MONMOUTH REAL ESTATE INVESTMENT CORPORATION
A Real Estate Investment Trust
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C
Freehold, New Jersey 07728
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of
Shareholders of Monmouth Real Estate Investment Corporation
(the Company) will be held on Thursday, April 25, 2002, at
4:00 p.m. at the offices of the Company at Juniper Business
Plaza, 3499 Route 9 North, Suite 3-C, Freehold, New Jersey,
for the following purposes:
1. To elect nine Directors, the names of whom are
set forth in the accompanying proxy statement,
to serve for the ensuing year; and
2. To ratify the appointment of KPMG LLP as
independent auditors for the Company for the
fiscal year ending September 30, 2002; and
3. To approve an amendment to the Certificate of
Incorporation authorizing the Company to
increase the number of authorized Class A
Common Stock, $.01 par value, from 16,000,000
to 20,000,000 shares; and
4. To consider a recommendation by the Stock
Option Committee of the Board of Directors that
the number of shares of the Company's Class A
Common Stock, $.01 par value, subject to Option
under the Company's 1997 Stock Option Plan, be
increased by 750,000 shares to 1,500,000 shares;
and
5. To transact such other business as may properly
come before the meeting or any adjournment(s)
thereof.
The books containing the minutes of the last Annual Meeting
of Shareholders, and the minutes of all meetings of the
Directors since the last Annual Meeting of Shareholders, will
be presented at the meeting for the inspection of the
shareholders. Only shareholders of record at the close of
business on March 14, 2002 will be entitled to vote at the
meeting and at any adjournments thereof.
IF YOU ARE UNABLE TO BE PRESENT IN PERSON, PLEASE SIGN AND
DATE THE ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD
OF DIRECTORS, AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ EUGENE W. LANDY
President and Director
March 20, 2002
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C
Freehold, New Jersey 07728
PROXY STATEMENT
Annual Meeting of Shareholders
April 25, 2002
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Monmouth Real
Estate Investment Corporation (the Company) of proxies to be
voted at the Annual Meeting of Shareholders of the Company to
be held on April 25, 2002, and at any adjournments thereof
(Annual Meeting), for the purposes listed in the preceding
Notice of Annual Meeting of Shareholders. This Proxy
Statement and the accompanying proxy card are being
distributed on or about March 20, 2002 to shareholders of
record March 14, 2002.
A copy of the Annual Report, including financial statements,
was mailed to all shareholders of record on or about February
___, 2002.
Any shareholder giving the accompanying proxy has the power
to revoke it at any time before it is exercised at the Annual
Meeting by filing with the Secretary of the Company an
instrument revoking it, by delivering a duly executed proxy
card bearing a later date, or by appearing at the meeting and
voting in person. Shares represented by properly executed
proxies will be voted as specified thereon by the
shareholder. Unless the shareholder specifies otherwise,
such proxies will be voted FOR the proposals set forth in the
Notice of Annual Meeting.
The cost of preparing, assembling and mailing this Proxy
Statement and form of proxy, and the cost of soliciting
proxies related to the meeting, will be borne by the Company.
The Company does not intend to solicit proxies otherwise than
by the use of the mail, but certain Officers and regular
employees of the Company, without additional compensation,
may use their personal efforts, by telephone or otherwise, to
obtain proxies.
VOTING RIGHTS
Only holders of the Company's $.01 par value common stock
(Common Stock) of record as of the close of business on March
14, 2002, are entitled to vote at the Annual Meeting of
Shareholders. As of the record date, there were issued and
outstanding _________ shares of Common Stock, each share
being entitled to one vote on any matter which may properly
come before the meeting. Said voting right is non-
cumulative. The presence in person or by proxy of holders of
a majority of the outstanding shares of Common Stock shall
constitute a quorum. Proposals 1, 2 and 4 require the
affirmative vote of a majority of the votes cast. Proposal 3
requires the affirmative vote of a majority of the
outstanding shares. If you abstain, your proxy will be
counted as present for the purpose of determining the
existence of a quorum, but will have the effect of a vote
against the proposal.
1
PROPOSAL 1
ELECTION OF DIRECTORS
It is proposed to elect a Board of nine Directors. The proxy
will be voted for the election of the nine nominees named
herein, all of whom are members of the present Board, to
serve for a one-year term for which they have been nominated,
unless authority is withheld by the shareholder. The nominees
have agreed to serve, if elected, for the new term. If for
any reason any of the nine nominees shall become unavailable
for election, the proxy will be voted for any substitute
nominee who may be selected by the Board of Directors prior
to or at the meeting, or, if no substitute is selected by the
Board of Directors, for a motion to reduce the membership of
the Board to the number of the following nominees who are
available. In the event the membership of the Board is
reduced, it is anticipated that it would be restored to the
original number at the next annual meeting. In the event a
vacancy occurs on the Board of Directors after the Annual
Meeting, the by-laws provide that any such vacancy shall be
filled for the unexpired term by a majority vote of the
remaining Directors. The Company has no knowledge that any
of the nine nominees shall become unavailable for election.
The proxies solicited cannot be voted for a greater number of
persons than the nominees named.
Some of the nominees for Director are also Officers and/or
Directors of other companies, including Monmouth Capital
Corporation and United Mobile Homes, Inc., both publicly-
owned companies. In addition, the Officers and Directors of
the Company may engage in real estate transactions for their
own account, which transactions may also be suitable for
Monmouth Real Estate Investment Corporation. In most
respects, the activities of the Company, United Mobile Homes,
Inc. and Monmouth Capital Corporation are not in conflict,
but rather complement each other. However, the activities of
the Officers and Directors on behalf of the other companies,
or for their own account, may on occasion conflict with those
of the Company and deprive the Company of favorable
opportunities. It is the opinion of the Officers and
Directors of the Company that there have been no conflicting
transactions since the beginning of the last fiscal year.
Committees of the Board of Directors and Meeting Attendance
The Board of Directors had four meetings during the last
fiscal year. No Director attended fewer than 75% of the
meetings.
The Company has a standing Audit Committee, a Stock Option
Committee and a Compensation Committee of the Board of
Directors.
2
The Audit Committee, which recommends to the Directors the
independent public accountants to be engaged by the Company
and reviews with management the Company's internal accounting
procedures and controls, had two meetings, including
telephone meetings, during the last fiscal year. Charles P.
Kaempffer, Matthew I. Hirsch, and Peter Weidhorn, all of whom
are outside Directors, serve on the Audit Committee.
The Stock Option Committee, which administers the Company's
Stock Option Plan, had one meeting during the last fiscal
year. Daniel D. Cronheim, Matthew I. Hirsch, and John
Sampson serve on the Stock Option Committee.
The Compensation Committee, which makes recommendations to
the Directors concerning compensation, had one meeting during
the last fiscal year. Daniel D. Cronheim and Matthew I.
Hirsch serve on the Compensation Committee.
3
NOMINEES FOR DIRECTOR
Present Position with the
Company; Business Experience
During Past Five Years; Director
Nominee; Age Other Directorships Since
Ernest V. Treasurer (1968 to present) and 1968
Bencivenga Director. Financial Consultant
(83) (1976 to present); Treasurer and
Director (1961 to present) and
Secretary (1967 to present) of
Monmouth Capital Corporation;
Director (1969 to present) and
Secretary/Treasurer (1984 to
present) of United Mobile Homes,
Inc.
Anna T. Chew Controller (1991 to present) and 1993
(43) Director. Certified Public
Accountant; Controller (1991 to
present) and Director (1994 to
present) of Monmouth Capital
Corporation; Vice President and
Chief Financial Officer (1995 to
present) and Director (1994 to
present) of United Mobile Homes,
Inc.
Daniel D. Director. Attorney at Law (1982 1989
Cronheim to present); Executive Vice
(47) President (1989 to present) and
General Counsel (1983 to present)
of David Cronheim Company.
Matthew I. Hirsch Director. Attorney at Law (1985 2000
(42) to present); Adjunct Professor
of Law (1993 to present), Widener
University School of Law.
Charles P. Director. Investor; Director 1974
Kaempffer (1970 to present) of Monmouth
(64) Capital Corporation; Director
(1969 to present) of United
Mobile Homes, Inc.; Vice Chairman
and Director (1996 to present) of
Community Bank of New Jersey.
4
NOMINEES FOR DIRECTOR (continued)
Present Position with the
Company; Business Experience
During Past Five Years; Director
Nominee; Age Other Directorships Since
Eugene W. Landy President (1968 to present) and 1968
(68) Director. Attorney at Law;
President and Director (1961 to
present) of Monmouth Capital
Corporation; Chairman of the
Board (1995 to present),
President (1969 to 1995) and
Director (1969 to present) of
United Mobile Homes, Inc.
Samuel A. Landy Director. Attorney at Law (1985 1989
(41) to present); President (1995 to
present), Vice President (1991 to
1995) and Director (1992 to
present) of United Mobile Homes,
Inc.; Director (1994 to present)
of Monmouth Capital Corporation.
John R. Sampson Senior Portfolio Manager at Fox 2001
(47) Asset Management, Inc. (1998 to
present); Principal at Pharos
Management and Principia Partners
LLC (1995 to 1998) specializing
in fixed income consulting and
research for the securities
industry.
Peter J. Weidhorn Director of Real Estate 2001
(55) Management/ Acquisitions at
Kushner Companies (2000 to
present); Director (2001 to
present) of BNP Residential
Properties Inc.; Director (1994
to 1997) of Monmouth Capital
Corporation; President (1981 to
1998) of WNY Management Corp.;
Chairman of the Board, President
and Director (1998 to 2000) of
WNY Group, Inc.; Trustee and
former Chairman of the Board of
CentraState Healthcare System;
Treasurer and Trustee of the
Union of American Hebrew
Congregations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
5
PROPOSAL 2
APPROVAL OF INDEPENDENT AUDITORS
It is proposed to approve the appointment of KPMG LLP as
Independent Auditors for the Company for the purpose of
making the annual audit of the books of account of the
Company for the year ending September 30, 2002 and
shareholder approval of said appointment is requested. KPMG
LLP has served as Independent Auditors of the Company since
1994. There are no affiliations between the Company and KPMG
LLP, its partners, associates or employees, other than its
employment as Independent Auditors for the Company. KPMG LLP
informed the Company that it has no direct or indirect
financial interest in the Company. The Company does expect a
representative of KPMG LLP to be present at the Annual
Meeting either to make a statement or to respond to
appropriate questions.
The approval of the appointment of the Independent Auditors
must be by the affirmative vote of a majority of the votes
cast at the Annual Meeting. In the event KPMG LLP does not
receive an affirmative vote of the majority of the votes cast
by the holders of shares entitled to vote, then another firm
will be appointed as Independent Auditors and the
shareholders will be asked to ratify the appointment at the
next annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PROPOSAL 3
INCREASE IN AUTHORIZED CLASS A COMMON STOCK
The Board of Directors has declared advisable and has directed
that there be submitted to the shareholders of the Company a
proposed amendment to Article IV, Section (a) of the Company's
Certificate of Incorporation which would effect an increase in
the number of authorized Class A common stock from 16,000,000
shares to 20,000,000 shares.
The approval of the proposal to amend the Certificate of
Incorporation will result in a substantially greater number of
authorized shares than the Company has under the current
Certificate of Incorporation. The additional shares may be
offered in capital raising transactions, property acquisition
transactions and investment in other entities. The authorization
of additional common shares gives management the ability to
counter takeover proposals by issuing additional shares. There
are no specific capital transactions, property acquisitions,
takeover proposals or other events pending (other than shares
needed for the Dividend Reinvestment and Stock Purchase Plan).
Management believes that prudent corporate governance includes
6
the Company having a substantial number of authorized but
unissued shares available. If approved, the increased number
of authorized Class A common shares will be available for
issuance from time to time for such purposes and consideration
as the Board of Directors may approve and no further votes of
shareholders will be required.
Under Delaware law, the affirmative vote of the holders of a
majority of the outstanding shares entitled to vote at the Annual
Meeting is required to authorize the proposed increase in the
authorized number of Class A common shares. If the amendment to
the Certificate of Incorporation is authorized, the text of
Article IV, Capitalization, Section (a), pertaining to the
Company's authority to issue common stock, will be as follows:
(a) Twenty million (20,000,000) shares of Class A Common
Stock, with a par value of $0.01 for each share of such
stock. In the event of a liquidation of the Corporation,
Class A Common Stock shall be entitled to all assets
allocated to holders of Common Stock. Class A Common
Stock shall be subject to redemption by the Corporation
in accordance with Article X of this Certificate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PROPOSAL 4
PROPOSAL REGARDING STOCK OPTION PLAN
The Company maintains its 1997 Stock Option Plan (the "Plan")
pursuant to which the Stock Option Committee of the Board of
Directors may grant incentive and non-qualified stock options to
certain officers, directors and key employees for the purposes of
(i) affording an incentive to certain officers and key employees
to remain in the employ of the Company and to use their best
efforts in its behalf; and (ii) aiding the Company in attracting,
maintaining and developing capable management personnel of a
caliber required to insure the Company's continued success by
means of an offer to such persons of an opportunity to acquire or
increase their proprietary interest in the Company through the
granting of options to purchase shares of the Company.
A maximum of 750,000 shares of the Company's Class A Common Stock
are reserved for issuance under the Plan. Options to acquire
385,000 shares at a weighted average exercise price of $6.19 have
been granted through September 30, 2001, and as of such date
365,000 shares remain available for future grant under the Plan.
The Stock Option Committee of the Board of Directors considers
the future grant of options under the Plan to be an integral part
of the Company's compensation strategies and policies, as it
seeks to enhance cash flows, and consequently real property and
stockholder value, by aligning the financial interests of the
Company's directors, executive officers and other key employees
with those of its shareholders.
7
Accordingly, the Stock Option Committee of the Board of Directors
has recommended that the Plan be amended so that the number of
shares of the Company's Class A Common Stock subject to option
under the Plan would be increased by 750,000 shares to 1,500,000
shares. The directors, officers and key employees who may
receive grants of options to acquire such additional shares will
continue to be determined in the future by the Stock Option
Committee of the Board of Directors. The persons named as
proxies in the accompanying form of proxy intend to vote FOR this
recommendation.
Vote Required
Approval of the recommendation by the Stock Option Committee to
increase the number of shares of the Company's Class A Common
Stock subject to option under the Plan by 750,000 shares requires
the approval by the affirmative vote of the holders of a majority
of the votes cast at the Annual Meeting; provided that the total
number of votes cast at the Annual Meeting represents over 50% in
interest of all the Company's Class A Common Stock entitled to
vote on such proposal. Accordingly, abstentions and broker non-
votes will have the effect of a vote against such proposal unless
holders of more than 50% in interest of all the Company's Class A
Common Stock entitled to vote on such proposal cast votes, in
which event abstentions will have no effect on the result of such
vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PRINCIPAL SHAREHOLDERS
As of February 4, 2002, no person owned of record, or was
known by the Company to own beneficially, more than five
percent (5%) of the shares of the Company except United
Mobile Homes, Inc. which is a 5.19% holder of the Company's
shares. This information is acquired from Form 13D as filed
with the Securities and Exchange Commission by United Mobile
Homes, Inc. on October 25, 2001 and subsequent Form 4
filings.
Eugene W. Landy is Chairman of the Board of United Mobile
Homes, Inc. Samuel A. Landy is President of United Mobile
Homes, Inc. See Information Respecting Directors and
Officers for holdings in the Company by these persons.
8
INFORMATION RESPECTING DIRECTORS AND OFFICERS
As of February 4, 2002, the Directors and Officers,
individually and as a group, beneficially owned Common Stock
as follows:
Name of Beneficial Shares Owned Percent of
Owner Beneficially (1) Class
Ernest V. Bencivenga 13,270(2) 0.12%
Anna T. Chew 24,841(3) 0.23%
Daniel D. Cronheim 26,163(4) 0.24%
Matthew I. Hirsch 14,867(5) 0.14%
Charles P. Kaempffer 37,966(6) 0.35%
Eugene W. Landy 433,042(7)(11) 4.10%
Samuel A. Landy 168,725(8) 1.56%
John R. Sampson 14,716 (9) 0.14%
Peter J. Weidhorn 1,000 (10) 0.01%
Directors & Officers
as a Group 744,590(11) 6.89%
(1) Beneficial ownership, as defined herein, includes
Common Stock as to which a person has or shares voting
and/or investment power.
(2) Excludes 15,000 shares issuable upon exercise of stock
option.
(3) Includes (a) 16,395 shares owned jointly with Ms.
Chew's husband; and (b) 8,446 shares held in Ms. Chew's
401(k) Plan. Excludes 15,000 shares issuable upon
exercise of stock option.
(4) Excludes 15,000 shares issuable upon exercise of stock
option.
(5) Excludes 5,000 shares issuable upon exercise of stock
option.
(6) Includes (a) 14,989 shares owned by Mr. Kaempffer's
wife; (b) 1,080 shares in joint name with Mrs.
Kaempffer; and (c) 2,425 shares held in the Charles P.
Kaempffer Defined Benefit Pension Plan of which Mr.
Kaempffer is Trustee with power to vote. Excludes
15,000 shares issuable upon exercise of stock option.
(7) Includes (a) 87,118 shares owned by Mr. Landy's wife;
(b) 161,764 shares held in the Landy & Landy Profit
Sharing Plan of which Mr. Landy is a Trustee with power
to vote; and (c) 126,585 shares held in the Landy &
Landy Pension Plan of which Mr. Landy is a Trustee with
power to vote. Excludes 41,043 shares held by Mr.
Landy's adult children in which he disclaims any
beneficial interest; and excludes 280,000 shares
issuable upon exercise of stock options.
(8) Includes (a) 4,516 shares owned by Mr. Landy's wife;
(b) 54,683 shares held in custodial accounts for Mr.
Landy's minor children under the NJ Uniform Transfers
to Minors Act in which he disclaims any beneficial
interest but has power to vote; (c) 1,000 shares in the
Samuel Landy Family Limited Partnership; and (d) 24,148
shares held in Mr. Landy's 401(k) Plan. Excludes
15,000 shares issuable upon exercise of stock option.
(9) Includes 2,000 shares held in custodial accounts for
Mr. Sampson's minor children under the NJ Uniform Gifts
to Minors Act in which he disclaims any beneficial
interest but has power to vote. Excludes 5,000 shares
issuable upon exercise of stock option.
(10) Excludes 5,000 shares issued upon exercise of stock
option.
(11) Excludes 561,051 shares (5.19%) owned by United Mobile
Homes, Inc. Eugene W. Landy owns beneficially
approximately 12.92% of the shares of United Mobile
Homes, Inc.
9
EXECUTIVE COMPENSATION
Summary Compensation Table.
The following Summary Compensation Table shows compensation
paid or accrued by the Company to its Chief Executive Officer
for services rendered during the fiscal years ended September
30, 2001, 2000 and 1999. Because no other executive officers
received total annual salary and bonus exceeding $100,000,
only the compensation paid to the Chief Executive Officer is
to be disclosed under the Securities and Exchange Commission
disclosure requirements.
Name and Annual Compensation
Principal Position Year Salary Bonus Other
Eugene W. Landy 2001 $150,000 $30,000 $105,200(1)
Chief Executive Officer 2000 $130,000 $80,000 $ 72,000
1999 $110,000 None $ 79,700
(1) Represents Director's fees of $8,700 paid to Mr. Landy,
legal fees of $47,500 paid to the firm of Landy & Landy, and
$49,000 accrual for pension and other benefits in accordance
with Mr. Landy's employment contract.
Compensation of Directors
The Directors received a fee of $1,000 for each Board meeting
attended and an additional fixed annual fee of $3,800 payable
quarterly. Effective April 1, 2001, the fixed annual fee was
increased to $7,600. Directors appointed to house committees
received $150 for each meeting attended. Those specific
committees are Compensation Committee, Audit Committee and
Stock Option Committee.
Stock Option Plan
On April 24, 1997, the shareholders approved and ratified the
Company's 1997 Stock Option Plan authorizing the grant to
officers, directors and key employees options to purchase up
to 750,000 shares of common stock. Options may be granted
any time up to December 31, 2006. No option shall be
available for exercise beyond ten years. All options are
exercisable after one year from the date of grant. The
option price shall not be below the fair market value at date
of grant. Canceled or expired options are added back to the
"pool" of shares available under the Plan.
10
There were no stock options granted to the executive officer
named in the Summary Compensation Table during the year ended
September 30, 2001.
The following table sets forth, for the executive officer
named in the Summary Compensation Table, information
regarding stock options outstanding at September 30, 2001:
Number of Value of
Unexercised Unexercised
Options at Options at
Year End Year-End
Shares Value Exercisable/ Exercisable/
Name Exercised Realized Unexercisable Unexercisable
Eugene W. Landy -0- N/A 215,000/-0- $42,250/$42,250
Employment Agreement
On December 9, 1994, the Company and Eugene W. Landy entered
into an Employment Agreement under which Mr. Landy receives
an annual base compensation of $150,000 (as amended) plus
bonuses and customary fringe benefits, including health
insurance and five weeks' vacation. Additionally, there will
be bonuses voted by the Board of Directors. The Employment
Agreement is terminable by either party at any time subject
to certain notice requirements.
On severance of employment for any reason, Mr. Landy will
receive severance of $300,000 payable $100,000 on severance
and $100,000 on the first and second anniversaries of
severance.
In the event of disability, Mr. Landy's compensation shall
continue for a period of three years, payable monthly.
On retirement, Mr. Landy shall receive a pension of $40,000 a
year for ten years, payable in monthly installments. Mr.
Landy has the right to be paid the $40,000 out of amounts
accrued and vested.
11
In the event of death, Mr. Landy's designated beneficiary
shall receive $300,000, $150,000 thirty days after death and
the balance one year after death.
The Employment Agreement terminated December 31, 2000, and
was automatically renewed and extended for successive one-
year periods.
Other Information
Except for specific agreements, the Company has no retirement
plan in effect for Officers, Directors or employees and, at
present, has no intention of instituting such a plan.
Cronheim Management Services received the sum of $220,521 in
2001 for management fees. Effective August 1, 1998, the
Company entered into a new management contract with Cronheim
Management Services. Under this contract, Cronheim
Management Services receives 3% of gross rental income on
certain properties for management fees. Cronheim Management
Services provides sub-agents as regional managers for the
Company's properties and compensates them out of this
management fee. Management believes that the aforesaid fees
are no more than what the Company would pay for comparable
services elsewhere. The David Cronheim Company received
$26,708, $14,347 and $136,229 in lease brokerage commissions
in 2001, 2000 and 1999, respectively. Daniel Cronheim
received $8,700, $5,650 and $2,400 for Director and Committee
fees in 2001, 2000 and 1999, respectively.
Report of Compensation Committee on Executive Compensation
Overview and Philosophy
The Company has a Compensation Committee consisting of two
independent outside Directors. This Committee is responsible
for making recommendations to the Board of Directors
concerning compensation. The Compensation Committee takes
into consideration three major factors in setting
compensation.
The first consideration is the overall performance of the
Company. The Board believes that the financial interests of
the executive officers should be aligned with the success of
the Company and the financial interests of its shareholders.
Increases in funds from operations, the enhancement of the
Company's equity portfolio, and the success of the Dividend
Reinvestment and Stock Purchase Plan all contribute to
increases in stock prices, thereby maximizing shareholders'
return.
The second consideration is the individual achievements made
by each officer. The Company is a small real estate
investment trust (REIT). The Board of Directors is aware of
the contributions made by each officer and makes an
evaluation of individual performance based on their own
familiarity with the officer.
12
The final criteria in setting compensation is comparable
wages in the industry. In this regard, the REIT industry
maintains excellent statistics.
Evaluation
The Company's funds from operations continue to increase.
The Committee reviewed the growth of the Company and progress
made by Eugene W. Landy, Chief Executive Officer. Mr. Landy
is under an employment agreement with the Company. His base
compensation under his contract was increased in 2001 to
$150,000 per year. In fiscal 2001, Mr. Landy was also paid a
total bonus of $30,000.
Compensation Committee:
Daniel D. Cronheim
Matthew I. Hirsch
Report of Audit Committee
The Board of Directors has adopted a written charter for the
Audit Committee.
The Company has an Audit Committee consisting of three
"independent" Directors, as defined by the listing standards
of the National Association of Securities Dealers (NASD).
The Audit Committee's role is to act on behalf of the Board
of Directors in the oversight of all material aspects of the
Company's reporting, internal control and audit functions.
We have reviewed and discussed with management the Company's
audited financial statements as of and for the year ended
September 30, 2001.
We have discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards
No. 61, Communication with Audit Committees.
We have received and reviewed the written disclosures and the
letter from the independent auditors required by Independence
Standard No. 1, Independence Discussions with Audit
Committees and have discussed with the auditors the auditors'
independence.
13
Based on the reviews and discussions referred to above, we
recommend to the Board of Directors that the financial
statements referred to above be included in the Company's
Annual Report on Form 10-K for the year ended September 30,
2001.
Audit Fees
The aggregate fees billed by KPMG LLP, for professional
services rendered for the audit of the Company's annual
financial statements for the fiscal year ended
September 30, 2001 and for the reviews of the financial
statements included in the Company's Quarterly Reports
on Form 10-Q for that fiscal year were $34,900.
Financial Information Systems Design and Implementation Fees
There were no fees billed by KPMG LLP for professional
services rendered for information technology services
relating to financial information systems design and
implementation for the fiscal year ended September 30, 2001.
All Other Fees
The aggregate fees billed by KPMG LLP, for services rendered
to the Company for the fiscal year ended September 30, 2001,
other than for services described above, were $21,800.
The Audit Committee has determined that the provision of the
non-audit services described above is compatible with
maintaining KPMG LLP's independence.
Audit Committee:
Charles P. Kaempffer
Matthew I. Hirsch
Peter Weidhorn
COMPARATIVE STOCK PERFORMANCE
The following line graph compares the total return of the
Company's common stock for the last five fiscal years to the
NAREIT All REIT Total Return Index, published by the National
Association of Real Estate Investment Trusts (NAREIT), and
the S&P 500 Index for the same period. The total return
reflects stock price appreciation and dividend reinvestment
for all three comparative indices. The information herein
has been obtained from sources believed to be reliable, but
neither its accuracy nor its completeness is guaranteed.
Monmouth
Real Estate
Investment
Year Corporation NAREIT S&P 500
1996 100 100 100
1997 128 140 140
1998 131 119 153
1999 125 109 196
2000 132 130 222
2001 177 148 163
14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors of the Company has granted Eugene W.
Landy, President, a loan of $100,000 at an interest rate of
10% due May 23, 2002. Principal and accrued interest are
payable at maturity. In fiscal 2001, Mr. Landy was also paid
a bonus of $30,000.
There is no family relationship between any of the Directors
or Executive Officers of the Company, except that Samuel A.
Landy, Director, is the son of Eugene W. Landy, President and
Director of the Company. Daniel D. Cronheim, Director, is
the son of Robert Cronheim, President of David Cronheim
Company, the Real Estate Advisor to the Company.
Eugene W. Landy and Samuel A. Landy are partners in the law
firm of Landy & Landy, which firm, or its predecessor firms,
have been retained by the Company as legal counsel since the
formation of the Company, and which firm the Company proposes
to retain as legal counsel for the current fiscal year.
The New Jersey Supreme Court has ruled that the relationship
of directors also serving as outside counsel is not per se
improper, but the attorney should fully discuss the issue of
conflict with the other directors and disclose it as part of
the proxy statement so that shareholders can consider the
conflict issue when voting for or against the
attorney/director nominee.
GENERAL
The Board of Directors knows of no other matters other than
those stated in this Proxy Statement which are to be
presented for action at the Annual Meeting. If any other
matters should properly come before the Annual Meeting, it is
intended that proxies in the accompanying form will be voted
on any such matter in accordance with the judgment of the
persons voting such proxies. Discretionary authority to vote
on such matters is conferred by such proxies upon the persons
voting them.
The Company will provide, without charge, to each person
being solicited by this Proxy Statement, on the written
request of any such person, a copy of the Annual Report of
the Company on Form 10-K for the year ended September 30,
2001 (as filed with the Securities and Exchange Commission),
including the financial statements and schedules thereto.
All such requests should be directed to Monmouth Real Estate
Investment Corporation, Attention: Shareholder Relations,
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C,
Freehold, NJ 07728.
15
COMPLIANCE WITH EXCHANGE ACT FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's Officers and Directors, and
persons who own more than 10% of the Company's Common Stock,
to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Officers, Directors
and greater than 10% shareholders are required by Securities
and Exchange Commission regulations to furnish the Company
with copies of all Section 16(a) forms they file. Based
solely on review of the copies of such forms furnished to the
Company, the Company believes that, during the fiscal year,
all Section 16(a) filing requirements applicable to its
Officers, Directors and greater than 10% beneficial owners
were met, except that John R. Sampson and Peter J. Weidhorn,
newly-elected Directors in 2001, failed to file their initial
reports on Form 3 on a timely basis.
SHAREHOLDER PROPOSALS
In order for Shareholder Proposals for the 2003 Annual
Meeting of Shareholders to be eligible for inclusion in the
Company's 2003 Proxy Statement, they must be received by the
Company at its principal office at 3499 Route 9 North, Suite
3-C, Freehold, New Jersey 07728 not later than October 30,
2002.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ EUGENE W. LANDY
President and Director
Dated: March 20, 2002
IMPORTANT: Shareholders can help the Directors avoid the
necessity and expense of sending follow-up letters to insure
a quorum by promptly returning the enclosed proxy. The proxy
is revocable and will not affect your right to vote in person
in the event you attend the meeting. You are earnestly
requested to sign and return the enclosed proxy in order that
the necessary quorum may be present at the meeting. The
enclosed addressed envelope requires no postage and is for
your convenience.
16
PROXY PROXY
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
A Real Estate Investment Trust
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
PLEASE FILL IN, DATE AND SIGN PROXY AND RETURN PROMPTLY
The undersigned hereby appoints EUGENE W. LANDY, SAMUEL A.
LANDY and ERNEST V. BENCIVENGA, and each or any of them,
proxies of the undersigned, with full power of substitution,
to vote in their discretion (subject to any direction
indicated hereon) at the Annual Meeting of Shareholders to be
held at the Company Office at Juniper Business Plaza, 3499
Route 9 North, Suite 3-C, Freehold, New Jersey, on Thursday,
April 25, 2002, at 4:00 o'clock p.m., and at any adjournment
thereof, with all the powers which the undersigned would
possess if personally present, and to vote all shares of
stock which the undersigned may be entitled to vote at said
meeting.
The Board of Directors recommends a vote FOR items (1), (2),
(3) and (4) and all shares represented by this Proxy will be
so voted unless otherwise indicated, in which case they will
be voted as marked.
(1) Election of Directors - Nominees are: Ernest V.
Bencivenga, Anna T. Chew, Daniel D. Cronheim,
Matthew I. Hirsch, Charles P. Kaempffer, Eugene W.
Landy, Samuel A. Landy, John R. Sampson and
Peter J. Weidhorn.
(Instruction: To withhold authority to vote for any
individual Nominee, write that person's name on the
line below.
________________________________________________________
FOR all Nominees WITHHOLD AUTHORITY
except as Indicated to vote for listed Nominees
/ / / /
(2) Approval of the appointment of KPMG LLP as Independent
Auditors for the Company for the fiscal year ending
September 30, 2002.
FOR AGAINST ABSTAIN
/ / / / / /
(3) Approval of an amendment to the Certificate of
Incorporation Authorizing the Company to increase the
number of authorized Class A Common Stock, $.01 par
value, from 16,000,000 to 20,000,000 shares.
FOR AGAINST ABSTAIN
/ / / / / /
(4) Consideration of a recommendation by the Stock Option
Committee of the Board of Directors that the number of
shares of the Company's Class A common Stock, $.01 par
value, subject to Option under the Company's 1997 Stock
Option Plan, be increased by 750,000 to 1,500,000 shares.
FOR AGAINST ABSTAIN
/ / / / / /
(5) Such Other Business as may be brought before the meeting
or any adjournment thereof. The Board of Directors at
present knows of no other business to be presented by or
on behalf of the Company or its Board of Directors at the
meeting.
Receipt of Notice of Meeting and Proxy Statement is hereby
acknowledged.
Dated:_____________________________________, 2002.
Signature_________________________________________________
Signature_________________________________________________
Important: Please date this Proxy; sign exactly as your
name(s) appears hereon. When signing as joint tenants,
all parties to the joint tenancy should sign. When signing
the Proxy as attorney, executor, administrator, trustee
or guardian, please give full title as such.