Alexandria Real Estate Equities, Inc 10-K, filed Mar 15, 2004

Alexandria Real Estate Equities, Inc. (ARE)

10-K 2004-03-15 For: 2003-12-31

Added on April 04, 2026

About this 10-K

Alexandria Real Estate Equities, Inc filed this 10-K on March 15, 2004, covering the fiscal year ended December 31, 2003.

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Maryland	95-4502084
(State or other jurisdiction of incorporation or organization)	(IRS Employer ID Number)

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $.01 par value per share (Including related preferred stock purchase rights) 9.50% Series A Cumulative Redeemable Preferred Stock 9.10% Series B Cumulative Redeemable Preferred Stock	New York Stock Exchange New York Stock Exchange New York Stock Exchange

Part I.		Page
Item 1.	Business	1
Item 2.	Properties	13
Item 3.	Legal Proceedings	21
Item 4.	Submission of Matters to a Vote of Security Holders	21
Part II.
Item 5.	Market for the Registrant's Common Equity and Related Stockholder Matters	22
Item 6.	Selected Financial Data	23
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 7a.	Quantitative and Qualitative Disclosures About Market Risks	43
Item 8.	Consolidated Financial Statements and Supplementary Data	44
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	44
Item 9a.	Controls and Procedures	44
Part III.
Item 10.	Directors and Executive Officers of the Registrant	45
Item 11.	Executive Compensation	45
Item 12.	Security Ownership of Certain Beneficial Owners and Management	45
Item 13.	Certain Relationships and Related Transactions	45
Item 14.	Principal Accounting Fees and Services	45
Part IV.
Item 15.	Exhibits, Consolidated Financial Statement Schedules and Reports on Form 8-K	46
Signatures		S-1

	Number of Securities to be issued upon exercise of outstanding options and awards (a)	Weighted-average exercise price of outstanding options and awards (b)	Number of securities remaining available for future issuance under the Stock Plan (excluding securities reflected in column a) (c)
Equity Compensation Plan Approved by Stockholders - 1997 Incentive Plan	809,583	$35.39	308,536

	Page
Report of Independent Auditors	F-1
Audited Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2003 and 2002	F-2
Consolidated Statements of Income for the Years Ended December 31, 2003, 2002 and 2001	F-3
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2003, 2002 and 2001	F-4
Consolidated Statements of Cash Flows for the Years Ended December 31, 2003, 2002 and 2001	F-5
Notes to Consolidated Financial Statements for the Years Ended December 31, 2003, 2002 and 2001	F-6
Schedule III - Consolidated Financial Statement of Rental Properties	F-28

Exhibit Number	Exhibit Title
3.1 *	Articles of Amendment and Restatement of Alexandria, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on August 14, 1997
3.2 *	Certificate of Correction of Alexandria, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on August 14, 1997
3.3*	Bylaws of Alexandria (as amended, adopted February 4, 2000; effective February 16, 2000), filed as an exhibit to Alexandria's current report on Form 8-K filed with the Commission on February 10, 2000
3.4 *	Articles Supplementary, dated February 10, 2000, relating to the election to be subject to Subtitle 8 of Title 3 of the Maryland General Corporation Law, filed as an exhibit to Alexandria's current report on Form 8-K filed with the Commission on February 10, 2000
3.5 *	Articles Supplementary, dated February 10, 2000, relating to the Series A Junior Participating Preferred Stock , filed as an exhibit to Alexandria's current report on Form 8-K filed with the Commission on February 10, 2000
3.6 *	Articles Supplementary, dated June 9, 1999, relating to the 9.50% Series A Cumulative Redeemable Preferred Stock, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on August 13, 1999
3.7 *	Articles Supplementary, dated January 28, 2002, relating to the 9.10% Series B Cumulative Redeemable Preferred Stock, filed as an exhibit to Alexandria's current report on Form 8-A filed with the Commission on February 17, 2002
4.1 *	Rights Agreement, dated as of February 10, 2000, between the Company and American Stock Transfer & Trust Company, as Rights Agent, including the forms of Articles Supplementary setting forth the terms of the Series A Junior Participating Preferred Stock, par value $.01 per share, Rights Certificate and the Summary of Rights to Purchase Preferred Stock attached as exhibits to the Rights Agreement. Pursuant to the Rights Agreement, printed Rights Certificates will not be mailed until after the Distribution Date (as defined in the Rights Agreement), filed as an exhibit to Alexandria's current report on Form 8-K filed with the Commission on February 10, 2000
4.2 *	Specimen certificate representing shares of Common Stock, filed as an exhibit to Alexandria's Registration Statement on Form S-11 (No. 333- 23545)
4.3 *	Specimen certificate representing shares of 9.50% Series A Cumulative Redeemable Preferred Stock, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on August 13, 1999
4.4 *	Specimen certificate representing shares of 9.10% Series B Cumulative Redeemable Preferred Stock, filed as an exhibit to Alexandria's current report on Form 8-A filed with the Commission on February 17, 2002
10.1 *	Second Amendment to Executive Employment Agreement and General and Special Release by and between Alexandria and Jerry M. Sudarsky, dated May 30, 1997, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 31, 1998
10.2 *	Amended and Restated Executive Employment Agreement between Alexandria and Joel S. Marcus, dated January 5, 1994, and amended as of March 28, 1997, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 31, 1998
10.3 *	Executive Employment Agreement between Alexandria and James H. Richardson, dated July 31, 1997, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on November 14, 1997
10.4 *	Amended and Restated Executive Employment Agreement between Alexandria and Peter J. Nelson, dated May 20, 1998, filed as an exhibit to Alexandria's quarterly report on Form 10-Q/A filed with the Commission on August 18, 1998
10.5 *	Amendment to Amended and Restated Executive Employment Agreement between Alexandria and Peter J. Nelson, dated August 31, 1999, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on November 15, 1999
10.6 *	Executive Employment Agreement between Alexandria and Vincent R. Ciruzzi, dated April 20, 1998, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 15, 1999
10.7 *	Amendment to Executive Employment Agreement between Alexandria and Vincent R. Ciruzzi, dated August 31, 1999, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on November 15, 1999
10.8 *	Employment Letter Agreement between Alexandria and Tom Andrews, dated June 1, 1999, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on November 15, 1999
10.9 *	Amended and Restated 1997 Stock Award and Incentive Plan of Alexandria, dated December 29, 2000, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 29, 2002
10.10 *	Form of Non-Employee Director Stock Option Agreement for use in connection with options issued pursuant to the Amended and Restated 1997 Stock Award and Incentive Plan, filed as an exhibit to Alexandria's Registration Statement on Form S-11 (No. 333-23545)
10.11 *	Form of Incentive Stock Option Agreement for use in connection with options issued pursuant to the Amended and Restated 1997 Stock Award and Incentive Plan, filed as an exhibit to Alexandria's Registration Statement on Form S-11 (No. 333-23545)
10.12 *	Form of Nonqualified Stock Option Agreement for use in connection with options issued pursuant to the Amended and Restated 1997 Stock Award and Incentive Plan, filed as an exhibit to Alexandria's Registration Statement on Form S-11 (No. 333-23545)
10.13 *	Form of Employee Restricted Stock Agreement for use in connection with shares of restricted stock issued to employees pursuant to the Amended and Restated 1997 Stock Award and Incentive Plan, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on November 15, 1999
10.14 *	Form of Independent Contractor Restricted Stock Agreement for use in connection with shares of restricted stock issued to independent contractors pursuant to the Amended and Restated 1997 Stock Award and Incentive Plan, filed as an exhibit to Alexandria's quarterly report on Form 10-Q filed with the Commission on November 15, 1999
10.15	Fourth Amended and Restated Revolving Loan Agreement, dated as of November 3, 2003, among Alexandria Real Estate Equities, Inc., Alexandria Real Estate Equities, L.P., ARE-QRS Corp., ARE Acquisitions, LLC, the other borrowers then and thereafter a party thereto, the banks therein named, the other banks which may become parties thereto, Fleet National Bank, as Administrative Agent, Fleet Securities, Inc. and JP Morgan Securities, Inc., as Co-Lead Arrangers, JP Morgan Securities, Inc. and Societe Generale, as Co- Syndication Agents, CommerzBank AG, New York and Grand Cayman Branches and KeyBank National Association, as Co-Documentation Agents and Eurohypo AG, New York Branch, as Senior Managing Agent
10.16 *	Amendment to Amended and Restated Executive Employment Agreement between Alexandria and Joel S. Marcus, dated September 4, 2000, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 30, 2001
10.17 *	Amendment to Executive Employment Agreement between Alexandria and James H. Richardson, dated September 4, 2000, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 30, 2001
10.18 *	Second Amendment to Amended and Restated Executive Employment Agreement between Alexandria and Peter J. Nelson, dated September 4, 2000, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 30, 2001
10.19 *	Amended and Restated Executive Employment Agreement between Alexandria and Vincent R. Ciruzzi, dated June 27, 2000, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 30, 2001
10.20 *	Term Loan Agreement among Alexandria, the Operating Partnership, ARE-QRS Corp., ARE Acquisitions, LLC, the Other Borrowers Then or Thereafter a Party Thereto, the Banks therein named, the Other Banks Which May Become Parties Thereto, Fleet National Bank, as Managing Agent, and Fleet Securities, Inc., as Arranger, dated October 17, 2001, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 29, 2002
10.21 *	Alexandria's 2000 Deferred Compensation Plans, effective December 1, 2000, filed as an exhibit to Alexandria's annual report on Form 10-K filed with the Commission on March 29, 2002
10.22	Term Loan Agreement, dated as of November 3, 2003, among Alexandria Real Estate, Inc., Alexandria Real Estate Equities, L.P., ARE-QRS Corp., ARE Acquisitions, LLC, the other borrowers then and thereafter a party thereto, the banks therein named, the other banks which may become parties thereto, Fleet National Bank, as Administrative Agent, Fleet Securities, Inc. and Commerzbank AG, New York and Grand Cayman Branches, as Co-Lead Arrangers, Commerzbank AG, New York and Grand Cayman Branches, as Syndication Agent, J.P. Morgan Chase Bank and Bank One, NA, as Co-Documentation Agents, Keybank National Association and Societe Generale, as Co-Managing Agents
12.1	Computation of Consolidated Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
14.1	Alexandria Real Estate Equities, Inc. Business Integrity Policy and Procedures for Reporting Non-Compliance (code of ethics pursuant to Item 406 Regulation S-K)
21.1	List of Subsidiaries of Alexandria
23.1	Consent of Ernst & Young LLP
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

		ALEXANDRIA REAL ESTATE EQUITIES, INC.
Dated March 12, 2004			By: /s/ JOEL S. MARCUS Joel S. Marcus Chief Executive Officer

Signature	Title	Date
/s/ JERRY M. SUDARSKY Jerry M. Sudarsky	Chairman of the Board of Directors	March 10, 2004
/s/ JOEL S. MARCUS Joel S. Marcus	Chief Executive Officer (Principal Executive Officer) and Director	March 12, 2004
/s/ JAMES H. RICHARDSON James H. Richardson	President and Director	March 11, 2004
/s/ PETER J. NELSON Peter J. Nelson	Chief Financial Officer, Senior Vice President, Treasurer and Secretary (Principal Financial and Accounting Officer)	March 12, 2004
/s/ RICHARD H. KLEIN Richard H. Klein	Director	March 11, 2004
/s/ RICHARD B. JENNINGS Richard B. Jennings	Director	March 10, 2004
/s/ ANTHONY M. SOLOMON Anthony M. Solomon	Director	March 10, 2004
/s/ ALAN G. WALTON Alan G. Walton	Director	March 10, 2004
/s/ RICHMOND A. WOLF Richmond A. Wolf	Director	March 12, 2004

ARTICLE 1	DEFINITIONS AND ACCOUNTING TERMS	2
1.1	Defined Terms	2
1.2	Use of Defined Terms	26
1.3	Accounting Terms	26
1.4	Rounding	26
1.5	Exhibits and Schedules	26
1.6	References to "Borrowers and their Subsidiaries"	26
1.7	Miscellaneous Terms	26
ARTICLE 2	LOANS	26
2.1	Committed Loans-General	26
2.2	Alternate Base Rate Loans	28
2.3	LIBOR Rate Loans	28
2.4	[Intentionally Omitted]	28
2.5	Swing Loan Commitments	28
2.6	Letters of Credit	31
2.7	Voluntary Reduction of Commitments	33
2.8	[Intentionally Omitted]	34
2.9	Administrative Agent's Right to Assume Funds Available for Advances	34
2.10	Extension of Maturity Date	34
2.11	Unencumbered Asset Pool	35
2.12	Representative of Borrowers	35
2.13	[Intentionally Omitted]	35
ARTICLE 3	PAYMENTS AND FEES	35
3.1	Principal and Interest	35
3.2	Amendment Fee	38
3.3	[Intentionally Omitted]	38
3.4	Commitment Fee	38
3.5	Agency Fee	38
3.6	Extension Fees	38
3.7	Increased Commitment Costs	38
3.8	LIBOR Costs and Related Matters	39
3.9	Late Payments	42
3.10	Computation of Interest and Fees	42
3.11	Non-Banking Days	42
3.12	Manner and Treatment of Payments	42
3.13	Funding Sources	43
3.14	Failure to Charge Not Subsequent Waiver	43
3.15	Administrative Agent's Right to Assume Payments Will be Made by Borrowers	44
3.16	Fee Determination Detail	44
3.17	Survivability	44
ARTICLE 4	REPRESENTATIONS AND WARRANTIES	44
4.1	Existence and Qualification; Power; Compliance With Laws	44
4.2	Authority; Compliance With Other Agreements and Instruments and Government Regulations	45
4.3	No Governmental Approvals Required	45
4.4	Subsidiaries	45
4.5	Financial Statements	46
4.6	No Other Liabilities; No Material Adverse Changes	46
4.7	Title to Property	46
4.8	Intangible Assets	46
4.9	Public Utility Holding Company Act	46
4.10	Litigation	46
4.11	Binding Obligations	47
4.12	No Default	47
4.13	ERISA	47
4.14	Regulations T, U and X; Investment Company Act	47
4.15	Disclosure	47
4.16	Tax Liability	48
4.17	Hazardous Materials	48
4.18	Initial Pool Properties	48
4.19	Property	48
4.20	Brokers	49
4.21	Other Debt	49
4.22	Solvency	49
4.23	No Fraudulent Intent	49
4.24	Transaction in Best Interests of Borrowers; Consideration	49
4.25	No Bankruptcy Filing	50
4.26	Tax Shelter Representation	50
ARTICLE 5	AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)	50
5.1	Payment of Taxes and Other Potential Liens	50
5.2	Preservation of Existence	50
5.3	Maintenance of Real Properties	50
5.4	Maintenance of Insurance	51
5.5	Compliance With Laws	51
5.6	[Intentionally Omitted]	51
5.7	Keeping of Records and Books of Account	51
5.8	Compliance With Agreements	51
5.9	Use of Proceeds	51
5.10	Hazardous Materials Laws	51
5.11	Unencumbered Asset Pool	52
5.12	REIT Status	52
5.13	Additional Borrowers	52
5.14	Inspection of Properties and Books	52
5.15	More Restrictive Agreements	52
5.16	Distributions of Income to the Borrowers	53
5.17	Unencumbered Asset Pool	53
ARTICLE 6	NEGATIVE COVENANTS	54
6.1	Mergers	54
6.2	ERISA	54
6.3	Change in Nature of Business	54
6.4	Transactions with Affiliates	54
6.5	Leverage Ratio	55
6.6	Debt Service Coverage	55
6.7	Fixed Charge Coverage	55
6.8	Distributions	55
6.9	Stockholders' Equity	55
6.10	[Intentionally Omitted]	55
6.11	Secured Debt	55
6.12	Recourse Debt	55
6.13	[Intentionally Omitted]	55
6.14	Negative Pledges	55
6.15	[Intentionally Omitted]	56
6.16	Limiting Agreements	56
6.17	[Intentionally Omitted]	56
6.18	Restrictions on Transfer	56
6.19	Permitted Assets	57
6.20	Equity Forwards	57
ARTICLE 7	INFORMATION AND REPORTING REQUIREMENTS	57
7.1	Financial and Business Information	57
7.2	Compliance Certificates	61
ARTICLE 8	CONDITIONS	61
8.1	Initial Advances	61
8.2	Any Advance	63
ARTICLE 9	EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT	63
9.1	Events of Default	63
9.2	Remedies Upon Event of Default	66
ARTICLE 10	THE ADMINISTRATIVE AGENT	68
10.1	Appointment and Authorization	68
10.2	Administrative Agent and Affiliates	68
10.3	Proportionate Interest in any Collateral	68
10.4	Banks' Credit Decisions	69
10.5	Action by Administrative Agent	69
10.6	Liability of Administrative Agent	70
10.7	Indemnification	71
10.8	Successor Administrative Agent	71
10.9	No Obligations of Borrowers	72
10.10	Co-Agents	72
ARTICLE 11	MISCELLANEOUS	72
11.1	Cumulative Remedies; No Waiver	72
11.2	[Intentionally Omitted]	72
11.3	Costs, Expenses and Taxes	72
11.4	Nature of Banks' Obligations	73
11.5	Survival of Representations and Warranties	74
11.6	Notices	74
11.7	Execution of Loan Documents	74
11.8	Binding Effect; Assignment	74
11.9	Right of Setoff	76
11.10	Sharing of Setoffs	77
11.11	Indemnity by Borrowers	77
11.12	Nonliability of the Banks	78
11.13	No Third Parties Benefited	79
11.14	Confidentiality	80
11.15	Further Assurances	82
11.16	Integration	82
11.17	Governing Law	83
11.18	Severability of Provisions	83
11.19	Headings	83
11.20	Time of the Essence	83
11.21	Foreign Banks and Participants	83
11.22	Hazardous Material Indemnity	84
11.23	Joint and Several	84
11.24	Removal of a Bank	85
11.25	WAIVER OF RIGHT TO TRIAL BY JURY	85
11.26	Purported Oral Amendments	85
11.27	Replacement of Notes	85
ARTICLE 12	AMENDMENTS; CONSENTS	85
12.1	Amendments; Consents	85

Credit Rating Of Parent	Leverage	Alternate Base Rate Margin	LIBOR Rate Margin
> BBB+/Baa1	N/A	0	90.00
BBB/Baa2	N/A	0	105.00
BBB-/Baa3	N/A	0	120.00
unrated or <BBB-/ Baa3	Less than .40 to 1.00	0	125.00
unrated or <BBB-/ Baa3	Equal to or greater than .40 to 1.00 but less than .50 to 1.00	20	140.00
unrated or <BBB-/ Baa3	Equal to or greater than .50 to 1.00 but less than or equal to ..55 to 1.00	20	160.00

	By: /s/ Joel S. Marcus
	Name: Joel S. Marcus
	Title: Chief Executive Officer

	By: /s/ Peter J. Nelson
	Name: Peter J. Nelson
	Title: Chief Financial Officer

Alexandria Real Estate Equities, Inc 10-K, filed Mar 15, 2004

About this 10-K

Available Information

Item 8. Consolidated Financial Statements and Supplementary Data

Series A Cumulative Redeemable Preferred Stock