, beneficially owned 262,386 Common Shares and 29,087 Units and held 135,000 currently exercisable Options to acquire Common Shares. Starting in November 1996, Mr. Mutz has financed the acquisition of 116,935 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $2,162,684; such loan balances totalled $2,143,221 at February 28, 2001 and bear interest at fixed rates ranging from 4.45% to 7.04%. (6) Mr. Allen, directly and through affiliates, beneficially owned 86,169 Common Shares and 1,434 Units and held 126,666 currently exercisable Options to acquire Common Shares. Starting in November 1996, Mr. Allen has financed the acquisition of 77,306 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $1,524,540; such loan balances totalled $1,464,532 at February 28, 2001 and bear interest at fixed rates ranging from 4.45% to 7.79%. (7) Mr. Sweet, directly and through various trusts and other affiliates, beneficially owned 134,952 Common Shares and 1,833 Units and held 121,666 currently exercisable Options to acquire Common Shares. Starting in November 1996, Mr. Sweet has financed the acquisition of 97,626 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $1,975,060; such loan balances totalled $1,975,060 at February 28, 2001 and bear interest at fixed rates ranging from 4.45% to 8.23% (8) Mr. Tague beneficially owned 101,323 Common Shares and held 102,499 currently exercisable Options to acquire Common Shares. Starting in November 1996, Mr. Tague has financed the acquisition of 95,521 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $1,923,627; such loan balances totalled $1,923,627 at February 28, 2001 and bear interest at fixed rates ranging from 4.45% to 7.66%. (9) Ms. Gates beneficially owned 15,564 Common Shares and held 8,385 currently exercisable Options to acquire Common Shares. Starting in November 1996, Ms. Gates has financed the acquisition of 13,209 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $167,770; such loan balances totalled $150,777 at February 28, 2001 and bear interest at fixed rates ranging from 7.06% to 7.66%. (10) Mr. Heilweil beneficially owned 9,345 Common Shares and held 8,385 currently exercisable Options to acquire Common Shares. (11) Mr. McConahey beneficially owned 12,912 Common Shares and held 8,385 currently exercisable Options to acquire Common Shares. Starting in November 1996, Mr. McConahey has financed the acquisition of 10,938 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $133,520; such loan balances totalled $119,159 at February 28, 2001 and bear interest at fixed rates ranging from 7.04% to 7.66%. (12) Mr. Primo beneficially owned 1,698 Common Shares and held 8,385 currently exercisable Options to acquire Common Shares. (13) Mr. Schreiber beneficially owned 19,068 Common Shares and held 8,385 currently exercisable Options to acquire Common Shares. (14) Mr. Aisner beneficially owned 47,588 Common Shares and held 24,166 currently exercisable options to acquire Common Shares. Starting in November 1996, Mr. Aisner has financed the acquisition of 45,410 of the Company's Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $872,056; such loan balances totalled $862,838 at February 28, 2001 and bear interest at fixed rates ranging from 4.45% to 7.66%. (15) Mr. Chapman beneficially owned 62,746 Common Shares and held 4,166 currently exercisable options to acquire Common Shares. Starting in December 1997, Mr. Chapman has financed the acquisition of 61,263 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $1,203,888; such loan balances totalled $1,203,888 at February 28, 2001 and bear interest at fixed rates ranging from 4.45% to 8.11%. (16) Mr. Ross beneficially owned, directly and through an affiliate, 24,760 Common Shares and held 67,166 currently exercisable Options to acquire Common Shares. Starting in February 1997, Mr. Ross has financed the acquisition of 17,866 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $361,863; such loan balances totalled $361,863 at February 28, 2001 and bear interest at fixed rates ranging from 5.89% to 7.01%. (17) Mr. Cranor beneficially owned 20,180 Common Shares, 17,000 Units and held 5,000 currently exercisable options to acquire Common Shares. Starting in May 1998, Mr. Cranor has financed the acquisition of 16,694 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $305,736; such loan balances totalled $303,243 at February 28, 2001 and bear interest at fixed rates ranging from 5.49% to 7.43%. (18) Mr. Thomas beneficially owned 14,360 Common Shares, 28,320 Units and held 5,000 currently exercisable options to acquire Common Shares. Starting in June 1998, Mr. Thomas has financed the acquisition of 14,343 Common Shares with recourse loans from the Company. The maximum aggregate loan balances between January 1, 2000 and February 28, 2001 were $254,433; such loan balances totalled $244,143 at February 28, 2001 and bear interest at fixed rates ranging from 5.57% to 7.43%. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires the Company's Trustees, certain of the Company's officers, and beneficial owners of more than 10 percent of the Company's outstanding Common Shares, to file reports of ownership and changes in ownership of the Company's Common Shares with the Securities and Exchange Commission and to send copies of such reports to the Company. Based solely upon a review of such reports and amendments thereto furnished to the Company and upon written representations of certain of such persons that they were not required to file certain of such reports, the Company believes that no such person failed to file any such report on a timely basis during 2000 except that Ms. Gates and Mr. McConahey were late in filing a report on Form 4 for a January 2000 Options Award, and Mr. Primo was late in filing a report on Form 4 for a February 2000 sale of Common Shares. PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS The Board, upon the recommendation of the Audit Committee, has appointed the firm of KPMG LLP as the Company's independent auditors for 2001. A proposal to ratify this appointment will be presented at the Annual Meeting. The affirmative vote of a majority of the votes cast at the Annual Meeting will be necessary to adopt this proposal. For purposes of the vote on this matter, abstentions will not be counted as votes cast and will have no effect on the result of the vote, although they will be counted toward the presence of a quorum. Each valid proxy returned to the Company will be voted for the ratification of the appointment of KPMG LLP as the Company's independent auditors for 2001 unless the proxy specifies otherwise. The Board recommends that shareholders vote FOR the ratification of such appointment. The Company expects that representatives of KPMG LLP will be present at the Annual Meeting and will be available to respond to appropriate questions. Such representatives will have the opportunity to make a statement at the Annual Meeting if they desire to do so. SHAREHOLDER PROPOSALS Shareholder proposals intended to be presented at the annual meeting of shareholders to be held in the year 2002 must be received by the Company at its principal executive offices on or before November 26, 2001 for inclusion in the Company's proxy statement and form of proxy relating to that meeting. PROXY SOLICITATION EXPENSE The cost of soliciting proxies will be borne by the Company. In addition to solicitation by mail, proxies may be solicited personally, or by telephone, facsimile transmission or other electronic means, by officers or employees of the Company. The Company will also request persons, firms and corporations holding shares beneficially owned by others to send proxy material to, and obtain proxies from, the beneficial owners of such shares and will, upon request, pay the holders' reasonable expenses for doing so. EXHIBIT A - --------- AMLI RESIDENTIAL PROPERTIES TRUST AUDIT COMMITTEE CHARTER ORGANIZATION There shall be a committee of the Board of Trustees of AMLI Residential Properties Trust to be known as the Audit Committee. The Audit Committee's membership, including the qualifications and independence of its members, its written charter and its responsibilities shall comply with the corporate governance rules of the New York Stock Exchange and the proxy rules of the Securities and Exchange Commission. The Audit Committee shall consist of at least three members, each of whom is independent of management and the Company and each of whom shall satisfy the qualification requirements established by the New York Stock Exchange. The Board of Trustees shall appoint the members of the Audit Committee annually who shall serve until their successors are appointed and qualify, and shall designate the Chairman of the Committee. Except as expressly provided in this charter, the Declaration of Trust of the Company or the bylaws of the Company, the Audit Committee may fix its own rules of procedure. STATEMENT OF POLICY The Audit Committee shall provide assistance to the Board of Trustees in fulfilling its oversight responsibilities by monitoring: . management's conduct relating to corporate accounting; . reporting practices of the Company; . the quality and integrity of the financial reports of the Company and the annual independent audit of the Company's financial statements; . the independence and performance of the Company's independent auditors and internal accounting department; and . systems of internal controls regarding finance, accounting and legal compliance. In so doing, it is the responsibility of the Audit Committee to maintain free and open means of communication between the Trustees, the independent auditors, and the management of the Company. RESPONSIBILITIES In carrying out its responsibilities, the Audit Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and to monitor the corporate accounting and financial reporting and control practices of the Company consistent with risk mitigation appropriate in the circumstances. in carrying out these responsibilities, the Audit Committee will: REVIEW PROCEDURES - ----------------- . Meet with the independent auditors and financial management of the Company to review the scope of the proposed audit and reviews for the current year and the audit and review procedures to be utilized. . Review and discuss with management and the independent auditors any changes in accounting standards that may significantly alter financial reporting practices. . Review the audited financial statements proposed to be contained in the Company's Annual Report on Form 10-K with management and the independent auditors to determine that the independent auditors are satisfied with the disclosure and content of the financial statements to be presented to the shareholders. . Provide unrestricted opportunity for each of the internal accounting department and the independent auditors to meet with the members of the Audit Committee without members of management present. . Recommend to the Board of Trustees the inclusion of the audited financial statements of the Company in its Annual Report on Form 10-K. INDEPENDENT AUDITORS - -------------------- . Ensure that the independent auditor remains ultimately accountable to the Board of Trustees and the Audit committee, and that the Board of Trustees and the Audit Committee have ultimate authority and responsibility to (i) select the independent auditor to (A) audit the consolidated financial statements of the Company to be included in its Annual Report on Form 10-K, and (B) perform quarterly reviews of the interim consolidated financial statements to be included in its Quarterly Reports on Form 10-Q; and (ii) to evaluate the performance of the independent auditor and, where appropriate, replace the independent auditor. . Obtain periodic reports from the independent auditor regarding all relationships between the independent auditor and the Company, discuss with the independent auditor any relationships or services that may affect their objectivity and independence and, when appropriate, recommend that the Board of Trustees take appropriate action to satisfy itself of the independence of the independent auditor. In that connection, the Committee will be informed of any services for which the independent auditing firm or any of its affiliates is expected to be engaged by the Company for which the fees may reasonably be expected to equal or exceed $40,000. . Prior to the earlier of (i) the release of the Company's quarterly or year-end earnings and financial results or (ii) the filing of each Form 10-Q and the Form 10-K, discuss with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, including the quality of the Company's accounting principles and financial reporting and other matters that should be communicated to the Audit Committee under the professional standards of the American Institute of Certified Public Accountants. The Chairman of the Audit Committee may represent the entire Audit Committee for this purpose. . Approve all compensation arrangements with the independent auditors. INTERNAL CONTROLS AND LEGAL COMPLIANCE - -------------------------------------- . Consult with management and the independent auditors regarding the integrity of the Company's financial reporting procedures and controls. . Review the internal accounting department of the Company, including the reporting relationships among the internal accounting department, management, the independent auditors and the Audit Committee. . Discuss with management additional or supplemental opinions, if any, requested by the Company from an accounting firm other than the independent auditors of the Company and consider the implications of such requests. . Review with the independent auditors and the Company's financial and accounting personnel, the adequacy and effectiveness of the accounting and financial controls of the Company, and elicit any recommendations for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures are desirable or necessary. . Review material legal and regulatory matters, including reports received from regulators, that may have an impact on the Company's financial statements. . Investigate any matter brought to the Audit Committee's attention within the scope of its duties, with the power to retain outside counsel or other experts for this purpose if, in its judgement, that is appropriate. OTHER AUDIT COMMITTEE RESPONSIBILITIES - -------------------------------------- . Review and reassess at least annually the Audit Committee Charter in light of current circumstances of the Company and changes in regulations and recommend any proposed revisions to the Audit Committee Charter to the Board of Trustees. . Prepare the report of the Audit Committee as may be required by the rules of the Securities and Exchange Commission to be included in the Company's annual meeting proxy statement. . Submit the minutes of all meetings of the Audit Committee to, or discuss the matters discussed at each committee meeting with, the Board of Trustees. -----END PRIVACY-ENHANCED MESSAGE-----