<PAGE>
BRT REALTY TRUST
60 CUTTER MILL ROAD
GREAT NECK, N.Y. 11021
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 17, 1995
----------------
To the Shareholders of BRT Realty Trust:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of BRT Realty Trust (the "Trust") will be held at the offices of the
Trust, 60 Cutter Mill Road, Great Neck, N.Y., Suite 303, at 9:00 A.M., local
time, on March 17, 1995 for the following purposes:
1. To elect three Class II Trustees to the Board of Trustees;
2. To appoint Kenneth Leventhal & Company as the Trust's independent
certified public accountants for the fiscal year ending September 30, 1995; and
3. To act on such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The close of business on January 20, 1995 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
Annual Meeting. The stock transfer books of the Trust will not be closed.
By order of the Board of Trustees
Simeon Brinberg, Secretary
January 27, 1995
All Shareholders are cordially invited to attend the Annual Meeting. Whether
or not you expect to attend, you are requested to sign, date and return the
enclosed proxy promptly. Your vote is important and it will not be counted
unless you return the proxy or attend the Annual Meeting. If you attend the
Annual Meeting, you may withdraw the proxy and vote your own shares. A return
envelope, which requires no postage if mailed in the United States, is enclosed
for your convenience.
SHAREHOLDERS ARE URGED TO DATE, SIGN AND
RETURN THEIR PROXIES PROMPTLY
<PAGE>
BRT REALTY TRUST
60 CUTTER MILL ROAD
GREAT NECK, N.Y. 11021
(516) 466-3100
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
----------------
This Proxy Statement is furnished in connection with the solicitation by the
Board of Trustees of BRT Realty Trust (the "Trust") of proxies in the enclosed
form for the Annual Meeting of Shareholders ("Annual Meeting") to be held at the
offices of the Trust, 60 Cutter Mill Road, Suite 303, Great Neck, New York, at
9:00 A.M., local time on March 17, 1995, and for any adjournments thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. Any shareholder giving a proxy has the power to revoke the proxy
at any time before it is voted. Written notice of such revocation should be
forwarded directly to the Secretary of the Trust. Proxies may also be revoked by
attending the Annual Meeting and voting in person or submitting a proxy bearing
a later date.
The principal executive offices of the Trust are located at 60 Cutter Mill
Road, Suite 303, Great Neck, NY 11021. The approximate date on which this Proxy
Statement and the form of proxy included herewith are being first sent to
shareholders is January 27, 1995.
VOTING SECURITIES
Only holders of shares of beneficial interest, par value $3.00 per share
("Beneficial Shares"), and holders of convertible preferred shares, par value
$1.00 per share ("Preferred Shares") of record as at the close of business on
January 20, 1995, are entitled to vote at the meeting. On the record date there
were issued and outstanding 7,346,624 Beneficial Shares (excluding treasury
shares and shares which have been reserved for issuance in connection with a
previous acquisition) and 1,030,000 Preferred Shares. Each outstanding
Beneficial Share and Preferred Share is entitled to one vote. The holders of a
majority of the outstanding Beneficial Shares and Preferred Shares, considered
as one class, shall constitute a quorum.
If the enclosed form of proxy is properly executed and returned, the
Beneficial Shares represented thereby will be voted in accordance with the
instructions thereon. If no instructions are indicated thereon, such Beneficial
Shares will be voted (i) for the election, as Class II Trustees, of the nominees
set forth under the caption "Election of Trustees," and (ii) for approval of the
appointment of Kenneth Leventhal & Company as the Trust's independent certified
public accountants for the fiscal year ending September 30, 1995. Approval of
each of the above items requires the affirmative vote of the holders of a
majority of the Beneficial Shares and Preferred Shares, voting as one class,
present in person or by proxy. If a shareholder, present in person or by proxy,
abstains on either matter, the shareholder's shares will not be voted on such
matter. Thus, an abstention from voting on any matter has the same legal effect
as a vote "against" the matter, even though the shareholder may interpret such
action differently.
The cost of soliciting proxies in the accompanying form has been, or will
be, paid by the Trust. In addition to the solicitation of proxies by use of the
mails, certain officers and employees (who will receive no additional
compensation therefor) may be used to solicit proxies personally and by
telephone and telegraph. In addition, banks, brokers and other custodians,
nominees and fiduciaries will be requested to forward copies of the proxy
material to their principals and to request authority for the execution of
proxies. The Trust will reimburse such persons for their expenses in so doing.
1
<PAGE>
BENEFICIAL OWNERSHIP BY TRUSTEES AND OFFICERS
Set forth below is information concerning stock ownership of all persons
known by the Trust to own beneficially 5% or more of the Beneficial Shares and
Preferred Shares of the Trust considered as one class, all Trustees and all
Trustees and officers of the Trust as a group, based upon the number of
outstanding Beneficial Shares and Preferred Shares as of January 20, 1995.
<TABLE>
<CAPTION>
AMOUNT OF
NAME OF BENEFICIAL BENEFICIAL PERCENT
OWNER OWNERSHIP (1)(2) OF CLASS
- ------------------------------------------------------------------------------------- --------------- --------
<S> <C> <C>
Patrick J. Callan (3)
55 East 52nd Street
New York, N.Y. 10055................................................................. 33,000 *
Fredric H. Gould (4)(5)(6)(12)(13)................................................... 2,042,758 24.18%
Stuart S. Gould (3)(4)(7)............................................................ 28,917 *
Arthur Hurand (3)(8)
G-4300 W. Pierson Road
Flint, MI 48504...................................................................... 157,970 1.88%
Gary Hurand (3)(9)
G-4300 W. Pierson Road
Flint, MI 48504...................................................................... 60,390 *
Nathan Kupin (3)(4).................................................................. 20,512 *
Herbert C. Lust, II (3)
54 Porchuck Road
Greenwich, CT 06830.................................................................. 70,000 *
Marshall Rose (10)
667 Madison Avenue
New York, N.Y. 10021................................................................. 1,855,992 21.97%
Israel Rosenzweig (4)(11)(12)........................................................ 293,111 3.50%
All Trustees and Officers as a group
(15 in number) (14)................................................................. 3,395,954(15) 38.60%
* Less than 1%
<FN>
- ------------------------
(1) All individuals listed are Trustees of the Trust.
(2) Securities are listed as beneficially owned by a person who directly or
indirectly holds or shares the power to vote or to dispose of the
securities, whether or not the person has an economic interest in the
securities. In addition, a person is deemed a beneficial owner if he has
the right to acquire beneficial ownership within 60 days, whether upon the
exercise of a stock option or otherwise.
(3) Includes 10,000 Beneficial Shares which underlie unexercised options.
(4) Address is 60 Cutter Mill Road, Great Neck, N.Y. 11021.
(5) Includes 254,334 Beneficial Shares owned by the pension and profit sharing
trusts of REIT Management Corp. of which Fredric H. Gould and two
non-Trustee officers are trustees, as to which Beneficial Shares Mr. Gould
has shared voting and investment power.
(6) Includes 34,762 Beneficial Shares held by Mr. Gould as joint custodian for
the children of his brother, 4,790 Beneficial Shares owned by Georgetown
Group, Inc., of which Mr. Gould is a Vice President and 60,444 Beneficial
Shares owned by two entities in which Mr. Gould is a general partner or
principal. Also includes 30,048 Beneficial Shares owned by One Liberty
Properties, Inc. ("OLP"), of which
</TABLE>
(FOOTNOTES CONTINUED ON NEXT PAGE)
2
<PAGE>
<TABLE>
<S> <C>
Mr. Gould is an officer and director and in which Gould Investors L.P.
("GLP") (an entity in which Mr. Gould is a general partner and a principal
executive officer of the managing general partner) is a controlling
shareholder, 414,066 Beneficial Shares and 1,030,000 Preferred Shares,
owned by GLP and 70,000 Beneficial Shares which underlie unexercised
options. Does not include 24,815 Beneficial Shares owned by Mrs. Fredric H.
Gould, as to which Beneficial Shares Mr. Gould disclaims beneficial
interest and Mrs. Gould has sole voting and investment power.
(7) Does not include 21,568 Beneficial Shares owned by Mrs. Stuart S. Gould, as
to which Beneficial Shares Mr. Gould disclaims beneficial interest and Mrs.
Gould has sole voting and investment power.
(8) Includes 105,081 Beneficial Shares owned by Mr. Hurand and his wife as
joint tenants and 822 Beneficial Shares held by Mr. Hurand as custodian for
his grandchildren.
(9) Includes 17,260 Beneficial Shares owned by Hurand & Hurand in which Mr.
Hurand is a partner.
(10) Includes 23,913 Beneficial Shares owned by Mr. Rose in a retirement
account, 4,790 Beneficial Shares owned by Georgetown Group, Inc. in which
Mr. Rose is an officer, 76,983 Beneficial Shares owned by the pension and
profit sharing trusts of Georgetown Group, Inc. of which Mr. Rose is
trustee, 60,444 Beneficial Shares owned by two entities in which Mr. Rose
is a general partner or principal shareholder, 8,644 Beneficial Shares
owned by Jill and Marshall Rose Foundation of which Mr. Rose is a trustee,
61,302 Beneficial Shares owned by Mr. Rose for the benefit of others,
30,048 Beneficial Shares owned by OLP, of which Mr. Rose is an officer and
director and in which GLP (an entity in which Mr. Rose is a general partner
and a principal executive officer of the managing general partner) is a
controlling shareholder, 414,066 Beneficial Shares and 1,030,000 Preferred
Shares, owned by GLP, and 70,000 Beneficial Shares which underlie
unexercised options. Does not include 41,662 and 1,600 Beneficial Shares
owned by Mrs. Rose as a trustee for her children and included in her Keogh
Plan, respectively, as to which Beneficial Shares Mr. Rose disclaims
beneficial interest and Mrs. Rose has sole voting and investment power.
(11) Includes 8,750 Beneficial Shares owned by Mr. Rosenzweig in retirement
accounts, 41,100 Beneficial Shares owned by Mr. Rosenzweig's son and Mr.
Rosenzweig as custodian for his minor children, and 70,000 Beneficial
Shares which underlie unexercised options. Mr. Rosenzweig disclaims
beneficial ownership of the Beneficial Shares owned by his son and owned by
him as custodian for his minor children.
(12) Includes 15,915 Beneficial Shares owned by the pension trust of the Trust
of which Fredric H. Gould, Israel Rosenzweig and a non-Trustee officer of
the Trust are trustees, as to which Beneficial Shares said trustees have
shared voting and investment power.
(13) Includes 9,214 Beneficial Shares owned by the pension and profit sharing
plans of Gould Capital Corp. of which Fredric H. Gould is a trustee and as
to which Mr. Gould has shared voting and investment power.
(14) This total is qualified by notes (5) through (13).
(15) Includes an aggregate of 419,000 Beneficial Shares which underlie
unexercised options.
</TABLE>
3
<PAGE>
ELECTION OF TRUSTEES
Pursuant to the Declaration of Trust, the Board of Trustees is divided into
three classes of Trustees, each of which is elected for a term of three years.
The Declaration of Trust provides for the number of Trustees to be between five
and fifteen, the exact number to be determined by resolution adopted by a
majority of the entire Board of Trustees. The Board of Trustees has fixed the
number of Trustees at nine (9).
At the meeting, three Class II Trustees will be elected by shareholders. Six
other individuals serve as Trustees but are not standing for reelection because
their terms as Trustees extend past the Annual Meeting. The accompanying form of
proxy will be voted for the election as Class II Trustees of Arthur Hurand,
Herbert C. Lust, II and Marshall Rose unless the proxy contains contrary
instructions. Proxies cannot be voted for a greater number of persons than the
number of nominees named in the Proxy Statement. Management has no reason to
believe that any of the nominees will become unable to serve. However, in the
event that any of the nominees should become unable or unwilling to serve as
Trustee, unless the shareholder WITHHOLDS AUTHORITY the proxy will be voted for
the election of such person or persons as shall be designated by the Board of
Trustees.
During the last full fiscal year, the Board of Trustees held 4 regularly
scheduled meetings. Stuart S. Gould, Herbert C. Lust, II, and Marshall Rose each
missed two meetings. The other Trustees attended at least 75% of the meetings
held.
The Board of Trustees has appointed an Audit Committee consisting of Gary
Hurand, Herbert C. Lust, II and Patrick J. Callan. The functions of the Audit
Committee include reviewing the scope and results of annual audit, reviewing the
adequacy of accounting and financial controls, and recommending independent
auditors to the Board of Trustees. The Audit Committee held one meeting in the
1994 fiscal year.
The Board of Trustees has appointed a Compensation Committee consisting of
Gary Hurand, Herbert C. Lust, II and Patrick J. Callan. The Compensation
Committee is composed entirely of independent outside directors and is
responsible for setting and administering the policies which govern both annual
compensation and the Trust's Stock Option Plans and Bonus Plan for executive
officers. The Compensation Committee held one meeting in the 1994 fiscal year.
The Trust has no Nominating Committee or any committee performing similar
functions.
Each Class II nominee, if elected, will serve until the annual meeting to be
held in 1998 and until his successor is elected and qualifies. Each other
Trustee will serve until the annual meeting to be held in the year set forth
opposite his name and until his successor is elected and qualifies.
The Board of Trustees of the Trust recommends a vote "FOR" the election of
the three nominees. Proxies solicited by the Board of Trustees will be so voted
unless shareholders specify in their proxies a contrary choice.
The following table sets forth certain information concerning the Trustees,
including the three nominees:
<TABLE>
<CAPTION>
TERM PRINCIPAL TRUSTEE
NAME AGE EXPIRING OCCUPATION (1) SINCE
- -------------------------------------- --- --------- ------------------------------------------------- --------
<S> <C> <C> <C> <C>
CLASS I
Patrick J. Callan (2)(3)(4)........... 58 1997 Principal of The RREEF Funds, pension fund real 1984
estate investments; Director of The East New York
Savings Bank; Director of First Empire State
Corporation.
Stuart S. Gould....................... 88 1997 Chairman of the Executive Committee of Georgetown 1983
Partners Inc., the Managing General Partner of
Gould Investors, L.P.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
TERM PRINCIPAL TRUSTEE
NAME AGE EXPIRING OCCUPATION (1) SINCE
- -------------------------------------- --- --------- ------------------------------------------------- --------
<S> <C> <C> <C> <C>
Israel Rosenzweig (2)................. 47 1997 President and Chief Executive Officer of the 1984
Trust; Senior Vice President of Georgetown
Partners, Inc.; Senior Vice President of One
Liberty Properties, Inc.; Senior Vice President
of Georgetown OLP Corp.; Vice President of
Bankers Federal Savings FSB since November 1994;
Director of Nautica Enterprises, Inc.
CLASS II
Arthur Hurand (2)..................... 78 1998(5) Private Investor; General Partner of the Motor 1989
Inn Limited Partnership; Director of One Liberty
Properties, Inc.
Herbert C. Lust, II (2)(3)(4)......... 68 1998(5) Private Investor; Director of Prime Hospitality, 1981
Inc.
Marshall Rose (2)..................... 58 1998(5) Vice Chairman of the Board of Trustees; Chairman 1986
of the Board of Georgetown Partners, Inc.; Vice
Chairman of the Board of One Liberty Properties,
Inc. and Chairman of Georgetown OLP Corp.;
Chairman of the Board of REIT Management Corp.;
President of Georgetown Equities, Inc.
CLASS III
Fredric H. Gould (2).................. 59 1996 Chairman of the Board of Trustees; President of 1983
Georgetown Partners, Inc.; Chairman of the Board
of One Liberty Properties, Inc. and President of
Georgetown OLP Corp.; President of REIT
Management Corp.; Director of BFS Bankorp, Inc.
Nathan Kupin.......................... 80 1996 Senior Vice President of the Trust; Director of 1983
REIT Management Corp.; Vice Chairman of the Board
of Georgetown Partners, Inc.; Senior Vice
President of One Liberty Properties, Inc.
Gary Hurand (3)(4).................... 48 1996 President of Dawn Donut Systems, Inc.; Director 1990
of Republic Bancorp.
<FN>
- ------------------------
(1) Each Trustee has been engaged in the principal occupation indicated for at
least the past five years, except as noted.
(2) Member of the Executive Committee.
(3) Member of the Audit Committee.
(4) Member of the Compensation Committee.
(5) If elected at the meeting.
</TABLE>
Stuart S. Gould is the father of Fredric H. Gould. Arthur Hurand is the
father of Gary Hurand.
5
<PAGE>
TRUSTEE'S FEES AND OTHER COMPENSATION
Each unaffiliated Trustee was paid an annual retainer of $10,000 for
services as a Trustee in the 1994 fiscal year. In addition, unaffiliated
Trustees are paid $500 per meeting for each Trustee's meeting and each committee
meeting attended. With respect to fees (charged to operations) paid and accrued
during the fiscal year for REIT Management Corp. (the "Advisor") under the
Advisory Agreement, see "Interest of Management in Certain Transactions."
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16(a)")
requires executive officers and directors, and persons who beneficially own more
than 10% of the Trust's shares, to file Initial Reports of Ownership and Reports
of Changes in Ownership with the Securities and Exchange Commission ("SEC") and
the New York Stock Exchange. Executive officers, Trustees and greater than 10%
beneficial owners are required by SEC regulations to furnish the Trust with
copies of all Section 16(a) forms they file. The Trust prepares and files the
requisite forms on behalf of its executive officers and Trustees. Based on a
review of information supplied to the Trust by the executive officers and
Trustees, the Trust believes that all Section 16(a) filing requirements
applicable to its executive officers, Trustees and greater than 10% beneficial
owners were complied with, except that a form 4 timely filed by Gary Hurand for
December 1993, was amended in August 1994 because it did not properly reflect
the number of shares purchased in December, 1993, and a form 4 filed by Gary
Hurand to report an August 1994 transaction was filed ten days late.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of BRT is composed of three independent
non-employee trustees. The Committee is responsible for advising management and
the Board of Trustees on matters pertaining to compensation arrangements for
executive employees, as well as administration of BRT's stock option plans and
bonus plan.
COMPENSATION OVERVIEW
It is the view of the Compensation Committee that the annual compensation of
executive officers is composed of two key elements: (i) an Annual Component made
up of base salary and annual bonus; and (ii) a longer term component, i.e. stock
options.
ANNUAL COMPONENT; BASE SALARY AND BONUS
Base salaries are intended to be competitive and are determined in a fashion
that takes into account an individual's performance and contributions to the
Trust and the Trust's operating performance. The determination by the
Compensation Committee of base compensation is subjective in nature and is not
based on any structured formula. In determining compensation for the 1994 fiscal
year the Compensation Committee took into account the difficult real estate
market of the past several years and the diligence and managerial expertise
which the executive officers have demonstrated in managing the business of the
Trust in a difficult real estate environment; among other things the
Compensation Committee gave consideration to the significant decrease in the
operating loss, time and effort expended in managing the non-performing portion
of the loan portfolio (including management of foreclosure litigation and
bankruptcy matters as well as negotiations dealing with defaulted loans prior
to, during or in lieu of litigation) and management of an increasing real estate
portfolio. The Committee also looked into compensation paid generally by other
real estate investment trusts to its executive officers.
The concept of the annual bonus is to link a portion of the compensation of
executives to the performance of the Trust. Under the Trust's existing bonus
plan the Trust must produce a minimum return to shareholders before any bonuses
are awarded. Under the plan a bonus pool is to be established in each fiscal
year in an amount equal to 15% of the amount by which the net income of the
Trust in any fiscal year exceeds stockholders' equity multiplied by the average
prime rate of interest plus 1%. Accordingly, the Trust must have a degree of
success before bonuses are paid to executive officers. However, the Compensation
6
<PAGE>
Committee deems it advisable to recognize significant individual contributions
by key employees in any particular fiscal year even if, pursuant to the bonus
plan, there are not sufficient earnings to establish, under the terms of the
plan, a bonus pool. Accordingly, under the existing bonus plan up to $50,000 may
be used to pay bonuses to officers and employees (other than the Chief Executive
Officer) if an individual made a significant contribution to the Trust during
the year.
LONG TERM COMPENSATION -- STOCK OPTIONS
Stock options may be granted periodically to provide incentive for the
creation of shareholder value over the long term, since the full benefit of the
compensation provided for under stock options cannot be realized unless there is
an appreciation in the price of the Trust's shares over a specified number of
years. Under the existing stock option plan, options are granted at an exercise
price equal to the fair market value of the stock of the Trust on the date of
grant and are exercisable over a number of years (generally five to six years),
in increments ranging between 20% and 25% per year on a cumulative basis. Stock
options are the only form of long term incentive currently used by the Trust.
At the present time there are options outstanding which have been granted to
executive officers and other key personnel of the Trust which have exercise
prices ranging from $3.50 to $3.625 per share. With respect to the executive
officers of the Trust I.E. Israel Rosenzweig, and Jeffrey A. Gould, they have
been granted 70,000, and 40,000 options, respectively. These options have
approximately one and a half years remaining. It is the recommendation of the
Compensation Committee that no additional options be granted since the
outstanding options (both amount and exercise price) are adequate to incentivize
the executive officers of the Trust.
CEO COMPENSATION
In the view of the Compensation Committee the base salary of the chief
executive officer of the Trust should be $350,000 for the 1994 fiscal year (the
same base compensation as was paid to the chief executive officer for the 1993
fiscal year). In addition, the chief executive officer should receive the
maximum combined allowable amount under the Trust's Pension Plan and Section
401(k) plan pursuant to Internal Revenue Service regulations effective January
1, 1994. The Compensation Committee has taken cognizance of the difficult real
estate environment and the factors described above. The Chief Executive Officer,
among other items, was involved in supervising and participating in negotiating
workouts, property dispositions and supervising the operations of real estate
owned.
Respectfully submitted,
Patrick J. Callan
Gary Hurand
Herbert C. Lust, II
March 7, 1994
7
<PAGE>
ANNUAL COMPENSATION
The following Summary Compensation Table includes information with respect
to compensation paid and accrued by the Trust for services rendered in all
capacities to the Trust during the fiscal years ended September 30, 1992, 1993
and 1994, for the Chief Executive Officer of the Trust and the one other
executive officer of the Trust whose annual compensation from the Trust exceeded
$100,000 for the fiscal year ended September 30, 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------------------
ANNUAL
AWARDS PAYOUTS
COMPENSATION (2) --------------------------------
--------------- OTHER ANNUAL RESTRICTED
NAME AND BONUS COMPEN- STOCK OPTIONS/ LTIP ALL OTHER
PRINCIPAL POSITION YEAR (1) SALARY $ SATION (3) AWARDS ($) SARS (#) PAYOUT ($) COMPENSATION (4)
- --------------------------- ---- -------- ----- ------------ ---------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Israel Rosenzweig,
President, Chief Executive
Officer................... 1994 $355,982(5) 0 -- -0- -0- -0- $ 22,500
1993 $350,000 0 -- -0- -0- -0- $ 30,000
1992 $350,000 0 -- -0- -0- -0- $ 30,000
Jeffrey A. Gould,
Executive Vice
President................. 1994 $137,000 0 -- -0- -0- -0- $ 20,550
1993 $122,000 0 -- -0- -0- -0- $ 18,300
1992 $122,000 0 -- -0- -0- -0- $ 18,300
<FN>
- ------------------------------
(1) Fiscal years ending September 30.
(2) The Trust does not have any profit sharing plan, but it does have Stock
Option Plans, a Pension Plan and a Bonus Plan. See "Stock Option Plans" and
"Pension Plan," below.
(3) The only type of Other Annual Compensation for each of the named officers
was in the form of perquisites and was less than the level required for
reporting.
(4) Represents annual contributions under the Trust's Pension Plan, which are
based on each participant's annual earnings.
(5) Includes $5,982 applicable to a section 401(k) plan.
</TABLE>
PENSION PLAN
The Trust has a non-contributory defined contribution pension plan covering
employees. The Pension Plan is administered by Fredric H. Gould, Israel
Rosenzweig and David W. Kalish. Annual contributions of the Trust are based on
15% of an employee's annual earnings, not to exceed $22,500 in 1994 and $30,000
per annum for years prior thereto. Partial vesting starts one year after
employment, increasing annually until full vesting is achieved at the completion
of five years of employment. Benefits to participants upon retirement are
determined by the participant, who may elect a lump sum payment or the purchase
of an annuity, the amount of which is determined primarily by the amount of
contributions. In fiscal 1994, $22,500 and $20,550, respectively, were
contributed for the benefit of Israel Rosenzweig and Jeffrey A. Gould. The
aggregate amount accrued to date for Messrs. Rosenzweig and Gould is
approximately $337,000 and $120,000, respectively. The estimated credited years
of service for each of Messrs. Rosenzweig and Gould is 11 and 8, respectively.
STOCK OPTION PLANS
On May 22, 1984, the Board of Trustees of the Trust adopted a Stock Option
Plan (the "1984 Plan"). The 1984 Plan was approved by the shareholders of the
Trust on March 1, 1985. The 1984 Plan provided for the issuance of up to 300,000
Beneficial Shares to key personnel of the Trust of which 31,581 were available
for grant until termination of the 1984 Plan in May, 1994. In fiscal 1994 no
options were granted, no options remain unexercised and the Plan terminated by
its terms in May, 1994.
On August 19, 1988 the Board of Trustees adopted a Stock Option Plan (the
"1988 Plan"). The 1988 Plan was approved by the shareholders of the Trust on
March 2, 1989. The 1988 Plan provides for the issuance of up to 500,000
Beneficial Shares to officers, trustees and employees of the Trust. The options
granted may be either incentive stock options or options which do not qualify as
incentive stock options. The
8
<PAGE>
exercise price of any option granted under the 1988 Plan must be not less than
100% of the fair market value of the Beneficial Shares on the date of grant. The
1988 Plan does not provide for the issuance of stock appreciation rights. At
September 30, 1994, 38,000 shares remain available for grant and options to
purchase 449,500 shares are exercisable. No options were granted during fiscal
1994.
The following table sets forth certain information with respect to
outstanding stock options held by the Trust's Chief Executive Officer and by the
other executive officer of the Trust named in the preceding Annual Compensation
table. No executive officer exercised stock options during fiscal 1994.
UNEXERCISED STOCK OPTIONS AT FISCAL YEAR END
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR END FISCAL YEAR END (1)
---------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Israel Rosenzweig......................................... 70,000 -0- $ 61,250 --
Jeffrey A. Gould.......................................... 40,000 -0- $ 35,000 --
<FN>
- ------------------------
(1) Based upon a price per Beneficial Share at September 30, 1994 of $4.375.
</TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following graph compares the performance of the Trust's Beneficial
Shares with the Standard & Poor's 500 Stock Index and a peer group index
consisting of publicly traded mortgage REIT's prepared by the National
Association of Real Estate Investment Trusts. The graph assumes $100 was
invested on September 30, 1989 in the Trust's Beneficial Shares, the S&P 500
Index and the peer group index and assumes the reinvestment of dividends. The
comparisons in this table are not intended to forecast or be indicative of any
future performance of the Trust's Beneficial Shares.
PERFORMANCE GRAPH
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BRT REALTY TRUST ALL MORTGAGE REIT'S S&P 500 INDEX
<S> <C> <C> <C>
Sep-89 100 100 100
Sep-90 38 70 91
Sep-91 24 98 119
Sep-92 20 98 132
Sep-93 35 112 149
Sep-94 38 99 155
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BRT Realty Trust 100 38 24 20 35 38
All Mortgage REITs 100 70 98 98 112 99
S&P 500 Index 100 91 119 132 149 155
</TABLE>
9
<PAGE>
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
The Trust and REIT Management Corp. ("REIT" or "Advisor") are parties to an
Advisory Agreement pursuant to which REIT furnishes administrative services with
respect to the Trust's assets and, subject to the supervision of the Trustees,
advises the Trust with respect to its investments. The Trust believes that the
Advisory Agreement is on terms as favorable to the Trust as would be available
from an unaffiliated party. The term of the Advisory Agreement has been renewed
by the Board of Trustees to December 31, 1998. Fredric H. Gould and two officers
of the Trust are directors of REIT and Messrs. Fredric H. Gould and Marshall
Rose are officers of REIT. All of the outstanding shares of REIT are owned by
Fredric H. Gould.
For services performed by REIT under the Advisory Agreement, REIT receives
an annual fee of 1/2 of 1% of the Invested Assets of the Trust other than
mortgages receivable, subordinated land leases and investments in unconsolidated
ventures with a 1% fee payable on mortgages receivable, subordinated land leases
and investments in unconsolidated ventures. The term "Invested Assets" is
defined in the Advisory Agreement as the aggregate of all assets of the Trust as
shown on the balance sheet of the Trust without deduction for (i) mortgages and
other security interests to which the assets are subject, (ii) depreciation, and
(iii) amortization, but excluding (a) cash and cash items, (b) amounts due from
managing agents, (c) rents and other receivables (not including mortgages
receivable or other receivables arising from the sale of invested assets), (d)
rent security, (e) prepaid expenses and deferred charges, and (f) obligations of
municipal, state and federal governments and governmental agencies, other than
securities of the Federal Housing Authority, the Veterans Administration and the
Federal National Mortgage Association and securities issued by governmental
agencies that are backed by a pool of mortgages.
The fee to REIT is based on net assets and computation of the fee includes
non-accruing mortgage receivables to the extent they exceed allowances for loan
losses. The fee under the Advisory Agreement is computed and payable quarterly,
subject to adjustment at year end based on the Trust's audited financial
statements. During the fiscal year ended September 30, 1994, REIT earned
$1,052,000 from the Trust under the Advisory Agreement.
Under the Advisory Agreement, the Trust bears all expenses including
interest, discount and other costs for borrowed money; taxes on income or
property and license fees (including franchise taxes); rental paid for office
space used by the Trust; audit fees and expenses; legal fees; expenses of
litigation involving the Trust; charges of custodians, transfer agents,
registrars, warrant agents, dividend disbursing agent, brokers, underwriters and
banks; expenses relating to meetings of trustees and shareholders; expenses
connected with the acquisition, disposition or ownership of investment assets,
including, but not limited to, travel expenses, costs of appraisal, leasing,
maintenance, repair, improvement and foreclosure of property and origination and
mortgage servicing fees and real estate brokerage commissions; fees for the
management of real estate owned by the Trust; fees and expenses payable to
trustees, officers and employees (other than fees payable to Trustees, officers
and employees who are directors, officers and employees of REIT, whose
compensation is payable solely by REIT), independent contractors, consultants,
managers, or agents; the expenses of revising, amending, modifying or
terminating the Trust; and indemnification required to be made by the Trust
under the Declaration of Trust.
The Advisory Agreement provides that directors, officers, and employees of
REIT may serve as trustees, officers and employees of the Trust, but such
persons are not and may not receive cash compensation from the Trust for
services rendered in the latter capacities.
The Advisory Agreement is not assignable by REIT without the written consent
of the Trust. The Advisory Agreement is not assignable by the Trust without the
written consent of REIT, except to a successor to the business and assets of the
Trust. The Advisory Agreement has been renewed for a term ending December 31,
1998 and may be renewed on an annual basis by the Board of Trustees, for a
maximum five year period. Notwithstanding such renewal of the Advisory Agreement
by the Board of Trustees, the shareholders have the right to rescind the renewal
of the Advisory Agreement authorized at the preceding Board of Trustees Meeting,
if at a special meeting of shareholders called by at least twenty percent of the
outstanding Beneficial Shares specifically for such purpose a majority of the
outstanding Beneficial Shares entitled to vote thereon shall determine that the
Advisory Agreement shall not be renewed. In the event the
10
<PAGE>
Advisory Agreement is not renewed in any year by the Board of Trustees or such
renewal is rescinded by a majority of the outstanding Beneficial Shares entitled
to vote thereon at a special meeting called for such purpose, the Advisory
Agreement will have a balance of four years remaining in the existing term.
The Trust engages entities affiliated with REIT to manage properties
acquired by the Trust in foreclosure or deed in lieu of foreclosure. The
management services include, among other things, rent billing and collection,
leasing (including document preparation), maintenance, construction supervision,
compliance with regulatory statutes and rules (i.e. New York City rent control
and rent stabilization rules) and property dispositions. In fiscal 1994 the
Trust paid $617,000 to these entities for management and construction
supervision fees and leasing and selling fees. The Trust believes these fees are
on terms at least as favorable to the Trust as would be available from
unaffiliated entities. The payment of these fees is ratified by the unaffiliated
trustees.
During the year ended September 30, 1994 Fredric H. Gould and Marshall Rose,
Chairman and Vice Chairman of the Board of Trustees, were officers and directors
of the managing corporate general partner of Gould Investors L.P. ("GLP"), a
public master limited partnership, and individual general partners of GLP. The
Trust, GLP and other related entities occupy common office space, and share
office services, equipment and personnel. In fiscal 1994, $1,264,000 of common
general and administrative expenses were allocated to the Trust. This amount
includes $97,000 and $121,000, allocated to the Trust for legal services and
accounting services performed by Simeon Brinberg and David W. Kalish,
respectively. Messrs. Brinberg and Kalish, who receive remuneration or payment
of fees directly from GLP and related entities, are also executive officers of
the Trust.
During the year ended September 30, 1994 a law firm in which Simeon
Brinberg, an officer of the Trust, is a Partner, received an aggregate of
approximately $67,000 directly from borrowers of the Trust, for services
rendered in transactions involving such borrowers and the Trust.
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Trustees of the Trust is seeking the appointment of Kenneth
Leventhal & Company as independent certified public accountants to audit the
books, records and accounts of the Trust for the fiscal year ending September
30, 1995. This firm has served as the Trust's independent certified public
accountants since 1986. Representatives of Kenneth Leventhal & Company are
expected to be present at the Annual Meeting and will have the opportunity to
make a statement if they desire to do so and will be available to respond to
questions of the Trust's shareholders.
If the Trust's shareholders do not approve of the appointment of Kenneth
Leventhal & Company, the selection of independent certified public accountants
will be made by the Trust's Board of Trustees.
The Board of Trustees recommends a vote "FOR" the appointment of Kenneth
Leventhal & Company as the Trust's independent certified public accountants for
the fiscal year ending September 30, 1995.
GENERAL
Management of the Trust does not know of any matters other than those stated
in this Proxy Statement which are to be presented for action at the Annual
Meeting. If any other matters should properly come before the Annual Meeting, it
is intended that proxies in the accompanying form will be voted on any such
other matters in accordance with the judgment of the persons voting such
proxies. Discretionary authority to vote on such voting matters is conferred by
such proxies upon the persons voting them. The expenses in connection with the
solicitation of the accompanying form of proxy, including the cost of preparing,
printing and mailing the notice of meeting, form or proxy and Proxy Statement,
have been or will be borne by the Trust.
11
<PAGE>
SHAREHOLDER PROPOSALS
The annual meeting of the Trust for the year ending September 30, 1995 is
scheduled to be held in March 1996. In order to have any proposal to be
presented by a shareholder at such meeting included in the Trust's proxy
statement and form or proxy relating to the meeting, the proposal must be
received by the Trust not later than September 28, 1995.
By order of the Board of Trustees
SIMEON BRINBERG, Secretary
Dated: January 27, 1995
12
<PAGE>
PROXY BRT REALTY TRUST
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
MARCH 17, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints FREDRIC H. GOULD, ISRAEL ROSENZWEIG and
SIMEON BRINBERG, as Proxies each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of Beneficial Interest, $3.00 par value per share, of BRT Realty Trust
held of record by the undersigned on January 20, 1995 at the Annual Meeting of
Shareholders to be held on March 17, 1995 or any adjournments thereof.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Election of Class II Trustees
/ / FOR ALL NOMINEES / / WITHHOLD ALL NOMINEES
Nominees: Arthur Hurand, Herbert C. Lust, II, Marshall Rose
/ / INSTRUCTIONS: To withhold authority to vote for any individual nominee,
place an "X" in the box on the left and strike a line through the nominee's name
listed above.
FOR AGAINST ABSTAIN
/ / / / / / 2. Appointment of Kenneth Leventhal & Company as Independent Certified Public
Accountants for the fiscal year ending September 30, 1995.
3. In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting.
</TABLE>
This Proxy when properly executed will be voted in the manner directed
hereby by the undersigned shareholder.
<PAGE>
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
Dated: __________________________, 1995
__________________________________ L.S.
__________________________________ L.S.
(NOTE: PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS HEREON. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC. SHOULD
SO INDICATE WHEN SIGNING, GIVING FULL
TITLE AS SUCH. IF SIGNER IS A
CORPORATION, EXECUTE IN FULL CORPORATE
NAME BY AUTHORIZED OFFICER. IF SHARES
HELD IN THE NAME OF TWO OR MORE
PERSONS, ALL SHOULD SIGN.)
