BRT REALTY TRUST
60 Cutter Mill Road
Suite 303
Great Neck, New York 11021
(516) 466-3100
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Notice of Annual Meeting of Shareholders
March 9, 2001
The Annual Meeting of Shareholders of BRT Realty Trust will be held on
Friday, March 9, 2001, at 9:00 a.m., at the offices of BRT, 60 Cutter Mill Road,
Suite 303, Great Neck, N.Y.:
1. To elect three Class II Trustees;
2. To ratify the selection by the Board of Trustees of Ernst & Young LLP as
independent auditors for the current fiscal year;
3. To transact any other business as may properly come before the meeting.
Shareholders of record at the close of business on January 15, 2001 will be
entitled 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. Most 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 26, 2001
BRT REALTY TRUST
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
March 9, 2001
We are providing this Proxy Statement to the shareholders of BRT Realty
Trust ("BRT") in connection with the solicitation of proxies by the Board of
Trustees of BRT to be voted at the Annual Meeting of Shareholders. The Annual
Meeting will be held at the offices of BRT, 60 Cutter Mill Road, Suite 303,
Great Neck, New York, at 9:00 A.M., on Friday, March 9, 2001.
The date of this Proxy Statement is January 26, 2001, the approximate date
on which we are mailing this Proxy Statement and the accompanying form of proxy
to shareholders. BRT's fiscal year begins on October 1st and ends on September
30th. References in the Proxy Statement to the year 2000 or fiscal 2000 refers
to the twelve month period from October 1, 1999 to September 30, 2000.
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 15, 2001
(the "Record Date") 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. On the Record Date there were 7,180,263 shares of Beneficial
Interest ("Shares") outstanding. A quorum (holders of a majority of 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 present
in person or by proxy is required to elect the three nominees for Class II
Trustee and to approve any other matter. There is no cumulative voting in
connection with the election of Trustees.
Because many shareholders can not attend the meeting in person, it is
necessary that a large number 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 9, 2001. 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.
You can revoke your proxy at any time before it is exercised. To revoke
your proxy you may file a written revocation with BRT's Secretary, or you may
deliver a properly executed proxy bearing a later date (including an internet or
telephone vote). You may also revoke your proxy by attending the meeting and
voting in person. If not so revoked, the Shares represented by such proxy will
be voted.
Votes withheld from nominees for Trustee, abstentions on proposals 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 nominees for
Trustee and abstentions on proposals have the same effect as votes against them.
Broker non-votes have no effect on the outcome of election of Trustees or other
proposals.
All shares 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 Shares "FOR" the
nominees for Class II Trustee and "FOR" the appointment of Ernst & Young LLP as
BRT's auditors for the current fiscal year.
COST OF PROXY SOLICITATION
BRT will pay the cost of soliciting proxies. In addition to the
solicitation of proxies by mail and through its regular employees, BRT 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 Shares and to request authority for the exercise of proxies; in
such cases, BRT will reimburse banks and brokerage houses and others for their
reasonable out-of-pocket expenses in forwarding proxies and proxy material to
shareholders.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
TRUSTEES AND OFFICERS
The following table sets forth information concerning share ownership of (i) all
persons known by BRT to own beneficially 5% or more of its Shares, (ii) all
Trustees and nominees for Trustee, (iii)each executive officer named in the
Summary Compensation Table, and (iv) all Trustees and officers of the Trust as a
group, based upon the number of outstanding Shares on January 15, 2001. There
were 7,180,263 shares outstanding on January 15, 2001.
Amount of
Name of Beneficial Beneficial Percent
Owner Ownership (1) of Class
- ------------------ ------------- --------
Gould Investors, L.P. (2) 2,099,417 28.49%
Patrick J. Callan 45,000 *
320 Park Avenue, Suite 1700
New York, NY 10022 (3)(5)
Fredric H. Gould (2)(3)(6)(7) 2,677,188 36.3%
Jeffrey A. Gould (2)(3)(8) 251,125 3.4%
Matthew Gould (2) (4) (9) 2,359,839 32.0%
David Heiden (2)(5) 20,000 *
David G. Herold (3)(5)
16 Southdown Court
Huntington, NY 11743 19,500 *
Arthur Hurand (3) (5)
4182 Pier North Blvd., Suite D
Flint, MI 48504 18,000 *
Gary Hurand (3)(5)(10)
4182 Pier North Blvd., Suite D
Flint, MI 48504 218,151 3.0%
Mark H. Lundy (2)(11) 24,340 *
Herbert C. Lust, II (3)(5)
54 Porchuck Road
Greenwich, CT 06830 75,000 1.0%
Marshall Rose (12)
667 Madison Avenue
New York, NY 10021 269,545 3.7%
Israel Rosenzweig (2)(13) 282,921 3.8%
Henry Moskowitz and the 460,500 6.3%
Argo Corporation
50 West 17th Street
New York, NY 10011 (14)
All Trustees and Officers
as a group
(17 in number)(15) 4,235,561 (16) 57.47%
*Less 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.
(2) Address is 60 Cutter Mill Road, Great Neck, NY 11021.
(3) A Trustee of BRT.
(4) Nominated for election as a Trustee of BRT.
(5) Includes 5,000 Shares which underlie unexercised stock options.
(6) Includes 256,990 Shares owned by the pension and profit sharing trusts
of BRT and REIT Management Corp. of which Fredric H.Gould and two non
-Trustee officers are trustees, as to which shares Mr. Gould has shared
voting and investment power.
(7) Includes 34,762 Shares held by Mr. Gould as co-trustee for the children
of his brother (as to which Shares Mr. Gould disclaims beneficial
interest), 25,000 Shares owned by a trust for the benefit of Mr.
Gould's grandchildren of which Mr. Gould is a trustee, 4,790 Shares
owned by Georgetown Group, Inc., of which Mr. Gould is a Vice President
and 18,988 Shares owned by a partnership in which Mr. Gould is a
general partner. Also includes 30,048 Shares owned by One Liberty
Properties, Inc. ("OLP"), of which Mr. Gould is an officer and director
and in which Gould Investors L.P. ("GLP") (an entity in which Mr. Gould
is a general partner and a principal executive officer and sole
shareholder of the managing general partner) is a controlling
shareholder, and 2,099,417 Shares owned by GLP. Does not include 25,015
Shares owned by Mrs. Fredric H. Gould, as to which shares Mr. Gould
disclaims beneficial interest and Mrs. Gould has sole voting and
investment power.
(8) Includes 22,252 Shares owned by Mr. Gould as custodian for his minor
children (as to which Shares Mr. Gould disclaims beneficial interest),
25,000 Shares owned by a trust for the benefit of Mr. Gould's children
and others, of which Mr. Gould is a trustee, and 23,250 Shares which
underlie unexercised stock options. Does not include 6,000 Shares owned
by Mrs. Jeffrey Gould as to which Shares Mr. Gould disclaims beneficial
interest and Mrs. Gould has sole voting and investment power.
(9) Includes 15,666 Shares owned by Mr. Gould as custodian for his minor
children (as to which Shares Mr. Gould disclaims beneficial interest),
25,000 Shares owned by a trust for the benefit of Mr. Gould's children
and others, of which Mr. Gould is a trustee, 23,250 Shares which
underlie unexercised stock options and 2,099,417 Shares owned by GLP
(Mr. Gould is President of the managing general partner of GLP). Does
not include 5,500 Shares owned by Mrs. Matthew Gould as to which Shares
Mr. Gould disclaims beneficial interest and Mrs. Gould has sole voting
and investment power.
(10) Includes 47,243 Shares owned by a partnership in which Mr. Hurand is a
partner, and 121,377 Shares owned by a corporation in which Mr. Hurand
is an officer and shareholder.
(11) Includes 23,250 Shares which underlie unexercised options.
(12) Mr. Rose, a Trustee of BRT, is not standing for reelection at the
Meeting. Includes 4,790 Shares owned by Georgetown Group, Inc. in which
Mr. Rose is an officer, 76,983 Shares owned by the pension and profit
sharing trusts of Georgetown Group, Inc., of which Mr. Rose is trustee,
18,988 Shares owned by a partnership in which Mr. Rose is one of the
general partners, 21,626 Shares owned by Jill and Marshall Rose
Foundation, of which Mr. Rose is a trustee (as to which Shares Mr. Rose
disclaims beneficial interest), 84,749 Shares owned by Mr. Rose for the
benefit of others (as to which Shares Mr. Rose disclaims beneficial
interest) and 16,167 shares owned by a partnership of which Mr.Rose is
general partner.
(13) Includes 5,625 Shares which underlie unexercised options.
(14) A Schedule 13G dated June 9, 1999 was filed with the Securities and
Exchange Commission reporting that Henry Moskowitz, and Rose Moskowitz,
as joint tenants, and the Argo Corporation have sole and/or shared
voting and dispositive power over an aggregate of 460,500 Shares.
(15) This total is qualified by notes (5) through (13).
(16) Includes an aggregate of 166,500 Shares which underlie unexercised op-
tions.
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. The Board may, following the Annual Meeting, increase the
size of the Board and fill any resulting vacancy or vacancies.
At the Annual Meeting, three Class II Trustees will be elected. 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 II Trustees of Matthew
Gould, Arthur Hurand and Herbert C. Lust, II, unless you indicate that your vote
should be withheld. Proxies will not be voted for a greater number of persons
than the number of nominees named in the Proxy Statement. We expect each nominee
to be able to serve if elected. However, if any 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 II nominee, if elected, will serve until the Annual Meeting
to be held in the year 2004. Each other Trustee will serve until the Annual
Meeting to be held in the year set forth opposite his name.
The Board of Trustees recommends a vote for Matthew Gould, Arthur
Hurand and Herbert C. Lust, II for election as Class II Trustees.
The following table sets forth the name and age of each nominee for election to
the Board of Trustees and 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, except
Matthew Gould, is currently serving as a Trustee.
Principal
Occupation
Term and Other Trustee
Name Age Expiring Directorships Since
- ---- ------------ ------------- -----
Class I
Patrick J. Callan
(1)(2) 64 2003 Principal of 1984
The RREEF Funds,
pension fund real
estate investments
(retired January 1,
2001); Director of
M&T Bank Corporation;
Director of
Manufacturers & Traders
Bank Directors Advisory
Council - New York City
Division.
Jeffrey A. Gould 35 2003 President and Chief 1997
Operating Officer
of BRT since March
1996; Executive Vice
President and Chief
Operating Officer of
BRT from March
1995 to March 1996;
Director of One Liberty
Properties, Inc.
David G. Herold (2) 59 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 (Nominees)
Matthew Gould 41 2004 President of
Georgetown Partners, Inc., (3)
General Partner of Gould
Investors L.P.;
Director of One Liberty
Properties, Inc.
Arthur Hurand (1) 84 2004 Private Investor; 1989
Director of One Liberty
Properties, Inc.
Herbert C. Lust, II 74 2004 Private Investor; 1981
(1)(2) Director of Prime
Hospitality, Inc.
Class III
Fredric H. Gould (1) 65 2002 Chairman of the Board 1983
and Chief Executive Officer
of BRT; Chairman of the Board
of Georgetown Partners,Inc.;
General Partner of Gould
Investors L.P.; Chairman of
the Board and Chief Executive
Officer 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 54 2002 President of Dawn Donut 1990
Systems, Inc.; Director
of Republic Bancorp.
- -----------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee and the Compensation Committee.
(3) Nominated for election at the Annual Meeting.
Fredric H. Gould is the father of Jeffrey A. Gould and Matthew Gould and Arthur
Hurand is the father of Gary Hurand.
EXECUTIVE COMPENSATION
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 $100,000 for the
fiscal year ended September 30, 2000.
Annual Compensation(2) Long Term Compensation
---------------------- ----------------------
Awards Payouts
------ -------
Other Securities/
Annual Restricted Underlying
Name and Principal Compen- Stock Options/ LTIP All Other
Position Year(1) Salary Bonus sation Awards($) SARs(#) Payout($) Compensation (2) (3)
-------- -------------- ----- ------ --------- ------- --------- --------------------
Fredric H. Gould 2000 0 0 0 0 0 0 0
Chairman of the 1999 0 0 0 0 0 0 0
Board and Chief 1998 0 0 0 0 0 0 0
Executive Officer (4)
Jeffrey A. Gould 2000 $260,000 0 0 0 0 0 $25,500
President and 1999 $250,000 0 0 0 12,500 0 $24,000
Chief Operating 1998 $240,000 0 0 0 0 0 $24,000
Officer
Israel Rosenzweig 2000 $192,405 0 0 0 0 0 $25,500
Vice President 1999 $250,000 0 0 0 12,500 0 $24,000
1998 $125,000 0 0 0 10,000 0 $18,750
Mark H. Lundy 2000 $132,805 0 0 0 0 0 $4,350
Vice President (5) 1999 $147,702 0 0 0 12,500 0 $3,800
1998 $148,185 0 0 0 0 0 $9,900
David Heiden 2000 $126,158 $20,000 0 0 0 0 $21,924
Vice President (6) 1999 $120,186 $10,000 0 0 10,000 0 $19,500
1998 $49,231 0 0 0 10,000 0 $7,385
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(1) Fiscal years ending September 30.
(2) The Trust does not have any profit sharing plan, but it does have Stock
Option Plans, a Pension Plan and a Bonus Plan. See "Stock Option Plans" and
"Pension Plan," below.
(3) Represents annual contributions under BRT's Pension Plan for Jeffrey Gould,
Israel Rosenzweig and David Heiden. With respect to Mark H. Lundy, repre-
sents the amount reimbursed by BRT to Gould Investors L.P. for the allocated
portion of the pension expense paid by Gould Investors L.P. for Mr. Lundy.
The only other type of Other Annual Compensation for each of the named
officers was in the form of perquisites and was less than the level required
for reporting.
(4) Fredric H. Gould does not receive any compensation directly from BRT.
Reference is made to the caption "Interest of Management in Certain
Transactions" for a discussion of fees paid to REIT Management Corp., BRT's
Advisor. Mr. Gould is the President and sole shareholder of REIT
Management Corp.
(5) Mark H. Lundy does not receive compensation directly from BRT; he receives
compensation and fees directly from Gould Investors L.P. The amounts set
forth represent the portion reimbursed by BRT for services, primarily legal
services, rendered by Mr. Lundy to BRT.
(6) David Heiden became an employee and officer of a BRT subsidiary in April,
1998 and a Vice President of BRT in March, 1999.
BRT Pension Plan
BRT has a non-contributory defined contribution Pension Plan covering
employees. The Pension Plan is administered by Fredric H. Gould, Simeon Brinberg
and David W. Kalish(Messrs. Brinberg and Kalish being non-trustee officers of
BRT). Annual contributions are based on 15% of an employees annual earnings, not
to exceed $25,500 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. In 2000, $25,500, $25,500 and $21,924
was contributed for the benefit of Jeffrey A. Gould, Israel Rosenzweig and David
Heiden, respectively. The aggregate amount accrued to date for Mr. Gould, Mr.
Rosenzweig and Mr. Heiden is approximately $517,879, $950,942 and $56,475,
respectively. The credited years of service for Mr. Gould, Mr. Rosenzweig and
Mr. Heiden are 13, 16 and 2, respectively.
Option Grants and Exercises; Unexercised Options
No options were granted to or exercised by any Named Executive Officer in Fiscal
2000. The table sets forth information concerning unexercised options at fiscal
year end with respect to the Named Executive Officers:
Number of
Securities
Underlying Value of Unexercised
Unexercised In-the-Money Options
Options at fiscal at Fiscal Year End (1)
Year end ----------------------
--------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
- ---- ----------- -------- ------------- -------------
Fredric H. Gould 0 0 0/ 0 $0/$0
Jeffrey A. Gould 0 0 20,125/12,500 $65,457/$31,219
Israel Rosenzweig 0 0 2,500/20,000 $1,250/$34,969
Mark H. Lundy 0 0 20,125/12,500 $65,457/$31,219
David Heiden 0 0 2,560/17,500 $2,813/$33,413
(1) Represents the difference between the exercise price of options and $8.44,
the closing price of BRT's Shares on September 30, 2000.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of three independent non-employee
Trustees; Patrick J. Callan, Herbert C. Lust, II and David Herold. 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's stock option plans.
Compensation Overview
It is the view of the Compensation Committee that 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 Salary and Bonus
Base salaries are targeted to be competitive with salaries paid to senior
executives at other real estate investment trusts and take into account an
individual's achievements and BRT's operating performance in the most recently
concluded fiscal year. The determination by the Committee of base compensation
is subjective and is not based on any structured formula. In determining
compensation for the 2000 fiscal year the Committee took into account the
expertise which the executive officers demonstrated in managing the business of
BRT; among other things the Committee gave consideration to the activity of BRT
in mortgage lending, including loan origination, underwriting, managing the loan
portfolio, and to adjustments made by BRT in its lending activities in a
competitive lending environment.
BRT 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 committee 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. Although bonus payments were approved for
certain officers of BRT, no bonuses were paid or accrued for the benefit of any
Named Executive Officer other than a $20,000 bonus accrued for the benefit of
David Heiden.
Long Term Compensation - Stock Options
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 Shares over a specified number of years.
Under the existing stock option plans options are granted at an exercise price
equal to the fair market value of the Shares of BRT on 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. The Committee determined that there were
sufficient options granted in prior years to incentivize and reward management
and accordingly, no stock options were granted in fiscal 2000.
CEO Compensation
Fredric H. Gould, Chairman of the Board of Trustees and Chief Executive
Officer does not receive any direct remuneration from the BRT, but is
compensated by REIT Management Corp. the Trust's advisor (see "Interest of
Management in Certain Transactions").
Respectfully submitted,
Patrick J. Callan
David Herold
Herbert C. Lust II
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
This graph compares the performance of BRT's Shares with the Standard &
Poor's 500 Stock Index and a peer group index consisting of publicly traded
mortgage REIT'S prepared by the National Association of Real Estate Investment
Trusts. The graph assumes $100 invested on September 30, 1995 in BRT's Shares,
the S & P 500 Index and the peer group index and assumes the reinvestment of
dividends.
TRUSTEE'S FEES AND OTHER COMPENSATION
Each unaffiliated Trustee was paid an annual retainer of $12,500 for his
services in the 2000 fiscal year. In addition, unaffiliated Trustees were paid
$500 per meeting for each Trustee's meeting and each committee meeting attended.
With respect to fees (charged to operations) paid and accrued during the fiscal
year for REIT Management Corp. (the "Advisor") under the Advisory Agreement, see
"Interest of Management in Certain Transactions."
ADDITIONAL INFORMATION ABOUT THE BOARD OF TRUSTEES;
REPORT OF THE AUDIT COMMITTEE
The Board of Trustees holds regular quarterly meetings. In addition
special meetings may be called from time-to-time and, where appropriate,
telephonic meetings are held or action is taken by unanimous consent. In 2000
the Board of Trustees held four meetings. For the 2000 fiscal year each Trustee
attended at least 75% of the Board Meetings.
The Board of Trustees has appointed an Audit Committee and a
Compensation Committee consisting of Patrick J. Callan, David Herold and Herbert
C. Lust II, all independent Trustees.
The Audit Committee of Board of Trustees acts under a written charter
first adopted and approved by the Board of Trustees on March 23, 2000, a copy of
which is attached to this Proxy Statement as Appendix A. Each member of the
Audit Committeee is independent as defined by applicable New York Stock
Exchanges rules. The functions of the Audit Committee include reviewing the
scope and results of the annual audit, reviewing policies related to internal
accounting and auditing procedures and controls, reviewing non-audit services
provided by the independent auditors, reviewing the fees of the independent
auditors for both audit and non-audit services, reviewing compliance with
applicable laws and regulations, and recommending independent auditors to the
Board of Trustees. The Audit Committee meets prior to filing the quarterly Form
10-Q and issuance of the quarterly earnings press release for the first three
quarters of the fiscal year, to review the quarterly results of operations with
BRT's management and BRT's independent auditors. Subsequent to fiscal year end
and prior to filing the annual report on Form 10-K and issuing the press release
relating to BRT's results of operations for the fiscal year, the Audit Committee
meets to review and discuss the year-end financial statements with management
and the independent auditors and evaluates the performance of the auditors and
the Trust's internal accounting staff. The quarterly and year end discussions
include matters required by the Statement on Auditing Standards No. 61
(Communication with Audit Committee). Ernst & Young LLC has provided the Audit
Committee with the written disclosures and letter regarding its independence.
The Compensation Committee is responsible for recommending to the Board of
Trustees the annual compensation of executive officers of BRT, annual bonuses
paid to executive officers and the granting of stock options and is also
responsible for administering the stock option plans.
The Audit Committee held two meetings in the 2000 fiscal year (subsequent
to the end of the 1999 fiscal year and subsequent to the adoption of the Audit
Committee Charter to review the Form 10-Q for the quarter ended June 30, 2000
and the press release issued with respect to the results of operations for the
June 30, 2000 quarter). The Audit Committee held a meeting in December, 2000 to
review the financial statements for Fiscal 2000. The Compensation Committee held
one meeting in 2000.
BRT has no nominating committee or any other committee performing
similar functions.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
BRT and REIT Management Corp. ("REIT") are parties to an Advisory
Agreement pursuant to which REIT furnishes administrative services with respect
to BRT's assets and, subject to the supervision of the Trustees, advises BRT
with respect to its 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, 2004. 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 Assets 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 2000 REIT earned $566,000 under the Advisory
Agreement.
Under 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; expenses 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 estate owned by BRT; fees and expenses payable to Trustees, officers and
employees (other than fees payable to Trustees, officers and employees who are
directors, officers and employees of REIT, whose compensation is payable solely
by REIT), independent contractors, consultants, managers, or agents; and
indemnification required to be made under the Declaration of Trust.
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 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 Agreement has been renewed for a term ending December 31, 2004
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 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 in
the existing term. A borrower may pay fees directly to REIT for services
rendered in arranging loans made by BRT. These fees, which are permitted by the
Advisory Agreement, amounted to $394,000 for fiscal 2000.
BRT engages entities affiliated with REIT to manage properties acquired
in foreclosure or deed in lieu of foreclosure or owned by joint ventures in
which BRT is a venturer. The management services 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), property
sales and mortgage financing. In fiscal 2000 BRT paid $140,000 to these entities
for all services. The Trust believes that the fees paid are on terms as
favorable to BRT as would be available from unaffiliated parties.
During the year ended September 30, 2000 Fredric H. Gould, Chairman and
Chief Executive Officer, was an officer and director of the managing corporate
general partner of Gould Investors L.P. ("GLP"), a limited partnership, and an
individual general partner of GLP. BRT, GLP and other related entities occupy
common office space, and share office services, equipment and personnel. In
fiscal 2000, $367,000 of common general and administrative expenses were
allocated to BRT, including the amounts reimbursed to GLP for services,
primarily legal services, provided by Mark H. Lundy (see "Summary Compensation
Table").
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, and persons who beneficially own
more than 10% of the BRT's Shares, to file Initial Reports of Ownership and
Reports of Changes in Ownership with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. Executive officers, Trustees and
greater than 10% beneficial owners are required by SEC regulations to furnish
BRT 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 BRT by the executive officers and Trustees,
BRT believes that all Section 16(a) filing requirements applicable to our
executive officers and Trustees with respect to fiscal 2000 were met.
RATIFICATION OF APPOINTMENT
OF
INDEPENDENT AUDITORS
(PROPOSAL II)
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, 2001. Representatives of Ernst & Young LLP are expected to be
present at the Annual Meeting and will have the opportunity to make a statement
if they desire to do so and will be available to respond to questions.
If the shareholders do not approve of the appointment of Ernst & Young
LLP, the selection of independent auditors will be made by the Board of
Trustees.
The Board of Trustees recommends a vote "FOR" the appointment of Ernst
& Young LLP as the Trust's independent auditors for the fiscal year ending
September 30, 2001.
SUBMISSION OF SHAREHOLDER PROPOSALS
The annual meeting of BRT for the year ending September 30, 2001 is
scheduled to be held in March 2002. 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, 2001.
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 Shares 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 26, 2001
APPENDIX A
BRT REALTY TRUST
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF TRUSTEES
Composition: The Board of Trustees annually elects, by majority
vote of the trustees then in office, the members, not
fewer than three in number, of the Audit Committee.
The Board shall designate one member to serve as
chairman of the Committee. All members of the Audit
Committee shall be independent Non-executive Trustees
who have a basic understanding of finance and
accounting and be able to read and understand
fundamental financial statements, and at least one
member of the Committee shall have accounting or
related financial management expertise.
Functions
And Authority: The functions and authority of the Audit Committee include:
Meeting periodically with Management and the
Trust's independent auditor to review the scope
of the annual audit, policies relating to
internal accounting and auditing procedures and
controls, major financial risk exposures, and the
completed annual audit including any comments or
recommendations of the auditor.
Reviewing with the Trust's counsel legal matters
that may have a material impact on the financial
statements, the Trust's compliance with
applicable laws and regulations and any material
reports or inquiries received from regulators or
governmental agencies.
Meeting at least annually with the chief
financial officer, the senior internal auditing
executive and the independent auditor in separate
executive sessions.
Reviewing prior to filing the Trust's annual
report on Form 10-K.
Recommending to the Board each year the selection
of the Trust's independent auditor, which firm is
ultimately accountable to the Audit Committee and
the Board.
Evaluating together with the Board the
performance of the independent auditor and, if so
determined by the Audit Committee, recommending
that the Board replace the independent auditor.
Receiving periodic reports from the independent
auditor regarding the auditor's independence,
discussing such reports with the independent
auditor, and if so determined by the Audit
Committee, recommending that the Board take
appropriate action to satisfy itself of the
independence of the auditor.
Approving professional non-audit services
provided by the independent auditor, giving
consideration to the possible effect of providing
such non-audit services on the auditor's
independence.
Reviewing the range of fees of the auditor for
both audit and non-audit services.
Reviewing the programs maintained by the Trust
with respect to compliance with law and
applicable regulations.
Annually prepare a report to shareholders as
required by Securities and Exchange Commission
rules and regulations. The report shall be
included in the Annual Proxy Statement.
Reviewing the charter on an annual basis and
recommending 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: The Audit Committee meets two times each year in June and December or
more frequently as circumstances dictate.
While the Audit Committee has the responsibilities and power set forth in the
Charter, it is not the duty of the Audit Committee to plan or conduct audits to
determine that the Trust's financial statements are complete and accurate and
are in accordance with generally accepted accounting principals. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure compliance with laws
and regulations.
ANNUAL MEETING OF SHAREHOLDERS OF
BRT RREALTY TRUST
March 9, 2001
TO VOTE BY MAIL
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
Please call toll-free (1-800-PROXIES and follow the instructions). Have your
control number and the proxy card available when you call.
TO VOTE BY INTERNET
Please access the web page at www.voteproxy.com and follow the on-screen
instructions. Have your control number available when you access the web page.
YOUR CONTROL NUMBER IS
-------------------
|_| Please mark your
Votes as in this example.
FOR ALL WITHHOLD
NOMINEES ALL NOMINEES
1. Election of / / / / Nominees: Arthur Hurand
Class I Herbert C. Lust II
Trustees Matthew Gould
/ / 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.
FOR AGAINST ABSTAIN
2. Appointment of Ernst & Young / / / / / /
LLP as independent auditors
for the fiscal year ending
September 30, 2001.
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 , 2001 Date , 2001
- --------------- -------- ------------------------- ----------
SIGNATURE SIGNATURE IF HELD JOINTLY
Please sign exactly as name appears on the certificate or certificates
representing shares to be voted by this proxy, as shown on the label above. 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 other authorized officer. If a partnership, please sign in
partnership name by authorized person(s).
Proxy BRT REALTY TRUST
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
March 9, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Jeffrey A. Gould, Simeon Brinberg and
Mark Lundy 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 15, 2001 at the Annual Meeting of Shareholders to be held
on March 9, 2001 or any adjournments thereof.
(To Be Signed on Reverse Side.)