def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. _____ )
Filed by the Registrant þ
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))
þ Definitive Proxy Statement
¨ Definitive Additional Materials
¨ Soliciting Material Pursuant to § 240.14a-12
TRIZEC PROPERTIES, INC.
(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):
þ No fee required.
¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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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.
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
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Corporate Headquarters
10 S. Riverside Plaza, Suite 1100
Chicago, Illinois 60606 |
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(312) 798-6000 tel
(312) 466-0185 fax
www.trz.com |
April 11, 2005
Dear Stockholder:
It is a pleasure to invite you to the 2005 annual meeting of
stockholders of Trizec Properties, Inc. to be held at the Park
Hyatt Hotel, 800 North Michigan Avenue, Chicago, Illinois, on
Thursday, May 19, 2005, at 10:00 a.m., local time. The
meeting will be held in Grand Salon B.
The attached Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the meeting. At
the meeting, we also will briefly report on the operations of
Trizec during the past year and our plans for the future.
Directors and officers of Trizec, as well as representatives
from our independent registered public accounting firm,
PricewaterhouseCoopers LLP, will be present to respond to
appropriate questions from stockholders.
Your vote is important. Whether or not you plan to attend the
meeting in person, please submit your vote as soon as possible.
You may be able to vote your shares through the Internet or by
using a toll-free telephone number. Please review the
instructions on the accompanying proxy card regarding each of
these voting options. Alternatively, you may vote your shares by
marking your votes on the accompanying proxy card, signing and
dating it, and mailing it in the envelope provided.
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Sincerely, |
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Peter Munk |
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Chairman of the Board of Directors |
TRIZEC PROPERTIES, INC.
10 S. Riverside Plaza, Suite 1100
Chicago, Illinois 60606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 2005
You are cordially invited to attend the 2005 annual meeting of
stockholders of Trizec Properties, Inc. to be held at the Park
Hyatt Hotel, Grand Salon B, 800 North Michigan Avenue, Chicago,
Illinois, on Thursday, May 19, 2005, at 10:00 a.m., local
time, for the following purposes:
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To elect nine directors to serve until the 2006 annual meeting
of stockholders; |
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To ratify the re-appointment of PricewaterhouseCoopers LLP as
our independent registered public accounting firm for the fiscal
year ending December 31, 2005; and |
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To consider and act upon any other matters that may properly be
brought before the annual meeting and any adjournments or
postponements of the meeting. |
Only stockholders of record at the close of business on
March 24, 2005 are entitled to vote at the 2005 annual
meeting or any adjournments or postponements of the meeting.
Whether or not you plan to attend the annual meeting in person,
please take part in our affairs by voting your shares. You may
be able to vote your shares through the Internet or by using a
toll-free telephone number. Please review the instructions on
the accompanying proxy card regarding each of these voting
options. Alternatively, you may vote your shares by marking your
votes on the accompanying proxy card, signing and dating it, and
mailing it in the envelope provided.
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By Order of the Board of Directors, |
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Ted R. Jadwin |
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Senior Vice President, General Counsel and |
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Corporate Secretary |
Chicago, Illinois
April 11, 2005
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ii
TRIZEC PROPERTIES, INC.
10 S. Riverside Plaza, Suite 1100
Chicago, Illinois 60606
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 2005
We are first sending this proxy statement and the accompanying
proxy card to our stockholders on or about April 11, 2005
in connection with the solicitation of proxies by the board of
directors of Trizec Properties, Inc. on behalf of Trizec
Properties, Inc. for use at the 2005 annual meeting of
stockholders to be held on Thursday, May 19, 2005 at
10:00 a.m., local time, at the Park Hyatt Hotel, Grand
Salon B, 800 North Michigan Avenue, Chicago, Illinois or at any
postponement or adjournment of the meeting. When used in this
proxy statement, the terms we, us,
our, Trizec, our company and
the company refer to Trizec Properties, Inc. and its
subsidiaries.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
What is the purpose of the annual meeting?
At the annual meeting, you will be asked:
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to elect nine directors to serve until the 2006 annual meeting
of stockholders; |
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to ratify the re-appointment of PricewaterhouseCoopers LLP as
our independent registered public accounting firm for the fiscal
year ending December 31, 2005; and |
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to consider and act upon any other matters that may properly be
brought before the annual meeting and any adjournments or
postponements thereof. |
Who is entitled to vote at the annual meeting?
Holders of record of our common stock at the close of business
on March 24, 2005 are entitled to receive notice of, and vote
at, the meeting. Each share of common stock outstanding on the
record date entitles its holder to cast one vote on each matter
to be voted on. On March 24, 2005, we had 154,061,250
shares of common stock outstanding.
In addition, the sole holder of record of our special voting
stock is entitled to vote with our common stockholders at the
annual meeting for the election of directors. The special voting
stock was issued to the Hungarian subsidiary of Trizec Canada
Inc., which directly and indirectly owns approximately 39.3% of
our outstanding common stock, in connection with our corporate
reorganization in May 2002. Mr. Peter Munk, the Chairman of
our board of directors, is the Chief Executive Officer and
Chairman of the board of directors of, and owns substantially
all of the multiple voting shares in, Trizec Canada Inc., which
we refer to in this proxy statement as Trizec Canada. We refer
you to Certain Relationships and Related
Transactions below for a description of the May 2002
corporate reorganization.
Under the terms of our special voting stock, Trizec
Canadas Hungarian subsidiary, as the sole holder of our
special voting stock, is entitled to a number of votes such
that, when that number of votes is added to the aggregate number
of votes that Trizec Canada and its subsidiaries otherwise may
cast in the election of our directors in regard to their
ownership of our common stock, the total number constitutes a
majority of the votes that may be cast in the election of our
directors. The holder of our special voting stock is entitled to
such votes in the election of our directors only if Trizec
Canada and its subsidiaries collectively own at least five
percent of our issued and outstanding common stock at the time
of the vote. As a result of this special voting right, Trizec
Canada and its majority stockholder will have voting control
over the election of our directors. The special voting stock
does not entitle its holder to voting rights with respect to any
other matters, except as otherwise required by Delaware
corporate law. This special voting right will expire on
January 1, 2008. On
1
March 24, 2005, there were 100 shares of special voting
stock outstanding, all of which were held by Trizec
Canadas Hungarian subsidiary.
What will constitute a quorum at the annual meeting?
The presence at the meeting, in person or by proxy, of the
holders of a majority of the shares of our common stock
outstanding on March 24, 2005, the record date for the 2005
annual meeting, will constitute a quorum, permitting the
stockholders to conduct business at the annual meeting.
We will include abstentions and broker non-votes in the
calculation of the number of shares considered to be present at
the meeting. A broker non-vote occurs when a bank or
broker holding shares for a beneficial stockholder does not vote
on a particular proposal because the bank or broker does not
have discretionary voting power with respect to the proposal and
has not received voting instructions from the beneficial
stockholder. Broker non-votes will not be considered as entitled
to vote with respect to a particular proposal and, therefore,
will not affect the outcome of the vote on the election of
directors or the ratification of the re-appointment of the
independent registered public accounting firm.
How do I vote?
Voting in person at the meeting. If you hold your
shares in your own name as a holder of record and you attend the
annual meeting, you may vote in person at the meeting. If you
hold your shares through a broker, bank or other nominee (i.e.,
in street name) and you wish to vote in person at
the meeting, you will need to obtain a proxy form from the
broker, bank or other nominee that holds your shares of common
stock of record.
Voting by proxy for shares registered directly in the name
of the stockholder. If you hold your shares in your own
name as a holder of record, you may instruct the proxy holders
named in the accompanying proxy card how to vote your shares of
common stock by using the Internet website or toll-free
telephone number listed on the accompanying proxy card or by
signing, dating and mailing the proxy card in the envelope
provided. If you vote through the Internet or by telephone, you
do not need to return your proxy card.
Voting by proxy for shares registered in street
name. If your shares of common stock are held in street
name, you will receive voting instructions from your broker,
bank or other nominee which you must follow in order to have
your shares of common stock voted. Many brokerage firms and
banks have a process for their beneficial holders to vote their
shares through the Internet or by telephone. If Internet or
telephone voting is unavailable from your broker or bank, you
will need to complete and return the accompanying voting
instruction card to your broker or bank.
How are proxy card votes counted?
If the accompanying proxy card is properly signed and returned
to us, and not revoked, it will be voted as directed by you.
Unless contrary instructions are given, Timothy H. Callahan and
Michael C. Colleran, or either of them, as the persons
designated as proxy holders on the proxy card, will vote
(a) FOR the election of all nominees for our board of
directors named in this proxy statement, and (b) FOR the
ratification of the re-appointment of PricewaterhouseCoopers LLP
as our independent registered public accounting firm for the
fiscal year ending December 31, 2005. If any other matters
properly come before the annual meeting, the designated proxy
holders will vote upon such matters as recommended by our board
of directors or, if no such recommendation is given, according
to their judgment.
What vote is required to approve each proposal?
Proposal 1 Election of Directors. The
affirmative vote of a plurality of the votes cast at the meeting
is required for the election of directors. A properly executed
proxy marked Withhold Authority with respect to the
election of one or more directors will not be voted with respect
to the director or directors indicated, although it will be
counted for purposes of determining whether there is a quorum.
However, Trizec Canadas
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Hungarian subsidiary, as the sole holder of our special voting
stock, may impact the voting for the election of our directors.
Please see the question above titled Who is entitled to
vote at the annual meeting?
Proposal 2 Ratification of Re-Appointment of
Independent Auditor. The ratification of the
re-appointment of PricewaterhouseCoopers LLP as our independent
registered public accounting firm for fiscal 2005 requires the
affirmative vote of the holders of a majority of the shares
represented at the meeting in person or by proxy and entitled to
vote on this proposal. A properly executed proxy marked
Abstain with respect to this proposal will not be
voted although it will be considered entitled to vote.
Accordingly, an abstention will have the same effect as a vote
against the proposal.
As of March 24, 2005, the record date for the annual
meeting, our directors and executive officers beneficially owned
or controlled approximately 63,280,030 shares of our common
stock, constituting approximately 40.3% of the outstanding
common stock. We believe that these holders will vote all of
their shares of common stock in favor of each of the proposals.
May I change or revoke my vote?
Yes. You may change or revoke a previously granted proxy at any
time by either (a) submitting a later-dated vote, in person
at the annual meeting, through the Internet, by telephone or by
mail, or (b) giving written notice to Dennis Fabro, Senior
Vice President, Investor Relations, at our executive offices
located at 10 S. Riverside Plaza, Suite 1100, Chicago,
Illinois, 60606. Please note that attendance at the meeting will
not, in itself, constitute revocation of a previously granted
proxy.
If you hold your shares in street name, then you may submit new
voting instructions by contacting your broker, bank or other
nominee. You may also vote in person at the annual meeting if
you obtain a proxy form from the broker, bank or other nominee
that holds your shares of common stock of record.
Who pays the costs of soliciting proxies?
We will pay the costs of soliciting proxies from our
stockholders. In addition to the mailing of these proxy
materials, the solicitation of proxies may be made in person, by
telephone or by electronic communication by our directors,
officers and employees, who will not receive any additional
compensation for such activities. We will also reimburse
brokers, banks and other fiduciaries, custodians and nominees
for their reasonable out-of-pocket expenses for forwarding proxy
solicitation materials to our stockholders.
What if I receive only one set of proxy materials although
there are multiple stockholders at my address?
If you and other residents at your mailing address own shares of
our common stock in street name, your broker or bank may have
sent you a notice that your household will receive only one
annual report and proxy statement for each company in which you
hold shares through that broker or bank. This practice of
sending only one copy of proxy materials is known as
householding. If you did not respond that you did
not want to participate in householding, you were deemed to have
consented to the process. If the foregoing procedures apply to
you, your broker has sent one copy of each of our annual report,
notice of annual meeting and proxy statement to your address.
However, even if your broker has sent only one copy of these
proxy materials, you should receive a proxy card for each
stockholder in your household. You may revoke your consent to
householding at any time by contacting your broker or bank, or
by calling 1-800-542-1061. The revocation of your consent to
householding will be effective 30 days following its
receipt. In any event, if you did not receive an individual copy
of our annual report or proxy statement, we will send a separate
copy of the annual report or the proxy statement to you upon
oral or written request. Such request can be made by contacting
us at 10 S. Riverside Plaza, Suite 1100, Chicago,
Illinois, 60606, attention: Dennis Fabro, Senior Vice President,
Investor Relations (telephone number: 312-798-6000).
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What other information should I review before voting?
Our 2004 annual report to stockholders is being mailed to you
concurrently with this proxy statement. Although our annual
report is not part of the proxy solicitation materials, we
recommend that you review our 2004 annual report prior to voting.
How can I receive a copy of Trizecs annual report on
Form 10-K for the year ended December 31, 2004?
The 2004 annual report to stockholders, which accompanies this
proxy statement, includes our annual report on Form 10-K
for the year ended December 31, 2004. We filed the 2004
Form 10-K with the Securities and Exchange Commission, or
the SEC, on March 11, 2005. You may view our 2004
Form 10-K on our website at www.trz.com or on the
website of the SEC at www.sec.gov. In addition, we will
provide to you, without charge, a copy of our 2004
Form 10-K upon written request to Dennis Fabro, Senior Vice
President, Investor Relations, at our executive offices located
at 10 S. Riverside Plaza, Suite 1100, Chicago, Illinois,
60606.
Will other matters be voted on at the annual meeting?
We are not aware of any other matters to be presented at the
annual meeting other than those described in this proxy
statement. If other matters not described in the proxy statement
are properly presented at the meeting, any proxies received by
us will be voted in accordance with the best judgment of the
proxy holders.
PROPOSAL 1 ELECTION OF DIRECTORS
Special Voting Stock
The election of directors may be influenced by our outstanding
special voting stock. The special voting stock entitles Trizec
Canadas Hungarian subsidiary, as the current sole holder
of our special voting stock, to a number of votes in the
election of our directors such that, when that number of votes
is added to the aggregate number of votes that Trizec Canada and
its subsidiaries otherwise may cast in the election of our
directors in regard to their ownership of our common stock, the
total number constitutes a majority of the votes that may be
cast in the election of our directors. The holder of our special
voting stock is entitled to such votes in the election of our
directors only if Trizec Canada and its subsidiaries
collectively own at least five percent of our issued and
outstanding common stock at the time of the vote. As a result of
the special voting right, Trizec Canada and its majority
stockholder will have voting control over the election of our
directors.
Our Board of Directors
Our board of directors currently consists of nine directors. The
board has nominated each of these nine directors for re-election
as a director at the 2005 annual meeting. A former director,
Casey R. Wold, resigned from our board effective
September 17, 2004 and, on February 18, 2005, our
board of directors reduced the size of our board from ten
members to nine members. If re-elected as a director at the
annual meeting, each of our nominees will serve a one-year term
expiring at our 2006 annual meeting of stockholders and until
his successor has been duly elected and qualified or until his
death, resignation or retirement.
Each of the nominees has consented to serve as a director if
re-elected for a one-year term. Our board of directors knows of
no reason why any nominee would be unable to serve as a
director. If any nominee is unavailable for election or service,
the board of directors may designate a substitute nominee and
the persons designated as proxy holders on the proxy card will
vote for the substitute nominee recommended by our board of
directors. Alternatively, our board of directors may decrease
the size of the board. For a discussion on our boards
determination of the independence of our directors and other
corporate governance matters, please see the section titled
Director Independence, Corporate Governance and Board
Committees below.
4
Nominees for Election to our Board of Directors Until Terms
Expiring in 2006
The following table and biographical descriptions set forth
certain information, including a brief description of principal
occupation for at least the past five years, other directorships
of public companies, and age as of March 24, 2005,
regarding each of our directors who has been nominated to stand
for re-election for a one-year term until the 2006 annual
meeting of stockholders.
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Peter Munk
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77 |
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Chairman of the Board of Directors |
Timothy H. Callahan
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President, Chief Executive Officer and Director |
L. Jay Cross
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52 |
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Director |
The Right Honourable Brian Mulroney
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66 |
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Director |
James J. OConnor
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68 |
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Director |
Glenn J. Rufrano
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55 |
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Director |
Richard M. Thomson
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71 |
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Director |
Polyvios C. Vintiadis
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69 |
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Director |
Stephen R. Volk
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68 |
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Director |
Peter Munk. Mr. Munk has served as the
Chairman of our board of directors since our corporate
reorganization in May 2002. Mr. Munk founded our former
parent company, TrizecHahn Corporation, and from 1987 through
May 2002, served as the Chairman of its board of directors. From
June 1996 until January 2001, Mr. Munk also served as the
Chief Executive Officer of TrizecHahn Corporation. Mr. Munk
founded and is currently the Chairman of the board of directors
of Barrick Gold Corporation, a gold mining company. He was also
the Chief Executive Officer of Barrick Gold Corporation from its
formation in 1984 until 1998. Mr. Munk has been the
President and a director of P.M. Capital Inc., a private
Canadian company, since its formation in 1992. Mr. Munk has
also served as the Chief Executive Officer and Chairman of the
board of directors of Trizec Canada since its incorporation in
2002. He also served as Trizec Canadas President from its
incorporation in May 2002 until December 2004.
Timothy H. Callahan. Mr. Callahan has served
as our President, Chief Executive Officer and a member of our
board of directors since August 2002. From October 1996 through
April 2002, Mr. Callahan was Trustee, President and Chief
Executive Officer of Equity Office Properties Trust, a real
estate investment trust that became publicly-traded in July
1997. From August 1996 to October 1997, Mr. Callahan served
on the board of managers and was the Chief Executive Officer of
Equity Office Holdings, L.L.C., and Equity Office Properties,
L.L.C., predecessors to Equity Office Properties Trust. From
January 1995 to August 1996, Mr. Callahan was the Executive
Vice President and Chief Financial Officer of Equity Group
Investments (EGI), a private investment group, where he was
responsible for coordinating all financing and capital markets
activities affecting EGI, including real estate and corporate.
From July 1992 to January 1995, Mr. Callahan served as
Senior Vice President of EGI. Prior to joining EGI,
Mr. Callahan was Vice President of Finance with The Edward
J. DeBartolo Corporation in Youngstown, Ohio from June 1990 to
July 1992 and Director of Development Northeast with
DeBartolo from June 1988 to June 1990. Before joining DeBartolo,
Mr. Callahan served as Senior Vice President at Chemical
Realty Corporation, a division of Chemical Bank. During his 14
years at Chemical, he was responsible for all real estate
lending activities with clients throughout the Midwest and
Mid-Atlantic regions before transferring to the investment
banking division, where he was responsible for various real
estate investment banking activities.
L. Jay Cross. Mr. Cross has served as a
member of our board of directors since November 2003.
Mr. Cross has served as the President of New York Jets LLC,
the corporate owner of the New York Jets professional football
franchise, since March 2001. From December 1996 to August 2000,
Mr. Cross served as President of Business Operations for
the National Basketball Associations Miami Heat franchise.
Between August 1994 and August 1996, Mr. Cross served as
the Project Director for the development of the Air Canada
Centre, home of Torontos NBA and NHL franchises.
Mr. Cross held Senior Vice President and Vice President
positions with Markborough Properties, Inc. from May 1989 to
July 1994. Between October 1985
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and April 1989, Mr. Cross served as a General Manager of
The Prudential Insurance Company of America in its real estate
investment operations.
The Right Honourable Brian Mulroney.
Mr. Mulroney has served as a member of our board of
directors since our May 2002 corporate reorganization and served
as a member of the board of directors of TrizecHahn Corporation
from June 1996 until May 2002. Since August 1993,
Mr. Mulroney has been a Senior Partner of Ogilvy Renault
LLP, a law firm based in Montreal, Canada. From September 1984
to June 1993, Mr. Mulroney served as the Prime Minister of
Canada. Mr. Mulroney serves as a member of the board of
directors of Barrick Gold Corporation, America Online Latin
America, Inc., Cendant Corporation, Archer-Daniels-Midland
Company and Quebecor World Inc.
James J. OConnor. Mr. OConnor has
served as a member of our board of directors since November
2003. In addition, Mr. OConnor serves as a member of
the board of directors of Corning Incorporated, Smurfit-Stone
Container Corporation and UAL Corporation.
Mr. OConnor joined Commonwealth Edison, a utility
company, in 1963. He became its President in 1977, a director in
1978 and its Chairman and Chief Executive Officer in 1980. In
1994, he was also named Chairman and Chief Executive Officer of
Unicom Corporation which then became the parent corporation of
Commonwealth Edison. He retired from these positions in March
1998.
Glenn J. Rufrano. Mr. Rufrano has served as a
member of our board of directors since our May 2002 corporate
reorganization and served as a member of the board of directors
of TrizecHahn Corporation from November 1996 until May 2002. In
addition, Mr. Rufrano serves as a member of the board of
directors of New Plan Excel Realty Trust, Inc., a
publicly-traded retail real estate investment trust and CRIIMI
MAE, Inc. Mr. Rufrano joined New Plan Excel Realty Trust,
Inc. in February 2000 where he serves as the Chief Executive
Officer and as a member of its Investment Committee. From
February 2000 to March 2002, Mr. Rufrano also served as
President of New Plan Excel Realty Trust, Inc. Mr. Rufrano was a
partner in The OConnor Group, a diversified real estate
firm, from its inception in 1983 until March 2000. He was Chief
Financial Officer of The OConnor Group from June 1990 to
November 1994 and President and Chief Operating Officer from
November 1994 to March 2000. He also was Co-Chairman of The
Peabody Group, an association between The OConnor Group
and J.P. Morgan & Co., Inc., from September 1998 to
March 2000.
Richard M. Thomson. Mr. Thomson has served as
a member of our board of directors since our May 2002 corporate
reorganization and served as a member of the board of directors
of TrizecHahn Corporation from May 1999 until May 2002.
Mr. Thomson also serves as a member of the board of
directors of Nexen Inc. and The Thomson Corporation.
Mr. Thomson served as Chief Executive Officer of The
Toronto-Dominion Bank from 1977 to 1997, as its Chairman from
1978 to February 1998 and as a director until March 2004.
Polyvios C. Vintiadis. Mr. Vintiadis has
served as a member of our board of directors since our May 2002
corporate reorganization. Mr. Vintiadis has served as a
consultant to Morgens, Waterfall, Vintiadis & Co., a
financial services firm based in New York, since 1999, and also
serves as a member of its board of directors. Mr. Vintiadis
served as a principal and/or consultant of Morgens, Waterfall,
Vintiadis & Co. from 1981 until 1999. In addition, Mr.
Vintiadis served as the Chairman, President and Chief Executive
Officer of Towermarc Corporation, a full service real estate
development company, from 1984 to 2001.
Stephen R. Volk. Mr. Volk has served as a
member of our board of directors since our May 2002 corporate
reorganization. Since August 2004, Mr. Volk has served as Vice
Chairman of Citigroup Inc., focusing primarily on
Citigroups Global Corporate and Investment Banking Group,
and also serves as a senior adviser to the company on other
matters. From August 2001 to August 2004, Mr. Volk served
as Chairman and a member of the Operating Committee and the
Executive Board of Credit Suisse First Boston Corporation, an
investment bank, based in New York, as well as a member of the
Executive Board of Credit Suisse Group. Mr. Volk served as
Senior Partner of Shearman & Sterling, an international law
firm headquartered in New York, New York, from 1991 to June
2001. Mr. Volk also serves as a member of the board of
directors of Consolidated Edison, Inc.
6
Our Recommendation
Our board of directors recommends a vote FOR each of the
nominees as a director.
Information Regarding Our Executive Officers
The following table and biographical descriptions set forth
certain information, including a brief description of principal
occupation for at least the past five years, other directorships
of public companies, and age as of March 24, 2005,
regarding each of our executive officers, other than Messrs.
Munk and Callahan whose positions and background are described
above.
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Michael C. Colleran
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52 |
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Executive Vice President and Chief Financial Officer |
Brian K. Lipson
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47 |
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Executive Vice President and Chief Investment Officer |
William R.C. Tresham
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49 |
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Executive Vice President and Chief Operating Officer |
Ted R. Jadwin
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56 |
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Senior Vice President, General Counsel and Corporate Secretary |
Michael C. Colleran. Mr. Colleran has served
as our Executive Vice President and Chief Financial Officer
since June 2003. From September 2000 to June 2003,
Mr. Colleran served as President of the Colleran Company, a
real estate investment banking consulting firm. From 1997 to
2000, Mr. Colleran served as Executive Vice President and
Chief Financial Officer of The Davis Companies. Between May 1988
and June 1997, Mr. Colleran served as Executive Vice
President and Chief Financial Officer of
Miller-Klutznick-Davis-Gray Company, a real estate investment
and development company. Before 1988, Mr. Colleran spent
fourteen years with KPMG LLP, an international accounting and
consulting firm, specializing in the structuring of financial
and tax-related transactions for major real estate owners and
developers.
Brian K. Lipson. Mr. Lipson has served as our
Executive Vice President and Chief Investment Officer since
January 2005. From June 2001 to January 2005, Mr. Lipson
was principal and owner of an independent real estate investment
and advisory firm. From September 2002 through December 2004, he
provided exclusive consulting services to Maguire Partners and,
following its initial public offering in June 2003, its
successor, Maguire Properties, Inc., a California-based,
publicly-traded office real estate investment trust. From March
1997 to June 2001, Mr. Lipson served as Executive Vice
President of TrizecHahn Office Properties Ltd., a subsidiary of
TrizecHahn Corporation, our former parent company. Prior to
joining TrizecHahn Office Properties Ltd., from March 1994 to
March 1997, Mr. Lipson served as Principal and Co-Head of
Capital Transactions at The Yarmouth Group, Inc., a subsidiary
of Lend Lease Corporation, a real estate company that owns,
develops, constructs and manages office and retail properties in
the U.S., Europe and Asia. From April 1990 to March 1994, he
served as Vice President with Equity Assets Management, which
later became Equity Office Properties Trust. From February 1985
to April 1990, Mr. Lipson served as Vice President of
Strategic Planning for VMS Realty Partners, a real estate
investment company. Prior to joining VMS, Mr. Lipson was an
attorney in California practicing real estate law.
William R.C. Tresham. Mr. Tresham has served
as our Executive Vice President and Chief Operating Officer
since June 2004. He served as our Executive Vice President,
Strategy and Operations from February 2003 to June 2004, and
served as our Executive Vice President, Six Sigma Initiatives,
from February 2002 to February 2003. From May 2000 to February
2002, Mr. Tresham served as Executive Vice President of one
of our subsidiaries, Trizec Holdings, LLC. Mr. Tresham
served as a Senior Vice President of TrizecHahn Office
Properties Ltd., a subsidiary of TrizecHahn Corporation, our
former parent company, from 1997 to May 2000 and as its Vice
President from 1995 to 1997.
Ted R. Jadwin. Mr. Jadwin has served as our
Senior Vice President and General Counsel since February 2003
and as our Corporate Secretary since July 2003. From 1984 to
February 2003, Mr. Jadwin was an Equity Member of
DAncona & Pflaum LLC, a law firm in Chicago, Illinois,
and an Equity Partner in its predecessor partnership,
DAncona & Pflaum.
There are no family relationships between our directors and
executive officers.
7
DIRECTOR INDEPENDENCE, CORPORATE GOVERNANCE AND BOARD
COMMITTEES
Independence of Our Directors
Under the listing standards of the New York Stock Exchange, or
the NYSE, and pursuant to our Corporate Governance Principles,
we are required to have and maintain a board with at least a
majority of independent directors. In addition to
setting forth the minimum standards for independence, the new
NYSE rules require that our board affirmatively determine the
independence of each of our directors by determining that the
director has no material relationship with us (either directly
or as a partner, stockholder or officer of an organization that
has a relationship with us). To assist our board in making
determinations of independence, the board adopted categorical
standards of independence that are based, in part, on the
minimum independence standards established under the NYSEs
listing standards. Under these categorical standards, a director
will be considered independent if (a) our board has
affirmatively determined that the director has no material
relationship with us (either directly or as a partner,
stockholder or officer of an organization that has a
relationship with us) and (b) during the three years
immediately prior to such directors election:
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the director has not been an employee of ours and no immediate
family member of the director (defined as a parent, spouse,
child, sibling, father- and mother-in-law, son- and
daughter-in-law, brother- and sister-in-law and anyone, other
than an employee of the director, who shares the directors
home) has been an executive officer of ours; |
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neither the director nor any immediate family member has been
affiliated with or employed by our present or former auditor; |
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neither the director nor any immediate family member has been
part of an interlocking directorate in which an executive
officer of ours serves on the compensation committee of another
company that concurrently employs the director; |
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neither the director nor any immediate family member has
received more than $100,000 in any twelve-month period in direct
compensation from us (other than director and committee fees,
pension payments or other deferred compensation payments for
prior service that are not contingent on continued service); and |
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neither the director nor any immediate family member was an
executive officer or an employee of another company that made
payments to, or received payments from, us for property or
services in an amount which, in any fiscal year during such
three-year period, exceeded the greater of $1,000,000 or 2% of
such other companys consolidated gross revenues. |
Further, under the categorical standards, the following
commercial or charitable relationships will not be considered
material relationships that would impair the directors
independence:
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if the director, an affiliate of the director, or an immediate
family member of the director or affiliate, leases office or
retail space from us, provided that our Corporate Governance
Committee has determined that the terms of such lease are not
materially different from terms that would have been agreed to
with an unrelated third party; |
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if the director is an executive officer of another company that
does business with us and the annual sales or services, or
purchases from, us are less than 1% of the annual revenues of
the company for which the director serves as an executive
officer; |
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if the director is an executive officer of another company which
is indebted to us, or to which we are indebted, and the total
amount of either companys indebtedness to the other is
less than 1% of the total consolidated assets of the company for
which the director serves as an executive officer; or |
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if the director serves as an officer, director or trustee of a
not-for-profit educational, civic or charitable organization and
our discretionary charitable contributions to such
not-for-profit organization are less than 1% of that
organizations total annual charitable receipts. |
8
In light of the NYSEs listing standards regarding board
independence, our board reviewed the independence status of each
of our directors. During this evaluation process, our board
reviewed both direct and indirect transactions and relationships
that each of our directors had or maintained with us, our
management and employees. The purpose of this review was to
determine the independence of each director and whether such
director would be considered an independent director under the
NYSEs listing standards.
As a result of this review, our board affirmatively determined
that seven of nine directors currently are independent under our
Corporate Governance Principles and the NYSEs listing
standards. Our board determined that Messrs. Cross, Mulroney,
OConnor, Rufrano, Thomson and Vintiadis are independent
based on the fact that none of them has any relationship with us
other than as a director and as a holder of our common stock.
Additionally, our board considered Mr. Volks position
as Vice Chairman of Citigroup and the lease arrangements between
us and Citigroup and its affiliates, pursuant to which Citigroup
and its affiliates lease an aggregate of 72,000 square feet of
office space from us. Based on this review, our board concluded
that this relationship fits within our categorical standards for
independence and that these transactions did not impair
Mr. Volks independence. As a result, our board
affirmatively determined that Mr. Volk is independent.
Mr. Callahan is not independent due to his employment with
us. Mr. Munk is not independent due to his effective
control over our board, as described more fully under
Stock Ownership Information Controlling
Stockholder below, and because we compensate Mr. Munk
in excess of $100,000 annually for his services as Chairman of
our board, as described in the Summary Compensation Table of the
section titled Compensation of Directors and Executive
Officers Executive Compensation below.
Our Code of Ethics and Corporate Governance Principles
Code of Ethics. Our board has adopted a Code of
Business Conduct & Ethics that applies to our directors and
to all of our employees, including our principal executive
officer, principal financial officer and principal accounting
officer.
Corporate Governance Principles. Our board has
adopted Corporate Governance Principles which address a number
of topics, including director qualification standards, director
responsibilities, director access to management and independent
advisors, director compensation, management succession,
executive sessions of non-management and independent directors,
annual board self-evaluations, and various committee matters.
Where You Can Find These Documents. Our Code of
Business Conduct & Ethics and Corporate Governance
Principles are available on our website at www.trz.com,
under the section titled Investors
Corporate Governance. Additionally, we will provide copies
of our Code of Business Conduct & Ethics and Corporate
Governance Principles, without charge, to any stockholder who
sends a written a request to Office of the Corporate Secretary,
Trizec Properties, Inc., 10 S. Riverside Plaza, Suite 1100,
Chicago, Illinois 60606. If we waive or amend any provision of
the Code of Business Conduct & Ethics for our principal
executive officer, principal financial officer or principal
accounting officer, we will disclose such waiver or amendment on
our website.
Attendance by Our Directors at Board and Committee Meetings
During 2004
During 2004, our board of directors held 11 meetings. Each of
our directors attended at least 75% of the aggregate number of
meetings held during 2004 by our board of directors and its
committees on which he served during his period of service.
Policy on Attendance at Annual Stockholders Meetings by Our
Directors
All of our directors attended the 2004 annual meeting of
stockholders. Each director is expected to attend our annual
meetings of stockholders, except where unusual circumstances
arise.
Committees of the Board of Directors
As permitted by our bylaws, our board of directors has
established four standing committees, an Audit Committee, a
Compensation Committee, a Nominating Committee, and a Corporate
Governance Commit-
9
tee, to assist the board of directors in carrying out its duties
and responsibilities. All members of the committees described
below are directors who are independent as that term is defined
in the NYSEs listing standards and as affirmatively
determined by our board of directors.
The following table sets forth the membership of these
committees as of March 24, 2005.
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Corporate | |
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Audit | |
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Compensation | |
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Governance | |
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Nominating | |
Director |
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Committee | |
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Committee | |
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Committee | |
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Committee | |
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L. Jay Cross
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M |
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The Right Honourable Brian Mulroney
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C |
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M |
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James J. OConnor
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M |
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Glenn J. Rufrano
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M |
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Richard M. Thomson
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Polyvios C. Vintiadis
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Stephen R. Volk
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C signifies a chairperson and M
signifies a member.
The functions performed by these committees are described below.
Audit Committee
The principal purposes of the Audit Committee are to assist the
board of directors in the oversight of:
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our financial reporting process, including monitoring the
integrity of the financial statements and the qualification,
independence and performance of our independent registered
public accounting firm; |
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the performance of our internal audit function; |
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our compliance with legal and regulatory requirements; and |
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monitoring the ownership and transfer of our shares for the
purpose of ensuring that we achieve and preserve our status as a
domestically-controlled REIT. |
The Audit Committee is directly responsible for the appointment,
compensation, retention and oversight of the work of our
independent registered public accounting firm and also is
responsible for reviewing with our independent registered public
accounting firm any issues it has encountered in the scope of
its audit work. The Audit Committee also is charged with the
tasks of reviewing our financial statements, financial reporting
issues and adequacy of internal control over financial reporting
with management and our independent registered public accounting
firm.
Pursuant to the charter of the Audit Committee, all of the
members of the Audit Committee must meet the independence,
experience and financial literacy and expertise requirements of
the NYSEs listing standards, the Sarbanes-Oxley Act of
2002, the Securities Exchange Act of 1934, as amended, or the
Exchange Act, and applicable rules and regulations of the SEC,
as in effect from time to time. Our board of directors has
determined that each of Richard M. Thomson (chairperson), James
J. OConnor, Glenn J. Rufrano and Polyvios C. Vintiadis,
comprising all of the members of our Audit Committee, is
independent within the meaning of the requirements of the
NYSEs listing standards and Rule 10A-3 under the
Exchange Act. Our board of directors also has determined that
each of Messrs. Thomson, OConnor and Rufrano is an
audit committee financial expert, as defined by the rules and
regulations promulgated by the SEC, and has accounting or
related financial management expertise as required by the
NYSEs listing standards. Additionally, each of Messrs.
Thomson, OConnor, Rufrano and Vintiadis is financially
literate as required by the NYSEs listing standards. The
Audit Committee held eight meetings during 2004.
10
Compensation Committee
The principal purposes of the Compensation Committee are:
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to assist the board in administering our compensation plans; |
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ensure appropriate compensation and effective incentives for our
employees, executive officers, directors, consultants and
advisors; |
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review and approve corporate goals and objectives relevant to
CEO compensation, evaluate the CEOs performance in light
of those goals and objectives and set the CEOs
compensation level based on this evaluation; and |
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review and approve the compensation of our executive officers
(other than the CEO), taking into account any recommendations of
the CEO. |
The Compensation Committee currently consists of four directors,
L. Jay Cross, Brian Mulroney (chairperson), Glenn J. Rufrano and
Stephen R. Volk, all of whom are independent directors under the
requirements of the NYSEs listing standards as currently
in effect, and all members must continue to meet those
requirements as in effect from time to time. In addition, all of
the members of the Compensation Committee must meet any other
legal requirements relevant to the proper administration of our
executive compensation program, including requirements under the
federal securities laws and the Internal Revenue Code of 1986,
as amended, or the IRC. The Compensation Committee held ten
meetings during 2004.
Corporate Governance Committee
The principal purposes of the Corporate Governance Committee are
to:
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develop, implement and monitor our Corporate Governance
Principles and our Code of Business Conduct & Ethics; |
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monitor and safeguard the boards independence; |
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annually undertake evaluations of the board committees and the
full board of directors; and |
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monitor significant developments in the law and practice of
corporate governance and of the duties and responsibilities of
directors of public companies. |
The Corporate Governance Committee currently consists of four
directors, L. Jay Cross, Brian Mulroney, Glenn J. Rufrano and
Stephen R. Volk (chairperson), all of whom are independent
directors under the requirements of the NYSEs listing
standards as currently in effect, and all of the members of the
Corporate Governance Committee must continue to meet those
requirements as in effect from time to time. The Corporate
Governance Committee held four meetings during 2004.
Nominating Committee
The principal purposes of the Nominating Committee are to:
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establish the criteria for evaluating and evaluate the
qualifications of individuals for election as members of the
board of directors; |
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identify individuals that are qualified to serve as directors;
and |
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recommend such individuals to the board of directors, either to
fill vacancies that occur on the board from time to time or in
connection with the selection of director nominees for each
annual meeting of stockholders. |
The Nominating Committee currently consists of four directors,
L. Jay Cross, Brian Mulroney, Glenn J. Rufrano
(chairperson) and Stephen R. Volk, all of whom are
independent directors under the requirements of the NYSEs
listing standards as currently in effect, and all of the members
of the Nominating Committee
11
must continue to meet those requirements as in effect from time
to time. The Nominating Committee held three meetings during
2004.
The Nominating Committee will consider stockholders
nominees for election as directors at our 2006 annual meeting of
stockholders if submitted to us not earlier than
January 19, 2006 and not later than March 5, 2006. See
Director Nomination and Evaluation Process and
Stockholder Proposals for 2006 Annual Meeting below.
Where You Can Find Our Boards Committee Charters
Our Audit Committee, Compensation Committee, Corporate
Governance Committee and Nominating Committee each has adopted a
written charter, which more fully describes the scope of the
respective committees duties and responsibilities. Copies
of these committee charters are available on our website at
www.trz.com, under the section titled
Investors Corporate Governance.
Additionally, we will provide copies of our boards
committee charters, without charge, to any stockholder who sends
a written request to Office of the Corporate Secretary, Trizec
Properties, Inc., 10 S. Riverside Plaza, Suite 1100,
Chicago, Illinois 60606. In addition, a copy of our Audit
Committee charter, which was amended in February 2005, is
attached as Appendix A to this proxy statement.
Director Nomination and Evaluation Process
The Nominating Committee has adopted, and our board of directors
has ratified, a policy relating to qualification and nomination
of directors, including consideration of directors nominated by
our stockholders, as further described below.
Qualifications of Directors. In considering potential
candidates for director, the Nominating Committee considers the
entirety of each candidates qualifications and
credentials. Qualifications and credentials for consideration as
a director nominee may vary according to the particular areas of
expertise being sought as a complement to the existing
composition of the board of directors. The Nominating Committee
believes that, at a minimum, candidates for director must
possess the following qualifications:
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high integrity; |
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an ability to exercise sound judgment; |
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an ability to make independent analytical inquiries; |
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a willingness and ability to devote adequate time and resources
to diligently perform board of director duties; |
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a reputation, both personal and professional, consistent with
the image and reputation of Trizec; and |
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an ability to contribute to the effective management of Trizec. |
In addition to these minimum qualifications, the Nominating
Committee also believes that there are other attributes that,
while not a prerequisite for nomination, should be taken into
account when considering whether to recommend a particular
candidate. These factors include:
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whether the person possesses specific real estate expertise and
familiarity with general issues affecting our business; |
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whether the person is financially literate, has accounting or
related financial management expertise, or qualifies as an
audit committee financial expert as such term is
defined by the SEC; |
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whether the person would qualify as an independent
director under the rules of the NYSE and the criteria set forth
in our Corporate Governance Principles; and |
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the importance of continuity of the existing composition of the
board of directors. |
12
Process for Identifying and Evaluating Nominees for
Director. The Nominating Committee will utilize a variety of
methods for identifying and evaluating nominees for director.
The Nominating Committee will periodically assess the
appropriate size of the board and whether any vacancies on the
board are expected. In the event that vacancies are anticipated
or otherwise arise, the Nominating Committee will seek to
identify director candidates based on input provided by a number
of sources, including (a) Nominating Committee members,
(b) other members of the board of directors, (c) our
management and (d) our stockholders. The Nominating
Committee also has the authority to consult with or retain
advisors or search firms to assist in the identification of
qualified director candidates.
Once director candidates have been identified, the Nominating
Committee will then evaluate each candidate in light of his or
her qualifications and credentials, and any additional factors
that the Committee deems necessary or appropriate, including
those set forth under Qualifications of
Directors above. Qualified prospective candidates will be
interviewed by the Chairman of our board, the Chief Executive
Officer and at least one member of the Nominating Committee. The
full board will be kept informed of progress. Using input from
such interviews and other information obtained by the Nominating
Committee, the Nominating Committee will evaluate whether a
prospective candidate is qualified to serve as a director and,
if so qualified, will take appropriate action to elect such
candidate to fill a vacancy on the board or seek full board
approval of the nomination of the candidate.
Existing directors who are being considered for re-nomination
will be re-evaluated by the Nominating Committee based on each
directors satisfaction of the qualifications set forth
above and his or her performance as a director during the
preceding year.
The Nominating Committee has adopted a policy which provides
that candidates submitted by stockholders will be evaluated in
the same manner as candidates recommended by other sources,
provided that the procedures set forth under
Stockholder Nominations below, have been
followed. The Nominating Committee did not receive any
nominations from stockholders for the 2005 annual meeting.
Stockholder Nominations. As provided in the policy
adopted by the Nominating Committee, the Nominating Committee
will consider nominations submitted by stockholders who comply
with the timing, informational and other requirements of our
bylaws. Specifically, a stockholder must be a holder of record
as of the time notice of a nomination is given and as of the
record date for the annual meeting. Such stockholder must be, or
his, her, or its representatives must be, present in person at
the annual meeting. A stockholders notice of nomination is
timely if delivered to, or mailed to and received by, our
Corporate Secretary at the principal executive offices not less
than 75 days nor more than 120 days prior to the one
year anniversary date of the prior years annual meeting
(that is, no earlier than January 19, 2006 and no later
than March 5, 2006 for candidates for election at the 2006
annual meeting). If, however, the annual meeting is scheduled to
be held on a date more than 30 days before, or 60 days
after, that anniversary date, a stockholders notice will
be timely if delivered to, or mailed and received by, the
Corporate Secretary no later than the close of business on the
later of (a) the 75th day prior to the scheduled date of the
annual meeting or (b) the 15th day following the day on
which the public announcement of the date of the annual meeting
is first made by Trizec.
A stockholders notice of nomination must include:
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the name, date of birth, business address and residence address
of the candidate; |
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the principal occupation or employment of such person; |
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the class and number of shares of our capital stock that are
beneficially owned by the candidate on the date of the notice;
and |
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the candidates signed consent to serve as a director if
elected and to be named in the proxy statement. |
The notice must also include any additional information required
by our bylaws or the Nominating Committees charter, as
amended from time to time, and any additional information
requested by the Nominating Committee.
13
The stockholders notice shall further set forth the
following information as to the stockholder giving such notice:
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the name and address, as they appear on the stock transfer
books, of the stockholder and of the beneficial owners of the
capital stock registered in such stockholders name, as
well as the name and address of other stockholders supporting
the nominee(s); |
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the series or class and number of shares of our capital stock
which are held of record, beneficially owned, or represented by
proxy by the stockholder and any other stockholders supporting
such nominee on the date of the notice; and |
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a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
or nominations are to be made by such stockholder. |
Once we receive the notice, we will deliver a questionnaire to
the candidate which requests additional information about the
candidates independence, qualifications and other
information that would assist the Nominating Committee in
evaluating the candidate, as well as certain information about
the candidate that must be disclosed in the proxy statement, if
such candidate is nominated. Candidates must complete and return
the questionnaire within the time frame provided to be
considered for nomination by the Nominating Committee.
Executive Sessions of Non-Management Directors and Presiding
Independent Director
Our Corporate Governance Principles require that our
non-management directors meet in an executive session at least
twice annually without participation by management. Our board of
directors has established the position of Presiding Independent
Director to preside at these executive sessions, which are
intended to promote open discussions among our non-management
directors. In addition to presiding over periodic executive
sessions of our non-management and independent directors, our
Presiding Independent Directors responsibilities include:
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consulting with the Chairman of the board with respect to
agendas for board meetings; |
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consulting with the board on the selection of committee
chairpersons; and |
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generally acting as an intermediary between management and the
non-management directors. |
Our independent directors, on an annual basis, select the
Presiding Independent Director from among the boards
independent directors. Our independent directors have designated
Polyvios C. Vintiadis to serve as Presiding Independent Director
for calendar year 2005. Mr. Vintiadis also served as
Presiding Independent Director for calendar year 2004.
During 2004, our non-management directors held four executive
sessions. Our Corporate Governance Principles also require that
our independent directors meet in an executive session at least
twice annually. During 2004, all of our non-management directors
were independent and, therefore, the executive sessions of
non-management directors were attended solely by independent
directors. As a result, our independent directors did not hold
any separate executive sessions.
Stockholder and Other Interested Party Communications with
Our Board
To enable our stockholders and interested parties to communicate
with our board of directors, we have set up a procedure by which
our stockholders and other interested parties may communicate
with our board, non-management directors or independent
directors as a group or the Presiding Independent Director. If
you wish to communicate with our board, non-management directors
or independent directors as a group or the Presiding Independent
Director, you may do so by mailing a written communication to
the attention of: c/o Corporate Secretary, Trizec Properties,
Inc., 10 S. Riverside Plaza, Suite 1100, Chicago, Illinois
60606. Stockholders and interested parties should clearly
specify in each communication the name of the individual
director or group of directors to whom the communication is
intended. All written communications sent to any
14
individual director or group of directors will be reviewed by
our Corporate Secretary and, if the inquiry or the communication
is relevant to, and consistent with, our corporate governance,
business operations and business practices and serves a
legitimate purpose, it will be forwarded to the board,
non-management directors, independent directors or the Presiding
Independent Director, as the case may be.
STOCK OWNERSHIP INFORMATION
Security Ownership of Certain Beneficial Owners
The following table sets forth information with respect to the
current beneficial ownership of our voting stock by each person,
or group of affiliated persons, who beneficially owns more than
5% of our voting stock. The percentage of class for the common
stock is based on 154,061,250 shares of our common stock
outstanding as of March 24, 2005. Beneficial ownership is
defined in Rule 13d-3 of the Exchange Act. The number of
shares beneficially owned is based on the most recent
Schedule 13D or 13G filed with the SEC on behalf of such
persons or other information made available to us as of
March 24, 2005. Except as otherwise noted, the reporting
persons have stated that they possess sole voting and sole
dispositive power over the entire number of shares reported.
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Name and Address |
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Amount and Nature of |
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Percent |
of Beneficial Owner |
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Title of Class |
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Beneficial Ownership |
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of Class |
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Peter Munk
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Special Voting Stock |
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100 shares |
(1) |
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100.0 |
% |
c/o Trizec Canada Inc.
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Common Stock |
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61,177,421 shares |
(2)(3) |
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39.4 |
% |
BCE Place, 181 Bay Street
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Suite 3820, Box 800
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Toronto, ON M5J 2T3
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Trizec Canada Inc.
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Special Voting Stock |
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100 shares |
(1) |
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100.0 |
% |
BCE Place, 181 Bay Street
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Common Stock |
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60,827,421 shares |
(2)(4) |
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39.3 |
% |
Suite 3820, Box 800
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Toronto, ON M5J 2T3
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FMR Corp.
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Common Stock |
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8,112,800 shares |
(5) |
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5.3 |
% |
82 Devonshire Street
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Boston, MA 02109
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(1) |
Because Peter Munks beneficial ownership of Trizec
Canadas multiple voting shares gives him voting control
over Trizec Canada, beneficial ownership of the 100 shares of
our special voting stock that are beneficially owned by Trizec
Canada, directly or indirectly, is attributable to Mr. Munk
pursuant to Rule 13d-3 under the Exchange Act. |
(2) |
Because Peter Munks beneficial ownership of Trizec
Canadas multiple voting shares gives him voting control
over Trizec Canada, beneficial ownership of shares of our common
stock that are beneficially owned by Trizec Canada, directly or
indirectly, is attributable to Mr. Munk pursuant to
Rule 13d-3 under the Exchange Act. |
(3) |
Based on information provided by Mr. Munk as of
March 24, 2005, Mr. Munk beneficially owned with
shared voting power and shared dispositive power 60,827,421
shares of our common stock that were also beneficially owned by
Trizec Canada, which amount included warrants to purchase
905,042 shares of our common stock that are currently
exercisable. Additionally, as of March 24, 2005,
Mr. Munk beneficially owned with sole voting power and sole
dispositive power 350,000 shares of our common stock, which
amount included warrants to purchase 350,000 shares of our
common stock that are currently exercisable. |
(4) |
Based on information provided by Trizec Canada, Trizec Canada
beneficially owned with shared voting power and shared
dispositive power 59,922,379 shares of our common stock and
warrants to purchase 905,042 shares of our common stock that are
currently exercisable. |
(5) |
According to the Schedule 13G filed by FMR Corp.
(FMR), Edward C. Johnson 3d, Chairman of FMR, and
Abigail P. Johnson, a Director of FMR, with the Securities and
Exchange Commission, (A) FMR has sole dispositive power
with respect to 7,995,300 of the listed shares and sole voting
power with respect to 757,200 of the listed shares,
(B) Edward C. Johnson 3d has sole dispositive power over
7,995,300 of the listed shares and sole voting power with
respect to 757,200 of the listed shares and (C) these
shares represented (i) 7,238,100 shares beneficially owned
by Fidelity Management & Research Company
(Fidelity), a wholly-owned subsidiary of FMR, as a
result of acting as investment advisor to various investment
companies (Funds), (ii) 757,200 shares |
15
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beneficially owned by Fidelity
Management Trust Company, a wholly-owned subsidiary of FMR, as a
result of its serving as investment manager of certain
institutional accounts and (iii) 117,500 shares beneficially
owned by Fidelity International Limited (FIL), a
Bermuda joint stock company of which a partnership controlled by
Mr. Johnson and his family members owns approximately 40%
of the voting stock. The voting power with respect to the
7,238,100 shares beneficially owned by Fidelity is held by the
Funds Boards of Trustees. Mr. Johnson and FMR each
has sole dispositive power and sole voting power over the
757,200 shares beneficially owned by Fidelity Management Trust
Company. FIL has sole voting power and sole dispositive power
over the 117,500 shares owned by it.
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Security Ownership of Management
The following table sets forth information with respect to the
beneficial ownership of our voting stock by:
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each of our directors, each of our executive officers named
under Compensation of Directors and Executive
Officers Executive Compensation Summary
Compensation Table below; and |
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all of our directors and executive officers as a group. |
For purposes of the following table, the number of shares of our
common stock that is beneficially owned by each of the persons
named below represents the aggregate of (a) shares of our
common stock, including restricted stock, such person holds and
(b) shares of our common stock that may be issued to such
person upon exercise of options or warrants that are exercisable
through May 23, 2005, the 60th day from March 24, 2005. The
extent to which a person holds shares of our common stock and
options or warrants to purchase our common stock is set forth in
the footnotes. As of March 24, 2005, the number of shares
of our common stock deemed outstanding was 154,061,250. For the
purpose of calculating the percentage of class of voting stock
held by a person, shares of our common stock outstanding as of
March 24, 2005, together with shares of our common stock
that may be issued only to such person upon exercise of options
or warrants that are exercisable within 60 days from
March 24, 2005, are deemed outstanding, and no other shares
of our common stock that may be issued to any other person upon
exercise of options or warrants that are exercisable within
60 days from March 24, 2005 are deemed outstanding.
Except as otherwise noted, the persons or entities in this table
have sole voting and investment power with respect to all of the
shares of common stock beneficially owned by them, subject to
community property laws, where applicable.
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Name of Director or |
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Amount and Nature of | |
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Percent | |
Executive Officer |
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Title of Class |
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Beneficial Ownership | |
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of Class | |
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Directors
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Peter Munk
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Special Voting Stock |
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100 shares(1) |
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100.0% |
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Common Stock |
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61,177,421 shares(2) |
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39.4% |
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Timothy H. Callahan
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Common Stock |
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1,384,354 shares(3) |
(4)(5) |
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* |
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L. Jay Cross
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Common Stock |
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5,141 shares(6) |
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* |
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Brian Mulroney
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Common Stock |
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47,075 shares(3) |
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* |
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James J. OConnor
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Common Stock |
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8,430 shares(6) |
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* |
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Glenn J. Rufrano
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Common Stock |
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62,792 shares(3) |
(6)(7) |
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* |
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Richard M. Thomson
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Common Stock |
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47,075 shares(3) |
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* |
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Polyvios C. Vintiadis
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Common Stock |
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21,717 shares(6) |
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* |
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Stephen R. Volk
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Common Stock |
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8,311 shares(6) |
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* |
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16
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Name of Director or |
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Amount and Nature of | |
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Percent | |
Executive Officer |
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Title of Class |
|
Beneficial Ownership | |
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of Class | |
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Named executive officers
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Casey R. Wold
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Common Stock |
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1,052,271 shares(3) |
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* |
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Michael C. Colleran
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Common Stock |
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26,440 shares(3) |
(4) |
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* |
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William R.C. Tresham
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Common Stock |
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453,390 shares(3) |
(4) |
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* |
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Ted R. Jadwin
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Common Stock |
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33,392 shares(4) |
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* |
|
Directors and executive officers as a group
(13 individuals) (excludes Mr. Wold)
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Common Stock |
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63,280,030 shares(2) |
(8) |
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40.3% |
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* |
Represents less than one percent. |
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|
(1) |
Because Peter Munks beneficial ownership of Trizec
Canadas multiple voting shares gives him voting control
over Trizec Canada, beneficial ownership of the 100 shares of
our special voting stock that are beneficially owned by Trizec
Canada, directly or indirectly, is attributable to Mr. Munk
pursuant to Rule 13d-3 under the Exchange Act. |
(2) |
Based on information provided by Mr. Munk as of
March 24, 2005, Mr. Munk beneficially owned with
shared voting power and shared dispositive power 60,827,421
shares of our common stock that were also beneficially owned by
Trizec Canada, which amount included warrants to purchase
905,042 shares of our common stock that are currently
exercisable. Additionally, as of March 24, 2005,
Mr. Munk beneficially owned with sole voting power and sole
dispositive power 350,000 shares of our common stock, which
amount included warrants to purchase 350,000 shares of our
common stock that are currently exercisable. Because
Mr. Munks beneficial ownership of Trizec
Canadas multiple voting shares gives him voting control
over Trizec Canada, beneficial ownership of shares of our common
stock that are beneficially owned by Trizec Canada, directly or
indirectly, is attributable to Mr. Munk pursuant to
Rule 13d-3 under the Exchange Act. |
(3) |
Includes beneficial ownership of the following number of shares
that may be acquired within 60 days of March 24, 2005,
pursuant to stock options and/or warrants to purchase shares of
our common stock: |
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Timothy H. Callahan 1,333,333 shares,
representing options exercisable for 1,333,333 shares; |
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Brian Mulroney 47,075 shares, representing
options exercisable for 40,825 shares and warrants to purchase
6,250 shares; |
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Glenn J. Rufrano 47,075 shares, representing
options exercisable for 40,825 shares and warrants to purchase
6,250 shares; |
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Richard M. Thomson 47,075 shares, representing
options exercisable for 40,825 shares and warrants to purchase
6,250 shares; |
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Michael C. Colleran 15,000 shares, representing
options exercisable for 15,000 shares; |
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Casey R. Wold 805,834 shares, representing
options exercisable for 805,834 shares; and |
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William R.C. Tresham 366,258 shares,
representing options exercisable for 366,258 shares. |
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(4) |
Includes the following number of shares of common stock
underlying restricted stock rights that have vested or will vest
within 60 days of March 24, 2005, for which receipt
has been deferred under the Trizec Properties, Inc. Deferred
Compensation Plan such that the individual could receive the
shares within 60 days of March 24, 2005 by terminating
service with Trizec: |
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Timothy H. Callahan 10,556 shares; |
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Michael C. Colleran 11,440 shares; |
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William R.C. Tresham 2,462 shares; and |
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Ted R. Jadwin 5,460 shares. |
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(5) |
This number includes 34,797 shares held by a trust for the
benefit of Mr. Callahan, for which Mr. Callahan serves as
trustee. |
(6) |
Includes the following number of shares of common stock
underlying deferred compensation rights credited to the account
of the non-employee director under the Trizec Properties, Inc.
Non-Employee Directors Deferred Compensation Plan: |
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L. Jay Cross 5,141 shares; |
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James J. OConnor 1,211 shares; |
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Glenn J. Rufrano 3,717 shares; |
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Polyvios C. Vintiadis 3,717 shares; and |
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Stephen R. Volk 5,311 shares. |
17
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The deferred compensation rights are payable solely in shares of
our common stock, for which receipt has been deferred such that
the individual could receive the shares within 60 days of
March 24, 2005 by terminating service with Trizec. |
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(7) |
This number includes 1,000 shares of common stock held in trust
for each of Mr. Rufranos son and daughter, for which
Mr. Rufrano serves as trustee. |
(8) |
The amount of shares beneficially owned by all directors and
executive officers as a group includes options exercisable for
1,837,066 shares of our common stock, warrants to purchase
1,273,792 shares of our common stock, 29,918 shares of common
stock underlying restricted stock rights, as further described
in note (4) above, and 19,097 shares of common stock
underlying deferred compensation rights, as further described in
note (6) above. |
Controlling Stockholder
Peter Munk, the Chairman of our board of directors and the Chief
Executive Officer and Chairman of the board of directors of
Trizec Canada, controls P.M. Capital Inc., which, through its
ownership of Trizec Canadas multiple voting shares, has a
majority of the votes in the election of Trizec Canadas
directors and on other matters to be voted on by Trizec Canada
stockholders. Trizec Canada, indirectly through its
subsidiaries, owns approximately 39.3% of our common stock and
all of our shares of Class F convertible stock, as well as
all of our shares of special voting stock. Trizec Canadas
indirect ownership of our special voting stock, when combined
with its indirect ownership of our common stock, provides it
with a majority of the votes in the election of directors.
Mr. Munks effective control of Trizec Canada will
enable him to elect our entire board of directors. Although our
Nominating Committee, which is composed solely of independent
directors, nominates candidates for election to our board, until
January 1, 2008, Mr. Munk may exercise his control
over us to elect alternate candidates. Additionally, as long as
Mr. Munk has this right to elect our directors, he also has
the power at any time, under Delaware law, to remove one or more
directors.
Equity Compensation Plan Information
The following table gives information about our common stock
that may be issued under all of our existing equity compensation
plans as of December 31, 2004, which include the Trizec
Properties, Inc. 2002 Long Term Incentive Plan (as amended and
restated effective May 29, 2003, as amended), which we
refer to as the LTIP, and the Trizec Properties, Inc. 2003
Employee Stock Purchase Plan, which we refer to as the ESPP.
Both the LTIP and ESPP were approved by our stockholders.
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Number of | |
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|
Securities | |
|
|
Number of | |
|
Weighted | |
|
Remaining Available | |
|
|
Securities to be | |
|
Average Exercise | |
|
for Future Issuance | |
|
|
Issued Upon | |
|
Price of | |
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Under Equity | |
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|
Exercise of | |
|
Outstanding | |
|
Compensation Plans | |
|
|
Outstanding | |
|
Options, | |
|
(Excluding | |
|
|
Options, Warrants | |
|
Warrants and | |
|
Securities Reflected | |
Plan Category |
|
and Rights(1) | |
|
Rights(2) | |
|
in Column(a))(3) | |
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| |
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| |
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| |
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(A) | |
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(B) | |
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(C) | |
Equity compensation plans approved by stockholders
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7,952,060 |
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$14.67 |
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12,183,216 |
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Equity compensation plans not approved by stockholders
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Total
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|
7,952,060 |
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|
$14.67 |
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|
12,183,216 |
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(1) |
Includes 7,296,183 shares of our common stock that are issuable
upon exercise of options and 655,877 shares of our common stock
that are issuable upon vesting of restricted stock rights, or
RSRs. Upon vesting, the RSRs are settled in shares of our common
stock. |
(2) |
Reflects weighted average exercise price of options to purchase
our common stock outstanding as of December 31, 2004. The
RSRs do not have any exercise price but are subject to vesting
based on passage of time and/or performance. |
(3) |
Reflects the sum of (a) 10,061,572 shares of our common
stock that may be granted or awarded under our LTIP and
(b) 2,121,644 shares of our common stock that may be issued
pursuant to our ESPP. |
18
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Compensation
Directors who are also our employees receive no additional
compensation for serving on our board of directors. The table
below reflects the various fees that we pay to our non-employee
directors for their service on our board of directors and its
committees:
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Annual fee for serving on the board of directors
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|
$ |
55,000 |
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Annual fee for Audit Committee chairperson
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|
|
7,500 |
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Annual fee for Compensation Committee, Corporate Governance
Committee and Nominating Committee chairpersons
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3,000 |
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Annual fee for Presiding Independent Director
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3,000 |
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Meeting fee per board meeting attended
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|
|
1,000 |
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Meeting fee per Audit Committee meeting attended
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|
|
2,000 |
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Meeting fee per Compensation Committee, Corporate Governance
Committee or Nominating Committee meeting attended
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|
|
1,000 |
|
We also reimburse our directors for travel expenses incurred in
attending stockholders, board and committee meetings.
Subject to certain exceptions, we pay at least $30,000 of the
$55,000 annual fee in the form of shares of our common stock
issued under our LTIP. A director may elect to receive any
additional amount up to the full $55,000 in shares of our common
stock. The annual fees that we pay to committee chairpersons and
our Presiding Independent Director are also payable in shares of
our common stock, rather than cash, if the chairperson or the
Presiding Independent Director, as the case may be, so elects.
Meeting fees are paid in cash. Due to restrictions in our
certificate of incorporation which prohibit non-qualifying
U.S. persons from holding shares of our common stock, all
fees payable to two of our non-employee directors who are not
U.S. persons are paid solely in cash.
Our non-employee directors may elect to defer their receipt of
all or a portion of their cash and/or stock compensation
pursuant to the terms of the Trizec Properties, Inc.
Non-Employee Directors Deferred Compensation Plan. Under this
plan, amounts deferred at the election of a director will be
paid out no sooner than upon the directors termination of
service from our board. Cash amounts deferred under the plan may
be deemed invested in the same investment fund options available
to our employees under the Trizec Properties, Inc. Deferred
Compensation Plan, subject to certain exceptions applicable to
non-qualifying U.S. persons. Common stock deferred
under the plan will be deemed invested in the Trizec stock fund.
Upon distribution of the deferred amounts, cash deferrals will
be paid out in cash, while stock deferrals will be paid out in
shares of our common stock.
19
Executive Compensation
The following table sets forth the compensation paid or accrued
by us during the past three fiscal years to, or on behalf of,
our chief executive officer, our four most highly compensated
executive officers who were serving as executive officers as of
December 31, 2004, and a former executive officer who
resigned during fiscal 2004 and was not serving as an executive
officer as of December 31, 2004. We collectively refer to
the officers in the table below as the named executive officers.
Summary Compensation Table
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Long Term | |
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Annual Compensation | |
|
Compensation Awards | |
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| |
|
| |
|
|
|
|
|
|
Restricted | |
|
Securities | |
|
|
|
|
|
|
Stock | |
|
Underlying | |
|
|
Name and Principal |
|
|
|
Award(s) | |
|
Options/SARS | |
|
All Other | |
Position |
|
Year | |
|
Salary($)(1) | |
|
Bonus($)(2) | |
|
($) | |
|
(#)(3) | |
|
Compensation($)(4) | |
| |
Peter Munk(5)
|
|
|
2004 |
|
|
$ |
500,000 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman of the
|
|
|
2003 |
|
|
|
500,000 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board of Directors
|
|
|
2002 |
|
|
|
324,658 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy H. Callahan
|
|
|
2004 |
|
|
$ |
1,000,000 |
|
|
$ |
1,600,000 |
(7) |
|
$ |
1,250,040 |
(8) |
|
|
|
|
|
$ |
6,400 |
|
|
President, Chief
|
|
|
2003 |
|
|
|
1,000,000 |
|
|
|
1,450,000 |
(7) |
|
|
959,320 |
(8) |
|
|
500,000 |
|
|
|
6,400 |
|
|
Executive Officer and
|
|
|
2002 |
|
|
|
320,385 |
(6) |
|
|
400,000 |
|
|
|
547,500 |
(8) |
|
|
1,000,000 |
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casey R. Wold
|
|
|
2004 |
|
|
$ |
449,515 |
(9) |
|
$ |
466,667 |
(9) |
|
|
|
|
|
|
|
|
|
$ |
1,802,821 |
(11) |
|
Former Executive Vice
|
|
|
2003 |
|
|
|
700,000 |
|
|
|
1,000,000 |
(10) |
|
$ |
534,242 |
(8) |
|
|
250,000 |
|
|
|
6,400 |
|
|
President and Chief
|
|
|
2002 |
|
|
|
650,000 |
|
|
|
650,000 |
|
|
|
438,000 |
(8) |
|
|
90,000 |
|
|
|
3,350 |
|
|
Investment Officer and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael C. Colleran
|
|
|
2004 |
|
|
$ |
350,000 |
|
|
$ |
600,000 |
(7) |
|
$ |
606,080 |
(8) |
|
|
|
|
|
$ |
6,400 |
|
|
Executive Vice
|
|
|
2003 |
|
|
|
195,192 |
(6) |
|
|
300,000 |
(7) |
|
|
674,018 |
(8) |
|
|
45,000 |
|
|
|
6,400 |
|
|
President and Chief
|
|
|
2002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William R.C. Tresham
|
|
|
2004 |
|
|
$ |
325,000 |
|
|
$ |
500,000 |
(7) |
|
$ |
568,200 |
(8) |
|
|
|
|
|
$ |
6,400 |
|
|
Executive Vice
|
|
|
2003 |
|
|
|
300,025 |
|
|
|
400,000 |
(7) |
|
|
426,732 |
(8) |
|
|
130,000 |
|
|
|
6,400 |
|
|
President and Chief
|
|
|
2002 |
|
|
|
275,000 |
|
|
|
300,000 |
|
|
|
273,750 |
(8) |
|
|
90,000 |
|
|
|
6,400 |
|
|
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ted R. Jadwin
|
|
|
2004 |
|
|
$ |
283,000 |
|
|
$ |
170,000 |
(7) |
|
$ |
208,340 |
(8) |
|
|
|
|
|
$ |
6,400 |
|
|
Senior Vice President,
|
|
|
2003 |
|
|
|
230,577 |
(6) |
|
|
150,000 |
(7) |
|
|
318,302 |
(8) |
|
|
25,000 |
|
|
|
3,702 |
|
|
General Counsel and
|
|
|
2002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Amounts shown include cash compensation earned and received by
the named executive officers for service during the indicated
year as well as amounts earned but deferred at the election of
these officers pursuant to the Trizec Properties, Inc. Deferred
Compensation Plan. |
(2) |
Cash and non-cash bonuses paid in RSRs granted under our LTIP,
including amounts earned but deferred pursuant to the Trizec
Properties, Inc. Deferred Compensation Plan, are reported in the
year in which the service was performed even if the bonuses are
paid in a subsequent year. All of the 2002 bonus awards, which
were made in 2003, were paid in cash. |
(3) |
Amounts shown in this column refer to options to purchase our
common stock. |
(4) |
All Other Compensation consists solely of amounts contributed by
us under our 401(k) plan on behalf of each of
Messrs. Callahan, Wold (with the exception of the amount
shown for 2004, which is described in more detail in footnote
(11)), Colleran, Tresham and Jadwin. |
(5) |
Mr. Munk did not receive any bonus or long term equity
incentive awards for 2004, 2003 or 2002. For 2004 and 2003,
Trizec Canada, of which Mr. Munk is the Chief Executive Officer
and Chairman of the board of directors, and we |
20
|
|
|
each paid 50% of
Mr. Munks annual compensation of US$1,000,000. For
2002, commencing on May 8, 2002, Trizec Canada and we each
paid 50% of the remaining amount of Mr. Munks salary
payable in 2002. The amount indicated for 2002 in the table
reflects the amount we paid after May 8, 2002. Prior to
May 8, 2002, TrizecHahn Corporation paid
Mr. Munks salary. TrizecHahn Corporation did not
allocate a specific portion of that amount to us. Under the
arrangement, for each of 2004, 2003 and 2002, Trizec Canada paid
Mr. Munk the full salary in Canadian dollars and we
reimbursed Trizec Canada for our share of Mr. Munks
salary in Canadian dollars on a monthly basis. Our actual
reimbursements, however, fluctuated from month to month due to
the change in the currency exchange rate between the U.S. dollar
and Canadian dollar in effect at the time of the reimbursement.
In addition, we reimbursed Trizec Canada for our pro rata share
of the Canadian employer withholding taxes that Trizec Canada
was required to pay in connection with the payment of
Mr. Munks salary. As a result, our actual
out-of-pocket reimbursements to Trizec Canada associated with
our share of Mr. Munks salary for 2004, 2003 and 2002
were greater than our stated share of Mr. Munks salary for
each of those years. The following table sets forth the actual
amount of our reimbursements, in U.S. dollars, to Trizec Canada
for Mr. Munks salary in each of 2004, 2003 and 2002,
after taking into account the currency exchange rate and
reimbursement of the Canadian employer withholding taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in U.S. dollars) |
|
|
|
|
Our Actual |
|
Our Reimbursement |
|
|
|
|
|
|
Reimbursement to |
|
to Trizec Canada |
|
|
|
|
Our Pro Rata |
|
Trizec Canada for Mr. |
|
for Our Pro Rata |
|
|
|
|
Share of |
|
Munks Salary Taking |
|
Share of Canadian |
|
Our Total |
|
|
Mr. Munks |
|
into Account the |
|
Employer |
|
Actual Out-of- |
Year |
|
Salary |
|
Currency Conversion |
|
Withholding Taxes |
|
Pocket Expense |
| |
2004
|
|
$ |
500,000 |
|
|
$ |
549,648 |
|
|
$ |
9,898 |
|
|
$ |
559,546 |
|
2003
|
|
|
500,000 |
|
|
|
515,682 |
|
|
|
4,062 |
|
|
|
519,744 |
|
2002
|
|
|
324,658 |
|
|
|
329,562 |
|
|
|
3,771 |
|
|
|
333,333 |
|
|
|
(6) |
The amount of salary indicated for the year reflects (a) in
the case of Mr. Callahan, the amount paid to him for the
period beginning on August 14, 2002, the date his employment
commenced, through December 31, 2002, (b) in the case
of Mr. Colleran, the amount paid to him for the period
beginning on June 9, 2003, the date his employment
commenced, through December 31, 2003, and (c) in the
case of Mr. Jadwin, the amount paid to him for the period
beginning on February 26, 2003, the date his employment
commenced, through December 31, 2003. |
(7) |
On February 18, 2005 and February 12, 2004, our
Compensation Committee awarded bonuses to each of
Messrs. Callahan, Colleran, Tresham and Jadwin for their
performance in 2004 and 2003, respectively. These bonus awards
were paid in the form of cash and/or RSRs. The RSR component of
the 2004 and 2003 bonus awards was calculated based on a
valuation of $18.00 and $15.50 per share, respectively, of our
common stock. The following table provides detailed information
on the bonus amounts that were paid in cash and RSRs for each of
these officers for 2004 and 2003: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Bonus |
|
Amount Paid |
|
Amount Paid in |
|
Number of |
Name |
|
Year |
|
Amount($) |
|
in Cash($) |
|
RSRs($) |
|
RSRs Granted |
| |
Timothy H. Callahan
|
|
|
2004 |
|
|
$ |
1,600,000 |
|
|
$ |
0 |
|
|
$ |
1,600,000 |
|
|
|
88,889 |
|
|
|
|
2003 |
|
|
|
1,450,000 |
|
|
|
0 |
|
|
|
1,450,000 |
|
|
|
93,550 |
|
Michael C. Colleran
|
|
|
2004 |
|
|
|
600,000 |
|
|
|
450,006 |
|
|
|
149,994 |
|
|
|
8,333 |
|
|
|
|
2003 |
|
|
|
300,000 |
|
|
|
225,600 |
|
|
|
74,400 |
|
|
|
4,800 |
|
William R.C. Tresham
|
|
|
2004 |
|
|
|
500,000 |
|
|
|
375,008 |
|
|
|
124,992 |
|
|
|
6,944 |
|
|
|
|
2003 |
|
|
|
400,000 |
|
|
|
300,025 |
|
|
|
99,975 |
|
|
|
6,450 |
|
Ted R. Jadwin
|
|
|
2004 |
|
|
|
170,000 |
|
|
|
127,502 |
|
|
|
42,498 |
|
|
|
2,361 |
|
|
|
|
2003 |
|
|
|
150,000 |
|
|
|
112,800 |
|
|
|
37,200 |
|
|
|
2,400 |
|
|
|
|
The RSRs issued as part of the named executive officers
bonus vest in equal, annual increments over three years,
beginning on the first anniversary of the date of grant, as long
as the officer remains in our continuous employment through the
applicable vesting date, and are settled in shares of our common
stock, on a one-for-one basis, at the time of vesting. The RSRs
entitle the holders the right to receive dividends based on the
number of shares of common stock underlying the RSRs, but do not
have voting rights. |
(8) |
On February 18, 2005 and February 12, 2004, our
Compensation Committee awarded to each of our named executive
officers RSRs as long term equity incentive compensation in
recognition of their performance and services for 2004 and 2003,
respectively. In addition, on June 23, 2003, our
Compensation Committee awarded to (a) each of |
21
|
|
|
Messrs. Callahan, Wold and
Tresham restricted common stock as long-term equity incentive
compensation in recognition of such officers performance
and services for 2002 and (b) each of Messrs. Callahan and
Jadwin restricted common stock as long-term equity incentive
compensation in connection with such officers employment,
which commenced on June 9, 2003 and February 26, 2003,
respectively. On December 23, 2003, each named executive
officer elected to have all of his shares of restricted stock
granted on June 23, 2003 converted to an equal number of
RSRs without affecting the original vesting schedule of such
restricted stock. The following table sets forth the grant
dates, the closing price of our common stock on the date of
grant, and the total number of RSRs and/or restricted stock
granted to each of Messrs. Callahan, Wold and Tresham for
2004, 2003 and 2002 and each of Messrs. Colleran and Jadwin
for 2004 and 2003 and in connection with their employment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value per | |
|
|
|
|
|
|
|
|
share of our | |
|
Total Number of | |
|
|
|
|
|
|
common stock | |
|
RSRs/Restricted | |
Name |
|
Year | |
|
Date of Grant | |
|
at Grant Date | |
|
Stock Granted | |
| |
Timothy H. Callahan
|
|
|
2004 |
|
|
2/18/05 |
|
|
$18.94 |
|
|
|
66,000 |
|
|
|
|
|
2003 |
|
|
2/12/04 |
|
|
16.54 |
|
|
|
58,000 |
|
|
|
|
|
2002 |
|
|
6/23/03 |
|
|
10.95 |
|
|
|
50,000 |
|
|
Casey R. Wold
|
|
|
2004 |
|
|
N/A |
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
2003 |
|
|
2/12/04 |
|
|
$16.54 |
|
|
|
32,300 |
|
|
|
|
|
2002 |
|
|
6/23/03 |
|
|
10.95 |
|
|
|
40,000 |
|
|
Michael C. Colleran
|
|
|
2004 |
|
|
2/18/05 |
|
|
$18.94 |
|
|
|
32,000 |
|
|
|
|
|
2003 |
|
|
2/12/04 |
|
|
16.54 |
|
|
|
24,200 |
|
|
|
|
|
|
|
|
6/23/03 |
|
|
10.95 |
|
|
|
25,000 |
|
|
William R.C. Tresham
|
|
|
2004 |
|
|
2/18/05 |
|
|
$18.94 |
|
|
|
30,000 |
|
|
|
|
|
2003 |
|
|
2/12/04 |
|
|
16.54 |
|
|
|
25,800 |
|
|
|
|
|
2002 |
|
|
6/23/03 |
|
|
10.95 |
|
|
|
25,000 |
|
|
Ted R. Jadwin
|
|
|
2002 |
|
|
2/18/05 |
|
|
$18.94 |
|
|
|
11,000 |
|
|
|
|
|
2003 |
|
|
2/12/04 |
|
|
16.54 |
|
|
|
11,300 |
|
|
|
|
|
|
|
|
6/23/03 |
|
|
10.95 |
|
|
|
12,000 |
|
|
|
|
|
Fifty percent of an award of RSRs to the named executive
officer, with the exception of Mr. Wold, whose RSRs are
discussed in the next paragraph, is subject to time-based
vesting requirements, such that the award vests in equal, annual
increments over five years, beginning on the first anniversary
of the date of grant, as long as the officer remains in our
continuous employment through the applicable vesting date. The
remaining 50% of the named executive officers award is
subject to performance-based vesting requirements, such that the
award vests in equal, annual increments over five years,
beginning on the first anniversary of the date of grant, based
on our achievement for the applicable performance year of either
of two specified performance goals. The performance goals for a
particular performance year are established annually by our
Compensation Committee of the board of directors within the
first sixty days of the applicable fiscal year. Upon vesting,
the RSRs are settled in shares of common stock, on a one-for-one
basis. The RSRs receive dividends based on the number of shares
of common stock underlying the RSRs, but do not have voting
rights. |
|
|
|
Pursuant to Mr. Wolds resignation agreement, his RSRs
will continue to vest through September 17, 2005.
Mr. Wolds RSRs that were scheduled to vest after that
date have been cancelled. |
22
|
|
|
The number and value of the aggregate holdings of unvested RSRs
at December 31, 2004 for each of the named executive officers
were as follows, based on a closing price of $18.92 per share of
our common stock on December 31, 2004: |
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Value at |
Name |
|
Unvested RSRs |
|
December 31, 2004 |
| |
Timothy H. Callahan
|
|
|
191,550 |
|
|
$ |
3,624,126 |
|
Casey R. Wold
|
|
|
25,227 |
|
|
|
477,295 |
|
Michael C. Colleran
|
|
|
49,000 |
|
|
|
927,080 |
|
William R.C. Tresham
|
|
|
52,250 |
|
|
|
988,570 |
|
Ted R. Jadwin
|
|
|
23,300 |
|
|
|
440,836 |
|
|
|
(9) |
Amounts shown reflect salary and a prorated cash bonus earned by
Mr. Wold through September 17, 2004, the date of his
resignation. |
(10) |
Amount shown reflects $499,350 paid in cash and $500,650 paid in
the form of 32,300 RSRs based on a valuation of $15.50 per
share. The RSRs vest in equal increments over three years,
beginning on the first anniversary of the date of grant, and are
settled in shares of common stock, on a one-for-one basis, at
the time of vesting. However, pursuant to Mr. Wolds
resignation agreement, his RSRs will continue to vest through
September 17, 2005 and the remaining RSRs that would vest
after that date have been cancelled. |
(11) |
The amount shown reflects the following: (a) an aggregate
of $1,796,421 paid by us to Mr. Wold pursuant to his
resignation agreement dated as of September 17, 2004, which
amount consists of severance payments aggregating $1,700,000,
$84,421 for accrued but unused vacation time and $12,000 for
rental office space, and excludes the amount shown as bonus for
2004, and (b) $6,400 contributed by us on behalf of
Mr. Wold under our 401(k) plan. |
Option Grants in Last Fiscal Year
We did not grant any stock options to our named executive
officers during 2004.
Aggregated Option/ SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/ SAR Values
The following table provides information regarding option
exercises by our named executive officers during the year ended
December 31, 2004 and the number and value of options held
by our named executive officers at December 31, 2004.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities |
|
|
|
|
Shares |
|
|
|
Underlying Unexercised |
|
Value of Unexercised In-the- |
|
|
Acquired |
|
|
|
Options/SARS at Fiscal |
|
Money Options/SARS at |
|
|
on |
|
|
|
Year-End(#)(1) |
|
Fiscal Year-End($)(1)(2) |
|
|
Exercise |
|
Value |
|
|
|
|
Name |
|
(#) |
|
Realized($) |
|
Exercisable |
|
Unexercisable |
|
Exercisable |
|
Unexercisable |
| |
Peter Munk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy H. Callahan
|
|
|
|
|
|
|
|
|
|
|
1,166,667 |
|
|
|
333,333 |
|
|
$ |
8,703,337 |
|
|
$ |
3,436,663 |
|
Casey R. Wold
|
|
|
183,333 |
|
|
$ |
849,331 |
|
|
|
692,501 |
|
|
|
196,666 |
|
|
|
244,585 |
|
|
|
1,738,126 |
|
Michael C. Colleran
|
|
|
|
|
|
|
|
|
|
|
15,000 |
|
|
|
30,000 |
|
|
|
119,100 |
|
|
|
238,200 |
|
William R.C. Tresham
|
|
|
|
|
|
|
|
|
|
|
292,925 |
|
|
|
116,666 |
|
|
|
1,365,201 |
|
|
|
913,326 |
|
Ted R. Jadwin
|
|
|
8,333 |
|
|
|
66,581 |
|
|
|
|
|
|
|
16,667 |
|
|
|
|
|
|
|
171,837 |
|
|
|
(1) |
Amounts shown in these columns refer to options to purchase our
common stock. |
(2) |
Based on a closing price of $18.92 for our common stock on
December 31, 2004. |
Long Term Incentive Plan Awards
On October 21, 2004, our Compensation Committee made awards
to certain of our senior executives under a long-term incentive
compensation program known as the Trizec Properties, Inc. 2004
Long-Term Outperformance Compensation Program, or OPP. The OPP
was designed as a feature of our LTIP, which previously was
approved by our stockholders, to provide meaningful incentives
to senior executives to increase stockholder value by aligning
the interests of our senior management with the interests of our
stockholders.
23
Pursuant to the terms of the awards, each participant was
granted a specified percentage allocation of an incentive pool
potentially created under the OPP. The size and dollar value of
the incentive pool, if any, will depend on the extent to which
our performance over a three-year period, as measured by our
total return to stockholders, exceeds a pre-established
performance threshold. The awards granted to each of our named
executive officers who will be participating in the OPP,
expressed as a percentage allocation of the total incentive
pool, were as follows:
Long Term Incentive Plans Awards in Last
Fiscal Year
|
|
|
|
|
|
|
|
|
|
|
Performance Or Other | |
|
|
|
|
Period Until Maturation | |
|
Allocation | |
Name |
|
Or Payout | |
|
(as a Percentage) | |
| |
Peter Munk(1)
|
|
N/A |
|
|
N/A |
|
|
Timothy H. Callahan
|
|
10/20/04 to 10/19/07 |
|
|
25 |
% |
|
Casey R. Wold(1)
|
|
N/A |
|
|
N/A |
|
|
Michael C. Colleran
|
|
10/20/04 to 10/19/07 |
|
|
14 |
|
|
William R.C. Tresham
|
|
10/20/04 to 10/19/07 |
|
|
14 |
|
|
Ted. R. Jadwin
|
|
10/20/04 to 10/19/07 |
|
|
3 |
|
|
|
|
(1) |
Neither Mr. Munk nor Mr. Wold, who had resigned as our
executive officer, received any allocation under the OPP. |
Our Compensation Committee of the board of directors retained an
independent compensation consultant to assist the committee in
developing the OPP.
The OPP is a three-year program, with the first day of the
measurement period commencing on October 20, 2004 (the
Effective Date) and the last day of the measurement
period ending on October 19, 2007 (the Valuation
Date). The pre-established performance threshold under the
OPP (the Outperformance Threshold) is equal to the
greater of (a) 110% of the average of the total rate of
return to shareholders achieved by members of a pre-determined
peer group of companies over the three-year measurement period
and (b) a 10% total annual rate of return to our
stockholders, compounded annually over the three-year
measurement period. If the total rate of return to our
stockholders over the three-year measurement period exceeds the
Outperformance Threshold (such excess amount, the Excess
Rate of Return), then the aggregate award amount allocable
to participants (the Outperformance Amount) will be
a dollar amount equal to 6% of the product of $2,442,851,072
(representing our market capitalization on the Effective Date)
multiplied by the Excess Rate of Return. Total return to
shareholders in respect of us and members of our peer
group will be measured by taking the sum of the cumulative
amount of dividends paid in respect of the common stock for the
period plus the appreciation in share price over the period, and
dividing that total by the share price on the Effective Date.
For purposes of computing the share price on any
given date, the average closing price of the common stock over
the 20 trading days ending on such date will be used. Our common
stock price per share as of the Effective Date was $16.08.
Awards ultimately will be paid to participants in the form of
shares of restricted common stock granted under the LTIP. If an
insufficient number of shares is available for issuance under
the LTIP, then the number of restricted shares granted to each
participant will be reduced on a pro rata basis and the
remaining portion of each participants award will be paid
in cash. Subject to certain limited exceptions, the
Outperformance Amount and the maximum number of shares issuable
to participants may not exceed the lesser of
(a) $25,000,000 and (b) 2.5% of the aggregate number
of our shares of common stock outstanding on a fully diluted
basis as of the Valuation Date.
Awards will be paid to participants as soon as practicable
following the Valuation Date, with 75% of an award vesting on
the Valuation Date and 25% of an award vesting on the first
anniversary of the Valuation Date, provided that the participant
remains employed by us through each such vesting date. Upon
payment of a restricted share award, only 25% of such award
shares may be sold during each of the four years following the
date of payment.
24
If prior to the applicable vesting date, a participants
employment with us terminates for any reason other than death or
disability, then the unvested portion of the participants
award will be immediately cancelled. Upon the death or
disability of a participant or upon a change in
control as defined under the OPP, each award will
immediately vest in full and be valued as of such date.
Employment Agreements and Other Arrangements
Below is a description of our employment arrangements with each
of Messrs. Callahan, Colleran, Tresham and Jadwin and the
resignation agreement between us and Mr. Wold. We do not
have an employment agreement or arrangement with Mr. Munk
other than our agreement to pay 50% of his annual salary. We
also describe below our employment arrangement with
Mr. Brian K. Lipson, our Executive Vice President and Chief
Investment Officer, who joined us in January 2005. Although
Mr. Lipson currently is not a named executive officer, we
are including a description of his employment arrangement with
us since we anticipate that Mr. Lipson will be one of our
named executive officers for 2005.
|
|
|
Employment Arrangement with Timothy H. Callahan |
Mr. Callahan executed a letter agreement with us dated
August 14, 2002, pursuant to which Mr. Callahan was
appointed as a member of the board of directors and as our
President and Chief Executive Officer. The agreement is for a
three-year term, subject to automatic one-year extensions unless
either party gives notice of non-renewal.
Under the agreement, Mr. Callahan has agreed to maintain
the confidentiality of our confidential and proprietary
information. In addition, Mr. Callahan has agreed to not
solicit our employees, clients or providers of material services
and products for the longer of one year after terminating
employment or the end of the period during which he receives
severance, as described below.
As compensation for his services, Mr. Callahan receives
(i) annual base salary of at least $850,000,
(ii) discretionary bonuses as determined by the board,
(iii) fully vested options to purchase one million shares
of our common stock under our stock option plan, and
(iv) participation in all incentive, retirement, welfare
and other benefit plans, programs and arrangements generally
available to our other senior executive officers.
Upon termination of Mr. Callahans employment by us
without cause, or upon termination of Mr. Callahans
employment for any reason within one year following a change of
control, if Mr. Callahan executes a waiver and release of
all claims in favor of us, Mr. Callahan is entitled to
receive (a) any earned but unpaid bonuses, (b) a pro
rata bonus for the year of termination, and (c) for two
years following termination of employment, or through the end of
the agreements term, if shorter, continuation of base
salary, bonus, and participation in health, medical, dental and
other welfare plans generally made available to our senior
executives.
|
|
|
Resignation Agreement with Casey R. Wold |
On September 17, 2004, we entered into a resignation
agreement with Mr. Wold pursuant to which Mr. Wold
resigned as our Executive Vice President and Chief Investment
Officer and as a member of our board of directors, effective as
of September 17, 2004. Under the agreement, Mr. Wold
was entitled to receive cash severance in an amount equal to
$1,700,000, $1,400,000 of which was payable within three
business days following September 17, 2004, and $300,000 of
which was payable within three business days following the
expiration of a seven-day revocation period. Mr. Wold also
was entitled to receive, within three business days following
the expiration of the seven-day revocation period, a prorated
bonus payment for the 2004 calendar year in the amount of
$466,667 and payments for accrued but unused vacation time and
the rental of office space. The agreement provided that all
stock options and restricted stock rights previously granted to
Mr. Wold will continue to vest until September 17,
2005, which is referred to in this section of the proxy
statement as the expiration date, in accordance with their
respective terms and original vesting schedules. In addition,
Mr. Wold will be entitled to exercise, for a period of time
ending three months after the expiration date, all stock options
that are currently vested and stock options that will be vested
as of the expiration date. We also provided Mr. Wold with
health insurance coverage until October 1, 2004, the date
on which
25
Mr. Wold became eligible to participate in his new
employers group health plan. However, Mr. Wolds
participation in our 401(k) plan, deferred compensation plan and
other employee benefit plans terminated as of September 17,
2004.
Pursuant to the agreement, Mr. Wold has agreed to maintain
the confidentiality of company information and has agreed that
he will not, during the one-year period commencing on
September 17, 2004, solicit any employee, officer,
representative or agent to leave our employment or any customer,
supplier or other party that has a business relationship with us
to cease doing business with us. In addition, during the
one-year period commencing on September 17, 2004,
Mr. Wold has agreed, subject to certain exceptions, that he
will not hire, directly or indirectly, any person who is or was
an employee of ours. In consideration of the payments and
benefits provided to Mr. Wold under the agreement, the
agreement contained a general release of claims by Mr. Wold
in favor of us. Following his resignation, Mr. Wold has
agreed to cooperate with us in connection with certain corporate
matters and any action, proceeding, investigation or litigation
in which we may be involved.
|
|
|
Employment Agreements with Brian K. Lipson, Michael C.
Colleran and William R.C. Tresham |
On January 4, 2005, we entered into an employment agreement
with Mr. Lipson in connection with Mr. Lipsons
appointment as our new Executive Vice President and Chief
Investment Officer effective January 4, 2005. On
January 4, 2005, we also entered into employment agreements
with each of Mr. Colleran, our current Executive Vice
President and Chief Financial Officer, and Mr. Tresham, our
current Executive Vice President and Chief Operating Officer,
each of which is effective January 4, 2005. Each of the
employment agreements has an initial term ending on
December 31, 2005; provided, however, that the term of
employment will renew automatically for successive one-year
periods unless either we or the officer provides a written
notice of either partys intention not to extend the term
to the other party at least 60 days prior to the end of
either the initial term or any of the successive terms, as
applicable.
Under his respective employment agreement, each of
Messrs. Lipson, Colleran and Tresham is entitled to receive
an annual base salary of $400,000, $350,000 and $325,000,
respectively, which amount is subject to review and increase
(but not decrease), not less often than annually, by the
Compensation Committee of our board of directors based on the
respective officers performance, and a target annual bonus
in an amount equal to 100% of the respective officers base
salary. Mr. Lipson also was entitled to receive a cash
signing bonus in the amount of $50,000 and an initial award of
restricted stock rights under our long-term incentive plan
having an aggregate fair market value of $250,000, one-third of
which vested immediately upon grant and the remaining two-thirds
of which will vest in equal amounts on each of January 5,
2006 and 2007.
Each of Messrs. Lipson, Colleran and Tresham also is
eligible to participate in our long-term incentive compensation
programs that are generally available to our senior executive
officers and our recently adopted OPP. Each of
Messrs. Lipson, Colleran and Treshams targeted amount
of annual long-term incentive compensation is 150% of his base
salary and each officers participation interest in the OPP
is 14%. In addition, each officer is entitled to participate in
all of our employee welfare, pension and fringe benefit plans
and programs on a basis that is no less favorable than that made
available to our other senior executive officers.
Mr. Tresham also is entitled to receive a monthly
automobile allowance of $1,000.
We may terminate each officers employment at any time,
with or without cause, and the officer may resign at
any time, with or without good reason, as such terms
are defined in the employment agreements. If we terminate the
officer for cause, or the officer resigns without good reason,
the officer will be entitled to receive any unpaid base salary
through the date of such termination or resignation and any
other amounts or benefits that are required to be paid or
provided by law or under any of our plans, programs, policies or
practices. If we terminate the officer without cause or elect
not to renew the officers employment term, or the officer
resigns with good reason, the officer will be entitled to
receive (a) his annual base salary and target annual bonus,
based on the rates in effect on the date of such termination or
resignation, for a one-year period commencing on the date of
termination or resignation, (b) his earned but unpaid bonus
for the previously completed fiscal year, (c) a prorated
portion of his target annual bonus for the fiscal year in which
the termination or resignation occurs, and (d) any other
amounts or benefits that are required to be paid or
26
provided by law. In addition, in the case of Mr. Lipson,
any unvested portion of his initial award of restricted stock
rights will vest immediately upon such termination or
resignation.
If we terminate the officer without cause, or the officer
resigns with good reason, in either case within two years
following a change in control of our company, in lieu of the
severance payment described above, the officer will be entitled
to receive a lump sum severance payment in an amount equal to
his annual base salary and target annual bonus, based on the
rates in effect on the date of such termination or resignation,
and any other amounts or benefits that are required to be paid
or provided by law or under any of our plans, programs, policies
or practices. We also will make an additional tax gross-up
payment to the officer if any payment or benefit made or
provided to him would be subject to the excise tax imposed under
Section 4999 of the IRC. In addition, any unvested portion
of each respective officers equity awards, including, in
the case of Mr. Lipson, his initial award of restricted
stock rights, will vest immediately upon such termination or
resignation.
In the event of termination of the officers employment due
to his death or disability, he (or his estate) will be entitled
to receive his annual base salary through the date of such
termination and any other amounts or benefits that are required
to be paid or provided by law or under any of our plans,
programs, policies or practices.
Each of Messrs. Lipson, Colleran and Tresham is subject to
certain restrictive covenants under his respective employment
agreement, including covenants related to confidentiality,
non-solicitation and non-disparagement.
|
|
|
Employment Arrangement with Ted R. Jadwin |
Under Mr. Jadwins employment arrangement, as set
forth in an offer letter dated February 13, 2003,
Mr. Jadwin serves as our Senior Vice President and General
Counsel. Under the arrangement, Mr. Jadwin was entitled to
receive a starting salary of $275,000 and options exercisable
for 25,000 shares of our common stock and is eligible to receive
an annual bonus equal to 50% to 75% of his eligible earnings
based on corporate, team and individual performance measures. In
addition, Mr. Jadwin is eligible for consideration in our
long-term incentive program and is eligible to participate in
our other benefits and programs, including our 401(k) and
deferred compensation plans. We also have agreed to provide
Mr. Jadwin with a parking space and reimbursement for club
dues in the amount of $289 per month.
After the initial 12 months of employment, if we terminate
Mr. Jadwins employment with us for any reason other
than cause, any severance payment provided to him will be in
accordance with our policy.
Mr. Jadwins employment arrangement also contains
severance payment obligations in the event of a change in
control of our company. If, within 12 months after a change
in control, Mr. Jadwins employment is terminated for
any reason other than his (a) disability, (b) death,
(c) conduct involving gross neglect, dishonesty, willful
gross misconduct or moral turpitude, any of which harmed our
business, or (d) voluntary resignation, he is entitled to
receive a lump sum payment equal to six months of his
then-current base salary plus bonus, medical benefits for six
additional months from the date of termination and all
outstanding stock options and grants would immediately vest as
of the termination date.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General
The Compensation Committee of the board of directors has
prepared the following report regarding 2004 executive
compensation. The Compensation Committee consists of four
members, all of whom are independent directors in accordance
with the listing standards of the NYSE, and is responsible for
determining the compensation for our executive officers and for
administering our equity and compensation plans. This report
describes our philosophy and approach to executive compensation
and the basis on which we made 2004 compensation determinations
with respect to our executive officers.
27
Executive Compensation Philosophy
The philosophy and goals of our executive compensation program
are to:
|
|
|
|
|
Attract, retain and motivate talented executives critical to our
short-term and long-term success; |
|
|
|
Align the interests of our executive officers with the long-term
interests of Trizecs stockholders; |
|
|
|
Base executive compensation levels on the overall financial and
operational performance of Trizec and the individual
contribution of the executive officer; and |
|
|
|
Position executive compensation levels to be competitive with
other similarly situated real estate investment trusts, or REITs. |
Since 2002, the Compensation Committee has engaged an
independent compensation consultant with expertise in the REIT
industry to assist it in developing an executive compensation
program that is competitive with Trizecs peers and
consistent with the Committees compensation philosophy.
The most recent report of the independent consultant was
prepared for the Committee for purposes of year-end 2004 and
2005 compensation. This report included a comprehensive survey
of the total compensation paid to executive officers employed in
various positions within a peer group comprised of approximately
20 REITs, the majority of which were office and/or industrial
REITs. The consultants findings, together with the
recommendations of the Compensation Committee and our Chief
Executive Officer (other than with respect to his own
compensation), formed the basis for the Compensation
Committees executive compensation program for 2004.
Compensation Committee Procedures
The Compensation Committee exercises its independent discretion
in reviewing and approving the executive compensation program as
a whole, as well as specific compensation levels for each
executive officer. Final aggregate compensation determinations
for a particular fiscal year are generally made after the end of
such year, when information regarding our financial and
operational results for that year are known. At that time, the
Compensation Committee determines bonuses, if any, for the past
years performance, sets base salaries for the current
year, and makes awards of equity-based compensation under the
LTIP. Our Chief Executive Officer, Timothy H. Callahan, makes
recommendations to the Compensation Committee with respect to
the compensation of our executive officers (excluding his own
compensation). In addition to Mr. Callahans
recommendations, the Compensation Committee bases its decisions
on any one or more of (a) the individual contributions of
the executive officers to our organization, (b) the overall
performance of our company, and (c) the findings and
recommendations of the independent consultant to ensure that
compensation packages are in line with our peer group. Subject
to certain exceptions, the Compensation Committee generally
provides total compensation to our executive officers at a
target level around the 75th percentile for executive officers
in comparable positions in our peer group.
Elements of Executive Compensation
The material elements of our executive compensation program
include base salary, incentive bonus and long-term incentive
compensation, as further described below.
Base salaries for executive officers are determined on the basis
of assigned responsibilities, the level of individual
performance and an evaluation of appropriate compensation levels
based on comparisons within our peer group. Base salaries for
our executive officers for 2004 ranged from $1,000,000, in
Mr. Callahans case, to $283,000 for one of our other
executive officers. While the employment agreements or
arrangements with our executive officers generally do not permit
the base salaries of such officers to be reduced during the term
of the agreement, the Compensation Committee has the discretion
to consider on an annual basis an increase in the executive
officers base salary, taking into account the executive
officers individual contributions, any changes in job
responsibilities and any changes in the market for comparable
executive-level positions.
28
Incentive compensation, in the form of discretionary bonus
awards, is structured in a manner that is intended to motivate
our executive officers by linking bonus awards to company
performance and individual performance. Specific company
performance measures and operational goals that the Compensation
Committee considered in connection with bonus determinations for
fiscal 2004 included total return to shareholders, growth in
funds from operations, strategic repositioning of our asset
portfolio through selective asset dispositions, increased
liquidity goals, balance sheet management, and dividend coverage
goals. The Compensation Committee also evaluated individual
performance based on factors such as the individuals
degree of responsibility, contribution to our overall
performance, ability to contribute to our future performance and
salary level.
Each executive officer was also assigned a targeted bonus range,
expressed as a percentage of the individuals base salary.
These allocations ranged from 50% to 175% of base salary, in
Mr. Callahans case, to 50% to 75% of base salary for
one of our other executive officers. These bonus ranges were
intended to be representative of target awards for comparable
executive-level positions in our peer group. Actual awards may
be more or less than the targeted ranges, depending on our
performance and the executive officers performance.
Applying the factors set forth above, the Compensation Committee
made determinations in February 2005 of the final dollar amount
of each executive officers bonus award for 2004. These
bonus awards ranged from $1,600,000, in Mr. Callahans
case, to $170,000 for one of our other executive officers. The
Compensation Committee determined to pay out these bonus awards
using a combination of cash and restricted stock rights awarded
under the LTIP, referred to in this report as RSRs, with the
exception of the bonus award paid to Mr. Callahan. In
accordance with Mr. Callahans preference, the
Compensation Committee determined that 100% of his bonus award
would be paid in the form of RSRs, resulting in an award to him
of an aggregate of 88,889 RSRs. The allocation between cash and
RSRs, in the case of each of our other executive officers, was
75% cash/ 25% RSRs. The RSRs awarded to the executive officers
vest in one-third increments on each of the first three
anniversaries of the date of grant, as long as the officer
remains in our continuous employment, and are settled in shares
of our common stock, on a one-for-one basis, at the time of
vesting. The RSRs entitle the holders the right to receive
dividends based on the number of shares of common stock
underlying the RSRs, but do not have voting rights.
|
|
|
Long-Term Incentive Compensation |
The primary components of the 2004 long-term incentive
compensation program for executive officers are (a) RSRs
granted under the LTIP, the vesting of which depends, in part,
on our achievement of specified performance goals, and
(b) the potential for our executive officers to earn
sizable awards under the 2004 Long-Term Outperformance
Compensation Program, a high-performance program under the LTIP,
which we refer to in this report as the OPP. Although stock
options were not a component of the executive compensation
program for 2004, stock options remain a viable component of
executive compensation in the future.
Restricted Stock Rights. In each of February 2004 and
February 2005, the Compensation Committee made long-term equity
incentive awards to our executive officers in the form of RSRs
granted under the LTIP. These awards were made largely in
recognition of services performed by our executive officers
during the fiscal year immediately prior to the date of grant,
and were based on the Compensation Committees review of
our overall performance for the period, as well as the
individual officers performance. The 2004 awards, which
recognized service for fiscal 2003, ranged from 58,000 RSRs, in
Mr. Callahans case, to 11,300 RSRs in the case of
another executive officer. The 2005 awards, which recognized
service for fiscal 2004, ranged from 66,666 RSRs, in
Mr. Callahans case, to 11,000 RSRs in the case of
another executive officer.
The RSRs are subject to the following vesting criteria:
(a) Fifty percent of an award of RSRs to an executive
officer is subject to time-based vesting requirements, such that
the award vests in equal, annual increments over five years,
beginning on the first anniversary of the date of grant,
provided that the officer remains in our continuous employment
through the applicable vesting date, and (b) the remaining
50% of an
29
executive officers award is subject to performance-based
vesting requirements, such that the award vests in equal, annual
increments over five years, beginning on the first anniversary
of the date of grant, based upon the achievement of either of
two specified performance goals determined by the Compensation
Committee on an annual basis. For each of the 2004 and 2005
performance periods under these awards, the two performance
goals, as established by the Compensation Committee, are:
(1) Trizecs achievement of a total return to
shareholders equal to at least 10% for the period, or
(2) Trizecs achievement of a total return to
shareholders for the period in an amount that is in the 50th
percentile or greater of a pre-determined group of peer
companies. For more information on these RSRs, including the
amounts awarded to our named executive officers in 2004, please
see footnote (8) to the Summary Compensation Table of the
section titled Compensation of Directors and Executive
Officers Executive Compensation above.
The Compensation Committee believes that the use of RSRs
(a) aligns the interests of our executive officers with the
interests of our stockholders through the use of vesting
criteria that is based on the performance of our company,
(b) serves as an effective retention tool by providing for
a five-year vesting schedule, and (c) advances our goal of
promoting long-term equity ownership in our company by our
executive officers.
2004 Long-Term Outperformance Compensation Program. In
October 2004, the Compensation Committee established, on behalf
of our executive officers and other senior executives, the OPP.
Each participant was granted a specified percentage allocation
of an incentive pool potentially created under the OPP. The size
and dollar value of the incentive pool, if any, will depend on
the extent to which our performance over a three-year period
beginning in October 2004 and ending in October 2007, as
measured by our total return to shareholders over such period,
exceeds the greater of two pre-established performance
thresholds. Thus, the OPP was designed to provide meaningful
incentives to our senior executives to increase stockholder
value by aligning the interests of such executives with the
interests of our stockholders. The awards granted to each of our
executive officers, expressed as a percentage allocation of the
total incentive pool, ranged from 25%, in the case of
Mr. Callahan, to 3% in the case of another executive
officer.
Awards under the OPP ultimately will be paid to participants in
the form of shares of restricted common stock granted under the
LTIP. Subject to certain limited exceptions, the dollar value of
the incentive pool and the maximum number of shares issuable to
participants may not exceed the lesser of (a) $25,000,000 and
(b) 2.5% of the aggregate number of shares of our common
stock outstanding on a fully diluted basis as of the end of the
three-year performance period. Awards will be paid to
participants following the completion of the three-year
performance period, with 75% of an award vesting on such date
and 25% of an award vesting on the first anniversary thereafter,
provided that the participant remains in our continuous
employment through each such vesting date. Upon payment of a
restricted share award, only 25% of such award shares may be
sold during each of the four years following the date of
payment. The Compensation Committee believes that these features
of the OPP serve as an effective retention tool by allowing a
possible payout to occur only upon the completion of the
three-year performance period and advance our goal of promoting
long-term equity ownership in us by our executive officers by
providing restrictions on the sale of the award shares.
The Compensation Committee retained an independent compensation
consultant to assist it in developing the OPP. For more
information on the OPP, including the percentage allocations
awarded to our executive officers in 2004, please see
Compensation of Directors and Executive
Officers Long Term Incentive Plan Awards,
above.
New Employment Agreements
On January 4, 2005, in consultation with our advisors, we
entered into new employment agreements with each of
Mr. Brian Lipson, our new Executive Vice President and
Chief Investment Officer, Mr. Michael C. Colleran, our
Executive Vice President and Chief Financial Officer, and
Mr. William R.C. Tresham, our Executive Vice President and
Chief Operating Officer. For a detailed description of these new
employment agreements, please see Compensation of
Directors and Executive Officers Employment
Agreements and Other Arrangements, above. In evaluating
these employment agreements, the Compensation Committee took
into consideration the total compensation payable to these
executive officers under the agreements,
30
including with respect to base salary, incentive bonus and
long-term incentive compensation, as well as the potential
payout to such officers under various events involving a
termination of the officers employment with us or upon a
change in control of our company.
Deferred Compensation Plan
The Trizec Properties, Inc. Deferred Compensation Plan is an
unfunded, deferred compensation plan maintained primarily for
members of management, including our executive officers. The
purpose of the plan is to provide a means by which eligible
employees may defer the receipt of certain forms of
compensation, thus enabling them to enjoy a tax deferral. As
administered, the plan permits the deferral of salary, bonus,
and the receipt of shares of our common stock underlying vested
RSRs. Benefits under the plan are paid directly by us out of our
general assets when due.
Compensation of the Chief Executive Officer
The Compensation Committee established the compensation of
Timothy H. Callahan, our Chief Executive Officer, in accordance
with the processes described under Elements of Executive
Compensation Base Salary,
Incentive Bonus and
Long-Term Incentive Compensation, above.
As reflected above, in respect of service for fiscal 2004,
Mr. Callahan received a base salary of $1,000,000 and an
incentive bonus award in the amount of $1,600,000. In accordance
with Mr. Callahans preference, the Compensation
Committee determined that the entire bonus award would be paid
in the form of restricted stock rights granted under the LTIP,
resulting in the issuance to Mr. Callahan of 88,889 RSRs.
These RSRs vest in one-third increments on each of the first
three anniversaries of the date of grant, as long as
Mr. Callahan remains in our continuous employment through
each of the applicable vesting dates. Mr. Callahan also received
a long-term equity incentive award in the form of 66,666 RSRs in
February 2005, in recognition of services provided during fiscal
2004. Fifty percent of this award is subject to time-based
vesting requirements over five years and the remaining 50% of
the award is subject to performance-based vesting requirements
over five years.
In arriving at Mr. Callahans total compensation
package for 2004, the Compensation Committee noted, among other
things, our success in meeting or exceeding most of our
financial and operational performance goals for fiscal 2004, and
Mr. Callahans success in (a) repositioning our
asset portfolio through the selective disposition of assets in
non-core markets, (b) building the confidence of our
stockholder base and investment analyst community, (c)
strengthening the balance sheet by selectively unencumbering
assets and restructuring debt, and (d) delivering solid
financial and operational results. The Compensation Committee
believes that Mr. Callahans total compensation
package for 2004 was both reasonable in relation to our
performance for fiscal 2004 and competitive in relation to the
total compensation paid to chief executive officers in our peer
group.
Limitations on the Deductibility of Execution Compensation
The Compensation Committee has reviewed the potential
consequences for the company of Section 162(m) of the IRC,
which prohibits publicly-traded companies from taking a tax
deduction for compensation paid in excess of $1 million in
any taxable year to a named executive officer, except for
certain qualifying performance-based compensation.
The Compensation Committees policy is to take into account
Section 162(m) in establishing compensation for our
executive officers. The Compensation Committee also believes,
however, that we must balance the benefit of deductions against
the need to provide our executives with proper incentives to
remain with us. Section 162(m) does not affect us as
directly as it does Subchapter C corporations because we are a
REIT and ordinarily do not pay taxes. The Compensation Committee
does not believe that it is necessarily in our or our
stockholders best interests that all compensation meet the
31
requirements of Section 162(m) for deductibility and the
Compensation Committee may determine to award non-deductible
compensation in such circumstances as it deems appropriate.
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Compensation Committee: |
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The Right Honourable Brian Mulroney, Chairperson |
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L. Jay Cross |
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Glenn J. Rufrano |
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Stephen R. Volk |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The members of the Compensation Committee who served during 2004
are L. Jay Cross, Brian Mulroney, Glenn J. Rufrano, and Stephen
R. Volk. None of Messrs. Cross, Mulroney, Rufrano or Volk
is, or ever was, an employee of Trizec. In 2004, none of our
executive officers served as a member of the board of directors
or compensation committee of any entity that had one or more of
its executive officers serving as a member of our Compensation
Committee. In addition, none of our executive officers served as
a member of the compensation committee of any entity that had
one or more of its executive officers serving as a member of our
board of directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our May 2002 Reorganization
On May 8, 2002, a plan of arrangement implementing a
corporate reorganization of TrizecHahn Corporation, our former
parent company, became effective. As a result of this
reorganization, we became a publicly-traded REIT owning
primarily the U.S. assets that TrizecHahn Corporation and its
subsidiaries owned prior to the reorganization.
The corporate reorganization was designed to create a U.S.
publicly-traded REIT while reducing withholding tax liabilities
and minimizing the recognition of potential tax liabilities on
unrealized appreciation in value that were present in TrizecHahn
Corporations ownership structure prior to the
reorganization. The corporate reorganization was also intended
to create economic equivalence between shares of our common
stock and Trizec Canada subordinate voting shares or multiple
voting shares.
Upon implementation of the plan of arrangement, holders of
TrizecHahn Corporations subordinate voting shares
exchanged their shares on a one-for-one basis for one or more of
the following securities:
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shares of our common stock, if they certified that they were
qualifying U.S. persons; |
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exchange certificates representing underlying shares of our
common stock, which could either be exchanged for common stock
by qualifying U.S. persons or sold on the market to qualifying
U.S. persons; or |
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Trizec Canada subordinate voting shares. |
As a result of the reorganization, approximately 60.7% of our
common stock is owned primarily by qualifying U.S. persons. The
remaining approximately 39.3% of our common stock is owned
indirectly by Trizec Canada through its subsidiaries, with the
result that Trizec Canada indirectly holds one share of our
common stock for each outstanding subordinate voting share of
Trizec Canada. In addition, Trizec Canada, indirectly through
its subsidiaries, also owns all shares of our Class F
convertible stock and special voting stock.
Outstanding options to purchase subordinate voting shares of
TrizecHahn Corporation were cancelled and replaced as part of
the corporate reorganization. Under the plan of arrangement, all
outstanding stock
32
options of TrizecHahn Corporation were cancelled in exchange for
either (1) options to purchase our common stock,
(2) warrants to purchase our common stock or (3) options to
purchase Trizec Canada subordinate voting shares.
We have conducted certain business activities in a manner that
would not result in TrizecHahn Corporation and its Canadian
subsidiaries being subject to Canadian tax on our business
activities in the United States or on distributions made by us.
In connection with the corporate reorganization, we entered into
a tax cooperation agreement with TrizecHahn Office Properties,
Ltd., a wholly-owned, Canadian subsidiary of TrizecHahn
Corporation. Under the agreement, we have agreed to continue to
conduct our business activities with regard to the consequences
under Canadian tax legislation to TrizecHahn Office Properties
Ltd., related Canadian corporations and Trizec Canada.
Compliance with this agreement may require us to conduct our
business in a manner that may not always be the most efficient
or effective because of potential adverse Canadian tax
consequences. Furthermore, we may incur incremental costs due to
the need to reimburse these entities for any negative tax
consequences.
In connection with the corporate reorganization, we have agreed
to provide shared services to TrizecHahn and therefore continue
to provide certain services to assist TrizecHahn in fulfilling
its public disclosure obligations and conducting investor, media
and public relations. TrizecHahn has agreed to and continues to
provide accounting services in conjunction with the corporate
reorganization. For the year ended December 31, 2004, we
recorded other income of approximately $0.1 million for
such services provided to TrizecHahn. In addition, we recorded
general and administrative expense for the year ended
December 31, 2004 of approximately $0.4 million for
such services provided to us. At December 31, 2004, we had
a receivable balance of approximately $0.5 million and a payable
balance of approximately $0.5 million related to such
services.
In connection with the corporate reorganization, some
outstanding TrizecHahn employee stock options were cancelled and
replaced with options to acquire subordinate voting shares of
Trizec Canada. For every outstanding option to acquire one
Trizec Canada subordinate voting share, Trizec Canada, directly
or indirectly, holds one of our warrants entitling Trizec Canada
to one share of our common stock at any time prior to the
respective warrants expiration date. We expect that Trizec
Canada will exercise these warrants whenever and to the extent
that one or more options to acquire subordinate voting shares of
Trizec Canada are exercised. Trizec Canadas anticipated
acquisition of one share of our common stock whenever one of its
stock options is exercised is intended to maintain economic
equivalence between shares of our common stock and Trizec Canada
subordinate voting shares.
Also in connection with the corporate reorganization, we have
entered into agreements with Trizec Canada pursuant to which we
have agreed to cause one or more registration statements on
Form S-11 to be filed with and declared effective by the
SEC, and to be maintained effective, registering the following
offerings of our securities:
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a primary offering of shares of our common stock to be issued
upon the exercise of our warrants; |
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a secondary offering of shares of our common stock that may be
disposed of by Trizec Canada in connection with the redemption
of its shares; |
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a secondary offering of shares of our common stock that may be
sold by Trizec Canadas Hungarian subsidiary, including in
connection with any conversions of our Class F convertible
stock; and |
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in connection with a pledge of our common stock pursuant to
certain TrizecHahn Corporation credit facilities, a secondary
offering of shares of our common stock that may be sold by the
pledgee in connection with an exercise on the pledge in the
event of default under the credit facilities. |
In October 2003, the registration statements for the first two
offerings listed above were converted from Forms S-11 to Forms
S-3. The registration statement for the third offering listed
above has not yet been filed. In addition, in November 2003, the
registration statement for the last offering listed above was
withdrawn due to a reduction in the outstanding balances under
the credit facilities and amendment of the facilities to
eliminate the requirement that we maintain the effectiveness of
this registration statement.
33
Other Transactions
On October 9, 2003, 4172352 Canada, Inc., an affiliate of
Trizec Canada Inc., contributed approximately $4.0 million
to us in exchange for preferred membership units in an entity
that held a 91.5% interest in the Hollywood & Highland
Hotel. The holders of the preferred membership units were
entitled to an initial dividend of 8% per annum, increasing to
12% per annum, as well as any unrecovered capital contribution
at the time of liquidation. On February 27, 2004, we sold the
Hollywood & Highland Hotel. We remitted approximately
$4.8 million to 4172352 Canada, Inc. in full satisfaction
of any outstanding dividends and unrecovered capital
contributions.
For 2004, Trizec Canada, of which Peter Munk, is the Chief
Executive Officer and Chairman of the board of directors, and we
each paid 50% of Mr. Munks annual compensation of
US$1,000,000. Under the arrangement, for 2004, Trizec Canada
paid Mr. Munk the full salary in Canadian dollars and we
reimbursed Trizec Canada for our share of Mr. Munks
salary in Canadian dollars on a monthly basis. Our actual
reimbursements, however, fluctuated from month to month due to
the change in the currency exchange rate between the U.S. dollar
and Canadian dollar in effect at the time of the reimbursement.
In addition, we reimbursed Trizec Canada for our pro rata share
of the Canadian employer withholding taxes that Trizec Canada
was required to pay in connection with the payment of
Mr. Munks salary. As a result, our actual
out-of-pocket reimbursements to Trizec Canada associated with
our share of Mr. Munks salary for 2004 which amounted
to $559,546, was greater than our share of Mr. Munks
salary. Please see footnote (5) to the Summary Compensation
Table of the section titled Compensation of Directors and
Executive Officers Executive Compensation.
In March 2005, Trizec Canada paid us $760,000 as reimbursement
for legal expenses that we incurred in connection with a
litigation matter in which we, Trizec Canada and Mr. Munk
were co-plaintiffs. As of March 24, 2005, Trizec Canada
owned, together with its affiliates, approximately 39.3% of our
common stock and all of our outstanding special voting stock and
series F convertible stock. Mr. Munk is the chairman and
chief executive officer of Trizec Canada and indirectly has
majority voting power with respect to the election of Trizec
Canadas board of directors and certain other matters.
34
STOCK PERFORMANCE GRAPH
The graph and the accompanying table compare the cumulative
total stockholders return on our common stock with the
index of equity REITs prepared by NAREIT, and the S&P 500
Composite Stock Index for the period from May 8, 2002
through December 31, 2004. Our common stock was registered
under Section 12 of the Exchange Act, on February 14,
2002, began trading on the NYSE on an as issued
basis on April 24, 2002, and began regular trading on the
NYSE on May 8, 2002. Equity REITs are defined as those
companies which derive more than 75% of their income from
investments in real estate assets. The NAREIT Equity Index
includes all tax-qualified REITs listed on the NYSE, the
American Stock Exchange or the Nasdaq Stock Market. The
calculations in the following graph and table assume that $100
was invested on May 8, 2002 in each of our common stock,
the NAREIT Equity Index and the S&P 500 Index and also
assume reinvestment of all dividends. The closing sale price of
our common stock on the NYSE was $18.65 per share on
March 24, 2005.
Comparison of Cumulative Total Return
Among Trizec, NAREIT Equity Index and S&P 500
Index1
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5/8/02 |
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12/31/02 |
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12/31/03 |
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12/31/04 |
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Trizec Properties, Inc.
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$ |
100.00 |
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$ |
57.10 |
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$ |
100.42 |
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$ |
129.28 |
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NAREIT Equity Index
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$ |
100.00 |
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$ |
94.99 |
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$ |
130.26 |
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$ |
171.40 |
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S&P 500 Index
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$ |
100.00 |
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$ |
81.80 |
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$ |
105.26 |
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$ |
116.71 |
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(1) |
Source: Standard & Poors Institutional Market Services. |
35
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that our
executive officers and directors, and persons who own more than
10% of a registered class of our equity securities, file reports
of ownership and changes in ownership with the SEC and the NYSE.
Executive officers, directors and greater than 10% stockholders
are required by SEC regulations to furnish us with copies of all
Section 16(a) reports that they file.
Based solely on our review of the copies of such reports
received by us, and/or on written representations from certain
reporting persons that Form 5 was required for the fiscal
year, we believe that our executive officers, directors and
greater than 10% stockholders complied with all
Section 16(a) filing requirements applicable to them with
respect to transactions during 2004.
AUDIT COMMITTEE REPORT
The primary function of the Audit Committee is to assist our
board of directors in its oversight and monitoring of our
financial reporting and auditing process. On February 18,
2005, our board of directors adopted an updated Audit Committee
charter that sets forth the responsibilities of the Audit
Committee. A copy of the Audit Committee charter as currently in
effect is attached as Appendix A to this proxy
statement.
Management has primary responsibility for our financial
statements and the overall reporting process, including our
system of internal controls. The independent registered public
accounting firm audits the annual financial statements prepared
by management, expresses an opinion as to whether those
financial statements fairly present our financial position,
results of operations and cash flows in conformity with
accounting principles generally accepted in the United States,
and discusses with the Audit Committee any issues it believes
should be raised with the Audit Committee. The Audit Committee
monitors these processes, relying, without independent
verification, on the information provided to it and on the
representations made by management and the independent
registered public accounting firm.
Representatives of PricewaterhouseCoopers LLP, our independent
registered public accounting firm, attended each meeting of the
Audit Committee. The Audit Committee reviewed and discussed with
management and PricewaterhouseCoopers LLP our audited financial
statements for the year ended December 31, 2004. The Audit
Committee also discussed with PricewaterhouseCoopers LLP the
matters required to be discussed by Statement on Auditing
Standards No. 61 (Communications with Audit Committees).
The Audit Committee also received the written disclosures and
the letter from PricewaterhouseCoopers LLP that are required by
Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and has discussed with
PricewaterhouseCoopers LLP the independence of
PricewaterhouseCoopers LLP. The Audit Committee considered
whether the non-audit services provided, and the fees charged
for such non-audit services, by PricewaterhouseCoopers LLP are
compatible with maintaining its independence.
Based upon its review of the audited financial statements and
the discussions noted above, the Audit Committee recommended to
the board of directors that the audited financial statements be
included in our annual report on Form 10-K for the year
ended December 31, 2004 for filing with the SEC.
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Audit Committee: |
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Richard M. Thomson, Chairperson |
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James J. OConnor |
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Glenn J. Rufrano |
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Polyvios C. Vintiadis |
36
PROPOSAL 2 RATIFICATION OF RE-APPOINTMENT OF
INDEPENDENT AUDITOR
Our Independent Registered Public Accounting Firm
The Audit Committee has re-appointed the firm of
PricewaterhouseCoopers LLP to serve as our independent
registered public accounting firm for the fiscal year ending
December 31, 2005, and has directed that such
re-appointment be submitted to our stockholders for ratification
at the annual meeting. If our stockholders do not ratify the
re-appointment of PricewaterhouseCoopers LLP, the Audit
Committee will consider the appointment of another independent
registered public accounting firm, but will not be required to
appoint a different audit firm.
Representatives of PricewaterhouseCoopers LLP will be present at
the annual meeting and will have an opportunity to make a
statement if they desire to do so. They also will be available
to respond to appropriate questions from stockholders.
Our Recommendation
We recommend a vote FOR the ratification of the
re-appointment of PricewaterhouseCoopers LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2005.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit and Non-Audit Fees of PricewaterhouseCoopers LLP
Aggregate fees for professional services rendered to us by
PricewaterhouseCoopers LLP as of or for the fiscal years ended
December 31, 2004 and 2003 are set forth below.
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Fiscal Year 2004 | |
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Fiscal Year 2003 | |
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Audit Fees
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$1,441,050 |
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$784,025 |
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Audit-Related Fees
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782,870 |
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697,280 |
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Tax Fees
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640,475 |
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916,111 |
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All Other Fees
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0 |
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0 |
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Total
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$2,864,395 |
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$2,397,416 |
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Audit Fees were for professional services rendered for
the audit of our consolidated financial statements as of and for
the years ended December 31, 2004 and 2003 and the audit of
internal control over financial reporting as of
December 31, 2004, quarterly review of the financial
statements included in our quarterly reports on Form 10-Q,
consents issued and review of filings with the SEC.
Audit-Related Fees consisted of assurance and related
services that are reasonably related to the performance of the
audit and are not reported under Audit Fees.
Audit-related fees consisted of employee benefit plan,
escalation, joint venture, and lender audits, documentation
assistance procedures related to internal control over financial
reporting and consultations concerning financial accounting and
reporting standards.
Tax Fees consisted of services related to Federal and
State tax compliance, including the preparation of tax returns
and claims for refund, tax planning and tax advice, including
assistance with and representation in tax audits and appeals,
advice related to property acquisitions and dispositions, REIT
compliance issues and requests for rulings or technical advice
from tax authorities.
The Audit Committee of the board of directors has determined
that the provision of these services is compatible with the
maintenance of the independence of PricewaterhouseCoopers LLP.
37
Pre-Approval of Audit and Non-Audit Services
Beginning in 2003, the Audit Committee pre-approved all audit
and permissible non-audit services provided by
PricewaterhouseCoopers LLP. In July 2003, the Audit Committee
adopted a pre-approval policy that provides guidelines for the
audit, audit-related, tax and other permissible non-audit
services that may be provided by PricewaterhouseCoopers LLP. The
policy identifies the guiding principles that must be considered
by the Audit Committee in approving services to ensure that
PricewaterhouseCoopers LLPs independence is not impaired,
as well as other factors that the Committee may consider in
evaluating whether to retain PricewaterhouseCoopers LLP,
including effectiveness and efficiency of service, cost,
improvement of the quality of the audit, and the relationship
between fees for audit and non-audit services. The policy
describes the audit, audit-related, tax and other services that
may be provided and the non-audit services that may not be
performed.
Under the policy, the Audit Committee annually pre-approves the
audit fee and terms of the engagement. The Audit Committee also
pre-approves a specified list of audit-related and tax services,
and annually pre-approves a spending limit for each of the
listed services. These services may not extend for more than
12 months unless approved by the Audit Committee. Other
permissible non-audit services in an amount less than $25,000
are pre-approved under the policy. If the fees for these
services are projected to exceed $25,000, they must be
specifically pre-approved by the chairperson of the Audit
Committee or the full Audit Committee, with written
documentation submitted for purposes of the approval. Any
increase in fees greater than 10% over the original approved
amounts for any type of approved service must be specifically
pre-approved by the chairperson of the Audit Committee or the
full Audit Committee, with the reason for the increase
documented in writing. Any increase of less than 10% is
pre-approved under the policy, and must be reported at the next
Committee meeting.
The chairperson of the Audit Committee has been delegated the
authority to pre-approve fee increases for audit, audit-related
and tax services above the amount originally approved, as well
as authority to pre-approve other permissible non-audit
services, in the event that the full Audit Committee is not
available. The chairperson must present any such approvals to
the Audit Committee at its next meeting. The Audit Committee
designated the Vice President, Internal Audit to monitor the
performance of services by PricewaterhouseCoopers LLP and
compliance with the policy. To ensure compliance with the
policy, the Vice President, Internal Audit provides a detailed
report to the Audit Committee on a periodic basis outlining
current and planned services, all fees incurred year-to-date for
services provided, and projected fees for planned services.
STOCKHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
Proposals of stockholders pursuant to Rule 14a-8 of the
Exchange Act, intended to be presented at the 2006 annual
meeting of stockholders must be received by us at our executive
offices in Chicago, Illinois, on or before December 12,
2005 to be eligible for inclusion in our proxy statement and
form of proxy relating to that meeting and to be introduced for
action at the meeting. In accordance with our bylaws, for
business to be properly brought before a meeting, but not
included in the proxy statement pursuant to Rule 14a-8 of
the Exchange Act, a stockholder must submit a proposal,
including nominations for the board of directors, not earlier
than January 19, 2006 and not later than March 5, 2006.
38
APPENDIX A
TRIZEC PROPERTIES, INC.
AUDIT COMMITTEE
CHARTER
I. Purpose
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The purpose of the Audit Committee is to assist the board of
directors (the Board of Directors) of Trizec
Properties, Inc. (the Corporation) in
(i) fulfilling its responsibilities to oversee the
Corporations financial reporting process, including
monitoring the integrity of the Corporations financial
statements and the independence and performance of the
Corporations internal and external auditors,
(ii) fulfilling its responsibilities to oversee the
Corporations compliance with legal and regulatory
requirements, and (iii) monitoring the ownership and
transfer of the Corporations shares for the purpose of
ensuring that the Corporation achieves and preserves its status
as a domestically-controlled REIT. The Audit
Committee shall also be responsible for preparing the report of
the audit committee included in the Corporations annual
proxy statement. |
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The Audit Committees responsibilities are those of
monitoring and supervision and, in carrying out its
responsibilities, the Audit Committee is not providing any
expert or other special assurances as to the Corporations
financial statements or as to the Corporations status as a
domestically-controlled REIT. The Corporations
executive management remains responsible for the preparation of
the financial statements in accordance with generally accepted
accounting principles and the Corporations independent
auditor remains responsible for auditing those financial
statements. |
II. Membership Requirements
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The Audit Committee shall be comprised of that number of
Directors as the Board of Directors shall determine from time to
time, such number not to be less than three (3) in
accordance with the Corporations by-laws (the
By-Laws). Each Director shall meet all applicable
requirements of the New York Stock Exchange, the SEC and any
other applicable laws, rules and regulations with respect to
independence, financial literacy, accounting or related
financial expertise, as determined by the Board of Directors.
Audit Committee Members shall not serve simultaneously on the
audit committees of more than two other public companies without
approval of the entire Board. The members of the Audit Committee
shall be appointed annually by the Board of Directors and may be
removed at any time, with or without cause, by the Board of
Directors. The Board of Directors, upon recommendation by the
members of the Audit Committee, shall appoint the Chairman of
the Audit Committee. |
III. Authority
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In discharging its oversight responsibilities, the Audit
Committee shall have unrestricted access to the
Corporations management, books and records and the
authority to retain outside counsel, accountants or other
consultants in the Audit Committees sole discretion. The
Audit Committee shall also have sole authority to approve the
fees and other retention terms of such consultants and to
terminate such consultants. The Audit Committee shall also have
the authority to create subcommittees with such powers as the
Audit Committee shall from time to time confer. |
IV. Audit Committee Compensation
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Audit Committee members shall not receive any compensation from
the Company other than directors fees (including any
equity-based awards), which may include amounts paid to
directors for service on committees and as chairmen of
committees of the Board. |
A-1
V. Responsibilities
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The following are the general responsibilities of the Audit
Committee and are set forth only for its guidance. The Audit
Committee may assume such other responsibilities as it deems
necessary or appropriate in carrying out its oversight functions. |
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A. |
On at least an annual basis, the Audit Committee shall: |
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1. |
Appoint, and approve the fees and engagement terms for, the
independent auditor who shall be accountable to the Board of
Directors and the Audit Committee; when circumstances warrant,
discharge the independent auditor; and recommend the independent
auditor to the Board of Directors for shareholder approval in
the proxy statement. |
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2. |
Review a report by the independent auditor describing: |
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a. |
the firms internal quality control procedures; |
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b. |
any material issues raised by the most recent quality-control
review, peer review or government or professional investigation,
within the preceding five years, of the independent
auditors independent audits, and steps taken to deal with
these issues; and |
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c. |
relationships between the independent auditor and the
Corporation to assess the independent auditors
independence. |
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3. |
Determine whether to recommend to the Board of Directors that
the Corporations financial statements be included in its
annual report on Form 10-K for filing with the Securities
and Exchange Commission (the SEC). To carry out this
responsibility, the Audit Committee shall: |
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a. |
review the proposed scope of the annual audit and agree thereon
with the independent auditor; |
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b. |
review and discuss the audited financial statements, including
Managements Discussion and Analysis of Financial
Condition and Results of Operations, with management and
the independent auditor; |
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c. |
review a report of the independent auditor with respect to: |
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(1) |
all critical accounting policies and practices used; |
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(2) |
all alternative treatments of financial information within GAAP
that have been discussed with management as well as the
ramifications of these alternatives and the treatment preferred
by the audit firm; and |
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(3) |
any other material written communications between the audit firm
and management (including the management letter and schedule of
unadjusted differences). |
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d. |
discuss with the independent auditor the matters required by
Statement on Auditing Standards No. 61; |
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e. |
review and discuss with the independent auditor the written
disclosures required by Independence Standards Board Standard
No. 1 regarding their independence and, where appropriate,
recommend that the Board of Directors take appropriate action in
response to the disclosures to satisfy itself of the
independence of the Corporations independent auditor; and |
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f. |
based upon the reviews and discussions, issue its report for
inclusion in the Corporations proxy statement. |
A-2
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4. |
Review and discuss with management, the internal auditors and
the independent auditor managements annual report on the
Corporations internal control over financial reporting and
the independent auditors attestation report regarding
managements report. |
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5. |
Review with the independent auditor any audit problems and
managements response to those problems. |
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6. |
Consider whether the provision of services by the independent
auditor not related to the audit of the annual financial
statement and the review of the interim financial statements
included in the Corporations reports on Form 10-Q for
such year is compatible with maintaining the auditors
independence. |
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7. |
Establish, and review at least annually, procedures: |
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a. |
for dealing with complaints received by the Corporation
regarding accounting, internal accounting controls or audit
matters; and |
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b. |
for the confidential anonymous submission by employees of
concerns regarding accounting or auditing matters. |
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8. |
Review and reassess the adequacy of this charter of the Audit
Committee annually and submit any proposed modifications to the
Board of Directors for approval. |
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9. |
Review and evaluate the Audit Committees performance
annually with the committee or individual designated by the
Board of Directors to undertake such review. |
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B. |
On a quarterly basis, the Audit Committee shall: |
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1. |
Review and discuss with management and the independent auditor
the Corporations interim financial statements, including
Managements Discussion and Analysis of Financial
Condition and Results of Operations, to be included in the
Corporations quarterly reports to be filed with the SEC. |
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2. |
Review and discuss, as appropriate, the adequacy of the
Corporations internal control over financial reporting
with the internal auditors, the independent auditor and
management, including without limitation, reports regarding: |
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a. |
all significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting; and |
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b. |
any fraud, whether or not material, that involves management or
other employees who have a significant role in the
Corporations internal control over financial reporting; |
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with a more detailed review to be undertaken annually in
connection with managements annual report on the
Corporations internal control over financial reporting and
the independent auditors attestation report regarding
managements report to be filed with the Form 10-K. |
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The Audit Committee also shall review and discuss, as
appropriate, any material changes implemented by management to
address control deficiencies or to make controls more effective. |
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3. |
Review each quarter the report of the Disclosure Controls and
Procedures Committee and meet with the Chief Executive Officer
and Chief Financial Officer each quarter to discuss the report,
any deficiencies or material weaknesses in disclosure controls
and procedures, and any fraud involving persons with a
significant role in the Corporations disclosure controls
and procedures. The review should include a discussion of the
Corporations risk assessment and risk management policies,
including discussion of |
A-3
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major financial risk exposures and steps management has taken to
monitor and control them. |
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4. |
Review the process for the Chief Executive Officer and Chief
Financial Officer certifications required by the SEC with
respect to the Companys financial statements. |
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5. |
Discuss, within the committee, earnings releases and financial
information and earnings guidance provided to analysts and
rating agencies. |
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6. |
Meet privately with the independent auditor and with the head of
the Internal Audit Department to review the Corporations
accounting practices, internal accounting controls and such
other matters as the Audit Committee deems appropriate. |
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C. |
From time to time and as necessary, the Audit Committee shall: |
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1. |
Review and approve all audit and non-audit services to be
provided by the independent auditor prior to the
Corporations receipt of such services in accordance with
all applicable laws, rules and regulations. |
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2. |
Oversee the functioning of the internal audit review, including
its organization, staffing and work plans, and review periodic
reports prepared by such organization, with a formal review of
the internal audit function at least annually. |
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3. |
Discuss with management and the independent auditor the effect
of regulatory and accounting initiatives as well as off-balance
sheet structures and aggregate contractual obligations on the
Companys financial statements. |
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4. |
Oversee the rotation of the lead (or coordinating) audit partner
having primary responsibility for the audit and the audit
partner responsible for reviewing the audit at least once every
five years, and oversee the rotation of other audit partners, in
accordance with all applicable laws, rules and regulations. |
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5. |
Discuss with management and the independent auditor any
correspondence between the Company and regulators or
governmental agencies and any associated complaints or published
reports that raise material issues regarding the Companys
financial statements or accounting policies. |
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6. |
Review and approve all related-party transactions in accordance
with all applicable laws, rules and regulations. |
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7. |
Set clear hiring policies for employees or former employees of
independent auditor, and review such policies at least annually,
which policies shall meet the requirements of all applicable
laws, rules and regulations. |
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8. |
Review any complaints received by the Corporation regarding
accounting, internal accounting controls or audit matters and
any submissions by employees of concerns regarding accounting or
auditing matters. |
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9. |
Regularly report to the Board of Directors its conclusions with
respect to the matters that the Audit Committee has considered. |
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D. |
In addition, in connection with the Corporations
obligations as a domestically-controlled REIT, the
Audit Committee shall: |
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1. |
Unless the Board of Directors has already done so, designate an
appropriate officer (Monitor) who, with the
assistance of such personnel as may be appropriate, shall
monitor and enforce ownership and transfer limitations and
restrictions necessary to ensure that the Corporation achieves
and maintains qualification as a domestically-controlled
REIT. |
A-4
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2. |
Review and discuss with the Monitor any matter relating to
ownership or transfer of the Corporations shares in
violation of the Corporations Certificate of
Incorporation, as may be amended from time to time, or any other
matters of which the Monitor is required to inform the Audit
Committee in accordance with the Corporations Policies and
Procedures. |
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3. |
Semi-annually review the performance of the Monitor to ensure
that the Monitor diligently performs his or her duties in
accordance with the Corporations Policies and Procedures
and at that time consider whether any changes to the
Corporations Policies and Procedures may be appropriate. |
VI. Meetings
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Subject to the By-Laws and resolutions of the Board of
Directors, the Audit Committee shall meet at least four
(4) times annually at such times as the Chairman of the
Committee shall designate. The Audit Committee shall also meet
with management, the internal auditors and the independent
auditor in separate executive sessions to discuss matters for
which the Audit Committee has responsibility. The Audit
Committee shall fix its own rules of procedure, and a majority
of the members serving shall constitute a quorum. The Audit
Committee shall keep minutes of its meetings and all action
taken shall be reported to the Board of Directors. |
A-5
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Please
Mark Here
for Address
Change or
Comments
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SEE REVERSE SIDE |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE BELOW-LISTED PROPOSALS.
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1. |
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Elect as directors the nine nominees listed below to serve until the 2006 Annual
Meeting of Stockholders and until their successors are elected and qualified (except as
marked to the contrary below): |
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INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominees name in the list below. |
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01 |
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Peter Munk, |
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02 |
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Timothy Callahan, |
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03 |
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L. Jay Cross,
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FOR
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WITHHOLD |
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04 |
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Brian Mulroney,
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all nominees listed
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AUTHORITY |
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05 |
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James OConnor,
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(except as marked
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to vote for all |
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06 |
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Glenn Rufrano,
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to the contrary)
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nominees listed |
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07 |
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Richard Thomson,
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08 |
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Polyvios Vintiadis, and |
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09 |
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Stephen Volk |
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FOR
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AGAINST
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ABSTAIN |
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2. |
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Ratify the re-appointment of PricewaterhouseCoopers LLP as Trizecs independent
registered public accounting firm for the fiscal year ending December 31, 2005.
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In their discretion, the proxies are authorized to vote upon such
other business as properly may come before the Annual Meeting and any
and all adjournments thereof. |
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
indicated, the Proxy will be voted FOR the election of the nine director
nominees, FOR the ratification of the re-appointment of
PricewaterhouseCoopers LLP as Trizecs independent registered public
accounting firm for the fiscal year ending December 31, 2005 and otherwise
in the discretion of the Proxy Holders.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
The undersigned may elect to withdraw this proxy card at any time prior to its use
by giving written notice to Dennis Fabro, Senior Vice President, Investor Relations,
of Trizec, by executing and delivering to Mr. Fabro a duly executed proxy card
bearing a later date, or by appearing at the Annual Meeting and voting in person.
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YES
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NO |
DO YOU PLAN TO
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ATTEND THE MEETING? |
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Signature
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Signature
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Date
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,2005 |
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Please mark, date and sign exactly as your name appears on this proxy card. When shares are
held jointly, both holders should sign. When signing as attorney, executor, administrator, trustee,
guardian or custodian, please give your full title. If the holder is a corporation or a
partnership, the full corporate or partnership name should be signed by a duly authorized officer. |
Ù FOLD AND DETACH HERE Ù
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet
http://www.proxyvoting.com/trz
Use the Internet to vote your proxy.
Have your proxy card in hand
when you access the web site.
OR |
|
Telephone
1-866-540-5760
Use any touch-tone telephone to
vote your proxy. Have your proxy
card in hand when you call.
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OR |
Mail
Mark, sign and date
your proxy card and
return it in the
enclosed postage-paid
envelope.
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
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Revocable Proxy
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COMMON STOCK
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Trizec Properties, Inc.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
2005 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Timothy H. Callahan and Michael C. Colleran, and each of them,
proxies, with full power of substitution, to act for and in the name of the undersigned to vote all
shares of common stock of Trizec Properties, Inc. (Trizec) that the undersigned is entitled to
vote at the 2005 Annual Meeting of Stockholders of Trizec, to be held at the Park Hyatt Hotel,
Grand Salon B, 800 North Michigan Avenue, Chicago, Illinois, on Thursday, May 19, 2005, at 10:00
a.m., local time, and at any and all adjournments or postponements thereof, as indicated below.
At the present time, the board of directors knows of no other business to be presented at the
Annual Meeting.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of
Stockholders and the accompanying proxy statement.
IMPORTANT THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
Address Change/Comments (Mark the corresponding box on the reverse side) |
|
You can now access your Trizec Properties, Inc. account online.
Access your Trizec Properties, Inc. stockholder account online via Investor
ServiceDirect® (ISD).
Mellon Investor Services LLC, Transfer Agent for Trizec Properties, Inc., now makes it easy and
convenient to get current information on your shareholder account.
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View account status |
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View certificate history |
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View book-entry information |
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View payment history for dividends |
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Make address changes |
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Obtain a duplicate 1099 tax form |
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Establish/change your PIN |
Visit us on the web at http://www.melloninvestor.com
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
Investor ServiceDirect® is a registered trademark of Mellon Investor Services LLC
|
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Revocable Proxy
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SPECIAL VOTING STOCK |
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Trizec Properties, Inc.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
2005 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Timothy H. Callahan and Michael C. Colleran, and each of them,
proxies, with full power of substitution, to act for and in the name of the undersigned to vote all
shares of special voting stock of Trizec Properties, Inc. (Trizec) that the undersigned is
entitled to vote with respect to the election of directors at the 2005 Annual Meeting of
Stockholders of Trizec to be held at the Park Hyatt Hotel, Grand Salon B, 800 North Michigan
Avenue, Chicago, Illinois, on Thursday, May 19, 2005, at 10:00 a.m., local time, and at any and
all adjournments or postponements thereof, as indicated below. The election of Trizecs directors
at the Annual Meeting is the sole matter on which the undersigned is entitled to vote as the holder
of the special voting stock of Trizec.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of
Stockholders and the accompanying proxy statement.
IMPORTANT THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE
(CONTINUED, AND TO BE SIGNED AND DATED, ON THE REVERSE SIDE)
(CONTINUED FROM THE FRONT SIDE)
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NINE DIRECTOR NOMINEES. |
1. |
Elect as directors the nine nominees listed below to serve until the
2006 Annual Meeting of Stockholders and until their successors are elected and
qualified (except as marked to the contrary below): |
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INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominees name in the list below. |
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01 Peter Munk,
02 Timothy Callahan,
03 L. Jay Cross,
04 Brian Mulroney,
05 James OConnor,
06 Glenn Rufrano,
07 Richard Thomson,
08 Polyvios Vintiadis, and
09 Stephen Volk |
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is indicated, this Proxy will
be voted FOR the election of the nine director nominees.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
The undersigned may elect to withdraw this proxy card at any time prior to its
use by giving written notice to Dennis Fabro, Senior Vice President, Investor
Relations, of Trizec, by executing and delivering to Mr. Fabro a duly executed
proxy card bearing a later date, or by appearing at the Annual Meeting and
voting in person.
o |
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FOR all nominees listed above (except as marked to the contrary). |
o |
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WITHHOLD AUTHORITY to vote for all nominees listed above. |
DO YOU PLAN TO ATTEND THE ANNUAL MEETING?
o YES
o NO
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Signature
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Signature
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Date
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, 2005 |
Please mark, date and sign exactly as your name appears on this proxy card. When shares are
held jointly, both holders should sign. When signing as attorney, executor, administrator,
trustee, guardian or custodian, please give your full title. If the holder is a corporation or a
partnership, the full corporate or partnership name should be signed by a duly authorized officer.