SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
INLAND RETAIL REAL ESTATE TRUST, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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MARCH 20, 2002
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
2002 Annual Meeting of Stockholders of Inland Retail Real Estate Trust, Inc. The
meeting will be held on Monday, April 22, 2002 at 2:00 p.m., local time, at our
principal executive offices located at 2901 Butterfield Road, Oak Brook,
Illinois 60523. I hope you will attend.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement contain a description of the formal business to be acted upon by the
stockholders. At this year's meeting, you will be entitled to vote on the
election of five directors and the ratification of KPMG LLP's appointment as our
independent auditors for 2002. Also enclosed is our 2001 Annual Report to
Stockholders. I encourage you to read the materials carefully. Our directors and
officers, as well as representatives of KPMG LLP, will be available at the
meeting to answer any questions you may have.
It is important that your shares be represented at the meeting regardless
of the size of your holdings. ACCORDINGLY, WHETHER OR NOT YOU INTEND TO BE
PRESENT AT THE MEETING IN PERSON, I URGE YOU TO SUBMIT YOUR PROXY AS SOON AS
POSSIBLE. You may do this by completing, signing and dating the enclosed proxy
card and returning it promptly in the envelope provided. You may also vote your
shares by following the procedure described in our Proxy Statement. This will
ensure that your shares will be represented at the meeting and voted in
accordance with your wishes. If you attend the meeting, you may, if you wish,
withdraw any proxy previously given and vote your shares in person.
Thank you for your continued support of and interest in our REIT. I and
everyone at Inland Retail Real Estate Trust, Inc. wish you good health,
happiness and prosperity.
Sincerely,
Robert D. Parks
Chairman and Chief Executive Officer
INLAND RETAIL REAL ESTATE TRUST, INC.
2901 BUTTERFIELD ROAD
OAK BROOK, ILLINOIS 60523
TELEPHONE: (630) 218-8000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE: April 22, 2002
TIME: 2:00 p.m.
PLACE: 2901 Butterfield Road
Oak Brook, Illinois 60523
To Our Stockholders:
The purposes of the annual meeting are:
- To elect five directors to hold office until our next annual meeting
of stockholders and until their successors are elected and qualify;
- To ratify the appointment of KPMG LLP as our independent auditors for
the 2001 fiscal year; and
- To transact any other business as may properly come before the meeting
or any adjournments or postponements of the meeting.
The Board of Directors has fixed the close of business on March 15, 2002 as
the record date for determining stockholders of record entitled to notice of and
to vote at the meeting.
A Proxy Statement, proxy card and our Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 accompany this notice.
We hope to have the maximum number of stockholders present in person or by
proxy at the meeting. To assure your representation at the meeting, please
submit your proxy by completing, signing, dating and mailing the enclosed proxy
card. You may also vote your shares electronically by following the procedures
described in the attached Proxy Statement. YOUR COOPERATION IN PROMPTLY
SUBMITTING YOUR PROXY WILL BE VERY MUCH APPRECIATED. For specific instructions,
please refer to the instructions on the proxy card.
You may use the enclosed envelope which requires no further postage if
mailed in the United States to return your proxy. If you attend the meeting, you
may revoke your proxy and vote in person, if you desire.
By order of the Board of Directors,
SCOTT W. WILTON
Secretary
INLAND RETAIL REAL ESTATE TRUST, INC.
2901 BUTTERFIELD ROAD
OAK BROOK, ILLINOIS 60523
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 22, 2002
INTRODUCTION
Our Board of Directors is furnishing you this Proxy Statement to solicit
proxies on its behalf to be voted at our 2002 Annual Meeting of Stockholders to
be held on Monday, April 22, 2002, and at any and all adjournments or
postponements thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. We encourage your participation in the voting at
the meeting and solicit your support on each proposal to be presented.
This Proxy Statement and the accompanying proxy card are first being mailed
to stockholders on or about March 20, 2002.
Unless the context otherwise requires, all references to "our," "we" and
"us" in this Proxy Statement relate to Inland Retail Real Estate Trust, Inc.
("IRRETI" or the "Company") and those entities owned or controlled directly or
indirectly by IRRETI, including Inland Retail Real Estate Limited Partnership,
which is IRRETI's operating partnership (the "Operating Partnership"), and any
entities owned or controlled by the Operating Partnership.
The mailing address of our principal executive offices is 2901 Butterfield
Road, Oak Brook, Illinois 60523.
RECORD DATE AND OUTSTANDING SHARES - The close of business on March 15,
2002 is the record date fixed by our Board of Directors for determining the
holders of record of Common Stock, $.01 par value per share, of the Company
entitled to notice of and to vote at the Annual Meeting. Each of the outstanding
shares of Common Stock, as of the record date, is entitled to one vote on all
matters to be voted upon at the meeting. On the record date, there were
45,239,880.2323 shares of Common Stock issued and outstanding, our only
outstanding voting securities.
VOTING OF PROXIES - Votes cast by proxy or in person at the meeting will be
tabulated by an inspector of election appointed for the meeting. Each executed
and returned proxy will be voted in accordance with the directions indicated on
it. Each stockholder giving a proxy has the power to revoke it at any time
before the shares it represents are voted by giving written notice of the
revocation to our Secretary, by delivering a later dated proxy (which
automatically revokes the earlier proxy), or by voting in person at the meeting.
VOTING ELECTRONICALLY VIA THE INTERNET - Stockholders may vote via the
Internet at the www.InlandVote.com Web site until 11:59 p.m. Central Time, April
21, 2002. The Internet voting procedures are designed to authenticate the
stockholders' identity and to allow stockholders to vote their shares and
confirm that their instructions have been properly recorded. If you would like
to receive future stockholder materials electronically, please enroll after you
complete your voting process at www.InlandVote.com.
Please refer to the proxy card enclosed for voting instructions. If you
choose not to vote over the Internet, please complete and return the paper proxy
card in the pre-addressed, postage-paid envelope provided with this Proxy
Statement.
QUORUM; ABSTENTIONS AND BROKER NON-VOTES - Presence in person or by proxy
at the meeting of holders of a majority of our issued and outstanding shares
constitutes a quorum. Abstentions and broker non-votes will count toward the
presence of a quorum. A "broker non-vote" occurs when a nominee (such as a
custodian or bank) holding shares for a beneficial owner returns a signed proxy
but does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner.
STOCKHOLDER LIST - A list of stockholders entitled to vote at the Annual
Meeting, arranged in alphabetical order, showing the address of, and number of
shares registered in the name of, each stockholder, will be open to the
examination of any stockholder by no later than April 12, 2002 and continuing
through the date of the Annual Meeting. The list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours. The list will also be produced and kept at the time and
place of the meeting during the whole meeting; it may be inspected by any
stockholder who is present.
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ELECTION OF DIRECTORS
ITEM NO. 1: TO ELECT FIVE INDIVIDUALS TO SERVE AS DIRECTORS TO HOLD OFFICE UNTIL
THE NEXT ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED
AND QUALIFY.
Our Board of Directors consists of five individuals. A majority of these
individuals must be "Independent Directors" which means that the individual:
- is not affiliated and has not been affiliated within the two years
prior to becoming an Independent Director, directly or indirectly,
with us, Inland Real Estate Investment Corporation ("IREIC" or our
"Sponsor"), or Inland Retail Real Estate Advisory Services, Inc. (our
"Advisor") whether by ownership of, ownership interest in, employment
by, any material business or professional relationship with, or as an
officer or director of IRRETI, our Sponsor, our Advisor or any of
their affiliates; and
- does not serve as a director for more than two other real estate
investment trusts ("REITs") organized by us or our Advisor or advised
by our Advisor; and performs no other services for us, except as a
director.
We currently have three Independent Directors, all of whom are nominees for
reelection as Independent Directors. Our other two directors are considered
"Affiliated Directors" because they are affiliated with us or our affiliates.
The election of members of the Board is conducted on an annual basis. Each
individual elected to the Board serves a one-year term and until his or her
successor is elected and qualifies. Accordingly, the term of office of each of
our current directors will expire at the 2002 Annual Meeting of Stockholders. At
that meeting each current director will be nominated to stand for reelection as
a director to hold office until our Annual Meeting of Stockholders to be held in
2003 and until his successor is elected and qualifies. We have no reason to
believe that any of the nominees will be unable or unwilling to serve if
elected. However, should any nominee be unable or unwilling to accept the office
of director, and if the Board shall designate a substitute nominee, the persons
named as proxies will vote for the election of the substitute nominee designated
by the Board, and if none, for such other persons as they shall determine. Each
current director has been a director since 1998. Information regarding the
business experience of each nominee is provided below based upon information
furnished to us by the individuals named.
NOMINEES FOR ELECTION AS DIRECTORS - The following sets forth information
with regard to the nominees for election to our Board as Independent Directors.
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NAME, POSITIONS WITH
IRRETI AND AGE Business Experience
DANIEL K. DEIGHAN Mr. Deighan has been one of our independent
Independent Director directors since September 1998. He is an
since 1998 appraiser who holds the MAI designation from
the American Institute of Real Estate
Age 62 Appraisers (the predecessor to the Appraisal
Institute) and has over 25 years of appraisal
experience. He has testified as an expert
witness in numerous counties throughout
Florida, and in some courts in New York in
eminent domain and other appraisal matters.
Mr. Deighan is president of Florida Property
Consultants Group, which has its office in
Port St. Lucie, Florida. That firm is
successor to Deighan Appraisal Associates,
Inc. and its predecessors, which Mr. Deighan
formed in 1971. Its business is the providing
of expert appraisal, consulting and eminent
domain services throughout Florida.
Since February 1996, he has been
vice-president of Southern Property
Consultants, Inc., a firm which specializes
in real estate tax appeals.
Deighan Appraisal Associates, Inc. was
honored as the "Business of the Year" in 1990
by the Port St. Lucie Chamber of Commerce.
Mr. Deighan is past vice chairman of the
Martin County Industrial Development Agency
and a past president of the Tri-County Tec
Foundation and the Economic Council of Martin
County, Florida. He received his B.A. degree
from Sienna College, Albany, New York.
KENNETH E. MASICK Mr. Masick has been one of our independent
Independent Director directors since December 1998. He has been a
since 1998 partner of Wolf & Company LLP, certified
public accountants, since its formation in
Age 56 1978. That firm, one of the largest in the
Chicagoland area, specializes in audit, tax
and consulting services to privately owned
businesses. Mr. Masick currently is
partner-in-charge of the firm's audit and
accounting department and is responsible for
the firm's quality control. His accounting
experience also includes forecasts and
projections, feasibility studies and due
diligence activities on acquisitions.
Mr. Masick has been in public accounting
since his graduation from Southern Illinois
University in 1967. He is also licensed as a
General Securities Representative. Mr. Masick
is a member of the American Institute of
Certified Public Accountants and the Illinois
CPA Society.
He also serves as treasurer and director of
Oak Brook Financial Group, Inc., a securities
broker dealer firm. All of the mentioned
entities with which Mr. Masick is affiliated
have their offices in Oak Brook, Illinois.
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MICHAEL S. ROSENTHAL Mr. Rosenthal has been one of our independent
Independent Director directors since October, 1998. He is an
since 1998 attorney who has been in private practice
since 1984. He has been a shareholder of the
Age 44 Atlanta, Georgia law firm of Wagner, Johnston
& Rosenthal, P.C. since September 1996. From
January 1991 through August 1996, Mr.
Rosenthal was president and a shareholder of
the Atlanta, Georgia law firm of Weinstein,
Rosenthal & Tobin, P.C. That law firm's
predecessor conducted business as a
partnership under the name of Weinstein,
Rosenthal & Tobin from 1986 through December
1990, and Mr. Rosenthal served as its
managing partner. He represents primarily
service industry clients, providing
day-to-day business counseling and advice,
and services in the areas of mergers and
acquisitions, real estate acquisitions and
financings, as well as litigation when
necessary. Mr. Rosenthal received both his
B.A. degree and his law degree from the
University of Florida.
The following sets forth information with regard to the remaining nominees
for election to our Board, each of whom is considered an Affiliated Director.
NAME, POSITIONS WITH
IRRETI AND AGE BUSINESS EXPERIENCE
ROBERT D. PARKS Mr. Parks has been with The Inland Group Inc.
Chairman, Chief ("Inland") and its affiliates since 1968 and
Executive Officer and is one of the four original principals. He
Affiliated Director since has been our chairman, chief executive
our formation in 1998 officer, and an affiliated director since our
formation in 1998. He is a director of The
Age 58 Inland Group as well as chairman of our
sponsor. Mr. Parks is president, chief
executive officer and a director of Inland
Real Estate Corporation. He is a director of
Inland Real Estate Advisory Services, Inc.,
Inland Investment Advisors, Inc., Partnership
Ownership Corp., Inland Southern
Acquisitions, Inc. and Inland Southeast
Investment Corp. He is a director of our
Advisor, a director of Inland Securities
Corporation ("Inland Securities") and a
trustee of Inland Mutual Fund Trust.
Mr. Parks is responsible for the ongoing
administration of existing investment
programs, corporate budgeting and
administration for our sponsor. He oversees
and coordinates the marketing of all
investments and investor relations.
Prior to joining Inland, Mr. Parks was a
school teacher in Chicago's public schools.
He received his B.A. Degree from Northeastern
Illinois University and his M.A. Degree from
the University of Chicago. He is a registered
Direct Participation Program Limited
Principal with the National Association of
Securities Dealers, Inc. He is also a member
of the Real Estate Investment Association,
the
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Financial Planning Association, the
Foundation for Financial Planning, as well as
a member of the National Association of Real
Estate Investment Trusts, Inc.
BARRY L. LAZARUS Mr. Lazarus has been our president, chief
President, Chief Operating operating officer and an affiliated director
Officer and Affiliated Director since our formation in 1998. He has been our
since our formation in 1998, and treasurer and chief financial officer since
Treasurer and Chief Financial June 1999. After a brief career in public
Officer since June 1999 accounting, Mr. Lazarus joined The Inland
Group in 1973 as its original controller and
Age 55 was later promoted to treasurer. From 1973 to
1979, he supervised all corporate and
partnership accounting and tax matters and
managed corporate financial affairs. In 1979,
Mr. Lazarus relocated to Phoenix, Arizona and
formed The Butterfield Company, a development
and contracting firm, while also serving as a
consultant to investors in several commercial
ventures. Between 1979 and 1987, The
Butterfield Company successfully completed
several projects in conjunction with national
real estate firms, including The Inland
Group. From 1988 until October 1990, Mr.
Lazarus was vice president of finance for UDC
Homes, Inc., then a New York Stock Exchange
Company and the 20th largest home builder in
the United States. His duties included
obtaining financing for numerous development
and construction projects in the southeastern
and southwestern United States, as well as
maintaining investor relations.
Mr. Lazarus rejoined Inland in October 1990
and became president of Intervest Midwest
Real Estate Corporation, then an affiliate of
The Inland Group. Mr. Lazarus solely owns
Wisconsin and Southern Land Company, Inc., of
which he has been president and director
since December 1993. Wisconsin and Southern
Land Company, Inc., which has its office in
Orlando, Florida, is a holding company that
acquired Intervest from The Inland Group in
1994. Intervest, pursuant to a service
agreement, previously provided property
zoning, development and disposition services
to Wisconsin Capital Land Fund, L.P., a
private placement real estate equity program
sponsored by our Sponsor.
Mr. Lazarus is president of Inland Shelter
Group, LLC, Orlando, Florida, which has been
engaged in the development of apartment
buildings in the state of Georgia through
1998. He received his B.B.A. degree from the
University of Wisconsin, is a certified
public accountant and holds real estate
broker licenses in the states of Florida and
Georgia.
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THE BOARD'S RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR
DANIEL K. DEIGHAN,
KENNETH E. MASICK,
MICHAEL S. ROSENTHAL,
ROBERT D. PARKS, AND
BARRY L. LAZARUS
ITS NOMINEES FOR ELECTION AS DIRECTORS
TO SERVE UNTIL THE NEXT ANNUAL MEETING OF STOCKHOLDERS
AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFY.
VOTE REQUIRED
The vote of a majority of the shares of stock of the Company entitled to
vote, present in person or by proxy at a meeting at which a quorum is present,
is necessary for the election of a director. There are no cumulative voting
rights in the election of directors. For purposes of the election of directors,
abstentions will have the effect of votes against nominees, although, as
mentioned, they will count toward the presence of a quorum.
BOARD MEETINGS IN 2001 - Our Board met ten times during 2001. Each director
attended more than 75% of the total number of meetings of the Board and the
Committee on which he served.
COMMITTEES OF THE BOARD OF DIRECTORS - Our Board has established an Audit
Committee comprised of our Independent Directors, Messrs. Deighan, Masick and
Rosenthal. These three directors are independent in accordance with the National
Association of Securities Dealers' listing standards. The Board has adopted a
written charter for the Audit Committee which was included as an Exhibit to the
Proxy Statement for our last annual meeting of stockholders.
The Audit Committee is responsible for recommending the engagement of our
independent auditors, reviewing the plans and results of the audit engagement
with our auditors, approving services performed by and the independence of our
independent auditors, considering the range of audit and non-audit fees, and
consulting with our independent auditors regarding the adequacy of our internal
accounting controls. This committee met five times during 2001.
The Board has also established a Development Committee comprised of Messrs.
Lazarus, Deighan, Parks, G. Joseph Cosenza, the vice chairman and director of
Inland, Brenda Gujral, president, chief operating officer and director of Inland
Securities and president, chief operating officer and director of IREIC, and
Steve Sanders, IRRETI's vice president of acquisitions.
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We formed the Development Committee in connection with our desire to engage
in the development of properties. This committee examines and discusses the
development of various properties. It did not meet during 2001.
We do not have a standing nominating committee or compensation committee of
the Board of Directors.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board is responsible for providing independent,
objective oversight of the Company's accounting functions and internal controls.
The Audit Committee is composed of three directors, each of whom is independent
as defined by the National Association of Securities Dealers' listing standards.
The Audit Committee operates under a written charter approved by the Board of
Directors. A copy of the charter was attached as Exhibit A to the Proxy
Statement relating to last year's Annual Meeting of Stockholders, which is on
file with the Securities and Exchange Commission.
Management is responsible for the Company's internal controls and financial
reporting process. The independent accountants are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants to review and discuss the December
31, 2001 financial statements. The Audit Committee also discussed with the
independent accountants the matters required by Statement on Auditing Standards
No. 61 (Communication with Audit Committees). The Audit Committee also received
written disclosures from the independent accountants required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and the Audit Committee discussed with the independent accountants that firm's
independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the representations
of management and the independent accountants, the Audit Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001, to be filed with the Securities and Exchange Commission.
The Audit Committee of the Board of Directors of Inland Retail Real Estate
Trust, Inc.:
Kenneth E. Masick
Daniel K. Deighan
Michael S. Rosenthal
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OUR EXECUTIVE OFFICERS
OUR AFFILIATION WITH THE INLAND GROUP OF COMPANIES
Inland, together with its subsidiaries and its and their affiliates
(collectively, the "Inland Affiliated Companies"), is a fully integrated real
estate company providing property management, leasing, marketing, acquisition,
disposition, development, redevelopment, syndication, renovation, construction,
finance and other related services. IREIC, a subsidiary of Inland and one of the
Inland Affiliated Companies, is our Sponsor and organizer. Inland Retail Real
Estate Advisory Services, Inc. is a wholly owned subsidiary of IREIC. Inland
Securities Corporation ("Inland Securities"), another of the Inland Affiliated
Companies, is the Dealer Manager of our initial public offering and our current
public offering of securities. Inland Securities was formed in 1984 and is
qualified to do business as a securities broker-dealer throughout the United
States. Since its formation, Inland Securities has provided the marketing
function for distribution of the investment products sponsored by IREIC. Inland
Securities does not render such services to anyone other than the Inland
Affiliated Companies. Inland Southeast Property Management Corp. ("Inland
Management"), which is owned principally by individuals who are affiliates of
Inland, is the real estate management agent for our properties. Inland Real
Estate Acquisitions, Inc. ("Inland Acquisitions"), one of the Inland Affiliated
Companies, has extensive experience in acquiring real estate for investment and
assists us in acquiring suitable properties to be purchased by other affiliates
from unaffiliated third parties on our behalf. Our senior management includes
executives of the mentioned Inland Affiliated Companies. In addition, we have
agreements with our Advisor and Inland Management to pay certain compensation to
them and other Inland Affiliated Companies for services provided to us. See
"Certain Relationships and Related Transactions" below.
BIOGRAPHIES OF OUR EXECUTIVE OFFICERS
Our executive officers are appointed by, and serve at the discretion of,
the Board. They will continue to serve in their respective offices until they
resign or their successors are elected and qualify. There is no family
relationship between any of our executive officers and any of our directors.
None of our executive officers has a written employment or severance agreement
with us. The following sets forth information regarding our executive officers:
NAME, POSITIONS WITH
IRRETI AND AGE BUSINESS EXPERIENCE
ROBERT D. PARKS The biography of Mr. Parks is included above
Chairman, Chief Executive under "Election of Directors-Nominees for
Officer and an Affiliated Election as Directors."
Director since our
formation in 1998
Age 58
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BARRY L. LAZARUS The biography of Mr. Lazarus is included
President, Chief Operating above under "Election of Directors-Nominees
Officer and an Affiliated for Election as Directors."
Director since our formation
in 1998, and Treasurer and
Chief Financial Officer
since June 1999
Age 55
ROBERTA S. MATLIN Ms. Matlin has been our vice president of
Vice President-Administration administration since our formation in 1998.
since our formation in 1998 Ms. Matlin joined Inland in 1984 as director
of investor administration and currently
Age 57 serves as senior vice president of
administration of our Sponsor, directing its
day-to-day internal operations. She was also
vice president of administration of Inland
Real Estate Corporation from March 1995 to
July 2000. Ms. Matlin is a director of our
Sponsor and of our Dealer Manager. She is
president and director of Inland Investment
Advisors, Inc. and Intervest Southern Real
Estate Corporation and a trustee of Inland
Mutual Fund Trust. She is also a director of
Partnership Ownership Corporation. Until
December 31, 2001, she was a director of
Inland Apartment Acquisitions, Inc. Prior to
joining Inland, she spent 11 years with the
Chicago Region of the Social Security
Administration of the United States
Department of Health and Human Services. Ms.
Matlin received her B.A. Degree from the
University of Illinois. She is registered
with the National Association of Securities
Dealers, Inc. as a general securities
principal and investment advisor.
STEVEN D. SANDERS Mr. Sanders has been our vice president of
Vice-President-Acquisitions acquisitions since our formation. Mr. Sanders
since our formation in 1998 has been an officer of Inland Real Estate
Acquisitions, Inc., one of our affiliates,
Age 52 since 1993 and its senior vice president
since 1997. He was president of our property
manager between May of 1998 and March of
2000. He has been involved in the real estate
industry, continuously, since 1970. His real
estate career began with Carlsberg Financial
Corporation, in Los Angeles, California, a
sponsor of national real estate limited
partnerships that acquired office,
industrial, multi-family, manufactured home
parks and retail properties throughout the
United States. As regional director of
acquisitions, Mr. Sanders' responsibilities
included identification, analysis,
negotiations and closings of properties in
the eastern United States, on behalf of
Carlsberg Financial Corporation sponsored
partnerships.
In 1979 and 1980, Mr. Sanders worked for R&B
Development, Los Angeles, California, as
director of acquisitions for multi-family
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properties acquired for ultimate conversions
to condominiums. In 1981, he formed Irvine
Properties, Inc. which offered real estate
consultation, brokerage and management
services to local and national investors. In
1984, Mr. Sanders joined Univest Real Estate
Corporation, Tampa, Florida, an affiliate of
Inland, and spearheaded the acquisition of
multi-family properties throughout the state
of Florida.
In 1988, he formed Florida Country Clubs,
Inc., which acquired and operated three golf
and country clubs located in Orlando,
Florida. In 1991, Mr. Sanders acquired
interests in additional golf and country
clubs on the east and west coasts of Florida.
In 1993, he rejoined Inland at its Oak Brook,
Illinois headquarters with the primary
responsibility of acquiring shopping centers
for Inland Real Estate Corporation.
VENTON J. CARLSTON Mr. Carlston has been our controller since
Vice President-Controller June 2000 and was promoted to Vice President
since January 2002 - Controller in January 2002. Mr. Carlston
joined Inland Real Estate Investment
Age 44 Corporation in February 1986. In 1994, Mr.
Carlston became controller of Inland
Securities Corporation and assistant
controller of Inland Real Estate Investment
Corporation. He received his B.S. degree in
accounting from Southern Illinois University.
Mr. Carlston is a Certified Public Accountant
and a member of the Illinois CPA Society.
SCOTT W. WILTON Mr. Wilton has been our secretary since
Secretary since August 2000 August 2000. Mr. Wilton joined Inland in
January 1995. He is assistant vice president
Age 42 of The Inland Real Estate Group, Inc. and
assistant counsel with The Inland Real Estate
Group law department. Mr. Wilton is involved
in all aspects of our business, including
real estate acquisitions and financing,
securities law and corporate governance
matters, leasing and tenant matters, and
litigation management. He received B.S.
degrees in economics and history from the
University of Illinois at Champaign in 1982
and his law degree from Loyola University of
Chicago, Illinois in 1985. Prior to joining
Inland, Mr. Wilton worked for the Chicago law
firm of Williams, Rutstein, Goldfarb, Sibrava
and Midura, Ltd., specializing in real estate
and corporate transactions and litigation.
COMPENSATION PAID TO OUR DIRECTORS AND OFFICERS
DIRECTOR COMPENSATION
Base Compensation. We will pay each of our Independent Directors an annual
fee of $5,000 plus $500 for each meeting of the Board or a committee thereof
attended in person, a fee of $250 for each meeting of the Board or committee of
the Board attended by telephone, and reimbursement of their out-of-pocket
expenses incurred. Messrs. Deighan, Masick and
11
Rosenthal were each paid fees of $10,500 in 2001 for their services as
Independent Directors. Messrs. Parks and Lazarus do not receive any fees or
other remuneration for serving as our Affiliated Directors.
OPTIONS. Under our Independent Director Stock Option Plan, each Independent
Director is granted a non-qualified stock option to acquire 3,000 shares as of
the date they become an Independent Director. Our current Independent Directors
were granted a non-qualified Stock Option to acquire 3,000 shares on April 1,
2000. The plan also provides for subsequent grants of options to purchase 500
shares on the date of each annual stockholders' meeting to each Independent
Director then in office. Each of our current Independent Directors was granted a
non-qualified Stock Option to acquire 500 shares at our first Annual Meeting on
June 1, 2000 and 500 shares at our second Annual Meeting on April 26, 2001. The
options for the initial 3,000 shares are exercisable as follows: 1,000 shares on
the date of grant and 1,000 shares on each of the first and second anniversaries
of the date of grant. The options granted as of each annual meeting of
stockholders become fully exercisable on the second anniversary of the date of
their grant. As of March 1, 2002, we have granted options to purchase 4,000
shares at $9.05 per share to each of the three Independent Directors. The option
price for subsequent options will be equal to the fair market value of a share
on the last business day preceding the annual meeting of stockholders.
EXECUTIVE COMPENSATION
With the exception of Barry L. Lazarus, our executive officers will not
receive any compensation from us for their services as such officers. Other than
Mr. Lazarus, our executive officers are officers of one or more of the Inland
Affiliated Companies and are compensated by those entities, in part, for their
services rendered to us. We pay our Advisor and its affiliates (which are Inland
Affiliated Companies) certain compensation in exchange for services they provide
to us. Such compensation is described below under "Certain Relationships and
Related Transactions."
Mr. Lazarus will receive an annual salary of $100,000 from us, and
reimbursement for his out-of-pocket expenses incurred on our behalf. His "at
will" employment is based on an oral agreement. Mr. Lazarus will devote most of
his time to our business; however, he will continue to devote some time to
Intervest Midwest Real Estate Corporation of which he is President. Mr. Lazarus
was paid $100,000 in 2001 for his services as our President, Chief Operating
Officer, Treasurer and Chief Financial Officer.
The following table sets forth information regarding the annual
compensation we paid to Mr. Lazarus during 1999, 2000 and 2001. No information
is presented for years prior to 1999 because the Company did not pay Mr. Lazarus
a salary until 1999.
NAME & POSITION YEAR SALARY
--------------- ---- ------
Barry L. Lazarus, 2001 $100,000
President, COO, Treasurer, 2000 $ 35,000
CFO 1999 $ 26,250
12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have entered into agreements to pay our Advisor and its affiliates
certain fees or other compensation for providing services to us. During the year
ended December 31, 2001, we paid the following fees or other compensation to our
Advisor or its affiliates:
ORGANIZATION AND OFFERING COSTS. IREIC, our Sponsor, advanced certain
organization and offering expenses for us, and is entitled to be reimbursed for
its actual costs incurred on our behalf in connection with our organization, the
initial public offering and the current offering, including legal and accounting
fees, registration and filing fees, printing costs and selling expenses. Through
December 31, 2001, we incurred a total of $39,335,560 of organization and
offering expenses in connection with our initial public offering, of which
$1,047,991 remained unpaid. In addition, as of December 31, 2001, our Sponsor
had advanced approximately $2,000,000 for the payment of offering expenses to
non-affiliated third parties in connection with our initial public offering, all
of which has been repaid. Our Sponsor has not advanced any reimbursable expenses
in connection with our current offering. See "Fees for the Offering of Our
Securities" below for an explanation of a portion of such expenses earned by
Inland Securities.
ADVISOR ASSET MANAGEMENT FEE. Our Advisor was entitled to receive an annual
advisor asset management fee equal to one-percent (1%) of our average invested
assets until August 1, 2001. Thereafter, our Advisor may receive an annual
Advisor asset management fee of not more than 1% of our net asset value, to be
paid quarterly. Our net asset value means, for any period, the total book value
of our assets invested, directly or indirectly, in equity interests and in loans
secured by real estate, before reserves for depreciation or bad debts or other
similar non-cash reserves less any mortgages payable on such assets, computed by
taking the average of these values at the end of each month during the period.
For any year in which we qualify as a REIT, the Advisor must reimburse us:
- to the extent that the Advisor asset management fee plus other
operating expenses paid during the previous calendar year exceed 2% of
our average invested assets for the calendar year or 25% of our net
income for that calendar year; and
- to the extent that stockholders have not received an annual
distribution equal to or greater than the 7% annual return on the net
investment of stockholders.
Through December 31, 2001, we have incurred $120,000 in Advisor asset
management fees.
PROPERTY MANAGEMENT FEES. Inland Management, an affiliate of our Advisor,
is entitled to receive property management fees for management and leasing
services provided to us. These fees may not exceed 4.5% of the gross income
earned by us on the properties managed. For 2001, we incurred and paid property
management fees of $1,605,491.
FEES FOR THE OFFERING OF OUR SECURITIES. Inland Securities, an affiliate of
our Advisor, served as Dealer Manager of our initial public offering and in that
capacity in 2001 earned selling commissions and certain other fees of
$19,092,420, of which $595,828 were unpaid as of
13
December 31, 2001. In addition, as of December 31, 2001, Inland Securities has
earned the right to purchase from us 1,410,472,516 Soliciting Dealer Warrants
for an aggregate purchase price of $1,128.38. Each Warrant will entitle the
holder to purchase one share for $12 per share. Inland Securities has informed
us that approximately all of these commissions and fees have been reallowed by
Inland Securities, and all of those Soliciting Dealer Warrants will be reallowed
by Inland Securities, to unaffiliated soliciting broker-dealers responsible for
the sale of our shares in the Offering.
REIMBURSEMENT OF CERTAIN SALARIES AND EXPENSES. Our Advisor and its
affiliates are entitled to reimbursement for salaries and expenses of employees
of the Advisor and its affiliates relating to our initial public offering and
our current offering and the administration of our day-to-day operations. The
amount of reimbursable expenses were $683,055 in 1999, $257,840 in 2000 and
$195,310 in 2001.
Additionally, our Advisor and its affiliates are entitled to reimbursement
for salaries and expenses of employees of the Advisor and its affiliates
relating to selecting, evaluating and acquiring our properties. These amounts
are included in building and improvements for those costs relating to properties
purchased. These amounts are included in acquisition cost expenses to affiliates
for costs relating to properties not acquired.
PROPERTY-LEVEL COMPENSATION. An affiliate of the Advisor will provide loan
servicing to us for a monthly fee. The fee for each full year will be equal to
no more than .05% of the total principal amount of the loans it is servicing for
us during that year up to the first $100 million in total principal loan
balances. After that, the fee will be a lesser percentage on a sliding scale
basis. In addition, we may pay our affiliates for providing other property-level
services to us.
All amounts we paid to affiliates are believed by us to be fair and
comparable to amounts that would be paid for similar services provided by
unaffiliated third parties.
14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of March 15, 2002, regarding
the number and percentage of shares beneficially owned by: (i) each director;
(ii) each executive officer; (iii) all directors and executive officers as a
group; (iv) any person known to us to be the beneficial owner of more than 5% of
our outstanding shares; and (v) IREIC, our Sponsor. Beneficial ownership
includes outstanding shares and shares which are not outstanding that any person
has the right to acquire within 60 days after the date of this table. However,
any such shares which are not outstanding are not deemed to be outstanding for
the purpose of computing the percentage of outstanding shares beneficially owned
by any other person. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the persons named in the table
have sole voting and investing power with respect to all shares beneficially
owned by them. As of March 15, 2002, we had 11,933 stockholders of record and
45,239,880.2323 shares of common stock outstanding.
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
------------------------ ------------------ ----------------
Robert D. Parks 34,726.2063(1) *
Barry L. Lazarus 11,049.7240 *
Daniel K. Deighan 5,185.3067(2) *
Kenneth E. Masick 6,635.8337(2) *
Michael S. Rosenthal 6,228.6502(2)(3) *
Roberta S. Matlin - *
Steven D. Sanders - *
Venton J. Carlston - *
Scott W. Wilton - *
All Directors and Executive
Officers as a group (9 persons) 63,825.7209(1)(2) *
*Less than 1%
(1) Includes 20,000 shares owned by our Advisor. Our Advisor is a
wholly-owned subsidiary of IREIC, which is an affiliate of Inland. Mr.
Parks is a control person of Inland and disclaims beneficial ownership
of these shares owned by our Advisor. Also includes 7,721.1841 shares
owned by Mr. Park's spouse, Catherine N. Parks.
(2) Includes 3,000 shares issuable upon exercise of options granted to
each Independent Director under our Independent Director Stock Option
Plan, to the extent that such options are currently exercisable or
will become exercisable within 60 days after the date of this table.
(3) Includes 617.0161 shares held by Mr. Rosenthal as Trustee under The
Uniform Gifts to Minors Act for Danielle N. Rosenthal and 471.7471
shares held by Mr. Rosenthal as Trustee under The Uniform Gifts to
Minors Act for Gabrielle M. Rosenthal.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT - Section 16(a) of the
Securities Exchange Act of 1934, as amended, requires our officers and
directors, and persons who own more than 10% of our outstanding shares, to file
statements of beneficial ownership and changes
15
in beneficial ownership of our shares with the Securities and Exchange
Commission (SEC) and to furnish us with copies of all statements they file.
Based solely on a review of the forms it has received and on written
representations from certain reporting persons that no such forms were required
for them, we believe that during 2001 all Section 16 filing requirements
applicable to our officers, directors and greater than 10% beneficial owners
were complied with by such persons.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS FOR 2001
ITEM NO. 2: TO RATIFY THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT
AUDITORS FOR 2002.
KPMG LLP has served as our independent auditors since our formation in
1998, and our management believes that they are knowledgeable about our
operations and accounting practices and are well qualified to act as our
independent auditors. Therefore, the Board, upon the recommendation of its Audit
Committee, has appointed KPMG LLP to act as our independent auditors to examine
our consolidated financial statements for our 2002 fiscal year. Although our
selection of independent auditors does not require your approval, we believe it
is desirable to obtain your concurrence to our selection.
One or more representatives of KPMG LLP are expected to be present at the
annual meeting. They will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
Audit Fees - The aggregate fees billed for professional services rendered
for the audit of our 2001 annual financial statements and the reviews of our
financial statements included in our Forms 10-Q were $7,560.
Financial Information Systems Design and Implementation Fees - We paid no
Financial Information Systems Designated Implementation fees for 2001 to our
principal accountant, KPMG LLP.
All Other Fees - Other than the fees listed above, the aggregate fees
billed for services rendered by KPMG LLP were $174,060.
The Audit Committee has considered whether the provision of the services
covered under "All Other Fees" is compatible with maintaining KPMG LLP's
independence.
16
THE BOARD'S RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR
THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP
AS OUR INDEPENDENT AUDITORS FOR 2001.
VOTE REQUIRED
Provided a quorum is present, the affirmative vote of a majority of the shares
present in person or represented by proxy and entitled to vote, is required to
ratify the appointment. For purposes of the vote on the appointment, abstentions
will have the effect of votes against the proposal, although they will count
toward the presence of a quorum.
MISCELLANEOUS AND OTHER MATTERS
ADVANCE NOTICE PROCEDURES FOR MAKING DIRECTOR NOMINATIONS AND STOCKHOLDER
PROPOSALS - Stockholder proposals for our Annual Meeting of Stockholders to be
held in 2003 will not be included in our Proxy Statement for that meeting unless
the proposal is proper for inclusion in our Proxy Statement and for
consideration at the next Annual Meeting of Stockholders and is received by our
Secretary at our executive offices located in Oak Brook, Illinois, no later than
December 4, 2002. Stockholders must also follow the procedures prescribed in SEC
Rule 14a-8 under the Exchange Act.
In addition, the Amended and Restated Bylaws of Inland Retail Real Estate
Trust, Inc. (as amended, the "Bylaws") provide that in order for a stockholder
to nominate a candidate for election as a director at an Annual Meeting of
Stockholders or propose business for consideration at such meeting, notice must
generally be given to our Secretary not less than 90 days nor more than 120 days
before the date on which we first mailed our notice of meeting and accompanying
proxy materials for the prior year's Annual Meeting of Stockholders.
These Bylaw requirements are separate from and in addition to the SEC's
requirements that a stockholder must meet in order to have a stockholder
proposal included in our Proxy Statement. If these requirements are not
followed, the nomination or proposal presented at an annual meeting of
stockholders will be out of order and will not be acted upon. Any stockholder
desiring a copy of our Bylaws will be furnished one without charge upon written
request to our Secretary at our principal executive offices. A copy of our
Bylaws, as amended, is filed as Exhibit 3.2 and Exhibit 3.2(a) to our annual
report on Form 10-K for the year ended December 31, 2001 and is available at the
SEC Internet site (http://www.sec.gov).
PROXY SOLICITATION COSTS - We will bear all expenses incurred in connection
with the solicitation of proxies. We will, upon request, reimburse brokerage
firms and other nominee holders for their reasonable expenses incurred in
forwarding the proxy solicitation materials to
17
the beneficial owners of our shares. Officers, directors and employees of
IRRETI, and officers and employees of our Advisor, may solicit proxies by mail,
personal contact, letter, telephone, telegram, facsimile or other electronic
means. They will not receive any additional compensation for those activities,
but they may be reimbursed for their out-of-pocket expenses. In addition to the
solicitation by mail, we have made these materials available via the Internet at
www.InlandVote.com.
OTHER MATTERS - As of the date of this Proxy Statement, the above are the
only matters we are aware of that are to be acted upon at the meeting. If any
other matter should properly come before the meeting, the persons appointed by
your proxy will vote on those matters in accordance with the recommendation of
the Board, or, in the absence of such a recommendation, in accordance with their
discretion and best judgment. The affirmative vote of the holders of a majority
of the shares represented in person or by proxy and entitled to vote on any such
other matter will be required for approval.
By the order of the Board of Directors,
Scott W. Wilton
Secretary
Oak Brook, Illinois
March 20, 2002
YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF PROXIES WILL SAVE US THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES. WE ENCOURAGE YOU TO COMPLETE, SIGN,
DATE AND RETURN YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE, BEFORE THE
MEETING, SO THAT YOUR SHARES WILL BE REPRESENTED AND VOTED AT THE MEETING.
Our 2001 Annual Report on Form 10-K to stockholders includes our financial
statements for the fiscal year ended December 31, 2001. The 2001 Annual Report
does not form any part of the material for the solicitation of proxies.
-------------------
18
INLAND RETAIL REAL ESTATE TRUST, INC.
REVOCABLE PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - APRIL 22, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Inland Retail Real Estate Trust, Inc., a Maryland
corporation (the "Company") hereby appoints Roberta S. Matlin and Scott W.
Wilton as proxies for the undersigned, and each of them, with full power of
substitution in each of them, to attend the annual meeting of stockholders to be
held at the principal executive offices of the Company located at 2901
Butterfield Road, Oak Brook, Illinois 60523 on Monday, April 22, 2002, at 2:00
p.m., local time, or any adjournment or postponement thereof to cast on behalf
of the undersigned all votes that the undersigned is entitled to cast at such
meeting and otherwise to represent the undersigned at the meeting with all
powers possessed by the undersigned if personally present at the meeting. The
undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement and revokes any proxy heretofore given with
respect to such meeting.
--------------------------------------------------------------------------------
PLEASE MARK VOTE IN THE FOLLOWING MANNER USING BLUE OR BLACK INK ONLY. [x]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR 1 AND 2.
FOR ALL
FOR ALL WITHHOLD ALL EXCEPT
1. ELECTION OF DIRECTORS: [ ] [ ] [ ]
01 - DANIEL K. DEIGHAN,
02 - KENNETH E. MASICK,
03 - MICHAEL S. ROSENTHAL,
04 - ROBERT D. PARKS,
05 - BARRY L. LAZARUS
---------------------------------
(Except nominee(s) written above)
FOR AGAINST ABSTAIN
2. PROPOSAL TO RATIFY KPMG LLP AS [ ] [ ] [ ]
INDEPENDENT AUDITORS.
3. TO VOTE AND OTHERWISE REPRESENT THE UNDERSIGNED ON ANY OTHER MATTER THAT
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF IN THE DISCRETION OF THE PROXY HOLDER.
[ ] CHECK HERE ONLY IF YOU PLAN TO ATTEND THE MEETING IN PERSON.
--------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS
GIVEN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST "FOR" EACH
OF THE NOMINEES FOR DIRECTOR AND "FOR" EACH OF THE OTHER PROPOSALS AND IN THE
DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
Signature of Stockholder Dated:
--------------------------------- ----------
Signature, if held jointly Dated:
--------------------------------- ----------
Signature, if held jointly Dated:
--------------------------------- ----------
Please sign exactly as your name or names appear above. For joint accounts, each
owner should sign. When signing as executor, administrator, attorney, trustee,
guardian or in another representative capacity, please give your full title. If
a corporation or partnership, please sign in the name of the corporation or
partnership by an authorized officer or person.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.