<PAGE>
SCHEUDLE 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
<TABLE>
<S> <C>
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 Under Rule 14a-12
</TABLE>
<TABLE>
<S> <C>
RECKSON ASSOCIATES REALTY CORP.
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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</TABLE>
<PAGE>
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2000
------------------------
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders (the
"Annual Meeting") of Reckson Associates Realty Corp. (the "Company") will be
held on Thursday, May 18, 2000 at 9:30 a.m. at the Omni, 333 Earl Ovington
Boulevard, Mitchel Field, New York, for the following purposes:
1. To elect three Class II directors of the Company to serve until the 2003
Annual Meeting of Stockholders and until their respective successors are
duly elected and qualified;
2. To ratify the selection of Ernst & Young LLP as the independent auditors
of the Company for the fiscal year ending December 31, 2000; and
3. To consider and act upon any other matters that may properly be brought
before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned or to which the Annual Meeting
may be postponed.
The Board of Directors has fixed the close of business on March 20, 2000 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournments or postponements thereof.
Only stockholders of record of the Company's Class A common stock, $.01 par
value per share, and Class B common stock, $.01 par value per share, at the
close of business on that date will be entitled to notice of and to vote at the
Annual Meeting and at any adjournments or postponements thereof. Holders of
Class A common stock and Class B common stock will vote together as a single
class.
You are requested to fill in and sign the enclosed form of proxy, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Gregg M. Rechler
GREGG M. RECHLER
SECRETARY
Melville, New York
March 30, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
------------------------
PROXY STATEMENT
-----------------
FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2000
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Reckson Associates Realty Corp. (the
"Company") for use at the 2000 Annual Meeting of Stockholders of the Company to
be held on May 18, 2000, and at any adjournments or postponements thereof (the
"Annual Meeting"). At the Annual Meeting, stockholders will be asked to vote
upon (1) the election of three Class II directors of the Company, (2) to ratify
the selection of Ernst & Young LLP as the independent auditors of the Company
for the fiscal year ending December 31, 2000, and (3) to act upon any other
matters that may properly be brought before the Annual Meeting and at any
adjournments or postponements thereof.
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to stockholders on or about March 31, 2000. The Board
of Directors has fixed the close of business on March 20, 2000 as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"). Only stockholders of record of the
Company's Class A common stock, par value $.01 per share, and Class B common
stock, par value $.01 per share (collectively, the "Common Stock"), at the close
of business on the Record Date will be entitled to notice of and to vote at the
Annual Meeting. As of the Record Date, there were 40,386,721 and 10,283,513
shares of Class A and Class B Common Stock outstanding, respectively, and
entitled to vote at the Annual Meeting. Holders of Common Stock outstanding as
of the close of business on the Record Date will be entitled to one vote for
each share held by them on the Record Date.
The presence, in person or by proxy, of holders of at least a majority of
the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. The affirmative vote of the holders of a plurality of the shares of
Common Stock cast on the matter at the Annual Meeting (assuming a quorum is
present) is required for the election of Class II directors, and the affirmative
vote of the Holders of a majority of the shares of Common Stock cast on the
matter at the Annual Meeting (assuming a quorum is present) for each of the
ratification of the Company's auditors, and the approval of any other matters
properly presented at the Annual Meeting for stockholder approval. Under
Maryland law, abstentions and broker "non-votes", or proxies from brokers or
nominees indicating that such person has not received instructions from the
beneficial owner or other person entitled to vote such shares on a particular
matter with respect to which the broker or nominee does not have discretionary
voting power, will not be counted as votes cast and will have no effect on the
results of the votes.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY RECEIVED PRIOR TO THE
VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL MEETING
AS DIRECTED ON THE PROXY. IF A PROPERLY EXECUTED PROXY IS SUBMITTED AND NO
INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE THREE
NOMINEES FOR CLASS II DIRECTORS OF THE COMPANY NAMED IN THIS PROXY STATEMENT,
AND FOR RATIFICATION OF THE BOARD OF DIRECTORS' SELECTION OF ERNST & YOUNG LLP
AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31,
2000. IT IS NOT ANTICIPATED THAT ANY MATTERS OTHER THAN THOSE SET FORTH IN THE
PROXY STATEMENT WILL BE PRESENTED AT THE ANNUAL MEETING. IF OTHER MATTERS ARE
PRESENTED, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXY
HOLDERS.
A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Company at
the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual
<PAGE>
Meeting. Any stockholder of record as of the Record Date attending the Annual
Meeting may vote in person whether or not a proxy has been previously given, but
the presence (without further action) of a stockholder at the Annual Meeting
will not constitute revocation of a previously given proxy.
The Company's 1999 Annual Report, including financial statements for the
fiscal year ended December 31, 1999, accompanies the proxy solicitation
materials. The Annual Report, however, is not part of the proxy solicitation
material.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors of the Company consists of ten members and is divided
into three classes, with the directors in each class serving for a term of three
years and until their successors are duly elected and qualified. The term of one
class expires at each annual meeting of stockholders.
At the Annual Meeting, three directors will be elected to serve until the
2003 Annual Meeting and until their successors are duly elected and qualified.
The Board of Directors has nominated Mr. Donald J. Rechler, Mr. Mitchell D.
Rechler and Mr. Leonard Feinstein to serve as Class II directors (the
"Nominees"). Each of the Nominees is currently serving as a Class II director of
the Company. The Board of Directors anticipates that each of the Nominees will
serve, if elected, as a director. However, if any person nominated by the Board
of Directors is unable to accept election, the proxies will be voted for the
election of such other person or persons as the Board of Directors may
recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following table and biographical descriptions set forth certain
information with respect to the three Nominees for election as Class II
directors at the Annual Meeting, the continuing directors whose terms expire at
the annual meetings of stockholders in 2001 and 2002 and the executive officers
who are not directors, based upon information furnished to the Company by each
director and executive officer.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
DIRECTOR OWNERSHIP OF PERCENT OF
NAME AGE SINCE COMMON STOCK(1) CLASS(2)
- ---- -------- -------- ----------------- ----------
<S> <C> <C> <C> <C>
CLASS II NOMINEES FOR ELECTION AT 2000 ANNUAL MEETING
(TERM TO EXPIRE IN 2003)
Donald J. Rechler.................................... 65 1994 1,980,393(3) 3.36%
Mitchell D. Rechler.................................. 40 1994 1,002,564(4) 1.70%
Leonard Feinstein.................................... 62 1995 94,000(5) *
CLASS III CONTINUING DIRECTORS (TERM EXPIRES IN 2001)
Roger Rechler........................................ 58 1994 1,843,445(6) 3.14%
Harvey Blau.......................................... 64 1995 23,000(7) *
John V.N. Klein...................................... 68 1995 25,800(7) *
CLASS I CONTINUING DIRECTORS (TERM EXPIRES IN 2002)
Scott H. Rechler..................................... 32 1994 1,032,609(8) 1.75%
Herve A. Kevenides................................... 61 1995 23,000(7) *
Conrad D. Stephenson................................. 72 1995 23,000(7) *
Lewis S. Ranieri..................................... 53 1997 17,000(9) *
</TABLE>
- ------------------------
* Less than one percent.
(1) All information has been determined as of March 20, 2000. For purposes of
this table a person is deemed to have "beneficial ownership" of the number
of shares of Common Stock that a person has the right to acquire pursuant to
the exercise of stock options exercisable within sixty days or the
2
<PAGE>
redemption of units (the "Units") of limited partnership interest in Reckson
Operating Partnership, L.P., a Delaware limited partnership (the "Operating
Partnership") (assuming the Company elects to issue Common Stock rather than
pay cash upon such redemption). Pursuant to the terms of the Amended and
Restated Agreement of Limited Partnership of the Operating Partnership,
dated as of June 2, 1995, and as amended, the Operating Partnership is
obligated to redeem Units for cash, or, at the option of the Company, shares
of Common Stock. See "Executive Compensation" for a discussion of the
vesting of stock options granted to directors and officers.
(2) For purposes of computing the percentage of outstanding shares of Common
Stock held by each person, any shares of Common Stock which such person has
the right to acquire pursuant to the exercise of a stock option exercisable
within 60 days is deemed to be outstanding, but is not deemed to be
outstanding for the purpose of computing the percent ownership of any other
person. In addition, for purposes of such calculation, Units held by each
person are treated as if such person had converted and held the related
equivalent number of shares of Common Stock.
(3) Includes (a) 447,267 shares of Class A Common Stock and 5,000 shares of
Class B Common Stock owned directly, (b) 517,500 exercisable options and (c)
1,010,626 Units, including 42,826 Units owned directly and 967,800 Units
owned through corporations and partnerships.
(4) Includes (a) 102,710 shares of Class A Common Stock, including 4,710 shares
owned in trust for Mr. Mitchell D. Rechler's children, (b) 501,500
exercisable options and (c) 398,354 Units, including 202,576 Units owned
directly, 70,913 Units owned through a trust and 124,865 Units owned through
corporations and partnerships.
(5) Includes (a) 21,000 shares of Class A Common Stock owned directly, (b)
options to purchase 23,000 shares of Class A Common Stock and (b) 50,000
shares of Class B Common Stock owned indirectly through a partnership.
(6) Includes (a) 421,611 shares of Class A Common Stock, including 414,767
shares owned directly and 6,844 shares owned by Mr. Roger Rechler's spouse,
(b) 417,500 exercisable options, and (c) 1,004,334 Units, including 37,576
Units owned directly and 966,758 Units owned through corporations and
partnerships.
(7) Includes options to purchase 23,000 shares of Class A Common Stock.
(8) Includes (a) 113,367 shares of Class A Common Stock, including 2,367 shares
owned in trust for Mr. Scott H. Rechler's child, (b) 526,500 exercisable
options and (c) 392,742 Units, including 194,352 Units owned directly,
70,913 Units owned through a trust and 127,477 Units owned through
corporations and partnerships.
(9) Includes options to purchase 17,000 shares of Class A Common Stock.
CLASS II NOMINEES FOR ELECTION AT 2000 ANNUAL MEETING--TERM TO EXPIRE IN 2003
DONALD J. RECHLER has served as Co-Chief Executive Officer of the Company
since May 1999 and has served as Chairman of the Board and a director of the
Company since its formation. In addition, until May 1999, Mr. Rechler served as
Chief Executive Officer of the Company since its formation. Mr. Rechler also
served as President of the Company from its formation until February 1997. Prior
to the Company's initial public offering of its common stock in June 1995 (the
"IPO"), Mr. Rechler was a co-founder and general partner of Reckson Associates.
He is a founder and former President and Chairman of the Association For A
Better Long Island, a founder of the Long Island Commercial & Industrial
Development Association, a member of the Board of Directors of the Development
Division of North Shore Hospital, a member of the Board of Directors of the Long
Island Philharmonic and a member of the Council of Overseers of Long Island
University, C.W. Post College. Mr. Rechler is a graduate of the University of
Miami. Mr. Rechler also serves as Chairman of the Board and a director of
FrontLine
3
<PAGE>
Capital Group ("FrontLine") (formerly known as Reckson Service
Industries, Inc.). Mr. Rechler is the father of Mitchell D. Rechler and the
brother of Roger Rechler.
MITCHELL D. RECHLER has served as Co-Chief Operating Officer of the Company
since May 1999 and has served as Executive Vice President and a director of the
Company since its formation. Mitchell D. Rechler also serves as the President of
Reckson Management Group, Inc. (the "Management Company"). From 1981 to 1985, he
was employed by Reckson in various non-supervisory roles including positions in
property management, construction, acquisitions and leasing. Since 1986,
Mr. Rechler has served as an Executive Vice President of Reckson, responsible
for all leasing activities including the coordination of leasing and marketing
strategies and overseeing tenant relations. Mr. Rechler has served as President
of the Management Company since its organization in 1991. Mr. Rechler serves on
the executive committee of the Children's Medical Fund of Schneider Children's
Hospital of Long Island Jewish Medical Center and as a member of the board of
directors of the Long Island Friends of the Arts. He is a graduate of Emory
University. Mr. Rechler also serves as Secretary, a member of the Management
Advisory Committee and a director of FrontLine. He is the son of Donald J.
Rechler.
LEONARD FEINSTEIN has served as a director of the Company since 1995.
Mr. Feinstein is the co-founder and the president and co-chief executive officer
of Bed Bath & Beyond Inc., a New York Stock Exchange listed company.
Mr. Feinstein has served in such capacity since 1992. Mr. Feinstein served as
co-chief executive officer, treasurer and secretary of Bed Bath & Beyond Inc.
from 1971 to 1992. Mr. Feinstein serves as a Trustee of North Shore L.I.J.
Health System and as Director of Long Island Head Injury Association. He is a
graduate of Cornell University.
CLASS III CONTINUING DIRECTORS--TERM EXPIRES IN 2001
ROGER RECHLER has served as Vice Chairman of the Board and a director of the
Company since its formation and as Executive Vice President of Development since
February 1997. Prior to the Company's IPO, Mr. Rechler was a co-founder and
general partner of Reckson Associates. Mr. Rechler is responsible for the
supervision of property development and construction, architectural and
design-services, interior construction and property management. Mr. Rechler
attended Adelphi University. Mr. Rechler also serves as a member of the
Management Advisory Committee and a director of FrontLine. Mr. Rechler is the
father of Scott H. Rechler and Gregg M. Rechler and the brother of Donald J.
Rechler.
HARVEY BLAU has served as a director of the Company since 1995. Mr. Blau is
a senior partner of the law firm of Blau, Kramer, Wachtler & Lieberman, P.C. and
has been associated with such firm (including its predecessors) since 1966.
Mr. Blau has served as the Chairman of the Board of Aeroflex, Incorporated since
1991, the Chairman of the Board of the Griffon Corporation and a Director of Nu
Horizons Electronics Corp. since 1984. Mr. Blau serves as a Trustee of Benjamin
N. Cardozo School of Law and as a Trustee of the Incorporated Village of Old
Westbury, New York. Mr. Blau holds a bachelor's degree from New York University,
a law degree from Columbia University School of Law and an advanced law degree
from New York University Graduate School of Law.
JOHN V.N. KLEIN has served as a director of the Company since 1995.
Mr. Klein was the Managing Attorney of the law firm of Meyer, Suozzi, English &
Klein, P.C. between 1984 and 1997. Mr. Klein served as a Director of Fleet Bank
from 1980 to 1994. Mr. Klein has also been a member of the advisory board of St.
Joseph's College, Patchogue, New York since 1980. For more than five years,
Mr. Klein has served as Director of Pocono Hotels Corporation, a hotel owner and
operator. Mr. Klein has served in various government positions on Long Island,
including County Executive of Suffolk County, New York from 1972 to 1979.
Mr. Klein holds a bachelor's degree and a law degree from the University of
Virginia.
CLASS I CONTINUING DIRECTORS--TERM EXPIRES IN 2002
SCOTT H. RECHLER has served as Co-Chief Executive Officer of the Company
since May 1999, has served as a director of the Company since its formation and
has served as President of the Company since
4
<PAGE>
February 1997. Mr. Rechler also served as Chief Operating Officer of the Company
from its formation until May 1999. In addition, until February 1997,
Mr. Rechler served as Executive Vice President of the Company since its
formation. Mr. Rechler has been employed at Reckson since 1989. He is a member
of the Board of Directors of the Long Island Children's Museum. Mr. Rechler is a
graduate of Clark University and received a Master's Degree in Finance with a
specialization in real estate from New York University. Mr. Rechler also serves
as President, Chief Executive Officer and a director of FrontLine. He is the son
of Roger Rechler and the brother of Gregg M. Rechler.
HERVE A. KEVENIDES has served as a director of the Company since 1995. Since
1997, Mr. Kevenides has served as the Managing Director, Research Group for
Landauer Associates, a real estate consulting and valuation firm. Mr. Kevenides
served from 1995 to 1996 as the director of the Real Estate Products Group for
Ceres Financial Concepts, N.A. Mr. Kevenides is the president and director of
research of Metropolitan Analysis & Forecasting Corporation, an international
real estate economics and market research firm. Mr. Kevenides has served in this
position since 1988. Mr. Kevenides has served as a Professor of the Masters in
Real Estate Program of New York University since 1998 and was an Adjunct
Associate Professor of such program from 1989 until 1998. Mr. Kevenides was a
vice president and director of real estate economics and market research for
Chemical Bank from 1981 to 1988, and a vice president and manager of real estate
market research for The Chase Manhattan Bank from 1972 to 1981. Mr. Kevenides
holds a Masters of Business Administration from New York University.
CONRAD D. STEPHENSON has served as a director of the Company since 1995.
Mr. Stephenson served as the chief executive officer of Pan Am Equities Inc., a
property ownership and management company from 1993 to 1997, and currently
serves as a consultant thereto. Mr. Stephenson was employed by The Comras
Company, a real estate company, from 1990 to 1993, and served as the vice
president in the tri-state and northeast real estate lending division of the
First National Bank of Chicago from 1987 to 1990. Mr. Stephenson was the vice
president in charge of all commercial real estate lending activities of The
Bowery Savings Bank from 1985 to 1987, and was a vice president of The Chase
Manhattan Bank from 1975 to 1985. Mr. Stephenson has served as a governor, vice
president and a member of the executive committee of the Real Estate Board of
New York. Mr. Stephenson holds a bachelor's degree from Fordham University and a
Masters of Business Administration from New York University. Mr. Stephenson is a
retired colonel of the U.S. Army Reserves, with which he served for 35 years.
LEWIS S. RANIERI has served as a director of the Company since 1997.
Mr. Ranieri is the chairman of Bank United Corp., a position he has held since
1988. He is also the chairman and chief executive officer of Ranieri &
Co., Inc., positions he has held since founding Ranieri & Co. in 1988.
Mr. Ranieri is the founder of Hyperion Partners L.P. and Hyperion Partners II
L.P. He is also Chairman of Hyperion Capital Management, Inc. and The Hyperion
Total Return Fund, Inc. He is director of Transworld HealthCare, Inc., the
Hyperion 1999 Term Trust, Inc., the Hyperion 2002 Term Trust, Inc. and Hyperion
2005 Investment Grade Opportunity Trust, Inc. Mr. Ranieri is also chairman and
president of various other indirect subsidiaries of Hyperion. He is a director
of Delphi Financial Group, Inc. and Delphi International Ltd. Prior to forming
Hyperion, Mr. Ranieri had been vice chairman of Salomon Brothers Inc.
Mr. Ranieri helped develop the capital markets as a source of funds for housing
and commercial real estate, established Salomon's leadership position in the
mortgage-backed securities area, and also led the effort to obtain Federal
legislation to support and build the market. Mr. Ranieri has served on the
National Association of Home Builders Mortgage Roundtable continuously since
1986. He was inducted into the National Housing Hall of Fame in 1997.
Mr. Ranieri also acts as a trustee or director of various environmental and
religious institutions such as the Environmental Defense Fund and Shrine of
Elizabeth Ann Seton/Our Lady of the Rosary Church.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
MICHAEL MATURO has served as Executive Vice President, Chief Financial
Officer and Treasurer of the Company since 1995. Prior to joining the Company,
Mr. Maturo was a senior manager at E&Y Kenneth
5
<PAGE>
Leventhal Real Estate Group (formerly Kenneth Leventhal & Company), a public
accounting and consulting firm. He specialized in diverse phases of real estate
finance including corporate and property debt financings and recapitalization
transactions. Mr. Maturo is a graduate of Seton Hall University with a degree in
accounting and finance and is a certified public accountant. Mr. Maturo also
serves as Executive Vice President, Chief Financial Officer, Treasurer and
director of FrontLine. Mr. Maturo is 38 years old.
GREGG M. RECHLER has served as Co-Chief Operating Officer of the Company
since May 1999 and has served as Executive Vice President and Secretary of the
Company since its formation. Mr. Rechler also serves as President of Reckson
Construction Group, Inc. From 1985 to 1988, Mr. Rechler held non-supervisory
roles at Reckson in the construction and property management areas. Beginning in
1989, as an Executive Vice President of Reckson, he served as the person
responsible for the construction and development activities of Reckson.
Mr. Rechler is a member of the Board of Directors of the Long Island chapter of
the Building Owners and Managers Association. Mr. Rechler attended the New York
Institute of Technology. He is the son of Roger Rechler and the brother of Scott
H. Rechler. Mr. Rechler also serves as a member of the Management Advisory
Committee and a director of FrontLine. Mr. Rechler is 33 years old.
JASON M. BARNETT has served as Executive Vice President and Assistant
Secretary of the Company since May 1999 and General Counsel of the Company since
May 1997. Mr. Barnett joined the Company in 1996. He is responsible for the
coordination of all legal and compliance matters for the Company. Prior to
joining the Company, Mr. Barnett practiced as an associate in the REIT practice
area of Brown & Wood LLP. While at Brown & Wood LLP, Mr. Barnett participated in
numerous corporate and real estate transactions involving publicly held REIT's
including initial public offerings, joint ventures and corporate and real estate
acquisitions. Mr. Barnett holds a Bachelor of Arts degree from Clark University
and Law Degree from Emory University School of Law. Mr. Barnett is admitted to
the Bar of the State of New York. Mr. Barnett also serves as Executive Vice
President, General Counsel and Assistant Secretary of FrontLine. Mr. Barnett is
31 years old.
CHAIRMAN OF THE BOARD EMERITUS
WALTER GROSS has served as Chairman of the Board Emeritus of the Company
since its formation. For over 40 years, Mr. Gross has been actively involved in
the development and operation of industrial and office properties on Long
Island. Together with the late William Rechler, Mr. Gross conceived of and
developed Vanderbilt Industrial Park, the first planned industrial park built on
Long Island. He also owned and operated Walter J. Gross Construction Corp., a
general contracting firm, that has constructed in excess of 3,000,000 square
feet on behalf of clients including B.F. Goodrich, Sears and The Prudential
since 1970.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company is managed by a ten member Board of Directors, a majority of
whom are independent of the Company's management. The Board of Directors held
five meetings during fiscal year 1999. Each of the directors attended at least
75% of the total number of meetings of the Board of Directors and of the
committees of the Company of which he was a member during 1999, except for Herve
A. Kevenides and Lewis S. Ranieri.
AUDIT COMMITTEE. The Audit Committee, which consists of Messrs. Feinstein
and Klein, makes recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the plans and
results of the audit engagements, approves professional services provided by the
independent public accountants, reviews the independence of the independent
public accountants, considers the range of audit and non-audit fees and reviews
the adequacy of the Company's internal accounting controls. The Audit Committee
held one meeting during fiscal year 1999.
EXECUTIVE COMMITTEE. Subject to the supervision and oversight of the Board
of Directors, the Executive Committee, which consists of Donald J. Rechler,
Scott H. Rechler, Herve A. Kevenides, and
6
<PAGE>
Conrad D. Stephenson, has the authority to approve the acquisition, financing
and disposition of investments by the Company and to authorize the execution of
certain contracts and agreements, including those relating to the borrowing of
money by the Company and to exercise generally all other powers of the Board of
Directors, except for those which require action by all Directors or the
Independent Directors under the Articles of Incorporation or By-Laws of the
Company or under applicable law. The Executive Committee held eight meetings
during fiscal year 1999.
COMPENSATION COMMITTEE. The Compensation Committee, which consists of
Harvey Blau and Leonard Feinstein, makes recommendations and exercises all
powers of the Board of Directors in connection with compensation matters,
including incentive compensation and benefit plans. The Compensation Committee
also has authority to grant awards under the Company's stock option plans. The
Compensation Committee held three meetings during fiscal year 1999.
The Board of Directors does not have a standing nominating committee. The
full Board of Directors performs the functions of such a committee.
DIRECTOR COMPENSATION
Each of the non-employee directors of the Company receives an annual
director's fee of $15,000. Each non-employee director also receives $500 for
each regular quarterly meeting of the Board of Directors attended, $500 for each
special meeting of the Board of Directors attended, $250 for each special
telephonic meeting of the Board of Directors participated in and $500 for each
committee meeting attended. Each non-employee director appointed or elected for
the first time receives an initial option to purchase 6,000 shares of Class A
Common Stock at the market price of the Class A Common Stock on the date of
grant. In addition, following each annual meeting of stockholders, each of the
Company's non-employee directors receives an option to purchase 2,000 shares of
Class A Common Stock at the market price of the Class A Common Stock on the date
of grant. All options granted to non-employee directors vest on the date of
grant. On May 27, 1999, each non-employee director was granted an option to
purchase 2,000 shares of Class A Common Stock at $25.563 per share.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has selected the accounting firm of Ernst & Young LLP to serve as
independent auditors of the Company for the fiscal year ending December 31,
2000, subject to ratification of this appointment by the stockholders of the
Company. Ernst & Young LLP has served as the Company's independent auditors
since the Company's formation in September 1994 and is considered by management
of the Company to be well qualified. The Company has been advised by that firm
that neither it nor any member thereof has any financial interest, direct or
indirect, in the Company or any of its subsidiaries in any capacity. A
representative of Ernst & Young LLP will be present at the Annual Meeting, will
be given the opportunity to make a statement if he or she so desires and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF THE INDEPENDENT AUDITORS.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding the base compensation
awarded for the past three fiscal years to each of the five most highly
compensated executive officers of the Company (collectively, the "Named
Executive Officers") whose base salary, on an annualized basis, exceeded
$100,000 during the fiscal year ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
SALARY($)(1) BONUSES LONG TERM ALL OTHER
NAME AND PRINCIPAL POSITION YEAR (2) ($) OPTIONS(#)(3) ($)
- --------------------------- -------- ------------ -------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Donald J. Rechler........................ 1999 $525,000 $525,000 -- --
Co-Chief Executive Officer 1998 $500,000 $500,000 122,500 --
1997 $325,000 $390,000 375,000 --
Scott H. Rechler......................... 1999 $450,000 $450,000 -- --
Co-Chief Executive Officer and 1998 $400,000 $400,000 122,500 --
President 1997 $250,000 $300,000 300,000 --
Michael Maturo........................... 1999 $375,000(4) $375,000 -- --
Executive Vice President, Chief 1998 $300,000(4) $300,000 122,500 --
Financial Officer and Treasurer 1997 $200,000(4) $240,000 275,000 --
Mitchell D. Rechler......................
Co-Chief Operating Officer, Executive 1999 $375,000 $375,000 -- --
Vice President and President of 1998 $300,000 $300,000 122,500 --
Reckson Management Group, Inc. 1997 $200,000 $240,000 275,000 --
Gregg M. Rechler.........................
Co-Chief Operating Officer, Executive
Vice President, Secretary and 1999 $375,000 $375,000 -- --
President of Reckson Construction 1998 $300,000 $300,000 122,500 --
Group, Inc. 1997 $200,000 $240,000 275,000 --
</TABLE>
- ------------------------
(1) The base salaries of Donald J. Rechler, Scott H. Rechler, Michael Maturo and
Mitchell D. Rechler are paid by the Management Company and the base salary
of Gregg M. Rechler is paid by the Construction Company. The Company and the
Operating Partnership reimburse the appropriate subsidiary corporation for
time spent by the Named Executive Officer on the business of the Company or
the Operating Partnership, respectively.
(2) Excludes loan forgiveness and related tax payments in 1999 and 1998,
respectively, pursuant to the terms of the 1997 Stock Loans in the following
amounts: Donald J. Rechler--$290,100 and $314,000, Scott H.
Rechler--$217,600 and $235,600, Michael Maturo--$174,200 and $184,400,
Mitchell D. Rechler--$174,200 and $184,400 and Gregg M. Rechler--$183,200
and $193,900.
(3) As of March 20, 2000, options to purchase 2,524,500 shares of Common Stock
have been granted to the Named Executive Officers.
(4) Excludes loan forgiveness in the amount of $100,000 pursuant to the terms of
Mr. Maturo's 1995 employment and noncompetition agreement with the Company.
No options were exercised by the Named Executive Officers in 1999. The
following table sets forth the value of options at the end of 1999 by the
Company's Named Executive Officers.
8
<PAGE>
AGGREGATED FISCAL YEAR-END 1999 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR-END($)(1)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
<S> <C> <C>
Donald J. Rechler.................................. 517,500/0 $112,930/$0
Scott H. Rechler................................... 526,500/0 $823,486/$0
Michael Maturo..................................... 477,500/0 $676,720/$0
Mitchell D. Rechler................................ 501,500/0 $823,486/$0
Gregg M. Rechler................................... 501,500/0 $823,486/$0
</TABLE>
- ------------------------
(1) The value of unexercised in-the-money options at fiscal year-end based on
the fair market value of Common Stock of $20.50 per share, as of
December 31, 1999.
EMPLOYMENT AND NONCOMPETITION AGREEMENTS
Each of the Named Executive Officers has entered into an employment and
noncompetition agreement and a severance agreement with the Company.
The employment and noncompetition agreements with each of Donald J. Rechler,
Scott H. Rechler, Michael Maturo, Mitchell D. Rechler and Gregg Rechler were
renewed, and an employment and noncompetition agreement for Roger Rechler was
executed, on June 1, 1998 for 5 year terms, unless in each case otherwise
extended. The term of each of the severance agreements is identical to the Named
Executive Officer's employment agreement, including any extension thereof.
However, in the event of a "Change in Control" (as such term is defined in the
applicable agreement), each severance agreement automatically extends the term
of the corresponding employment agreement until the later of (i) the date on
which the employment and noncompetition agreement otherwise would have expired
and (ii) the date which is 36 months after the end of the calendar year in which
such Change in Control occurs. Each agreement provides for certain benefits in
the event of termination of the Named Executive Officer by the Company without
"Good Reason" (as such term is defined in the applicable agreement), resignation
by the Named Executive Officer upon a material breach of the agreement by the
Company or a Change in Control of the Company. These benefits include the
continued payment of the Named Executive Officer's base salary during the
remaining term of the agreement, immediate vesting of all equity awards as well
as continued entitlement to receive other benefits conferred under the
applicable agreement for such remaining term. Under the agreements, each Named
Executive Officer is also entitled to certain specified benefits in the event of
his death or disability.
In addition, such employment and noncompetition agreements, subject to
certain exceptions, prohibit each such Named Executive Officer from engaging,
directly or indirectly, during the term of his employment, in any business
(other than FrontLine and its affiliates) which engages or attempts to engage
in, directly or indirectly, the acquisition, development, construction,
operation, management or leasing of any industrial office real estate property
anywhere within the Tri-State metropolitan area ("Competitive Activities").
These employment and noncompetition agreements also prohibit such persons from
engaging, directly or indirectly, during a specified Noncompetition Period in
any Competitive Activities, subject to certain limited exceptions. The
Noncompetition Period for each such employee is the period beginning on the date
of the termination of employment and ending on the latest of (i) the first
anniversary of the termination of his employment with the Company and (ii) the
third anniversary of the effective date of the employee's employment and
noncompetition agreement.
Pursuant to the original employment and noncompetition agreement with
Mr. Maturo entered into in 1995, the Company made a non-recourse loan to
Mr. Maturo in the amount of approximately $400,000
9
<PAGE>
(the "Loan") in order to finance his purchase of an equity interest in the
Company. On each of the first four anniversaries of the Loan, $100,000 of the
outstanding principal amount was forgiven by the Company and the Company made
non-recourse loans to Mr. Maturo in an amount equivalent to his resulting tax
liability (a "Tax Loan"), which in turn is forgiven (together with accrued
interest thereon and on the Loan) over the fifth through eighth anniversaries of
the date the Loan was made. During 1999, Tax Loans in the amount of $26,000 were
made to Mr. Maturo.
REPORT ON EXECUTIVE COMPENSATION
The following is a report by the Company's Compensation Committee regarding
the Company's executive compensation objectives, executive compensation program
and the compensation of the Company's co-chief executive officers:
EXECUTIVE COMPENSATION OBJECTIVES. The objective of the Company's executive
compensation program is to attract, retain and motivate talented executives who
will maximize stockholder value. In order to achieve this objective, in addition
to annual base salaries, the executive compensation program utilizes a
combination of long-term incentives through equity-based compensation and annual
incentives through cash bonuses. The program is intended to align the interests
of executives with those of the Company's stockholders by linking a portion of
executive compensation directly to increases in stockholder value. The Company
seeks to provide total compensation to its executive officers which is
competitive with total compensation paid by REITs similar to the Company.
PROCEEDINGS OF THE COMPENSATION COMMITTEE. The Compensation Committee
determines compensation for the Company's executive officers and is comprised of
two nonemployee directors, Mr. Blau and Mr. Feinstein. Final compensation
determinations for each fiscal year will generally be made after the end of the
fiscal year. At that time, base salaries for the following fiscal year will be
set, cash bonuses, if any, will be determined for the past year's performance,
and option grants, if any, will generally be made. At a meeting in March 2000,
the Compensation Committee fixed the base salaries for the Named Executive
Officers for the fiscal year ending December 31, 2000 and determined incentive
compensation awards for such officers in respect of the fiscal year ended
December 31, 1999.
The Compensation Committee engaged FPL Associates to advise the Compensation
Committee regarding executive officer compensation matters, including annual
base salary, annual incentives and long-term incentives. FPL Associates is a
consultant specializing in compensation matters in the real estate industry and
is not affiliated with the Company. The Compensation Committee considered FPL's
analysis in determining base salaries and incentives.
In determining compensation for the Named Executive Officers, the
Compensation Committee noted several factors, including the Company's strong
operating performance for the 1999 fiscal year, in terms of a 13% increase in
Funds From Operations per share in 1999 over levels achieved in 1998. The
Committee also considered the efforts of the Named Executive Officers in
completing the acquisition of Tower Realty Trust, Inc. and the establishment of
Metropolitan Partners, LLC, the Company's New York City division, and the
disposition of a portfolio of the Company's big box industrial properties. The
Compensation Committee also considered the efforts of the Named Executive
Officers in the acquisition of two properties aggregating approximately
2.0 million square feet during 1999, as well as leasing activity at the
Company's properties. In addition, the Compensation Committee considered the
performance of its common stock relative to other real estate companies.
The Compensation Committee exercises independent discretion in respect of
executive compensation matters. With respect to the compensation of the Named
Executive Officers other than Donald J. Rechler, the Compensation Committee
reviews the recommendations of Donald J. Rechler.
10
<PAGE>
The following is a discussion of each element of the Company's executive
compensation:
ANNUAL BASE SALARY. Base salaries for each of the Named Executive Officers
are the subject of the employment and noncompetition agreements between the
Company and each such executive as indicated above. Each such agreement provides
that the base salary provided for under the respective agreement will be
reviewed no less frequently than annually. For 1999, base salaries for the Named
Executive Officers were determined by the Compensation Committee based upon a
review of the performance of each Named Executive Officer and the report
prepared by FPL for the fiscal year ended December 31, 1999.
ANNUAL INCENTIVES. Annual incentives are provided in the form of cash
bonuses to be paid if certain performance objectives are achieved. Cash bonuses
will also be subject to adjustment based upon the Compensation Committee's
evaluation of an executive's personal performance.
The Compensation Committee awarded the following cash bonuses to the
following Named Executive Officers in March 2000 in respect of the fiscal year
ended December 31, 1999: Michael Maturo--$375,000, Mitchell Rechler--$375,000,
and Gregg Rechler--$375,000. The cash bonus awards to Donald J. Rechler and
Scott Rechler are discussed separately below. In determining incentive
compensation for 1999, the Compensation Committee considered the factors
described above regarding annual base salaries.
LONG-TERM INCENTIVES. Long-term incentives may be provided through a
variety of means, including the grant of stock options, restricted stock awards
and stock loans. These awards are intended to align the executive's long-term
objectives with those of the Company's stockholders. The grant of stock options,
restricted stock awards and stock loans are made under the Company's stock
option plans which are administered by the Compensation Committee. The
Compensation Committee has the discretion to determine those individuals to whom
awards are made and the terms and conditions of the awards. The Named Executive
Officers did not receive any stock options or stock grants in respect of the
1999 fiscal year.
In March 2000, the Compensation Committee awarded each of the Named
Executive Officers loans from the Company to purchase shares of Common Stock of
the Company in respect of the fiscal year ended December 31, 1999 (the "1999
Stock Loans"). The aggregate principal amount of the 1999 Stock Loans is
$921,875 in the case of each of Mitchell Rechler, Gregg Rechler and Michael
Maturo. Each 1999 Stock Loan has a term of ten years, accrues interest at the
mid-term "Applicable Federal Rate" ("AFR") as in effect from time to time, is
secured by the Common Stock purchased and is otherwise non-recourse. 40% of each
Named Executive Officer's 1999 Stock Loan (together with accrued interest on the
1999 Stock Loan) will be forgiven ratably each year during the ten year term of
the 1999 Stock Loan, provided that the Named Executive Officer is then employed
by the Company. One-tenth of the other 60% (together with accrued interest) will
be forgiven each year only if the performance of the Company's Class A Common
Stock since the Company's IPO is ranked in the top 40% for office and industrial
REITs (as reported by NAREIT or, if not available from NAREIT, from such other
standard industry source as may be approved by the Compensation Committee) at
the end of the respective year. In the event this criteria is not satisfied in
any particular year, the portion of the 1999 Stock Loan that is not forgiven in
respect of such year will be carried forward and forgiven in a subsequent year
only if the Company's Class A Common Stock satisfies the criteria. The Named
Executive Officers will also receive tax payments in respect of the forgiveness
of the 1999 Stock Loans. In the event of a Change of Control of the Company, a
Named Executive Officer's death or permanent disability, termination of his
employment by the Company without cause or a reduction in the nature or scope of
such Named Executive Officer's duties, the outstanding principal amount of the
applicable 1999 Stock Loan will be forgiven in full and such Named Executive
Officer will receive a tax payment in respect of such forgiveness. In the event
a Named Executive Officer leaves the employ of the Company or is terminated with
cause, the outstanding amount of the applicable loans will be immediately due
and payable. In approving these loans the Compensation Committee considered the
same factors it considered in determining the annual incentives, including the
retention of the Named Executive Officers.
11
<PAGE>
In 1997, as a long-term incentive award, each of the Company's Named
Executive Officers received loans from the Company to purchase shares of Common
Stock of the Company (the "1997 Stock Loans"). Pursuant to the terms of the 1997
Stock Loans, in 1999 10% of the 1997 Stock Loans of each Named Executive Officer
was forgiven and the Company paid to each Named Executive Officer the following
amounts, representing tax payments: Michael Maturo--$80,700, Mitchell
Rechler--$80,700 and Gregg Rechler--$89,700.
1999 CO-CHIEF EXECUTIVE OFFICER COMPENSATION. Donald J. Rechler and Scott
Rechler's base salaries for the fiscal year ended December 31, 1999 were
$525,000 and $450,000, respectively, as determined by the Compensation
Committee.
For the fiscal year ended December 31, 1999, the Compensation Committee
awarded to Donald J. Rechler and Scott Rechler cash bonuses of $525,000 and
$450,000, respectively. The amounts of these bonuses were determined by the
Compensation Committee substantially in accordance with the policies described
above relating to all Named Executive Officers of the Company. In making such
determination the Compensation Committee noted several factors, including the
Company's achievement of a 13% increase in Funds From Operations per share in
1999 over levels achieved in 1998. The Committee also considered the efforts of
the Named Executive Officers in completing the acquisition of Tower Realty
Trust, Inc. and the establishment of Metropolitan Partners, LLC, the Company's
New York City division, and the disposition of a portfolio of the Company's big
box industrial properties. The Compensation Committee also considered the
efforts of the Named Executive Officers in the acquisition of two properties
aggregating approximately 2.0 million square feet during 1999, as well as
leasing activity at the Company's properties. In addition, the Compensation
Committee considered the performance of its common stock relative to other real
estate companies.
As a long-term incentive the Compensation Committee awarded each Donald J.
Rechler and Scott Rechler 1999 Stock Loans in the amount of $1,106,250 in
accordance with the terms described above relating to the other Named Executive
Officers of the Company, including the relating tax payments. The terms of the
1999 Stock Loans and the related tax payments are described above under "--Long
Term Incentives." In addition, in 1999 Donald J. Rechler and Scott Rechler
received tax payments from the Company in the amounts of $134,300 and $100,700,
respectively, relating to the forgiveness of 10% of each of their respective
1997 Stock Loans.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), limits the deductibility on the
Company's tax return of compensation over $1 million to any of the Named
Executive Officers of the Company unless, in general, the compensation is paid
pursuant to a plan which is performance-related, non-discretionary and has been
approved by the Company's stockholders. The Compensation Committee's policy with
respect to section 162(m) is to make every reasonable effort to ensure that
compensation is deductible to the extent permitted while simultaneously
providing Company executives with appropriate compensation for their
performance. The Company paid compensation of $1,434,000 and $1,169,000 to
Donald J. Rechler and Scott Rechler, respectively, during 1999, $434,000 and
$169,000 of which would be nondeductible under the limitations set forth in
section 162(m).
Submitted by the Compensation
Committee
of the Board of Directors:
Harvey Blau
Leonard Feinstein
12
<PAGE>
STOCK PERFORMANCE GRAPHS
The following graph provides a comparison of the cumulative total
stockholder return on the Class A Common Stock for the period from May 26, 1995
(the date upon which the Company's Class A Common Stock commenced trading on the
New York Stock Exchange) to December 31, 1999 with the cumulative total return
on the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") and the
NAREIT Equity REIT Total Return Index. Total return values were calculated based
on cumulative total return assuming (i) the investment of $100 in the Class A
Common Stock on May 26, 1995 and in the S&P 500 and the NAREIT Equity REIT Total
Return Index on May 31, 1995 and (ii) reinvestment of dividends.
[GRAPH OF CLASS A COMMON STOCK]
The following graph provides a comparison of the cumulative total
shareholder return on the Class B Common Stock for the period from May 25, 1999
(the date upon which the Company's Class B Common Stock commenced trading on the
New York Stock Exchange) to December 31, 1999 with the cumulative total return
on the S&P 500 and the NAREIT Equity REIT Total Return Index. Total return
values were calculated based on cumulative total return assuming (i) the
investment of $100 in the Class B Common Stock and in the S&P 500 on May 25,
1999 and the NAREIT Equity REIT Total Return Index on May 31, 1999 and (ii)
reinvestment of dividends.
[GRAPH OF CLASS B COMMON STOCK]
13
<PAGE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth the beneficial ownership of Common Stock for
(i) each stockholder of the Company holding more than a 5% beneficial interest
in the Class A or Class B shares of the Company, (ii) each executive officer of
the Company who is not a director of the Company and (iii) the directors and
executive officers of the Company as a group. Stock ownership of the Directors
of the Company appears under the heading "Information Regarding Nominees and
Directors" in this Proxy Statement.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK AND UNITS
BENEFICIALLY OWNED
AS OF MARCH 20, 2000(1)
--------------------------------------------------
NAME OF BENEFICIAL OWNERS TITLE OF CLASS NUMBER PERCENT OF CLASS(2)
- ------------------------- -------------- --------- -------------------
<S> <C> <C> <C>
CLASS A
Michael Maturo...................................... Class A 588,528(3) 1.21%
Gregg M. Rechler.................................... Class A 983,360(4) 2.02%
Cohen & Steers Capital Management Inc.(5)........... Class A 5,937,300 14.82%
LaSalle Investment Management, Inc.(6).............. Class A 4,345,897 10.80%
Fidelity Management & Research Corp.(7)............. Class A 4,200,300 10.39%
European Investors Inc.(8).......................... Class A 2,970,639 7.42%
T. Rowe Price Associates, Inc. (9).................. Class A 2,567,809 6.20%
All directors and executive officers as a group (12
persons).......................................... Class A 7,581,699 14.82%
CLASS B
Morgan Stanley Dean Witter & Co.(10)................ Class B 2,200,988 20.99%
Heitman/PRA Securities Advisors LLC(11)............. Class B 1,447,906 13.81%
Taunus Corp.(12).................................... Class B 687,207 6.50%
All directors and executive officers as a group (12
persons).......................................... Class B 55,000 *
</TABLE>
- ------------------------
* Less than one percent.
(1) All information has been determined as of March 20, 2000. For purposes of
this table a person is deemed to have "beneficial ownership" of the number
of shares of Common Stock that person has the right to acquire pursuant to
the exercise of stock options within 60 days or upon the redemption of Units
(assuming the Company elects to issue Common Stock rather than pay cash upon
such redemption). Units are exchangeable for cash or, at the option of the
Company, on a one-for-one basis for shares of common stock, subject to
certain limitations. See "Executive Compensation" for a discussion of the
vesting of stock options granted to directors and officers.
(2) For purposes of computing the percentage of outstanding shares of Common
Stock held by each person, any shares of Common Stock which such person has
the right to acquire pursuant to the exercise of a stock option exercisable
within 60 days is deemed to be outstanding, but is not deemed to be
outstanding for the purposes of computing the percent ownership of any other
person. In addition, for purposes of such calculation, Units held by each
person are treated as if such person had converted and held the related
equivalent number of shares of Common Stock.
(3) Represents (a) 40,988 Units, (b) 70,040 shares of Class A Common Stock, and
(c) 477,500 exercisable options.
(4) Includes (a) 90,159 shares of Class A Common Stock, including 4,159 shares
held in trust for the child of Gregg M. Rechler, (b) 391,701 Units,
including 194,352 Units owned directly, 70,913 Units owned
14
<PAGE>
through a trust and 126,436 Units owned through corporations and
partnerships, and (c) 501,500 exercisable options.
(5) This information is based upon information reported by the stockholder in
filings made with the SEC. The address of Cohen & Steers Capital
Management Inc. is 757 Third Avenue, New York, NY 10019.
(6) This information is based upon information reported by the stockholder in
filings made with the SEC. LaSalle Investment Management, Inc. ("LaSalle")
owns 1,431,430 shares of Class A Common Stock of the Company (3.6% of total
shares of Class A Common Stock outstanding) and LaSalle Investment
Management (Securities), L.P. ("LIM"), a subsidiary of LaSalle, owns
2,914,467 shares of Class A Common Stock of the Company (7.2% of total
shares of Class A Common Stock outstanding). The address of both LaSalle and
LIM is 200 East Randolph Drive, Chicago, Illinois 60601.
(7) This information is based upon information reported by the stockholder in
filings made with the SEC. The address of Fidelity Management & Research
Corp. is 82 Devonshire Street, Boston, MA 02109.
(8) This information is based upon information reported by the stockholder in
filings made with the SEC. European Investors Inc. ("European") owns 684,739
shares of Class A Common Stock of the Company (1.71% of total shares of
Class A Common Stock outstanding) and EII Realty Securities ("EII"), a
wholly-owned subsidiary of European, owns 2,285,900 shares of Class A Common
Stock of the Company (5.71% of the shares of Class A Common Stock
outstanding). The address of both European and EII is 667 Madison Avenue,
New York, New York 10021.
(9) This information is based upon information reported by the stockholder in
filings made with the SEC. The address of T. Rowe Price Associates, Inc. is
100 East Pratt Street, Baltimore, Maryland 21202.
(10) This information is based upon information reported by the stockholder in
filings made with the SEC. Morgan Stanley Dean Witter & Co. ("MSDW") owns
1,204,015 shares of Class B Common Stock of the Company (11.48% of total
shares of Class B Common Stock outstanding) and Morgan Stanley Dean Witter
Investment Management Inc. ("MSDWIM"), a subsidiary of MSDW, owns 996,973
shares of Class B Common Stock of the Company (9.51% of total shares of
Class B Common Stock outstanding). The address of MSDW is 1585 Broadway, New
York, NY 10036 and the address of MSDWIM is 1221 Avenue of the Americas, New
York, NY 10020.
(11) This information is based upon information reported by the stockholder in
filings made with the SEC. The address of Heitman/PRA Securities Advisors
LLC is 180 North LaSalle Street, Suite 3600, Chicago, IL 60601.
(12) This information is based upon information reported in filings made with
the SEC on behalf of Taunus Corp. and Deutsche Bank Securities Inc.
("DBSI"). The principal place of business of Taunus Corp. and DBSI is 31
West 52(nd) Street, New York, NY 10019.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers and directors, and
persons who own more than 10% of a registered class of the Company's equity
securities ("10% Holders"), to file reports of ownership and changes in
ownership with the SEC and the New York Stock Exchange. Officers, directors and
10% Holders are required by SEC regulation to furnish the Company with copies of
all Section 16(a) forms that they file. To the Company's knowledge, based solely
on review of the copies of such reports furnished to the Company, all
Section 16(a) filing requirements applicable to its executive officers,
directors and 10% Holders were satisfied during 1999, except that Donald J.
Rechler, the Co-Chief Executive Officer and Chairman of the Board of the
Company, purchased 10,000 shares of Class B Common Stock of the Company on
December 16, 1999 and did not file a report until February 14, 2000.
15
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LEASE OF CORPORATE OFFICES
The Company leases approximately 31,403 square feet of office space at its
corporate offices located at 225 Broadhollow Road, at an annual base rent of
approximately $833,353 from a partnership in which Donald Rechler, Roger
Rechler, Mitchell Rechler and trusts established for Rechler family members
maintain an equity interest.
FRONTLINE CAPITAL GROUP
In 1998, the Company completed the spin-off distribution of the shares of
FrontLine. FrontLine is an operating company that acquires interests in and
develops a network of business-to-business e-commerce and e-services Internet
companies focused on serving small and medium sized enterprises, including
independent professionals, entrepreneurs and the mobile workforce of larger
companies. The Operating Partnership and FrontLine have entered into an
intercompany agreement to formalize their relationship and to limit conflicts of
interest.
Donald J. Rechler, Scott H. Rechler, Michael Maturo, Gregg Rechler, Mitchell
D. Rechler, Roger Rechler and Jason Barnett, each of whom serves as a director
and/or officer of the Company, serves as a director and/or officer of FrontLine
and collectively own approximately 25.6% of FrontLine's outstanding common stock
(assuming the exercise of vested stock options) as of March 20, 2000.
In June 1998, the Operating Partnership established a credit facility with
FrontLine (the "FrontLine Facility") in the amount of $100 million for
FrontLine's service sector operations and other general corporate purposes. As
of December 31, 1999, borrowings under the FrontLine Facility aggregated
approximately $79.5 million.
In addition, the Operating Partnership has approved the funding of
investments of up to $100 million with or in Reckson Strategic Venture Partners,
LLC ("RSVP") (the "RSVP Commitment"), through RSVP-controlled joint venture
REIT-qualified investments or advances made to FrontLine under a credit facility
with terms similar to the FrontLine Facility. As of December 31, 1999, the
Operating Partnership had made advances under the RSVP Facility aggregating
approximately $42.4 million and had invested approximately $24.8 million in
RSVP-controlled joint venture REIT-qualified investments.
In August 1999 the Operating Partnership's credit facilities with FrontLine
were amended in order to provide for obtaining letters of credit. In
November 1999, the Board of Directors of the Company approved such amendment,
and in consideration thereof FrontLine paid the Company a fee of approximately
$3.6 million in the form of shares of FrontLine common stock.
FrontLine and RSVP reimburse the Operating Partnership for certain general
and administrative expenses (including payroll expenses) incurred by the
Operating Partnership for their benefit. During 1999, FrontLine and RSVP
reimbursed the Operating Partnership approximately $525,000 for such expenses.
MISCELLANEOUS
During July 1999, the Company sold its interest in an 852,000 square foot
development property to Reckson Construction Group, Inc. ("RCG") in exchange for
a $12.3 million note. The note accrues interest annually at the rate of 12%, has
a five year maturity and is prepayable in whole or in part. During
October 1999, RCG made a payment to the Company, in the form of 97 shares of its
preferred stock, valued at approximately $4.0 million, towards accrued interest
and principal due under the note.
In 1999 the Company invested approximately $7.2 million, through a
subsidiary, in RAP Student Housing Properties, LLC ("RAP-SHP"), a company that
engages primarily in the acquisition and development of off-campus student
housing projects. The Company's investment was funded through the RSVP
Commitment. In addition, the Company has advanced approximately $3.2 million to
FrontLine through the RSVP Commitment for an additional investment in RSVP which
was invested in certain service
16
<PAGE>
business activities related to student housing. As of December 31, 1999, RAP-SHP
had investments in four off-campus student housing projects.
The Company leases approximately 56,416 square feet in a building located in
Farmingdale, New York at an annual base rent of approximately $533,384 to a
company affiliated with Leonard Feinstein, a director of the Company. The
Company also leases approximately 15,566 square feet in a building located in
Mitchel Field, New York, at an annual base rent of approximately $380,190 to a
company affiliated with Lewis S. Ranieri, a director of the Company. In
addition, the Company also leases approximately 5,144 square feet in the Omni in
Mitchel Field, New York at an annual base rent of approximately $158,000 to
RSVP. In March 2000, the Company leased approximately 15,000 square feet in a
building located in Manhattan, for six months at a rent of approximately
$450,000 to Frontline.
OTHER MATTERS
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
paid by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
STOCKHOLDER PROPOSALS
For a proposal of a stockholder to be presented to an annual meeting, other
than a stockholder proposal included in the Company's proxy statement pursuant
to Rule 14a-8 of the Exchange Act ("Rule 14a-8"), the Secretary of the Company
must receive written notice thereof on or before the date specified in the
Company's Bylaws, and the proponent or a representative of the proponent must
attend the annual meeting. In addition, pursuant to Rule 14a-4 of the Exchange
Act, if a stockholder failed to notify the Company at least 45 days before the
date on which the Company first mailed its proxy materials for the prior year's
annual meeting, management proxies are allowed to use their discretionary voting
authority when the proposal is raised at the annual meeting, without any
discussion of the matter in the proxy statement.
For a proposal of a stockholder to be presented at the Company's 2001 annual
meeting of stockholders, other than a stockholder proposal included in the
Company's proxy statement pursuant to Rule 14a-8, it must be received at the
principal executive offices of the Company after November 18, 2000 and on or
before February 23, 2001, unless the 2001 annual meeting of stockholders is
scheduled to take place before May 18, 2001. The Company's Bylaws provide that
any stockholder wishing to nominate a director or have a stockholder proposal,
other than a stockholder proposal included in the Company's proxy statement
pursuant to Rule 14a-8, considered at an annual meeting must provide written
notice of such nomination or proposal and appropriate supporting documentation,
as set forth in the Bylaws, to the Company at its principal executive offices
not less than 75 days nor more than 180 days prior to the anniversary of the
immediately preceding annual meeting of stockholders (the "Anniversary Date");
provided, however, that in the event that the annual meeting is scheduled to be
held more than seven calendar days prior, or more than 60 days subsequent, to
the Anniversary Date, such nominations or proposals must be delivered to the
Company not earlier than the 180th day prior to such meeting and not later than
the later of the 75th day prior to such annual meeting or the twentieth day
following the earlier of the day on which public announcement of the meeting is
first made or notice of the meeting is mailed to stockholders. Any such proposal
should be mailed to: Reckson Associates Realty Corp., 225 Broadhollow Road,
Melville, New York 11747, Attn: Gregg M. Rechler, Secretary.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
17
<PAGE>
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 18, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Donald Rechler and John
V.N. Klein, and either of them, as Proxies of the undersigned, with full power
of substitution, to vote all shares of Common Stock of Reckson Associates Realty
Corp. (the "Company") held of record by the undersigned as of the close of
business on March 20, 2000, on behalf of the undersigned at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at the Omni, 333 Earl Ovington
Boulevard, Mitchel Field, New York, 9:30 a.m., local time, on Thursday, May 18,
2000, and at any adjournments or postponements thereof.
When properly executed, this proxy will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is given, this proxy
will be voted FOR the three nominees of the Board of Directors listed in
Proposal 1 and FOR Proposal 2. In their discretion, the Proxies are each
authorized to vote upon such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof. A stockholder
wishing to vote in accordance with the Board of Directors' recommendations need
only sign and date this proxy and return it in the enclosed envelope.
-----------
Please vote and sign on other side and SEE REVERSE
return promptly in the enclosed envelope. SIDE
-----------
<PAGE>
- --------------------------------------------------------------------------------
|X| Please mark your votes as in this example.
<TABLE>
<S> <C> <C>
1. To elect three Class II Directors of the Company to serve until the 2003
Annual Meeting of Stockholders and until their respective successors are
duly elected
and qualified. FOR AGAINST ABSTAIN
Nominees: Donald J. Rechler, Mitchell D. Rechler, 2. To ratify the selection of |_| |_| |_|
Leonard Feinstein Ernst & Young LLP as the
independent auditors of
FOR WITHHELD the Company for the fiscal
|_| |_| year ending December 31, 2000.
|_| ___________________________ MARK HERE |_| 3. To consider and act upon any other matters that
For all nominees except as FOR ADDRESS may properly be brought before the Annual Meeting
noted above CHANGE AND and at any adjournments or postponements thereof.
NOTE BELOW
</TABLE>
The undersigned hereby acknowledge(s) receipt of a
copy of the accompanying Notice of Annual Meeting of
Stockholders, the Proxy Statement with respect
thereto and the Company's Annual Report to
Stockholders and hereby revoke(s) any proxy or
proxies heretofore given. This proxy may be revoked
at any time before it is exercised.
NOTE: Please sign exactly as name appears hereon.
Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such.
Signature:______________________________Date:________
Signature:______________________________Date:________
If Held Jointly
