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EXHIBIT 99.3
STANDSTILL AND CORPORATE GOVERNANCE AGREEMENT
THIS STANDSTILL AND CORPORATE GOVERNANCE AGREEMENT (the
"Agreement") dated as of February 6, 1995, by and among Alexander's, Inc.,
a Delaware corporation (the "Company"), Vornado Realty Trust, a Maryland
real estate investment trust ("Vornado"), and Interstate Properties, a New
Jersey general partnership ("Interstate").
W I T N E S S E T H
WHEREAS, Vornado and Interstate collectively own beneficially
and of record approximately 29.3% of the outstanding shares of common
stock, par value $1.00 per share, of the Company (the "Common Shares");
WHEREAS, Vornado and Citibank, N.A. ("Citibank") have entered
into an agreement (the "Citibank Agreement") pursuant to which Vornado will
acquire an additional approximately 27.1% of the outstanding Common Shares
from Citibank; and
WHEREAS, Vornado, Interstate and the Company desire to enter
into certain restrictions and agreements with respect to Vornado's and
Interstate's investments in the Company.
NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE I.
STANDSTILL RESTRICTIONS
1.1. Standstill. During the term of this Agreement unless
approved by the Independent Directors (as hereinafter defined), Vornado and
Interstate will not, and will cause each of their respective Affiliates (as
such term is defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) and Associates (as such term is
defined in Rule 12b-2 under the Exchange Act), whether or not any such
Affiliate or Associate was such on the date of this Agreement, not to:
(a) acquire, offer to acquire, or agree to acquire, directly
or indirectly (including repurchases by the Company), by purchase or
otherwise, any Common Shares or
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direct or indirect rights or options to acquire (through purchase,
exchange, conversion or otherwise) any Common Shares, if such acquisition,
at the time it is made, together with the Common Shares otherwise owned
collectively by Vornado, Interstate and their respective Affiliates and
Associates (excluding the Company) (collectively, the "Vornado Group"),
would result in the Vornado Group's aggregate Beneficial Ownership (as such
term is defined in Rule 13d-3 under the Exchange Act) or record ownership
of Common Shares during the term of this Agreement exceeding 66.65% of the
then outstanding Common Shares; or
(b) sell, transfer, or otherwise dispose of any Common Shares
owned or subsequently obtained by each of them in the aggregate in excess
of the Permitted Transfer Amount, in one or a series of related
transactions, at a price or prices per Common Share in excess of 115% of
the average of the last reported sales price per Common Share, as reported
by the New York Stock Exchange, Inc. for the previous 20 trading days,
unless the transferee of such Common Shares irrevocably offers to purchase
the same pro rata percentage of the Common Shares of all other Beneficial
Owners of outstanding Common Shares, other than the members of the Vornado
Group, on the same terms and at the same price per Common Share, it being
understood that any transfers occurring within a 360-day period involving,
directly or indirectly, the same transferee or its Affiliates or Associates
or any other person who would constitute a "group" as defined in Exchange
Act Rule 13d-3 with any of the foregoing ("Related Parties") shall be
deemed to be part of a series of related transactions, but that
transactions with persons who are not Related Parties shall not be
considered a series of related transactions for purposes of this Section
1(b). "Permitted Transfer Amount" means the number of Common Shares
included in any transaction or related series of transactions which in the
aggregate is equal to the greater of (i) 30% of the outstanding Common
Shares or (ii) a majority of the Common Shares owned in the aggregate by
the Vornado Group, in each case at the time of such transfer or transfers.
Notwithstanding the foregoing, the members of the Vornado Group shall be
permitted to transfer any Common Shares pursuant to a broad public
distribution in an underwritten public offering registered under the
Securities Act of 1933, as amended.
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ARTICLE II.
CORPORATE GOVERNANCE MATTERS
2.1. Directors. (a) During the term of this Agreement,
Interstate and Vornado agree to use their best efforts to cause the Board
of Directors of the Company to include three members who are Independent
Directors. For purposes hereof, a person shall be deemed to be an
"Independent Director" if he or she is not, or was not at any time during
the five years preceding his or her election as a director, (i) a member of
the Vornado Group, (ii) an Affiliate or Associate of any entity which
Beneficially Owns 25% or more of the voting securities of the Company,
(iii) an Affiliate or Associate of any entity who has had any material
business dealings with a member of the Vornado Group during such period or
(iv) a family member of any of the above-named persons. If the Independent
Director or Independent Directors so request, Interstate and Vornado agree
to use their best efforts to cause an individual or individuals chosen by
the remaining Independent Director or Independent Directors, who is
reasonably satisfactory to a majority of the remaining members of the
Company's Board of Directors, to fill the vacancy discussed in Section
2.1(b) or any vacancy caused by the resignation, removal or death of an
Independent Director. Any action to be taken by the Independent Directors
shall be taken by majority vote of the Independent Directors in office.
(b) The Parties hereto agree that on the date hereof, Stephen
Mann and Thomas DiBenedetto are the only members of the Board of Directors
of the Company who are Independent Directors. Interstate and Vornado agree
to use their best efforts to cause Messrs. Mann and DiBenedetto and a third
Independent Director designated by Messrs. Mann and DiBenedetto in
accordance with Section 2.1(a) to serve on the Board of Directors of the
Company as Independent Directors during the term of this Agreement. The
parties hereto further agree that the Independent Directors can only be
removed for "cause."
(c) The Company shall, and Interstate and Vornado agree to
use their best efforts to cause the Company to, provide the Independent
Directors with a reasonable budget to employ investment bankers,
independent counsel or other professionals that the Independent Directors
determine are necessary to carry out their responsibilities. The Company
shall maintain its current indemnification of officers and directors under
its Amended and Restated Certificate of Incorporation and By-Laws and shall
maintain its directors
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and officers insurance to the extent available at current premiums (which
do not exceed $250,000 per annum).
(d) The Board of Directors has approved of the appointment of
Russell Wight and David Mandelbaum as members of the Company's Board of
Directors, to fill two of the three vacancies created by the resignations
of the Citibank designees.
2.2. Business Combinations and Other Affiliate Transactions.
During the term of this Agreement, Interstate and Vornado agree not to
cause the Company to engage in any transaction with a member of the Vornado
Group (i) that is described in or contemplated by the definition of
"business combination" contained in Section 203 of the Delaware General
Corporation Law, or (ii) in which any member of the Vornado Group has an
interest (other than as a stockholder of the Company), unless in each case,
such transaction has been approved by a majority of the Independent
Directors.
2.3. REIT Qualification. The Company agrees that it will not
knowingly take any action that will cause the Company to cease to qualify
as a real estate investment trust within the meaning of Section 856 of the
Internal Revenue Code of 1986, as amended, unless such action shall have
been approved by a majority of the Board of Directors of the Company.
2.4. Registration Rights. Upon the request of the Vornado
Group, the Company agrees to use its best efforts to cause a registration
statement to become effective under the Securities Act of 1933, as amended,
relating to the offer and sale of the Common Shares held by the Vornado
Group, on customary and usual terms to be agreed upon between the Company
and the Vornado Group. The parties hereto agree that, in connection with
such registration, the Vornado Group shall pay for all costs and expenses
relating to its legal fees, any blue sky fees and any underwriter discount,
and the Company shall pay for all costs and expenses relating to its legal
and accounting fees, and any printing or listing fees. Interstate and
Vornado agree that the Vornado Group shall not make more than one such
request during any twelve-month period nor request that the Company
register less than 10% of the outstanding Common Shares at any one time.
The Company shall have no liability to the Vornado Group if such
registration statement does not become effective for any reason, provided
that the Company has responded to such request in good faith.
2.5. Conduct of Company's Business. From the date hereof to
the earlier of (i) Closing or termination of
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the Citibank Agreement or (ii) June 30, 1995, the Company shall not take
any action not approved by Vornado to (a) conduct its business other than
in the ordinary course, (b) amend its Amended and Restated Certificate of
Incorporation or its By-Laws, (c) declare, set aside or pay any dividend
payable in cash, stock or property with respect to the Company's common
stock, (d) issue, sell, pledge, dispose of or encumber any additional
shares of, or securities convertible or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, the
Company's common stock, (e) acquire directly or indirectly by redemption or
otherwise any Common Shares, (f) incur any indebtedness for money borrowed,
(g) make or commit any expenditure (not previously committed) in excess of
$50,000 or (h) agree to do any of the foregoing.
2.6. Terms of Office. The Company will use its best efforts
to adjust the classes in which directors serve so that the Independent
Directors will stand for election at the next annual meeting of
shareholders.
ARTICLE III.
MISCELLANEOUS
3.1. Authorization and Enforceability. Each of the parties
hereto represents and warrants that it is duly authorized to execute and
deliver this Agreement and that this Agreement is a valid and binding
obligation of such party enforceable against such party in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the rights
of creditors generally and by general equitable principles.
3.2. Specific Performance. Interstate and Vornado acknowledge
that the Company would not have an adequate remedy at law for money damages
in the event that any of the covenants of Interstate and Vornado in this
Agreement were not performed in accordance with its terms and therefore
agree that the Company shall be entitled to specific enforcement of such
covenants in addition to any other remedy to which it may be entitled, at
law or in equity.
3.3. Term. If the closing of the Citibank Agreement occurs,
this Agreement shall terminate three years from the date of such closing.
If the closing of the Citibank Agreement has not occurred, this Agreement
shall terminate on the earlier of (i) termination of the Citibank
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Agreement or (ii) June 30, 1995. This Agreement is effective immediately
except that Sections 2.1, 2.2, 2.4 and 2.6 shall not become effective until
the closing of the Citibank Agreement has occurred.
3.4. Waivers. The failure at any time of any party to require
performance by any other party of any responsibility or obligation required
by this Agreement shall in no way affect a party's right to require such
performance at any time thereafter, nor shall the waiver by the party of a
breach of any provision of this Agreement by any other party constitute a
waiver of any other breach of the same or any other provision of this
Agreement nor constitute a waiver of the responsibility or obligation
itself.
3.5. Assignability. This Agreement shall be binding upon and
inure to the benefit of the successors, heirs and legatees of each party
hereto, as appropriate. Neither this Agreement nor any right or obligation
hereunder may be assigned or delegated in whole or in part to any other
person without the prior written consent of the other parties.
3.6. Notices. In any case where any notice or other
communication is required or permitted to be given hereunder such notice or
communication shall be in writing and (a) personally delivered, (b) sent by
registered United States mail, postage prepaid, return receipt requested,
(c) transmitted by telecopy of (d) sent by way of a recognized overnight
courier service, postage prepaid, return receipt requested with
instructions to deliver on the next business day, in each case as follows:
If to the Company, to:
Alexander's Inc.
31 West 34th Street
New York, New York 10001
Attention: Brian Kurtz
Telecopy: (212) 695-4221
With copy to:
Stephen Mann
c/o Clifford Companies
292 Madison Avenue
New York, New York 10017
Telecopy: (212) 689-8490
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and
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Douglas Bartner, Esq.
Telecopy: (212) 848-7179
If to Vornado or Interstate, to or in care of:
Vornado Realty Trust
Park 80 West
Plaza II
Saddle Brook, NJ 07662
Attention: Steven Roth
Telecopy: (201) 587-0600
With copy to:
Sullivan & Cromwell
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attention: Janet T. Geldzahler, Esq.
Telecopy: (202) 293-6330
All such notices or other communications shall be deemed to
have been given or received (i) upon receipt if personally delivered, (ii)
on the fifth day following posting if by registered United States mail,
(iii) when sent if by confirmed telecopy or (iv) on the next business day
following deposit with an overnight courier.
3.7. Choice of Law. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of
Delaware without giving effect to the principles of conflict of laws
thereof.
3.8. Severability. Should any provision of this Agreement be
deemed in contradiction with the laws of any jurisdiction in which it is to
be performed or unenforceable for any reason, such provision shall be
deemed null and void solely for the purpose of the performance thereof in
such jurisdiction, but this Agreement shall remain in force in all other
respects. Should any provision of this Agreement be or become ineffective
because of changes in applicable laws or interpretations thereof or should
this Agreement
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fail to include a provision that is required as a matter of law, the
validity of the other provisions of this Agreement shall not be affected
thereby. If such circumstances arise, the parties hereto shall negotiate
in good faith appropriate modifications to this Agreement to reflect those
changes that are required by law.
3.9. Third Party Beneficiaries. In the event the Independent
Directors shall not be in office or the Company has failed to seek
enforcement of its rights or the rights of its shareholders under this
Agreement despite a demand by the Independent Directors that the Company do
so, the present and future beneficial owners of voting securities of the
Company are intended third party beneficiaries of this Agreement and any
such person may take such action as may deemed necessary or appropriate to
enforce the rights and obligations arising pursuant to this Agreement or to
obtain the benefits intended to be conferred hereby.
3.10. References to Agreement. Any reference herein to this
Agreement shall be deemed to be a reference to such Agreement as the same
may be modified, varied, amended or supplemented from time to time by the
parties in accordance with the provisions hereof. Unless the context
otherwise expressly requires, the words "herein," "hereof" and "hereunder"
and other words of similar importance refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision.
3.11. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior agreement or
understanding between the parties hereto whether oral or written, with
respect to the matters contemplated hereby.
3.12. Headings, etc. The Article and Section headings in this
Agreement are intended for convenience of reference only and shall not
affect the interpretation of this Agreement. Whenever the context shall
require, each term stated in either the singular or plural shall include
the singular and the plural. References herein to masculine, feminine or
neuter pronouns shall be construed to refer to another gender when the
context may require.
3.13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
3.14. Amendments and Waivers. This Agreement may be amended
or modified and any provision hereof may be
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waived only by a written instrument approved by the Independent Directors
and executed by each of the parties or by their respective successors,
assigns, heirs and legatees, as appropriate.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first written above.
ALEXANDER'S, INC.
By:/s/ STEPHEN MANN
Name: Stephen Mann
Title: Chairman
VORNADO REALTY TRUST
By:/s/ JOSEPH MACNOW
Name: Joseph Macnow
Title: Executive Vice President
INTERSTATE PROPERTIES
By:/s/ STEVEN ROTH
Name: Steven Roth
General Partner