<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
</TABLE>
<TABLE>
<S> <C>
SL GREEN REALTY CORP.
- - ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
SL GREEN REALTY CORP.
420 Lexington Avenue
New York, New York 10170
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 16, 2000
----------------------------
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders (the
"Annual Meeting") of SL Green Realty Corp. (the "Company") will be held on
Tuesday, May 16, 2000 at 10:00 a.m. at the Grand Hyatt New York Hotel, Park
Avenue at Grand Central Terminal, 109 East 42nd Street, New York, New York, for
the following purposes:
1. To elect two Class III directors of the Company to serve until the
2003 Annual Meeting of Stockholders and until their successors are duly
elected and qualified;
2. To ratify the selection of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending December 31, 2000;
3. To consider and act upon any other matters that may properly be
brought before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned, or to which the Annual Meeting
may be postponed.
The Board of Directors has fixed the close of business on March 21, 2000 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournments or postponements thereof.
Only stockholders of record of the Company's common stock, $.01 par value per
share, at the close of business on that date will be entitled to notice of and
to vote at the Annual Meeting and at any adjournments or postponements thereof.
You are requested to fill in and sign the enclosed form of proxy, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
BY ORDER OF THE BOARD OF DIRECTORS
[LOGO]
BENJAMIN P. FELDMAN
SECRETARY
New York, New York
March 31, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
SL GREEN REALTY CORP.
420 Lexington Avenue
New York, New York 10170
------------------------
PROXY STATEMENT
------------------------
FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
to be held on May 16, 2000
------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of SL Green Realty Corp. (the "Company") for
use at the 2000 Annual Meeting of Stockholders of the Company to be held on
Tuesday, May 16, 2000, and at any adjournments or postponements thereof (the
"Annual Meeting"). At the Annual Meeting, stockholders will be asked to vote
upon (1) the election of two Class III directors of the Company, (2) to ratify
the selection of Ernst & Young LLP as the independent auditors of the Company
for the fiscal year ending December 31, 2000, and (3) to act upon any other
matters properly brought before them.
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to stockholders on or about March 31, 2000. The Board
of Directors has fixed the close of business on March 21, 2000 as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"). Only stockholders of record of the
Company's common stock, par value $.01 per share (the "Common Stock"), at the
close of business on the Record Date will be entitled to notice of and to vote
at the Annual Meeting. As of the Record Date, there were 24,229,997 shares of
Common Stock outstanding and entitled to vote at the Annual Meeting. Holders of
Common Stock outstanding as of the close of business on the Record Date will be
entitled to one vote for each share held by them.
The presence, in person or by proxy, of holders of at least a majority of
the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. The vote of a plurality of all of the votes cast at a meeting at which
a quorum is present is necessary for the election of the Class III directors.
The affirmative vote of the holders of a majority of the shares of Common Stock
cast at the Annual Meeting at which a quorum is present is required for the
ratification of the Company's auditors and the approval of any other matters
properly presented at the Annual Meeting for stockholder approval. Under
Maryland law, abstentions do not constitute a vote "for" or "against" a matter
and will be disregarded in determining "votes cast." Broker "non-votes," or
proxies from brokers or nominees indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote such
shares on a particular matter with respect to which the broker or nominee does
not have discretionary voting power, will be treated in the same manner as
abstentions.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY RECEIVED PRIOR TO THE
VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL MEETING
AS DIRECTED ON THE PROXY. IF A PROPERLY EXECUTED PROXY IS SUBMITTED AND NO
INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE
TWO NOMINEES FOR CLASS III DIRECTORS OF THE COMPANY NAMED IN THIS PROXY
STATEMENT AND FOR RATIFICATION OF THE BOARD OF DIRECTORS' SELECTION OF ERNST &
YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2000. IT IS NOT ANTICIPATED THAT ANY MATTERS OTHER THAN THOSE SET
FORTH IN THE PROXY STATEMENT WILL BE PRESENTED AT THE ANNUAL MEETING. IF OTHER
MATTERS ARE PRESENTED, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION
OF THE PROXY HOLDERS.
1
<PAGE>
A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Company at
the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not a proxy has been previously
given, but the presence (without further action) of a stockholder at the Annual
Meeting will not constitute revocation of a previously given proxy.
The Company's 1999 Annual Report, including financial statements for the
fiscal year ended December 31, 1999, has been mailed to stockholders concurrent
with the mailing of this Proxy Statement. The Annual Report, however, is not
part of the proxy solicitation material.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors of the Company consists of five members and is
divided into three classes, with the directors in each class serving for a term
of three years and until their successors are duly elected and qualified. The
term of one class expires at each annual meeting of stockholders.
At the Annual Meeting, two directors will be elected to serve until the 2003
Annual Meeting and until their successors are duly elected and qualified. The
Board of Directors has nominated Mr. John H. Alschuler, Jr. and Mr. Stephen L.
Green to serve as the Class III directors (the "Nominees"). The Nominees are
currently serving as Class III directors of the Company. The Board of Directors
anticipates each Nominee will serve, if elected, as a director. However, if
either person nominated by the Board of Directors is unable to accept election,
the proxies will be voted for the election of such other person or persons as
the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE.
INFORMATION REGARDING THE NOMINEES AND THE CONTINUING DIRECTORS
The following table and biographical descriptions set forth certain
information with respect to each Nominee for election as a Class III director at
the Annual Meeting and the continuing directors whose terms expire at the annual
meetings of stockholders in 2001 and 2002, based upon information furnished to
the Company by each director.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
DIRECTOR BENEFICIAL OWNERSHIP PERCENT OF
NAME AGE SINCE OF COMMON STOCK (1) CLASS (2)
- - ---- -------- -------- -------------------- ----------
<S> <C> <C> <C> <C>
CLASS III NOMINEES FOR ELECTION (TERMS TO EXPIRE
IN 2003)
John H. Alschuler, Jr............................. 51 1997 13,160 N/A
Stephen L. Green.................................. 61 1997 2,165,784(3) 8.2%
CLASS II CONTINUING DIRECTORS (TERMS EXPIRE IN
2001)
Benjamin P. Feldman............................... 47 1997 191,165(4) 0.8%
John S. Levy...................................... 63 1997 12,000 N/A
CLASS I CONTINUING DIRECTOR (TERM EXPIRES IN 2002)
Edwin Thomas Burton, III.......................... 57 1997 12,000 N/A
</TABLE>
- - ------------------------
(1) All information has been determined as of March 21, 2000. For purposes of
this table a person is deemed to have "beneficial ownership" of the number
of shares of Common Stock that such person has the right to acquire pursuant
to the exercise of stock options exercisable within sixty days or the
redemption of units (the "Units") of limited partnership interests in SL
Green Operating Partnership, L.P., a Delaware limited partnership (the
"Operating Partnership") of which the Company is the general partner
(assuming the Company elects to issue Common Stock rather than pay cash upon
such redemption). See "Executive Compensation" for a discussion of the
vesting of stock options granted to directors and officers. Pursuant to the
terms of the First Amended and Restated Agreement of Limited Partnership of
the Operating Partnership, dated as of August 20, 1997, after
2
<PAGE>
August 20, 1999, upon a notice of redemption from a Unit holder, the
Operating Partnership is obligated to redeem Units for cash, or, at the
option of the Company, shares of Common Stock.
(2) For purposes of computing the percentage of outstanding shares of Common
Stock held by each person, any share of Common Stock which such person has
the right to acquire pursuant to the exercise of a stock option exercisable
within 60 days is deemed to be outstanding, but is not deemed to be
outstanding for the purpose of computing the percent ownership of any other
person.
(3) Includes 2,140,784 Units.
(4) Certain of such shares are held by Mr. Feldman through a family limited
liability company of which he is the managing member.
CLASS III NOMINEES FOR ELECTION--TERMS EXPIRE IN 2003
JOHN H. ALSCHULER, JR. has served as a director of the Company since 1997
and serves on the Audit Committee, the Executive Committee and the Compensation
Committee of the Board of Directors. He is the President of Hamilton,
Rabinowitz & Alschuler, Inc. ("HR&A") and the Partner in Charge of its New York
office. HR&A is a nationally recognized consulting firm with 20 years of
experience in real estate, advisory services, policy, and management consulting.
Mr. Alschuler conducts a broad range consulting practice focused on the
revitalization of urban communities and the construction of significant places
with sound economic and social foundations. He has advised a wide range of
development clients including the Alliance for Downtown New York, the New Jersey
Performing Arts Center, The Guggenheim Foundation, The Related Companies,
Madison Square Garden, Brookfield Properties, the Government of Kuwait, Queens
West Development Corporation, Empire State Development Corporation, and the
State of New York, among others. He has also advised a large array of public
organizations and elected officials, including the Mayor and Governor of the
State of New York and a variety of State Governors across the nation on issues
including economic development, real estate development, capital construction,
etc. Most recently, he led the advisory team that shaped Mayor Rudolph
Giuliani's and Governor George Pitaki's plan for the redevelopment of Governor's
Island. He currently serves as the Chief Consultant for the redevelopment of the
Brooklyn Waterfront. He also assists the Office of the Deputy Mayor of
Washington, D.C. develop new initiatives and has managed a variety of large
scale privatizations, including one recently completed for the MBTA.
Mr. Altschuler is also an Adjunct Associate Professor at Columbia University
where he teaches real estate development. Mr. Alschuler received a B.A. degree
from Wesleyan University and Ed.D. degree from the University of Massachusetts
at Amherst.
STEPHEN L. GREEN has served as the Chairman and member of the Executive
Committee of the Board of Directors and Chief Executive Officer of the Company
since 1997. Mr. Green founded S.L. Green Real Estate in 1980. Since then he has
been involved in the acquisition of over 30 Manhattan office buildings
containing in excess of four million square feet and the management of 50
Manhattan office buildings containing in excess of 10 million square feet. His
clients have included Aldrich Eastman & Waltch, Bank of New York, CalPERS,
Dai-Ichi Kangyo Bank, and CS First Boston. Mr. Green is a Governor of the Real
Estate Board of New York and an at-large member of the Executive Committee of
the Board of Governors of the Real Estate Board of New York. Additionally,
Mr. Green is a Co-Chairman of the Real Estate Tax Fairness Coalition. Mr. Green
received a B.A. degree from Hartwick College and a J.D. degree from Boston
College Law School.
CLASS II CONTINUING DIRECTORS--TERMS EXPIRE IN 2002
BENJAMIN P. FELDMAN has served as Executive Vice President and General
Counsel of the Company and as a Director and member of the Executive Committee
of the Board of Directors since 1997. He served as General Counsel of SL Green
Properties, Inc. ("SL Green Properties") from 1987 until 1997. Mr. Feldman
handles the legal aspects of all leasing, financing and acquisition decisions.
Prior to joining the Company, Mr. Feldman was vice-president and general counsel
for Bruce Berger Realty. Mr. Feldman received a B.A. degree from Columbia
University and a J.D. degree from Columbia University School of Law.
JOHN S. LEVY has served as a director of the Company since 1997 and serves
on the Audit Committee and Compensation Committee of the Board of Directors.
Mr. Levy is a private investor. He also serves as a
3
<PAGE>
director of the Bear Stearns funds. Mr. Levy was associated with Lehman
Brothers Inc. (or its corporate predecessors) from 1983 until 1995. During that
period, Mr. Levy served as Managing Director and Chief Administrative Officer of
the Financial Services Division, Senior Executive Vice President and Co-Director
of the International Division overseeing the International Branch System, and
Managing Partner of the Equity Securities Division, where he managed the
International, Institutional, Retail and Research Departments. Prior to that
period, Mr. Levy was associated with A.G. Becker Incorporated (or its corporate
predecessors) from 1960 until 1983. At A.G. Becker, Mr. Levy served as Managing
Director of the Execution Services Division, Vice President-Manager of
Institutional and Retail Sales, Manager of the Institutional Sales Division,
Manager of the New York Retail Office and a Registered Representative. Mr. Levy
received a B.A. degree from Dartmouth College.
CLASS I CONTINUING DIRECTOR--TERM EXPIRES IN 2001
EDWIN THOMAS BURTON, III has served as a director of the Company since 1997
and serves as Chairman of the Audit Committee, and is a member of the
Compensation Committee. He is Chairman of the Board of Trustees and a member of
the Investment Advisory Committee of the Virginia Retirement System ("VRS") for
state and local employees of the Commonwealth of Virginia ($30 billion in
assets). Mr. Burton served as the Chairman of the VRS Special Committee on the
sale of RF&P Corporation, a $570 million real estate company. He is currently a
professor of economics at the University of Virginia. From 1994 until 1995,
Mr. Burton served as Senior Vice President, Managing Director and member of the
Board of Directors of Interstate Johnson Lane, Incorporated, an investment
banking firm where he was responsible for the Corporate Finance and Public
Finance Divisions. From 1987 to 1994, Mr. Burton served as President of
Rothschild Financial Services, Incorporated (a subsidiary of Rothschild, Inc. of
North America), an investment banking company headquartered in New York City
that is involved in proprietary trading, securities lending and other investment
activities. Mr. Burton also serves as a consultant to numerous companies on
investment strategy and investment banking. Mr. Burton served on the Board of
Directors of Capstar, a publicly traded hotel company, and SNL Securities, a
private securities data company. He has also served on the Board of Directors of
Virginia National Bank since 1998 and is currently Chairman of the Compensation
Committee. He has held various teaching positions at York College, Rice
University and Cornell University and has written and lectured extensively in
the field of economics. Mr. Burton also serves as a member of the Children's
Medical Center Committee of the University of Virginia Hospital Advisory Board.
Mr. Burton received a B.A. and an M.A. in economics from Rice University and a
Ph.D. in economics from Northwestern University.
BIOGRAPHICAL INFORMATION REGARDING EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
DAVID J. NETTINA has served as President since 1998 and Chief Operating
Officer of the Company since 1997. Prior to joining the Company, Mr. Nettina
worked for The Pyramid Companies ("Pyramid"), based in Syracuse, NY, in various
positions from March 1986 to June 1997. From 1990 to 1997, Mr. Nettina was a
partner and Chief Financial Officer of Pyramid. From 1989 to 1990, Mr. Nettina
was a development partner at the Boston, MA office of Pyramid. Mr. Nettina was
the Director of Corporate Finance of the Pyramid Development Group from 1987 to
1989. From 1986 to 1987, Mr. Nettina was Chief Operating Officer of the Pyramid
Management Group. Mr. Nettina served as President of Citibank (Maine), N.A. from
1983 to 1986. From 1980 to 1983, Mr. Nettina was Assistant Vice President of
Citibank (NYS), N.A. in Rochester, NY. Mr. Nettina was in the U.S. Army from
1976 until he completed service as a Captain in 1980 Mr. Nettina received a B.S.
degree in 1974 and an MBA in 1976 from Canisius College. Mr. Nettina is
47 years old.
MARC HOLLIDAY joined the Company as Chief Investment Officer in July, 1998,
prior to which he was Managing Director and Head of Direct Originations for New
York-based Capital Trust (NYSE:CT). While at Capital Trust, a specialty real
estate finance company, Mr. Holliday was in charge of originating direct
principal investments for the firm, consisting of mezzanine debt, preferred
equity and first mortgage bridge
4
<PAGE>
loans. From July, 1997 until the time he departed, Mr. Holliday was responsible
for the origination of approximately $450 million of debt and preferred equity
investments, $260 million of which involved properties located in Manhattan.
From January 1991 to June 1997, Mr. Holliday served in various management
positions, including Senior Vice President, at New York-based Victor Capital
Group--a private real estate investment bank specializing in advisory services,
investment management and debt and equity placements. While there, Mr. Holliday
was chiefly responsible for the strategic management and resolution of over
$250 million of debt on behalf of the firm and its investors. Additionally, he
played an integral role in the restructuring and repositioning of over
$3.0 billion of troubled assets for the firm's institutional clients.
Mr. Holliday received a Bachelor of Science degree in Business and Finance from
Lehigh University in 1988, as well as a Master of Science degree in Real Estate
Development from Columbia University in 1990. Mr. Holliday is 33 years old.
GERARD NOCERA has served as Executive Vice President-Leasing of the Company
since 1997. From 1991 to 1997, Mr. Nocera was responsible for the development
and implementation of marketing and leasing programs at SL Green Properties
owned and managed properties. Prior to joining SL Green Properties, Mr. Nocera
worked for The Cohen Brothers as a landlord representative. Mr. Nocera is a
member of the Real Estate Board of New York. Mr. Nocera received a B.A. degree
from Duquesne University. Mr. Nocera is 43 years old.
THOMAS E. WIRTH has served as Chief Financial Officer since June 1999 and
joined the Company in 1997 as Vice President-Finance. Prior to joining the
Company, from 1995 to 1997 Mr. Wirth was Vice President of Financial Reporting
and Analysis for Greenwich, Connecticut based United Waste System, Inc., a waste
management company acquired in 1997 by USA Waste Services, Inc. Mr. Wirth also
spent 10 years with Ernst & Young LLP in various positions, including senior
manager. Mr. Wirth received his Bachelor of Arts degree in business management
and accounting from Gettysburg College and is a licensed CPA. Mr. Wirth is
36 years old.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company is managed by a five member Board of Directors, a majority of
whom are independent of the Company's management. The Board of Directors held
six meetings during fiscal year 1999. Each of the directors attended at least
75% of the total number of meetings of the Board of Directors during 1999.
AUDIT COMMITTEE. The Audit Committee, which consists of John H. Alschuler,
Jr., Edwin Thomas Burton, III and John S. Levy, makes recommendations concerning
the engagement of independent public accountants, reviews with the independent
public accountants the plans and results of the audit engagements, approves
professional services provided by the independent public accountants, reviews
the independence of the independent public accountants, considers the range of
audit and non-audit fees and reviews the adequacy of the Company's internal
accounting controls. The Audit Committee held four meetings during fiscal year
1999. Each of the committee members attended at least 75% of the total meetings
of the Audit Committee. The Audit Committee adopted a charter on February 16,
2000 that complies with recent Securities and Exchange Commission and New York
Stock Exchange requirements.
EXECUTIVE COMMITTEE. Subject to the supervision and oversight of the Board
of Directors, the Executive Committee, which consists of Stephen L. Green,
Benjamin P. Feldman and John H. Alschuler, Jr., has the authority to approve the
acquisition, financing and disposition of investments by the Company and to
authorize the execution of certain contracts and agreements, including those
relating to the borrowing of money by the Company and to exercise generally all
other powers of the Board of Directors, except for those which require action by
all Directors or the Independent Directors under the Articles of Incorporation
or Bylaws of the Company or under applicable law. The Executive Committee held
no meetings during fiscal year 1999.
5
<PAGE>
COMPENSATION COMMITTEE. The Compensation Committee, which consists of John
H. Alschuler, Jr., Edwin Thomas Burton, III and John S. Levy makes
recommendations and exercises all powers of the Board of Directors in connection
with compensation matters, including incentive compensation and benefit plans.
The Compensation Committee also has authority to grant awards under the
Company's 1997 Stock Option and Incentive Plan, as amended by the Board of
Directors (the "Amended 1997 Stock Option and Incentive Plan"). The Compensation
Committee held two meetings during fiscal year 1999.
The Board of Directors does not have a standing nominating committee. The
full Board of Directors performs the functions of such a committee.
DIRECTOR COMPENSATION
Each of the non-employee directors of the Company receives an annual
director's fee of $12,000. Each non-employee director also receives $1,000 for
each meeting of the Board of Directors attended and $500 for each committee
meeting attended, provided such committee meeting does not occur on a day on
which a Board of Directors meeting is held. The annual fee is payable half in
stock and half in cash each year. The meeting fees are paid in cash. Each
non-employee director, upon initial election to the Board of Directors, received
options under the 1997 Stock Option and Incentive Plan to purchase 6,000 shares
of Common Stock at the market price of the Common Stock on the date of grant,
which vested one year from the date of grant and, on May 19, 1999, received
options under such plan to purchase an additional 6,000 shares of Common Stock
at the market price of the Common Stock on the date of grant, all of which
vested on the date of grant.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has selected the accounting firm of Ernst & Young LLP to serve as
independent auditors of the Company for the fiscal year ending December 31,
2000, subject to ratification of this appointment by the stockholders of the
Company. Ernst & Young LLP has served as the Company's independent auditors
since the Company's formation in June 1997 and is considered by management of
the Company to be well qualified. The Company has been advised by that firm that
neither it nor any member thereof has any financial interest, direct or
indirect, in the Company or any of its subsidiaries in any capacity. A
representative of Ernst & Young LLP will be present at the Annual Meeting, will
be given the opportunity to make a statement if he or she so desires and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF THE INDEPENDENT AUDITORS.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding the base compensation
awarded to the Company's Chief Executive Officer and each of the Company's other
four most highly compensated executive officers (collectively, the "Named
Executive Officers") whose base salary, on an annualized basis exceeded $100,000
during the fiscal year ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------------------------
LONG
TERM ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUSES($) OPTIONS(1) ($)(2)
- - --------------------------- -------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
1999 $250,000 $325,000 300,000 - 0 -
Stephen L. Green, Chairman of the Board, 1998 $250,000 - 0 - 125,000 - 0 -
Chief Executive Officer.................... 1997 $250,000 - 0 - - 0 - - 0 -
1999 $300,000 $100,000 - 0 - $300,000
David J. Nettina, President and Chief 1998 $200,000 $100,000 100,000 $300,000
Operating Officer.......................... 1997 $200,000 -0- 75,000 - 0 -
1999 $175,000 $ 50,000 - 0 - - 0 -
Benjamin P. Feldman, Executive Vice President 1998 $150,000 $ 50,000 50,000 - 0 -
and General Counsel........................ 1997 $150,000 - 0 - 50,000 - 0 -
1999 $175,000 $125,000 - 0 - - 0 -
Gerard T. Nocera, Executive Vice President- 1998 $175,000 $ 75,000 75,000 - 0 -
Leasing.................................... 1997 $175,000 -0- 50,000 - 0 -
1999 $300,000 $100,000 100,000 - 0 -
Marc Holliday, Chief Investment Officer...... 1998 $126,923 $ 50,000 300,000 - 0 -
</TABLE>
- - ------------------------
(1) As of December 31, 1999, options to purchase a total of 2,051,000 shares of
Common Stock have been granted to directors and employees of the Company,
including options to purchase 1,225,000 shares of Common Stock granted to
the Named Executive Officers.
(2) See "Certain Relationships and Related Transactions" for information
regarding certain warrants distributed to the executives which were granted
to the Company by OnSite Access, Inc.
7
<PAGE>
The following table sets forth the options granted with respect to the
fiscal year ended December 31, 1999 to the Company's Named Executive Officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1999
PERCENT OF
TOTAL
OPTIONS POTENTIAL REALIZABLE VALUE AT
NUMBER OF GRANTED EXERCISE ASSUMED ANNUAL RATES OF
SECURITIES TO PRICE PER SHARE PRICE APPRECIATION
UNDERLYING EMPLOYEES SHARE OF FOR OPTION TERM (3)
OPTIONS IN FISCAL COMMON EXPIRATION ------------------------------
NAME GRANTED(1) YEAR STOCK(2) DATE 5% 10%
- - ---- ---------- ---------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Stephen L. Green............ 300,000 % $20.8125 12/23/09 $3,926,670(4) $9,950,940(5)
David J. Nettina............ - 0 - 0.0% N/A N/A N/A N/A
Benjamin P. Feldman......... - 0 - 0.0% N/A N/A N/A N/A
Gerard T. Nocera............ - 0 - 0.0% N/A N/A N/A N/A
Marc Holliday............... 100,000 % $20.8125 12/23/09 $1,308,890(4) $3,316,980(5)
</TABLE>
- - ------------------------
(1) All options are granted at the fair market value of the common stock at the
date of grant. These options will vest in three equal annual installments
(rounded to the nearest whole share) over three years.
(2) The exercise price for the options was based on the market price of the
Common Stock on the date of issuance.
(3) In accordance with the rules of the Commission, these amounts are the
hypothetical gains or "option spreads" that would exist for the respective
options based on assumed rates of annual compound share price appreciation
of 5% and 10% from the date the options were granted over the full option
term. No gain to the optionee is possible without an increase in the price
of the Common Stock, which would benefit all stockholders.
(4) An annual compound share price appreciation of 5% from the issuance price of
the Common Stock yields a price of $33.9014 per share of Common Stock.
(5) An annual compound share price appreciation of 10% from the issuance price
of the Common Stock yields a price of $53.9823 per share of Common Stock.
No options were exercised by the Named Executive Officers in 1999. The
following table sets forth the value of options held at the end of 1999 by the
Company's Named Executive Officers.
AGGREGATED FISCAL YEAR-END 1999 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED IN-THE-
UNEXERCISED OPTIONS AT FISCAL MONEY OPTIONS AT FISCAL YEAR-
YEAR-END (#1) END($)(1)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ---- ----------------------------- -----------------------------
<S> <C> <C>
Stephen L. Green............................ 25,000/400,000 $82,813/$612,500
David J. Nettina............................ 70,000/105,000 $103,750/$283,750
Benjamin P. Feldman......................... 43,333/56,667 $58,125/$145,000
Gerard T. Nocera............................ 48,333/76,667 $74,687/$211,250
Marc Holliday............................... 60,000/340,000 $0/$93,750
</TABLE>
- - ------------------------
(1) The value of unexercised in-the-money options at fiscal year-end based on
the fair market value for Common Stock, $21.75 share, as of December 31,
1999.
8
<PAGE>
EMPLOYMENT AND NONCOMPETITION AGREEMENTS
Benjamin P. Feldman and Gerard T. Nocera each entered into an amended and
restated employment and noncompetition agreement, effective as of October 1,
1998. Each agreement has a three-year term, will automatically renew for
additional one-year terms unless notice of non-renewal is given and provides for
certain severance payments in the event of the Named Executive Officer's death,
disability, termination "without cause" or resignation with "good reason" (as
such terms are defined in the agreements). Each such employment and
noncompetition agreement, subject to certain exceptions, prohibits the Named
Executive Officer from engaging, directly or indirectly, in any business which
engages or attempts to engage, directly or indirectly, in any material
acquisition, development, construction, operation, management or leasing of any
commercial real estate property within specified portions of the New York City
metropolitan area during the one-year period following the executive's
termination of employment with the Company.
In October 1998, as amended in January 2000, David J. Nettina also entered
into a generally similar amended and restated employment and noncompetition
agreement with the Company. However, Mr. Nettina's agreement expires on July 8,
2001 and does not automatically renew. The agreement, through July 8, 2000,
provides for a minimum yearly bonus of $100,000, and the award of $200,000 worth
of shares of Common Stock on the annual anniversary dates of his employment. The
agreement also provides that if Mr. Nettina voluntarily terminates employment
for a reason other than disability or "good reason" and does not provide at
least 12 months advance notice to the Company ("Sufficient Notice"), certain
stock options and shares of restricted stock granted to him will be forfeited
and/or subject to repurchase by the Company. Subject to certain exceptions, if
Mr. Nettina's employment is terminated without Sufficient Notice, the agreement
prohibits Mr. Nettina from engaging in certain competitive activities within the
New York City metropolitan area during the period beginning on the date of the
termination of his employment with the Company and ending on the later of
(i) three years from his commencement of such employment and (ii) one year from
the termination of such employment. Mr. Nettina's agreement is subject to
extension by mutual agreement between Mr. Nettina and the Company.
In addition, pursuant to the terms of Mr. Nettina's prior employment
agreement, Mr. Nettina received a loan from the Company on August 14, 1997 to
purchase shares of Common Stock issued under the 1997 Stock Option and Incentive
Plan (a "Stock Loan"). The principal amount of the Stock Loan was $300,000. On
August 14, 1999, the Stock Loan was cancelled and replaced with a new loan from
the Company in the principal amount of $100,000 (the "New Loan"). The New Loan
matures on July 14, 2000, accrues interest at a rate of 6.74% per annum and is
secured by a portion of the Common Stock purchased and is otherwise
non-recourse. One-twelfth of the New Loan (together with accrued interest on the
New Loan) will be forgiven each month during the term of the New Loan provided
that Mr. Nettina is then employed by the Company. In the event of a
change-in-control of the Company, Mr. Nettina's death or permanent disability or
the termination of his employment by the Company without cause, the outstanding
principal amount of the New Loan will be forgiven in full. In the event that
Mr. Nettina terminates employment without Sufficient Notice or is terminated
with cause, the outstanding amount of the New Loan will be immediately due and
payable. The outstanding amount shall be equal to the amount then due and owing,
pro rated for the number of months elapsed for the year in which termination
occurs.
In July 1998 Marc Holliday entered into an employment and noncompetition
agreement with the Company. The term of the agreement is five (5) years, which
term does not renew automatically. Pursuant to the agreement, Mr. Holliday
received, among other things, (i) an interest free loan from the Company in the
amount of $300,000 (which was forgiven in its entirety because Mr. Holliday
remained in the employ of the Company after January 10, 2000); (ii) options to
purchase 300,000 shares of SL Green Common Stock, which options vest equally
over a five year period; and (iii) 150,000 shares of restricted SL Green Common
Stock, subject to vesting as described below (the "Holliday Restricted Stock").
9
<PAGE>
The Holliday Restricted Stock vests over five years, with 15% vesting after
years one, two and three, 20% vesting after year four and the remaining 35%
vesting after year five. However, the vesting of the Holliday Restricted Stock
is further conditioned upon the attainment of specified financial performance
goals during the vesting period. On the fifth anniversary of Mr. Holliday's
employment with SL Green, if Mr. Green is no longer the Chairman of the Board of
Directors of the Company and the total value (such value being the "Total
Value") of Mr. Holliday's stock options, the Holliday Restricted Stock and any
other shares of restricted stock received by Mr. Holliday as compensation is
less than $1,500,000, Mr. Holliday may, at his option, either require SL Green
to pay to him the difference between $1,500,000 and the Total Value or retain
such options and shares. In the event Mr. Holliday requires the Company to pay
such difference, the Company may, at its option, purchase from Mr. Holliday all
such shares and options for a purchase price of $1,500,000.
Finally, in connection with the IPO, Stephen L. Green entered into an
employment and noncompetition agreement with the Company that is substantially
similar to the amended and restated employment and noncompetition agreements of
Messrs. Feldman and Nocera. Mr. Green's agreement has been extended by authority
of the Company's Compensation Committee so as to expire on August 30, 2002.
Mr. Green's agreement, subject to certain exceptions, prohibits him from
engaging in certain competitive activities within the New York metropolitan area
during the period beginning on the date of the termination of his employment
with the Company and ending on the later of (i) three years from the closing of
the IPO and (ii) one year from the termination of such employment.
REPORT ON EXECUTIVE COMPENSATION
The following is a report by the Company's Compensation Committee regarding
the Company's executive compensation objectives, executive compensation program
and the compensation of the Company's chief executive officer.
EXECUTIVE COMPENSATION OBJECTIVES. The objective of the Company's executive
compensation program is to attract, retain and motivate talented executives that
will maximize stockholder value. In order to achieve this objective, in addition
to annual base salaries, the executive compensation program utilizes a
combination of long-term incentives through equity-based compensation and annual
incentives through cash bonuses. The program is intended to align the interests
of executives with those of the Company's stockholders by linking a portion of
executive compensation directly to increases in stockholder value. The Company
seeks to provide total compensation to its executive officers which is
competitive with total compensation paid by REITs similar to the Company.
PROCEEDINGS OF THE COMPENSATION COMMITTEE. The Compensation Committee
determines compensation for the Company's executive officers and is comprised of
three nonemployee directors, John H. Alschuler, Jr., Edwin Thomas Burton, III
and John S. Levy. Final compensation determinations for each fiscal year
generally are made after the end of the fiscal year and after audited financial
statements for such year become available. At that time, base salaries for the
following fiscal year are set to the extent not already dictated by the terms of
existing employment agreements, cash bonuses, if any, will be determined for the
past year's performance, and option grants, if any, will generally be made.
The Compensation Committee exercises independent discretion in respect of
executive compensation matters. With respect to the compensation of the Named
Executive Officers other than Mr. Stephen L. Green, the Compensation Committee
reviews the recommendations of Mr. Stephen L. Green.
The following is a discussion of each element of the Company's executive
compensation:
ANNUAL BASE SALARY. Base salaries for each of the Named Executive Officers
are the subject of the employment agreement between the Company and each such
executive as indicated above.
10
<PAGE>
ANNUAL INCENTIVES. Annual incentives are provided in the form of cash
bonuses to be paid if certain performance objectives are achieved. The
Compensation Committee may in the future award cash bonuses based primarily upon
the Company's level of Funds from Operations. Cash bonuses will also be subject
to adjustment based upon the Compensation Committee's evaluation of an
executive's personal performance. Mr. Nettina's employment and noncompetition
agreement provides for a minimum annual cash bonus (commencing on the first
anniversary of the date of the agreement) of $100,000.
LONG-TERM INCENTIVES. Long-term incentives are provided through the grant
of stock options. The grant of stock options are intended to align the
executive's long-term objectives with those of the Company's stockholders. The
Amended 1997 Stock Option and Incentive Plan is administered by the Compensation
Committee, which has the discretion to determine those individuals to whom
options will be granted, the number of shares subject to options and other terms
and conditions of the options. In 1999, as a long-term incentive award, Marc
Holliday received 100,000 stock options.
1999 CHIEF EXECUTIVE OFFICER COMPENSATION. As indicated above, Stephen L.
Green's salary was determined prior to the IPO and prior to the formation of the
Compensation Committee. Accordingly, the Compensation Committee took no action
with respect to such determination.
For the fiscal year ended December 31, 1999, the Compensation Committee
awarded to Stephen L. Green 300,000 stock options and a $325,000 cash bonus.
These awards were determined by the Compensation Committee substantially in
accordance with the policies described above relating to all Named Executive
Officers of the Company. In making such determinations, the Compensation
Committee noted several factors, including the Company's achievement of an 18%
increase in Funds from Operations per share in 1999 over levels achieved in
1998.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162(m) of the Internal
Revenue Code of 1986, as amended, limits the deductibility on the Company's tax
return of compensation over $1 million to any of the named executive officers of
the Company unless, in general, the compensation is paid pursuant to a plan
which is performance-related, non-discretionary and has been approved by the
Company's stockholders. The Compensation Committee's policy with respect to
Section 162(m) is to make every reasonable effort to ensure that compensation is
deductible to the extent permitted while simultaneously providing Company
executives with appropriate compensation for their performance. The Company did
not pay any compensation during 1999 that would be subject to the limitations
set forth in Section 162(m).
SUBMITTED BY THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
John H. Alschuler, Jr.
Edwin Thomas Burton, III
John S. Levy
11
<PAGE>
STOCK PERFORMANCE GRAPH(1)
The following graph provides a comparison of the cumulative total
shareholder return on the Common Stock from the IPO price to the NYSE closing
price per share on December 31, 1999 with the cumulative total return on the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"), the Bloomberg
REIT Office Properties Index (the "BBG REIT Index") and the Standard & Poor's
REIT Index (the "S&P REIT Index"). In order to provide an Index for comparison
that was more widely available than the BBG REIT Index, the Company is now
comparing its returns to that of the S&P REIT Index, an Index that, as of
November 1999, includes the Company. Total return values were calculated based
on cumulative total return assuming (i) the investment of $100 in the Common
Stock IPO on August 15, 1997, in the S&P 500 and the BBG REIT Index on
August 31, 1997 and in the S&P REIT Index on October 31, 1997 (first day of
publication for the S&P REIT Index) and (ii) reinvestment of dividends.
TOTAL RETURNS BASED ON THE FOLLOWING DATA:
<TABLE>
<CAPTION>
15-AUG-97(1) DEC-97 DEC-98 DEC-99
------------ -------- -------- --------
<S> <C> <C> <C> <C>
SL Green............................................. 100.00 105.81 93.62 100.88
S&P 500.............................................. 100.00 108.42 139.40 168.73
BBG REIT............................................. 100.00 118.35 96.85 90.37
S&P REIT............................................. 100.00 104.00 83.54 72.99
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
15-AUG-97 DEC-97 DEC-98 DEC-99
<S> <C> <C> <C> <C>
SL Green 100.00 105.81 93.62 100.88
S&P 500 100.00 108.42 139.40 168.73
BBG REIT 100.00 118.35 96.85 90.37
S&PREIT 100.00 104.00 83.54 72.99
</TABLE>
SOURCE: STANDARD & POOR'S AND BLOOMBERG
- - ------------------------
(1) Assumes an initial investment of $100 on August 15, 1997 (the IPO purchase
date) with respect to shares of the Company's Common Stock; on August 31,
1997 with respect to the S&P 500 and the BBG REIT Index; and October 31,
1997 with respect to the S&P REIT Index (first day of publication of the S&P
REIT Index).
12
<PAGE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth the beneficial ownership of Common Stock for
(i) each stockholder of the Company holding more than a 5% beneficial interest
in the Company, (ii) each executive officer of the Company who is not a director
of the Company and (iii) the directors and executive officers of the Company as
a group as of March 21, 2000. Stock ownership of the Directors of the Company
appears under the heading "Information Regarding the Nominee and Directors" in
this Proxy Statement.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED (1)
----------------------------
NAME OF BENEFICIAL OWNERS NUMBER PERCENT OF TOTAL
- - ------------------------- --------- ----------------
<S> <C> <C>
David J. Nettina(2)......................................... 203,315 0.8%
Gerard T. Nocera(2)......................................... 157,421 0.7%
Marc Holliday (2)........................................... 210,000 0.9%
Thomas E. Wirth (2)......................................... 23,000 0.1%
Cohen & Steers Capital Management, Inc.(3).................. 3,577,900 14.8%
Capital Growth Management LP (4)............................ 1,473,000 6.1%
EII Realty Securities Inc.(5)............................... 1,706,500 7.0%
The Equitable Companies Incorporated(6)..................... 1,269,500 5.2%
All directors and executive officers as a group (9 persons)
(7)....................................................... 2,987,845 12.3%
</TABLE>
- - ------------------------
(1) The number of Common Shares beneficially owned is reported on the basis of
regulations of the SEC governing the determination of beneficial ownership
of securities, which includes stock options exercisable within sixty days of
the date of this Proxy Statement. Assumes 24,229,997 shares of Common Stock
outstanding. Assumes that all Units held by the person (and no other person)
are redeemed for shares of Common Stock. The total number of shares of
Common Stock outstanding used in calculating this percentage assumes that
none of the Units held by other persons are redeemed for shares of Common
Stock.
(2) The business address for this stockholder is 420 Lexington Avenue, New York,
New York 10170.
(3) The business address for this stockholder is 757 Third Avenue, New York, New
York 10017. Pursuant to a Schedule 13G filed with the SEC, as of
December 31, 1999, this stockholder may have direct or indirect voting
and/or investment discretion over these shares of Common Stock which are
held for the benefit of its clients by its separate accounts, externally
managed accounts, registered investment companies, subsidiaries and/or other
affiliates. This stockholder is reporting the combined holdings of the
entities for the purpose of administrative convenience.
(4) The business address for this stockholder is One International Plaza,
Boston, MA 02110. Pursuant to a Schedule 13G filed with the SEC, as of
December 31, 1999, this stockholder may have direct or indirect voting
and/or investment discretion over these shares of Common Stock which are
held for the benefit of its clients by its separate accounts, externally
managed accounts, registered investment companies, subsidiaries and/or other
affiliates. This stockholder is reporting the combined holdings of the
entities for the purpose of administrative convenience.
(5) The business address for this stockholder is 667 Madison Avenue, New York,
NY 10021. Pursuant to a Schedule 13G filed with the SEC, as of December 31,
1999, this stockholder may have direct or indirect voting and/or investment
discretion over these shares of Common Stock which are held for the benefit
of its clients by its separate accounts, externally managed accounts,
registered investment companies, subsidiaries and/or other affiliates. This
stockholder is reporting the combined holdings of the entities for the
purpose of administrative convenience.
(6) The business address for this stockholder is 1290 Avenue of the Americas,
New York, NY 10104. Pursuant to a Schedule 13G filed with the SEC, as of
December 31, 1999, this stockholder may have direct or indirect voting
and/or investment discretion over these shares of Common Stock which are
held for the benefit of its clients by its separate accounts, externally
managed accounts, registered investment companies, subsidiaries and/or other
affiliates. This stockholder is reporting the combined holdings of the
entities for the purpose of administrative convenience.
(7) Includes shares held by Mr. Feldman through a family limited liability
company of which he is the managing member.
13
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Exchange Act requires the Company's executive officers and directors, and
persons who own more than 10% of a registered class of the Company's equity
securities ("10% Holders"), to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the New York
Stock Exchange. Officers, directors and 10% Holders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms that
they file. To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company, all Section 16(a) filing requirements
applicable to its executive officers, directors and 10% Holders were satisfied,
except that Mr. Green reported two previously reportable transactions on his
most recent Form 5, Messrs. Feldman, Nettina, Nocera and Holliday each reported
one previously reportable transaction on his most recent Form 5, Mr. Alschuler
reported one previously reportable transaction on an amended Form 5, and the
Forms 5 for Messrs. Burton and Levy were filed two and three days late,
respectively.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CLEANING SERVICES
First Quality Maintenance, L.P. ("First Quality") provides cleaning and
related services with respect to certain of the properties owned by the Company.
First Quality is owned by Gary Green, a son of Stephen L. Green. First Quality
also provides additional services directly to tenants on a separately negotiated
basis. The aggregate amount of fees to First Quality for services provided
(excluding services provided directly to tenants) was approximately $325,000 in
1997, $1,056,000 in 1998 and $2,843,000 in 1999. In addition, the cleaning
entity has the non-exclusive opportunity to provide cleaning and related
services to individual tenants at the Company's properties on a basis separately
negotiated with any tenant seeking such additional services. The cleaning entity
will provide such services to individual tenants pursuant to agreements on
customary terms (including at market rates). First Quality leases 3,740 square
feet of space at 70 West 36th Street pursuant to a lease that expires on
December 31, 2005 and provides for annual rental payments of approximately
$68,660.
SECURITY SERVICES
Classic Security LLC ("Classic Security") provides security services with
respect to certain of properties owned by the Company. Classic Security is owned
by Gary Green, a son of Stephen L. Green. The aggregate amount of fees for such
services was approximately $143,000 in 1997, $566,000 in 1998 and $1,864,000 in
1999.
WARRANTS
On December 13, 1999, the Company entered into a Warrant Issuance Agreement
with OnSite Access, Inc. ("OnSite"). Under this agreement, OnSite agreed to
issue to the Company warrants to purchase up to 882,353 shares of OnSite common
stock for an exercise price of $2.36 per share in exchange for the Company
giving OnSite access to provide certain telecommunications services to tenants
of properties owned by the Company and its affiliates. The number of warrants
that actually will be issued to the Company will be determined based on the size
of the properties to which OnSite is given access and ultimately contracts to
provide services. Effective as of December 31, 1999, the Compensation Committee
resolved to award 25% of the warrants ultimately issued to the Company to
various Company service providers (including each of the Named Executive
Officers) as a form of incentive compensation. Accordingly, the Company
contributed its right to receive the warrants to a partnership and sold
percentage interests in such partnership to the selected service providers. (The
partnership subsequently was converted into a limited liability company, of
which SL Green Operating Partnership, L.P. is the managing member.) Each service
provider purchased the interest made available to him for its fair market value
(as determined based upon an independent valuation of the warrants contributed
to the partnership). If the service provider's relationship with the Company and
all affiliates is terminated by the Company for cause (as defined) or by the
service provider without good reason (as defined) prior to January 1, 2001 or
the occurrence of certain other events, the service provider will be required to
sell his interest back to SL Green Operating Partnership, L.P. for the original
purchase price. The percentage of
14
<PAGE>
the warrants sold to each Named Executive Officer and the purchase price paid by
such officer are as follows: Stephen L. Green, 5.3333%, $16,168.93; David J.
Nettina, 5.3333%, $16,168.93; Marc Holliday, 5.3333%, $16,168.93; Gerard Nocera,
3.0%, $9,095.08; Benjamin P. Feldman, 2.5%, $7,579.23.
OTHER MATTERS
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
paid by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
In addition, the Company intends to utilize the proxy solicitation services of
GA Kraut at an aggregate estimated cost of $7,500 plus out-of-pocket expenses.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2001 annual meeting of
stockholders must be received by the Secretary of the Company no later than
December 1, 2000 in order to be considered for inclusion in the Company's proxy
statement relating to the 2001 meeting pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended ("Rule 14a-8").
For a proposal of a stockholder to be presented to the Company's 2001 annual
meeting of stockholders, other than a stockholder proposal included in the
Company's proxy statement pursuant to Rule 14a-8, it must be received at the
principal executive offices of the Company after November 17, 2000 and on or
before March 2, 2001, unless the 2001 annual meeting of stockholders is
scheduled to take place before May 9, 2001. The Company's Bylaws provide that
any stockholder wishing to nominate a director or have a stockholder proposal
other than a stockholder proposal included in the Company's proxy statement
pursuant to Rule 14a-8, considered at an annual meeting must provide written
notice of such nomination or proposal and appropriate supporting documentation,
as set forth in the Bylaws, to the Company at its principal executive offices
not less than 75 days nor more than 180 days prior to the anniversary of the
immediately preceding annual meeting of stockholders (the "Anniversary Date");
provided, however, that in the event that the annual meeting is scheduled to be
held more than seven calendar days prior, or more than 60 days subsequent, to
the Anniversary Date, such nominations or proposals must be delivered to the
Company not earlier than the 180th day prior to such meeting and not later than
the later of the 75th day prior to such annual meeting or the twentieth day
following the earlier of the day on which public announcement of the meeting is
first made or notice of the meeting is mailed to stockholders. Any such proposal
should be mailed to: SL Green Realty Corp., 420 Lexington Avenue, New York, New
York 10170, Attn: Benjamin P. Feldman, Secretary.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
BY ORDER OF THE BOARD OF DIRECTORS
[LOGO]
Benjamin P. Feldman
SECRETARY
New York, New York
March 24, 2000
15
<PAGE>
v Please Detach and Mail in the Envelope Provided v
|X| Please mark your
votes as indicated
in this example
1. To elect two Class III directors of FOR ALL WITHHOLD
the Company to serve until the 2003 (except as AUTHORITY
Annual Meeting of Stockholders and marked to the (to vote for all
until their respective successors contrary below) nominees)
are duly elected and qualified. |_| |_|
(INSTRUCTION: To withhold authority to NOMINEES:
vote for any individual nominee or John H. Alschuler, Jr.
nominee, write that nominee's name in Stephen L. Green
the space below.)
- - ----------------------------------------
2. To ratify the selection of Ernst & FOR ABSTAIN AGAINST
Young LLP as the independent |_| |_| |_|
auditors of the Company for the
fiscal year ending December 31,
2000.
3. To consider and act upon any other matters that may properly be brought
before the Annual Meeting and at any adjournments or postponements thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGE(S)
RECEIPT OF A COPY OF THE ACCOMPANYING
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS, THE PROXY STATEMENT WITH
RESPECT THERETO AND THE COMPANY'S 1999
ANNUAL REPORT TO STOCKHOLDERS AND HEREBY
REVOKE(S) ANY PROXY OR PROXIES
HERETOFORE GIVEN. THIS PROXY MAY BE
REVOKED AT ANY TIME BEFORE ITS
EXERCISED.
MARK HERE FOR ADDRESS CHANGE AND |_|
NOTE AT LEFT
shareholder name & address
do not print in this area
Please Detach and Mail in the Envelope Provided
SEE REVERSE
SIDE
