(adopted 12/13/04)
The Board of Trustees of AMLI Residential Properties Trust have adopted
procedures (the “Related Party Transaction Procedures”) designed to monitor and
ensure the prior approval of material transactions involving AMLI and its
affiliates, on the one hand, and individuals or business entities deemed to be
related parties, on the other.
The elements of the Related Party Transaction Procedures are set forth below:
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Any Material Transaction (as defined) entered into between AMLI Residential
Properties Trust, AMLI Residential Properties, L.P., or any of their
subsidiaries (collectively, the “Company”) and any Related Party (as defined)
shall be valid for all purposes if such Material Transaction is assessed to be
fair to the Company and approved in advance by a majority of the Disinterested
Trustees (as defined). A Related Party must obtain pre-approval from a majority
of the Disinterested Trustees for any Material Transaction.
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Material amendments and/or modifications to any Material Transaction with a
Related Party are also subject to the prior approval of a majority of the
Disinterested Trustees.
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For purposes of these Related Party Transaction Procedures, A “Related Party”
is a person or entity that is an “affiliate” of the Company or any entity in
which any affiliate of the Company has a 5% or greater equity interest. An
“affiliate” of the Company is any trustee or any officer or executive officer
of the Company or any person or entity controlled by, controlling, or under
common control with any trustee or officer of the Company, and any member of
the immediate family of any such persons. A “Material Transaction” shall be any
arrangement, contract or transaction involving payments by or from the Company
equal to or greater than $60,000 during any twelve-month period and equal to or
greater than $250,000 over the term of such arrangement, contract or
transaction. A “Disinterested Trustee” is any Trustee of the Company who has no
direct or indirect interest in the Material Transaction with the Company being
voted on and the members of whose immediate family holds no such interest.
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Notwithstanding the foregoing, management of the Company is required to report
to the Board no less frequently than annually with respect to all transactions
subject to disclosure in accordance with the rules and regulations of the
federal securities laws.
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In all Material Transactions involving Related Parties, the Company should seek
bids, quotes or independent valuations from unaffiliated third parties
sufficient to enable the Board and management to assess the fairness of the
transaction to the Company.
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Mr. Robert Chapman has been designated as the officer of the Company charged
with maintaining familiarity with the rules and regulations of the Securities
and Exchange Commission governing the proper disclosure of related party
transactions involving the Company, and Mr. Chapman has been designated as the
person responsible for reviewing the text of all disclosure documents and
financial statement footnote disclosures to ensure that disclosure is complete,
accurate and consistent.
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Ms. Charlotte Sparrow has been designated as the officer of the Company
responsible for soliciting from the Trustees and executive officers and
officers of the Company, no less frequently than quarterly, information
concerning potential or pending Related Party Material Transactions and any
other transactions that would require disclosure in any of the Company’s
regular or periodic filings with the Securities and Exchange Commission or any
other regulatory body.
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The Chief Executive Officer of the Company will have overall responsibility for
the Company’s implementation of and compliance with these Related Party
Transaction Procedures and compliance with the disclosure requirements of the
federal and state securities laws with respect to related party transactions.
These AMLI Related Party Transaction Procedures are not designed to be or
intended as a restatement of the Trustees’ and officers’ general duty of
loyalty to the Company under Maryland law or their obligation to comply with
the Company’s Code of Business Conduct and Ethics. Trustees of AMLI and
directors of subsidiaries of AMLI have an obligation to disclose to the AMLI
Board or the Board of any subsidiary of AMLI any interest they may have in any
matter or transaction coming before any such Board or in any matter or
transaction in which the Company may have an interest, and they must refrain
from voting on any such matter.
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1 Generally, Item 404 of Regulation S-K requires disclosure of
transactions involving the Company (a) in which the amount involved is in
excess of $60,000 and (b) in which the following persons have a direct, or
indirect interest: trustees, executive officers, nominees for directorships, 5%
beneficial holders of AMLI Residential Properties Trust shares or AMLI
Residential Properties, L.P. partnership interests, and any member of the
immediate family of any of the foregoing.
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