<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
VORNADO OPERATING COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[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:
- --------------------------------------------------------------------------------
<PAGE> 2
VORNADO OPERATING COMPANY
------------ V
------------
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
2 0 0 0
<PAGE> 3
VORNADO OPERATING COMPANY
PARK 80 WEST, PLAZA II
SADDLE BROOK, NEW JERSEY 07663
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 31, 2000
------------------------
To our Stockholders:
The Annual Meeting of Stockholders of Vornado Operating Company, a Delaware
corporation (the "Company"), will be held at the Marriott Hotel, Interstate 80
and the Garden State Parkway, Saddle Brook, New Jersey 07663, on Wednesday, May
31, 2000, beginning at 10:00 a.m., local time, for the following purposes:
(1) The election of two persons to the Board of Directors of the Company,
each for a term of three years;
(2) The approval of an amendment to the Company's Omnibus Stock Plan; and
(3) The transaction of such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Pursuant to the By-laws of the Company, the Board of Directors of the
Company has fixed the close of business on April 20, 2000, as the record date
for determination of stockholders entitled to notice of and to vote at the
meeting.
Your attention is called to the attached proxy statement. Whether or not
you plan to attend the meeting, you are urged to complete and sign the enclosed
proxy and return it in the accompanying envelope to which no postage need be
affixed if mailed in the United States. If you attend the meeting in person, you
may revoke your proxy and vote your own shares.
By Order of the Board of Directors,
Larry Portal
Assistant Secretary
<PAGE> 4
VORNADO OPERATING COMPANY
PARK 80 WEST, PLAZA II
SADDLE BROOK, NEW JERSEY 07663
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 31, 2000
------------------------
The enclosed proxy is being solicited by the Board of Directors (the
"Board") of Vornado Operating Company, a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders of the Company to be held on
Wednesday, May 31, 2000, beginning at 10:00 a.m., local time (the "Annual
Meeting"). The proxy may be revoked by the stockholder at any time prior to its
exercise at the Annual Meeting by executing and delivering to the Company at its
principal office a written revocation or later dated proxy or by attending the
Annual Meeting and voting in person. The cost of soliciting proxies will be
borne by the Company. MacKenzie Partners, Inc. has been engaged by the Company
to solicit proxies, at a fee not to exceed $5,000. In addition to solicitation
by mail and by telephone calls, arrangements may be made with brokerage houses
and other custodians, nominees and fiduciaries to send proxies and proxy
material to their principals and the Company may reimburse them for their
expenses in so doing.
Only stockholders of record at the close of business on April 20, 2000 are
entitled to notice of and to vote at the Annual Meeting. There were on such date
4,068,665 shares of common stock, par value $.01 per share ("Common Stock"), of
the Company outstanding, each entitled to one vote at the Annual Meeting.
The principal executive office of the Company is located at Park 80 West,
Plaza II, Saddle Brook, New Jersey 07663. The accompanying notice of annual
meeting of stockholders, this proxy statement and the enclosed proxy will be
mailed on or about May 8, 2000 to the Company's stockholders of record as of the
close of business on April 20, 2000.
<PAGE> 5
THE COMPANY
The Company was formed on October 30, 1997, as a wholly owned subsidiary of
Vornado Realty Trust, a Maryland real estate investment trust ("Vornado"). In
order to maintain its status as a real estate investment trust ("REIT") for
federal income tax purposes, Vornado is required to focus principally on
investments in real estate assets. Accordingly, Vornado is prevented from owning
certain assets and conducting certain activities that would be inconsistent with
its status as a REIT. The Company was formed to own assets that Vornado could
not itself own and conduct activities that Vornado could not itself conduct. The
Company is intended to function principally as an operating company, in contrast
to Vornado's principal focus on investments in real estate assets. The Company
is able to do so because it is taxable as a regular "C" corporation rather than
as a REIT. See "Certain Relationships and Related Transactions" below.
ELECTION OF DIRECTORS
DIRECTORS STANDING FOR ELECTION
The Company's Board of Directors currently has six members. The Company's
restated certificate of incorporation (the "Charter") provides that the
directors of the Company will be divided into three classes, as nearly equal in
number as reasonably possible, as determined by the Board of Directors. The term
of office of Class I directors will expire at the annual meeting of stockholders
in 2002, the term of office of Class II directors will expire at the annual
meeting of stockholders in 2000 and the term of office of Class III directors
will expire at the annual meeting of stockholders in 2001, with each class of
directors to hold office until their successors have been duly elected and
qualified. At each annual meeting of stockholders, directors elected to succeed
the directors whose terms expire at such annual meeting shall be elected to hold
office for a term expiring at the annual meeting of stockholders in the third
year follow-
2
<PAGE> 6
ing the year of their election and until their successors have been duly elected
and qualify.
Unless otherwise directed in the proxy, the person named in the enclosed
proxy, or his substitute, will vote such proxy for the election of the two
nominees listed below as directors for a three-year term and until their
respective successors are duly elected and qualify. If any nominee at the time
of election is unavailable to serve, a contingency not presently anticipated, it
is intended that the person named in the proxy, or his substitute, will vote for
an alternate nominee who will be designated by the Board. Proxies may be voted
only for the nominees named or such alternates.
Under the By-laws, the affirmative vote of a plurality of all the votes
cast at the Annual Meeting, assuming a quorum is present, is sufficient to elect
a director. Under Delaware law, proxies marked "withhold authority" will be
counted for the purpose of determining the presence of a quorum but such proxies
will not be counted as votes cast in the election of directors and thus will
have no effect on the result of the vote.
The following table sets forth the nominees (all of whom are presently
members of the Board) and the other present members of the Board. With respect
to each such person, the table sets forth the age, principal occupation,
position presently held with the Company, and the year in which the person first
became a director of the Company.
<TABLE>
<CAPTION>
YEAR YEAR
PRINCIPAL OCCUPATION TERM FIRST
AND PRESENT POSITION WILL APPOINTED
NAME AGE WITH THE COMPANY EXPIRE AS DIRECTOR
- ---- --- ------------------------- ------ -----------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION TO SERVE AS DIRECTORS
UNTIL THE ANNUAL MEETING IN 2003
- ------------------------------------------------------
Martin Rosen(2)(3) 58 President of United Yarn 2000 1998
Products Co., Inc.
Russell B. Wight,
Jr.(1) 60 A general partner of 2000 1998
Interstate Properties
("Interstate")
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
YEAR YEAR
PRINCIPAL OCCUPATION TERM FIRST
AND PRESENT POSITION WILL APPOINTED
NAME AGE WITH THE COMPANY EXPIRE AS DIRECTOR
- ---- --- ------------------------- ------ -----------
<S> <C> <C> <C> <C>
PRESENT DIRECTORS ELECTED TO SERVE UNTIL
THE ANNUAL MEETING IN 2002
- ------------------------------------------------------
Douglas H.
Dittrick(2) 66 President and Chief 2002 1998
Executive Officer of
Douglas Communications
Corporation II
Richard West(2)(3) 62 Dean Emeritus, Leonard N. 2002 1998
Stern School of Business,
New York University
PRESENT DIRECTORS ELECTED TO SERVE UNTIL
THE ANNUAL MEETING IN 2001
- ------------------------------------------------------
Steven Roth(1) 58 Chairman of the Board and 2001 1998
Chief Executive Officer
of the Company; Managing
General Partner of
Interstate
Michael D.
Fascitelli(1) 43 President of the Company 2001 1998
</TABLE>
- ---------------
(1) Member of the Executive Committee of the Board of Directors of the Company.
(2) Member of the Audit Committee of the Board of Directors of the Company.
(3) Member of the Compensation Committee of the Board of Directors of the
Company.
Mr. Rosen has been the President of United Yarn Products Co., Inc. (a
manufacturer of synthetic fiber) since 1970. Mr. Rosen is a former director of
First National Bank of North Jersey, and a former director of First Fidelity
North, N.A. Mr. Rosen is a board member and past president of the YM-YWHA of
North Jersey, a board member of the Daughters of Miriam Home for the Aged
Foundation, and is Chairman of the Counsel for the Arts at Massachusetts
Institute of Technology.
4
<PAGE> 8
Mr. Wight has been a general partner of Interstate since 1968. Mr. Wight is
also a trustee of Vornado and a director of Alexander's, Inc. ("Alexander's")
and Insituform Technologies, Inc.
Mr. Dittrick has been the President and Chief Executive Officer of Douglas
Communications Corporation II (cable television) since July 1986. Prior to July
1986, Mr. Dittrick was the President and Chief Executive Officer of Tribune
Cable Communications, a cable television subsidiary of Tribune Company, which
was sold in 1986. Mr. Dittrick is Chairman of the Board of Trustees of Ohio
Wesleyan University, past President of Phi Gamma Delta, an international college
fraternity, and the Chairman of the Board of Trustees of Valley Hospital. Mr.
Dittrick is also a director of Fleet Bank, N.A.
Mr. West is Dean Emeritus of the Leonard N. Stern School of Business, New
York University. He was a professor there from September 1984 until September
1995. Prior thereto, Mr. West was Dean of the Amos Tuck School of Business
Administration at Dartmouth College. Mr. West is also a trustee of Vornado and a
director of Alexander's, Bowne & Co., Inc., and various investment companies
managed by Merrill Lynch Asset Management, Inc. or Hotchkis & Wiley, both
affiliates of Merrill Lynch & Co.
Mr. Roth is Chairman of the Board and Chief Executive Officer of the
Company. Mr. Roth has been Chairman of the Board and Chief Executive Officer of
Vornado since May 1989 and Chairman of the Executive Committee of the Board of
Vornado since April 1980. Since 1968, he has been a general partner of
Interstate and more recently, Managing General Partner. On March 2, 1995, he
became Chief Executive Officer of Alexander's. Mr. Roth is also a director of
Alexander's and of Capital Trust, Inc.
Mr. Fascitelli is President of the Company. Mr. Fascitelli has been
President and a trustee of Vornado, and a Director of Alexander's, since
December 2, 1996. From December 1992 to December 1996, Mr. Fascitelli was a
partner at Goldman, Sachs & Co. in charge of its real estate practice and was a
vice president prior to 1992.
5
<PAGE> 9
The Company is not aware of any family relationships among any directors or
executive officers of the Company. Messrs. Roth and Wight are affiliated with
each other as general partners of Interstate and in other businesses.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has an Executive Committee, an Audit Committee and a Compensation
Committee.
The Board held three meetings during 1999. Each director attended all of
the meetings of the Board during 1999.
Executive Committee
The Executive Committee possesses and may exercise all the authority and
powers of the Board in the management of the business and affairs of the
Company, except those reserved to the Board by the Delaware General Corporation
Law. The Executive Committee consists of three members, Messrs. Roth, Fascitelli
and Wight. Mr. Roth is Chairman of the Executive Committee. The Executive
Committee did not meet in 1999.
Audit Committee
The purposes of the Audit Committee are to assist the Board: (i) in its
oversight of the Company's accounting and financial reporting principles and
policies and internal controls and procedures; (ii) in its oversight of the
Company's financial statements and the independent audit thereof; (iii) in
selecting, evaluating and where deemed appropriate, replacing the outside
auditors; and (iv) in evaluating the independence of the outside auditors. The
function of the Audit Committee is oversight. The management of the Company is
responsible for the preparation, presentation and integrity of the Company's
financial statements and for maintaining appropriate accounting and financial
reporting principles and policies and internal controls and procedures designed
to assure compliance with accounting standards and applicable laws and
regulations. The outside auditors are responsible for planning and carrying out
a proper audit and reviews and other procedures. The Audit Committee,
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<PAGE> 10
which held four meetings during 1999, consisted of two members, Messrs. West and
Dittrick. Mr. Rosen was appointed to the Audit Committee at the March 2, 2000
meeting of the Board of Directors. Effective March 2, 2000, Mr. Dittrick became
the Chairman of the Audit Committee. Prior thereto, Mr. West was the Chairman of
the Audit Committee.
Compensation Committee
The Compensation Committee is responsible for establishing the terms of the
compensation of the executive officers and the granting of awards under the 1998
Omnibus Stock Plan of Vornado Operating Company (the "Omnibus Stock Plan"). The
Committee consists of two members, Messrs. West and Rosen. Mr. West is the
Chairman of the Compensation Committee. The Compensation Committee did not meet
in 1999.
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<PAGE> 11
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board is responsible for establishing the
terms of the compensation of the executive officers and the granting of awards
under the Company's Omnibus Stock Plan.
None of the Company's executive officers has received compensation from or
on behalf of the Company since its formation on October 30, 1997, except that in
connection with the formation of the Company, options and Stock Appreciation
Rights ("SARs") were granted to Vornado employees who held Vornado options,
including executive officers of the Company. Although the Company currently has
no employment agreements with any person and does not currently pay a salary or
other compensation to any executive officer for his services in such capacity,
the Company expects that it will pay salaries and other compensation to its
executive officers when it begins conducting business operations material enough
to warrant such compensation.
The factors and criteria which the Compensation Committee expects to
utilize in establishing the compensation of the Company's executive officers
include an evaluation of the Company's overall financial and business
performance, the officer's overall leadership and management and contributions
by the officer to the Company's acquisitions or investments. The Compensation
Committee also expects to consider the compensation provided in the prior year
and estimates of compensation to be provided by similar companies in the current
year. The primary objective of the Compensation Committee in establishing the
terms of the executive officers' compensation will be to provide strong
financial incentives for the executive officers to maximize stockholder value.
The Compensation Committee believes that the best way to accomplish this
objective is to grant substantial stock options on a fixed share basis without
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<PAGE> 12
adjusting the number of shares granted to offset changes in the Company's stock
price.
Section 162(m) of the Internal Revenue Code, which was adopted in 1993,
provides that, in general, publicly traded companies may not deduct, in any
taxable year, compensation in excess of $1,000,000 paid to the company's chief
executive officer and four other most highly compensated executive officers as
of the end of any fiscal year which is not "performance based", as defined in
Section 162(m). Options granted under the Omnibus Stock Plan to date satisfy the
performance based requirements under the final regulations issued with respect
to Section 162(m).
RICHARD WEST
MARTIN N. ROSEN
9
<PAGE> 13
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
with the performance of the Russell 2000 Index and NASDAQ Industrial Index (a
peer group index) for the period from October 16, 1998 (the initial day of
trading of the Common Stock on the American Stock Exchange) through the end of
1999. The graph assumes that $100 was invested on October 16, 1998 in each of
the Company's Common Stock, the Russell 2000 Index and the peer group index, and
that all dividends were reinvested. As the Company has only a limited operating
history, the Company believes that the information provided below has limited
relevance to an assessment of the Company's compensation policies or strategy.
[PERFORMANCE LINE GRAPH]
<TABLE>
<CAPTION>
VORNADO OPERATING
COMPANY RUSSELL 2000 INDEX NASDAQ INDUSTRIAL INDEX
----------------- ------------------ -----------------------
<S> <C> <C> <C>
10/16/98 100.00 100.00 100.00
12/31/98 101.00 123.00 131.00
12/31/99 75.00 147.00 225.00
</TABLE>
10
<PAGE> 14
PRINCIPAL SECURITY HOLDERS
The following table sets forth the number of shares of Common Stock and
units of limited partnership interest ("Units") in Vornado Operating L.P., a
Delaware limited partnership (the "Company L.P."), beneficially owned by (i)
each person who holds more than a 5% interest in the Company, (ii) directors of
the Company, (iii) executive officers of the Company, and (iv) the directors and
executive officers of the Company as a group. In addition, unless otherwise
noted, the address of all such persons is c/o Vornado Operating Company, Park 80
West, Plaza II, Saddle Brook, New Jersey 07663.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF PERCENT OF
COMMON STOCK PERCENT OF ALL SHARES
BENEFICIALLY ALL SHARES AND UNITS
NAME OF BENEFICIAL OWNER OWNED(1) (1)(2) (1)(2)
- ------------------------ ------------ ---------- ----------
<S> <C> <C> <C>
NAMED EXECUTIVE OFFICERS AND
DIRECTORS
Steven Roth(3)(4)................. 304,778 7.4% 16.6%
Michael D. Fascitelli............. 113,977 2.8% 2.5%
Douglas H. Dittrick............... 12,100 * *
Martin N. Rosen................... 5,100 * *
Richard West(6)................... 6,150 * *
Russell B. Wight, Jr.(3)(5)....... 232,723 5.7% 15.0%
Joseph Macnow..................... 10,550 * *
Irwin Goldberg.................... 1,120 * *
All executive officers and
directors as a group (8
persons)......................... 486,365 11.6% 20.1%
OTHER BENEFICIAL OWNERS
David Mandelbaum(3)............... 216,082 5.3% 14.7%
Interstate(3)..................... 200,133 4.9% 14.3%
Gotham Partners, L.P., Gotham
Partners III, L.P., Gotham
International Advisors,
L.L.C.(7)........................ 451,525 11.1% 10.0%
</TABLE>
- ---------------
* Less than 1%.
(1) Unless otherwise indicated, each person is the direct owner of, and has sole
voting power and sole investment power with respect to, such Common Stock.
Numbers and percentages in the table are based on 4,068,665 shares of Common
Stock and 447,017 Units outstanding as of April 20, 2000.
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<PAGE> 15
(2) The total number of shares outstanding used in calculating this percentage
assumes that all shares that each person has the right to acquire within 60
days pursuant to the exercise of options or upon the exchange of Units for
shares are deemed to be outstanding, but are not deemed to be outstanding
for the purpose of computing the ownership percentage of any other person.
(3) Interstate, a partnership of which Messrs. Roth, Wight and Mandelbaum are
the general partners, owns 200,133 shares of Common Stock and also owns a
9.9% limited partnership interest in Company L.P. Interstate has the right
to have its Units in Company L.P. redeemed by Company L.P. either (a) for
cash in an amount equal to the fair market value, at the time of redemption,
of 447,017 shares of Common Stock or (b) for 447,017 shares of Common Stock,
in each case as selected by the Company and subject to customary
anti-dilution provisions.
(4) Includes 1,720 shares owned by the Daryl and Steven Roth Foundation, over
which Mr. Roth holds sole voting power and investment power. Does not
include 1,800 shares owned by Mr. Roth's wife, as to which Mr. Roth
disclaims any beneficial interest.
(5) Includes 4,690 shares owned by the Wight Foundation, over which Mr. Wight
holds sole voting power and investment power.
(6) Mr. West and his wife own 150 shares jointly. Mr. West holds 900 shares in
self-directed Keogh accounts.
12
<PAGE> 16
(7) Based on Schedule 13G filed on February 15, 2000, Gotham Partners, L.P.,
Gotham Partners III, L.P. and Gotham International Advisors, L.L.C. have the
sole power to vote or to direct the vote of, and the sole power to dispose
or to direct the disposition of, 221,025 shares, 24,185 shares and 206,315
shares, respectively. The address of Gotham Partners, L.P. and Gotham
Partners III, L.P. is 110 East 42nd Street, 18th Floor, New York, New York
10017. The address of Gotham International Advisors, L.L.C. is c/o Goldman
Sachs (Cayman) Trust, Limited, Harbour Centre, 2nd Floor, P.O. Box 896,
George Town, Grand Cayman, Cayman Islands, British West Indies.
13
<PAGE> 17
EXECUTIVE COMPENSATION
None of the Company's executive officers has received compensation from or
on behalf of the Company since its formation. Although the Company currently has
no employment agreements with any person and does not currently pay a salary or
other compensation to any executive officer for his services in such capacity
(except that options or SARs have been granted to executive officers), the
Company expects that it will pay salaries and other compensation to its
executive officers when it begins conducting business operations material enough
to warrant such compensation.
The Company did not grant any options or SARs during 1999. All prior grants
were made in 1998. The following table summarizes all exercises of options and
SARs during 1999 and the number and value of options and SARs held at December
31, 1999.
AGGREGATED OPTION AND SAR EXERCISES IN 1999 AND
YEAR END OPTION AND SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS OPTIONS/SARS
ACQUIRED AT 12/31/99 AT 12/31/99
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- -------- -------- -------------- --------------------
<S> <C> <C> <C> <C>
Steven Roth -- $-- 69,700/135,300 $32,062/62,238
Michael D. Fascitelli -- -- 68,000/132,000 31,280/60,720
Joseph Macnow -- -- 6,800/13,200 3,128/6,072
Irwin Goldberg -- -- 1,020/1,980 469/911
</TABLE>
COMPENSATION OF DIRECTORS
Messrs. Roth, Fascitelli and Wight each receive from the Company
compensation at a rate of $25,000 per year for serving as a director of the
Company and Messrs. West, Dittrick and Rosen each receive from the Company
compensation at a rate of $50,000 per year for serving as a director of the
Company.
14
<PAGE> 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
General
On October 16, 1998 Vornado Realty L.P. (the "Operating Partnership"), a
subsidiary of Vornado Realty Trust together with its consolidated subsidiaries
("Vornado"), made a distribution (the "Distribution") of one share of Common
Stock of the Company for 20 units of limited partnership interest of the
Operating Partnership (including the units owned by Vornado) held of record as
of the close of business on October 9, 1998 (the "Record Date"), and Vornado in
turn made a distribution of the Common Stock it received to the holders of its
common shares of beneficial interest. While no Common Stock was distributed in
respect of Vornado's $3.25 Series A Convertible Preferred Shares, Vornado
adjusted the conversion price to take into account the Distribution.
The Company was formed on October 30, 1997, as a wholly owned subsidiary of
Vornado. In order to maintain its status as a REIT for federal income tax
purposes, Vornado is required to focus principally on investments in real estate
assets. Accordingly, Vornado is prevented from owning certain assets and
conducting certain activities that would be inconsistent with its status as a
REIT. The Company was formed to own assets that Vornado could not itself own and
conduct activities that Vornado could not itself conduct. The Company is
intended to function principally as an operating company, in contrast to
Vornado's principal focus on investments in real estate assets. The Company is
able to do so because it is taxable as a regular "C" corporation rather than as
a REIT.
The Company will seek to become the operator of businesses conducted at
properties it leases from Vornado, as contemplated by the agreement between the
Company and Vornado, as described under "Vornado Agreement" below. The Company
expects to rely on Vornado to identify business opportunities and currently
expects that those opportunities will relate in some manner to Vornado and its
real estate investments rather than to unrelated businesses.
15
<PAGE> 19
Capital Contribution and Revolving Credit Agreement
As part of its formation, the Company obtained a $75 million unsecured
five-year revolving credit facility from Vornado ("Revolving Credit Agreement")
which expires on December 31, 2004. Borrowings under the Revolving Credit
Agreement bear interest at a floating rate per annum equal to LIBOR plus 3%.
Commencing January 1, 1999, the Company began paying Vornado a commitment fee
equal to 1% per annum on the average daily unused portion of the facility.
Amounts may be borrowed under the Revolving Credit Agreement, repaid and
reborrowed from time to time on a revolving basis (so long as the principal
amount outstanding at any time does not exceed $75 million). Only interest and
commitment fees are payable under the Revolving Credit Agreement until it
expires. The Revolving Credit Agreement prohibits the Company from incurring
indebtedness to third parties (other than certain purchase money debt and
certain other exceptions) and prohibits the Company from paying dividends. Debt
under the Revolving Credit Agreement is recourse to the Company. At December 31,
1999, $4,587,000 was outstanding under the Revolving Credit Agreement.
Vornado Agreement
The Company and Vornado have entered into an agreement (the "Vornado
Agreement") pursuant to which, among other things, (a) Vornado will under
certain circumstances offer the Company an opportunity to become the lessee of
certain real property owned now or in the future by Vornado (under mutually
satisfactory lease terms) and (b) the Company will not make any real estate
investment or other REIT-Qualified Investment (as defined below) unless it first
offers Vornado the opportunity to make such investment and Vornado has rejected
that opportunity.
More specifically, the Vornado Agreement requires, subject to certain
terms, that Vornado provide the Company with an opportunity (a "Tenant
Opportunity") to become the lessee of any real property owned now or in the
future by Vornado if Vornado determines in its sole discretion that,
16
<PAGE> 20
consistent with Vornado's status as a REIT, it is required to enter into a
"master" lease arrangement with respect to such property and that the Company is
qualified to act as lessee thereof. In general, a master lease arrangement is an
arrangement pursuant to which an entire property or project (or a group of
related properties or projects) is leased to a single lessee. Under the Vornado
Agreement, the Company and Vornado will negotiate with each other on an
exclusive basis for 30 days regarding the terms and conditions of the lease in
respect of each Tenant Opportunity. If a mutually satisfactory agreement cannot
be reached within the 30-day period, Vornado may for a period of one year
thereafter enter into a binding agreement with respect to such Tenant
Opportunity with any third party on terms no more favorable to the third party
than the terms last offered to the Company. If Vornado does not enter into a
binding agreement with respect to such Tenant Opportunity within such one-year
period, Vornado must again offer the Tenant Opportunity to the Company in
accordance with the procedures specified above prior to offering such Tenant
Opportunity to any other party.
In addition, the Vornado Agreement prohibits the Company from making (i)
any investment in real estate (including the provision of services related to
real estate, real estate mortgages, real estate derivatives or entities that
invest in the foregoing) or (ii) any other REIT-Qualified Investment, unless it
has provided written notice to Vornado of the material terms and conditions of
the investment opportunity and Vornado has determined not to pursue such
investment either by providing written notice to the Company rejecting the
opportunity within 10 days from the date of receipt of notice of the opportunity
or by allowing such 10-day period to lapse. As used herein, "REIT-Qualified
Investment" means an investment, at least 95% of the gross income from which
would qualify under the 95% gross income test set forth in Section 856(c)(2) of
the Internal Revenue Code of 1986, as amended (the "Code") (or could be
structured to so qualify), and the ownership of which would not cause Vornado to
violate the asset limitations set forth in Section 856(c)(4) of the Code (or
could
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<PAGE> 21
be structured not to cause Vornado to violate the Section 856(c)(4)
limitations); provided, however, that "REIT-Qualified Investment" does not
include an investment in government securities, cash or cash items (as defined
for purposes of Section 856(c)(4) of the Code), money market funds, certificates
of deposit, commercial paper having a maturity of not more than 90 days,
bankers' acceptances or the property transferred to the Company by the Operating
Partnership. The Vornado Agreement also requires the Company to assist Vornado
in structuring and consummating any such investment which Vornado elects to
pursue, on terms determined by Vornado. In addition, the Company has agreed to
notify Vornado of, and make available to, Vornado investment opportunities
developed by the Company or of which the Company becomes aware but is unable or
unwilling to pursue.
Under the Vornado Agreement, Vornado provides the Company with certain
administrative, corporate, accounting, financial, insurance, legal, tax, data
processing, human resources and operational services. For these services, the
Company compensates Vornado in an amount determined in good faith by Vornado as
the amount an unaffiliated third party would charge the Company for comparable
services and will reimburse Vornado for certain costs incurred and paid to third
parties on behalf of the Company. For the year ended December 31, 1999,
approximately $330,000 of compensation for such services was charged pursuant to
the Vornado Agreement.
Vornado and the Company each have the right to terminate the Vornado
Agreement if the other party is in material default of the Vornado Agreement or
upon 90 days written notice to the other party at any time after December 31,
2003. In addition, Vornado has the right to terminate the Vornado Agreement upon
a change in control of the Company.
The Company's Charter specifies that one of its corporate purposes is to
perform the Vornado Agreement and, for so long as the Vornado Agreement remains
in effect, prohibits the Company from making any real estate investment or
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<PAGE> 22
other REIT-Qualified Investment without first offering the opportunity to
Vornado in the manner specified in the Vornado Agreement.
The Company's Management
Messrs. Roth, Fascitelli, West and Wight are directors of Vornado. Mr. Roth
is also Chairman of the Board and Chief Executive Officer of Vornado, Mr.
Fascitelli is also President of Vornado and certain members of the Company's
senior management hold corresponding positions with Vornado.
Vornado Operating L.P. and the Interstate Exchange
The Company holds its assets and conducts its business through Company L.P.
The Company is the sole general partner of, and as of December 31, 1999 owned a
90.1% partnership interest in, Company L.P. All references to the Company refer
to Vornado Operating Company and its subsidiaries including Company L.P.
Interstate and its three partners -- Steven Roth (Chairman of the Board and
Chief Executive Officer of Vornado and the Company), David Mandelbaum (a trustee
of Vornado) and Russell B. Wight, Jr. (a trustee of Vornado and a director of
the Company) -- beneficially owned, in the aggregate, 17.0% of the Company's
Common Stock immediately after the Distribution (excluding shares underlying
SARs and options held by Messrs. Roth and Wight for this purpose). Under
applicable provisions of the Code, Vornado will not continue to be treated as a
REIT unless it satisfies, among other things, requirements relating to the
sources of its gross income. Rents received or accrued by Vornado from the
Company will not be treated as qualifying rent for purposes of these
requirements if Vornado owns, either directly or under the applicable
attribution rules, 10% or more of the Common Stock of the Company. Thus, in
order to enable rents received or accrued by Vornado from the Company to be
treated as qualifying rent for purposes of the REIT gross income requirements
and to achieve certain other purposes, pursuant to the Exchange Agreement, dated
as of October 16, 1998, between the Company and
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<PAGE> 23
Interstate, (i) Interstate exchanged 447,017 shares of Common Stock for a 9.9%
undivided interest in all of the Company's assets and (ii) Interstate and the
Company contributed all of their interests in such assets to Company L.P. and in
return Interstate received a 9.9% limited partnership interest and the Company
received a 90.1% partnership interest therein. Interstate has the right to have
its limited partnership interest in Company L.P. redeemed by Company L.P. either
(a) for cash in an amount equal to the fair market value, at the time of
redemption, of 447,017 shares of Common Stock or (b) for 447,017 shares of
Common Stock, in each case as selected by the Company and subject to customary
anti-dilution adjustments. Interstate and its partners owned approximately 18.1%
of the shares of Vornado as of December 31, 1999.
Acquisition of Interest in Charles E. Smith Commercial Realty L.P.
On December 31, 1998, the Company purchased from a subsidiary of Vornado
approximately 1.7% of the outstanding partnership units of Charles E. Smith
Commercial Realty L.P. ("CESCR"), a Delaware limited partnership for an
aggregate purchase price of approximately $12.9 million, or $34 per unit. The
purchase price was funded out of the Company's working capital. In connection
with this purchase, the Company was granted an option to require Vornado to
repurchase all of the CESCR units at the price at which the Company purchased
the CESCR units from the Vornado subsidiary, plus a cumulative return on such
amount at a rate of 10% per annum. On March 4, 1999, the Company exercised such
option and Vornado reacquired the CESCR units from the Company for $13,200,000.
The Temperature Controlled Logistics Companies and
Related Leases
On October 31, 1997, partnerships (the "Vornado/ Crescent Partnerships") in
which Vornado has a 60% interest and Crescent Real Estate Equities Company
("Crescent") has a 40% interest acquired each of Americold Corporation
("Americold") and URS Logistics, Inc.
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<PAGE> 24
("URS"). In June 1998, Vornado/Crescent Partnerships acquired the assets of
Freezer Services, Inc. and in July 1998 acquired the Carmar Group.
In March 1999, the Company and Crescent Operating Inc. ("Crescent
Operating") formed a new partnership -- the Vornado Crescent Logistics Operating
Partnership -- in which the Company has a 60% interest. The partnership does
business under the name "AmeriCold Logistics". AmeriCold Logistics purchased all
of the non-real estate assets of the Vornado/Crescent Partnerships for
$48,700,000, of which the Company's share is $29,200,000. To fund its share of
the purchase price, the Company utilized $4,600,000 of cash, borrowed
$18,600,000 under the Revolving Credit Facility and paid the balance of
$6,000,000 in March 2000. The purchase price of the non-real estate assets was
proposed by the partnership of Vornado and Crescent. The Board of Directors of
both the Company and Crescent Operating reviewed and approved the transaction
after concluding that the price was fair market value at the time of the
transaction.
AmeriCold Logistics leases 89 temperature controlled warehouses from the
Vornado/Crescent Partnerships, which continue to own the real estate pursuant to
six leases. The leases, which commenced in March 1999, generally have a 15-year
term with two five-year renewal options and provide for the payment of fixed
base rent and percentage rent based on customer revenues. AmeriCold Logistics is
required to pay for all costs arising from the operation, maintenance and repair
of the properties, including all real estate taxes and assessments, utility
charges, permit fees and insurance premiums, as well as property capital
expenditures in excess of $5,000,000 annually. AmeriCold Logistics recognized
$134,000,000 of rent expense from March 11, 1999 (acquisition date) through
December 31, 1999. AmeriCold Logistics has the right to defer the payment of 15%
of fixed base rent and all percentage rent for up to three years beginning on
March 11, 1999 to the extent that available cash, as defined in the leases, is
insufficient to pay such rent, and pursuant thereto, $5,400,000 (of which the
Company's share is $3,240,000) was deferred for the period
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ended December 31, 1999. The fixed rent for each of the two five-year renewal
options is equal to the greater of the then fair market value rent and the fixed
rent for the immediately preceding lease year plus 5%. In addition to the leased
warehouses, AmeriCold Logistics manages 15 additional warehouses.
AmeriCold Logistics has its headquarters in Atlanta, Georgia and has 6,900
employees and operates 104 warehouse facilities nationwide with an aggregate of
approximately 519 million cubic feet of refrigerated, frozen and dry storage
space. AmeriCold Logistics provides the frozen food industry with refrigerated
warehousing and transportation management services. Refrigerated warehouses are
comprised of production and distribution facilities. Production facilities
typically serve one or a small number of customers, generally food processors,
located nearby. These customers store large quantities of processed or partially
processed products in the facility until they are shipped to the next stage of
production or distribution. Distribution facilities primarily warehouse a wide
variety of customers' finished products until future shipment to end-users. Each
distribution facility primarily services the surrounding regional market.
AmeriCold Logistics offers transportation management services including freight
routing, dispatching, freight rate negotiation, backhaul coordination and
distribution channel assessment. AmeriCold Logistics temperature-controlled
logistics expertise and access to both frozen food warehouses and distribution
channels enable its customers to respond quickly and efficiently to
time-sensitive orders from distributors and retailers.
AmeriCold Logistics customers consist primarily of national, regional and
local frozen food manufacturers, distributors, retailers and food service
organizations including Con-Agra, Inc., Tyson Foods, H.J. Heinz & Co., McCain
Foods, Pillsbury, Sara Lee, Philip Morris, J.R. Simplot, Farmland Industries and
Unilever.
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Management of AmeriCold Logistics
Vornado is the day-to-day liaison to the management of AmeriCold Logistics.
AmeriCold Logistics pays Vornado an annual fee of $487,000, which is based on
the non-real estate assets acquired by the new partnership on March 11, 1999.
The fee increases by an amount equal to 1% of the cost of new acquisitions,
including transaction costs. AmeriCold Logistics will provide financial
statement preparation, tax and similar services to the Vornado/Crescent
Partnerships for an annual fee of $250,000 increasing 2% each year.
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<PAGE> 27
APPROVAL OF PROPOSAL TO AMEND
THE COMPANY'S OMNIBUS STOCK PLAN
The Board of Directors is asking the stockholders to approve an amendment
to the 1998 Omnibus Stock Plan of Vornado Operating Company (the "Omnibus Stock
Plan" or the "Plan") which would authorize the allocation of an additional
250,000 shares to be reserved for issuance and sale under the Plan. The Omnibus
Stock Plan was first approved by the stockholders of the Company on September
17, 1998. Of the 1,000,000 shares authorized under the Plan, 390,681 shares of
Common Stock were available for issuance as of December 31, 1999 and as of April
20, 2000. The fair market value of the shares of the Company on April 20, 2000
was $8.00 per share.
The purpose of the Omnibus Stock Plan is to promote the financial interests
of the Company by encouraging its employees and the employees of its
subsidiaries to acquire an ownership position in the Company, enhancing its
ability to attract and retain employees of outstanding ability and providing
such employees with a way to acquire or increase their proprietary interest in
the Company's success. The Directors and the Compensation Committee of the Board
of Directors have determined that it is in the best interest of the Company and
the stockholders to add an additional 250,000 shares to the Plan to further
promote the Plan's objectives.
Terms of the Omnibus Stock Plan
Under the Omnibus Stock Plan, officers, directors, employees and
consultants of the Company and its subsidiaries may be granted awards of stock
options, stock appreciation rights, performance shares and restricted stock. The
Omnibus Stock Plan is administered by the Compensation Committee of the Board of
Directors, which is authorized to select officers, directors, employees and
consultants to receive awards, determine the type of awards to be made,
determine the number of shares or share units subject to any award and determine
the other terms and conditions of any award. All officers, directors, employees
and consultants of the Company and its subsidiaries who are selected
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<PAGE> 28
by the Compensation Committee, are eligible to receive awards under the Omnibus
Stock Plan. As such criteria are subjective in nature, the Company cannot
accurately estimate the number of persons who may be included in such class from
time to time.
Except as determined by the Compensation Committee with respect to
non-qualified stock options, the awards are not assignable or transferable
except by will or the laws of descent and distribution and no right or interest
of any participant may be subject to any lien, obligation or liability of the
holder.
Stock Options
Except as provided below, stock options entitle the holder to purchase the
Company's Common Stock at a per share price determined by the Compensation
Committee which in no event may be less than the fair market value of the shares
on the date of grant. Options may be either "incentive stock options" within the
meaning of Section 422 of the Code or non-qualified stock options. Stock options
are exercisable for such period as is determined by the Compensation Committee,
but in no event may options be exercisable after 10 years from the date of
grant. The option price for shares purchased upon the exercise of an option must
be paid in full at the time of exercise and may be paid in cash, by tender of
Common Stock, by such other consideration as the Compensation Committee deems
appropriate or by a combination of cash, Common Stock and such other
consideration.
The Plan provides for the grant of "reload stock options", at the
discretion of the Compensation Committee, to a participant who uses Common Stock
owned by the participant to pay all or a part of the exercise price of a stock
option (including a reload stock option). A reload stock option will cover the
number of shares tendered in payment of the exercise price and will have a per
share exercise price not less than the fair market value of the Common Stock on
the date of grant of the reload stock option.
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<PAGE> 29
Upon the grant or exercise of an incentive stock option, no income will be
recognized by the optionee for Federal income tax purposes, and the Company will
not be entitled to any deduction. If the shares acquired upon exercise are not
disposed of within the one-year period beginning on the date of the transfer of
the shares to the optionee, nor within the two-year period beginning on the date
of the grant of the option, any gain or loss realized by the optionee upon the
disposition of such shares will be taxed as long-term capital gain or loss. In
such event, no deduction will be allowed to the Company. If such shares are
disposed of within the one-year or two-year periods referred to above, the
excess of the fair market value of the shares on the date of exercise (or, if
less, the fair market value on the date of disposition) over the exercise price
will be taxable as ordinary income to the optionee at the time of disposition,
and the Company will be entitled to a corresponding deduction. The amount by
which the fair market value of the shares at the time of exercise of an
incentive stock option exceeds the option price will constitute an item of tax
preference which could subject the optionee to the alternative minimum tax.
Whether the optionee will be subject to such tax depends on the facts and
circumstances applicable to the individual.
Upon the grant of a non-qualified stock option, no income will be realized
by the optionee, and the Company will not be entitled to any deduction. Upon the
exercise of such an option, the amount by which the fair market value of the
shares at the time of exercise exceeds the exercise price will be taxed as
ordinary income to the optionee and the Company will be entitled to a
corresponding deduction.
Stock Appreciation Rights
Stock appreciation rights entitle the holder to receive from the Company an
amount equal to the amount by which the fair market value of a share of stock on
the date of exercise exceeds the grant price. Stock appreciation rights may be
granted in tandem with a stock option, in addition to a stock option or may be
freestanding and unrelated to a stock option and may not be exercised earlier
than six months after grant except in the event of the holder's death
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<PAGE> 30
or disability. The Compensation Committee is authorized to determine whether a
stock appreciation right will be settled in cash, shares or a combination
thereof.
Performance Stock
Performance stock awards consist of a grant of actual shares of stock or
stock units having a value equal to an identical number of the Company's shares
in amounts determined by the Compensation Committee at the time of grant.
Performance stock awards consisting of actual shares of stock entitle the holder
to receive shares in an amount based upon performance conditions of the Company
over a performance period as determined by the Compensation Committee at the
time of grant. Such performance stock awards may provide the holder with
dividends and voting rights prior to vesting. Performance stock awards
consisting of stock units entitle the holder to receive the value of such units
in cash, shares of stock or a combination thereof based upon performance
conditions and over a performance period as determined by the Compensation
Committee at the time of grant. Such performance stock awards may provide the
holder with dividend equivalents prior to vesting.
Restricted Stock
Restricted stock awards consist of a grant of actual shares of stock or
stock units having a value equal to an identical number of shares of stock of
the Company. Restricted stock awards consisting of actual shares of stock
entitle the holder to receive shares of stock of the Company. Such restricted
stock awards may provide the holder with dividends and voting rights prior to
vesting. Restricted stock awards consisting of stock units entitle the holder to
receive the value of such units in cash, shares of stock or a combination
thereof as determined by the Compensation Committee. Such restricted stock
awards may provide the holder with dividend equivalents prior to vesting. The
employment conditions and the length of the period for vesting of restricted
stock awards are established by the Compensation Committee at the time of grant.
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<PAGE> 31
INFORMATION RESPECTING THE COMPANY'S
INDEPENDENT AUDITORS
The Board has retained Deloitte & Touche LLP to act as independent auditors
for the fiscal year ending December 31, 2000. The firm of Deloitte & Touche LLP
was engaged as independent auditors for the 1999 fiscal year and representatives
of Deloitte & Touche LLP are expected to be present at the Annual Meeting. They
will have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
ADDITIONAL MATTERS TO COME BEFORE
THE MEETING
The Board does not intend to present any other matter, nor does it have any
information that any other matter will be brought before the Annual Meeting.
However, if any other matter properly comes before the Annual Meeting, it is the
intention of the person named in the enclosed proxy to vote said proxy in
accordance with his discretion on such matters.
ADVANCE NOTICE FOR STOCKHOLDER NOMINATIONS AND PROPOSALS OF NEW BUSINESS
The By-laws of the Company generally require notice of any proposal to be
presented by any stockholder or of the name of any person to be nominated by any
stockholder for election as a director of the Company at a meeting of
stockholders to be delivered to the Secretary of the Company not less than 120
nor more than 150 days prior to the date of the meeting. Accordingly, failure by
a stockholder to act in compliance with the notice provisions will mean that the
stockholder will not be able to nominate directors or propose new business under
the By-laws.
Stockholders interested in presenting a proposal for inclusion in the proxy
statement for the Company's annual meeting of stockholders in 2001 may do so by
following the procedures prescribed in Rule 14a-8 under the Securities Exchange
Act of 1934. To be eligible for inclusion, stock-
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<PAGE> 32
holder proposals must be received at the principal executive
office of the Company, Park 80 West, Plaza II, Saddle Brook, New Jersey 07663,
Attention: Secretary, not later than 120 days before the one year anniversary of
the release of this proxy statement.
By order of the Board of Directors,
Larry Portal
Assistant Secretary
May 8, 2000
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE
URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE.
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<PAGE> 33
VORNADO OPERATING COMPANY
PROXY
The undersigned, revoking all prior proxies, hereby appoints Steven Roth
proxy, with full power of substitution, to attend, and to cast all votes which
the undersigned stockholder is entitled to cast at the Annual Meeting of
Stockholders of Vornado Operating Company, a Delaware corporation (the
"Company"), to be held at the Marriott Hotel, Interstate 80 and the Garden State
Parkway, Saddle Brook, New Jersey 07663 on Wednesday, May 31, 2000 at 10:00
A.M., local time, upon any and all business as may properly come before the
meeting and all postponements or adjournments thereof. Said proxy is authorized
to vote as directed on the reverse side hereof upon the proposals which are more
fully set forth in the Proxy Statement and otherwise in his discretion upon such
other business as may properly come before the meeting and all postponements or
adjournments thereof, all as more fully set forth in the Notice of Meeting and
Proxy Statement, receipt of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. WHEN
PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED STOCKHOLDER. IF THIS PROXY IS EXECUTED BUT NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS "FOR" THE APPROVAL OF
THE AMENDMENT TO THE COMPANY'S OMNIBUS STOCK PLAN AND OTHERWISE IN THE
DISCRETION OF THE PROXY.
(Continued and to be Executed, on Reverse side)
<PAGE> 34
(Continued from other side)
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS:
The Board of Directors recommends a Vote "FOR" Election of
the nominees for Directors listed below.
[ ] FOR all nominees listed below
[ ] WITHHOLD AUTHORITY to vote for all nominees
Nominees: Martin Rosen
Russell B. Wight, Jr.
(each for a term ending at the Annual Meeting of
Stockholders in 2003)
To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.
------------------------------------------------------------
2. APPROVAL OF THE AMENDMENT TO THE COMPANY'S OMNIBUS STOCK
PLAN:
The Board of Directors recommends a Vote "FOR" approval of
the Amendment to the Company's Omnibus Stock Plan
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
Address Change and/or Comments [
]
Please date and sign as your
name or names appear hereon.
Each joint owner must sign.
(Officers, Executors,
Administrators, Trustees, etc.,
will kindly so indicate when
signing.)
Dated
------------------------------------------------------------------------,
2000
--------------------------------
Signature(s) of Stockholder(s)
VOTES MUST BE INDICATED (X) IN
BLACK OR BLUE INK. [X]
PLEASE VOTE, DATE AND SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
