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 Under Rule 14a-12
RECKSON ASSOCIATES REALTY CORP.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/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:
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(2) Aggregate number of securities to which transaction
applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(4) Date Filed:
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RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 2001
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NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Stockholders (the
"Annual Meeting") of Reckson Associates Realty Corp. (the "Company") will be
held on Thursday, May 24, 2001 at 10:00 a.m. at 1350 Avenue of the Americas, New
York, New York, in the MGM Theater on the ground floor, main lobby, for the
following purposes:
1. To elect three Class III directors of the Company to serve until the
2004 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, 2001; 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 23, 2001 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
April 6, 2001
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.
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
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PROXY STATEMENT
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FOR 2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 2001
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 2001 Annual Meeting of Stockholders of the Company to
be held on May 24, 2001, 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 III 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, 2001, 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 April 9, 2001. The Board
of Directors has fixed the close of business on March 23, 2001 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 45,812,864 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 III 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 III 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,
2001. 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.
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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 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 2000 Annual Report, including financial statements for the
fiscal year ended December 31, 2000, 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
2004 Annual Meeting and until their successors are duly elected and qualified.
The Board of Directors has nominated Mr. Roger Rechler, Mr. Harvey Blau and
Mr. John V. N. Klein to serve as Class III directors (the "Nominees"). Each of
the Nominees is currently serving as a Class III 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 III
directors at the Annual Meeting, the continuing directors whose terms expire at
the annual meetings of stockholders in 2002 and 2003 and the executive officers
who are not directors, based upon information furnished to the Company by each
director and executive officer.
AMOUNT AND NATURE
OF BENEFICIAL
DIRECTOR OWNERSHIP OF PERCENT OF
NAME AGE SINCE COMMON STOCK(1) CLASS(2)
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CLASS III NOMINEES FOR ELECTION AT 2001 ANNUAL
MEETING (TERM TO EXPIRE IN 2004)
Roger Rechler........................................ 59 1994 1,944,771(3) 3.03%
Harvey Blau.......................................... 65 1995 25,000(4) *
John V. N. Klein..................................... 69 1995 27,800(5) *
CLASS I CONTINUING DIRECTORS (TERM EXPIRES IN 2002)
Scott H. Rechler..................................... 33 1994 1,143,068(6) 1.78%
Herve A. Kevenides................................... 62 1995 25,000(4) *
Conrad D. Stephenson................................. 73 1995 25,000(4) *
Lewis S. Ranieri..................................... 54 1997 19,000(7) *
CLASS II CONTINUING DIRECTORS (TERM EXPIRES IN 2003)
Donald J. Rechler.................................... 66 1994 2,105,393(8) 3.27%
Mitchell D. Rechler.................................. 41 1994 1,103,462(9) 1.72%
Leonard Feinstein.................................... 63 1995 76,000(10) *
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* Less than one percent.
3
(1) All information has been determined as of March 23, 2001. For purposes of
this table a person is deemed to have "beneficial ownership" of the number
of shares of Class A common stock that a person has the right to acquire
pursuant to the exercise of stock options exercisable within sixty days or
the 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 Class A
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 Class A 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 Class A 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 Class A common stock.
(3) Includes (a) 522,937 shares of Class A common stock, including 514,767
shares owned directly and 8,170 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.
(4) Includes options to purchase 25,000 shares of Class A common stock.
(5) Includes (a) 2,800 shares of Class A common stock and (b) options to
purchase 25,000 shares of Class A common stock.
(6) Includes (a) 223,826 shares of Class A common stock, including 221,000
shares owned directly and 2,826 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.
(7) Includes options to purchase 19,000 shares of Class A common stock.
(8) Includes (a) 577,267 shares of Common Stock, including 572,267 shares of
Class A common stock owned directly 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.
(9) Includes (a) 203,608 shares of Class A common stock, including 198,000
shares owned directly and 5,608 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.
(10) Includes (a) 21,000 shares of Class A common stock owned directly,
(b) 25,000 exercisable options and (c) 30,000 shares of Class B common stock
owned indirectly through a partnership.
CLASS III NOMINEES FOR ELECTION AT 2001 ANNUAL MEETING--TERM TO EXPIRE IN 2004
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 initial public offering of its common
stock in June 1995 (the "IPO"), Mr. Rechler was a co-founder and general partner
of Reckson Associates. Mr. Rechler is responsible for the supervision of
property
4
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 Capital Group ("FrontLine") (formerly known as Reckson
Service Industries, Inc.). 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 and currently serves as Chairman for the firm.
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 six 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 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. Mr. Rechler serves as a Director of Keystone Property Trust
and is Chairman of the Board of Directors of HQ Global Holdings, Inc. He also 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 Chairman of
the Board 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
5
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 in 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 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 vice
chairman of Hyperion Capital Management, Inc. and chairman of Hyperion Total
Return Fund, Inc. He is a director of Transworld HealthCare, Inc., Hyperion 2002
Term Trust, Inc. and Hyperion 2005 Investment Grade Opportunity Trust, Inc.
Mr. Ranieri also serves as a director and/or an executive officer 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
Environmental Defense and Shrine of Elizabeth Ann Seton/Our Lady of the Rosary
Church.
CLASS II CONTINUING DIRECTORS--TERM EXPIRES 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 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 serves as a member of the Management Advisory
Committee of FrontLine. He also served as Chairman of the Board and a director
of FrontLine from 1998 to 2000. 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.
6
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 NASDAQ 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.
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 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 a director and
Treasurer of FrontLine, and served as its Executive Vice President and Chief
Financial Officer from 1998 to 2000. Mr. Maturo is 39 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 the Company.
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 of FrontLine. He served as a director of FrontLine from 1998 to 2000.
Mr. Rechler is 34 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 corporate 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 REITs including initial public offerings, joint ventures and
corporate and real estate acquisitions. Mr. Barnett holds a Bachelor of Arts
degree from Clark University and a JURIS DOCTOR from Emory University School of
Law. Mr. Barnett is a member of the American Bar Association, a member of the
Real Estate Board of New York, and is involved in various industry related
groups. Mr. Barnett is admitted to the Bar of the State of New York.
Mr. Barnett is a member of the Management Advisory Committee of FrontLine. He
also served as Executive Vice President, General Counsel and Assistant Secretary
of FrontLine from 1998 to 2000. Mr. Barnett is 32 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.
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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
six meetings during fiscal year 2000. 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 2000.
AUDIT COMMITTEE. The Company has a standing Audit Committee consisting of
Messrs. Feinstein, Stephenson and Klein, each of whom is "independent" as
defined in the New York Stock Exchange's listing standards. The Board of
Directors of the Company adopted a written charter for the Audit Committee, a
copy of which is included herein as Appendix A. Information regarding the
functions performed by the Audit Committee is set forth in the "Audit Committee
Report" included in this annual proxy statement. The Audit Committee held four
meetings during the fiscal year 2000.
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 Conrad D. Stephenson, has the authority
to approve the acquisition, financing and dispositions 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
four meetings during fiscal year 2000.
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 one meeting during fiscal year 2000.
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
At a meeting held in March 2001, the Board of Directors determined to
increase the compensation paid to each non-employee director of the Company,
after considering a report provided by FPL Associates, a consultant specializing
in compensation matters in the real estate industry, and other information. In
that regard, each of the non-employee directors of the Company receives an
annual director's fee of $22,000. Each non-employee director also receives
$1,000 for each regular quarterly meeting of the Board of Directors attended,
$1,000 for each special meeting of the Board of Directors attended, $500 for
each special telephonic meeting of the Board of Directors participated in and
$1,000 for each committee meeting attended. Each non-employee director appointed
or elected for the first time receives an initial option to purchase 7,500
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 6,250 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 25, 2000, in accordance with the Company's previous compensation
structure for non-employee directors, each non-employee director was granted an
option to purchase 2,000 shares of Class A common stock at $21.3125 per share.
8
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,
2001, 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.
FEE DISCLOSURE
AUDIT FEES. The aggregate fees billed by Ernst & Young LLP for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2000 and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for that
fiscal year were $304,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Ernst & Young
LLP did not provide any information technology services relating to financial
information systems design and implementation for the fiscal year ended
December 31, 2000.
ALL OTHER FEES. The aggregate fees billed by Ernst & Young LLP for services
rendered to the Company, other than the services described under "Audit Fees"
and "Financial Information Systems Design and Implementation Fees," for the
fiscal year ended December 31, 2000 were $610,000.
The Audit Committee has considered whether (and has determined that) the
provision by Ernst & Young LLP of the services described under "Financial
Information System Design and Implementation Fees" and "All Other Fees" is
compatible with maintaining Ernst & Young LLP's independence from management and
the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF THE INDEPENDENT AUDITORS.
9
REPORT OF THE AUDIT COMMITTEE
THE FOLLOWING IS A REPORT BY THE COMPANY'S AUDIT COMMITTEE REGARDING THE
RESPONSIBILITIES AND FUNCTIONS OF THE AUDIT COMMITTEE.
The Audit Committee, on behalf of the Board of Directors of the Company,
serves as an independent and objective party to monitor the Company's financial
reporting process and internal control system, and to review and appraise the
audit efforts of the Company's independent accountants. The Audit Committee
performs these oversight responsibilities in accordance with its Audit Committee
Charter, a copy of which is included as Appendix A to this annual proxy
statement. Management has the primary responsibility for the financial
statements and the reporting process including the systems of internal controls.
In fulfilling its oversight responsibilities, the Audit Committee reviewed with
management the audited financial statements in the Company's Annual Report, and
discussed the quality, not just the acceptability, of the accounting principles,
the reasonableness of significant judgments, and the clarity of disclosures in
the financial statements.
Additionally, the Audit Committee reviewed with the independent auditors,
who are responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under generally accepted auditing standards. The Audit
Committee also received the written disclosures and the letter from the
independent auditors required by the Independence Standards Board Standard
No. 1, discussed with the independent auditors the auditors' independence from
management and the Company and considered the compatibility of non-audit
services with the auditors' independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Audit Committee met with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2000 for filing with the Securities
and Exchange Commission.
Submitted by the Audit Committee
Of the Board of Directors of the
Company
Conrad D. Stephenson (Chairman)
Leonard Feinstein
John V. N. Klein
10
EXECUTIVE COMPENSATION
The following table sets forth information regarding the 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
$100,000 during the fiscal year ended December 31, 2000.
SUMMARY COMPENSATION TABLE
SALARY($)(1) BONUSES LONG TERM ALL OTHER
NAME AND PRINCIPAL POSITION YEAR (2) ($) OPTIONS(#)(3) ($)
--------------------------- -------- ------------ -------- ------------- ---------
Donald J. Rechler.......................... 2000 $525,000 $656,250 -- --
Co-Chief Executive Officer 1999 $525,000 $525,000 -- --
1998 $500,000 $500,000 122,500 --
Scott H. Rechler........................... 2000 $450,000 $562,500 -- --
Co-Chief Executive Officer and President 1999 $450,000 $450,000 -- --
1998 $400,000 $400,000 122,500 --
Michael Maturo............................. 2000 $400,000 $500,000 -- --
Executive Vice President, Chief Financial 1999 $375,000(4) $375,000 -- --
Officer and Treasurer 1998 $300,000(4) $300,000 122,500 --
Mitchell D. Rechler........................ 2000 $400,000 $500,000 -- --
Co-Chief Operating Officer, Executive 1999 $375,000 $375,000 -- --
Vice President and President of Reckson 1998 $300,000 $300,000 122,500 --
Management Group, Inc.
Gregg M. Rechler........................... 2000 $400,000 $500,000 -- --
Co-Chief Operating Officer, 1999 $375,000 $375,000 -- --
Executive Vice President, Secretary and 1998 $300,000 $300,000 122,500 --
President of Reckson Construction
Group, Inc.
------------------------
(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 Reckson Construction Group, Inc. 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 2000, 1999 and 1998,
respectively, pursuant to the terms of the 1997 Stock Loans and the 1999
Stock Loans in the following amounts: Donald J. Rechler-$481,400, $290,100
and $314,000, Scott H. Rechler-$395,700, $217,600 and $235,600, Michael
Maturo-$293,500, $174,200 and $184,400, Mitchell D. Rechler-$293,500,
$174,200 and $184,400 and Gregg M. Rechler-$308,600, $183,200 and $193,900.
(3) As of March 23, 2001, options to purchase 2,524,500 shares of Class A common
stock have been granted to the Named Executive Officers.
(4) Excludes loan forgiveness in the amount of $100,000 pursuant to the terms of
Mr. Maturo's 1995 employment and noncompetition agreement with the Company.
11
The following table sets forth the value of options at the end of 2000 by
the Company's Named Executive Officers and information concerning each exercise
of stock options by the Named Executive Officers during the 2000 fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
AGGREGATED FISCAL YEAR-END 2000 OPTION VALUES
NUMBER OF SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
SHARES YEAR-END(#) YEAR-END($)(2)
ACQUIRED ON VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($)(1) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------------- ----------------- -----------------
Donald J. Rechler..................... -- -- 517,500/0 $ 594,600/$0
Scott H. Rechler...................... -- -- 526,500/0 $1,688,455/$0
Michael Maturo........................ -- -- 477,500/0 $1,432,189/$0
Mitchell D. Rechler................... -- -- 501,500/0 $1,688,455/$0
Gregg M. Rechler...................... 84,000 $658,100 417,500/0 $ 594,600/$0
------------------------
(1) The aggregate dollar value realized upon exercise was determined based on
the difference between the market price of the Company's Class A common
stock on the date of exercise and the exercise price of the options.
(2) The value of unexercised in-the-money options at fiscal year-end based on
the fair market value of the Class A common stock of $25.0625 per share, as
of December 31, 2000.
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 M. Rechler were
renewed as of August 15, 2000 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 60 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) or the
resignation of 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 which
engages or attempts to engage in, directly or indirectly, the acquisition,
development, construction, operation, management or leasing of any industrial or
office real estate property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which the Company
is operating ("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
12
Noncompetition Period for each such Executive Officer is the period beginning on
the date of the termination of employment and ending on the later of (i) the
first anniversary of such person's termination of employment with the Company
and (ii) the third anniversary of the person's prior 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 (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, which in turn is forgiven
(together with accrued interest thereon and on the Loan) over the sixth through
eighth anniversaries of the date the Loan was made.
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 non-employee 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 2001,
the Compensation Committee fixed the base salaries for the Named Executive
Officers for the fiscal year ending December 31, 2001 and determined incentive
compensation awards for such officers in respect of the fiscal year ended
December 31, 2000.
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 2000 fiscal year, in terms of a 12.1% increase in
fully diluted Funds From Operations per share in 2000 over levels achieved in
1999, and a total return to shareholders of Class A common stock in the year
2000 of 30.5%. The Committee also considered the efforts of the Named Executive
Officers with respect to the strong leasing activity at the Company's
properties, including the leasing of a record 4 million square feet and the
stabilization of over $500 million of value creation projects generating yields
in excess of 12%. In addition, the Compensation Committee considered the
performance of the Company's 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.
13
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 2000, the Compensation Committee
determined base salaries for the Named Executive Officers upon the Committee's
review of the performance of each Named Executive Officer during the previous
year 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 and were determined at the discretion of the Board of Directors based
upon the overall performance of the Company, the personal performance of each
executive and the report prepared by FPL.
The Compensation Committee awarded the following cash bonuses to the
following Named Executive Officers in March 2001 in respect of the fiscal year
ended December 31, 2000: Michael Maturo-$500,000, Mitchell D. Rechler-$500,000,
and Gregg M. Rechler-$500,000. The cash bonus awards to Donald J. Rechler and
Scott Rechler are discussed separately below. In determining incentive
compensation for 2000, 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
2000 fiscal year.
In March 2001, the Compensation Committee awarded each of the Named
Executive Officers loans from the Company to purchase shares of Class A common
stock of the Company in respect of the fiscal year ended December 31, 2000 (the
"2000 Stock Loans"). The initial principal amount of the 2000 Stock Loans is
$1,177,000 in the case of each of Mitchell D. Rechler, Gregg M. Rechler and
Michael Maturo. Each 2000 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 Class A common stock purchased and is otherwise
non-recourse. 40% of each Named Executive Officer's 2000 Stock Loan (together
with accrued interest on the 2000 Stock Loan) will be forgiven ratably each year
during the ten year term of the 2000 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 2000 Stock Loan that is not forgiven in respect of such year will be carried
forward and forgiven in a subsequent year only if, on a cumulative basis, 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
2000 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
2000 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.
14
In 1999, as a long-term incentive award, each of the Company's Named
Executive Officers received loans from the Company to purchase shares of
Class A common stock of the Company (the "1999 Stock Loans"). Pursuant to the
terms of the 1999 Stock Loans, in 2000, 10% of the 1999 Stock Loan of each Named
Executive Officer was forgiven and the Company paid to each Named Executive
Officer the following amounts, representing tax payments: Michael
Maturo-$42,800, Mitchell D. Rechler-$42,800 and Gregg M. Rechler-$47,600.
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
Class A common stock of the Company (the "1997 Stock Loans"). Pursuant to the
terms of the 1997 Stock Loans, in 2000, 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-$93,000, Mitchell D. Rechler-$93,000 and Gregg M. Rechler-$103,400.
2000 CO-CHIEF EXECUTIVE OFFICER COMPENSATION. Donald J. Rechler and
Scott H. Rechler's base salaries for the fiscal year ended December 31, 2000
were $525,000 and $450,000, respectively, as determined by the Compensation
Committee.
For the fiscal year ended December 31, 2000, the Compensation Committee
awarded to Donald J. Rechler and Scott H. Rechler cash bonuses of $656,250 and
$562,500, 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 12.1% increase in fully diluted Funds From Operations
per share in 2000 over levels achieved in 1999 and a total return to
shareholders of Class A common stock in the year 2000 of 30.5%. The Committee
also considered the efforts of the Named Executive Officers with respect to the
strong 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 of Donald
J. Rechler and Scott H. Rechler 2000 Stock Loans in the amount of $1,177,000 in
accordance with the terms described above relating to the other Named Executive
Officers of the Company, including the related tax payments. The terms of the
2000 Stock Loans and the related tax payments are described above under
"--Long-Term Incentives." In addition, in 2000, Donald J. Rechler and Scott H.
Rechler received tax payments from the Company in the amount of $64,300 each
relating to the forgiveness of 10% of each of their respective 1999 Stock Loans
and $158,600 and $119,000, 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 approximately $1,923,000 to its
Named Executive Officers during 2000 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
15
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 25, 1995
(the date upon which the Company's Class A common stock commenced trading on the
New York Stock Exchange) to December 31, 2000 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 25, 1995 and in the S&P 500 and the NAREIT Equity REIT Total
Return Index on May 31, 1995 and (ii) reinvestment of dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/95 6/95 9/95 12/95 3/96 6/96
Reckson Associates Realty Corp. - Common A 100.00 100.00 110.06 127.12 132.53 145.54
S&P 500 100.00 104.04 111.62 117.64 123.29 128.09
NAREIT Equity REIT Total Return Index 100.00 101.59 106.38 110.78 113.30 118.34
9/96 12/96 3/97 6/97 9/97 12/97
Reckson Associates Realty Corp. - Common A 166.87 193.02 213.54 215.82 253.08 247.11
S&P 500 131.27 141.48 144.60 169.06 180.92 185.35
NAREIT Equity REIT Total Return Index 126.09 149.85 150.90 158.40 177.12 180.21
3/98 6/98 9/98 12/98 3/99 6/99
Reckson Associates Realty Corp. - Common A 256.85 232.97 234.84 228.63 211.88 246.74
S&P 500 210.43 216.55 194.24 234.78 245.69 262.18
NAREIT Equity REIT Total Return Index 179.37 171.15 153.14 148.67 141.51 155.77
9/99 12/99 3/00 6/00 9/00 12/00
Reckson Associates Realty Corp. - Common A 221.55 226.61 207.26 267.54 291.55 295.66
S&P 500 244.99 280.62 286.22 277.82 274.36 252.16
NAREIT Equity REIT Total Return Index 143.25 141.80 145.20 160.49 172.77 179.19
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, 2000 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.
16
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/99 6/99 9/99 12/99 3/00 6/00 9/00 12/00
Reckson Associates Realty Corp. - Common B 100.00 86.43 80.67 86.21 79.82 101.61 109.23 113.90
S&P 500 100.00 104.19 97.36 111.52 113.74 110.40 109.03 100.21
NAREIT Equity REIT Total Return Index 100.00 98.38 90.47 89.56 91.70 101.36 109.11 113.17
17
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 common stock of the Company, (ii) each Named 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.
SHARES OF COMMON
STOCK AND UNITS
BENEFICIALLY OWNED
AS OF MARCH 23, 2001(1)
--------------------------------------------
TITLE OF
NAME OF BENEFICIAL OWNERS CLASS NUMBER PERCENT OF CLASS(2)
------------------------- -------- --------- -------------------
CLASS A
Michael Maturo (3).................................... Class A 688,528 1.28%
Gregg M. Rechler (4).................................. Class A 1,000,166 1.85%
Cohen & Steers Capital Management Inc. (5)............ Class A 5,404,900 11.80%
Stichting Pensioenfonds ABP (6)....................... Class A 4,478,358 9.78%
LaSalle Investment Management, Inc. (7)............... Class A 4,231,679 9.24%
Fidelity Management & Research Corp. (8).............. Class A 3,809,795 8.32%
Franklin Resources, Inc. (9).......................... Class A 3,712,159 8.10%
T. Rowe Price Associates, Inc. (10)................... Class A 2,474,116 5.40%
Wellington Management Company, LLP (11)............... Class A 2,470,200 5.39%
All directors and executive officers as a group
(13 persons)........................................ Class A 8,414,089 14.85%
CLASS B
Franklin Resources, Inc. (9).......................... Class B 675,265 6.57%
Paloma International, L.P. (12)....................... Class B 592,800 5.76%
Heitman/PRA Securities Advisors LLC (13).............. Class B 576,485 5.61%
All directors and executive officers as a group
(13 persons)........................................ Class B 35,836 *
------------------------
* Less than one percent.
(1) All information has been determined as of March 23, 2001. For purposes of
this table a person is deemed to have "beneficial ownership" of the number
of shares of Class A 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 Class A 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
Class A 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 Class A 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 Class A common stock.
(3) Represents (a) 40,988 Units, (b) 170,040 shares of Class A common stock, and
(c) 477,500 exercisable options.
18
(4) Includes (a) 190,965 shares of Class A common stock, including 186,000
shares owned directly and 4,965 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 through a trust and 126,436 Units owned through
corporations and partnerships, and (c) 417,500 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. The address of Stichting Pensioenfonds ABP is
Oude Lindestraat 70, Postbus 2889, 6401 DL Heerlen, The Netherlands.
(7) This information is based upon information reported by the stockholder in
filings made with the SEC. LaSalle Investment Management, Inc. ("LaSalle")
owns 1,181,672 shares of Class A common stock of the Company (2.58% of total
shares of Class A common stock outstanding) and LaSalle Investment
Management (Securities), L.P. ("LIM"), a subsidiary of LaSalle, owns
3,050,007 shares of Class A common stock of the Company (6.66% of total
shares of Class A common stock outstanding). The address of both LaSalle and
LIM is 200 East Randolph Drive, Chicago, IL 60601.
(8) This information is based upon information reported by the stockholder in
filings made with the SEC. Fidelity Management & Research Company owns
2,443,745 shares of Class A common stock of the Company (5.33% of total
shares of Class A common stock outstanding) and Fidelity Management Trust
Company owns 1,366,050 shares of Class A common stock of the Company (2.99%
of the total shares of Class A common stock outstanding). The address of
Fidelity Management & Research Corp. is 82 Devonshire Street, Boston, MA
02109.
(9) This information is based upon information reported in filings made with the
SEC on behalf of Franklin Resources, Inc., Franklin Advisers, Inc., Charles
B. Johnson and Rupert H. Johnson, Jr. The principal place of business of the
filers is 777 Mariners Island Boulevard, San Mateo, CA 94404.
(10) 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, MD 21202.
(11) This information is based upon information reported by the stockholder in
filings made with the SEC. The address of Wellington Management Company, LLP
is 75 State Street, Boston, MA 02109.
(12) This information is based upon information reported in filings made with
the SEC on behalf of Paloma International L.P. ("Paloma"), S. Donald
Sussman, Amaranth L.L.C. ("Amaranth") and Nicholas M. Maounis. Paloma and
Sussman collectively own 296,200 shares of Class B common stock of the
Company (2.88% of total shares of Class B common stock outstanding) and
Amaranth and Maounis collectively own 296,600 shares of Class B common stock
of the Company (2.88% of total shares of Class B common stock outstanding).
The principal place of business of the filers is 2 American Lane, Greenwich,
CT 06836-2571.
(13) 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.
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 2000, except that Gregg M.
Rechler, Executive Vice President of the Company, exercised stock options for
84,000 shares of Class A common stock of the Company, and simultaneously sold
such shares, on April 12, 2000 and did not file a report until February 14,
2001.
19
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LEASE OF CORPORATE OFFICES
The Company leases approximately 34,485 square feet of office space at its
corporate offices located at 225 Broadhollow Road, at an annual base rent of
approximately $882,696 from a partnership in which Donald J. Rechler, Roger
Rechler, Mitchell D. 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 manages companies which leverage the Internet and which
service small and medium-size enterprises ("SMEs") and mobile workforces of
larger companies. FrontLine has two distinct operating segments: one holds
FrontLine's interest in HQ Global Workplaces, Inc., the world's largest provider
of officing solutions, and its predecessor companies, and the other consists of
FrontLine and its interests in a group of companies which provide a wide range
of services to the SME marketplace. In October 2000, FrontLine announced that it
would focus its resources and capital on the businesses within its existing
portfolio and cease pursuing new investment activities. The Operating
Partnership and FrontLine entered into an intercompany agreement to formalize
their relationship and to limit conflicts of interest.
Scott H. Rechler, Michael Maturo, Mitchell D. Rechler and Roger Rechler,
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 15.1% of
FrontLine's outstanding common stock (assuming the exercise of vested stock
options) as of March 23, 2001.
In June 1998, the Operating Partnership established a credit facility with
FrontLine (the "FrontLine Facility") in the amount of $100 million for FrontLine
to use in its investment activities, operations and other general corporate
purposes. As of December 31, 2000, the Operating Partnership had advanced
approximately $93.4 million under the FrontLine Facility.
In addition, the Operating Partnership approved the funding of investments
of up to $100 million with or in Reckson Strategic Venture Partners, LLC
("RSVP") (the "RSVP Commitment" and, together with the FrontLine Facility, the
"Credit Facilities"), through RSVP-controlled joint ventures (for REIT-qualified
investments) or advances made to FrontLine under terms similar to the FrontLine
Facility. As of December 31, 2000, approximately $83.2 million had been funded
through the RSVP Commitment, of which $41.1 million represents investments in
RSVP-controlled (REIT-qualified) joint ventures and $42.1 million represents
advances. In March 2001, the Operating Partnership increased the RSVP Commitment
to $110 million and advanced approximately $24 million under the RSVP Commitment
to fund additional RSVP-controlled (REIT-qualified) joint ventures.
In March 2001, the Credit Facilities were amended to provide that
(i) interest is payable only at maturity and (ii) the Company may transfer all
or any portion of its rights or obligations under the Credit Facilities to its
affiliates. The Company requested these changes as a result of changes in REIT
tax laws.
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 2000, FrontLine and RSVP
reimbursed the Operating Partnership approximately $963,000 for such expenses.
MISCELLANEOUS
The Company leases approximately 66,000 square feet in a building located in
Farmingdale, New York at an annual base rent of approximately $623,000 to a
company affiliated with Leonard Feinstein, a director of the Company. The
Company also leases approximately 16,000 square feet in a building located in
Mitchel Field, New York, at an annual base rent of approximately $392,000 to a
company affiliated with Lewis S. Ranieri, a director of the Company. In
addition, the Company also leases approximately 5,000
20
square feet in the Omni in Mitchel Field, New York at an annual base rent of
approximately $164,000 to RSVP.
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 2002 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 25, 2001 and on or
before January 24, 2002, unless the 2002 annual meeting of stockholders is
scheduled to take place before May 24, 2002. 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 120 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 120th 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.
21
APPENDIX A
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF
RECKSON ASSOCIATES REALTY CORP.
CHARTER (FEBRUARY 23, 2000)
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Company to any
governmental body or the public; the Company's systems of internal controls
regarding finance, accounting, legal compliance and ethics that management and
the Board have established; and the Company's auditing, accounting and financial
reporting processes generally. Consistent with this function, the Audit
Committee should encourage continuous improvement of, and should foster
adherence to, the Company's policies, procedures and practices at all levels.
The Audit Committee's primary duties and responsibilities are to:
Serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system.
Review and appraise the audit efforts of the Company's independent
accountants, recognizing that the independent accountants are ultimately
accountable to the Board of Directors and/or the Audit Committee and that the
Board of Directors and/or the Audit Committee have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace the outside
auditor (or nominate the outside auditor to be proposed for shareholder approval
in any proxy statement).
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section III. of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be "independent directors" as such
term may be defined in the listing standards of NYSE or other national
securities exchange upon which the Company's securities may be listed. Under the
current definition, members of the Committee shall be considered independent if
they have no relationship to the Company that may interfere with the exercise of
their independence from management and the Company, including, but not limited
to:
EMPLOYEES. A director who is an employee (including non-employee
executive officers) of the Company or any of its affiliates may not serve on
the Audit Committee until three years following the termination of his or
her employment. In the event the employment relationship is with a former
parent or predecessor of the Company, the director may serve on the Audit
Committee after three years following the termination of the relationship
between the Company and the former parent or predecessor.
BUSINESS RELATIONSHIP. A director (i) who is a partner, controlling
shareholder, or executive officer of an organization that has a business
relationship with the Company, or (ii) who has a direct business
relationship with the Company (e.g., a consultant) may serve on the Audit
Committee only if the Board determines in its business judgment that the
relationship does not interfere with the director's exercise of independent
judgment. In making a determination regarding the independence of a director
pursuant to this paragraph, the Board will consider, among other things, the
materiality of the relationship to the Company, to the director, and, if
applicable, to the organization with which the director is affiliated.
"Business relationships" can include commercial, industrial, banking,
consulting, legal, accounting and other relationships. A director can have
this relationship directly with the Company, or the director can be a
partner, officer or employee of an organization that has such a
relationship. The director may serve on the Audit Committee without the
above-referenced Board of Directors'
A-1
determination after three years following the termination of, as applicable,
either (1) the relationship between the organization with which the director
is affiliated and the Company, (2) the relationship between the director and
his or her partnership status, shareholder interest or executive officer
position, or (3) the direct business relationship between the director and
the Company.
CROSS COMPENSATION COMMITTEE LINK. A director who is employed as an
executive of another entity where any of the Company's executives serve on
that entity's compensation committee.
IMMEDIATE FAMILY. A director who is a member of the immediate family of
an individual who is, or has been in any of the past three years, employed
by the Company or any of its affiliates as an executive officer.
"Immediate Family" includes a person's spouse, parents, children,
siblings, mothers-in-law and fathers-in-law, sons and daughters-in-law,
brothers and sisters-in-law, and anyone (other than employees) who shares
such person's home.
"Affiliate" includes a subsidiary, sibling company, predecessor, parent
company, or former parent company.
All members of the Audit Committee shall have a working familiarity with
basic finance and accounting practices, and at least one member of the Audit
Committee shall have accounting or related financial management expertise. Audit
Committee members may enhance their familiarity with finance and accounting by
participating in educational programs conducted by the Company or an outside
consultant.
The members of the Audit Committee shall be elected by the Board at the
annual organizational meeting of the Board or until their successors shall be
duly elected and qualified. Unless a Chair is elected by the full Board, the
members of the Audit Committee may designate a Chair by majority vote of the
full Audit Committee membership.
III. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
DOCUMENTS/REPORTS REVIEW
1. Review and update this Charter periodically, at least annually, as
conditions dictate.
2. Review the Company's annual financial statements and any reports or
other financial information submitted to any governmental body, or the
public, including any certification, report, opinion, or review rendered
by the independent accountants.
3. Review quarterly financial information and other data prior to public
release of quarterly earnings information.
4. Review with management and the independent accountant at the completion
of the annual audit:
- The Company's annual financial statements and related footnotes and the
Company's annual report on Form 10-K.
- The independent accountant's audit of the financial statements and his
or her report thereon.
- Any significant changes required in the independent accountant's audit
plan.
- Any serious difficulties or disputes with management encountered during
the course of the audit.
- Other matters related to the conduct of the audit which are to be
communicated to the committee under generally accepted auditing
standards.
INDEPENDENT ACCOUNTANTS
5. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve the
fees and other compensation to be paid to the independent accountants. On
an annual basis, the Committee shall review and discuss with the
A-2
accountants all non-audit services (and/or associated fees) and other
relationships the accountants and its affiliates have with the Company to
determine the accountants' independence. Review annually independent
accountants' letter relating to their independence.
6. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
7. Periodically consult with the independent accountants out of the
presence of management about internal controls and the fullness and
accuracy of the Company's financial statements.
FINANCIAL REPORTING PROCESSES
8. Review with management and the independent accountants the integrity of
the Company's internal controls and procedures.
9. In consultation with the independent accountants, review the integrity
of the Company's financial reporting processes, both internal and
external, and any difficulties encountered in the course of their audits,
including any restrictions on the scope of their work or access to
required information.
10. Consider the independent accountants' judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
11. Consider and approve, if appropriate, major changes to the Company's
auditing and accounting principles and practices as suggested by the
independent accountants or management.
PROCESS IMPROVEMENT
12. Establish regular and separate systems of reporting to the Audit
Committee by each of management and the independent accountants regarding
any significant judgments made in management's preparation of the
financial statements and the view of each as to appropriateness of such
judgments.
13. Following completion of the annual audit, review separately with each of
management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions on
the scope of work or access to required information.
14. Review any significant disagreement among management and the independent
accountants in connection with the preparation of the financial
statements.
15. Review with the independent accountants and management the extent to
which changes or improvements in financial or accounting practices, as
approved by the Audit Committee, have been implemented. (This review
should be conducted at an appropriate time subsequent to implementation
of changes or improvements, as decided by the Committee.)
LEGAL COMPLIANCE
16. Review, with the Company's counsel, legal compliance matters including
corporate securities trading policies.
17. Review, with management, Company's counsel and the independent
accountants annually, the Company's compliance with rules and regulations
relating to its status as a real estate investment trust.
18. Review, with the Company's counsel, any legal matter that could have a
significant impact on the Company's financial statements.
19. Perform any other activities consistent with this Charter, the Company's
By-laws and governing law, as the Committee or the Board deems necessary
or appropriate.
A-3
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 24, 2001
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 23, 2001, on behalf of the undersigned at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at 1350 Avenue of the
Americas, New York, New York, in the MGM Theater on the ground floor, main
lobby, 10:00 a.m., local time, on Thursday, May 24, 2001, 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
return promptly in the enclosed envelope. REVERSE
SIDE
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/X/ Please mark your votes as in this example.
1. To elect three Class III Directors of the Company
to serve until the 2004 Annual Meeting of
Stockholders and until their respective successors
are duly elected and qualified. FOR AGAINST ABSTAIN
Nominees: Roger Rechler, Harvey Blau, 2. To ratify the selection of / / / / / /
John V.N. Klein Ernst & Young LLP as the
independent auditors of the
the Company for the fiscal
FOR WITHHELD year ending December 31, 2001.
/ / / /
/ /___________________________ MARK HERE / / 3. To consider and act upon any
For all nominees except as noted FOR ADDRESS other matters that may properly
above CHANGE AND be brought before the Annual
NOTE BELOW Meeting and at any adjournments
or postponements thereof.
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
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