BRT REALTY TRUST
60 Cutter Mill Road
Suite 303
Great Neck, New York 11021
(516) 466-3100
------------------
Notice of Annual Meeting of Shareholders
To Be March 23, 2000
The Annual Meeting of Shareholders of BRT Realty Trust will be held on
Thursday, March 23, 2000, at 9:00 a.m., at the offices of BRT, 60 Cutter Mill
Road, Suite 303, Great Neck, N.Y.:
1. To elect three Class I Trustees;
2. To ratify the selection by the Board of Trustees of Ernst & Young LLP as
independent auditors for the current fiscal year; and
3. To transact any other business as may properly come before the meeting.
Shareholders of record at the close of business on January 21, 2000
will be entitled to vote at the meeting. It is important that your shares be
represented and voted at the meeting. You can vote your shares by completing and
returning the proxy card sent to you. Most shareholders can also vote their
shares over the internet or by telephone. If internet or telephone voting is
available to you, voting instructions are printed on the proxy card sent to you.
You can revoke a proxy at any time prior to its exercise at the meeting by
following the instructions in the accompanying proxy statement.
Simeon Brinberg
Secretary
January 26, 2000
<PAGE>
BRT REALTY TRUST
60 Cutter Mill Road
Suite 303
Great Neck, New York 11021
---------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held March 23, 2000
We are providing this Proxy Statement in connection with the solicitation
by the Board of Trustees of BRT Realty Trust ("BRT") of proxies to be voted at
the Annual Meeting of Shareholders. The Annual Meeting will be held at the
offices of BRT, 60 Cutter Mill Road, Suite 303, Great Neck, New York, at 9:00
A.M., on Thursday, March 23, 2000.
The date of this Proxy Statement is January 26, 2000, the approximate date
on which we are mailing this Proxy Statement and the accompanying form of proxy
to shareholders. BRT's fiscal year begins on October 1st and ends on September
30th. References in the Proxy Statement to the year 1999 or fiscal 1999 refers
to the twelve month period from October 1, 1998 to September 30, 1999.
The executive offices of BRT are located at 60 Cutter Mill Road, Suite 303,
Great Neck, New York, 11021. Our telephone number is (516) 466-3100.
VOTING PROCEDURES
Shareholders at the close of business on January 21, 2000, (the "Record
Date") are entitled to notice of and to vote at the Annual Meeting. You are
entitled to one vote for each share of Beneficial Interest you own on the Record
Date. On the Record Date there were 7,165,263 shares of Beneficial Interest
("Shares") outstanding. A quorum (holders of a majority of the Shares present in
person or represented by proxy) is required to hold the meeting. When a quorum
is present, the voting of the holders of a majority of Shares present in person
or by proxy is required to elect the three nominees for Class I Trustee and to
approve any other matter. There is no cumulative voting in connection with the
election of Trustees.
Because many shareholders can not attend the meeting in person, it is
necessary that a large number be represented by proxy. Most shareholders have a
choice of voting over the internet, by using a toll-free telephone number or by
completing a proxy card and mailing it in the postage paid envelope provided.
Please refer to your proxy card or to the information provided by your bank,
broker, or other holder of record to see which options are available to you. You
should be aware that if you vote over the internet, you may incur costs, such as
telephone and internet access charges for which you will be responsible. The
internet and telephone voting facilities for shareholders of record will close
at 12:01 a.m., E.S.T. on March 23, 2000. The internet and telephone voting
procedures are designed to authenticate shareholders by use of a control number,
and to allow you to confirm that your instructions have been properly recorded.
You can revoke your proxy at any time before it is exercised. To revoke
your proxy you may file a written revocation with BRT's Secretary, or you may
deliver a properly executed proxy bearing a later date (including an internet or
telephone vote). You may also revoke your proxy by attending the meeting and
voting in person.
Votes withheld from nominees for Trustee, abstentions on proposals and
broker non-votes are counted as present and entitled to vote for purposes of
determining whether a quorum has been reached. Votes withheld from nominees for
Trustee and abstentions on proposals have the same effect as votes against them.
Broker non-votes have no effect on the outcome of election of Trustees or other
proposals.
All shares entitled to vote and represented by properly completed
proxies received prior to the meeting and not revoked will be voted at the
meeting in accordance with your instructions. If no choice is indicated on the
proxy card, the persons named as your proxies will vote the Shares "FOR" the
nominees for Class I Trustee and "FOR" the appointment of Ernst & Young LLP as
BRT's auditors for the current fiscal year.
COST OF PROXY SOLICITATION
BRT will pay the cost of soliciting proxies. In addition to the
solicitation of proxies by mail and through its regular employees, BRT will
request brokers, custodians, nominees and other record holders to forward copies
of the proxy and other soliciting material to persons for whom they hold Shares
and to request authority for the exercise of proxies; in such cases, BRT
reimburses brokerage houses and others for forwarding proxies and proxy material
to shareholders.
<PAGE>
ELECTION OF TRUSTEES
The Board of Trustees is divided into three classes, each of which is
elected for a staggered 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 the Board of Trustees. The Board has fixed the number of
Trustees at eight. The Board may, following the Annual Meeting, increase the
size of the Board and fill any resulting vacancy or vacancies.
At the Annual Meeting, three Class I Trustees will be elected. Five
other individuals serve as Trustees but are not standing for election because
their terms extend past the Annual Meeting. The persons named in the proxy card
intend to vote such proxy for the election as Class I Trustees of Patrick J.
Callan, Jeffrey Gould and David G. Herold unless you indicate that your vote
should be withheld. Proxies will not be voted for a greater number of persons
than the number of nominees named in the Proxy Statement. We expect each nominee
to be able to serve if elected. However, if any nominee is unable to serve as a
Trustee, unless a shareholder withholds authority, the persons named in the
proxy card may vote for any substitute nominee proposed by the Board of
Trustees.
Each Class I nominee, if elected, will serve until the Annual Meeting
to be held in the year 2003. Each other Trustee will serve until the Annual
Meeting to be held in the year set forth opposite his name.
The Board of Trustees recommends a vote for Patrick J. Callan, Jeffrey
Gould and David G. Herold for election as Class I Trustees.
<PAGE>
NOMINEES FOR TRUSTEE; REMAINING TRUSTEES
The following table sets forth the name and age of each nominee for election to
the Board of Trustees and each Trustee whose term of office will continue after
the Annual Meeting, the principal occupation of each during the past five years
and the period during which each has served as a Trustee. Each nominee is
currently serving as a Trustee.
Term Principal Trustee
Name Age Expiring Occupation Since
- ---- --- -------- ---------- -----
Class I (Nominees)
Patrick J. Callan
(1)(2) 63 2003 Principal of 1984
The RREEF Funds,
pension fund real
estate investments;
Director of
Manufacturers & Traders
Bank Directors Advisory
Council - New York City
Division; Director of
M & T Bank Corporation.
Jeffrey A. Gould 34 2003 President and Chief 1997
Operating Officer
of BRT since March
1996; Executive Vice
President and Chief
Operating Officer of
BRT from March
1995 to March 1996;
Vice President of BRT
for more than
three years prior
thereto.
David G. Herold 58 2003 Private Investor; 1997
President and Chief
Executive Officer
of Metro Bancshares,
Inc., the savings and
loan holding company for
Bayside Federal Savings
and Loan Association,
from 1988 to 1994.
Class II
Arthur Hurand (1)
83 2001 Private Investor; 1989
Director of One Liberty
Properties, Inc.
Herbert C. Lust, II 73 2001 Private Investor; 1981
(1)(2) Director of Prime
Hospitality, Inc.
Marshall Rose (1) 63 2001 Real Estate Consultant; 1986
President of
Georgetown Equities, Inc.;
Director of One Liberty
Properties, Inc.;
Director of Estee
Lauder, Inc.; Director of
Golden Book Family Enter-
tainment, Inc.
Class III
Fredric H. Gould (1) 64 2002 Chairman of the Board 1983
and Chief Executive Officer
of BRT; Chairman of the Board
of Georgetown Partners,
Inc.; General Partner
of Gould Investors L.P.;
Chairman of the Board
and Chief Executive Officer
of One Liberty Properties, Inc.;
President of REIT Management Corp.;
Director of East Group Properties, Inc.
Gary Hurand (2) 53 2002 President of Dawn Donut 1990
Systems, Inc.; Director
of Republic Bancorp.
- -----------------
(1) Member of the Executive Committee.
(2) Member of the Audit and Compensation Committee.
Fredric H. Gould is Jeffrey A. Gould's father and Arthur Hurand is the father of
Gary Hurand.
<PAGE>
SHARE OWNERSHIP; HOLDINGS OF TRUSTEES AND OFFICERS
The following sets forth information concerning share ownership of all persons
known by BRT to own beneficially 5% or more of its Shares, all Trustees and
nominees for Trustee and all Trustees and officers of the Trust as a group,
based upon the number of outstanding Shares on January 21, 2000. There were
7,165,263 shares outstanding on January 21, 2000.
Amount of
Name of Beneficial Beneficial Percent
Owner Ownership (1) of Class
----- ------------- --------
Gould Investors, L.P. (2) 1,871,319 25.7%
Patrick J. Callan 42,500 *
55 East 52nd Street
New York, NY 10055 (3)(4)
Fredric H. Gould (2)(3)(5)(6) 2,448,678 33.6%
Jeffrey A. Gould (2)(3)(7) 245,500 3.4%
David G. Herold (3)(4)
16 Southdown Court
Huntington, NY 11743 14,500 *
Arthur Hurand (3) (4)
4182 Pier North Blvd., Suite D
Flint, MI 48504 15,500 *
Gary Hurand (3)(4)(8)
4182 Pier North Blvd., Suite D
Flint, MI 48504 215,651 3.0%
Herbert C. Lust, II (3)(4)
54 Porchuck Road
Greenwich, CT 06830 72,500 *
Marshall Rose (3)(9)
667 Madison Avenue
New York, NY 10021 269,545 3.7%
Henry Moskowitz and the 460,500 6.3%
Argo Corporation
50 West 17th Street
New York, NY 10011 (10)
All Trustees and Officers
as a group
(17 in number)(11) 3,940,141 (12) 54.1%
*Less than 1%
- -----------------
(1) 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.
(2) Address is 60 Cutter Mill Road, Great Neck, NY 11021.
(3) A Trustee of BRT.
(4) Includes 2,500 Shares which underlie unexercised stock options.
(5) Includes 256,990 Shares owned by the pension and profit sharing trusts
of BRT and REIT Management Corp. of which Fredric H. Gould and two
non-Trustee officers are trustees, as to which shares Mr. Gould has
shared voting and investment power.
(6) Includes 34,762 Shares held by Mr. Gould as co-trustee for the children
of his brother (as to which Shares Mr. Gould disclaims beneficial
interest), 25,000 Shares owned by a trust in which Mr. Gould is a
trustee, 4,790 Shares owned by Georgetown Group, Inc., of which Mr.
Gould is a Vice President and 18,988 Shares owned by a partnership in
which Mr. Gould is a general partner. Also includes 30,048 Shares owned
by One Liberty Properties, Inc. ("OLP"), of which 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 and sole shareholder of the managing general partner)
is a controlling shareholder, and 1,913,219 Shares owned by GLP. Does
not include 25,015 Shares owned by Mrs. Fredric H. Gould, as to which
shares Mr. Gould disclaims beneficial interest and Mrs. Gould has sole
voting and investment power.
(7) Includes 22,252 Shares owned by Mr. Gould as custodian for his minor
children (as to which Shares Mr. Gould disclaims beneficial interest),
25,000 Shares owned by a trust in which Mr. Gould is a trustee, and
17,625 Shares which underlie unexercised stock options. Does not
include 6,000 Shares owned by Mrs. Jeffrey Gould as to which Shares Mr.
Gould disclaims beneficial interest and Mrs. Gould has sole voting and
investment power.
<PAGE>
(8) Includes 47,243 Shares owned by a partnership, in which Mr. Hurand
is a partner, and 121,377 Shares owned by a corporation in which Mr.
Hurand is an officer and shareholder.
(9) Includes 4,790 Shares owned by Georgetown Group, Inc. in which Mr. Rose
is an officer, 76,983 Shares owned by the pension and profit sharing
trusts of Georgetown Group, Inc., of which Mr. Rose is trustee, 18,988
Shares owned by a partnership in which Mr. Rose is one of the general
partners, 21,626 Shares owned by Jill and Marshall Rose Foundation, of
which Mr. Rose is a trustee (as to which Shares Mr. Rose disclaims
beneficial interest), 84,749 Shares owned by Mr. Rose for the benefit
of others, (as to which Shares Mr. Rose disclaims beneficial
interest)and 16,167 shares owned by a partnership of which Mr.
Rose is general partner.
(10) A Schedule 13G dated June 9, 1999 was filed with the Securities and
Exchange Commission reporting that Henry Moskowitz, and Rose Moskowitz,
as joint tenants, and the Argo Corporation have sole and/or shared
voting and dispositive power over an aggregate of 460,500 Shares.
(11) This total is qualified by notes (4) through (9).
(12) Includes an aggregate of 103,000 Shares which underlie unexercised
options.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
This table shows the compensation paid and accrued for services
rendered in all capacities to BRT during the last three fiscal years for the
Chief Executive Officer of BRT and the four other most highly compensated
Executive Officers of BRT whose annual compensation exceeded $100,000 for the
fiscal year ended September 30, 1999.
<TABLE>
<CAPTION>
Annual Compensation(2) Long Term Compensation
Awards
Other Securities/
Annual Restricted Underlying Payouts
Name and Principal Salary Bonus Compen- Stock Options/ LTIP All Other
Position Year(1) $ $ sation (3) Awards($) SARs(#) Payout($) Compensation (3)
-------- ------- -------- ----- ---------- --------- --------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fredric H. Gould 1999 0 0 0 0 0 0 0
Chairman of the 1998 0 0 0 0 0 0 0
Board and Chief 1997 0 0 0 0 0 0 0
Executive Officer (4)
Jeffrey A. Gould 1999 $250,000 0 0 0 12,500 0 $24,000
President and 1998 $240,000 0 0 0 0 0 $24,000
Executive Vice 1997 $225,000 0 0 0 10,000 0 $24,000
President
Israel Rosenzweig 1999 $250,000 0 0 0 12,500 0 24,000
Vice President and 1998 $125,000 0 0 0 10,000 0 18,750
President of BRT 1997 0 0 0 0 0 0 0
Funding Corp. (5)
Mark H. Lundy 1999 0 0 $147,702 0 12,500 0 $3,800
Vice President (6) 1998 0 0 $148,185 0 0 0 $9,900
1997 0 0 $115,600 0 10,000 0 $5,300
David Heiden 1999 $120,186 $10,000 0 0 10,000 0 $19,500
Vice President and 1998 $49,231 0 0 0 10,000 0 $7,385
Vice President of 1997 0 0 0 0 0 0 0
BRT Funding Corp. (7)
- ---------------------------
</TABLE>
(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)Represents annual contributions under BRT's Pension Plan for Messrs. Jeffrey
Gould, Israel Rosenzweig and David Heiden. With respect to Mark H. Lundy,
represents the amount reimbursed by BRT to Gould Investors L.P. for the
allocated portion of the pension expense paid by Gould Investors L.P. for Mr.
Lundy. The only other 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)Fredric H. Gould does not receive any compensation directly from BRT.
Reference is made to the caption "Interest of Management in Certain
Transactions" for a discussion of fees paid to REIT Management Corp., BRT's
Advisor. Mr. Gould is the President and sole shareholder of REIT Management
Corp.
(5)Israel Rosenzweig became President of BRT Funding Corp. effective April, 1998
and a Vice President of BRT in March, 1999.
(6)Mark H. Lundy does not receive compensation directly from BRT; he receives
compensation and fees directly from Gould Investors L.P.The amounts set forth
represent the portion reimbursed by BRT for legal services rendered by Mr.
Lundy to BRT.
(7)David Heiden became an employee and officer of BRT Funding Corp. in April,
1998 and a Vice President of BRT in March, 1999.
<PAGE>
BRT Pension Plan
BRT has a non-contributory defined contribution Pension Plan covering
employees. The Pension Plan is administered by Fredric H. Gould, Simeon Brinberg
and David W. Kalish(Messrs. Brinberg and Kalish being non-trustee officers of
BRT). Annual contributions are based on 15% of an employees annual earnings, not
to exceed $24,000 per employee (increasing to $25,500 in 2000). Partial vesting
commences one year after employment, increasing annually until full vesting is
achieved at the completion of five years of employment. The method of payment of
benefits to participants upon retirement is determined solely 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 1999,
$24,000, $24,000 and $19,500 was contributed for the benefit of Jeffrey A.
Gould, Israel Rosenzweig and David Heiden, respectively. The aggregate amount
accrued to date for Mr. Gould, Mr. Rosenzweig and Mr. Heiden is approximately
$470,923, $885,508 and $32,253, respectively. The credited years of service for
Mr. Gould, Mr. Rosenzweig and Mr. Heiden are 14, 15 and 1, respectively.
Options Granted For The Fiscal Year Ended September 30, 1999
The table sets forth information concerning the grant of stock options
in Fiscal 1999 to Named Executive Officers.
<TABLE>
<CAPTION>
Individual Grants(1)
Potential Realizable
% of Total Value At Assumed
Options Annual Rates of Stock
Granted Exercise or Price Appreciation For
Options to Employees Base Price Option Term (2)
Name Granted in Fiscal Year ($/sh) Expiration Date 5% 10%
---- ------- -------------- ---------------- ---------------- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Jeffrey Gould 12,500 9.62% $5.94 12/04/08 $37,125 $74,250
Israel Rosenzweig 12,500 9.62% $5.94 12/04/08 $37,125 $74,250
Mark H. Lundy 12,500 9.62% $5.94 12/04/08 $37,125 $74,250
David Heiden 10,000 7.69% $5.94 12/04/08 $29,700 $59,400
</TABLE>
(1) Options were granted on December 5, 1998. The exercise price equals the
closing price of BRT Shares on the New York Stock Exchange on the date of grant.
The options are exercisable in four equal annual installments, cumulatively,
beginning two years after grant and expire ten years after grant.
(2) These amounts, based on assumed appreciation rates of 5% and 10% prescribed
by the Securities and Exchange Commission rules, are not intended to forecast
possible appreciation of BRT's stock price. These numbers do not take into
account certain provisions of the options and the related stock option plan
providing for termination of options following termination of employment,
non-transferability or phased-in vesting. BRT did not use an alternate formula
for a grant date valuation as it is not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown or
volatile factors. Future compensation resulting from option grants is based
solely on the performance of the BRT's stock price.
Option Exercises and Unexercised Options
No options were exercised by any Named Executive Officer in Fiscal 1999. The
table sets forth information concerning unexercised options at fiscal year end
with respect to the Named Executive Officers:
<TABLE>
Number of
Securities
Underlying Value of Unexercised
Unexercised In-the-Money Options
Options at fiscal at Fiscal Year End (1)
---------------------
Year end
--------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
- ---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Fredric H. Gould 0 0 0/0 $0/$0
Jeffrey A. Gould 0 0 17,625/15,000 $64,871/$42,000
Israel Rosenzweig 0 0 0/22,500 $0/$43,250
Mark H. Lundy 0 0 10,125/22,500 $44,246/$43,250
David Heiden 0 0 0/20,000 $0/$42,475
</TABLE>
(1) Represents the difference between the exercise price of options and $8.75,
the closing price of BRT's Shares on September 30,
1999.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee 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 three key elements: (i) an annual component
made up of base salary; (ii) an annual bonus; and (iii) a long term
incentive-based compensation for executive officers realized through the
granting of stock options.
Base Salary and Bonus
Base salaries are targeted to be competitive with salaries paid to senior
executives at other real estate investment trusts and take into account an
individual's performance and BRT's operating performance in the most recently
concluded fiscal year. The determination by the Committee of base compensation
is subjective and is not based on any structured formula. In determining
compensation for the 1999 fiscal year the Committee took into account the
expertise which the executive officers demonstrated in managing the business of
BRT; among other things the Committee gave consideration to the activity of the
Trust in mortgage lending, and the activities of the executive officers in
managing, financing and disposing of real estate assets taken back in
foreclosure proceedings.
<PAGE>
BRT does not have a bonus plan in existence and it does not establish a
bonus pool. Any bonuses granted are granted on a case by case basis, with the
amount thereof being subjective. The committee takes into consideration, among
other things, the base compensation of each officer, the performance of each
officer during the most recently concluded fiscal year and the results of
operations of BRT for such year.
Long Term Compensation - Stock Options
Stock options, which are purely discretionary and are not based on any
formula, 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 BRT's Shares over a specified number of years.
Under the existing stock option plans options are granted at an exercise price
equal to the fair market value of the Shares of BRT on the date of grant and are
exercisable over a number of years. Options granted in 1999 are exercisable
commencing two years from the date of grant to the extent of 25% thereof, and
thereafter in annual increments of 25%, on a cumulative basis, and expire ten
years from the date of grant. Stock options are the only form of long term
incentive currently used by BRT.
CEO Compensation
Fredric H. Gould, Chairman of the Board of Trustees and Chief Executive
Officer does not receive any direct remuneration from the BRT, but is
compensated by REIT Management Corp. the Trust's advisor (see "Interest of
Management in Certain Transactions").
Respectfully submitted,
Patrick J. Callan
Gary Hurand
Herbert C. Lust II
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
This graph compares the performance of BRT's 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 invested on September 30, 1994 in BRT's Shares,
the S & P 500 Index and the peer group index and assumes the reinvestment of
dividends.
PERFORMANCE GRAPH
9/94 9/95 9/96 9/97 9/98 9/99
BRT Realty Trust 100.00 94.00 137.00 209.00 136.00 204.00
S&P 500 Index 100.00 130.00 156.00 219.00 239.00 306.00
NAREIT Mortgage 100.00 127.00 179.00 239.00 188.00 119.00
<PAGE>
TRUSTEE'S FEES AND OTHER COMPENSATION
Each unaffiliated Trustee was paid an annual retainer of $12,500 for his
services in the 1999 fiscal year. In addition, unaffiliated Trustees were 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."
ADDITIONAL INFORMATION ABOUT THE BOARD OF TRUSTEES
The Board of Trustees holds regular quarterly meetings. In addition
special meetings may be called from time-to-time and, where appropriate,
telephonic meetings are held or action is taken by unanimous consent. In 1999
the Board of Trustees held four meetings. For the 1999 fiscal year each Trustee
attended at least 75% of the Board Meetings except that Messrs. Herold, Lust and
Rose each missed two meetings.
The Board of Trustees has appointed an Audit and Compensation Committee
consisting of Patrick J. Callan, Gary Hurand and Herbert C. Lust II, all
independent Trustees. The functions of the Audit and Compensation Committee
include reviewing the scope and results of the annual audit, reviewing the
adequacy of internal accounting and financial controls and recommending
independent auditors to the Board of Trustees. The Audit and Compensation
Committee is also responsible for setting and administering the policies which
govern annual compensation of executive officers, bonuses paid to any officers
and the stock options plans. The Audit and Compensation Committee held one
meeting in the 1999 fiscal year.
BRT has no nominating or any committee performing similar functions.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
BRT and REIT Management Corp. ("REIT") are parties to an Advisory
Agreement pursuant to which REIT furnishes administrative services with respect
to BRT's assets and, subject to the supervision of the Trustees, advises BRT
with respect to its investments. The Trust believes that the Advisory Agreement
is on terms as favorable to BRT 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, 2003. Fredric H. Gould and two officers of BRT are
directors of REIT and Fredric H. Gould is an officer 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 Invested Assets 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 shown on the balance sheet
of BRT 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 computations 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 audited financial
statements. During the fiscal year ended September 30, 1999 REIT earned $571,000
under the Advisory Agreement.
<PAGE>
Under the Advisory Agreement, BRT 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 BRT; audit fees and expenses; legal fees; expenses of litigation;
charges of transfer agents, registrars, 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 BRT; 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; and
indemnification required to be made under the Declaration of Trust.
The Advisory Agreement provides that directors, officers, and employees
of REIT may serve as Trustees, officers and employees of BRT, but such persons
may not receive cash compensation from BRT for services rendered in the latter
capacities.
The Advisory Agreement is not assignable by REIT without the written
consent of BRT. The Advisory Agreement is not assignable by BRT without the
written consent of REIT, except to a successor to the business and assets of
BRT. The Advisory Agreement has been renewed for a term ending December 31, 2003
and is renewable 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 shares specifically for such purpose a majority of the outstanding
shares entitled to vote thereon determine that the Advisory Agreement shall not
be renewed. In the event the Advisory Agreement is not renewed in any year by
the Board of Trustees or such renewal is rescinded by a majority of the
outstanding 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. A borrower may pay fees directly to REIT for services
rendered in arranging loans made by the Trust. These fees, which are permitted
by the Advisory Agreement, amounted to $151,000 for fiscal 1999.
BRT engages entities affiliated with REIT to manage properties acquired
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), property dispositions and mortgage financing and legal expenses. In
fiscal 1999 BRT paid $746,000 to these entities.
During the year ended September 30, 1999 Fredric H. Gould, Chairman and
Chief Executive Officer, was an officer and director of the managing corporate
general partner of Gould Investors L.P. ("GLP"), a limited partnership, and an
individual general partner of GLP. BRT, GLP and other related entities occupy
common office space, and share office services, equipment and personnel. In
fiscal 1999, $422,000 of common general and administrative expenses were
allocated to BRT, including the amounts reimbursed to GLP for legal services
provided by Mark H. Lundy (See "Summary Compensation Table"). In addition
commencing April 1, 1998, BRT Funding Corp., a subsidiary of BRT, leased space
from GLP at an annual rental of $65,000.
<PAGE>
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 our executive officers and directors, and persons who beneficially own
more than 10% of the BRT'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
BRT with copies of all Section 16(a) forms they file. BRT prepares and files the
requisite forms on behalf of its executive officers and Trustees. Based on a
review of information supplied to BRT by the executive officers and Trustees,
BRT believes that all Section 16(a) filing requirements applicable to our
executive officers and Trustees with respect to fiscal 1999 were met. Although
Fredric H. Gould and Matthew Gould, as a general partner and as president of the
managing general partner, respectively, of Gould Investos L.P. filed Form 4's
for the month of November, 1999 reflecting the purchase by Gould Investors L.P.
of shares of BRT, Gould Investors L.P., a holder of more than 10% of BRT's
shares filed the Form 4 approximately thirty (30) days late due to inadvertence
on the part of the Gould Investors L.P. staff.
<PAGE>
RATIFICATION OF APPOINTMENT
OF
INDEPENDENT AUDITORS
The Board of Trustees is seeking the ratification of the appointment of
Ernst & Young LLP as independent auditors for BRT for the fiscal year ending
September 30, 2000. Representatives of Ernst & Young LLP 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.
If the shareholders do not approve of the appointment of Ernst & Young
LLP, the selection of independent auditors will be made by the Board of
Trustees.
The Board of Trustees recommends a vote "FOR" the appointment of Ernst
& Young LLP as the Trust's independent auditors for the fiscal year ending
September 30, 2000.
<PAGE>
SUBMISSION OF SHAREHOLDER PROPOSALS
The annual meeting of BRT for the year ending September 30, 2000 is
scheduled to be held in March 2001. In order to have any proposal presented by a
shareholder at the meeting included in the proxy statement and form of proxy
relating to the meeting, the proposal must be received by BRT not later than
September 28, 2000.
OTHER MATTERS
The Board does not know of any matter other than those stated in this
Proxy Statement which are to be presented at the Annual Meeting. If any other
matter should properly come before the meeting, the persons named in the proxy
card will vote the Shares represented by it in accordance with their best
judgment. Discretionary authority to vote on other matters is included in the
proxy.
By order of the Board of Trustees
Simeon Brinberg, Secretary
Dated: January 26, 2000
ANNUAL MEETING OF SHAREHOLDERS OF
BRT RREALTY TRUST
March 23, 2000
TO VOTE BY MAIL
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
Please call toll-free (1-800-PROXIES and follow the instructions).
Have your control number and the proxy card available when you
call.
TO VOTE BY INTERNET
Please access the web page at www.voteproxy.com and follow the
on-screen instructions. Have your control number available
when you access the web page.
YOUR CONTROL NUMBER IS ________________
|_| Please mark your
Votes as in this example.
FOR ALL WITHHOLD
NOMINEES ALL NOMINEES
1. Election of / / / / Nominees: Patrick J. Callan
Class I Jeffrey Gould
Trustees David G. Herold
/ / 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 at right.
2. Appointment of Ernst & Young / / / / / /
LLP as independent auditors
for the fiscal year ending
September 30, 2000.
3. In their discretion,the proxies are authorized to vote
upon such other business as may properly come before
the meeting.
This Proxy when properly executed will be voted in
the manner directed hereby by the undersigned
shareholder.
PLEASE RETURN USING ENCLOSED ENVELOPE
-------------------------------------
Date , 2000 Date , 2000
- --------------- ------- ------------------------- ----------
SIGNATURE SIGNATURE IF HELD JOINTLY
Please sign exactly as name appears on the certificate or certificates
representing shares to be voted by this proxy, as shown on the label above. When
signing as executor, administrator, attorney, trustee, or guardian, please give
full title as such. If a corporation, please sign full corporation name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person(s).
<PAGE>
Proxy BRT REALTY TRUST
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
March 23, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Jeffrey A. Gould, Simeon Brinberg and
David W. Kalish 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 of BRT Realty Trust held of
record by the undersigned on January 21, 2000 at the Annual Meeting of
Shareholders to be held on March 23, 2000 or any adjournments thereof.
(To Be Signed on Reverse Side.)
