SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[ ] Preliminary Proxy Statement
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(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
BRT REALTY TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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BRT REALTY TRUST
60 Cutter Mill Road
SuiteCUTTER MILL ROAD
SUITE 303
Great Neck, New YorkGREAT NECK, NEW YORK 11021
(516) 466-3100
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Notice of Annual Meeting of Shareholders
March 11, 2002---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 15, 2004
---------------------
The Annual Meeting of Shareholders of BRT Realty Trust will be held on
Monday, March 11, 2002,15, 2004, at 9:00 a.m. (local time), at the offices of BRT Realty
Trust, 60 Cutter Mill Road, Suite 303, Great Neck, N.Y.: for the following
purposes:
1. To elect twoone Class III Trustees;II Trustee to serve until the 2007 Annual Meeting of
Shareholders;
2. To approve an amendment to the 1996 Stock Option Plan to increase
the number of shares available under the Plan by 250,000 shares;
3. To ratify the selection by the Board of Trustees of Ernst & Young LLP as independent auditors
for the 20022004 fiscal year; 4.and
3. To transact any other business as may properly come before the meeting.
Shareholders of record at the close of business on January 21, 200220, 2004 will be
entitled to notice of and to vote at the meeting. It is important that your
shares be represented and voted at the meeting. You can vote your shares by
completing and returning the proxy card sent to you. MostCertain shareholders can
also vote their shares over the internet or by telephone. If internet or
telephone voting is available to you, voting instructions are printed on the
proxy card sent to you. You can revoke a proxy at any time prior to its exercise
at the meeting by following the instructions in the accompanying proxy
statement.
Simeon Brinberg
Secretary
Great Neck, New York
January 25, 200228, 2004
BRT REALTY TRUST
60 Cutter Mill Road
SuiteCUTTER MILL ROAD
SUITE 303
Great Neck, New YorkGREAT NECK, NEW YORK 11021
------------------------------------
PROXY STATEMENT
We are providing this Proxy Statement to the shareholders of BRT Realty
Trust ("BRT") in connection with the solicitation of proxies by theour Board of Trustees
of BRT to be votedfor use at the Annual Meeting of Shareholders. In this Proxy Statement we refer
to BRT Realty Trust as "BRT", "we", "our" or the "Trust". The Annual Meeting
will be held at theour offices, of BRT, 60 Cutter Mill Road, Suite 303, Great Neck, New
York, at 9:00 A.M., on Monday, March 11, 2002.15, 2004.
The date of this Proxy Statement is January 25, 2002,28, 2004, the approximate date
on which we are mailing this Proxy Statement and the accompanying form of proxy
to shareholders. BRT'sOur fiscal year begins on October 1st and ends on September
30th. References in thethis Proxy Statement to the year 20012003 or fiscal 20012003 refers
to the twelve month period from October 1, 20002002 to September 30, 2001.2003.
The executive offices of BRT are located at 60 Cutter Mill Road, Suite 303,
Great Neck, New York, 11021. Our telephone number is (516) 466-3100.
VOTING PROCEDURES
Shareholders of record at the close of business on January 21, 2002
(the "Record Date")20, 2004 are
entitled to notice of and to vote at the Annual Meeting. You are entitled to one
vote for each share of Beneficial Interest you own on the Record Date.January 20, 2004. On
the Record DateJanuary 20, 2004 there were 7,379,6397,598,940 shares outstanding. In order to carry on
the business at the Annual Meeting, we must have a quorum present in person or
by proxy. This means that at least a majority of the outstanding shares must be
represented at the Annual Meeting, either in person or by proxy. The affirmative
vote of a plurality of the outstanding shares of Beneficial Interest ("Shares") outstanding. A quorum (holders of a majority ofpresent and
voting at the Shares
present in person or represented by proxy) is required to hold the meeting. When
a quorum is present, the voting of the holders of a majority of Shares presentAnnual Meeting, in person or by proxy, is required to elect the
two nominees fornominee as a Class III
Trustee,II Trustee. The affirmative vote of a majority of the
outstanding shares of Beneficial Interest is required to ratify the selection of
Ernst & Young LLP as BRT's independent auditors for fiscal 2002, and to approve any other matter that properly comes
before the meeting. The voting of a majority of the outstanding Shares is
required to approve the amendment to the 1996 Stock Option Plan increasing the
number of Shares available under the Plan by 250,000 Shares.auditors. There is no cumulative voting in
connection with the election of Trustees.the Trustee.
Because many shareholders can notcannot attend the meeting in person, it is
necessary that a large number of shares be represented by proxy. Most
shareholders have a choice of voting over the internet, by using a toll-free
telephone number or by completing a proxy card and mailing it in the postage
paid envelope provided. Please refer to your proxy card or to the information
provided by your bank, broker, or other holder of record to see which options
are available to you. You should be aware that if you vote over the internet,
you may incur costs, such as telephone and internet access charges for which you
will be responsible. The internet and telephone voting facilities for
shareholders of record will close at 12:01 a.m., E.S.T. on March 11, 2002.15, 2004. If
you vote by telephone or via the internet, it is not necessary to return a proxy
card. The internet and telephone voting procedures are designed to authenticate
shareholders by use of a control
number, and to allow you to confirm that your instructions have been
properly recorded.
If you wish to name as a proxy someone other than the proxies named on the
proxy card, you may do so by crossing out the namenames of the designated proxies
and inserting the name of another person. In that case it will be necessary to
sign the proxy card and deliver it to the person so named and for the person so
named to be present at and to vote at the meeting. Proxy cards so marked should
not be mailed to BRTus or to American Stock Transfer and Trust Company.
You can revoke your proxy at any time before it is exercised. To revoke
your proxy you may file a written revocation with BRT'sour Secretary, or you may
deliver a properly executed proxy bearing a later date (including andate. If you vote by telephone
or internet, you may also revoke your proxy with a timely and valid later
telephone or telephone vote).internet vote, as the case may be. You may also revoke your proxy
by attending the meeting and voting in person. If not so revoked, the Sharesshares
represented by such proxy will be voted.
2
Votes withheld from nomineesthe nominee for Trustee, abstentions on proposalsthe proposal
relating to the selection of the independent auditors and broker non-votes are
counted as present and entitled to vote for purposes of determining whether a
quorum has been reached. Votes withheld from nomineesthe nominee for Trustee and
abstentions on proposalsthe proposal relating to the selection of the independent
auditors have the same effect as votes against them. Broker non-votes have the
same effect as a vote against the selection of the independent auditors, but
will have no effect on the outcome of the election of Trustees, the approvalTrustee.
If you hold your shares through a broker, your shares may be voted even if
you do not vote or attend the Annual Meeting. Under the rules of the amendmentNew York
Stock Exchange, if you hold your shares through a broker, your broker is
permitted to vote your shares on the election of the Trustee and on the proposal
relating to the 1996 Stock Option Plan orselection of the other proposals.independent auditors even if the broker does
not receive instructions from you.
All Sharesshares of Beneficial Interest entitled to vote and represented by
properly completed proxies received prior to the meeting and not revoked will be
voted at the meeting in accordance with your instructions. If no choice is
indicated on the proxy card, the persons named as your proxies will vote the
Sharesshares "FOR" the nomineesnominee for Class IIIII Trustee and "FOR" all other proposals described in this
Proxy Statementthe selection of Ernst &
Young LLP as independent auditors for the 2004 fiscal year, and as the proxy
holders may determine, in their discretion, with respect to other matters that
properly come before the meeting. RepresentativesThe Board of Trustees is not currently aware
of any business to be acted upon at the Annual Meeting other than that which is
described in this Proxy Statement. A representative of American Stock Transfer
and Trust Company will tabulate the votes and act as inspectorsinspector of election.elections.
COST OF PROXY SOLICITATION
BRTWe will pay the cost of soliciting proxies. In addition to the solicitation
of proxies by mail and through itsour regular employees, BRTwe will request banks,
brokers, custodians, nominees and other record holders to forward copies of the
Proxy Statement and other soliciting materials to persons for whom they hold
Sharesshares of Beneficial Interest and to request authority for the exercise of
proxies; in such
cases, BRTproxies. We will reimburse banks and brokerage houses and otherssuch record holders for their reasonable
out-of-pocket expenses in forwarding proxies and proxy materials to
shareholders.
3
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, TRUSTEES AND OFFICERS
The following table sets forth information concerning share ownershipshares of Beneficial
Interest owned by (i) all persons known by BRT to own beneficially 5% or more of its Shares,our
outstanding shares of Beneficial Interest, (ii) all Trustees and nomineesthe nominee for
Trustee, (iii)each executive officer named in the Summary Compensation Table,
and (iv) all Trustees and executive officers of the Trust as a group, based upon the number of outstanding Shares on January 21, 2002. There
were 7,379,639 Shares outstanding on January 21, 2002.
Amount of
Name of Beneficial Beneficial Percent
Owner Ownership (1) of Class
----- ------------- --------
Gould Investors, L.P. (2) 2,105,117 28.46%
Patrick J. Callan 47,500group.
AMOUNT OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- ------------------------ ------------ --------
Gould Investors L.P.(2)..................................... 2,108,048 27.59%
Patrick J. Callan(3)........................................ 50,750 *
280 Park Avenue,
38th Floor West
New York, NY 10017
Fredric H. Gould(2)(3)(4)(5)................................ 2,689,379 35.20%
Jeffrey A. Gould(2)(3)(6)................................... 236,850 3.10%
Matthew J. Gould(2)(3)(7)................................... 2,354,195 30.81%
Mitchell Gould(2)........................................... 28,850 *
Louis C. Grassi(3).......................................... 750 *
Grassi & Company CPA P.C.
2001 Marcus Avenue
Lake Success, NY 11042
David Heiden(2)............................................. 43,250 *
David G. Herold(3).......................................... 32,750 *
16 Southdown Court
Huntington, NY 11743
Arthur Hurand(3)............................................ 20,516 *
4182 Pier North Blvd., Suite D
Flint, MI 48504
Gary Hurand(3)(8)........................................... 228,581 2.99%
4182 Pier North Blvd., Suite D
Flint, MI 48504
Mark H. Lundy(2)............................................ 44,065 *
Henry Moskowitz and the Argo Corporation(9)................. 570,700 7.47%
50 West 17th Street
New York, NY 10011
George Zweier(2)............................................ 13,200 *
All Trustees and Officers as a group (16 in number)(10)..... 4,026,284 52.70%
- ---------------
* 280 Park Avenue, 38th Floor West
New York, NY 10017 (3)
Fredric H. Gould (2)(3)(4)(5) 2,682,888 36.27%
Jeffrey A. Gould (2)(3)(6) 220,250 2.98%
Mitchell Gould (2) (7) 11,800 *
Matthew Gould (2) (3) (8) 2,334,664 31.56%
David Heiden (2) 25,000 *
David G. Herold (3)(7)
16 Southdown Court
Huntington, NY 11743 24,500 *
Arthur Hurand (3)
4182 Pier North Blvd., Suite D
Flint, MI 48504 20,500 *
Gary Hurand (3)(9)
4182 Pier North Blvd., Suite D
Flint, MI 48504 220,651 2.98%
Herbert C. Lust, II (3)
54 Porchuck Road
Greenwich, CT 06830 77,500 1.05%
Israel Rosenzweig (2)(10) 288,546 3.90%
Henry Moskowitz and the 570,700 7.72%
Argo Corporation
50 West 17th Street
New York, NY 10011 (11)
All Trustees and Officers
as a group
(16 in number)(12) 3,932,373 (13) 53.16%
*LessLess than 1%
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(1) Securities are listed as beneficially owned by a person who directly or
indirectly holds or shares the power to vote or to dispose of the
securities, whether or not the person has an economic interest in the
securities. In addition, a person is deemed a beneficial owner if he has
the right to acquire beneficial ownership of shares within 60 days, whether
upon the exercise of a stock option or otherwise. The percentage of
beneficial ownership is based on 7,598,940 shares of Beneficial Interest
outstanding on January 20, 2004.
(2) Address is 60 Cutter Mill Road, Great Neck, NY 11021.
(3) A Trustee of BRT.Trustee.
(4) Includes 256,990 Shares257,990 shares of Beneficial Interest owned by the pension and
profit sharing trusts of BRT Realty Trust and REIT Management Corp. of
which Fredric H.GouldH. Gould and two non-Trustee officers are trustees, as to
which shares Mr. Gould has shared voting and investment power.
4
(5) Includes 34,762 Sharesshares of Beneficial Interest held by Mr. Gould as
co-trustee for the children of his brother (as to which Sharesshares Mr. Gould
disclaims beneficial interest), 25,000 Sharesshares of Beneficial Interest owned
by a trust for the benefit of Mr. Gould's grandchildren of which Mr. Gould
is a trustee (as to which Sharesshares Mr. Gould disclaims beneficial interest),
4,790 Shares owned by
Georgetown Group, Inc., of which Mr. Gould is a Vice President and 18,988 Sharesshares of Beneficial Interest owned by a partnership in which
Mr. Gould is a general partner. Also includes 30,048 Sharesshares owned by One
Liberty Properties, Inc. ("OLP"), of which Mr. Gould is an officer and director and
in
which2,108,048 shares of Beneficial Interest owned by Gould Investors L.P. ("GLP")Mr.
Gould is a controllingChairman of the Board and sole shareholder and
2,105,117 Shares owned by GLP.of the Managing General
Partner of Gould Investors L.P. Does not include 25,015 Sharesshares of
Beneficial Interest owned by Mrs. Fredric H. Gould, as to which shares Mr.
Gould disclaims beneficial interest and Mrs. Gould has sole voting and
investment power.
(6) Includes 22,252 Sharesshares of Beneficial Interest owned by Mr. Gould as
custodian for his minor children (as to which Sharesshares Mr. Gould disclaims
beneficial interest) and 25,000 Sharesshares of Beneficial Interest owned by a
trust for the benefit of Mr. Gould's children and others, of which Mr.
Gould is a trustee (as to which Sharesshares Mr. Gould disclaims a beneficial
interest). Does not include 40,000 Sharesshares of Beneficial Interest owned by
Mrs. Jeffrey A. Gould as to which Sharesshares Mr. Gould disclaims beneficial
interest and Mrs. Gould has sole voting and investment power.
(7) Includes 2,500 Shares which underlie unexercised stock options.
(8) Includes 15,666 Sharesshares of Beneficial Interest owned by Mr. Gould as
custodian for his minor children (as to which Sharesshares Mr. Gould disclaims
beneficial interest), 25,000 Sharesshares of Beneficial Interest owned by a trust
for the benefit of Mr. Gould's children and others, of which Mr. Gould is a
trustee (as to which Sharesshares Mr. Gould disclaims a beneficial interest) and
2,105,117 Shares2,108,048 shares of Beneficial Interest owned by GLP (Mr.Gould Investors L.P. Mr.
Gould is President of the managing general partnerManaging General Partner of GLP).Gould Investors L.P.
Does not include 39,500 Sharesshares of Beneficial Interest owned by Mrs. Matthew
J. Gould as to which Sharesshares Mr. Gould disclaims beneficial interest and
Mrs. Gould has sole voting and investment power.
(9)(8) Includes 47,243 Shares50,477 shares of Beneficial Interest owned by a partnership in
which Mr. Hurand is a partner, and 121,377 Sharesshares of Beneficial Interest
owned by a corporation in which Mr. Hurand is an officer and shareholder.
(10) Includes 27,800 Shares owned by Mr. Rosenzweig as custodian for his
children and 13,700 Shares owned by his son (as to which Shares
Mr. Rosenzweig disclaims beneficial interest).
(11)(9) Based on information provided by the shareholder to BRT.shareholder. Includes 82,600 Sharesshares of
Beneficial Interest owned by the Henry Moskowitz and Rose Moskowitz 1999
Family Foundation.
(12)(10) This total is qualified by notes (4) through (11)(8).
(13) Includes an aggregate of
17,250 Shares22,875 shares of Beneficial Interest which underlie unexercised
options.
5
BOARD OF TRUSTEES
ELECTION OF TRUSTEES
(Proposal I)
The Board of Trustees is divided into three classes, each of which is
elected for a staggered term of three years. The Declaration of Trust provides
for the number of Trustees to be between five and fifteen, the exact number to
be determined by the Board of Trustees. The Board has fixed the number of
Trustees at eight.six. The Board may, following the Annual Meeting, increase the size
of the Board and fill any resulting vacancy or vacancies.
At the Annual Meeting, twoone Class III TrusteesII Trustee will be elected. SixThe nominee is
currently serving as a Trustee. Five other individuals serve as Trustees but are
not standing for election because their terms extend past the Annual Meeting.
The persons named in the proxy card
intend to vote such proxy for the election as Class III Trustees of Fredric H.
Gould and Gary Hurand, unless you indicate that your vote should be withheld.
Proxies will not be voted for a greater number of personsnominees than the number of
nomineesare named in the
Proxy Statement. We expect eachthe nominee to be able to serve if elected. However,
if anythe nominee is unable to serve as a Trustee, unless a shareholder withholds
authority, the persons named in the proxy card may vote for any substitute
nominee proposed by the Board of Trustees.
Each Class IIIThe nominee, if elected, will serve until the Annual Meeting to be held in
the year 2005.2007. Each other Trustee will serve until the Annual Meeting to be held
in the year set forth opposite his name.
If a quorum is present, Trustees shall be elected by the affirmative
vote of the holders of a plurality of the Shares present or represented at the
meeting. The Board of Trustees recommends a vote FOR election of Fredric H.
Gould and Gary Hurand as Class III Trustees.below.
The following table sets forth the name and age of eachthe nominee for election
to the Board of Trustees and of each Trustee whose term of office will continue
after the Annual Meeting, the principal occupation of each during the past five
years and the period during which each has served as a Trustee.
Each nominee is
currently serving as a Trustee.
Principal
Occupation
Term and Other Trustee
Name Age Expiring Directorships Since
- ---- --- -------- ------------- -----
Class I
Patrick J. Callan
(1)(2) 65 2003 Real Estate Consultant; 1984
Principal of The RREEF Funds,
pension fund real
estate investments,
from 1984 to January 2001.
Director of
M&T Bank Corporation;
Member of Manufacturers &
& Traders Trust Company
Directors Advisory
Council
TERM TRUSTEE
NAME AGE EXPIRING PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ---- --- -------- -------------------------------------------- -------
CLASS II
Louis C. Grassi...................... 48 2007 Managing Partner of Grassi & Co. CPA's since 2003
1984; Director of Flushing Financial Corp.
CLASS III
Fredric H. Gould(1).................. 68 2005 Chairman of the Board of BRT since 1983; 1983
Chief Executive Officer of BRT from March
1996 to December 31, 2001; Chairman of the
Board of Georgetown Partners, Inc., Managing
General Partner of Gould Investors L.P. and
sole member of Gould General LLC., a general
partner of Gould Investors L.P.; Chairman of
the Board of One Liberty Properties, Inc.;
President of REIT Management Corp.; Director
of East Group Properties, Inc.
Gary Hurand.......................... 57 2005 President of Dawn Donut Systems, Inc. since 1990
1973; Director of Republic Bancorp.
CLASS I
Patrick J. Callan(1)................. 67 2006 Real Estate Consultant; Principal of The 1984
RREEF Funds, pension fund real estate
investments, from 1984 to January 2001;
Director of M&T Bank Corporation; Member of
Manufacturers & Traders Trust Company
Directors Advisory Council -- New York City
Division.
Jeffrey A. Gould 36 2003
6
TERM TRUSTEE
NAME AGE EXPIRING PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ---- --- -------- -------------------------------------------- -------
Jeffrey A. Gould..................... 38 2006 President and Chief Executive Officer of BRT 1997
from January 1, 2002 to present; President
and Chief Operating Officer of BRT from
March 1996 to December 31, 2001; Director of
One Liberty Properties, Inc.
David G. Herold...................... 62 2006 Private Investor; President and Chief 1997
Executive Officer of
BRT from January 1, 2002
to Present; President and Chief
Operating Officer
of BRT from March
1996 to December 31, 2001;
Director of One Liberty
Properties, Inc.
David G. Herold (2) 60 2003 Private Investor; 1997
President and Chief
Executive Officer of Metro Bancshares, Inc.,
the savings and loan holding company for
Bayside Federal Savings and Loan
Association, from 1988 to 1994.
Class II
Matthew Gould 42 2004 President of 2001
Georgetown Partners, Inc.,
Managing general partner
of Gould Investors L.P.;
Director of One Liberty
Properties, Inc.
Arthur Hurand (1) 85 2004 Private Investor; 1989
Director of One Liberty
Properties, Inc.
Herbert C. Lust, II 75 2004 Private Investor; 1981
(1)(2) Director of Prime
Hospitality, Inc.
Class III (Nominees)
Fredric H. Gould (1) 66 2005(3) Chairman of the Board 1983
of BRT since 1983; Chief
Executive Officer of BRT from
March, 1996 to December
31, 2001;
Chairman of the Board
of Georgetown Partners,
Inc., Managing General
Partner of Gould Investors
L.P. and sole member of Gould
General LLC., a
general partner of
Gould Investors L.P.;
Chairman of the Board
of One Liberty Properties,
Inc.;President of REIT
Management Corp.; Director
of East Group Properties, Inc.;
Director of Yonkers Financial
Corporation and The Yonkers
Savings and Loan Association
FA.
Gary Hurand 55 2005(3) President of Dawn Donut 1990
Systems, Inc.; Director
of Republic Bancorp.
- --------------------------------
(1) Member of the Executive Committee. (2) MemberArthur Hurand, a Trustee who is also a
member of the AuditExecutive Committee, and the Compensation Committee.
(3) Nominatedis not standing for election at the Annual Meeting.reelection.
Fredric H. Gould is the father of Jeffrey A. Gould and Matthew Gould
and Arthur HurandGould.
MEETINGS AND COMMITTEES OF THE BOARD OF TRUSTEES
BRT is the father of Gary Hurand.
Meetings and Committees of thegoverned by a Board of Trustees and various committees of the Board.
During fiscal 2001,2003 the Board of Trustees held four regularly scheduled meetings. During fiscal 2001, eachmeetings
and enacted resolutions by unanimous consent on several occasions. Each Trustee
attended at least 75% of the aggregate number of Board and applicable Committee
meetings of the Board of Trustees held during the year and committee members attended
100% of the meetings held by the committee on which he served during the 2001
year.in 2003. The Board of Trustees has four standing committees; an
Executive Committee, an Audit Committee, a Compensation Committee and a
Nominating and Corporate Governance Committee. The Board of Trustees has adopted
a Charter for each committee (other than the Executive Committee). Copies of
these charters are posted on BRT's website at www.brtrealty.com. You may also
obtain a copy of the charters by writing to us at 60 Cutter Mill Road, Great
Neck, New York 11021, Attention: Secretary.
The Audit Committee, which is comprised of Messrs. David G. Herold, Patrick
J. Callan and Louis C. Grassi met four times during fiscal 2003. Herbert C.
Lust, II served as a member of the Audit Committee until his retirement from the
Board in June 2003. Mr. Grassi was appointed a member of the Audit Committee in
June 2003. The Audit Committee is responsible for (1) the quality and integrity
of BRT's financial statements and internal controls, (ii) BRT's compliance with
legal and regulatory requirements, (iii) the independent auditor's qualification
and independence, and (iv) the performance of BRT's internal audit function and
independent auditors. The Board of Trustees has determined that each member of
the Audit Committee satisfies the independence, financial literacy and expertise
requirements of the New York Stock Exchange. The Board of Trustees has
determined that Louis C. Grassi meets the Securities and Exchange Commission
definition of an "Audit Committee Financial Expert". A copy of the Audit
Committee Charter is annexed hereto as Appendix A.
The Compensation Committee. BRTCommittee is composed of independent trustees and
currently consists of Messrs. Callan and Herold. Herbert C. Lust, II served as a
member of the Compensation Committee until his retirement from the Board in June
2003. The Compensation Committee met one time during fiscal 2003. The
Compensation Committee assists management in making recommendations to the Board
of Trustees with respect to officers' (including the Chief Executive Officer)and
key employees' salaries, bonuses and stock incentive awards. The Compensation
Committee administers BRT's stock option plan and equity incentive plan.
The Nominating and Corporate Governance Committee is composed of
independent trustees and currently consists of Messrs. Callan, Grassi and
Herold. The Nominating and Corporate Governance Committee was formed in
September 2003. The responsibilities of the Committee include proposing a slate
of trustees for election to the Board of Trustees at the Annual Shareholders'
Meeting, identification and recommendation of candidates to fill vacancies on
the Board of Trustees between Annual Shareholder Meetings and monitoring and
recommending changes to the Trust's Corporate Governance Guidelines.
7
In November 2003 the Securities and Exchange Commission adopted disclosure
rules regarding policies on shareholder nominations of board members. As of the
date of this proxy statement the Committee has not formulated such a policy.
Prior to the Trust's 2005 Annual Meeting of Shareholders the Committee will
determine if such a policy should be adopted. If such a policy is adopted, it
will provide, among other things, the procedures to be followed by shareholders,
the minimum qualifications to be met by all potential nominees, and a
description of the specific experience, skills and qualities which the Committee
believes are necessary for trustees to possess.
The Nominating and Corporate Governance Committee did not hold any meetings
in 2003. It held its first meeting in December 2003 to select the slate of
trustee nominees for election to the Board of Trustees at the Annual Meeting.
On January 13, 2004, the Nominating and Corporate Governance Committee
adopted a Code of Business Conduct and Ethics which applies to all trustees and
employees, including the Trust's principal executive officer, principal
financial officer, principal accounting officer or controller or persons
performing similar functions. The Committee has also adopted Corporate
Governance Guidelines to assist the Board of Trustees in the exercise of its
responsibilities. The Code of Business Conduct and Ethics and the Corporate
Governance Guidelines may be found on our website at www.brtrealty.com. You may
also obtain a copy of the Code of Business Conduct and Ethics and the Corporate
Governance Guidelines by writing to us at 60 Cutter Mill Road, Great Neck, New
York 11021, Attention: Secretary.
In accordance with New York Stock Exchange Corporate Governance listing
standards, the Trust's non-management Trustees will meet at regularly scheduled
executive sessions without management. Non-management trustees are all those
trustees who are not officers of BRT. The Board does not haveintend to designate a
nominating committee"Lead Director" or a single trustee to preside at executive sessions. The person
who presides over executive sessions of non-management trustees will be one of
the independent trustees and the presiding trustee will rotate among the
independent trustees.
Shareholders who want to send a communication to the Board of Trustees or
to an individual Trustee may do so by writing to the Board or a committee performing similar functions. Duringspecific trustee
c/o Secretary, BRT Realty Trust, 60 Cutter Mill Road, Great Neck, NY 11021.
Inquiries will be reviewed by the 2001 year,Trust's Secretary and if the Audit
Committee, which consistsinquiry is
relevant to and consistent with BRT's operations, policies and business
philosophy will be forwarded to the intended recipient of Messrs. Callan (Chairman), Herold and Lust metsuch correspondence.
BRT does not require its Board Members to attend the Annual Meeting of
Shareholders. At the Annual Meeting of Shareholders held in March 2003, four times. For additional information concerning the Audit Committee see "Report of
Audit Committee". During the 2001 year,our trustees were in attendance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee which
consistsare as set forth in the preceding
section. None of Messrs. Callan (Chairman), Heroldthe members has ever been an officer or employee of BRT or any
of its subsidiaries and Lust, met one time. For
additional information concerning the Compensation Committee see "Report of
Compensation Committee".
Compensation of Trusteesno "compensation committee interlocks" existed during
fiscal 2003.
COMPENSATION OF TRUSTEES
Members of theour Board of Trustees who are not employees of BRT are paid an
annual retainer of $15,000, a fee of $750 for each meeting$15,000. Each member of the BoardAudit Committee is paid an annual
retainer of Trustees
they attend, including teleponic meetings$5,000, the Chairman of the Board of Trustees, and a fee of
$750 for eachAudit Committee meeting they attend, including telephonic Committee
meetings. Committee Chairmen receiveis paid an additional
annual feeretainer of $1,000.$1,000, each member of the Compensation Committee is paid an
annual retainer of $3,000 and each member of the Nominating and Corporate
Governance Committee is paid an annual retainer of $2,000. In addition, in 2003
each non-employee Trustee of BRT was awarded 750 Beneficial Shares under the BRT
Realty Trust 2003 Incentive Plan. The restricted shares granted to the Trustees
have a five year vesting period during which period the registered owner is
entitled to vote and to receive cash distributions on such shares. Non-employee
Trustees who reside outside of the local area also receive reimbursement for
travel expenses.expenses incurred in attending Board and Committee Meetings.
8
APPROVALINDEPENDENCE OF AMENDMENT TO INCREASE SHARES
UNDER THE 1996 STOCK OPTION PLAN
(PROPOSAL 2)
OnTRUSTEES
The rules of the New York Stock Exchange require that BRT have and maintain
a Board that includes a majority of independent directors.
The following standards for "director" independence are applicable to BRT
in accordance with the New York Stock Exchange corporate governance listing
standards:
- No trustee of BRT qualifies as "independent" unless the Board
affirmatively determines that the trustee has no material relationship
with BRT or any of its subsidiaries (either directly or as a partner,
shareholder or officer of an organization that has a relationship with
BRT or any of its subsidiaries);
- A trustee who is an employee, or whose immediate family member is an
executive officer of BRT or any of its subsidiaries is not independent
until three years after the end of such employment relationship;
- A trustee who receives, or whose immediate family member receives, more
than $100,000 per year in direct compensation from BRT or any of its
subsidiaries, other than director and committee fees and pension or other
forms of deferred compensation for prior services (provided such
compensation is not contingent in any way on continued service), is not
independent until three years after he or she ceases to receive more than
$100,000 per year in such compensation;
- A trustee who is affiliated with or employed by, or whose immediate
family member is affiliated with or employed in a professional capacity
by, a present or former internal or external auditor of BRT or any of its
subsidiaries is not "independent" until three years after the end of the
affiliation or the employment or auditing relationship;
- A trustee who is employed, or whose immediate family member is employed,
as an executive officer of another company for which any of BRT's or any
of its subsidiaries' present executives serve on that company's
compensation committee is not "independent" until three years after the
end of such service or the employment relationship; and
- A trustee who is an executive officer or an employee, or whose immediate
family member is an executive officer, of a company that makes payments
to, or receives payments from, BRT or any of its subsidiaries for
property or services in an amount which, in any single fiscal year,
exceeds the greater of $1 million, or 2% of such other company's
consolidated gross revenues, is not "independent" until three years after
falling below such threshold.
The Board has determined that Patrick J. Callan, Louis C. Grassi and David
Herold meet the aforementioned independence standards but that Gary Hurand, a
partner in an entity which owns a preferred limited partnership interest in
Gould Investors L.P., does not satisfy the independence standards. As of the
date of the Annual Meeting, BRT will have six Trustees, three of whom are
"independent." Accordingly, BRT will not have a majority of independent
Trustees. However, Gary Hurand's term of office will expire at the Annual
Meeting to be held in March 2005. Under the New York Stock Exchange transition
rule, since BRT has a staggered board, BRT has until the second Annual Meeting
after January 15, 2004, but no later than December 10, 2001,31, 2005, to comply with the
New York Stock Exchange's requirement that a majority of its board consists of
independent directors. At or prior to its 2005 Annual Meeting, BRT's Board of
Trustees approved an amendmentwill take such action as may be necessary to the BRT Realty Trust 1996 Stock Option Plan (the "1996 Plan") to increase the
number of shares of Common Stock available under the Plan by 250,000 Shares. The
total number of shares initially available for grant under the Plan was 450,000
Shares. At the Record Date 171,250 Shares underlying options previously granted
under the 1996 Plan have been issued upon exercise and 273,750 Shares,
underlying previously granted but unexercised options, are reserved for
issuance. Accordingly, prior to the amendment BRT does not haveestablish a sufficient
number of Shares available for issuance upon exercise of previously granted
options, although 89,000 options were granted in December, 2001 subject to and
conditional upon the amendment being approved by shareholders. The only purpose
of the amendment is to increase the number of Shares available under the 1996
Plan by 250,000 Shares. The amendment is subject to approval by BRT's
shareholders. The reasons for the amendment to the 1996 Plan include:
- - The Board of
Trustees believes that BRT must have Shares available for the
grant of options in order to retain key employees, officers and trustees of the
Trust;
- - Options provide an incentive on the part of officers and other employees,
as well as trustees, to improve BRT's performance;
- - The grant of options aligns the goals of the optionees with those of the
shareholders.
- - There are an insufficient number of Shares available for option grants in
future years.
The 1996 Plan as it will be in effect after the amendment, is attached
to this Proxy Statement as Appendix A and is described below.
General. On December 6, 1996, BRT's Board of Trustees adopted the 1996
Stock Option Plan and BRT's shareholders approved the Plan on March 27, 1997.
The Plan provides for the granting of options to employees, officers and
trustees of, and consultants to, BRT. Under the 1996 Plan, the Board, may grant
either Incentive Stock Options (those which qualify for favorable federal income
tax treatment under the Internal Revenue Code) and options which do not qualify
as Incentive Stock Options ("nonstatutory options").
Shares Available for Issuance. A maximum of 528,750 Shares, after the
amendment, and 278,750 Shares prior to the amendment, are available for issuance
upon the exercise of options granted under the 1996 Plan. The foregoing gives
effect to 171,250 Shares which have been issued upon the exercise of stock
options previously granted. At present, stock options to purchase 362,750 Shares
have been granted and are outstanding including 89,000 granted in December, 2001
subject to and conditional upon approval of the amendment to the 1996 Plan by
shareholders. Accordingly, after approval of the amendment by shareholders
166,000 Shares will be available for grant under the 1996 Plan. If the amendment
is not approved the options granted in December, 2001 will terminate and BRT
will only be able to grant options relating to 5,000 underlying Shares. The
number of Shares available under the 1996 Plan, the number of Shares subject to
outstanding options, and the exercise price per share of such options are
subject to adjustment on account of stock dividends, stock splits, mergers,
consolidations, recapitalizations, combinations or exchanges of stock, or other
similar occurrences effecting a change in the outstanding Shares without the
receipt of additional consideration by BRT. If any option under the Plan
terminates or expires, the Shares allocable to the unexercised portion of the
option will again be available for purposes of the 1996 Plan.
Administration. The Compensation Committee of the Board of Trustees is
responsible for administering the 1996 Plan. The Committee has authority,
subject to the terms of the 1996 Plan, to make all determinations under the 1996
Plan, including the selection of optionees, the timing of option grants, the
exercise price and the number of Shares subject to option. However, the
selection of a trustee or an officer who is a reporting person for the purposes
Section 16 of the Securities Exchange Act of 1934 as a recipient of options and
the timing of option grants to a reporting person, the exercise price and the
number of Shares subject to options granted to a reporting person shall be
determined by the Board of Trustees or a committee consisting solely of two or
more "non-employee" trustees as defined in Rule 16b-3.
Eligibility. Employees, officers and trustees of BRT are eligible to
receive incentive stock options and nonstatutory stock options under the 1996
Plan. Consultants are only eligible to receive nonstatutory stock options.
Exercise Price. The 1996 Plan provides that the exercise price under
each incentive stock option shall be no less than 100% of the fair market value
of the Shares on the business day immediately preceding the day the option is
granted. The exercise price for each nonstatutory stock option granted under the
1996 Plan will be the price established by the Board of Trustees but not less
than the per share par value. The exercise price of an option is to be paid in
cash or by any other means which the Compensation Committee determines is
consistent with the purposes of the Plan and applicable laws and regulations.
Transferability. Incentive Stock Options are not assignable or
transferable other than by will and the laws of descent and distribution. All
nonstatutory options granted under the 1996 Plan may be assigned or otherwise
transferred (i) by will or the laws of descent and distribution, (ii) pursuant
to a qualified domestic relations order, (iii) to the spouse, children,
grandchildren or parents of the optionee ("Qualifying Relatives") or any trust
created for the benefit of the optionee or any Qualifying Relative, or (iv) to
any partnership or limited liability company in which an optionee or a
Qualifying Relative is a partner or member.
Exercise. Generally, except as otherwise specified by the Board of
Trustees or the Compensation Committee, the duration of each option will be five
to ten years from the date of the grant. Generally, options will not be
exercisable for at least one year following the date of grant. After the
specified waiting period, the optionee may exercise the option for up to 25% of
the Shares subject to the option and each year thereafter the optionee may
exercise the option for up to an additional 25% of the Shares subject to the
option on a cumulative basis. In no event will any option be exercisable later
than ten years from the date of grant of the option.
Effect of Termination of Services. If an optionee's employment or
provision of services as a non-employee trustee is terminated because of the
optionee's death, options held by the optionee may be exercised by the person
designated in the optionee's will or the optionee's proper legal representative
for a period of one year following the optionee's death. Generally speaking, if
an optionee's employment or provision of services as a non-employee trustee, as
the case may be, is terminated for a reason other than death, options held by
the optionee may be exercised for a period of three months following the
termination. If the termination is by BRT for cause, or a breach of any
employment or confidentiality agreement, any options held by the optionee will
terminate immediately. In each case options may be exercised only to the extent
exercisable on the date of termination of employment or provision of services as
a non-employee trustee, and in no event is an option exercisable after the
termination date specified in the option grant.
Change of Control. In the event of a "trigger event", options granted
under the 1996 Plan will be fully exercisable for sixty days following the date
of the trigger event. A trigger event is (i) the date Shares of BRT are first
purchased pursuant to a tender or exchange offer, (ii) the date BRT acquires
knowledge that any person or group (other than BRT, or current officers and/or
trustees of BRT) has become the beneficial owner of Shares of BRT entitling the
person or group to vote 30% or more of the voting stock of BRT, (iii) the date
during any period of two consecutive years when individuals who at the beginning
of such period constituted the Board of Trustees cease for any reason to
constitute at leastincludes a majority of independent trustees.
If a quorum is present, the Board of Trustees unless the election of
each newnominee for Class II Trustee was approved by a vote of at least two thirds of Trustees then
in office who were Trustees at the beginning of such period, (iv) the date of
approval of a merger where the shareholders of BRT immediately prior to the
merger do not beneficially own immediately after the merger 80% or more of the
voting stock of the entity surviving the merger, or (v) sale or disposition of
substantially all the assets of BRT.
Term of the 1996 Plan; Amendment. The 1996 Plan will terminate on
December 5, 2006, ten years from the date the 1996 Plan was adoptedshall be elected
by the Board
of Trustees. Any options outstanding after the termination of the 1996 Plan will
remain in effect in accordance with their terms. The Board of Trustees may amend
the 1996 Plan, except that the Board may not without consent of an optionee
affect the optionee's rights under a previously granted option and shareholder
approval must be sought if required under Section 422 of the Internal Revenue
Code.
Federal Income Tax Consequences
Incentive Stock Options. An optionee will not realize taxable
compensation income upon the grant of an incentive stock option under the 1996
Plan. In addition, an optionee will not realize taxable compensation income upon
the exercise of an incentive stock option if the optionee holds the Shares
acquired until at least one year after exercise and, if later, until two years
after the date of grant of the option. The amount by which the fair market value
of the Shares exceeds the option price at the time of exercise generally is an
item of tax preference for purposes of the alternative minimum tax. If an
optionee acquires Shares through the exercise of an incentive stock option under
the 1996 Plan and subsequently sells the Shares after holding the Shares for the
period described above, the gain which is the difference between the sale price
of the Shares and the option exercise prices will be taxed as capital gain. The
gain will not be treated as compensation income except when the holding period
requirements discussed above are not satisfied.
An incentive stock option does not entitle BRT to an income tax
deduction except to the extent that an optionee realizes compensation income
therefrom.
Nonstatutory Options. An optionee will not realize taxable compensation
income upon the grant of a nonstatutory stock option. When an optionee exercises
a nonstatutory stock option, the optionee will realize taxable compensation
income at that time equal to the difference between the option price and the
fair market value of the Shares on the date of exercise. If, however, an
optionee is subject to Section 16(b) of the Securities Exchange Act of 1934 (the
"1934 Act") (i.e., the optionee is an officer, trustee or ten percent
stockholder of BRT) and the option does not fall within the exemption provided
by Section 16(b), the optionee will not realize taxable compensation income
until six months after he or she exercises the nonstatutory stock options. In
such event, the amount of the optionee's compensation income will equal the
difference between the option price and the fair market value of the Shares on
the date immediately preceding the sixth month anniversary of the date of
exercise. An optionee who is subject to Section 16(b) may, however, elect to be
fully taxable at the time the optionee exercises his or her nonstatutory stock
option in the same manner as an optionee who is not subject to Section 16(b).
An optionee will generally have a basis in Shares acquired through the
exercise of a nonstatutory stock option under the 1996 Plan equal to the fair
market value of the Shares on the date of exercise. If the optionee subsequently
sells the Shares, the gain which is the difference between the sale price and
the basis, will be taxed as capital gain.
Any compensation income realized by an optionee upon exercise of a
nonstatutory stock option will be allowable to BRT as a deduction at the time
any compensation income is realized by the optionee.
The affirmative vote of the holders of a majorityplurality of the outstanding
Shares is required for approvalshares of
this proposal.
The Board of Directors recommends that shareholders voteBeneficial Interest present or represented at the meeting.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR this
proposal.ELECTION OF LOUIS C. GRASSI AS
A TRUSTEE. THE PERSONS NAMED IN THE PROXY CARD INTEND TO VOTE SUCH PROXY FOR THE
ELECTION AS TRUSTEE OF LOUIS C. GRASSI, UNLESS YOU INDICATE THAT YOUR VOTE
SHOULD BE WITHHELD.
9
INDEPENDENT AUDITORS
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 3)
The Audit Committee and the Board of Trustees is seeking the ratification of
the appointment of Ernst & Young LLP as independent auditors for BRT for the fiscal year
ending September 30, 2002. Representatives2004. A representative of Ernst & Young LLP areis expected to
be present at the Annual Meeting and will have the opportunity to make a
statement if they desirehe or she desires to do so and will be available to respond to
appropriate questions.
We are not required to have our shareholders ratify the selection of Ernst
& Young LLP as our independent auditors. We are doing so, because we believe it
is a matter of good corporate practice. If the shareholders do not approveratify the
selection, the Audit Committee and the Board of the appointment ofTrustees will reconsider whether
or not to retain Ernst & Young LLP,LLP. Even if the selection of independent auditors will be made byis ratified, the Board
of Trustees.
IfTrustees and the Audit Committee, in their discretion, may change the
appointment at any time during the year if they determine that such a quorum is present,change
would be in the best interests of BRT and its shareholders.
The affirmative vote of the holders of a majority of outstanding shares of
Beneficial Interest present at the Annual Meeting, in person or representedby proxy, is
required to ratify the appointment of Ernst & Young LLP as independent auditors
for the fiscal year ending September 30, 2004.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT AUDITORS. THE PERSONS NAMED IN THE PROXY CARD
INTEND TO VOTE SUCH PROXY FOR THE PROPOSAL UNLESS YOU SPECIFY OTHERWISE.
AUDIT AND OTHER FEES
The following table presents the fees for professional audit services
billed by Ernst & Young LLP for the audit of our annual consolidated financial
statements for the years ended September 30, 2002 and 2003, and fees billed for
other services rendered to us by Ernst & Young LLP for each of such years:
FISCAL
-------------------
2002 2003
-------- --------
Audit fees(1)............................................... $143,000 $151,750
Tax fees(2)................................................. 18,500 18,000
All other fees(3)........................................... 3,000
-------- --------
Total fees................................................ $161,500 $172,750
- ---------------
(1) Audit fees include fees for review of consolidated financial statements
included in our quarterly reports on Form 10-Q and fees for services
normally provided by an independent auditor in connection with statutory and
regulatory filings or engagements.
(2) Tax fees consists of fees for tax advice, tax compliance and tax planning.
(3) All other fees consists of fees paid for the review in 2003 of a
Registration Statement on Form S-8 filed by BRT.
The Audit Committee has concluded that the provision of non-audit services
listed above is compatible with maintaining the independence of Ernst & Young
LLP.
PRE-APPROVAL POLICY FOR AUDIT AND NON-AUDIT SERVICES
The Audit Committee must pre-approve all audit and non-audit services
involving BRT's independent auditors.
In addition to the audit work necessary for BRT to file required reports
under the Securities Exchange Act of 1934 (i.e., quarterly reports on Form 10-Q
and annual reports on Form 10-K) the independent auditors
10
may perform non-audit services, other than those prohibited by the
Sarbanes-Oxley Act of 2002, provided they are pre-approved by the Audit
Committee.
The independent auditors are prohibited from providing the following types
of services:
- bookkeeping or other services related to BRT's accounting records or
financial statements;
- financial information systems, design and implementation;
- appraisal or valuation services, fairness opinions or contribution - in -
kind reports;
- actuarial services;
- internal outsourcing services;
- management functions or human resources;
- broker or dealer, investment adviser or investment banking services; and
- legal services and expert services related to the audit.
APPROVAL PROCESS
At an Audit Committee meeting held in December of each year, the Committee
reviews and approves the audit scope concerning the audit of BRT's consolidated
financial statements for the fiscal year which commenced the preceding October
1st, including the audit fee associated with the audit. In addition at that
meeting, the Committee approves the provision of tax related non-audit services
and the maximum expenditure which may be incurred for such tax services for such
year. Any fees for the audit in excess of those approved at the meeting and voting onany
fees for tax related services in excess of the matter is required formaximum established by the
Committee must receive the prior approval of the Audit Committee.
Proposals for any other non-audit services to be performed by the
independent auditors must be approved by the Audit Committee in advance at a
regularly scheduled meeting, by unanimous consent or at a meeting held by
telephone conference.
11
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Trustees is comprised of three
independent trustees and operates under a written charter adopted by the Board
of Trustees, a copy of which, as amended, is included as Appendix A to this
proposal.Proxy Statement. The Committee reviews the charter on an annual basis. The Board
of Trustees recommends a vote FORhas reviewed the New York Stock Exchange listing standards
definition of independence for Audit Committee members and has determined that
each member of the Committee is independent.
The Committee is appointed by the Board of Trustees to oversee and monitor,
among other things, the financial reporting process, the independence and
performance of the independent auditors and the internal controls. It is the
responsibility of executive management to prepare financial statements in
accordance with generally accepted accounting principles and of the independent
auditors to perform an independent audit of the financial statements and to
express an opinion on the conformity of those financial statements with
generally accepted accounting principles.
In this proposal.context, the Committee met on four occasions and held discussions
with management and the independent auditors. Management represented to the
Committee that the year-end consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the Committee
reviewed and discussed the consolidated financial statements with management and
the independent auditors. The Committee also discussed with BRT's management the
process used for the certifications under the Sarbanes-Oxley Act of 2002 of the
Trust's filings with the Securities and Exchange Commission. In fiscal 2003 the
Committee met to review the unaudited quarterly financial statements prior to
filing of each Form 10-Q with the Securities and Exchange Commission. In fiscal
2003, the Committee also reviewed each quarterly earnings press release prior to
public release. The Committee discussed with the independent auditors matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication With Audit Committee).
In addition, the Committee discussed with the independent auditors the
auditors' independence from BRT and its management, and has received the written
disclosures and letter from the independent auditors required by Independence
Standards Board Standard No. 1 (Independence Discussions With Audit Committees).
Further, the Committee reviewed and approved the auditor's fees, both for
performing audit and non-audit services and considered whether the provision of
non-audit services by the independent auditors was compatible with maintaining
the auditors' independence and concluded that it was compatible.
The Committee meets with the independent auditors, with and without
management present, to discuss the results of their examinations, the
evaluations of the internal controls, and the overall quality of the financial
reporting.
Based on the reviews and discussions referred to above, the Committee
recommended that the audited financial statements for the year ended September
30, 2003 be included in Annual Report on Form 10-K for the year ended September
30, 2003 for filing with the Securities and Exchange Commission.
The Committee has approved the retention of Ernst & Young LLP as
independent auditors for the fiscal year ended September 30, 2004 after
reviewing the firm's performance, fee structure and independence from BRT and
its management.
David G. Herold
Patrick J. Callan
Louis C. Grassi
12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table discloses the compensation paid and accrued for
services rendered in all capacities to BRT during the last three fiscal years
for the Chief Executive Officer of BRT and the four other most highly
compensated executive officers whose annual compensation exceeded $100,000 for
the 2003 fiscal year (collectively the "Named Executive Officers").
Summary Compensation Table
This table shows the compensation paid and accrued for services
rendered in all capacities to BRT during the last three fiscal years for the
Chief Executive Officer of BRT and the four other most highly compensated
Executive Officers of BRT whose annual compensation exceeded $100,000 for the
fiscal year ended September 30, 2001.
Annual Compensation(2) Long Term CompensationLONG TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME AND PRINCIPAL FISCAL ---------------------- ----------------------
AwardsSTOCK AWARDS UNDERLYING ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) ($)(1) OPTIONS (#) COMPENSATION $(2)
- ------------------ ------ Other Securities/
Annual Restricted Underlying Payouts
-------
Name and Principal Compen- Stock Options/ LTIP All Other
Position Year(1) Salary($) Bonus($) sation($) Awards($) SARs(#) Payout($) Compensation (2) (3)
-------- ----------------- --------- -------- --------- --------- ------- --------- --------------------------------- ----------- -----------------
Fredric H. Gould 2001 0 0 0 0 10,000 0 0Gould(3)(4)............. 2003 -- -- $35,838 -- --
Chairman of the 2000 0 0 0 0 0 0 02002 -- -- -- -- --
Board 2001 -- -- -- 10,000 --
Jeffrey A. Gould(3)................ 2003 $335,074 -- $35,838 -- $30,000
President and 2002 $293,750 -- -- 6,000 $28,875
Chief 1999 0 0 0 0 0 0 0Operating 2001 $275,000 -- -- 10,000 $25,500
Officer; Chief Executive Officer
(4)
Jeffrey A. Gould 2001 $275,000 0 0 0 10,000 0 $25,500David Heiden....................... 2003 $163,075 $ 8,000 $11,438 -- $25,661
Vice President and 2000 $260,000 0 0 0 0 0 $25,500
Chief Operating 1999 $250,000 0 0 0 12,500 0 $24,000
Officer
David Heiden2002 $148,596 $10,000 -- 5,000 $23,789
2001 $128,829 $15,000 0 0-- 10,000 0 $21,574
Mitchell Gould..................... 2003 $158,818 $ 9,000 $11,438 -- $25,173
Vice President 2000 $126,158 $20,000 0 0 0 0 $21,924
1999 $120,186 $10,000 0 0 10,000 0 $19,500
Israel Rosenzweig 2001 $125,000 0 0 0 10,000 0 $18,750
Vice President 2000 $192,405 0 0 0 0 0 $25,500
1999 $250,000 0 0 0 12,500 0 $24,000
Mitchell Gould2002 $142,653 -- -- 5,000 $21,398
2001 $121,134 $15,000 0 0-- 10,000 0 $20,420
George Zweier...................... 2003 $104,833 $10,000 $10,675 -- $17,225
Vice President 2000 $116,150 $15,000 0 0 0 0 $19,674
1999 $112,686 $15,000 0 02002 $101,991 $11,500 -- 5,000 $17,282
2001 $ 92,234 $11,500 -- 10,000 0 $18,403$15,796
Mark H. Lundy(5)................... 2003 $123,650 -- $35,838 -- --
Vice President 2002 $118,906 -- -- 6,000 --
2001 $115,392 -- -- 10,000 --
- ------------------------------------------
(1) Fiscal years ending September 30.Represents the grant of restricted stock awards which the executive has the
right to receive, subject to vesting. The restricted stock awards vest after
five years. The value set forth above is based on the closing price on May
2, 2003, the date of the award, which was $15.25. The restricted stock
awards receive cash dividends at the rate paid on all BRT's shares. The
number of restricted shares awarded were 2,350 shares for each of Fredric H.
Gould, Jeffrey A. Gould and Mark H. Lundy and 750 shares, 750 shares and 700
shares for David Heiden, Mitchell Gould and George Zweier, respectively.
(2) BRT does not have any profit sharing plan, but it does have Stock Option
Plans and a Pension Plan. See "BRT Pension Plan" and "Option Grants and
Exercises; Unexercised Options" below.
(3) Represents annual contributions under BRT'sthe BRT Realty Trust Pension Plan for
Jeffrey A. Gould, David Heiden, Mitchell Gould and Israel Rosenzweig.George Zweier. The only
other type of Other Annual Compensation for each of the named officers wasNamed Executive
Officers is in the form of perquisites and wasis less than the level required
for reporting.
(4)(3) Fredric H. Gould served as Chief Executive Officer through December 31,
2001. Effective January 1, 2002, Jeffrey A. Gould became Chief Executive
Officer.
(4) The compensation reported does not receiveinclude compensation directlyof $537,000 received
by Fredric H. Gould from REIT Management Corp., the advisor to BRT.
Reference is made to the caption "Interest of Management in Certain
Transactions" for a discussion of fees paid by BRT to REIT Management Corp., BRT's Advisor.
Mr.
and fees paid by BRT to Majestic Property Management Corp. Fredric H. Gould
is the President and sole shareholder of REIT Management Corp. and Majestic Property
Management Corp.
(5) Mark H. Lundy does not receive compensation directly from BRT. He is
compensated by Gould Investors L.P. and other related entities and his
salary is allocated to BRT pursuant to a shared services agreement. The
salary set forth is the amount allocated to BRT. See "Interest of Management
in Certain Transactions."
13
BRT Pension PlanPENSION PLAN
BRT has a non-contributory defined Pension Plan covering employees. The
Pension Plan is administered by Fredric H. Gould, Simeon Brinberg and David W.
Kalish(Messrs.Kalish (Messrs. Brinberg and Kalish beingare non-trustee officers of BRT). Annual
contributions are based on 15% of an employeesemployee's annual earnings, not to exceed
$25,500$30,000 per employee. Partial vesting commences one year after employment,
increasing annually until full vesting is achieved at the completion of five
years of employment. The method of payment of benefits to participants upon
retirement is determined solely by the participant, who may elect a lump sum
payment or the purchase of an annuity, the amount of which is determined
primarily by the amount of contributions. The following table sets forth the
amount contributed to the Pension Plan in 2001fiscal 2003 for the benefit of each
Named Executive Officer, (other than Fredric H. Gould and Mark H. Lundy who do
not participate in the Pension Plan), the aggregate amount accrued to date and
the credited years of service for each Named Executive Officer.
Credited
Amount Contributed Aggregate Amount Years ofAGGREGATE
AMOUNT AMOUNT
CONTRIBUTED ACCUMULATED CREDITED YEARS
NAME in 2001 Accumulated to Date ServiceIN 2003 TO DATE OF SERVICE
- ---- ------------------ ------------------- ------------------ ----------- --------------
Jeffrey A. Gould $25,500 $549,069 14Gould........................................ $30,000 $694,286 16
David Heiden $21,574Heiden............................................ $25,661 $142,273 5
Mitchell Gould.......................................... $25,173 $131,776 5
George Zweier........................................... $17,225 $ 80,926 3
Mitchell Gould $20,420 $ 74,478 3
Israel Rosenzweig $18,750 $978,178 1794,668 5
Option Grants and Exercises; Unexercised Options
The following tables set forth theOPTION GRANTS AND EXERCISES; UNEXERCISED OPTIONS
OPTION GRANTS IN 2003
BRT did not grant any stock options granted to each Named Executive
Officer under BRT's stock option plan and options exercised by such Named
Executive Officer during 2001.fiscal 2003.
OPTION EXERCISES IN 2003 AND FISCAL YEAR END OPTION VALUES
1. Option Grants in 2001
Number of
Securities % of Potential Realizable
Underlying Total Exercise Expiration Value NUMBER OF
SHARES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED SEPTEMBER 30, 2003 SEPTEMBER 30, 2003 ($)(2)
Name Options ON VALUE REALIZED --------------------------- ---------------------------
NAME EXERCISE ($)(1) Grants Price Date @5% @10%EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- --------------- ------ ----------- -------------- ----- ----------------- ----------- -------------
Fredric H. Gould 10,000 6.04% $7.75 12/12/2010 $48,739 $123,515Gould....... 2,500 15,000 0 7,500 0 84,975
Jeffrey A. Gould 10,000 6.04% $7.75 12/12/2010 $48,739 $123,515Gould....... 7,125 44,364 0 15,125 0 164,880
David Heiden 10,000 6.04% $7.75 12/12/2010 $48,739 $123,515Heiden........... 8,750 54,750 0 13,750 0 150,194
Mitchell Gould 10,000 6.04% $7.75 12/12/2010 $48,739 $123,515
Israel Rosenzweig 10,000 6.04% $7.75 12/12/2010 $48,739 $123,515Gould......... 8,750 61,625 0 13,750 0 150,194
Mark H. Lundy.......... 11,875 130,270 1,500 15,125 12,945 164,880
George Zweier.......... 1,250 9,766 3,750 12,500 39,133 133,766
(1) All of the options reflected in the above table are subject to the
1996 Plan and are exercisable only as they vest.
(2) These columns reflect the potential realizable value of each grant
assuming the market value of BRT's shares appreciates at 5% and 10%
annually from the date of the grant over the term of the option.
There is no assurance that the actual stock price appreciation over the
10-year option term will be at the assumed 5% or 10% levels or at any
other level. Unless the market price of the BRT shares does in fact
appreciate over the option term, no value will be realized from option
grants.
2. Option Exercised in 2001 and Fiscal Year End Option Values
Number of
Securities
Underlying Value of Unexercised
Unexercised In-the-Money Options
Options at fiscal at Fiscal Year End (2)
-----------------------
Year end
----------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized (1) Unexercisable Unexercisable
- ---- ---------------- ------------- ------------- -------------
Fredric H. Gould 0 0 0/10,000 $0/$23,400
Jeffrey A. Gould 23,250 $121,965 0/19,375 $0/$62,306
David Heiden 7,500 $ 29,219 0/22,500 $0/$68,431
Mitchell Gould 7,500 $ 29,219 0/22,500 $0/$68,431
Israel Rosenzweig 8,125 $ 29,102 0/24,375 $0/$73,092
- ---------------
(1) Represents the fair market value of the shares underlying the stock options
on the date of exercise less the stock option exercise price.
(2) Represents the difference between the exercise price of options and $10.09,$19.08,
the closing price of BRT's Sharesshares of Beneficial Interest of BRT Realty Trust on
September 30, 2001.2003.
14
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee is currently composed of threetwo independent
non-employee Trustees; Patrick J. Callan (Chairman),and David Herold andG. Herold. Herbert C. Lust,
II.II, an independent non-employee Trustee, served as a member of the Compensation
Committee until his retirement from the Board of Trustees in June 2003 and
participated in all compensation decisions for fiscal 2003, other than year end
bonus determinations. The Committee is responsible for advising management and
the Board of Trustees on matters pertaining to compensation arrangements for
executive employees, as well as administration of BRT'sthe Trust's stock option plan.
Compensation Overview
It isplan
and the view of the Compensation Committee that theBRT Realty Trust 2003 Incentive Plan.
COMPENSATION OVERVIEW
The annual compensation of executive officers is composed of three key
elements: (i) an annual component made up of base salary; (ii) an annual bonus;
and (iii) a long term incentive-based compensation for executive officers realized
through the granting of stock options.
Base Salaryoptions and Bonusthe awarding of restricted shares
under the 2003 Incentive Plan.
BASE SALARY AND BONUS
Base salaries are targeted to be competitive with salaries paid to senior
executives at other real estate investment trusts of similar size and take into
account an individual's achievements and performance, BRT'sthe operating performance
of BRT Realty Trust in the most recently concluded fiscal year and the number of
years an individual has been associated with BRT Realty Trust in an executive
capacity. The determination by the Committee of base compensation is subjective
and is not based on any structured formula. In determining compensation for the
20012003 fiscal year the Committee took into account the expertise which the
executive officers demonstrated in managing the business of BRT; amongbusiness. Among other things,
the Committee gave consideration to BRT'sthe operating results, the increase in BRT's loan portfolio in a competitive
lending environment, the activities of BRT in
loan origination, underwriting and managing the loan portfolio, the management
of BRT'sthe real estate portfolio, innovativeand activities of BRT Realty Trust in various joint
ventures, and the expansion of
BRT's activities in participating mortgage lending.venture investments.
BRT Realty Trust does not have a bonus plan in existence and it does not
establish a bonus pool. Any bonuses granted are granted on a case by case basis,
with the amount thereof being subjective. The committeeCommittee takes into
consideration, among other things, the base compensation of each officer, the
performance of each officer during the most recently concluded fiscal year, and the
results of operations of BRT for such year. No bonuses were paid or accrued foryear, and the benefitrecommendations of any Named Executive Officer other than a $15,000 bonus accrued for the
benefit of each of David Heiden and Mitchell Gould.
Long Term Compensation - Stock Optionsmanagement.
LONG TERM COMPENSATION -- STOCK OPTIONS AND RESTRICTED STOCK AWARDS
Stock options, which are purely discretionary and are not based on any
formula, may be granted periodically to provide incentive for the creation of
shareholder value over the long term, since the full benefit of the compensation
provided for under stock options cannot be realized unless there is an
appreciation in the price of BRT's Sharesthe shares over a specified number of years. Under
the existing stock option plan options are granted at an exercise price equal to
the fair market value of the Shares of BRTshares on the business day
immediately preceding the date of grant and are exercisable
over a number of years. Stock options are the only form of long term incentive currently used by
BRT.
CEO Compensation
Fredric H. Gould, Chairman ofyears with phased in vesting.
In 2003 the Board of TrusteesDirectors authorized, and BRT's shareholders approved,
the adoption of the BRT Realty Trust 2003 Incentive Plan which authorizes the
grant of incentive and non-statutory options and the awarding of restricted
shares. The granting of options and the awarding of restricted shares under the
2003 Incentive Plan is at the discretion of the Compensation Committee and is
not based on any formula. No options have been granted under the 2003 Incentive
Plan. In 2003 the Compensation Committee approved the awarding of 28,800
restricted shares to a total of 23 persons including employees, officers,
trustees and consultants of BRT. The awards granted in 2003 provide for a five
year vesting period and, therefore, the shares awarded are not to be transferred
by the recipient until the five year vesting period has been satisfied.
Accordingly, unless vesting is accelerated by the Compensation Committee, an
award of restricted shares under the 2003 Plan cannot be realized unless the
awardee remains with the Trust for a period of five years during which five year
period the awardee realizes the benefits of any cash distributions paid on the
shares awarded to him. The Compensation Committee believes that awarding
restricted shares under the 2003 Plan
15
provides the recipients with an incentive to devote their best efforts in
pursuing the success of BRT by providing awardees with an opportunity to share
in the growth and prosperity of BRT through the ownership of shares of BRT.
CEO COMPENSATION
Jeffrey A. Gould became Chief Executive Officer throughout 2001 does not receive any direct cash compensation from the
BRT, but is compensated by REIT Management Corp. BRT's advisor (see "Interest of
Management in Certain Transactions").
Respectfully submitted,
Patrick J. Callan, Chairman
David Herold
Herbert C. Lust II
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Trustees is comprised of three independent
directors and operates under a written charter adopted by the Board. The
charter, as amended to date, is attached hereto as Appendix B. The Committee is
appointed by the Board to assist the Board in its oversight function by
monitoring, among other things, the Trust's financial reporting process, the
independence and performance of the Trust's independent auditors and the
performance of the Trust's internal accounting personnel. It is the
responsibility of executive management of BRT effective January 1,
2002. In setting Mr. Gould's compensation, the Compensation Committee seeks to
prepare financial statements in
accordanceprovide compensation which is competitive with generally accepted accounting principles andother real estate investment
trusts of the Trust's
independent auditors to audit those financial statements.
In this context, the Committee has met and held discussions with management and
the independent auditors. Management represented to the Committee that the
Trust's year end consolidated financial statements were prepared in accordance
with generally accepted accounting principles, and the Committee has reviewed
and discussed the consolidated financial statements with management and the
independent auditors.similar size as BRT. In addition, the Committee meets to reviewevaluates Mr. Gould's
personal performance as well as the unaudited
quarterly financial statements prior to filing the Form 10-Q with the Securities
and Exchange Commission and issuanceperformance of the quarterly earnings press release.
The Committee discusses with the independent auditors matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication With Audit
Committee).
In addition, the Committee has discussed with the independent auditors the
auditor's independence from BRT and its management, including the mattersTrust in the
written disclosures required by the Independence Standards Board Standard No. 1
(Independence Discussions With Audit Committees). Further, the Committee has
reviewed the auditor's fees, both for performing the audit and non-audit fees,
considered whether the provision of non-audit services by the independent
auditors is compatible with maintaining the auditor's independence and concluded
that it is compatible.
Further, the Committee meets with the independent auditors, with and without
management present, to discuss the results of their examinations, the
evaluations of BRT's internal controls,prior fiscal year and the overall qualityreturn of BRT's financial reporting.
Based onshareholders in the reviewsprior
fiscal year; i.e., dividend yield and discussions referred to above, the Committee
recommended that the audited financial statements be includedincremental stock value, if any. The final
determination of Mr. Gould's compensation is subjective in BRT's Annual
Report on Form 10-K for the year ended September 30, 2001, for filing with the
Securities and Exchange Commission.
Each of the members of the Audit Committee is independent as defined under the
listing standards of the New York Stock Exchange. The Committee recommended to
the Board and the Board has approved, subject to shareholder approval, retention
of Ernst & Young LLP as independent auditors for 2002.nature.
Patrick J. Callan
Chairman
David G. Herold
Herbert C. Lust II
Audit Fees
The following is a description of the fees billed to BRT by Ernst & Young LLP
during the year ended September 30, 2001:
- - Audit Fees - Audit fees paid and/or billed to BRT in connection with the audit
of the annual financial statements for the year ended September 30, 2001 and
review of the interim financial statements included in BRT's Quarterly Reports
on Form 10-Q during the year ended September 30, 2001 totaled $139,500.
- - All other fees - Fees billed by Ernst & Young LLP during the year ended
September 30, 2001 for all non-audit services rendered (which consisted of tax
related services) totaled $15,416.
- - No fees were paid to Ernst & Young LLP for financial information systems
design and implementation.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
Fredric H. Gould, Chairman of our Board of Trustees, is Chairman of the
Board of Directors of One Liberty Properties, Inc., a real estate investment
trust listed on the New York Stock Exchange engaged in the ownership of a
diversified portfolio of income producing real properties net leased to tenants
substantially under long-term leases. He is also Chairman of the Board of
Directors and sole stockholder of the Managing General Partner of Gould
Investors L.P. and sole member of a limited liability company which is also a
General Partner of Gould Investors L.P. Jeffrey A. Gould, a Trustee and our
President and Chief Executive Officer is a Senior Vice President and Director of
One Liberty Properties, Inc. and a Vice President of the Managing General
Partner of Gould Investors L.P. Matthew J. Gould, one of our Senior Vice
Presidents, is a Senior Vice President and Director of One Liberty Properties,
Inc., and President of the Managing General Partner of Gould Investors L.P.
Gould Investors L.P. owns approximately 28% of our outstanding shares of
Beneficial Interest. In addition, David W. Kalish, Simeon Brinberg, Mark H.
Lundy and Israel Rosenzweig, each of whom is an executive officer of BRT Realty
Trust, are also executive officers of One Liberty Properties, Inc. and of the
Managing General Partner of Gould Investors L.P. Arthur Hurand, one of our
Trustees (Mr. Hurand is not standing for re-election), is a director of One
Liberty Properties, Inc.
We and certain related entities, including Gould Investors L.P. and One
Liberty Properties, Inc., occupy common office space and use certain services
and personnel in common. In 2003 we paid Gould Investors L.P. $656,000 for
general and administrative expenses, including rent, telecommunication services,
computer services, bookkeeping, secretarial and other clerical services and
legal and accounting services. This amount includes $60,131 contributed to the
annual rent of $362,000 paid by Gould Investors L.P., One Liberty Properties,
Inc. and related entities to a subsidiary of Gould Investors L.P. which owns the
building in which the offices of these entities are located and an aggregate of
$476,000 allocated to us for services (primarily legal and accounting) performed
by some of the above executive officers who are not engaged by us on a full-
time basis, including the amounts allocated by Mark H. Lundy as set forth in the
"Summary Compensation Table" and $82,261, $90,003 and $94,818 of salary
allocated by David W. Kalish, Simeon Brinberg and Israel Rosenzweig,
respectively. The allocation of general and administrative expenses is computed
in accordance with a Shared Services Agreement and is based on the estimated
time devoted by executive, administrative and clerical personnel to the affairs
of each participating entity. The services of secretarial personnel generally
are allocated on the same basis as that of the executive to whom each secretary
is assigned. BRT also leases under a direct lease with a subsidiary of Gould
Investors L.P. approximately 1,800 square feet at an annual rental of $51,000,
which is a competitive rent for comparable office space in the area in which the
building is located.
We and REIT MangementManagement Corp. ("REIT") are parties to an Advisory Agreement
pursuant to which REIT furnishes administrative services with respect to BRT'sour
assets and, subject to the supervision of the
16
Trustees, advises BRTus with respect to itsour investments. BRT believes that the Advisory Agreement is on
terms as favorable to BRT as would be available from an unaffiliated party. The
term of the Advisory Agreement has been renewed by the Board of Trustees to
December 31, 2005. Fredric H. Gould and two officers of BRT are directors of
REIT and Fredric H. Gould is an officer of REIT. All of the outstanding shares
of REIT are owned by Fredric H. Gould. For services performed by
REIT under the Advisory Agreement, REIT receives an annual fee of 1/2 of 1% of
Invested Assetsinvested assets (as defined in the Advisory Agreement) other than mortgages
receivable, subordinated land leases and investments in unconsolidated ventures,
with a 1% fee payable on mortgages receivable, subordinated land leases and
investments in unconsolidated ventures. The term "Invested Assets" is defined in
the Advisory Agreement as the aggregate of all assets shown on the balance sheet
of BRT without deduction for (i) mortgages and other security interests to which
the assets are subject, (ii) depreciation, and (iii) amortization, but excluding
(a) cash and cash items, (b) amounts due from managing agents, (c) rents and
other receivables (not including mortgages receivable or other receivables
arising from the sale of invested assets), (d) rent security, (e) prepaid
expenses and deferred charges, and (f) obligations of municipal, state and
federal governments and governmental agencies, other than securities of the
Federal Housing Authority, the Veterans Administration and the Federal National
Mortgage Association and securities issued by governmental agencies that are
backed by a pool of mortgages.
The fee to REIT is based on net assets and computations of the fee includes non-accruing
mortgage receivables to the extent they exceed allowances for loan losses. The
fee under the Advisory Agreement is computed and payable quarterly, subject to adjustment at year end based
on the audited financial statements. During fiscal 20012003 REIT earned $745,000$875,000 under the
Advisory Agreement. UnderBorrowers of BRT may pay fees directly to REIT for services
rendered. These fees totaled $601,000 in fiscal 2003.
All of the Advisory Agreement, BRT bears all expenses including
interest, discount and other costs for borrowed money; taxes on income or
property and license fees (including franchise taxes); rental paid for office
space used by BRT; audit fees and expenses; legal fees; expensesoutstanding shares of litigation;
charges of transfer agents, registrars, brokers, underwriters and banks;
expenses relating to meetings of trustees and shareholders; expenses connected
with the acquisition, disposition or ownership of investment assets, including
but not limited to, travel expenses, costs of appraisal, leasing, maintenance,
repair, improvement and foreclosure of property and origination and mortgage
servicing fees and real estate brokerage commissions; fees for the management of
real estateREIT are owned by BRT; feesFredric H. Gould, the
Chairman of our Board. Fredric H. Gould and expenses payable to Trustees,Matthew J. Gould, one of our Senior
Vice President, are salaried officers and
employees (other than fees payable to Trustees, officers and employees who are
directors, officers and employees of REIT whoseand received compensation is payable solely
by REIT), independent contractors, consultants, managers, or agents;from
REIT of $537,300 and indemnification required to be made under the Declaration$630,617 respectively in 2003. Simeon Brinberg, David W.
Kalish and Mark H. Lundy, officers of Trust.BRT Realty Trust, received consulting fees
from REIT in 2003 of $45,833, $62,501 and $93,749, respectively.
The Advisory Agreement provides that directors, officers, and employees of
REIT may serve as Trustees, officers and employees of BRT, but such persons may
not receive cash compensation from BRT Realty Trust for services rendered in the
latter capacities.
The Advisory Agreement, is not assignable by REIT without the written
consent of BRT. The Advisory Agreement is not assignable by BRT without the
written consent of REIT, except to a successor to the business and assets of
BRT. The Advisory Agreementwhich was entered into in February 1983, has been
renewed for a term ending December 31, 20052007 and is renewable on an annual basis
by the Board of Trustees, for a maximum five year period. Notwithstanding such
renewal, of the Advisory Agreement by the Board
of Trustees, the shareholders have the right to rescind the renewal of the Advisory
Agreement authorized at the preceding Board of Trustees' Meeting, if at a
special meeting of shareholders called by holders of at least twenty percent of
the outstanding shares specifically for such purpose, a majority of the
outstanding shares entitled to vote thereon determine that the Advisory
Agreement shall not be renewed. In the event the Advisory Agreement is not
renewed in any year by the Board of Trustees or such renewal is rescinded by a
majority of the outstanding shares entitled to vote thereon at a special meeting
called for such purpose, the Advisory Agreement will have a balance of four
years remaining inon the existing term.
A borrower may pay fees directly to REIT for services
renderedIn 2003, we paid Majestic Property Management Corp., a company in arranging loans made by BRT. These fees, which are permittedwe
have no ownership interest and which is 100% owned by the Advisory Agreement, amounted to $443,000Chairman of our Board
of Trustees, fees for fiscal 2001.
BRT engages entitiesmanagement services and brokerage fees totaling $92,000.
Majestic Property Management Corp. provides real property management, real
estate brokerage and construction supervision services for affiliated with REIT to manage properties acquiredand
non-affiliated entities. Fredric H. Gould received compensation from Majestic
Property Management Corp. of $323,286 in foreclosure or deed2003 and Jeffrey A. Gould, Matthew J.
Gould, David W. Kalish, Mark H. Lundy and Israel Rosenzweig received
compensation from Majestic Property Management Corp. in lieu2003 of foreclosure or owned by joint ventures in
which BRT is a venturer.$226,194,
$226,194, $75,144, $110,341 and $226,194, respectively. The management services
provided to BRT include, among other things, rent billing and collection,
leasing, (including document preparation),
maintenance, construction supervision, compliance with regulatory statutes and rules (i.e., New York City rent
control and rent stabilization rules), construction supervision and property
sales and mortgage financing. In fiscal 2001 BRT paid $132,000 to these entities
for all services.sales.
The Trust believes that the fees paid whichby BRT Realty Trust to Majestic Property Management Corp. and
REIT Management Corp. and the expenses reimbursed to Gould Investors L.P. under
the Shared Services Agreement were approved by our Audit Committee and Board of
Trustees. The fees to Majestic Property Management Corp. were based on fees
which we believe are no greater than fees which would have been charged by
unaffiliated persons for comparable services. The fees paid to REIT are pursuant
to the Advisory Agreement discussed above and the expenses reimbursed to Gould
Investors L.P. were reimbursed pursuant to a majority ofShared Services Agreement approved
by the Board of Trustees, including a majority of the independent trustees, are on terms as favorable to BRT as would be available from
unaffiliated parties.
During 2001 Fredric H. Gould, Chairman and Chief Executive Officer of
BRT, was an officer and director of the managing corporate general partner of
Gould Investors L.P. ("GLP"), a limited partnership, an individual general
partner of GLP through June 30, 2001 and managing and sole member of Gould
General LLC, a general partner of GLP on and after July 1, 2001. BRT, GLP and
other related entities occupy common office space, and share office services,
equipment and personnel, including personnel performing legal and accounting
services. In fiscal 2001, $645,000 of common general and administrative expenses
were allocated to BRT, including $85,600 reimbursed to GLP for services,
primarily accounting and tax related services, provided by David W. Kalish,
Senior Vice President-Finance of BRT, and $115,392 and $74,600, respectively,
reimbursed to GLP for services, primarily legal services, provided by Mark H.
Lundy, a Vice President and Simeon Brinberg, a Senior Vice President of BRT. The
direct compensation of Messrs. Kalish, Lundy and Brinberg is paid by GLP and
then allocated to BRT. The Trust believes that the allocations, which are based
upon time expended by officers and employees on BRT's activities, compared to
total time expanded on activities for all entities which share various services,
is on terms which are fair and reasonable and are on terms as favorable to BRT
as would be available from unaffiliated parties.
Trustees.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16(a)")
requires our executive
officers and directors,trustees, and persons who beneficially own more than 10% of BRT's Shares,our
shares, to file Initial Reports of Ownership and Reports of
17
Changes in Ownership with the Securities and Exchange Commission ("SEC") and the
New York Stock Exchange. Executive officers, Trusteestrustees and greater than 10%
beneficial owners are required by SEC regulations to furnish BRTus with copies of
all Section 16(a) forms they file. BRT prepares and files the requisite forms on
behalf of its executive officers and Trustees.
Based on a review of information supplied to BRTus by theour executive officers
and Trustees, BRT believestrustees, we believe that all Section 16(a) filing requirements applicable
to our executive officers and Trustees with respect to fiscal 20012003 were met.met
except for the following: two amended Form 4s were filed on behalf of Seth
Kobay, Treasurer of BRT, on January 31, 2003, to correct information contained
in Form 4s filed on January 10 and 13, 2003; a Form 5 was filed by David W.
Kalish, a Senior Vice President of BRT on October 31, 2003 to correct a
computational error which appeared in Form 4s filed June 16, 2003 and September
17, 2003.
18
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNSTOCK PERFORMANCE GRAPH
This graph compares the performance of BRT's Sharesshares of Beneficial Interest of BRT
Realty Trust with the Standard & Poor's 500 Stock Index and a peer group index
consisting of publicly traded mortgage REIT'SREITs prepared by the National
Association of Real Estate Investment Trusts. The graph assumes $100 invested on
September 30, 1996 in BRT's Shares,
the S & P 500 Index and the peer group index1998 and assumes the reinvestment of dividends.
Cumulative Total Return
-----------------------
9/96 9/97 9/98 9/99 9/00 9/01
------ ------ ------ ------ ------ ------
BRT Realty Trust 100.00 152.08 98.96 148.96 140.63 175.41
S&P 500 Index 100.00 140.45 153.15 195.74 221.74 162.71
NAREIT Mortgage 100.00 134.04 105.51 66.84 63.33 104.42[STOCK PERFORMANCE GRAPH]
Cumulative Total Return
---------------------------------------------------------
9/98 9/99 9/00 9/01 9/02 9/03
BRT REALTY TRUST.... 100.00 150.53 142.11 177.26 243.77 394.73
S&P 500 INDEX....... 100.00 127.81 144.78 106.24 84.48 105.09
NAREIT MORTGAGE..... 100.00 63.35 60.02 98.96 133.87 195.76
19
SUBMISSION OF SHAREHOLDER PROPOSALS
The annual meeting of BRT for the year ending September 30, 20022004 is
scheduled to be held in March 2003.2005. In order to have any proposal presented by a
shareholder at the meeting included in the proxy statement and form of proxy
relating to the meeting, the proposal must be received by BRT not later than
September 28, 2002.24, 2004.
For any proposal that is not submitted for inclusion in next year's proxy
statement, but is instead intended to be presented directly at the 2005 annual
meeting, SEC rules permit BRT to exercise discretionary authority to the extent
conferred by proxy if BRT:
- receives notice of the proposal before December 13, 2004 and advises
stockholders in the 2005 proxy statement of the nature of the proposal
and how management intends to vote on such matter, or
- does not receive notice of the proposal before December 13, 2004.
OTHER MATTERS
The Board does not know of any matter other than those stated in this Proxy
Statement which are to be presented at the Annual Meeting. If any other matter
should properly come before the meeting, the persons named in the proxy card
will vote the Sharesshares represented by it in accordance with their best judgment.
Discretionary authority to vote on other matters is included in the proxy.
By order of the Board of Trustees
Simeon Brinberg, Secretary
Dated: January 25, 200228, 2004
20
APPENDIX A
BRT REALTY TRUST
1996 STOCK OPTION PLAN
1. Purpose.
-------
The purpose of this plan (the "Plan") is to secure for BRT
Realty Trust (the "Trust") and its shareholders the benefits arising from
ownership of shares of Beneficial Interest, $3.00 par value ("Beneficial
Shares") by employees, officers and trustees of, and consultants or advisors to,
the Trust who are expected to contribute to the Trust's future growth and
success. Except where the context otherwise requires, the term "Trust" shall
include all present and future subsidiaries of the Trust as defined in Sections
424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or replaced
from time to time (the "Code"). Those provisions of the Plan which make express
reference to Section 422 shall apply only to Incentive Stock Options (as that
term is defined in the Plan).
2. Type of Options and Administration.
----------------------------------
(a) Types of Options. Options granted pursuant to the Plan
shall be authorized by action of the Board of Trustees of the Trust and may be
either incentive stock options ("Incentive Stock Options") meeting the
requirements of Section 422 of the Code or non-statutory options which are not
intended to meet the requirements of Section 422 of the Code.
(b) Administration. The Plan will be administered by the
Compensation Committee (the "Committee") appointed by the Board of Trustees of
the Trust (or any successor committee), whose construction and interpretation of
the terms and provisions of the Plan shall be final and conclusive. The
delegation of powers to the Committee shall be consistent with applicable laws
or regulations (including, without limitation, applicable state law and Rule
16b-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act"), or any successor rule ("Rule 16b-3")). The Committee shall have
authority, subject to the express provisions of the Plan, to construe the
respective option agreements and the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan, to determine the terms and provisions of
the respective option agreements, which need not be identical, and to make all
other determinations in the judgment of the Committee necessary or desirable for
the administration of the Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any option
agreement in the manner and to the extent it shall deem expedient to carry the
Plan into effect and it shall be the sole and final judge of such expediency. No
trustee or person acting pursuant to authority delegated by the Board of
Trustees shall be liable for any action or determination under the Plan made in
good faith. Subject to adjustment as provided in Section 15 below, the aggregate
number of Beneficial Shares that may be granted to any person in a calendar year
shall not exceed 50,000 Beneficial Shares.
(c) Applicability of Rule 16b-3. Those provisions of the Plan
which make express reference to Rule 16b-3 shall apply to the Trust only at such
time as the Trust's Beneficial Shares are registered under the Exchange Act and
then only to such persons as are required to file reports under Section 16(a) of
the Exchange Act (a "Reporting Person").
3. Eligibility.
-----------
(a) General. Options may be granted to persons who are, at the
time of grant, employees, officers or trustees of, or consultants or advisors
to, the Trust or any subsidiaries of the Trust as defined in Sections 424(e) and
424(f) of the Code ("Participants") provided, that Incentive Stock Options may
only be granted to individuals who are employees of the Trust (within the
meaning of Section 3401(c) of the Code). Subject to the limitation contained in
Section 2(b) above. A person who has been granted an option may, if he or she is
otherwise eligible, be granted additional options if the Committee shall so
determine.
(b) Grant of Options. The Board of Trustees or the Committee
shall select the persons to whom options shall be granted and the timing of the
option grants, the exercise price of the options and the number of shares
subject to option, provided, however, that the selection of a trustee (director)
or an officer who is a Reporting Person (as the terms "director" and "officer"
are defined for purposes of Rule 16b-3) as a recipient of an option, and with
respect to a Reporting Person the timing of the option grant, the exercise price
of the option and the number of shares subject to the option shall be determined
either (i) by the Board of Trustees, or (ii) by a committee consisting solely of
two or more trustees having full authority to act in the matter, each of whom
shall be a "Non-Employee Trustee" . For the purposes of the Plan, a Trustee
shall be deemed to be a "Non-Employee Trustee" only if such person qualifies as
a "Non-Employee Trustee" as such term is defined in Rule 16b-3, as such term is
interpreted from time to time. If at least two of the members of the Board of
Trustee do not qualify as a "Non-Employee Trustee" within the meaning of Rule
16b-3, as such term is interpreted from time to time, then the granting of
options to officers and trustees who are Reporting Persons under the Plan shall
be determined by the Board of Trustees.
4. Stock Subject to Plan.
---------------------
The stock subject to options granted under the Plan shall be
shares of authorized but unissued or reacquired Beneficial Shares. Subject to
adjustment as provided in Section 15 below, the maximum number of shares of
Common Stock of the Corporation which may be issued and sold under the Plan is
700,000 shares. If an option granted under the Plan shall expire, terminate or
is cancelled for any reason without having been exercised in full, the
unpurchased shares subject to such option shall again be available for
subsequent option grants under the Plan.
5. Forms of Option Agreements.
--------------------------
As a condition to the grant of an option under the Plan, each
recipient of an option shall execute an option agreement in such form not
inconsistent with the Plan as may be approved by the Board of Trustees or the
Committee. Such option agreements may differ among recipients.
6. Purchase Price.
--------------
(a) General. The purchase price per share of stock deliverable
upon the exercise of an option shall be determined by the Board of Trustees at
the time of grant of such option; provided, however, that in the case of an
Incentive Stock Option, the exercise price shall not be less than 100% of the
Fair Market Value (as hereinafter defined) of such stock, at the time of grant
of such option, or less than 110% of such Fair Market Value in the case of
options described in Section 11(b). "Fair Market Value" of Beneficial Shares as
of a specified date for the purposes of the Plan shall mean the closing price of
Beneficial Shares on the principal securities exchange (including the Nasdaq
National Market) on which such shares are traded on the day immediately
preceding the date as of which Fair Market Value is being determined, or on the
next preceding date on which such shares are traded if no shares were traded on
such immediately preceding day, or if the shares are not traded on a securities
exchange, Fair Market Value shall be deemed to be the average of the high bid
and low asked prices of the shares in the over-the-counter market on the day
immediately preceding the date as of which Fair Market Value is being determined
or on the next preceding date on which such high bid and low asked prices were
recorded. If the shares are not publicly traded, Fair Market Value of Beneficial
Shares shall be determined in good faith by the Board of Trustees. In no case
shall Fair Market Value be determined with regard to restrictions other than
restrictions which, by their terms, will never lapse.
(b) Payment of Purchase Price. Options granted under the Plan
may provide for the payment of the exercise price by delivery of cash or a check
to the order of the Trust in an amount equal to the exercise price of such
options, or by any other means which the Board of Trustees determines are
consistent with the purpose of the Plan and with applicable laws and regulations
(including, without limitation, the provisions of Rule 16b-3 and Regulation T
promulgated by the Federal Reserve Board).
7. Option Period.
-------------
Subject to earlier termination as provided in the Plan, each
option and all rights thereunder shall expire on such date as determined by the
Board of Trustees and set forth in the applicable option agreement, provided,
that such date shall not be later than (10) ten years after the date on which
the option is granted.
8. Exercise of Options.
-------------------
Each option granted under the Plan shall be exercisable either
in full or in installments at such time or times and during such period as shall
be set forth in the option agreement evidencing such option, subject to the
provisions of the Plan. No option granted to a Reporting Person for purposes of
the Exchange Act, however, shall be exercisable during the first six months
after the date of grant. Subject to the requirements in the immediately
preceding sentence, if an option is not at the time of grant immediately
exercisable, the Board of Trustees may (i) in the agreement evidencing such
option, provide for the acceleration of the exercise date or dates of the
subject option upon the occurrence of specified events, and/or (ii) at any time
prior to the complete termination of an option, accelerate the exercise date or
dates of such option.
9. Transferability of Options.
--------------------------
Incentive Stock Options granted under the Plan shall not be
assignable in whole or in part except by will or by the laws of descent and
distribution. Options granted under this Plan which are non-statutory options
shall be assignable or otherwise transferable by the optionee in whole or in
part (i) by will or by the laws of descent and distribution, (ii) pursuant to a
qualified domestic relations order as defined in the Code, (iii) pursuant to
Title I of the Employee Retirement Income Security Act, or the rules thereunder,
(iv) to the spouse, children, grandchildren or parents of the optionee
("Qualifying Relatives") or any trust created or existing for the benefit of the
optionee and/or one or more Qualifying Relatives, and (v) to any partnership or
limited liability company in which the optionee and/or one or more Qualifying
Relatives is a partner or member. The Board of Trustees or the Committee, in
their discretion, may permit the transfer of options granted under the Plan to
other persons or entities, provided that Incentive Stock Options are not
assignable or otherwise transferable except by will or the laws of descent and
distribution.
In the event an optionee dies during his employment by the
Trust or any of its subsidiaries, or during the three-month period following the
date of termination of such employment, the option shall thereafter be
exercisable, during the period specified in the option agreement, by his
executors or administrators or by any assignee or transferee to the extent to
which such option was exercisable at the time of the optionee's death during the
periods set forth in Section 10 or 11(d).
10. Effect of Termination of Employment or Other Relationship.
---------------------------------------------------------
Except as provided in Section 11(d) with respect to Incentive
Stock Options and except as otherwise determined by the Committee at the date of
grant of an Option, and subject to the provisions of the Plan, an optionee (or
any permitted assignee or transferee of an option granted hereunder), may
exercise an option at any time within three months following the termination of
the optionee's employment or other relationship with the Trust or within one (1)
year if such termination was due to the death or disability of the optionee but,
except in the case of the optionee's death, in no event later than the
expiration date of the Option. If the termination of the optionee's employment
is for cause or is otherwise attributable to a breach by the optionee of an
employment or confidentiality or non-disclosure agreement, the option shall
expire for all purposes and with respect to any assignee or transferee
immediately upon such termination. The Board of Trustees shall have the power to
determine what constitutes a termination for cause or a breach of an employment
or confidentiality or non-disclosure agreement, whether an optionee has been
terminated for cause or has breached such an agreement, and the date upon which
such termination for cause or breach occurs. Any such determinations shall be
final and conclusive and binding upon the optionee and any assignee or
transferee of any option granted hereunder.
11. Incentive Stock Options.
-----------------------
Options granted under the Plan which are intended to be
Incentive Stock Options shall be subject to the following additional terms and
conditions:
(a) Express Designation. All Incentive Stock Options
granted under the Plan shall, at the time of grant, be specifically designated
as such in the option agreement covering such Incentive Stock Options.
(b) 10% Shareholder. If any person to whom an Incentive Stock
Option is to be granted under the Plan is, at the time of the grant of such
option, the owner of stock possessing more than 10% of the total combined voting
power of all classes of stock of the Trust (after taking into account the
attribution of stock ownership rules of Section 424(d) of the Code), then the
following special provisions shall be applicable to the Incentive Stock Option
granted to such individual:
(i) The purchase price per share of Beneficial Shares
subject to such Incentive Stock Option shall not be less than
110% of the Fair Market Value of one Beneficial Share at the
time of grant; and
(ii) the option exercise period shall not exceed five
years from the date of grant.
(c) Dollar Limitation. For so long as the Code shall so
provide, options granted under the Plan (and any other incentive stock option
plans of the Trust) which are intended to constitute Incentive Stock Options
shall not constitute Incentive Stock Options to the extent that such options, in
the aggregate, become exercisable for the first time in any one calendar year
for Beneficial Shares with an aggregate Fair Market Value, as of the respective
date or dates of grant, of more than $100,000.
(d) Termination of Employment, Death or Disability. No
Incentive Stock Option may be exercised unless, at the time of such exercise,
the optionee is, and has been continuously since the date of grant of his or her
option, employed by the Trust, except that:
(i) an Incentive Stock Option may be exercised within
the period of three months after the date the optionee ceases
to be an employee of the Trust (or within such lesser period
as may be specified in the applicable option agreement),
provided, that the agreement with respect to such option may
designate a longer exercise period and that the exercise after
such three-month period shall be treated as the exercise of a
non-statutory option under the Plan;
(ii) if the optionee dies while in the employ of the
Trust, or within three months after the optionee ceases to be
such an employee, the Incentive Stock Option may be exercised
by the person to whom it is transferred by will or the laws of
descent and distribution within the period of one year after
the date of death (or within such lesser period as may be
specified in the applicable option agreement); and
(iii) if the optionee becomes disabled (within the meaning
of Section 22(e)(3) of the Code or any successor provisions
thereto) while in the employ of the Trust, the Incentive Stock
Option may be exercised within the period of one year after
the date the optionee ceases to be such an employee because of
such disability (or within such lesser period as may be
specified in the applicable option agreement).
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
12. Additional Provisions.
---------------------
(a) Additional Option Provisions. The Board of Trustees may,
in its sole discretion, include additional provisions in option agreements
covering options granted under the Plan, including without limitation,
repurchase rights, rights of first refusal, or such other provisions as shall be
determined by the Board of Trustees; provided, that such additional provisions
shall not be inconsistent with any other term or condition of the Plan and such
additional provisions shall not cause any Incentive Stock Option granted under
the Plan to fail to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code.
(b) Acceleration, Extension, Etc. The Board of Trustees may,
in its sole discretion (i) accelerate the date or dates on which all or any
particular option or options granted under the Plan may be exercised or (ii)
extend the dates during which all, or any particular, option or options granted
under the Plan may be exercised; provided, however, that no such extension shall
be permitted if it would cause the Plan to fail to comply with Section 422 of
the Code or with Rule 16b-3 (if applicable).
13. General Restrictions.
--------------------
(a) Investment Representations. The Trust may require any
person to whom an Option is granted, as a condition of exercising such option,
to give written assurances in substance and form satisfactory to the Trust to
the effect that such person is acquiring the Beneficial Shares subject to the
option or award, for his or her own account for investment and not with any
present intention of selling or otherwise distributing the same, and to such
other effects as the Trust deems necessary or appropriate in order to comply
with federal and applicable state securities laws.
(b) Compliance With Securities Law. Each Option shall be
subject to the requirement that if, at any time, counsel to the Trust shall
determine that the listing, registration or qualification of the shares subject
to such option upon any securities exchange or automated quotation system or
under any state or federal law, or the consent or approval of any governmental
or regulatory body, or that the disclosure of non-public information or the
satisfaction of any other condition is necessary as a condition of, or in
connection with the issuance or purchase of shares thereunder, such option may
not be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Board of Trustees.
Nothing herein shall be deemed to require the Trust to apply for or to obtain
such listing, registration or qualification, or to satisfy such condition.
14. Rights as a Stockholder.
-----------------------
The holder of an option shall have no rights as a stockholder
with respect to any shares covered by the option (including, without limitation,
any rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.
15. Adjustment Provisions for Recapitalizations, Reorganizations and
----------------------------------------------------------------
Related Transactions.
---------------------
(a) Recapitalizations and Related Transactions. If, through or
as a result of any recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar transaction, (i) the outstanding
Beneficial Shares are increased, decreased or exchanged for a different number
or kind of shares or other securities of the Trust, or (ii) additional shares or
new or different shares or other non-cash assets are distributed with respect to
such Beneficial Shares or other securities, an appropriate and proportionate
adjustment shall be made in (x) the maximum number and kind of shares reserved
for issuance under or otherwise referred to in the Plan, (y) the number and kind
of shares or other securities subject to any then outstanding options under the
Plan, and (z) the price for each share subject to any then outstanding options
under the Plan, without changing the aggregate purchase price as to which such
options remain exercisable. Notwithstanding the foregoing, no adjustment shall
be made pursuant to this Section 15 if such adjustment (i) would cause the Plan
to fail to comply with Section 422 of the Code or with Rule 16b-3 or (ii) would
be considered as the adoption of a new plan requiring stockholder approval.
(b) Reorganization, Merger and Related Transactions. All
outstanding Options under the Plan shall become fully exercisable for a period
of sixty (60) days following the occurrence of any Trigger Event, whether or not
such Options are then exercisable under the provisions of the applicable
agreements relating thereto. For purposes of the Plan, a "Trigger Event" is any
one of the following events:
(i) the date on which Beneficial Shares are
first purchased pursuant to a tender offer or exchange offer
(other than such an offer by the Trust, any Subsidiary, any
employee benefit plan of the Trust or of any Subsidiary or any
entity holding Beneficial Shares or other securities of the
Trust for or pursuant to the terms of such plan), whether or
not such offer is approved or opposed by the Trust and
regardless of the number of shares purchased pursuant to such
offer;
(ii) the date the Trust acquires knowledge
that any person or group deemed a person under Section 13(d)-3
of the Exchange Act (other than the Trust, current officers
and/or trustees, any Subsidiary, any employee benefit plan of
the Trust or of any Subsidiary or any entity holding
Beneficial Shares or other securities of the Trust for or
pursuant to the terms of any such plan or any individual or
entity or group or affiliate thereof which acquired its
beneficial ownership interest prior to the date the Plan was
adopted by the Board), in a transaction or series of
transactions, has become the beneficial owner, directly or
indirectly (with beneficial ownership determined as provided
in Rule 13d-3, or any successor rule, under the Exchange Act),
of securities of the Trust entitling the person or group to
30% or more of all votes (without consideration of the rights
of any class or stock to elect directors by a separate class
vote) to which all shareholders of the Trust would be entitled
if the election of the Board of Trustees were an election held
on such date;
(iii) the date, during any period of two
consecutive years, when individuals who at the beginning of
such period constitute the Board of Trustees of the Trust
cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election
by the stockholders of the Trust, of each new trustee was
approved by a vote of at least two-thirds of the trustees then
still in office who were trustees at the beginning of such
period; and
(iv) the date of approval by the
stockholders of the Trust of an agreement (a "reorganization
agreement") providing for:
(A) The merger or consolidation of the Trust
with another corporation or real estate investment trust where
the stockholders of the Trust, immediately prior to the merger
or consolidation, do not beneficially own, immediately after
the merger or consolidation, shares of the entity issuing cash
or securities in the merger or consolidation entitling such
shareholders to 80% or more of all votes (without
consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all stockholders
of such corporation or real estate investment trust would be
entitled in the election of directors or trustees or where the
members of the Board of Trustees of the Trust, immediately
prior to the merger or consolidation, do not, immediately
after the merger or consolidation, constitute a majority of
the Board of Directors or the Board of Trustees of the entity
issuing cash or securities in the merger or consolidation; or
(B) The sale or other disposition of all or
substantially all the assets of the Corporation.
(c) Board Authority to Make Adjustments. Any adjustments under
this Section 15 will be made by the Board of Trustees, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
16. Merger, Consolidation, Asset Sale, Liquidation, etc.
----------------------------------------------------
(a) General. In the event of any sale, merger, transfer or
acquisition of the Trust or substantially all of the assets of the Trust in
which the Trust is not the surviving entity, and provided that after the Trust
shall have requested the acquiring or succeeding entity (or an affiliate
thereof), that equivalent options shall be substituted and such successor entity
shall have refused or failed to assume all options outstanding under the Plan or
issue substantially equivalent options, then any or all outstanding options
under the Plan shall accelerate and become exercisable in full immediately prior
to such event. The Committee will notify holders of options under the Plan that
any such options shall be fully exercisable for a period of fifteen (15) days
from the date of such notice, and the options will terminate upon expiration of
such notice.
(b) Substitute Options. The Trust may grant options under the
Plan in substitution for options held by employees of another entity who become
employees of the Trust, or a subsidiary of the Trust, as the result of a merger
or consolidation of the employing entity with the Trust or a subsidiary of the
Trust, or as a result of the acquisition by the Trust, or one of its
subsidiaries, of property or stock of the employing entity. The Trust may direct
that substitute options be granted on such terms and conditions as the Board of
Trustees considers appropriate in the circumstances.
17. No Special Employment Rights.
----------------------------
Nothing contained in the Plan or in any option shall confer
upon any optionee any right with respect to the continuation of his or her
employment by the Trust or interfere in any way with the right of the Trust at
any time to terminate such employment or to increase or decrease the
compensation of the optionee.
18. Other Employee Benefits.
-----------------------
Except as to plans which by their terms include such amounts
as compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Trustees.
19. Amendment of the Plan.
---------------------
(a) The Board of Trustees may at any time, and from time to
time, modify or amend the Plan in any respect; provided, however, that if at any
time the approval of the stockholders of the Trust is required under Section 422
of the Code or any successor provision with respect to Incentive Stock Options,
the Board of Trustees may not effect such modification or amendment without such
approval.
(b) The modification or amendment of the Plan shall not,
without the consent of an optionee, affect his or her rights under an option
previously granted to him or her. With the consent of the optionee affected, the
Board of Trustees may amend outstanding option agreements in a manner not
inconsistent with the Plan. The Board of Trustees shall have the right to amend
or modify (i) the terms and provisions of the Plan and of any outstanding
Incentive Stock Options granted under the Plan to the extent necessary to
qualify any or all such options for such favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422 of the Code and (ii) the terms and provisions of
the Plan and of any outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
20. Withholding.
-----------
(a) The Trust shall have the right to deduct from payments of
any kind otherwise due to the optionee any federal, state or local taxes of any
kind required by law to be withheld with respect to any shares issued upon
exercise of options under the Plan. Subject to the prior approval of the Trust,
which may be withheld by the Trust in its sole discretion, the optionee may
elect to satisfy such obligations, in whole or in part, (i) by causing the Trust
to withhold Beneficial Shares otherwise issuable pursuant to the exercise of an
option or (ii) by delivering to the Trust Beneficial Shares already owned by the
optionee. The shares so delivered or withheld shall have a Fair Market Value
equal to such withholding obligation as of the date that the amount of tax to be
withheld is to be determined. An optionee who has made an election pursuant to
this Section 20(a) may only satisfy his or her withholding obligation with
Beneficial Shares which are not subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements.
(b) The acceptance of Beneficial Shares upon exercise of an
Incentive Stock Option shall constitute an agreement by the optionee (i) to
notify the Trust if any or all of such shares are disposed of by the optionee
within two years from the date the option was granted or within one year from
the date the shares were issued to the optionee pursuant to the exercise of the
option, and (ii) if required by law, to remit to the Trust, at the time of and
in the case of any such disposition, an amount sufficient to satisfy the Trust's
federal, state and local withholding tax obligations with respect to such
disposition, whether or not, as to both (i) and (ii), the optionee is in the
employ of the Trust at the time of such disposition.
(c) Notwithstanding the foregoing, in the case of a Reporting
Person whose options have been granted in accordance with the provisions of
Section 3(b) herein, no election to use shares for the payment of withholding
taxes shall be effective unless made in compliance with any applicable
requirements of Rule 16b-3.
21. Cancellation and New Grant of Options, Etc.
------------------------------------------
The Board of Trustees shall have the authority to effect, at
any time and from time to time, with the consent of the affected optionees (i)
the cancellation of any or all outstanding options under the Plan and the grant
in substitution therefor of new options under the Plan covering the same or
different numbers of shares and having an option exercise price per share which
may be lower or higher than the exercise price per share of the cancelled
options or (ii) the amendment of the terms of any and all outstanding options
under the Plan to provide an option exercise price per share which is higher or
lower than the then-current exercise price per share of such outstanding
options.
22. Effective Date and Duration of the Plan.
---------------------------------------
(a) Effective Date. The Plan shall become effective when
adopted by the Board of Trustees, but no Incentive Stock Option granted under
the Plan shall become exercisable unless and until the Plan shall have been
approved by the Trust's shareholders. If such shareholder approval is not
obtained within twelve months after the date of the Board's adoption of the
Plan, no options previously granted under the Plan shall be deemed to be
Incentive Stock Options and no Incentive Stock Options shall be granted
thereafter. Amendments to the Plan not requiring shareholder approval shall
become effective when adopted by the Board of Trustees; amendments requiring
shareholder approval shall become effective when adopted by the Board of
Trustees, but no Incentive Stock Option granted after the date of such amendment
shall become exercisable (to the extent that such amendment to the Plan was
required to enable the Trust to grant such Incentive Stock Option to a
particular optionee) unless and until such amendment shall have been approved by
the Trust's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any Incentive Stock
Options granted on or after the date of such amendment shall terminate to the
extent that such amendment to the Plan was required to enable the Trust to grant
such option to a particular optionee. Subject to this limitation, options may be
granted under the Plan at any time after the effective date and before the date
fixed for termination of the Plan.
(b) Termination. Unless sooner terminated in accordance with
Section 16, the Plan shall terminate upon the earlier of (i) the close of
business on the day next preceding the tenth anniversary of the date of its
adoption by the Board of Trustees, or (ii) the date on which all shares
available for issuance under the Plan shall have been issued pursuant to the
exercise or cancellation of options granted under the Plan. If the date of
termination is determined under (i) above, then options outstanding on such date
shall continue to have force and effect in accordance with the provisions of the
instruments evidencing such options.
23. Governing Law.
-------------
The provisions of this Plan shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
Adopted by the Board of Trustees on December 6, 1996, as
amended by the Board of Trustees on December 10, 2001.
APPENDIX B
BRT REALTY TRUST
CHARTER OF THE
AUDIT COMMITTEE OF THE BOARD OF TRUSTEES
Composition:CHARTER
I. PURPOSE
The Audit Committee (the "Committee) is a committee of the Board of
Trustees annually elects, by majority
vote(the "Board"). The primary function of the trustees then in office,Committee is to represent
and assist the members, not
fewer than three in number,Board with the oversight of: (i) the quality and integrity of the
Audit Committee.
The Board shall designate one member to serve as
chairmanTrust's financial statements and internal controls, (ii) the Trust's compliance
with legal and regulatory requirements, (iii) the independent auditor's
qualifications and independence, and (iv) the performance of the Committee. AllTrust's
internal audit function and independent auditors. The Committee will fulfill its
responsibilities by carrying out its activities and duties consistent with this
Charter. The Committee shall be given full and direct access to the Trust's
management, Trust's employees and independent auditors as necessary to carry out
these responsibilities.
II. COMPOSITION
The Audit Committee shall be comprised of three or more Trustees. The
members of the Audit Committee shall be independent Non-executive Trustees
who have a basic understanding of financenominated by the Nominating and
accountingCorporate Governance Committee and be ableelected by the Board at the annual
organizational meeting to readone-year terms or until their successors are elected
and understand
fundamentalqualified. Each member shall satisfy the independence, experience and
financial statements in accordance with
theliteracy requirements of theThe New York Stock Exchange, as
interpreted by the
Board in its business judgment,Sarbanes-Oxley Act of 2002 and atapplicable rules and regulations of the
Securities and Exchange Commission.
At least one member of the Audit Committee shall be a "financial expert"
and have accounting"accounting or related financial management expertiseexpertise" as required by
the Board interprets such qualification in its
business judgment.
Functions
And Authority:Sarbanes-Oxley Act of 2002, The functions and authority of the Audit Committee include:
o Meeting periodically with ManagementNew York Stock Exchange listing standards
and the Trust's independent auditor to review the scope
of the annual audit, policies relating to
internal accounting and auditing procedures and
controls, the adequacy of the Trust's internal
controls and financial reporting process, major
financial risk exposures, and the completed
annual audit including any comments or
recommendations of the auditor.
o Reviewing with the Trust's counsel legal matters
that may have a material impact on the financial
statements, the Trust's compliance with
applicable lawsrules and regulations and any material
reports or inquiries received from regulators or
governmental agencies.
o Meeting annually with the chief financial
officer,the senior internal auditing executive
and the independent auditor in separate executive
sessions.
o Discussing with the independent auditors the
matters the independent auditor determines are
required to be discussed by Statement on
Auditing Standards No. 61.
o Reviewing prior to filing the Trust's annual
report on Form 10-K and recommending, based on a
review of the audited financial statements with
management and the independent auditor, inclusion
of the audited financial statements in the annual
report on Form 10-K.
o Discussing with management and the independent
auditor the matters the independent auditor
determines are required to be discussed by the
Statement on Auditing Standards No. 71 regarding
the interim quarterly financial statements, prior
to filing the Form 10-Q with the Securities and Exchange Commission. o Recommending toThe
designation of one or more members as a "financial expert" shall not impose any
duties, obligations or liabilities on such member greater than the regular
duties, obligations and liabilities as a member of the Committee or the Board.
If any Committee member simultaneously serves on the audit committee of
other public companies, the Board each yearmust determine that such simultaneous service
or services will not impair the selectionability of such member to effectively serve on
the Trust's Audit Committee.
Unless a Chair is elected by the full Board, the members of the Trust's independent auditor, which firm is
ultimately accountable to the Audit Committee
and
the Board.
o Evaluating together with the Board the
performancemay designate a Chair by majority vote of the independent auditorfull Committee membership.
No consulting, advisory or compensatory fees shall be paid by or for the
Trust to any member of the Committee or to any entity with which he or she is
affiliated, other than trustee and if socommittee fees payable by the Trust in the
regular course. Board and committee fees may be payable in cash, shares, options
and/or in kind. Committee members may receive additional compensation from the
Trust for their service on the Committee.
III. MEETINGS.
The Committee shall meet at least quarterly, or more frequently as
circumstances dictate. The timing of the meetings shall be determined by the
AuditCommittee. However, the Committee recommendingwill meet at any time that the Board replaceindependent
auditors believe communication with the Committee is required. As part of its
job to foster open communication, the Committee shall meet periodically with
management, the trustees and the independent auditor.
o Receiving periodic reports fromauditors in separate executive
sessions to discuss any matter which the independent
auditor regardingCommittee or each of these groups
believes should be discussed privately. Minutes shall be kept of each meeting of
the auditor's independence,
discussing such reports withCommittee.
A-1
IV. RESPONSIBILITIES AND DUTIES
The Committee shall have the independent
auditor,following duties and if so determined byresponsibilities:
GENERAL RESPONSIBILITIES:
- To report Committee actions to the Audit
Committee, recommending that thefull Board takeand make appropriate
actionrecommendations.
- To inquire as to satisfy itself of the independence of the auditor.
o Activelyindependent auditors. As part of
this responsibility, the Committee will ensure that the independent
auditors submit on a periodic basis to the Committee a formal written
statement delineating all relationships between such auditors and the
Trust. The Committee is responsible for actively engaging in a dialogue
with the independent auditorauditors with respect to any disclosed relationshiprelationships
or services that may impact the objectivity and independence of the
independent auditor.
o Approving professionalauditors and for recommending that the Board take appropriate
action in response to the independent auditors' report to satisfy itself
of the independent auditors' independence.
- To conduct or authorize investigations into matters within the
Committee's scope of responsibility. The Committee is authorized to the
extent it deems necessary or appropriate, at the Trust's expense and
without Board approval, to retain independent counsel, accountants or
other advisors to assist the Committee in fulfilling its duties. The
Committee may request any officer, trustee or employee of the Trust or
the Trust's outside counsel or independent auditors to attend any meeting
of the Committee or to meet with any members of or consultants to the
Committee.
- To review and approve, specifically and in advance, any permitted
non-audit services proposed to be provided to the Trust by its
independent auditors, and ensure that such services do not interfere with
the independence of such auditors, and do not give rise to an appearance
of impropriety. Pre-approval of permitted non-audit services may be
delegated to the Chairman or another member of the Committee.
- To consider policies and procedures for audit partner rotation on a
five-year cycle.
- To establish procedures for the receipt, retention and treatment of
complaints received by the Trust regarding accounting, internal
accounting controls, or auditing matters, and the confidential, anonymous
submission by employees of concerns regarding accounting, auditing or
internal control issues.
- To meet separately and periodically, with management and with independent
auditors.
- To review and establish hiring policies regulating the hiring by the
Trust of employees or former employees of the Trust's independent
auditors.
RESPONSIBILITIES FOR ENGAGING INDEPENDENT AUDITORS AND REVIEWING INTERNAL AUDIT
FUNCTION:
- To be directly and solely responsible for the appointment, retention and
evaluation of the independent auditors and to directly and be solely
responsible for the approval of any replacement of the independent
auditors. The Committee also will review and approve fees paid to the
independent auditors, including audit and non-audit fees.
- To confirm and assure the objectivity of the internal audit function and
the independence of independent auditors, including a review of
management consulting services provided by the independent auditor, giving
considerationauditors.
RESPONSIBILITIES REGARDING THE ANNUAL AUDIT, INTERNAL AUDITS AND QUARTERLY AND
ANNUAL FINANCIAL STATEMENTS:
- At least annually, the Committee will obtain and review a report by the
independent auditors describing: the firm's internal quality-control
procedures; any material issues raised by the most recent internal
quality-control review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities, within the
preceding five years, respecting one or more
A-2
independent audits carried out by the firm, and any steps taken to the possible effect of providingdeal
with any such non-audit services onissues; and (to assess the auditor's independence.
o Reviewingindependence) all
relationships between the independent auditors and approving the feesTrust.
- The Committee will strive to insure that the independent auditors provide
the Committee with a timely notification and analysis of significant
financial reporting issues.
- The Committee will have discussions with management and the auditor
for both audit and non-audit services.
o Reviewingindependent
auditors regarding the programs maintained byannual report filed with the Trust
with respect to compliance with law and
applicable regulations.
o Annually prepare a report to shareholders as
required by Securities and
Exchange Commission (Form 10-K) and other published documents containing
the Trust's financial statements. Each Form 10-K must be approved by the
Committee prior to filing, either at a meeting, or by a telephone
conference call in which management and the independent auditors
participate.
- The Committee will have discussions with management and the independent
auditors regarding each quarterly report filed with the Securities and
Exchange Commission (Form 10-Q). Each Form 10-Q must be approved by the
Committee prior to filing, either at a meeting, or by a telephone
conference call in which management and the independent auditors
participate.
THE COMMITTEE WILL DISCUSS THE FOLLOWING WITH THE INDEPENDENT AUDITORS:
- The planned arrangements and scope of the annual audit.
- The adequacy of the Trust's internal controls, including computerized
information systems controls and security.
- Any significant findings and recommendations made by the independent
auditors together with management's response.
- The need for the independent auditors to assess their responsibility for
detecting accounting and financial reporting errors, fraud, and
defalcations, illegal acts and noncompliance with the Trust's Code of
Business Conduct and Ethics and regulating requirements.
- The need for changes or improvements, including improvements in
efficiency, in financial or accounting practices or controls.
THE COMMITTEE WILL DISCUSS WITH MANAGEMENT AND THE INDEPENDENT AUDITORS:
- The Trust's annual financial statements and related notes and quarterly
financial statements, including all of the Trust's disclosures under
"Management's Discussion and Analysis of Financial Condition and Results
of Operations."
- The independent auditor's audit of and report on the financial
statements.
- The independent auditor's qualitative judgment about the quality, not
just the acceptability, of the accounting principles and financial
disclosures.
- The matters required to be discussed by Statement on Auditing Standards
No. 61, as it may be amended, including but not limited to:
- Methods used to account for significant unusual transactions.
- Effect of significant accounting policies in controversial or emerging
areas.
- Process and basis for sensitive accounting estimates.
- Disagreements between independent auditors and management over
accounting or disclosure matters.
- Any serious difficulties or disputes with management encountered during
the course of the audit. The Committee is directly responsible for the
resolution of disagreements between management and the Trust's
independent auditors regarding financial reporting.
A-3
- The Trust's significant risks and exposures and the steps management has
taken to monitor and control such exposures, including the Trust's risk
assessment and risk management policies or guidelines, if any.
PERIODIC RESPONSIBILITIES:
- Review annually the Committee's charter for adequacy and recommend any
changes to the Board.
- Meet with the independent auditors and management in separate executive
sessions to discuss matters that should be discussed privately with the
Committee.
- Review the Committee's methodology and functions at least annually;
evaluate its performance and institute appropriate changes to improve
performance or reflect changes in the business environment.
- Prepare an annual Committee report or other proxy statement disclosure
about the Committee in accordance with rules and regulations. The report shall be
included inregulations of the
Annual Proxy Statement.
o ReviewingSecurities and Exchange Commission and other applicable law.
- Include a copy of the Committee charter onas an annual basis and
recommendingappendix to the Board appropriate
modifications or additions hereto. Have the
charter set forth in the Trust's proxy
statement at least once every three years.
Meetings:- Review and update periodically the Trust's policies and procedures that
pertain to the Trust's financial reporting process, system of internal
controls, and compliance and ensure that management has established a
system to enforce these policies.
- Discuss with management the Trust's earnings press releases, as well as
financial information and earnings guidance provided to analysts and
rating agencies, if any.
- Perform an annual self-evaluation of its performance and compliance with
the Charter.
The Audit Committee meets quarterly each fiscal
yeardoes not itself prepare financial statements or more frequently as the Boardperform
audits, and its members are not auditors or Committee
deems necessary.
While the Audit Committee has the responsibilities and powers set forth in the
Charter, it is not the dutycertifiers of the AuditTrust's financial
statements. Members of the Committee rely without independent verification on
the information provided to plan or conduct auditsthem and the representations made to them by
management and the independent auditors, and look to management to provide full
and timely disclosure of all material facts affecting the Trust. Accordingly,
the Committee's oversight does not provide an independent basis to determine
that management has maintained appropriate accounting and financial reporting
policies, appropriate internal controls and procedures or appropriate disclosure
controls and procedures, or that the Trust's reports and information provided
under the Securities Exchange Act of 1934 are accurate and complete.
Furthermore, the Committee's consideration and discussions referred to in this
Charter do not assure that the audit of the Trust's financial statements has
been carried out in accordance with generally accepted auditing standards, that
the financial statements are complete and accurate and
arepresented in accordance with generally accepted
accounting principals. This isprinciples, that the responsibilityTrust's auditors are in fact "independent", or
that the matters required to be certified by the Trust's Chief Executive Officer
("CEO"), Chief Financial Officer ("CFO") or other officers of managementthe Trust under
the Sarbanes-Oxley Act of 2002 and the independent auditor. Nor is it the dutyapplicable rules and regulations of the
Audit Committee to conduct investigations, to resolve disagreements, if any,
between managementSecurities and the independent auditor or to assure compliance with lawsExchange Commission have been properly and regulations.accurately certified.
A-4
ANNUAL MEETING OF SHAREHOLDERS OF
BRT RREALTYREALTY TRUST
March 11, 200215, 2004
TO VOTE BY MAIL
Please date,Date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BYpossible; or
TELEPHONE
(TOUCH-TONE PHONE ONLY)
Please callCall toll-free (1-800-PROXIES1-800-PROXIES from any touch tone telephone and follow the
instructions).instructions. Have your control number and the proxy card available when
you call.
TO VOTE BYcall; or
INTERNET
Please access the web page atAccess www.voteproxy.com and follow the on-screen
instructions. Have your control numberproxy card available when you access the web page.
YOUR CONTROL NUMBER IS
-------------------
|X|Please sign, date and return promptly in the enclosed envelope. Please mark
your Votesvote in BLUE or BLACK Ink as in this example.shown here [X]
WITHHOLD
AUTHORITY
FOR ALL WITHHOLD
NOMINEES ALL NOMINEESTHE FOR THE
NOMINEE NOMINEE
1. Election of / / / / Nominees: Fredric H. GouldNominee: Louis C. Grassi
Class III Gary Hurand
Trustees
/ / INSTRUCTIONS: To withhold authority to vote for
any individual nominee, place an "X" in the box on
the left and strike a line through the nominee's name
listed at right.II
Trustee
FOR AGAINST ABSTAIN
2. Approval of Amendment to 1996 / / / / / /
Stock Option Plan increasing the
Number of shares available under
the Plan by 250,000 shares.
FOR AGAINST ABSTAIN
3. Appointment of Ernst & Young / / / / / /
LLP as independent auditors
for the fiscal year ending
September 30, 2002.
4.2004.
3. In their discretion,the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner directed
hereby by the undersigned shareholder.
PLEASE RETURN USING ENCLOSED ENVELOPE
-------------------------------------
Date , 20022004 Date , 20022004
- --------------- -------- ------------------------- ------------------------ ----- ------------------------------ ----
SIGNATURE SIGNATURE IF HELD JOINTLY
Please sign exactly as name appears on the certificate or certificates
representingthis proxy. When shares to be voted by this proxy, as shown on the label above.are held jointly,
each holder should sign. When signing as executor, administrator, attorney,
trustee, or guardian, please give full title as such. If a corporation, please
sign full corporation name by president or otherduly authorized officer. If a partnership, please
sign in partnership name by authorized person(s).
BRT REALTY TRUST
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
March 11, 200215, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Simeon Brinberg and Mark LundyDavid W. Kalish as
Proxies each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of Beneficial
Interest, $3.00 par value of BRT Realty Trust held of record by the undersigned
on January 21, 200220, 2004 at the Annual Meeting of Shareholders to be held on March
11, 200215, 2004 or any adjournments thereof.
(To Be Signed on Reverse Side.)
COVER
January 25, 2002
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: DEFINITIVE PROXY STATEMENT OF BRT REALTY TRUST
Gentlemen:
On behalf of BRT Realty Trust (the "Trust") enclosed for filing pursuant to Rule
14a-6(b) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is a definitive copy of the Trust's Proxy Statement and Form of Proxy in
connection with the Annual Meeting of Shareholders. Copies of such material are
expected to be released to shareholders on January 25, 2002.
This filing is being effected by direct transmission to the commission's EDGAR
System.
In addition, seven (7) copies of the Trust's annual report to shareholders are
being sent to the Commission on January 25, 2002.
Please note that the proxy statement includes a proposal to amend the Trust's
stock option plan by increasing the number of shares available for grant by
250,000 shares. The amended plan is included as Exhibit B to the proxy
statement, in accordance with instruction 3 to Item 10(b) of the proxy rules.
It is not presently contemplated that the option shares will be registered under
the Securities Act of 1933 in reliance on the exemption provided for in Section
4(2) thereof. The Trust has a limited number of persons to whom options are
granted and all have sufficient information about the Trust to make an informed
decision as to whether or not to exercise options and each executes and delivers
an investment representation to the Trust. If these facts change, a registration
statement on Form S-8 will be filed.
If you have any questions or comments, please contact the undersigned at (516)
466-3100.
Very truly yours,
BRT REALTY TRUST
SIMEON BRINBERG
/s/ SIMEON BRINBERG
SENIOR VICE PRESIDENT AND SECRETARY