<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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
ALEXANDER'S, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ALEXANDER'S, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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
ALEXANDER'S, INC.
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
1999
<PAGE> 3
ALEXANDER'S, INC.
PARK 80 WEST PLAZA II
SADDLE BROOK, NEW JERSEY 07663
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 2, 1999
------------------------
To the Holders of Common Stock:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Alexander's, Inc., 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, June 2, 1999 at 12:00 P.M. for the following purposes:
1. The election of three 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 thereof.
Pursuant to the By-laws of the Company, the Board of Directors of the
Company has fixed the close of business on April 19, 1999, 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 WITHDRAW YOUR PROXY AND VOTE YOUR OWN SHARES.
By Order of the Board of Directors,
Stephen Mann
Chairman
<PAGE> 4
ALEXANDER'S, INC.
PARK 80 WEST PLAZA II
SADDLE BROOK, NEW JERSEY 07663
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 1999
------------------------
INTRODUCTION
The enclosed proxy is being solicited by the Board of Directors of
Alexander's, Inc., a Delaware corporation (together with its consolidated
subsidiaries, the "Company", unless the context indicates otherwise), for use at
the Annual Meeting of Stockholders of the Company to be held on Wednesday, June
2, 1999 (the "Annual Meeting"). The proxy may be revoked by the stockholder at
any time prior to its exercise at the Annual Meeting. 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 19, 1999 are
entitled to notice of and to vote at the Annual Meeting. On April 19, 1999,
there were 5,000,850 shares of Common Stock, par value $1.00 per share ("Common
Stock") outstanding, each entitled to one vote at the Annual Meeting.
Under the Company's 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 Directors. The approval of the amendment to the Company's Omnibus Stock
Plan must receive an affirmative vote by a majority of the votes cast to be
approved. A majority of the outstanding shares will constitute a quorum at the
meeting. Proxies marked "withhold authority" (including proxies from brokers or
other nominees indicating that such persons do not have discretionary power to
vote shares in certain matters) will be counted for the purpose of determining
the presence of a quorum, but will not be counted for purposes of determining
whether a proposal has been approved.
The principal executive office of the Company is located at Park 80 West
Plaza II, Saddle Brook, New Jersey 07663. This notice of meeting and proxy
statement and enclosed proxy will be mailed on or about May 10, 1999 to the
Company's stockholders of record as of the close of business on April 19, 1999.
ELECTION OF DIRECTORS
The By-laws of the Company provide that the Board of Directors shall be
divided into three classes. One class of directors is elected at each annual
meeting of stockholders to hold office for a term of three years and until their
successors are duly elected and qualify. Three nominees for Class II Directors
are to be elected at the Annual Meeting to serve on the Board of Directors until
the Company's Annual Meeting in 2002 and their respective successors shall have
been elected and qualified. Present Class I and III Directors serve until the
Company's Annual Meetings in 2001 and 2000, respectively.
Unless otherwise directed in the proxy, the person named in the enclosed
proxy, or his or her substitute, will vote such proxy for the election of the
three nominees listed below as Class II Directors for a three-year term and
until their respective successors are elected and qualify. If any nominee at the
time of election is unavailable to serve, it is intended that the person named
in the proxy, or his substitute, will vote for an alternative nominee who will
be designated by the Board. Proxies may be voted only for the three nominees
<PAGE> 5
named or such alternates. However, the Board has no reason to anticipate that
any of the nominees hereafter named will not be available to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE ELECTION OF THE NOMINEES LISTED BELOW AS CLASS II DIRECTORS. It is the
Company's understanding that Interstate Properties ("Interstate"), a New Jersey
general partnership, Vornado Realty Trust ("Vornado") and Steven Roth, the
Managing General Partner of Interstate and Chief Executive Officer and director
of the Company and Chairman of the Board of Trustees and Chief Executive Officer
of Vornado, who own in the aggregate 56.6% of the Common Stock, will vote for
this proposal.
The nominees for election as Class II Directors are currently members of
the Board of Directors. The present members of the Board of Directors are listed
below, together with a brief biography for each such person and the year in
which he first became a Director of the Company.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION YEAR TERM
AND PRESENT POSITION WILL INITIAL
NAME AGE WITH THE COMPANY EXPIRE ELECTION
- ---- --- -------------------- --------- --------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION TO SERVE AS
DIRECTORS UNTIL THE ANNUAL
MEETING IN 2002 (CLASS II)
Arthur Sonnenblick(1).................. 67 Managing Director of Sonnenblick- 1999 1984
Goldman Company, real estate
investment bankers, since January 1,
1996 and Vice Chairman and Chief
Executive Officer prior thereto.
Russell B. Wight, Jr.*(2).............. 59 A general partner of Interstate since 1999 1995
1968; Trustee of Vornado since 1979
and Director of Insituform
Technologies, Inc.
Neil Underberg(3)...................... 70 A member of the law firm of Whitman 1999 1980
Breed Abbott & Morgan since December
1987.
PRESENT DIRECTORS ELECTED TO SERVE
AS DIRECTORS UNTIL THE ANNUAL
MEETING IN 2000 (CLASS III)
Steven Roth*........................... 57 Chief Executive Officer of the 2000 1989
Company since March 2, 1995; Chairman
and Chief Executive Officer of
Vornado since 1989 and Trustee of
Vornado since 1979; Chairman of the
Board and Chief Executive Officer of
Vornado Operating Company; Managing
General Partner of Interstate, and a
Director of Capital Trust, Inc.
Thomas R. DiBenedetto(4)............... 49 President of Boston International 2000 1984
Group, Inc. since prior to 1986;
Director of Showscan Corp.; Director
of National Wireless Holdings, Inc.;
Managing Director of Olympic
Partners, a real estate investment
firm.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION YEAR TERM
AND PRESENT POSITION WILL INITIAL
NAME AGE WITH THE COMPANY EXPIRE ELECTION
- ---- --- -------------------- --------- --------
<S> <C> <C> <C> <C>
Stephen Mann(5)........................ 61 Chairman of the Board of Directors of 2000 1980
the Company since March 2, 1995;
Interim Chairman of the Board of
Directors of the Company from August
8, 1994 to March 2, 1995; Chairman of
the Clifford Companies since 1990;
prior thereto, counsel to the law
firm of Mudge, Rose, Guthrie,
Alexander & Ferdon.
NOMINEES FOR ELECTION TO SERVE
AS DIRECTORS UNTIL THE ANNUAL
MEETING IN 2001 (CLASS I)
Michael D. Fascitelli*................. 42 President and Trustee of Vornado 2001 1996
since December 1996; President of
Vornado Operating Company; Partner at
Goldman Sachs, in charge of its real
estate practice from December 1992 to
December 1996 and a vice president
prior thereto.
David Mandelbaum....................... 63 A member of the law firm of 2001 1995
Mandelbaum & Mandelbaum, P.C.; a
general partner of Interstate since
1968; Trustee of Vornado since 1979.
Richard West*.......................... 61 Dean Emeritus, Leonard N. Stern 2001 1984
School of Business, New York
University; Professor of Finance from
1984 through 1995, and Dean from 1984
through August 1993; prior thereto,
Dean of the Amos Tuck School of
Business Administration at Dartmouth
College; Director or Trustee of
Vornado, Vornado Operating Company,
Bowne & Co., Inc., various investment
companies managed by Merrill Lynch
Assets Management, Inc. and various
investment companies managed by
Hotchkis & Wiley.
</TABLE>
- ---------------
* Member of the Executive Committee of the Board of Directors of the Company.
(1) Mr. Sonnenblick also served as a director of the Company between 1980 and
1982.
(2) Mr. Wight, formerly a Class III director of the Company, was elected as a
Class II director of the Company by the Board of Directors on March 4, 1999.
(3) Mr. Underberg, formerly a Class III director of the Company, was elected as
a Class II director of the Company by the Board of Directors on March 4,
1999.
(4) Mr. DiBenedetto, formerly a Class II director of the Company, was elected as
a Class III director of the Company by the Board of Directors on March 4,
1999.
(5) Mr. Mann, formerly a Class II director of the Company, was elected as a
Class III director of the Company by the Board of Directors on March 4,
1999. Mr. Mann was also re-elected Chairman of the Board by the Board of
Directors on March 4, 1999.
The Company is not aware of any family relationships among any directors,
executive officers or nominees.
3
<PAGE> 7
The Board of Directors held two meetings during 1998. Messrs. Roth,
Fascitelli, West and Wight are the members of the Executive Committee of the
Board of Directors, which is authorized to exercise virtually all the powers of
the Board of Directors in the management of the business and affairs of the
Company to the fullest extent permitted by law. The Executive Committee of the
Board of Directors did not meet in 1998.
The Audit Committee's functions include reviewing annual and quarterly
reports sent to stockholders and filed with the Securities and Exchange
Commission, recommending to the Board of Directors the engaging of the
independent auditors, reviewing with the independent auditors the plan and
results of the auditors' engagement and other matters of interest to the
Committee and reviewing with the Company's officers and internal auditors
matters of interest to the Committee, including the effectiveness of the
Company's internal controls and the results of its operations. Messrs. West,
Underberg, DiBenedetto and Mann are the members of the Audit Committee. The
Audit Committee held four meetings during 1998.
The Omnibus Stock Plan Committee is responsible for administering the
Company's Omnibus Stock Plan. The Committee consists of two members, Messrs.
West and DiBenedetto. The Omnibus Stock Plan Committee took no action during
1998.
The Compensation Committee is responsible for establishing the terms of the
compensation of the executive officers. The Committee consists of two members,
Messrs. Mann and DiBenedetto. The Compensation Committee took no action during
1998.
All directors attended 75% or more of the meetings of the Board of
Directors and the Committees on which they served in 1998.
BOARD OF DIRECTORS REPORT ON EXECUTIVE OFFICER COMPENSATION
During 1998, Mr. Roth was the Chief Executive Officer of the Company but
did not receive any base salary, bonus or incentive compensation in 1998 for his
services in such capacity.
During 1998, Joseph Macnow was the Vice President-Chief Financial Officer
of the Company but did not receive any base salary, bonus or incentive
compensation in 1998 for his services in such capacity.
During 1998, Mr. Kurtz was paid a base salary in the annual amount of
$60,000 pursuant to the terms of an employment contract signed in 1995.
Beginning April 1998, Mr. Kurtz became an employee of Vornado and accordingly he
did not receive any base salary, bonus, or incentive compensation for the
remainder of the year.
The compensation currently paid to the named officers of the Company is not
limited by the cap on deductible compensation imposed by Section 162(m) of the
Internal Revenue Code.
Stephen Mann
Thomas R. DiBenedetto
4
<PAGE> 8
PERFORMANCE GRAPH
The line graph that follows charts the yearly percentage change in
cumulative stockholder return on an investment in the Company's Common Stock
against the Standard & Poor's 500 Index (the "S&P 500") and the National
Association of Real Estate Investment Trusts ("NAREIT") All Equity Index
(excluding Health Care REIT's). The graph assumes an investment of $100 on
December 31, 1993 (weighted on the basis of market capitalization) and
accumulation and reinvestment of all dividends paid thereafter through December
31, 1998. THERE CAN BE NO ASSURANCE THAT THE COMPANY'S STOCK PERFORMANCE WILL
CONTINUE WITH THE SAME OR SIMILAR TRENDS DEPICTED IN THE GRAPH BELOW.
<TABLE>
<CAPTION>
NAREIT ALL EQUITY INDEX
ALEXANDER'S S&P 500 INDEX (1)
----------- ------------- -----------------------
<S> <C> <C> <C>
'1993' 100.00 100.00 100.00
'1994' 87.00 101.00 103.00
'1995' 114.00 139.00 118.00
'1996' 130.00 171.00 160.00
'1997' 149.00 229.00 193.00
'1998' 129.00 294.00 159.00
</TABLE>
(1) Excluding Health Care REITs.
5
<PAGE> 9
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of April 19, 1999, by (i) each director of the
Company, (ii) each person known by the Company to be the owner of more than five
percent of the Company's outstanding Common Stock and (iii) all directors,
nominees and executive officers as a group. Except as otherwise indicated, each
listed beneficial owner is the direct owner of and has sole investment and
voting power with respect to such shares. Unless otherwise noted, the address of
all such persons is c/o Alexander's, Inc., Park 80 West Plaza II, Saddle Brook,
New Jersey 07663.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
- ------------------------------------ -------------------- ----------
<S> <C> <C>
Steven Roth................................................. 1,364,268(3) 27.3%
Russell B. Wight, Jr.
278 S. Maya Palm Drive
Boca Raton, Florida 33432................................. 1,364,068(3)(4) 27.3%
David Mandelbaum
Mandelbaum & Mandelbaum, P.C.
80 Main Street
West Orange, New Jersey 07052............................. 1,354,568(3) 27.1%
Michael D. Fascitelli....................................... 140,000(5) 2.7%
Neil Underberg
Whitman Breed Abbott & Morgan
200 Park Avenue
New York, New York 10166.................................. 500 *
Richard West
Box 604
287 Genoa Springs Drive
Genoa, Nevada 89411....................................... 200 *
Stephen Mann
The Clifford Companies
292 Madison Avenue
New York, New York 10017.................................. 110(6) *
All directors and executive officers as a group
(11 persons).............................................. 1,514,578 29.5%
Vornado Realty Trust........................................ 1,466,568(7) 29.3%
Interstate Properties....................................... 1,354,568(3) 27.1%
Franklin Mutual Advisers, Inc.
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078............................. 572,990(8) 11.5%
Ronald Baron, BAMCO, Inc. and Baron Capital Management, Inc.
450 Park Avenue
New York, New York 10022.................................. 372,100(9) 7.4%
</TABLE>
- ---------------
* Does not exceed 1%.
(1) Based on 5,000,850 shares outstanding as of April 19, 1999.
(2) The percentages in this column assume that all shares of Common Stock that
each person has the right to acquire within 60 days pursuant to the exercise
of options to purchase Common Stock ("Options") 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 1,354,568 shares. These shares are included in
the total shares and the percentage of class of Interstate, Mr. Roth, Mr.
Wight and Mr. Mandelbaum. Messrs. Roth, Wight and Mandelbaum share
investment power and voting power with respect to these shares.
6
<PAGE> 10
(4) Includes 9,500 shares owned by the Wight Foundation, over which Mr. Wight
holds sole investment and voting power.
(5) Represents Options for Common Stock which are currently exercisable.
(6) Includes 10 shares owned by Mr. Mann's son, a minor.
(7) Interstate owns 15.2% of the common shares of beneficial interest of
Vornado. Interstate and its three general partners (Messrs. Roth, Mandelbaum
and Wight, all directors of the Company) own in the aggregate 18.1% of the
common shares of beneficial interest of Vornado. Interstate, its three
general partners and Vornado own in the aggregate 56.8% of the outstanding
shares of the Common Stock of the Company. See "Certain Transactions" below.
(8) Based on Schedule 13G dated January 27, 1999, Franklin Mutual Advisors, Inc.
has sole investment discretion and voting authority with respect to the
shares.
(9) Based on Schedule 13D dated October 23, 1998, Ronald Baron owns 366,580
shares in his capacity as a controlling person of BAMCO, Inc. and Baron
Capital Management, Inc. Mr. Baron disclaims beneficial ownership of these
shares. He also owns 5,520 shares personally. Mr. Baron has the sole power
to vote or direct the vote and to dispose or direct the disposition of 5,520
shares and shared power to vote or direct the vote and to dispose or direct
the disposition of 366,580 shares, including 270,500 shares purchased by
BAMCO, Inc. for its investment advisory clients and 96,080 shares purchased
by Baron Capital Management Inc. for its investment advisory clients. Mr.
Baron is the President of BAMCO, Inc. and Baron Capital Management Inc.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by the Company and its
subsidiaries to the Company's executive officers, who were serving as executive
officers at December 31, 1998, and to the Company's Chairman of the Board of
Directors for services rendered in all capacities to the Company and its
subsidiaries for the years 1996 through 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION ALL OTHER
----------------------------- COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)
- --------------------------- ---- --------- -------- ------------
<S> <C> <C> <C> <C>
Stephen Mann..................................... 1998 250,000 -- --
Chairman of the Board of Directors(1) 1997 250,000 -- --
1996 250,000 -- --
Steven Roth...................................... 1998 -- -- --
Chief Executive Officer(1)(2) 1997 -- -- --
1996 -- -- --
</TABLE>
- ---------------
(1) Mr. Mann was appointed Chairman on March 2, 1995 when Mr. Roth was appointed
Chief Executive Officer of the Company.
(2) The fee payable by the Company to Vornado includes the services of Mr. Roth
as Chief Executive Officer of the Company. Mr. Roth is compensated as an
officer of Vornado and does not receive any additional consideration for
providing services to the Company. See "Certain Transactions".
EMPLOYMENT CONTRACTS
Mr. Mann's original three-year employment contract, which had a term
expiring in March 1998, has been extended through the date of the 2000 Annual
Meeting of Stockholders of the Company. Both the original employment agreement
and the extension provide for a base salary of $250,000 per annum to be paid to
Mr. Mann. In the event of termination of the employment agreement by the Company
without just cause, or if Mr. Mann resigns for good reason, Mr. Mann will
continue to be paid his base salary until the end of the term provided for under
the employment agreement.
7
<PAGE> 11
COMPENSATION OF DIRECTORS
Directors of the Company received an annual retainer of $13,500 for their
services in 1998. In addition, directors who are not compensated as officers of
the Company received a fee of $500 for each Board or Committee meeting attended.
In 1998, Mr. DiBenedetto and Mr. Sonnenblick were each paid a $100,000
bonus which was approved in 1995.
Effective March 2, 1995, Mr. Mann became Chairman of the Board of Directors
and entered into an employment agreement under which he is paid $250,000 per
annum. See "Employment Contracts."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The Company has a Compensation Committee, consisting of Messrs. Mann and
DiBenedetto. There are no interlocking relationships involving the Company's
Board of Directors which require disclosure under the executive compensation
rules of the Securities and Exchange Commission.
CERTAIN TRANSACTIONS
Steven Roth is Chief Executive Officer and a Director of the Company, the
Managing Partner of Interstate Properties ("Interstate") and Chairman of the
Board and Chief Executive Officer of Vornado Realty Trust ("Vornado").
Interstate owns 27.1% of the outstanding Common Stock of the Company and owns
15.2% of the outstanding common shares of beneficial interest of Vornado. In
addition, Mr. Roth owns 1.9% of the outstanding common shares of beneficial
interest of Vornado. Mr. Roth, Interstate and the other two general partners of
Interstate, David Mandelbaum and Russell B. Wight, Jr. (who are also directors
of the Company and trustees of Vornado) own, in the aggregate, 18.1% of the
outstanding common shares of beneficial interest of Vornado. Vornado owns 29.3%
of the outstanding Common Stock of the Company.
The Company is managed by and its properties are redeveloped and leased by
Vornado, pursuant to agreements with a one-year term which are automatically
renewable.
The annual management fee payable by the Company to Vornado is equal to the
sum of (i) $3,000,000, (ii) 3% of the gross income from the Kings Plaza Mall
($87,459 for the period from November 1, 1998 to December 31, 1998), plus (iii)
6% of development costs with minimum guaranteed fees of $750,000 per annum. The
leasing agreement for the Company's properties other than the Kings Plaza Mall
provides for the Company to pay a fee to Vornado equal to (i) 3% of the gross
proceeds, as defined, from the sale of an asset and (ii) in the event of a lease
or sublease of an asset, 3% of lease rent for the first ten years of a lease
term, 2% of lease rent for the eleventh through the twentieth years of a lease
term and 1% of lease rent for the twenty-first through thirtieth year of a lease
term. Subject to the payment of rents by tenants, the Company owes Vornado
$5,145,000 at December 31, 1998. Such amount is payable annually in an amount
not to exceed $2,500,000, until the present value of such installments
(calculated at a discount rate of 9% per annum) equals the amount that would
have been paid had it been paid on September 21, 1993, or at the time the
transactions which gave rise to the commissions occurred, if later.
During the year ended December 31, 1998, Vornado through Interstate was
paid $616,000 by the Kings Plaza Mall for performing leasing services.
The Company is indebted to Vornado in the amount of $45,000,000 which was
borrowed in March 1995, and is the subordinated tranche of a loan in the
original amount of $75,000,000, which has a current outstanding balance of
$65,000,000. The Vornado loan, which was scheduled to expire in March 1999, has
been extended to March 2000 and the interest rate has been reset from 13.87% per
annum to 14.18% per annum. The Company incurred interest on the loan of
$6,486,000 for the year ended December 31, 1998.
During the year ended December 31, 1998, Whitman Breed Abbott & Morgan, a
law firm of which Neil Underberg, a director of the Company, is a partner,
performed legal services for the Company for which it was paid $513,680.
8
<PAGE> 12
PROPOSAL TO AMEND THE OMNIBUS STOCK PLAN
The Board of Directors is asking the stockholders to approve an amendment
to the Omnibus Stock Plan of Alexander's, Inc. (the "Omnibus Stock Plan" or the
"Plan") which would authorize the allocation of an additional 500,000 shares of
Common Stock to be reserved for issuance and sale under the Plan. The Omnibus
Stock Plan was first approved by stockholders on May 22, 1996. Of the 1,050,000
shares currently authorized under the Plan, 700,000 shares were available for
issuance as of December 31, 1998 and 445,000 shares were available for issuance
as of April 19, 1999. The fair market value of the Common Stock of the Company
on April 13, 1999 was $69.8125 per share.
The purpose of the Alexander's Omnibus Stock Plan (the "Plan") is to
promote the financial interests of the Company by encouraging employees and
officers of the Company and its subsidiaries, employees of Vornado Realty Trust
("Vornado") and its subsidiaries or any other person or entity designated by the
Committee (as defined below) (collectively "Eligible Persons") to acquire an
ownership interest in the Company, enhancing its ability to attract and retain
people or entities of outstanding ability and providing such persons with a way
to acquire or increase their proprietary interest in the Company's success.
Approval of the amendment of the Plan requires the affirmative vote of a
majority of the outstanding shares of Common Stock represented and entitled to
vote at the Annual Meeting.
TERMS OF THE OMNIBUS STOCK PLAN
Under the Plan, Eligible Persons may be granted awards of stock options,
stock appreciation rights, performance shares and restricted stock. The Plan is
administered by the Omnibus Stock Plan Committee selected by the Board of
Directors of the Company, from time to time (the "Committee"), which is
comprised exclusively of non-employee Directors, and which will be authorized to
select Eligible Persons to receive awards, determine the type of awards to be
made, determine the number of shares of Common Stock or share units subject to
any award and the other terms and conditions of such awards. All Eligible
Persons who have demonstrated significant management potential or who have the
capacity for contributing in a substantial measure to the successful performance
of the Company, as determined by the Committee, are eligible to receive awards
under the Plan. As such criteria is subjective in nature, the Company cannot
accurately estimate the number of persons who may be included in such class from
time to time. Each officer of the Company could be granted awards under the
Plan.
Except as determined by the Committee with respect to the transferability
of stock options by a participant to such participant's immediate family members
(or trusts, partnerships or limited liability companies established for such
immediate family members) 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
participant.
STOCK OPTIONS
Options may be either "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code or "non-qualified" stock options;
provided, however, that only employees of the Company or its subsidiaries may
receive incentive stock options. Stock options entitle the holder to purchase
shares of Common Stock at a per share price determined by the Committee which in
no event may be less than the fair market value of the Common Stock on the date
of grant. For incentive stock options granted to persons owning more than ten
percent of the outstanding Common Stock, the option price shall not be less than
110% of the fair market value per share of Common Stock at the date of grant. No
employee may receive incentive stock options that, in the aggregate, entitle the
employee to purchase, in any calendar year during which such options first
become exercisable, stock in the Company, any parent or any subsidiary having a
fair market value in excess of $100,000. Stock options will be exercisable for
such period as will be determined by the Committee, but in no event may options
be exercisable after 10 years from the date of grant (5 years in the case of an
incentive stock option granted to a ten percent stockholder). The option price
for shares of Common Stock 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
unrestricted shares of Common Stock or by a combination of cash and unrestricted
shares of Common Stock.
9
<PAGE> 13
The Plan provides for the grant of "reload stock options", at the
discretion of the Committee, to a participant who uses common shares 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 shares on the
date of grant of the reload stock option.
Awards under the Plan are determined by the Committee in its discretion.
For this reason, it is not possible to determine the benefits and amounts that
will be received by any individual participant or group of participants in the
future.
Upon the grant or exercise of an incentive stock plan, 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 of Common Stock acquired upon
exercise are not disposed of within the one year period beginning on the date of
the transfer of the shares of Common Stock 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 the shares of Common Stock are disposed of within the one-year
or two-year periods referred to above, the excess of the fair market value of
the shares of Common Stock 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 shares of Common Stock at the time of exercise of an incentive stock
option exceeds the option price will constitute an item of tax preference which
subjects 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 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 of Common Stock at the time of exercise of the option exceeds the
exercise price will be taxed as ordinary income to the optionee and the Company
generally 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 Common
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 or
disability. The Committee is authorized to determine whether a stock
appreciation right will be settled in cash, previously acquired shares of Common
Stock or a combination thereof.
PERFORMANCE SHARES
Performance share awards consist of a grant of actual shares of Common
Stock or share units having a value equal to an identical number of shares of
Common Stock in amounts determined by the Committee at the time of grant.
Performance share awards consisting of actual shares of Common Stock entitle the
holder to receive shares of Common Stock in an amount based upon performance
conditions of the Company over a performance period as determined by the
Committee at the time of grant. Such performance share awards may provide the
holder with dividends and voting rights prior to vesting. Performance share
awards consisting of share units entitle the holder to receive the value of such
units in cash, shares of Common Stock or a combination thereof based upon
performance conditions and over a performance period as determined by the
Committee at the time of grant. Such performance share awards may provide the
holder with dividend equivalents prior to vesting.
10
<PAGE> 14
RESTRICTED STOCK
Restricted stock awards consist of a grant of actual shares of Common Stock
or share units having a value equal to an identical number of shares of Common
Stock. Restricted stock awards consisting of actual shares of Common Stock
entitle the holder to receive shares of Common Stock. Such restricted stock
awards may provide the holder with dividends and voting rights prior to vesting.
Restricted stock awards consisting of share units entitle the holder to receive
the value of such units in cash, shares of Common Stock or a combination thereof
as determined by the Committee. Such restricted stock awards may provide the
holders with dividend equivalents prior to vesting. The employment conditions
and the length of the period for vesting of restricted stock awards will be
established by the Committee at time of grant.
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, 1999. The firm of Deloitte & Touche LLP
was engaged as independent auditors for the 1998 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 judgment on such matters.
ADVANCE NOTICE BYLAW
The Bylaws of the Company provide that in order for a stockholder to
nominate a candidate for election as a director at an annual meeting of
stockholders or propose business for consideration at such meeting, notice must
be given to the Secretary of the Company no more than 90 days nor less than 60
days prior to the first anniversary of the preceding year's annual meeting.
STOCKHOLDER PROPOSALS
Stockholder proposals for the 2000 Annual Meeting of Stockholders of the
Company 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 April 3, 2000 for inclusion in the 2000 proxy statement and form of
proxy.
By Order of The Board of Directors
Stephen Mann
Chairman
May 10, 1999
11
<PAGE> 15
ALEXANDER'S, INC.
The undersigned, revoking all prior proxies, hereby appoints Steven Roth
proxy, with full power of substitution, to attend, and to vote all shares the
undersigned is entitled to vote, at the Annual Meeting of Stockholders of
Alexander's, Inc. (the "Company") to be held at the Marriott Hotel, Interstate
80 and the Garden State Parkway, Saddle Brook, New Jersey 07663 on Wednesday,
June 2, 1999, at 12:00 P.M., local time, upon any and all business as may
properly come before the meeting and all adjournments thereof. Said proxy is
authorized to vote as directed below upon the proposal which is 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 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. 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 AND "FOR" THE APPROVAL OF THE AMENDMENT TO THE
COMPANY'S OMNIBUS STOCK PLAN.
(Continued and to be executed on reverse side)
<PAGE> 16
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS:
The Board of Directors recommends a Vote "FOR" Election of
Directors
[ ] FOR all nominees listed below
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below
Nominees: Arthur I. Sonnenblick
Russell B. Wight, Jr.
Neil Underberg
(Instructions: To withhold authority to vote for any
individual nominee, write that nominee's name in the space
provided below.)
------------------------------------------------------------
APPROVAL OF THE AMENDMENT TO THE COMPANY'S OMNIBUS STOCK
2. PLAN:
The Board of Directors recommends a Vote "FOR" the approval
of the Amendment to the Company's Omnibus Stock Plan
FOR [ ] AGAINST [ ] ABSTAIN [
]
</TABLE>
Please date and sign exactly as
your name or names appear
hereon. Each joint owner must
sign. (Officers, Executors,
Administrators, Trustees, etc.
will kindly so indicate when
signing.)
Dated
------------------------------------------------------------------------,
1999
--------------------------------
(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.
