MONMOUTH REAL ESTATE INVESTMENT CORPORATION
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C
Freehold, New Jersey 07728
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 2004
Notice is hereby given that the Annual Meeting of
Shareholders (Annual Meeting) of Monmouth Real Estate Investment
Corporation (the Company) will be held Thursday, April 29, 2004,
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 three Directors, the names of whom are set
forth in the accompanying Proxy Statement, to serve for
a three-year term;
2. To approve the selection by the Board of Directors of
the appointment of KPMG LLP as Independent Auditors for
the Company for the year ending September 30, 2004; and
3. To transact such other business as may properly come
before the Annual Meeting and any adjournment 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 Annual Meeting for the inspection of the shareholders.
Only shareholders of record at the close of business on March 16,
2004 will be entitled to vote at the Annual 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
EUGENE W. LANDY
PRESIDENT AND DIRECTOR
March 29, 2004
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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 29, 2004
__________
SOLICITATION AND REVOCATION OF PROXIES
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 29, 2004, and at any adjournments thereof, 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 29, 2004 to shareholders of record
on March 16, 2004.
A copy of the Annual Report, including financial statements,
was mailed to all shareholders of record on or about March 2,
2004.
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 the
proxies related to the Annual Meeting will be borne by the
Company. The Company does not intend to solicit proxies
otherwise than by 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
16, 2004, are entitled to vote at the Annual Meeting. As of the
record date, there were issued and outstanding 16,327,375 shares
of Common Stock, each share being entitled to one vote on any
matter which may properly come before the Annual Meeting. Said
voting right is non-cumulative. The holders of a majority of the
outstanding shares of Common Stock shall constitute a quorum. An
affirmative vote of a majority of the votes cast by the holders
of the Common Stock is required for approval of Proposals 1 and
2.
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PROPOSAL 1
ELECTION OF DIRECTORS
Three persons have been nominated by the Nominating
Committee to serve on the Board of Directors of the Company.
Your proxy will be voted for the election of the three nominees
named in this proxy statement, all of whom, other than Neal
Herstik, are members of the present Board of Directors, to serve
for a three-year term, unless you specifically withhold your
authority. All nominees have agreed to serve, if elected, for
the new term. If for any reason any of the three nominees
becomes unavailable for election, your 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 of Directors to the number of the
nominees who are available to serve. In the event the membership
of the Board of Directors 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 Company's Bylaws provide that any
such vacancy will be filled for the unexpired term only by the
affirmative vote of a majority of the remaining Directors in
office. The Company has no knowledge that any of the three
nominees will become unavailable for election.
The proxies solicited cannot be voted for a greater number
of persons than the nominees named.
Neal Herstik, a nominee for director, is also a director of
Monmouth Capital Corporation, a publicly-owned affiliate of the
Company. 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 the Company. In most
respects, the activities of the Company, United Mobile Homes,
Inc., a publicly-owned affiliate of the Company, and Monmouth
Capital Corporation are not in conflict, but rather complement
each other. However, the activities of the Officers and
Directors of the Company 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.
The Company has three long-time Directors who have served
the Company with distinction. Under the recently adopted
Sarbanes-Oxley Act, the Board of Directors must consist of a
majority of "independent" Directors. Therefore, Ernest V.
Bencivenga, Anna T. Chew and Charles P. Kaempffer will resign as
Directors, effective April 29, 2004. Each will continue to
provide advice to the Company as Director Emeritus.
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The following table sets forth information regarding the
Directors standing for election, the Directors who will resign in
order to comply with the Director requirements of the Sarbanes-
Oxley Act, and Directors whose terms continue beyond the Annual
Meeting:
Present Position with the Company;
Business Experience During Past Director
Nominee Age Five Years; Other Directorships Since
_______ ___ _______________________________ _____
DIRECTORS STANDING FOR ELECTION
_______________________________
Daniel D. 48 Director. Attorney at Law (1982 1989
Cronheim to present); Executive Vice
President (1989 to present) and
General Counsel (1983 to present)
of David Cronheim Company;
President (1997 to present) of
David Cronheim Mortgage Company;
President (2000 to present) of
Cronheim Management Services,
Inc.; and Director (2000 to
present) of Hilltop Community
Bank.
Neal Herstik 45 Attorney at Law, Gross, Truss & New
Herstik, PC (1997 to present); Nominee
Director of Monmouth Capital
Corporation (2002 to present);
First Vice President, Marlboro
Community Players, Inc., a non-
profit corporation (2000 to 2002);
Co-founder and former President,
Manalapan-Englishtown Education
Foundation, Inc., a non-profit
corporation (1995 to 2001).
John R. Sampson 49 Director. Managing Director and 2001
co-founder, Kalorama Partners,
LLC, a strategic consulting
company (2003 to present); Senior
Portfolio Manager (1998 to 2002)
at Fox Asset Management, LLC, a
registered investment advisor that
manages equity, fixed income and
balanced portfolios; Principal
(1995 to 1998) at Pharos
Management and Principia Partners
LLC, which specialize in fixed
income consulting and research for
the securities industry.
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Present Position with the Company;
Business Experience During Past Director
Nominee Age Five Years; Other Directorships Since
_______ ___ __________________________________ _______
DIRECTORS WHO WILL RESIGN
_________________________
Ernest V. 85 Treasurer (1968 to present) and 1968
Bencivenga Director. Financial consultant to
the Company (1976 to present);
Treasurer and Director (1961 to
present) and Secretary (1967 to
present) of Monmouth Capital
Corporation, an affiliate of the
Company; Director (1969 to
present) and Secretary/Treasurer
(1984 to present) of United Mobile
Homes, Inc., an affiliate of the
Company.
Anna T. Chew 45 Chief Financial Officer (2003 to 1993
present) and Director. Certified
Public Accountant. Controller
(1991 to 2003) of Monmouth Real
Estate Investment Corporation;
Controller (1991 to 2003), Chief
Financial Officer (2003 to
present) and Director (1994 to
present) of Monmouth Capital
Corporation, an affiliate of the
Company; Vice President and Chief
Financial Officer (1995 to
present) and Director (1994 to
present) of United Mobile Homes,
Inc., an affiliate of the Company.
Charles P. 66 Director. Director (1970 to 1974
Kaempffer present) of Monmouth Capital
Corporation, an affiliate of the
Company; Director (1969 to
present) of United Mobile Homes,
Inc., an affiliate of the Company;
Vice Chairman and Director (1996
to present) of Community Bank of
New Jersey.
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Present Position with the Company;
Business Experience During Past Director
Nominee Age Five Years; Other Directorships Since
_______ ___ _________________________________ _______
DIRECTORS WHOSE TERMS EXPIRE IN 2005
____________________________________
Matthew I. 44 Director. Attorney at Law (1985 2000
Hirsch to present); Adjunct Professor of
Law (1993 to present), Widener
University School of Law.
Cynthia J. 34 Executive Vice President (2001 to 2002
Morgenstern present) and Director (2002 to
present). Vice President (1996 to
2001) Summit Bank, Commercial Real
Estate Division, a regional
commercial bank.
Stephen B. 49 Director. Principal of U.S. Real 2003
Wolgin Estate Advisors, Inc. (2000 to
present), a real estate advisory
services group based in New York;
Principal of the Wolgin Group
(2000-2003); prior affiliations
with J.P. Morgan, Odyssey
Associates, The Prudential Realty
Group, Standard & Poor's
Corporation, and Grubb and Ellis.
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Present Position with the Company;
Business Experience During Past Director
Nominee Age Five Years; Other Directorships Since
_______ ___ __________________________________ _______
DIRECTORS WHOSE TERMS EXPIRE IN 2006
____________________________________
Eugene W. Landy 70 President (1968 to present) and 1968
Director. Attorney at Law;
President and Director (1961 to
present) of Monmouth Capital
Corporation, an affiliate of the
Company; Chairman of the Board
(1995 to present), President (1969
to 1995) and Director (1969 to
present) of United Mobile Homes,
Inc., an affiliate of the Company.
Samuel A. Landy 42 Director. Attorney at Law (1985 1989
to present); President (1995 to
present), Vice President (1991 to
1995) and Director (1992 to
present) of United Mobile Homes,
Inc., an affiliate of the Company;
Director (1994 to present) of
Monmouth Capital Corporation, an
affiliate of the Company.
Peter J. 55 Director. Investor; Director (2000- 2001
Weidhorn 2003) of real estate
management/acquisitions at Kushner
Companies; Chairman of the Board,
President/CEO (1998-2000) of WNY
Group, Inc., a real estate
investment trust that owned and
operated 8,000 apartments prior to
its sale to the Kushner Companies;
Director (2001 to present) of BNP
Residential Properties, Inc.;
Director (2003-present) of The
Community Development Trust, Inc.;
Trustee of the CentraState
Healthcare Foundation, Inc; and
Vice Chairman and Trustee of the
Union for Reform Judaism.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION TO
THE BOARD OF DIRECTORS OF EACH OF THE THREE PERSONS STANDING FOR
ELECTION NAMED ABOVE
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, Stock Option
Committee, Compensation Committee and Nominating Committee of the
Board of Directors.
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Audit Committee
The Audit Committee's responsibilities include reviewing and
overseeing financial reporting, policies and procedures and
internal controls, retaining the independent auditor, approving
the audit fees, and discussing the independent auditors
independence. It also overseeing the internal audit function,
legal and regulatory compliance and adherence to the Code of
Business Conduct and Ethics, establishing procedures for
complaints received regarding the Company's accounting, internal
accounting controls and auditing matters. In addition, the Audit
Committee prepares the Audit Committee Report which is included
in the Company's annual proxy statements. The Audit Committee
had four meetings during the fiscal year, including an executive
session with the independent auditors, in which management did
not attend.
The current members of the Company's Audit Committee are
Charles P. Kaempffer, Matthew I. Hirsch, and Peter J. Weidhorn.
The Board intends to appoint Stephen B. Wolgin to the Audit
Committee upon resignation of Charles P. Kaempffer at the Annual
Meeting of Shareholders. After the Annual Meeting, the new
members of Audit Committee will then consist of Matthew I.
Hirsch, Peter J. Weidhorn, and Stephen B. Wolgin. The Board has
determined that the new members of the Audit Committee are
independent as defined by the rules of the SEC and the listing
standards of the NASDAQ Stock Market, and that each of them is
able to read and understand fundamental financial statements.
The Board has also determined that Peter J. Weidhorn is an "audit
committee financial expert" within the meaning of the rules of
the SEC and is "financially sophisticated" within the meaning of
the rules of the NASDAQ Stock Market.
Stock Option Committee
The Stock Option Committee administers the Company's 1997
Stock Option Plan and had one meeting during the last fiscal
year. The current members of the Stock Option Committee are
Daniel D. Cronheim and Matthew I. Hirsch. The Board intends
to appoint Stephen B. Wolgin to the Stock Option Committee after
the Annual Meeting of Shareholders. After the Annual Meeting,
the members of the Stock Option Committee will then consist of
Matthew I. Hirsch and Stephen B. Wolgin. The Board has
determined that the new members of the Stock Option Committee are
independent as defined by the rules of the SEC and the listing
standards of the NASDAQ Stock Market.
Compensation Committee
The Compensation Committee evaluates the President's
performance in light of the Company's goals and objectives and
determines the President's and executive officers' compensation,
which includes base salary and bonus. The Compensation Committee
had one meeting during the last fiscal year. The current members
of the Compensation Committee are Daniel D. Cronheim and Matthew
I. Hirsch. The Board intends to appoint Stephen B. Wolgin to the
Compensation Committee after the Annual Meeting of Shareholders.
After the Annual Meeting, the members of the Compensation
Committee will then consist of Matthew I. Hirsch and Stephen B.
Wolgin. The Board has determined that the new members of the
Compensation Committee are independent as defined by the rules of
the SEC and the listing standards of the NASDAQ Stock Market.
-8-
Nominating Committee
The Nominating Committee identifies, considers and
recommends candidates to serve as members of the Board and makes
recommendations regarding the structure and composition of the
Board of Directors and Committees. The Nominating Committee was
established in January 2004, and accordingly had no meetings
during the last fiscal year. The Nominating Committee met in
January 2004 to recommend the directors for the Annual Meeting of
Shareholders. Matthew I. Hirsch, Peter J. Weidhorn and Stephen
B. Wolgin serve on the Nominating Committee. The Board of
Directors has determined that each member of the Nominating
Committee is an independent Director as defined by the rules of
the SEC and the listing standards of the NASDAQ Stock Market.
Our Nominating Committee does not operate under a written
charter.
The principal function of the Nominating Committee is to
review and select candidates for nomination to the Board of
Directors. The Nominating Committee will consider director
candidates recommended by the Company's shareholders.
Recommendations with regard to nominees for election to the Board
of Directors may be submitted by any stockholder entitled to vote
for the election of directors in writing, received by the
Secretary of the Corporation at least 45 days prior to the date
on which the Company first mailed its proxy materials for the
prior year's annual meeting of shareholders, or, if the Company
did not have an annual meeting of shareholders in the prior year,
90 days prior to the date of the annual meeting. Each notice of
nomination must set forth (i) the name, age, business address
and, if known, residence address of each nominee, (ii) the
principal occupation or employment of each such nominee, and
(iii) the number of shares of common stock of the Company which
are beneficially owned by each such nominee.
In connection with the formation of the Nominating
Committee, the Company's Board of Directors established certain
minimum qualifications for board members, including being at
least 21 years old and possessing (1) the ability to read and
understand corporate financial statements, (2) relevant business
experience and professional skills, (3) high moral character and
personal and professional integrity, and (4) the willingness to
commit sufficient time to attend to his or her duties and
responsibilities as a director of a public corporation. In
addition, the Nominating Committee may consider a variety of
other qualities and skills, including (i) the ability to exercise
independent decision-making, (ii) the absence of conflicts of
interest and, (iii) the ability to work effectively with other
directors in collectively serving the long-term interests of all
shareholders. Nominees must also meet any applicable requirements
of SEC regulations, state law, and the Company's articles of
incorporation and bylaws.
The Nominating Committee has established a process for
identifying and evaluating nominees for director. The Nominating
Committee will annually assess the qualifications, expertise,
performance and willingness to serve of existing directors. If at
this time or at any other time during the year the Board of
Directors determines a need to add a new director with specific
qualifications or to fill a vacancy on the Board, the Chair of
the Nominating Committee will then initiate the search, seeking
input from other directors and senior management, considering
nominees previously submitted by shareholders, and, if deemed
necessary or appropriate, hiring a search firm. An initial slate
of candidates satisfying the specific qualifications, if any, and
otherwise qualifying for membership on the Board, will then be
identified and presented to the Nominating Committee by the
Committee Chairman. The Nominating Committee will then prioritize
the candidates and determine if the Nominating Committee members,
other directors or senior management have relationships with the
preferred candidates and can initiate contacts. To the extent
feasible, all of the members of the Nominating Committee and the
President will interview the prospective candidate(s).
Evaluations and recommendations of the interviewers will be
submitted to the Nominating Committee for final evaluation. The
Nominating Committee will meet to consider such recommendations
and to approve the final candidate. The Nominating Committee will
evaluate all nominees for director, including nominees
recommended by a stockholder, on the same basis.
-9-
To date, there are no third parties being compensated for
identifying and evaluating candidates.
Independent Director Meeting
The Company's independent directors, as defined under the
listing standards of the NASDAQ stock market, have established a
policy to meet separately from the other directors in a regularly
scheduled executive session at least annually, and at such times
as may be deemed appropriate by the Company's independent
directors. Any independent director may call and executive
session of independent directors at any time.
Shareholder Communications
The Company has established procedures for shareholders to
communicate with the Board of Directors on a confidential basis.
Shareholders who wish to communicate with the Board or with a
particular director may send a letter to the Secretary of the
Company at 3499 Route 9 North, Suite 3-C, Freehold, NJ 07728.
The mailing envelope must contain a clear notation indicating
that the enclosed mailing is a "Stockholder-Board Communication"
or "Stockholder-Director Communication". All such letters must
identify the author as a stockholder and clearly state whether
the intended recipients of the letter are all of the members of
the Board or just certain specified individual directors. The
Secretary will make copies of all such letters and circulate them
to the directors addressed. If a stockholder wishes the
communication to be confidential, such shareholder must clearly
indicate on the envelope that the communication is
"Confidential". The Secretary will then forward such
communication, unopened, to the intended recipient.
Code of Conduct
The Company has adopted a Code of Business Conduct and
Ethics, which applies to all directors, officers, and employees
of the Company, including its principal executive officers and
principal financial officer. This code is posted on our website
at http:www.mreic.com. During 2003, no violations of the Code of
Business Conduct and Ethics were reported nor were any waivers
granted.
PROPOSAL 2
APPROVAL OF INDEPENDENT AUDITORS
It is proposed to approve the appointment of KPMG LLP as
Independent Auditors for the purpose of making the annual audit
of the books of account of the Company for the year ending
September 30, 2004, 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 expects
a representative of KPMG LLP to be present at the Annual Meeting
either to make a statement or to respond to appropriate
questions.
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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
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists information with respect to the
beneficial ownership of the Company's Common Stock (Shares) as of
March 1, 2004 by:
- each person known by the Company to beneficially own more
than five percent of the Company's outstanding Shares;
- the Company's directors;
- the Company's executive officers; and
- all of the Company's executive officers and directors as
a group.
Unless otherwise indicated, the person or persons named
below have sole voting and investment power and that person's
address is c/o Monmouth Real Estate Investment Corporation,
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C, Freehold,
New Jersey 07728. In determining the number and percentage of
shares beneficially owned by each person, Shares that may be
acquired by that person under options exercisable within sixty
(60) days of March 1, 2004 are deemed beneficially owned by that
person and are deemed outstanding for purposes of determining the
total number of outstanding shares for that person and are not
deemed outstanding for that purpose for all other shareholders.
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Amount and Nature Percentage
Name and Address of Beneficial of Shares
of Beneficial Owner Ownership(1) Outstanding(2)
__________________ _________________ _____________
United Mobile Homes, Inc. 194,480 1.21%
Palisade Concentrated Equity
Partnership, L.P.
One Bridge Plaza
Fort Lee, New Jersey 07024 1,304,000 8.11%
Oakland Financial Corporation
34200 Mound Road
Sterling Heights, Michigan
48310 1,149,245(3) 7.15%
Ernest V. Bencivenga 47,822(4) *
Anna T. Chew 98,276(5) *
Daniel D. Cronheim 60,863(6) *
Neal Herstik 200 *
Matthew I. Hirsch 44,691(7) *
Charles P. Kaempffer 66,836(8) *
Eugene W. Landy 1,051,483(9)(14) 6.46%
Samuel A. Landy 230,756(10) 1.43%
Cynthia J. Morgenstern 56,957(11) *
John R. Sampson 35,814(12) *
Peter J. Weidhorn 21,000(13) *
Stephen B. Wolgin 2,592 *
Directors and Officers as a
group 1,717,290(14) 10.45%
*Less than 1%.
(1) Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the Company
believes that the persons named in the table have sole voting and
investment power with respect to all Shares listed.
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(2) Based on the number of Shares outstanding on March 1,
2004, which was 16,078,030 Shares.
(3) Based upon correspondence dated March 1, 2004 from
Oakland Financial Corporation ("Oakland"), Liberty Bell Agency,
Inc. ("Liberty Bell"), and Cherokee Insurance Company
("Cherokee"), as of March 1, 2004, Oakland owns 17,271 Shares,
Liberty Bell owns 593,861 Shares and Cherokee owns 492,395
Shares, and Matthew T. Moroun owns 45,718 Shares. Amendment No.
2 to Schedule 13-D dated October 1, 2002 filed with the SEC by
Oakland, indicates that Oakland shares voting and dispositive
power with respect to those Shares with Liberty Bell and
Cherokee, both of which are wholly-owned subsidiaries of Oakland.
Matthew T. Moroun is the Chairman of the Board and controlling
stockholder of Oakland, Liberty Bell and Cherokee.
(4) Includes 15,000 Shares issuable upon the exercise of
stock options.
(5) Includes (a) 48,276 Shares owned jointly with Ms.
Chew's husband; and (b) 62,414 Shares held in the United Mobile
Homes, Inc. 401(k) Plan (the "UMH 401(k)"). As a co-trustee of
the UMH 401(k), Ms. Chew has shared voting power over all the
shares held by the UMH 401(k). She, however, disclaims
beneficial ownership of all of the Shares held by the UMH 401(k),
except for the 11,783 Shares held by the UMH 401(k) for her
benefit. Includes 50,000 Shares issuable upon the exercise of
stock options.
(6) Includes 15,000 Shares issuable upon the exercise of
stock options.
(7) Includes 30,691 Shares owned jointly with Mr. Hirsch's
wife and 14,000 Shares issuable upon the exercise of stock
options.
(8) Includes 16,974 Shares owned by Mr. Kaempffer's wife
and 15,000 Shares issuable upon exercise of stock options.
(9) Includes (a) 84,766 Shares owned by Mr. Landy's wife;
(b) 161,764 Shares held in the Landy & Landy Employees' Profit
Sharing Plan of which Mr. Landy is a trustee and has shared
voting and dispositive power; (c) 126,586 Shares held in the
Landy & Landy Employees' Pension Plan of which Mr. Landy is a
trustee and has shared voting and dispositive power; and
(d) 60,000 Shares held in the Eugene W. and Gloria Landy Family
Foundation, a charitable trust, of which Mr. Landy has shared
voting and dispositive power. Includes 195,000 Shares issuable
upon the exercise of stock options.
(10) Includes (a) 6,646 Shares owned by Mr. Landy's wife;
(b) 74,202 Shares held in custodial accounts for Mr. Landy's
minor children under the New Jersey Uniform Transfers to Minors
Act with respect to which he disclaims any beneficial interest
but he has sole dispositive and voting power; (c) 1,000 Shares in
the Samuel Landy Family Limited Partnership; and (d) 62,414
Shares held in the UMH 401(k) Plan. As a co-trustee of the UMH
401(k), Mr. Landy has shared voting power over the Shares held by
the UMH 401(k). He, however, disclaims beneficial ownership of
all of the Shares held by the UMH 401(k), except for the 30,935
Shares held by the UMH 401(k) for his benefit. Includes 15,000
Shares issuable upon the exercise of stock options.
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(11) Includes 800 Shares held in Ms. Morgenstern's 401(k)
plan over which she has sole dispositive power.
(12) Includes 2,000 Shares held in custodial accounts for
Mr. Sampson's minor children under the New Jersey Uniform Gifts
to Minors Act with respect to which he disclaims any beneficial
interest but he has sole dispositive and voting power. Includes
20,000 Shares issuable upon the exercise of stock options.
(13) Includes 15,000 Shares issuable upon exercise of stock
options.
(14) Excludes 194,480 Shares owned by United Mobile Homes,
Inc. Eugene W. Landy beneficially owns approximately 11.65% of
the shares of United Mobile Homes, Inc. and is an officer and
director of United Mobile Homes, Inc.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table shows compensation
paid by the Company to its Chief Executive Officer and Executive
Vice President for services rendered during the fiscal years
ended September 30, 2003, 2002 and 2001. There were no other
executive officers whose aggregate cash compensation exceeded
$100,000.
Name and Annual Compensation
Principal Position Year Salary Bonus Other
__________________ ____ ______ _____ ____
Eugene W. Landy 2003 $150,000 $30,000 $ 94,000 (1)
Chief Executive Officer 2002 $150,000 $30,000 $ 75,300 (1)
2001 $150,000 $30,000 $105,200 (1)
Cynthia J. Morgenstern 2003 $139,077 $9,615 $ 21,905 (2)
Executive Vice President 2002 $121,250 $8,462 $ 6,438 (2)
2001 $ 78,269 -0- -0-
(1) Represents Director's fees of $17,500, $16,300 and $8,700
for 2003, 2002 and 2001, respectively, paid to Mr. Landy;
accrual for pension and other benefits of $59,000, $59,000
and $49,000 for 2003, 2002 and 2001, respectively, in
accordance with Mr. Landy's employment contract; and legal
fees of $17,500, $-0- and $47,500 for 2003, 2002 and 2001,
respectively.
(2) Represents Director's fees and discretionary contributions
by the Company to the Company's 401(k) Plan allocated to the
account of the named executive officer.
Compensation of Directors
During 2001, the Directors received a fee of $1,000 for each
Board meeting attended and an additional fixed annual fee of
$7,600 payable quarterly. Effective April 1, 2002, the meeting
fee was increased to $1,500 and the fixed annual fee was
increased to $10,000. Directors appointed to committees received
$150 for each committee meeting attended. Those specific
committees are Compensation Committee, Audit Committee, Stock
Option Committee and Nominating Committee.
-14-
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. On April 25, 2002, the shareholders approved an
increase in the number of shares available under the Plan to
1,500,000. Options may be granted any time up to December 31,
2006. No option is available for exercise ten years after the
date it is granted. All options are exercisable 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.
The following table sets forth, for the executive officers
named in the Summary Compensation Table, information regarding
individual grants of stock options made during the year ended
September 30, 2003:
Potential Realized
Percent Price Value at Assumed
Options Granted to Per Expiration Annual Rates for
Name Granted Employees Share Date Option Terms
____ _______ __________ _____ __________ _________________
Eugene W.
Landy 65,000 100% $6.90 1/22/11 $181,500 $465,500
The following table sets forth, for the executive officers
named in the Summary Compensation Table, information regarding
stock options outstanding at September 30, 2003:
Number of Value of
Unexercised Unexercised
Shares Options Options at
Acquired at Year-End Year-End
Upon Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
____ ________ ________ _____________ _____________
-0- N/A 195,000/ $320,000/
Eugene W. Landy 65,000 $78,650
Cynthia J. 50,000/ $49,000/
Morgenstern -0- N/A -0- -0-
Employment Agreements
On January 1, 2004, Eugene W. Landy's Employment Agreement
with the Company was amended to extend for five years to December
31, 2009. Mr. Landy's amended Employment Agreement provides for
(1) an increase in his annual base compensation from $150,000 to
$175,000; (2) an increase in his severance payment from $300,000
payable $100,000 a year for three years to $500,000 payable
$100,000 a year for five years; and (3) an increase from $40,000
a year to $50,000 a year of his pension benefits; and (4) an
extension of three years of his pension payments for a ten-year
period commencing January 1, 2004. Mr. Landy receives 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. The Agreement is attached at Appendix A.
-15-
Effective January 15, 2004, the Company and Cynthia J.
Morgenstern entered into a three-year employment agreement under
which Ms. Morgenstern receives an annual base salary of $160,000,
increasing to $176,000 in 2005 and to $194,000 in 2006, plus
bonuses and customary fringe benefits. In the event of
disability, her salary shall continue for a period of two years.
The Agreement is attached at Appendix B.
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.
Daniel D. Cronheim is a Director of the Company and
Executive Vice President of David Cronheim Company. The David
Cronheim Company received $14,377 in lease brokerage commissions
in 2003. Cronheim Management Services, a division of David
Cronheim Company, received the sum of $258,626 in 2003 for
management fees. In 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.
REPORT OF THE 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 Committee 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.
The second consideration is the individual achievements made
by each officer. The Company is a small 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.
-16-
The final criteria in setting compensation is comparable
wages in the industry. In this regard, the REIT industry
maintains excellent statistics.
Evaluation
The Committee reviewed the progress made by Eugene W. Landy,
Chief Executive Officer. Mr. Landy is under an employment
agreement with the Company. His base compensation under this
contract was increased in 2004 to $175,000 per year, and his
bonus for 2003 was $30,000.
Compensation Committee:
Daniel D. Cronheim
Matthew I. Hirsch
REPORT OF THE AUDIT COMMITTEE
The Board of Directors adopted a written charter for the
Audit Committee in March, 2001. The Board of Directors amended
this charter in September 2003 in order to comply with the new
rules of the SEC and the listing standards of the NASDAQ Stock
Market. The amended charter is presented herein at Appendix C
and on our website at http: www.mreic.com.
The Company has an Audit Committee consisting of three
"independent" Directors, as defined by the listing standards of
the Nasdaq Stock Market. 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, 2003.
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.
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, 2003.
-17-
Fees Billed by Independent Auditors
KPMG LLP served as the Company's independent auditors for
the years ended September 30, 2003 and 2002. The following are
the fees billed by KPMG in connection with services rendered:
2003 2002
____ ____
Audit Fees $73,000 $34,900
Audit Related Fees -0- -0-
Tax Fees 39,500 21,800
All Other Fees -0- -0-
________ ________
Total Fees $112,500 $56,700
======== ========
Audit fees include professional services rendered by KPMG
LLP for the audit of the Company's annual financial statements
and reviews of financial statements included in the Company's
quarterly reports on Form 10-Q. Audit fees also include services
that are normally provided by the Company's independent auditors
in connection with statutory and regulatory filings, such as
consents and assistance with and review of documents filed with
the Securities and Exchange Commission.
Tax fees include professional services rendered by KPMG LLP
for the preparation of the Company's federal and state corporate
tax returns and supporting schedules as may be required by the
Internal Revenue Service and applicable state taxing authorities.
Tax fees also include other work directly affecting or supporting
the payment of taxes, including planning and research of various
tax issues.
Audit Committee Pre-Approval Policy
The Audit Committee has adopted a policy for the pre-
approval of audit and permitted non-audit services provided by
the Company's principal independent accountants. The policy
requires that all services provided by KPMG LLP to the Company,
including audit services, audit-related services, tax services
and other services, must be pre-approved by the Committee. The
pre-approval requirements do not prohibit day-to-day normal tax
consulting services, which matters will not exceed $10,000 in the
aggregate.
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 J. Weidhorn
-18-
COMPARATIVE STOCK PERFORMANCE
The following line graph shows changes in the value over the
last five fiscal years of an assumed investment of $100 in (i)
the Company's common stock; (ii) in the stocks that comprise the
NAREIT All REIT Total Return Index, published by the National
Association of Real Estate Investment Trusts (NAREIT); and (iii)
the stocks that comprise 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
____ ___________ ______ _______
1998 100 100 100
1999 95 91 126
2000 101 109 141
2001 135 124 102
2002 168 136 80
2003 210 172 98
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to the adoption of Sarbanes Oxley Act of 2002, Section
202, prohibiting loans to directors and executive officers, the
Board of Directors of the Company granted Eugene W. Landy,
President, loans to enable Mr. Landy to exercise stock options
totaling $1,164,375 at December 31, 2003, at interest rates
ranging from 5% to 7% and maturity dates ranging from 2007 to
2012.
There is no family relationship between any of the Directors
or executive officers of the Company, except that Samuel A.
Landy, a Director of the Company, is the son of Eugene W. Landy,
the President and a Director of the Company.
-19-
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 Company now uses
outside counsel for most of the legal services required. 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.
Daniel D. Cronheim, a Director of the Company, is the
Executive Vice President and General Counsel of David Cronheim
Company, the real estate advisor to the Company.
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.
OTHER MATTERS
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, 2003 (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.
-20-
SHAREHOLDER PROPOSALS
In order for Shareholder Proposals for the 2005 Annual
Meeting of Shareholders to be eligible for inclusion in the
Company's 2005 Proxy Statement, they must be received by the
Company at its office at Juniper Business Plaza, 3499 Route 9
North, Suite 3-C, Freehold, New Jersey 07728 not later than
December 7, 2004.
BY ORDER OF THE BOARD OF DIRECTORS
Eugene W. Landy
President and Director
Dated: March 29, 2004
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 represented at the meeting. The enclosed addressed
envelope requires no postage and is for your convenience.
-21-
APPENDIX A
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
_______________________________________
This Second Amendment to Employment Agreement (the
"Amendment") is made and entered into this 5th day of November,
2003, by and between Monmouth Real Estate Investment Corporation,
a Maryland corporation (the "Company") and Eugene W. Landy, an
individual (the "Employee").
W I T N E S S E T H:
WHEREAS, in accordance with the recommendations of the
Compensation Committee of the Company and the approval of the
Board of Directors of the Company at its meeting on September 23,
2003, it was determined to amend the current Compensation
Agreement of Eugene W. Landy.
NOW, THEREFORE, the following amendments are hereby
added to the Amended Employment Agreement dated June 26, 1997, by
and between the Company and Eugene W. Landy.
1. The current Amended Employment Agreement
automatically extends for five years. Thus, the parties have
agreed that the Second Amended Employment Agreement will be for
the period January 1, 2004 to December 31, 2009.
2. The base salary effective January 1, 2004 is
$175,000.
3. The 1997 Bonus Schedule, a copy of which is
attached, will remain in force, including the annual grants of
stock options of 65,000 shares per year.
4. Severance shall be $500,000, payable $100,000 a
year for five years. The transactional severance bonus will
remain the same as currently provided.
5. Eugene W. Landy has elected early payment of the
pension benefits, commencing in 2001. Effective January 1, 2004,
the pension for Eugene W. Landy shall be $50,000 a year for ten
years, an extension of three years from the current pension
payments. On the death of the Employee, the pension funds shall
be paid to the Employee's designated beneficiary.
-22-
6. The $500,000 death benefit shall remain in force.
7. The three-year disability payment will remain the
same.
The provision providing that the Employee shall
participate in all health, dental, insurance and similar plans of
the Company shall further provide that the Employee shall
participate during the period he is receiving the pension
benefits provided in Section 7 of the Amended Employment
Agreement.
IN WITNESS WHEREOF, this Second Amendment to Employment
Agreement has been duly executed by the Company and the Employee
on the date first above written.
MONMOUTH REAL ESTATE INVESTMENT
CORPORATION
By: /s/ Cynthia J. Morgenstern
Cynthia J. Morgenstern,
Executive Vice President
ATTEST:
/s/ Louise Green
Louise Green, Secretary /s/ Eugene W. Landy
Eugene W. Landy,
Employee
WITNESS:
/s/ Elizabeth Chiarella
Elizabeth Chiarella
-23-
APPENDIX B
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
Employment of the Executive Vice-President -
Cynthia J. Morgenstern
AGREEMENT EFFECTIVE JANUARY 15, 2004
BY AND BETWEEN: Monmouth Real Estate Investment
Corporation, A Maryland
Corporation ("Corporation")
AND: Cynthia J. Morgenstern ("Employee")
Corporation desires to employ Employee to the business of
the Corporation and Employee desires to be so employed.
The parties agree as follows:
1. Employment.
Corporation agrees to employ Employee and Employee agrees to
be employed in the capacity as Executive Vice-President for a
term of three (3) years effective January 15, 2004 and
terminating January 14, 2007.
2. Time and Efforts.
Employee shall diligently and conscientiously devote her time
and attention and use her best efforts in the discharge of
her duties as Executive Vice-President of the Corporation.
3. Board of Directors.
Employee should at all times discharge her duties in
consultation with and under the supervision of the Board of
Directors of the Corporation. In the performance of her
duties, Employee shall make her principal office in such
place as the Board of Directors of the Corporation and
Employee from time to time agree.
4. Compensation.
Corporation shall pay to Employee as compensation for her
services a base salary, which shall be paid in equal weekly
installments, as follows:
(a.) For the year beginning January 15, 2004 and ending on
January 14, 2005, the base salary shall be $160,000
annually;
(b.) For the year beginning January 15, 2005 and ending on
January 14, 2006, the base salary shall be $176,000 annually;
(c.) For the year beginning January 15, 2006 and ending on
January 14, 2007, the base salary shall be $194,000 annually;
In the event of the disability of employee, her salary shall
continue for a period of two years payable monthly.
-24-
Thereafter, the term of this Employment Agreement shall be
automatically renewed and extended for successive one-year
periods except that either party may, at least ninety (90)
days prior to such expiration date or any anniversary
thereof, give written notice to the other party electing that
this Employment Agreement not be renewed or extended, in
which event this Employment Agreement shall expire as of the
expiration date or anniversary date, respectively.
In the event of a merger of the Corporation, or upon any
change of control, defined as either voting control or
control of 25% of the Board of Directors by other than the
existing directors, Employee shall have the right to extend
and renew this Employment Agreement so that the expiration
date will be one year from January 14, 2007. If there is a
termination of employment for any reason, either involuntary
or voluntary, Employee shall be entitled to receive one
year's compensation at the date of termination. The
compensation is to be at the greater of current compensation
or that at the date of merger or change of control.
5. Bonuses.
Bonuses shall be paid at the discretion of the Board of
Directors or the President.
6. Expenses.
Corporation will reimburse Employee for reasonable and
necessary expenses incurred by her in carrying out her duties
under this Agreement. Employee shall present to the
Corporation from time to time an itemized account of such
expenses in such form as may be required by the Corporation.
7. Vacation.
Employee shall be entitled to take four (4) paid weeks
vacation per year.
8. Pension.
Employee, at her option, may participate in the 401-k plan of
United Mobile Homes, Inc., according to its terms.
9. Life and Health Insurance Benefits.
Employee shall be entitled during the term of this Agreement
to participate in all health insurance and group life
insurance benefit plans providing benefits generally
applicable to the employees of United Mobile Homes, Inc. as
may be modified from time to time. Plan description is
detailed in Exhibit A attached.
10. The Employee shall be provided with a company
automobile.
11. Notices.
-25-
All notices required or permitted to be given under this
Agreement shall be given by certified mail, return receipt
requested, to the parties at the following addresses or such
other addresses as either may designate in writing to the
other party:
Corporation:
MREIC
Juniper Business Plaza
3499 Route 9N, Suite 3C
Freehold, NJ 07728
Employee: Cynthia J. Morgenstern
317 Ace Dr.
Wall. NJ 07719
12. Governing Law.
This Agreement shall be construed and governed in accordance
with the laws the State of New Jersey.
13. Entire Contract.
This Agreement constitutes the entire understanding and
agreement between the Corporation and Employee with regard to
all matters herein. There are no other agreements, conditions
or representations, oral or written, express or implied, with
regard thereto. This agreement may be amended only in writing
signed by both parties hereto.
IN WITNESS WHEREOF, Corporation has by its appropriate
officers signed and affixed its seal and Employee has signed
and sealed this Agreement.
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
(SEAL) By /s/Ernest V. Bencivenga
Ernest V. Bencivenga
Treasurer
By /s/Cynthia J. Morgenstern
Cynthia J. Morgenstern
Employee
Dated: January 15, 2004
-26-
APPENDIX C
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
AUDIT COMMITTEE CHARTER
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to
assist the Board in fulfilling its oversight responsibilities.
The Audit Committee's primary duties and
responsibilities are to:
- Monitor the integrity of the Company's financial reporting
process and systems of internal controls regarding finance,
accounting, and legal compliance.
- Monitor the independence and performance of the Company's
independent auditors.
- Provide an avenue of communication among the independent
auditors, management, and the Board of Directors.
The Audit Committee has the authority to conduct any
investigation appropriate to fulfilling its responsibilities and
it has direct access to the independent auditors as well
as anyone in the organization. The Audit Committee has the
ability to retain, at the Company's expense, special legal,
accounting, or other consultants or experts it deems
necessary in the performance of its duties.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
Audit Committee members shall meet the requirements of the
listing standards of the National Association of Securities
Dealers (NASD) and the Securities and Exchange Commission (SEC).
The Audit Committee shall be comprised of three directors as
determined by the Board, each of whom shall be independent
nonexecutive directors, free from any relationship that would
interfere with the exercise of his or her independent judgment.
All members of the Committee shall have a basic understanding of
finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the
Committee shall have accounting or related financial
management expertise.
Audit Committee members shall be appointed by the Board of
Directors upon recommendation by the Chairman. If an audit
committee Chair is not designated or present, the members of the
Committee may designate a Chair by majority vote of the
Committee membership.
The Committee shall meet at least two times annually, or more
frequently as circumstances dictate. The Audit Committee
Chair shall prepare and/or approve an agenda in advance of
each meeting. The Committee should meet privately in
executive session at least annually with management and the
independent auditors and as a committee to discuss any
matters that the Committee or each of these groups believe
should be discussed. The Committee may ask members of
management or others to attend meetings and provide pertinent
information as necessary. The Committee or its Chair should
communicate with management and the independent auditors
quarterly to review the Company's financial statements and
significant findings based upon the auditors limited review
procedures, as considered necessary.
-27-
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
Review Procedures
1. Review and reassess the adequacy of this Charter at
least annually. Submit the charter to the Board of
Directors for approval and have the document published at
least every three years in accordance with SEC regulations.
2. Review the Company's annual audited financial statements
prior to filing or distribution. Review should include
discussion with management and independent auditors of
significant issues regarding accounting principles,
practices and judgments.
3. In consultation with management and the independent
auditors, consider the integrity of the Company's
financial reporting processes and controls. Discuss
significant financial risk exposures and the steps
management has taken to monitor, control and report such
exposures. Review significant findings prepared by the
independent auditors together with management's
responses.
4. Review with financial management and the independent
auditors, the company's quarterly financial results prior to
the release of earnings and/or the company's quarterly
financial statements prior to filing or distribution, as
considered necessary. Discuss any significant changes to
the Company's accounting principles and any items required
to be communicated by the independent auditors in accordance
with SAS 61 (see item 9). The Chair of the Committee may
represent the entire Audit Committee for purposes of this review.
Independent Auditors
5. The independent auditors are ultimately accountable to the
Audit Committee and the Board of Directors. The Audit
Committee shall review the independence, and performance of
the auditors and annually recommend to the Board of
Directors the appointment of the independent auditors or
approve any discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be
paid to the independent auditors.
7. On an annual basis, the Committee should review and
discuss with the independent auditors all significant
relationships they have with the Company that could impair
the auditors' independence.
8. Review the independent auditors audit plan-discuss scope,
staffing, locations, reliance upon management and general
audit approach, as considered necessary.
-28-
9. Discuss certain matters required to be communicated to
audit committees in accordance with AICPA SAS 61.
10. Consider the independent auditors' judgments about the
quality and appropriateness of the Company's accounting
principles as applied in its financial reporting.
Legal Compliance
11. On at least an annual basis, review with the Company's
counsel, any legal matters that could have a significant impact
on the organization's financial statements, the Company's
compliance with applicable laws and regulations,
inquiries received from regulators or governmental agencies.
Other Audit Committee Responsibilities
12. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be
included in the Company's annual proxy statement.
13. Perform any other activities consistent with this
Charter, the Company's By-laws and governing law, as the
Committee or the Board deems necessary or appropriate.
14. Maintain minutes of meetings and periodically report to the
Board of Directors on significant results of the foregoing
activities.
15. Establish and maintain the procedures for the treatment of
complaints regarding accounting, internal control, auditing,
including procedures for the anonymous submission of complaints.
-29-
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
The undersigned hereby constitutes and appoints Eugene W.
Landy, Cynthia J. Morgenstern, and Samuel A. Landy, 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 29, 2004, 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.
(Continued and to be signed on the reverse side)
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/
1. Election of Directors:
NOMINEES:
FOR ALL NOMINEES Daniel D. Cronheim
Neal Herstik
John R. Sampson
WITHHOLD AUTHORITY
FOR ALL NOMINEES
FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), mark "FOR ALL EXCEPT" and fill in the circle next to
each nominee you wish to withhold, as shown here:
(2) Approval of the appointment of KPMG LLP as Independent
Auditors for the Company for the fiscal year ending
September 30, 2004.
FOR AGAINST ABSTAIN
(3) 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.
The Board of Directors recommends a vote FOR items (1) and (2),
and all shares represented by this Proxy will be so voted unless
otherwise indicated, in which case they will be voted as marked.
Receipt of Notice of Meeting and Proxy Statement is hereby
acknowledged.
To change the address on your account, please check the box at
right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account
may not be submitted via this method.
Signature of Shareholder _____________________ Date ______
Signature of Shareholder _____________________ Date ______
Note: Please sign exactly as your name(s) appear on this Proxy.
When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.