<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
VORNADO REALTY TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
VORNADO REALTY TRUST
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
- ---------------
(1)Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
[VORNADO LOGO]
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
------------ V
------------
1 9 9 8
<PAGE> 3
[VORNADO LOGO]
PARK 80 WEST, PLAZA II
SADDLE BROOK, NEW JERSEY 07663
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 27, 1998
------------------------
To the Holders of Common Shares of Beneficial Interest:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Vornado
Realty Trust, a Maryland real estate investment trust (the "Company"), will be
held at the Marriott Hotel, Interstate 80 and the Garden State Parkway, Saddle
Brook, New Jersey 07663, on Wednesday, May 27, 1998, at 10:00 A.M., local time,
for the following purposes:
(1) The election of two persons to the Board of Trustees of the Company,
each for a term of three years; and
(2) The transaction of such other business as may properly come before the
meeting or any adjournment thereof.
Pursuant to the Bylaws of the Company, the Board of Trustees of the Company
has fixed the close of business on April 13, 1998, as the record date for
determination of shareholders entitled to notice of and to vote at the meeting.
Your attention is called to the attached proxy statement. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO COMPLETE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE TO WHICH NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING IN PERSON, YOU
MAY REVOKE YOUR PROXY AND VOTE YOUR OWN SHARES.
By Order of the Board of Trustees
Lee D. Ratner
Assistant Secretary
<PAGE> 4
[VORNADO LOGO]
PARK 80 WEST, PLAZA II
SADDLE BROOK, NEW JERSEY 07663
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 27, 1998
------------------------
The enclosed proxy is being solicited by the Board of Trustees of Vornado
Realty Trust, a Maryland real estate investment trust (the "Company"), for use
at the Annual Meeting of Shareholders of the Company to be held on Wednesday,
May 27, 1998 ("Annual Meeting"). The proxy may be revoked by the shareholder at
any time prior to its exercise at the Annual Meeting by executing and delivering
to the Company at its principal office a written revocation or later dated proxy
or by attending the Annual Meeting and voting in person. The cost of soliciting
proxies will be borne by the Company. MacKenzie Partners, Inc. has been engaged
by the Company to solicit proxies, at a fee not to exceed $5,000. In addition to
solicitation by mail and by telephone calls, arrangements may be made with
brokerage houses and other custodians, nominees and fiduciaries to send proxies
and proxy material to their principals and the Company may reimburse them for
their expenses in so doing.
Only shareholders of record at the close of business on April 13, 1998 are
entitled to notice of and to vote at the Annual Meeting. There were on such date
72,185,535 Shares outstanding, each entitled to one vote at the Annual Meeting.
The principal executive office of the Company is located at Park 80 West,
Plaza II, Saddle Brook, New Jersey 07663. This notice of meeting and proxy
statement and enclosed proxy will be mailed on or about May 4, 1998 to the
Company's shareholders of record as of the close of business on April 13, 1998.
<PAGE> 5
In April 1997, the Company transferred substantially all of its assets to
Vornado Realty L.P., a Delaware limited partnership (the "Operating
Partnership"). As a result, the Company now conducts its business through, and
substantially all of its interests in properties are held by, the Operating
Partnership. The Company is the sole general partner of, and owned an
approximate 91.1% limited partnership interest in, the Operating Partnership at
April 15, 1998.
On October 7, 1997, the Company declared a two-for-one share split of its
outstanding common shares of beneficial interest, par value $.04 per share
("Shares"), to be effected in the form of a 100% share dividend. The share
dividend was paid on October 30, 1997 to shareholders of record as of the close
of business on October 15, 1997. Accordingly, all share information contained in
this Proxy Statement has been adjusted to give effect to the two-for-one share
split.
2
<PAGE> 6
ELECTION OF TRUSTEES
The Amended and Restated Declaration of Trust of the Company, as amended
("Declaration of Trust"), provides that the Board shall be divided into three
classes, as nearly equal in number as possible. One class of trustees is elected
at each annual meeting of shareholders to hold office for a term of three years
and until their successors are duly elected and qualify.
Unless otherwise directed in the proxy, the person named in the enclosed
proxy, or his substitute, will vote such proxy for the election of the two
nominees listed below as trustees for a three-year term and until their
respective successors are duly elected and qualify. If any nominee at the time
of election is unavailable to serve, a contingency not presently anticipated, it
is intended that the person named in the proxy, or his substitute, will vote for
an alternate nominee who will be designated by the Board. Proxies may be voted
only for the nominees named or such alternates.
Under the Bylaws, the affirmative vote of a plurality of all the votes cast
at the Annual Meeting, assuming a quorum is present, is sufficient to elect a
trustee. Under Maryland law, proxies marked "withhold authority" will be counted
for the purpose of determining the presence of a quorum but such proxies and
failures to vote (including proxies from brokers or other nominees indicating
that such persons do not have discretionary power to vote Shares in the election
of trustees) will not be counted as votes cast in the election of trustees and
thus will have no effect on the result of the vote.
The following table sets forth the nominees (all of whom are presently
members of the Board of the Company) and the other present members of the Board
of the Company. With respect to each such person, the table sets forth the age,
principal occupation, position presently held with the Company, and the year in
which the person first became a trustee of the Company or a director of its
predecessor, Vornado, Inc.
3
<PAGE> 7
<TABLE>
<CAPTION>
YEAR
PRINCIPAL OCCUPATION TERM
AND PRESENT POSITION WILL INITIAL
NAME AGE WITH THE COMPANY EXPIRE ELECTION
---- --- -------------------- ------ --------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION TO SERVE AS TRUSTEES
UNTIL THE ANNUAL MEETING IN 2001
- ------------------------------------------------------
DAVID MANDELBAUM 62 A member of the law firm 1998 1979
of Mandelbaum &
Mandelbaum, P.C.; a
general partner of
Interstate Properties
("Interstate")
RICHARD WEST 60 Dean Emeritus, Leonard N. 1998 1982
Stern School of Business,
New York University
PRESENT TRUSTEES ELECTED TO SERVE UNTIL
THE ANNUAL MEETING IN 1999
- ------------------------------------------------------
BERNARD H.
MENDIK 68 Co-Chairman of the Board 1999 1997
of the Company; Chief
Executive Officer of the
Mendik Division of the
Company
STANLEY SIMON* 80 Owner of Stanley Simon 1999 1960
and Associates,
management and financial
consultants
RONALD TARGAN 71 A member of the law firm 1999 1980
of Schechner and Targan,
P.A.; President of Malt
Products Corporation of
New Jersey, a producer of
malt syrup
PRESENT TRUSTEES ELECTED TO SERVE UNTIL
THE ANNUAL MEETING IN 2000
- ------------------------------------------------------
MICHAEL D.
FASCITELLI* 41 President of the Company 2000 1996
STEVEN ROTH* 56 Chairman of the Board and 2000 1979
Chief Executive Officer
of the Company; managing
general partner of
Interstate
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
YEAR
PRINCIPAL OCCUPATION TERM
AND PRESENT POSITION WILL INITIAL
NAME AGE WITH THE COMPANY EXPIRE ELECTION
---- --- -------------------- ------ --------
<S> <C> <C> <C> <C>
RUSSELL B.
WIGHT, JR.* 58 A general partner of 2000 1979
Interstate
</TABLE>
- ---------------
* Member of Executive Committee of the Board of the Company.
Mr. Mandelbaum has been a member of Mandelbaum & Mandelbaum, P.C. since
1967. Since 1968, he has been a general partner of Interstate. Mr. Mandelbaum is
also a director of Alexander's, Inc. ("Alexander's").
Mr. West is Dean Emeritus at the Leonard N. Stern School of Business, New
York University. He was a professor there from September 1984 until September
1995. He was also Dean from September 1984 until August 1993. Mr. West is also a
director or a trustee of Alexander's, Bowne & Co., Inc., various investment
companies managed by Merrill Lynch Assets Management, Inc. and various
investment companies managed by Hotchkis & Wiley.
Mr. Mendik has been Chief Executive Officer of the Mendik Division of the
Company since April 15, 1997 and Co-Chairman of the Board since April 28, 1997
(see the description of the Mendik Transaction included in "Certain
Transactions"). From 1990 until April 15, 1997, he was Chairman of the Board of
Directors of Mendik Realty. He was President and sole shareholder of Mendik
Realty from its founding in 1978 until 1990.
Mr. Simon has been the owner of Stanley Simon and Associates since 1958.
Mr. Simon is also a director of General Microwave Corporation.
Mr. Targan has been President of Malt Products Corporation of New Jersey
since 1962. Since 1964, he has been a member of the law firm of Schechner and
Targan, P.A.
Mr. Fascitelli became the President and a Trustee of the Company on
December 2, 1996. He was a partner at Goldman Sachs, in charge of its real
estate practice, from
5
<PAGE> 9
December 1992 to December 1996 and was a vice president there prior to December
1992. He is also a director of Alexander's.
Mr. Roth has been Chairman of the Board and Chief Executive Officer of the
Company since May 1989 and Chairman of the Executive Committee of the Board of
the Company since April 1980. Since 1968, he has been a general partner of
Interstate and, more recently, he has been managing general partner. On March 2,
1995, he became Chief Executive Officer of Alexander's. Mr. Roth is also a
director of Alexander's.
Mr. Wight has been a general partner of Interstate since 1968. Mr. Wight is
also a director of Alexander's and Insituform Technologies, Inc.
Interstate is a New Jersey partnership formed in 1968. Messrs. Roth, Wight
and Mandelbaum have at all times been the general partners of Interstate.
Interstate is an owner of shopping centers, and an investor in securities and
partnerships.
The Company is not aware of any family relationships between any trustee or
executive officer of the Company or person nominated or chosen by the Company to
become a trustee or executive officer. Messrs. Roth, Wight and Mandelbaum are
affiliated with each other as general partners of Interstate and in other
businesses. Messrs. Mandelbaum and Targan are affiliated with each other in
businesses and in the practice of law.
Mr. Roth, Mr. Fascitelli and Interstate Properties who beneficially own, as
of April 15, 1998, 19.6% of the outstanding Shares, entered into an agreement in
April 1997 with Mr. Mendik pursuant to which they are obligated to vote all
Shares which they own (or over which they exercise voting control) in favor of
the election of Mr. Mendik to the Board of Trustees of Vornado until April 2003
(unless earlier terminated in accordance with its terms).
The Board has an Executive Committee, Audit Committee and a Compensation
Committee. The Executive Committee possesses and may exercise certain powers of
the
6
<PAGE> 10
Board in the management of the business affairs of the Company, except those
reserved to the Board under Maryland law. The Executive Committee consists of
Messrs. Roth, Fascitelli, Simon and Wight, Jr. Mr. Roth is Chairman of the
Executive Committee. The Executive Committee did not meet in 1997.
The Audit Committee's functions include reviewing annual and quarterly
reports and proxy statements sent to shareholders and filed with the Securities
and Exchange Commission, recommending to the Board 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 financial 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. The Audit
Committee, which held four meetings during the Company's last fiscal year,
consists of three members, Messrs. West, Mandelbaum and Simon. Mr. West is the
Chairman of the Audit Committee.
The Compensation Committee is responsible for establishing the terms of the
compensation of the executive officers and the granting of awards under the
Company's Omnibus Share Plan. The Committee, which held four meetings during the
Company's last fiscal year, consists of two members, Messrs. Simon and West. Mr.
Simon is the Chairman of the Compensation Committee.
The Board held ten meetings during the Company's last fiscal year. Each
trustee of the Company attended at least 80% of the combined total of meetings
of the Board and all committees on which he served during that period.
7
<PAGE> 11
COMPENSATION COMMITTEE
OF THE BOARD OF TRUSTEES
REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee (the "Committee") is responsible for
establishing the terms of the compensation of the Company's executive officers.
Each of the executive officers receives a base salary. The Committee
periodically reviews and adjusts Mr. Roth's base salary. Mr. Roth's current base
salary of $625,000 was established in November 1991. Mr. Fascitelli's base
salary is $600,000 in accordance with the employment agreement entered into on
December 2, 1996. The base salary of Mr. Greenbaum is $425,000 in accordance
with the employment agreement entered into on April 15, 1997. The base salary of
Mr. Macnow is $425,000 in accordance with the employment agreement entered into
as of January 1, 1998. The base salary of Mr. Rowan is $380,500 in accordance
with the employment agreement entered into as of January 1, 1998. Such
employment agreements provide for an annual adjustment of their base salary
equal to 125% of the percentage increase in the prior year's consumer price
index. (See "Executive Compensation -- Employment Contracts")
The factors and criteria which the Committee utilitizes in establishing the
compensation of the Company's executive officers (including Mr. Roth) include an
evaluation of the Company's overall financial and business performance, the
officer's overall leadership and management and contributions by the officer to
the Company's acquisitions or investments. The Committee also considers the
compensation provided in the prior year and estimates of compensation to be
provided by similar companies in the current year. The primary objective of the
Committee in establishing the terms of the executive officers' compensation has
been to provide strong financial incentives for the executive officers to maxi-
8
<PAGE> 12
mize shareholder value. The Committee believes that the best way to accomplish
this objective is to grant substantial share options on a fixed share basis
without adjusting the number of shares granted to offset changes in the
Company's share price.
The employment agreement of Michael D. Fascitelli, President, provides in
addition to his annual salary, that he receive a deferred payment consisting of
$5,000,000 in cash and a $20,000,000 convertible obligation payable at the
Company's option in 919,540 of its Shares or the cash equivalent of their
appreciated value but not less than $20,000,000. Accordingly, cash of $5,000,000
and 919,540 Shares are being held in an irrevocable trust for the benefit of Mr.
Fascitelli. The deferred payment obligation to Mr. Fascitelli vested on December
2, 1997. In December 1996 Mr. Fascitelli was granted an option to purchase
3,500,000 Shares, exercisable at the current market price on the date the Option
was granted. In addition, Mr. Fascitelli's employment agreement provides that he
may receive loans of up to $10 million from the Company during the term of his
employment.
The employment agreement of David R. Greenbaum, President of the Mendik
Division provides that Mr. Greenbaum may receive loans of up to $10 million from
the Company during the term of his employment agreement. In addition, Mr.
Greenbaum was granted an option to purchase 570,000 Shares exercisable at the
current market price on the date the option was granted.
The employment agreement of Joseph Macnow, Executive Vice
President -- Finance and Administration, provides an undertaking to use best
efforts annually to cause the Compensation Committee of the Board to grant Mr.
Macnow options to purchase 75,000 Shares at a purchase price equal to the fair
market value of the Shares on the dates the options are granted.
The employment agreement of Mr. Rowan, Vice President -- Real Estate,
provides an undertaking to use best
9
<PAGE> 13
efforts to cause the Compensation Committee of the Board to grant Mr. Rowan
50,000 Shares in each of the years, all at a purchase price equal to the fair
market value of the Shares on the dates the options are granted.
Section 162(m) of the Internal Revenue Code, which was adopted in 1993,
provides that, in general, publicly traded companies may not deduct, in any
taxable year, compensation in excess of $1,000,000 paid to any individual named
in the Summary Compensation Table which is not "performance based", as defined
in Section 162(m). Options granted under the Company's Omnibus Share Plan to
date satisfy the performance based requirements under the final regulations
issued with respect to Section 162(m). The deferred payment to Mr. Fascitelli
does not meet the requirements of Section 162(m) and will thus be subject to the
$1,000,000 limitation when paid.
STANLEY SIMON
RICHARD WEST
10
<PAGE> 14
PERFORMANCE GRAPH
The following performance graph compares the Company's share price
performance to the S&P 500 and to the published National Association of Real
Estate Investment Trusts (NAREIT) All Equity Index (excluding Health Care
REITs). Share price performance for the past five years is not necessarily
indicative of future results. The cumulative return includes the reinvestment of
dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
<TABLE>
<CAPTION>
MEASUREMENT THE
PERIOD NAREIT
(FISCAL YEAR S&P 500 ALL EQUITY
COVERED) VORNADO INDEX INDEX(1)
<S> <C> <C> <C>
1992 100 100 100
1993 138 110 120
1994 155 111 123
1995 169 153 142
1996 246 188 192
1997 449 251 231
</TABLE>
- ---------------
(1) Excluding Health Care REITs.
(2) Includes a special dividend of $1.68 per share.
11
<PAGE> 15
PRINCIPAL SECURITY HOLDERS
The following table sets forth the beneficial ownership of Shares and units
of limited partnership interest ("Units") in the Operating Partnership (based on
82,185,535 Shares and 7,988,470 Units outstanding as of April 15, 1998) of (i)
each person holding more than a 5% interest in the Operating Partnership or the
Company, (ii) trustees of the Company, (iii) the Named Executive Officers, and
(iv) the trustees and executive officers of the Company as a group. Unless
otherwise noted, all of such interests are owned directly, and the indicated
person or entity has sole voting and investment power. In addition, unless
otherwise noted, the address of all such persons is c/o Vornado Realty Trust,
Park 80 West, Plaza II, Saddle Brook, New Jersey 07663.
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT OF
AND UNITS ALL
BENEFICIALLY PERCENT OF ALL SHARES AND
NAME OF BENEFICIAL OWNER OWNED SHARES(1)(2) UNITS(1)(3)
------------------------ ------------ -------------- -----------
<S> <C> <C> <C>
Steven Roth(5)(6)........... 14,525,900 17.7% 15.8%
Russell B. Wight,
Jr.(5)(7)................. 13,492,800 16.4% 14.7%
David Mandelbaum(5)......... 13,261,998 16.1% 14.4%
Interstate Properties(5).... 12,943,000 15.7% 14.1%
Cohen & Steers Capital
Management, Inc.(8)....... 7,042,900 8.6% 7.7%
FMR Corp.(14)............... 4,699,824 5.7% 5.1%
Bernard H.
Mendik(4)(9)(10).......... 3,386,554 4.0% 3.7%
Michael D.
Fascitelli(4)(11)......... 1,619,540 1.9% 1.8%
David R. Greenbaum
(4)(9)(12)................ 3,545,508 4.1% 3.9%
Joseph Macnow(4)............ 412,500 * *
Richard T. Rowan(4)......... 222,500 * *
Ronald Targan............... 750,000 * *
Stanley Simon............... 75,000 * *
Richard West(13)............ 21,000 * *
All trustees and executive
officers as a group (11
persons).................. 22,075,592 25.4% 24.0%
</TABLE>
- ---------------
* Less than 1%.
12
<PAGE> 16
(1) At any time after one year from the date of issuance (or two years in the
case of certain holders), holders of Units (other than the Company) will
have the right to have their Units redeemed in whole or in part by the
Operating Partnership for cash equal to the fair market value, at the time
of redemption, of one Share of the Company for each Unit redeemed or, at
the option of the Company, one Share of the Company for each Unit tendered,
subject to customary anti-dilution provisions (the "Unit Redemption
Right"). Holders of Units may be able to sell Shares received upon the
exercise of their Unit Redemption Right in the public market pursuant to a
registration rights agreement with the Company. The Company has filed a
Registration Statement with the Securities and Exchange Commission to
register certain of the Shares issuable upon the exercise of the Unit
Redemption Right.
(2) Assumes that all Units held by the beneficial owner are redeemed for
Shares. The total number of Shares outstanding used in calculating this
percentage assumes that all Shares that each person has the right to
acquire within 60 days pursuant to the exercise of options or upon the
exchange of Units for Shares are deemed to be outstanding, but are not
deemed to be outstanding for the purpose of computing the ownership
percentage of any other person.
(3) Assumes that all Units are redeemed for Shares.
(4) The number of Shares beneficially owned by the following persons includes
the number of Shares indicated due to the vesting of options: Bernard
Mendik -- 34,000; Michael D. Fascitelli -- 700,000; David R.
Greenbaum -- 193,800; Joseph Macnow -- 262,500; Richard Rowan -- 211,030;
and all executive officers as a group -- 1,401,330.
(5) Interstate, a partnership of which Messrs. Roth, Wight and Mandelbaum are
the three general partners, owns 12,943,000 Shares. These Shares are
included in the total Shares and the percentage of class for Interstate.
Messrs. Roth, Wight and Mandelbaum share voting
13
<PAGE> 17
power and investment power with respect to these Shares.
(6) Includes 34,400 Shares owned by the Daryl and Steven Roth Foundation, over
which Mr. Roth holds sole voting power and investment power. Does not
include 36,000 Shares owned by Mr. Roth's wife, as to which Mr. Roth
disclaims any beneficial interest.
(7) Includes 64,800 Shares owned by the Wight Foundation, over which Mr. Wight
holds sole voting power and investment power.
(8) Based on Schedule 13G dated February 11, 1998, Cohen & Steers Capital
Management, Inc. has the sole power to vote or to direct the vote of
6,133,900 Shares and has the sole power to dispose or to direct the
disposition of 7,042,900 Shares. The address of this beneficial owner is
757 Third Avenue, New York, New York 10017.
(9) The address for this beneficial owner is c/o Mendik Realty Company, Inc.,
330 Madison Avenue, New York, New York 10017.
(10) Includes (i) 2,549,782 Units which are held by The Mendik Partnership, L.P.
(TMP) in which Mr. Mendik is a limited partner and controls the company
which is the general partner of TMP, (ii) 801,926 Units which are held by
FW/Mendik REIT, L.L.C. ("FW/Mendik"), which is comprised of two members
controlled by Mr. Mendik, and (iii) 846 Units which are held by Mendik RELP
Corp., a corporation controlled by Mr. Mendik. Does not include 976 Units
which are held by Mr. Mendik's wife, as to which Mr. Mendik disclaims any
beneficial interest.
(11) Includes 919,540 Shares held in a trust for the benefit of Mr. Fascitelli.
(12) Includes (i) 2,549,782 Units which are held by TMP in which Mr. Greenbaum
is a limited partner and controls the Company which is the general partner
of TMP, and (ii) 801,926 Units which are held by FW/Mendik,
14
<PAGE> 18
which is comprised of two members controlled by Mr. Greenbaum. Does not
include 23,576 Units which are held by Mr. Greenbaum's wife, as to which
Mr. Greenbaum disclaims any beneficial interest.
(13) Mr. West and his wife own 3,000 of these Shares jointly. Mr. West holds
18,000 of these Shares in self-directed Keogh accounts.
(14) Based on Schedule 13G dated February 14, 1998, FMR Corp. has the sole power
to vote or to direct the vote of 58,694 Shares and has the sole power to
dispose or to direct the disposition of 4,641,130 Shares. The address of
this beneficial owner is 82 Devonshire Street, Boston, Massachusetts 02109.
15
<PAGE> 19
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to or accrued during
the past three fiscal years for each of the five highest paid executive officers
of the Company whose total compensation aggregated $100,000 or more in 1997
("Covered Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS ALL OTHER
NAME AND ---------------------------------- ------------ COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OTHER($)(1) OPTIONS ($)(6)
------------------ ---- --------- -------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Steven Roth 1997 629,750 0 0 0 56,547
Chairman and Chief 1996 629,750 0 0 0 57,108
Executive Officer 1995 625,000 0 0 0 53,537
Michael D. Fascitelli 1997 600,000 0 0 3,049
President 1996 34,616 0 0 3,500,000(2) 0
David R. Greenbaum
President of the
Mendik Division 1997 212,500(3) 0 0 570,000(4) 11,305
Joseph Macnow 1997 380,500 0 56,524 75,000(5) 22,666
Executive Vice 1996 365,500 0 0 75,000(5) 21,968
President -- Finance 1995 354,000 0 0 75,000(5) 16,100
and Administration
Richard Rowan 1997 380,500 0 62,678 75,000(5) 21,973
Vice President -- 1996 365,500 0 0 75,000(5) 21,066
Real Estate 1995 354,000 250,000 0 75,000(5) 16,848
</TABLE>
- ---------------
(1) Represents the forgiveness by the Company of one-fifth of the loan amount
(together with interest) due from each of Messrs. Macnow and Rowan. The
loans were issued in connection with Messrs. Macnow and Rowan's option
exercises in prior years. The Company has agreed that on each January 1st
(commencing January 1, 1997) it will forgive one-fifth of the amounts due
from Messrs. Macnow and Rowan, provided they remain employees of the
Company.
(2) Options are exercisable 20% twelve months after grant, and 20% after each of
the following four twelve-month periods.
(3) Mr. Greenbaum's employment with the Company commenced on April 15, 1997.
16
<PAGE> 20
(4) Options are exercisable 34% twelve months after grant, and 33% after each of
the following two twelve-month periods.
(5) Options are exercisable 25% nine months after grant, and 25% after each of
the following three six-month periods.
(6) Represents annual amounts of (i) employer paid contributions to the
Company's 401(k) retirement plan and (ii) Company paid whole life insurance
premiums for Covered Executives. Employer contributions to the Company's
401(k) retirement plan become vested 100% after the completion of five years
of eligible service. The whole life insurance policies provide coverage in
an amount equal to the excess of the amount covered under the Company's
non-discriminatory group term life insurance benefit for all full time
employees (i.e., two times salary) over the benefit cap imposed by the term
insurance carrier.
17
<PAGE> 21
The following table lists all grants of share options and share
appreciation rights to the Covered Executives made in 1997 and their potential
realizable values, assuming annualized rates of share price appreciation of 5%
and 10% over the term of the grant. The Company has not, to date, granted any
share appreciation rights.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------- ANNUAL
% OF TOTAL RATES OF
OPTIONS SHARE PRICE
GRANTED TO APPRECIATION FOR
EMPLOYEES EXERCISE OPTION TERM
OPTIONS IN FISCAL OR BASE EXPIRATION --------------------
NAME GRANTED YEAR PRICE DATE 5% 10%
---- ------- ---------- -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Steven Roth -- 0% N/A N/A N/A N/A
Michael D. Fascitelli -- 0% N/A N/A N/A N/A
David R. Greenbaum 570,000 38% $30.34375 3/12/07 $10,877,322 $27,565,270
Joseph Macnow 75,000 5% $26.28125 1/30/07 $ 1,239,610 $ 3,141,416
Richard Rowan 75,000 5% $26.28125 1/30/07 $ 1,239,610 $ 3,141,416
</TABLE>
The following table summarizes all exercises of options during 1997, and
the options held at December 31, 1997, by the Covered Executives.
AGGREGATED OPTION EXERCISES IN 1997 AND 1997-YEAR END
OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED 12/31/97 12/31/97
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- -------- -------- ------------------ ----------------------
<S> <C> <C> <C> <C>
Steven Roth -- $ -- 0/0 $ 0/0
Michael D. Fascitelli -- -- 700,000/2,800,000 16,428,125/65,712,500
David R. Greenbaum -- -- 0/570,000 0/9,458,438
Joseph Macnow -- -- 225,000/75,000 6,424,219/1,699,219
Richard Rowan 11,470 179,378 173,530/75,000 4,893,289/1,699,219
</TABLE>
EMPLOYEE RETIREMENT PLAN
The Company's employee retirement plan provides retirement benefits to
full-time employees of the Company. Effective December 31, 1997, the Company
froze the plan. Benefits under the plan will continue to vest upon the
completion of five years of service for all eligible employees. However,
employees will not earn any additional benefits
18
<PAGE> 22
after December 31, 1997. In addition, no new participants will be eligible to
enter the frozen plan. Annual retirement benefits are equal to 1% of the
participant's base salary for each year of service. However, the portion of
retirement benefits payable for service prior to plan participation is equal to
1% of the participant's base salary as of December 31 of the year before the
participant began to participate in the plan for each year of the participant's
past service. The amount of base salary which may be taken into account for
benefit accrual purposes is limited to $160,000 in 1997.
The amounts shown below are the estimated annual benefits (payable in the
form of a life annuity) for each of the Covered Executives payable upon normal
retirement at age 65. This amount assumes a maximum base salary for benefit
accrual purposes of $160,000 for 1997 and that the Covered Executive's service
is up to December 31, 1997. The estimated annual benefit payable at age 65 to
Mr. Roth is $45,003; to Mr. Rowan, $28,427; and to Mr. Macnow, $29,002.
EMPLOYMENT CONTRACTS
Mr. Fascitelli has a five-year employment contract which provides for an
annual salary of $600,000. In addition to his annual salary, he received a
deferred payment consisting of $5,000,000 in cash and a $20,000,000 convertible
obligation payable at the Company's option in 919,540 of its Shares or the cash
equivalent of their appreciated value but not less than $20,000,000.
Accordingly, cash of $5,000,000 and 919,540 Shares are being held in an
irrevocable trust for the benefit of Mr. Fascitelli. The deferred payment
obligation to Mr. Fascitelli vested as of December 2, 1997. Further, Mr.
Fascitelli was granted options for 3,500,000 Shares of the Company. Mr.
Fascitelli may also receive loans of up to $10 million from the Company during
the term of the employment agreement. He has also been given the use of a
company automobile.
The agreement also provides that if his employment is terminated by the
Company without cause or by him for good reason (as defined in the agreement to
include a
19
<PAGE> 23
change in Mr. Fascitelli's responsibilities, change in control
of the Company, relocation of the Company or the failure of the Company to
comply with the terms of the agreement) payment of his base salary shall
continue for three years, offset in the second and third years for compensation
received from another employer and benefits to him and his family shall continue
for three years. The agreement further provides that if his employment is
terminated by him without good reason or by the Company for cause (as defined in
the agreement to include conviction of, or plea of guilty or nolo contendere to,
a felony, failure to perform his duties or willful misconduct) payment of salary
will cease.
Mr. Greenbaum has an employment agreement with an initial term through
April 30, 2000 (subject to extension) pursuant to which he will serve as
President of the Mendik Division of the Company. The employment agreement
provides for annual base compensation in the amount of $425,000. Mr. Greenbaum
was granted options for 570,000 Shares of the Company. Mr. Greenbaum also may
receive loans of up to $10 million from the Company during the term of the
employment agreement.
The agreement also provides that if his employment is terminated by the
Company without cause or by him for good reason (as defined in the agreement to
include, among other things, a change in Mr. Greenbaum's responsibilities,
change in control of the Company, relocation of the Mendik Division's principal
executive offices, the failure of Mr. Mendik to be elected as a trustee of the
Company prior to April 30, 2003 or the failure of the Company to comply with the
terms of the agreement), Mr. Greenbaum will receive (a) a lump sum payment of
three times the sum of (i) his annual base compensation plus (ii) the average of
the annual bonuses earned by him in the two fiscal years ending immediately
prior to his termination and (b) continued provision of benefits to him and his
family for three years. The agreement further provides that if his employment is
terminated by him without good reason or by the Company for cause (as defined in
the agreement to include conviction of, or plea of guilty or nolo contendere to,
a
20
<PAGE> 24
felony, failure to perform his duties or willful misconduct) payment of salary
will cease.
Vornado has entered into an employment agreement with Joseph Macnow for a
term through December 31, 2000 pursuant to which Mr. Macnow serves as Executive
Vice President -- Finance and Administration. The employment agreement provides
for annual base compensation in the amount of $425,000, subject to increases in
the second and third years by a factor equal to 125% of the percentage increase
in the prior year's consumer price index; use of a company automobile; and an
undertaking by the Company to use best efforts to cause the Compensation
Committee of the Board to grant Mr. Macnow options to purchase 75,000 Shares
during each of the three years at a purchase price equal to the fair market
value of the stock on the dates the options are granted.
The agreement also provides that if Mr. Macnow's employment is terminated
by the Company without cause or by him for good reason (as defined in the
agreement to include, among other things, a change in his responsibilities,
change in control of the Company, relocation of Vornado's principal executive
offices or the failure of the Company to comply with the terms of the
agreement), he will receive: (a) a lump sum payment of three times the sum of
(i) his annual base compensation plus (ii) the average of the annual bonuses
earned by him in the two fiscal years ending immediately prior to his
termination; (b) immediate vesting in any stock options granted to him by the
Board; and (c) continued provision of benefits to him and his family for three
years. The agreement further provides that if Mr. Macnow's employment is
terminated by him without good reason or by the Company for cause (as defined in
the agreement to include conviction of, or plea of guilty or nolo contendere to,
a felony, failure to perform his duties or willful misconduct) payment of salary
will cease.
Mr. Rowan has an employment agreement expiring December 31, 2000 with the
Company. The agreement provides to Mr. Rowan an initial annual salary of
$380,500, subject to increases in the second and third years by a factor
21
<PAGE> 25
equal to 125% of the percentage increase in the prior year's consumer price
index; use of a company automobile; and an undertaking by the Company to use
best efforts to cause the Compensation Committee of the Board to grant Mr. Rowan
options to purchase 50,000 Shares during each of the three years at a purchase
price equal to the fair market value of the stock on the dates the options are
granted. The agreements also provide that, if the Company should terminate Mr.
Rowan's employment other than for just cause, payment of salary shall continue
until the earlier of two years after the date of termination or the employee's
becoming self-employed or employed with another company. The agreement further
provides that if Mr. Rowan should terminate employment for just cause (defined
as change of the employee's responsibility, change in control of the Company or
relocation of the Company), such employee will be paid 2.99 times his annual
salary and his unvested stock options will vest.
COMPENSATION OF TRUSTEES
The Company compensated Messrs. Wight, Mandelbaum and Targan at a rate of
$15,000 per year for serving as trustees plus $750 for each meeting of the Board
or of any committee of the Board which the trustee attends. The Company
compensated Stanley Simon and Associates, of which Stanley Simon is the owner,
at a rate of $30,000 per year and Richard West at a rate of $40,000 per year in
addition to $750 for each meeting. Messrs. Roth, Fascitelli and Mendik received
no compensation as trustees. In addition Mr. Mendik was paid compensation of
$141,667 for his services as Chief Executive Officer of the Mendik Division.
COMPENSATION INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS
The Company has a Compensation Committee, consisting of Messrs. Simon and
West, which grants awards under the Company's Omnibus Share Plan and makes all
other executive compensation determinations. Messrs. Roth, Fascitelli and Mendik
are the only officers or employees of the Company or any of its subsidiaries who
are members of the Board. There are no interlocking relationships involving the
22
<PAGE> 26
Company's Board which require disclosure under the executive compensation rules
of the Securities and Exchange Commission.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1997, the Company transferred substantially all of its assets to
the Operating Partnership. As a result, the Company now conducts its business
through, and substantially all of its interests in properties are held by, the
Operating Partnership, in which it is the sole general partner.
Simultaneously with the formation of the Operating Partnership, the Company
consummated the acquisition of interests in all or a portion of seven Manhattan
office buildings (the "Mendik Properties") and the management company held by
Bernard H. Mendik, Co-Chairman of the Board of Trustees of the Company, David R.
Greenbaum, President of the Mendik Division of the Company, and certain entities
controlled by them (the "Mendik Group") and certain of its affiliates (the
"Mendik Transaction").
The consideration for the Mendik Transaction was approximately $656
million, including $264 million in cash, $177 million in Units and $215 million
in indebtedness.
Pursuant to the Mendik Transaction, Mendik Management Company Inc. ("MMC")
was formed. The Operating Partnership received 100% of MMC's non-voting common
stock which entitles it to 95% of the net operating cash flow distributed by MMC
to its shareholders. Michael Fascitelli, President and Trustee of the Company,
Bernard Mendik, Co-Chairman of the Board of Trustees of the Company and Chief
Executive Officer of the Mendik Division of the Company and David Greenbaum,
President of the Mendik Division of the Company own the voting common stock of
MMC. MMC will allocate expenses to the Operating Partnership to the extent that
MMC employees perform services on behalf of the Operating Partnership.
The Mendik Group owns an entity which provides cleaning and related
services and security services to office properties. The Company has entered
into contracts with the
23
<PAGE> 27
Mendik Group to provide such services in the Company's Manhattan office
buildings. Although the terms and conditions of the contracts pursuant to which
these services are provided were not negotiated at arms-length, the Company
believes, based upon comparable fees charged to other real estate companies,
that the terms and conditions of such contracts are fair to the Company. The
Company was charged fees in connection with these contracts of $9,965,241 for
the period from April 15, 1997 to December 31, 1997, a portion of which is
expected to be reimbursed to the Company by its tenants.
During 1997, the Company paid $101,400 for legal services, in connection
with certiorari proceedings at its shopping centers, to the firm of Mandelbaum &
Mandelbaum, P.C., of which David Mandelbaum is a member, all or substantially
all of which is expected to be reimbursed to the Company by its tenants. In
addition, during 1997, the Company paid $92,545 for legal services to the firm
of Schechner and Targan, P.A., of which Ronald Targan is a member.
The Company currently manages and leases the real estate assets of
Interstate pursuant to a management agreement for which the Company receives a
quarterly fee equal to 4% of base rent and percentage rent and certain other
commissions. The management agreement has a term of one year and is
automatically renewable unless terminated by either of the parties on sixty
days' notice at the end of the term. Although the management agreement was not
negotiated at arms' length, the Company believes, based upon comparable fees
charged by other real estate companies, that its terms are fair to the Company.
For the year ended December 31, 1997, $1,184,000 of management fees were earned
by the Company pursuant to the management agreement.
The Company owns 29.3% of the outstanding shares of common stock of
Alexander's. In March 1995, the Company lent Alexander's $45 million. The loan,
which was scheduled to mature on March 15, 1998, has been extended to March 15,
1999 and the interest rate was reset from 15.60% per annum to 13.87% per annum.
24
<PAGE> 28
Alexander's is managed by and its properties are leased by the Company,
pursuant to agreements with a one-year term which automatically renew. The
annual management fee payable to the Company by Alexander's is $3,000,000, plus
6% of development costs with minimum guaranteed fees of $750,000 per annum.
The leasing agreement provides for the Company to generally receive a fee
of (i) 3% of sales proceeds and (ii) 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 years of
a lease term. Subject to the payment of rents by Alexander's tenants, the
Company is due $6,244,000 at December 31, 1997. Such amount is receivable
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. The
Company recognized leasing fee income of $767,000 in 1997.
On July 6, 1995, the Company assigned its management agreement with
Alexander's to Vornado Management Corp. ("VMC"), a New Jersey corporation. In
exchange, the Company received 100% of the preferred stock of VMC, which
entitles it to 95% of net operating cash flow distributed by VMC to its
shareholders. Steven Roth and Richard West, Trustees of the Company, own all of
the common stock of VMC. VMC is responsible for its pro-rata share of
compensation and fringe benefits of common employees and 30% of other common
expenses.
As of December 31, 1997, Interstate owned approximately 17.9% of the Shares
of the Company and 27.1% of Alexander's common stock. Interstate is a general
partnership in which Steven Roth, David Mandelbaum and Russel B. Wight, Jr. are
the three general partners. Mr. Roth is the Chairman of the Board and Chief
Executive Officer of the Company, the Managing General Partner of Interstate and
the Chief Executive Officer and a director of Alexander's.
25
<PAGE> 29
Mr. Mandelbaum and Mr. Wight are Trustees of the Company. The agreement with the
Company and Interstate not to own in excess of two-thirds of Alexander's common
stock or to enter into certain other transactions with Alexander's expired in
March 1998.
At December 31, 1997, the loans due from Mr. Roth, Mr. Rowan and Mr. Macnow
in connection with their stock option exercises were $13,122,500 ($4,993,000 of
which is shown as a reduction in shareholders' equity), $202,000 and $182,000,
respectively. The loans bear interest at a rate equal to the broker call rate
(7.25% at December 31, 1997) but not less than the minimum applicable federal
rate provided under the Internal Revenue Code. Interest on the loan to Mr. Roth
is payable quarterly. Mr. Roth's loan, which was due in December 1997, was
extended for five years until December 2002. The Company has agreed on each
January 1st (commencing January 1, 1997) to forgive one-fifth of the amounts due
from Mr. Rowan and Mr. Macnow, provided that they remain employees of the
Company.
In March 1998, the Company lent Mr. Fascitelli $3,500,000 in connection
with the terms of his employment agreement. The loan has a five-year term and
bears interest at 5.47% (the mid-term applicable federal rate provided under the
Internal Revenue Code). Interest on this loan is payable quarterly.
In connection with the Company's acquisition of (i) a 60% interest in two
partnerships which own Americold Corporation and URS Logistics, Inc., (ii) a 40%
interest in Hotel Pennsylvania, (iii) a 100% interest in a company that manages
the trade shows held at the Merchandise Mart and the Apparel Center in Chicago
and the Washington Design Center and the Washington Office Center in Washington,
D.C., (iv) a retail cooperative, and (v) the YMCA Development, preferred stock
affiliates were formed. The Operating partnership received 100% of the
non-voting common stock of these preferred stock affiliates which entitles it to
98% of the net operating cash flow distributed by the preferred stock affiliates
to its shareholders. Steven Roth, Chief Executive Officer and Trustee of the
Company, Michael D. Fas-
26
<PAGE> 30
citelli, President and Trustee of the Company, and Joseph Macnow, Executive Vice
President -- Finance and Administration of the Company, purchased and own all of
the voting common stock of these preferred stock affiliates which entitle them
to the remaining 2% of the net operating cash flow distributed by these
preferred stock affiliates.
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, 1998. The firm of Deloitte & Touche LLP
was engaged as independent auditors for the 1997 fiscal year and representatives
of Deloitte & Touche LLP are expected to be present at the Annual Meeting. They
will have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
ADDITIONAL MATTERS TO COME BEFORE THE MEETING
The Board does not intend to present any other matter, nor does it have any
information that any other matter will be brought before the Annual Meeting.
However, if any other matter properly comes before the Annual Meeting, it is the
intention of the person named in the enclosed proxy to vote said proxy in
accordance with his discretion on such matters.
ADVANCE NOTICE BYLAW
The Bylaws of the Company provide that in order for a shareholder to
nominate a candidate for election as a trustee at an annual meeting of
shareholders or propose business for consideration at such meeting, notice must
be given in writing to the Secretary of the Company at the principal executive
offices 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.
27
<PAGE> 31
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1999 Annual Meeting of Shareholders 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 January 8, 1999, for inclusion in the 1999 proxy statement and form
of proxy.
By Order of the Board of Trustees,
Lee D. Ratner
Assistant Secretary
April 30, 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS ARE
URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE.
28
<PAGE> 32
[VORNADO LOGO]
Park 80 West, Plaza II, Saddle Brook, New Jersey 07663
<PAGE> 33
VORNADO REALTY TRUST
PROXY
The undersigned, revoking all prior proxies, hereby appoints Steven Roth
proxy, with full power of substitution, to attend, and to cast all votes which
the undersigned shareholder is entitled to cast, at the Annual Meeting of
Shareholders of Vornado Realty Trust, a Maryland real estate investment trust
(the "Company"), to be held at the Marriott Hotel, Interstate 80 and the Garden
State Parkway, Saddle Brook, New Jersey 07663 on Wednesday, May 27, 1998 at
10:00 A.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 on the reverse side hereof upon the proposals which are more fully set
forth in the Proxy Statement and otherwise in his discretion upon such other
business as may properly come before the meeting and all 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 TRUSTEES OF THE COMPANY. WHEN
PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF THIS PROXY IS EXECUTED BUT NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF TRUSTEES AND OTHERWISE IN THE
DISCRETION OF THE PROXY.
(Continued and to be Executed, on Reverse side)
<PAGE> 34
1. ELECTION OF TRUSTEES:
The Board of Trustees recommends a Vote "FOR"
Election of Trustees.
FOR all nominees listed below [ ] WITHHOLD
AUTHORITY to vote for all nominees listed below [ ]
Nominees: David Mandelbaum, Richard West (each for a
term ending at the Annual Meeting of Shareholders in
2001)
(Instructions: To withhold authority to vote for any
individual nominee, write that
nominee's name in the space provided
below.)
----------------------------------------------------
Address Change and/or
Comments [ ]
Please date and sign as your name
or names appear hereon. Each joint
owner
must sign. (Officers, Executors,
Administrators, Trustees, etc.,
will kindly so indicate when
signing.)
Dated , 1998
(Signature(s) of Shareholder(s))
VOTES MUST BE INDICATED (X) IN
BLACK OR BLUE INK. [X]
PLEASE VOTE, DATE AND SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
