SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<Table>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant under Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</Table>
ALEXANDER'S INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
ALEXANDER'S, INC.
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
2002
ALEXANDER'S, INC.
888 SEVENTH AVENUE
NEW YORK, NEW YORK 10019
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 2002
------------------------
To the Holders of Common Stock:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Alexander's, Inc., a
Delaware corporation (the "Company"), will be held at the Marriott Hotel,
Interstate 80 and the Garden State Parkway, Saddle Brook, New Jersey 07663, on
Wednesday, May 29, 2002 at 3:30 P.M. for the following purposes:
1. The election of three persons to the Board of Directors of the Company,
each for a term of three years; and
2. The transaction of such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Pursuant to the By-laws of the Company, the Board of Directors of the
Company has fixed the close of business on April 22, 2002, as the record date
for determination of stockholders entitled to notice of and to vote at the
meeting.
Your attention is called to the attached proxy statement. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO COMPLETE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE TO WHICH NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING IN PERSON, YOU
MAY WITHDRAW YOUR PROXY AND VOTE YOUR OWN SHARES.
By Order of the Board of Directors,
Larry Portal
Corporate Secretary
ALEXANDER'S, INC.
888 SEVENTH AVENUE
NEW YORK, NEW YORK 10019
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 2002
------------------------
INTRODUCTION
The enclosed proxy is being solicited by the Board of Directors of
Alexander's, Inc., a Delaware corporation (together with its consolidated
subsidiaries, the "Company", unless the context indicates otherwise), for use at
the Annual Meeting of Stockholders of the Company to be held on Wednesday, May
29, 2002 (the "Annual Meeting"). The proxy may be revoked by the stockholder at
any time prior to its exercise at the Annual Meeting. The cost of soliciting
proxies will be borne by the Company. MacKenzie Partners, Inc. has been engaged
by the Company to solicit proxies, at a fee not to exceed $5,000. In addition to
solicitation by mail and by telephone, arrangements may be made with brokerage
houses and other custodians, nominees and fiduciaries to send proxies and proxy
material to their principals and the Company may reimburse them for their
expenses in so doing.
Only stockholders of record at the close of business on April 22, 2002 are
entitled to notice of and to vote at the Annual Meeting. On April 22, 2002,
there were 5,000,850 shares of Common Stock, par value $1.00 per share ("Common
Stock") outstanding, each entitled to one vote at the Annual Meeting.
Under the Company's By-laws, the affirmative vote of a plurality of all the
votes cast at the Annual Meeting, assuming a quorum is present, is sufficient to
elect Directors. A majority of the outstanding shares will constitute a quorum
at the meeting. Proxies marked "withhold authority" (including proxies from
brokers or other nominees indicating that such persons do not have discretionary
power to vote shares in certain matters) will be counted for the purpose of
determining the presence of a quorum, but will not be counted for purposes of
determining whether a proposal has been approved.
The principal executive office of the Company is located at 888 Seventh
Avenue, New York, New York 10019. The accompanying notice of the annual meeting
of stockholders, this proxy statement and the enclosed proxy will be mailed on
or about April 30, 2002 to the Company's stockholders of record as of the close
of business on April 22, 2002.
ELECTION OF DIRECTORS
The By-laws of the Company provide that the Board of Directors shall be
divided into three classes. One class of directors is elected at each annual
meeting of stockholders to hold office for a term of three years and until their
successors are duly elected and qualify. Three nominees for Class II Directors
are to be elected at the Annual Meeting to serve on the Board of Directors until
the Company's Annual Meeting in 2005 and their respective successors shall have
been elected and qualified. Present Class III and I Directors serve until the
Company's Annual Meetings in 2003 and 2004, respectively.
Unless otherwise directed in the proxy, the person named in the enclosed
proxy, or his substitute, will vote such proxy for the election of the three
nominees listed below as Class II Directors for a three-year term and until
their respective successors are elected and qualify. If any nominee at the time
of election is unavailable to serve, it is intended that the person named in the
proxy, or his substitute, will vote for an alternative nominee who will be
designated by the Board. Proxies may be voted only for the three nominees named
or such
alternates. However, the Board has no reason to anticipate that any of the
nominees hereafter named will not be available to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE ELECTION OF THE NOMINEES LISTED BELOW AS CLASS II DIRECTORS. It is the
Company's understanding that Interstate Properties ("Interstate"), a New Jersey
general partnership, Vornado Realty Trust ("Vornado") and Steven Roth, the
Managing General Partner of Interstate and Chief Executive Officer and director
of the Company and Chairman of the Board of Trustees and Chief Executive Officer
of Vornado, who as of April 22, 2002, own in the aggregate 60.4% of the Common
Stock, will vote for this proposal.
The nominees for election as Class II Directors are currently members of
the Board of Directors. The present members of the Board of Directors are listed
below, together with a brief biography for each such person and the year in
which he first became a Director of the Company.
<Table>
<Caption>
PRINCIPAL OCCUPATION YEAR TERM
AND PRESENT POSITION WILL INITIAL
NAME AGE WITH THE COMPANY EXPIRE ELECTION
- ---- --- -------------------- --------- --------
NOMINEES FOR ELECTION TO SERVE AS
DIRECTORS UNTIL THE ANNUAL MEETING IN
2005 (CLASS II)
David Mandelbaum(1).................... 66 A member of the law firm of 2002 1995
Mandelbaum & Mandelbaum, P.C.; a
general partner of Interstate since
1968; Trustee of Vornado since 1979.
Richard West(2)........................ 64 Dean Emeritus, Leonard N. Stern 2002 1984
School of Business, New York
University; Professor of Finance from
1984 through 1995, and Dean from 1984
through August 1993; prior thereto,
Dean of the Amos Tuck School of
Business Administration at Dartmouth
College; Director or Trustee of
Vornado, Vornado Operating Company
("Vornado Operating"), Bowne & Co.,
Inc., various investment companies
managed by Merrill Lynch and various
investment companies managed by
Hotchkis and Wiley.
Neil Underberg......................... 73 A member of the law firm Winston & 2002 1980
Strawn since September 1, 2000; a
member of the law firm of Whitman
Breed Abbott & Morgan from December
1987 to September 2000.
</Table>
2
<Table>
<Caption>
PRINCIPAL OCCUPATION YEAR TERM
AND PRESENT POSITION WILL INITIAL
NAME AGE WITH THE COMPANY EXPIRE ELECTION
- ---- --- -------------------- --------- --------
PRESENT DIRECTORS ELECTED TO SERVE AS
DIRECTORS UNTIL THE ANNUAL MEETING IN
2004 (CLASS I)
Michael D. Fascitelli(3)............... 45 President and Director of the 2004 1996
Company; President and Trustee of
Vornado since December 1996;
President and Director of Vornado
Operating Company, Partner at Goldman
Sachs, in charge of its real estate
practice from December 1992 to
December 1996 and a vice president
prior thereto.
Arthur Sonnenblick..................... 70 Managing Director of Sonnenblick- 2004 1984
Goldman Company, real estate
investment bankers, since January 1,
1996 and Vice Chairman and Chief
Executive Officer prior thereto.
Russell B. Wight, Jr. ................. 62 A general partner of Interstate since 2004 1995
1968; Trustee of Vornado since 1979
and Director of Vornado Operating.
PRESENT DIRECTORS ELECTED TO SERVE AS
DIRECTORS UNTIL THE ANNUAL MEETING IN
2003 (CLASS III)
Steven Roth............................ 60 Chief Executive Officer of the 2003 1989
Company since March 2, 1995; Chairman
of the Board and Chief Executive
Officer of Vornado since 1989 and
Trustee of Vornado since 1979;
Chairman of the Board and Chief
Executive Officer of Vornado
Operating; Managing General Partner
of Interstate, and a Director of
Capital Trust, Inc.
Stephen Mann(4)........................ 64 Chairman of the Board of Directors of 2003 1980
the Company since March 2, 1995;
Interim Chairman of the Board of
Directors of the Company from August
8, 1994 to March 2, 1995; Chairman of
the Clifford Companies since 1990;
prior thereto, counsel to the law
firm of Mudge, Rose, Guthrie,
Alexander & Ferdon.
Thomas R. DiBenedetto(5)............... 51 President of Boston International 2003 1984
Group, Inc. since 1983; Director of
National Wireless Holdings, Inc.;
Managing Director of Olympic
Partners, a real estate investment
firm.
</Table>
- ---------------
(1) Mr. Mandelbaum, formerly a Class III director of the Company, was elected as
a Class II director of the Company by the Board of Directors on March 11,
2002.
(2) Mr. West, formerly a Class III director of the Company, was elected as a
Class II director of the Company by the Board of Directors on March 11,
2002.
(3) Mr. Fascitelli was appointed President of the Company by the Board of
Directors on August 1, 2000.
3
(4) Mr. Mann, formerly a Class II director of the Company, was elected as a
Class III director of the Company by the Board of Directors on March 11,
2002. Mr. Mann was also re-elected Chairman of the Board by the Board of
Directors on March 11, 2002.
(5) Mr. DiBenedetto, formerly a Class II director of the Company, was elected as
a Class III director of the Company by the Board of Directors on March 11,
2002.
The Company is not aware of any family relationships among any directors,
executive officers or nominees.
The Board of Directors held three meetings during 2001. Messrs. Roth,
Fascitelli, West and Wight are the members of the Executive Committee of the
Board of Directors, which is authorized to exercise virtually all the powers of
the Board of Directors in the management of the business and affairs of the
Company to the fullest extent permitted by law. The Executive Committee of the
Board of Directors did not meet in 2001.
The purposes of the Audit Committee are to assist the Board: (i) in its
oversight of the Company's accounting and financial reporting principles and
policies and internal controls and procedures; (ii) in its oversight of the
Company's financial statements and the independent audit thereof; (iii) in
selecting, evaluating and, where deemed appropriate, replacing the outside
auditors; and (iv) in evaluating the independence of the outside auditors. The
function of the Audit Committee is oversight. The management of the Company is
responsible for the preparation, presentation and integrity of the Company's
financial statements and for maintaining appropriate accounting and financial
reporting principles and policies and internal controls and procedures designed
to assure compliance with accounting standards and applicable laws and
regulations. The outside auditors are responsible for planning and carrying out
a proper audit and reviews and other procedures. The Board of Directors has
adopted a written charter for the Audit Committee, a copy of which was attached
as Annex A to the Company's Proxy Statement for its 2001 Annual Meeting of
Stockholders. Messrs. West, Underberg and DiBenedetto are the members of the
Audit Committee. Mr. Underberg is a partner with Winston & Strawn, a law firm
which performed legal services for the Company during the year ended December
31, 2001, for which it was paid $170,051. The Board of Directors has determined
in its business judgement that this relationship does not interfere with Mr.
Underberg's exercise of independent judgement. The Audit Committee held four
meetings during 2001.
The Omnibus Stock Plan Committee is responsible for administering the
Company's Omnibus Stock Plan. The Committee consists of two members, Mr. West
and Mr. DiBenedetto. The Omnibus Stock Plan Committee did not meet during 2001.
The Compensation Committee is responsible for establishing the terms of the
compensation of the executive officers. The Committee consists of two members,
Mr. Mann and Mr. DiBenedetto. The Compensation Committee did not meet during
2001.
All directors attended 75% or more of the meetings of the Board of
Directors and the Committees on which they served in 2001.
4
BOARD OF DIRECTORS REPORT ON EXECUTIVE OFFICER COMPENSATION
During 2001, Mr. Roth was the Chief Executive Officer of the Company. He
did not receive any base salary, bonus or incentive compensation in 2001 for his
services in such capacity.
During 2001, Mr. Fascitelli was the President of the Company. He did not
receive any base salary, bonus or incentive compensation in 2001 for his
services in such capacity.
During 2001, Joseph Macnow was the Executive Vice President-Finance and
Administration of the Company. He did not receive any base salary, or incentive
compensation bonus in 2001 for his services in such capacity.
During 2001, Patrick Hogan was the Vice President-Chief Financial Officer
of the Company. He did not receive any base salary, bonus or incentive
compensation in 2001 for his services in such capacity. Mr. Hogan was appointed
Vice President-Chief Financial Officer on March 1, 2001.
The compensation currently paid to the named officers of the Company is not
limited by the cap on deductible compensation imposed by Section 162(m) of the
Internal Revenue Code.
Stephen Mann
Thomas R. DiBenedetto
5
PERFORMANCE GRAPH
The line graph that follows charts the yearly percentage change in
cumulative stockholder return on an investment in the Company's Common Stock
against the Standard & Poor's 500 Index (the "S&P 500") and the National
Association of Real Estate Investment Trusts ("NAREIT") All Equity Index
(excluding Health Care REITs). The graph assumes an investment of $100 on
December 31, 1996 (weighted on the basis of market capitalization) and
accumulation and reinvestment of all dividends paid thereafter through December
31, 2001. THERE CAN BE NO ASSURANCE THAT PERFORMANCE OF THE COMPANY'S SHARES
WILL CONTINUE IN LINE WITH THE SAME OR SIMILAR TRENDS DEPICTED IN THE GRAPH
BELOW.
[Performance Graph]
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------------------
1996 1997 1998 1998 2000 2001
- ----------------------------------------------------------------------------------------------------------
Alexander's 100 115 99 100 86 72
S&P 500 Index 100 129 159 192 184 162
NAREIT All Equity Index(1) 100 120 99 95 120 136
</Table>
(1) Excluding Health Care REITs.
6
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of April 22, 2002, by (i) each director of the
Company, (ii) each person known by the Company to be the owner of more than five
percent of the Company's outstanding Common Stock and (iii) all directors,
nominees and executive officers as a group. Except as otherwise indicated, each
listed beneficial owner is the direct owner of and has sole investment and
voting power with respect to such shares. Unless otherwise noted, the address of
all such persons is c/o Alexander's, Inc., 888 Seventh Avenue, New York, New
York, 10019.
<Table>
<Caption>
AMOUNT AND
NATURE OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1)(2) CLASS(3)
- ------------------------------------ -------------------- ----------
Steven Roth................................................. 1,364,268(4)(7) 27.3%
Russell B. Wight, Jr. ...................................... 1,376,568(6)(7) 27.5%
David Mandelbaum............................................ 1,364,568(7) 27.2%
Michael D. Fascitelli....................................... --(5) *
Neil Underberg.............................................. 10,500 *
Richard West................................................ 10,200 *
Stephen Mann................................................ 10,110 *
Thomas R. DiBenedetto....................................... 10,000 *
Arthur Sonnenblick.......................................... 10,000 *
All directors and executive officers as a group
(11 persons).............................................. 1,445,928 28.5%
Vornado Realty Trust........................................ 1,654,068(8) 33.1%
Interstate Properties....................................... 1,354,568(7)(8) 27.1%
Franklin Mutual Advisers, Inc.
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078............................. 570,390(9) 11.4%
Ronald Baron, BAMCO, Inc. and Baron Capital Management, Inc.
450 Park Avenue
New York, New York 10022.................................. 538,800(10) 11.0%
</Table>
- ---------------
* Does not exceed 1%.
(1) Based on 5,000,850 shares outstanding as of April 22, 2002.
(2) Includes options to purchase Common Stock ("Options") which are currently
exercisable.
(3) The percentages in this column assume that all shares of Options that each
person has the right to acquire within 60 days pursuant to the exercise of
options to purchase Options are deemed to be outstanding, but are not
deemed to be outstanding for the purpose of computing the ownership
percentage of any other person.
(4) On August 1, 2000, Mr. Roth's 350,000 Options were converted into Stock
Appreciation Rights ("SARs").
(5) On August 1, 2000, Mr. Fascitelli's 500,000 Options were converted into
SARs.
(6) Includes 11,000 shares owned by the Wight Foundation, over which Mr. Wight
holds sole investment and voting power.
(7) Interstate, a partnership of which Messrs. Roth, Wight and Mandelbaum are
the general partners, owns 1,354,568 shares. These shares are included in
the total shares and the percentage of class of Interstate, Mr. Roth, Mr.
Wight and Mr. Mandelbaum. Messrs. Roth, Wight and Mandelbaum share
investment power and voting power with respect to these shares.
(8) Interstate owns 11.7% of the common shares of beneficial interest of
Vornado. Interstate and its three general partners (Messrs. Roth,
Mandelbaum and Wight, all directors of the Company) own in the
7
aggregate 14.4% of the common shares of beneficial interest of Vornado.
Interstate, its three general partners and Vornado own in the aggregate 60.6% of
the outstanding shares of the Common Stock of the Company. See "Certain
Transactions" below.
(9) Based on Schedule 13G dated January 23, 2001, Franklin Mutual Advisors,
Inc. has sole investment discretion and voting authority with respect to
the shares.
(10) Based on Schedule 13D dated August 19, 1999, Ronald Baron owns 538,800
shares in his capacity as a controlling person of BAMCO, Inc. and Baron
Capital Management, Inc. Mr. Baron disclaims beneficial ownership of these
shares. He also owns 10,520 shares personally. Mr. Baron has the sole power
to vote or direct the vote and to dispose or direct the disposition of
10,520 shares and shared power to vote or direct the vote and to dispose or
direct the disposition of 538,580 shares, including 400,500 shares
purchased by BAMCO, Inc. for its investment advisory clients and 138,300
shares purchased by Baron Capital Management Inc. for its investment
advisory clients. Mr. Baron is the President of BAMCO, Inc. and Baron
Capital Management Inc.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by the Company and its
subsidiaries to the Company's executive officers, who were serving as executive
officers at December 31, 2001, and to the Company's Chairman of the Board of
Directors for services rendered in all capacities to the Company and its
subsidiaries for the years 1999 through 2001 ("Covered Executives"). Only
Stephen Mann, the Company's Chairman of the Board of Directors, received cash
compensation from the Company. None of the Company's other executive officers
has received cash from the Company.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
ANNUAL
COMPENSATION LONG TERM
--------------------------- COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS/OPTIONS/SARS COMPENSATION($)
- --------------------------- ---- --------- -------- ------------------- ---------------
Stephen Mann........................ 2001 250,000 -- -- --
Chairman of the Board of 2000 250,000 -- -- --
Directors(1)
1999 250,000 -- 10,000 --
Steven Roth......................... 2001 -- -- -- --
Chief Executive Officer(1) 2000 -- -- -- --
1999 -- -- 350,000 --
Michael Fascitelli.................. 2001 -- -- -- --
President(2) 2000 -- -- -- --
1999 -- -- 150,000 --
Joseph Macnow....................... 2001 -- -- -- --
Executive Vice President-Finance 2000 -- -- -- --
and Administration(3) 1999 -- -- 35,000 --
Patrick Hogan....................... 2001 -- -- -- --
Vice President-Chief Financial 2000 -- -- -- --
Officer(4)
</Table>
- ---------------
(1) Mr. Mann was appointed Chairman on March 2, 1995 when Mr. Roth was appointed
Chief Executive Officer of the Company.
(2) Mr. Fascitelli was appointed President of the Company on August 1, 2000.
(3) Mr. Macnow was appointed Executive Vice President-Finance and Administration
of the Company on March 1, 2001. Prior thereto, Mr. Macnow served as Vice
President-Chief Financial Officer.
(4) Mr. Hogan was appointed Vice President-Chief Financial Officer on March 1,
2001.
8
The following table summarizes all exercises of Options during 2001, and
the number and value of options held at December 31, 2001, by the Covered
Executives.
AGGREGATED OPTION AND SAR EXERCISES IN 2001 AND
YEAR END OPTION AND SAR VALUES
<Table>
<Caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING IN-THE-MONEY
ACQUIRED UNEXERCISED OPTIONS OPTIONS AND SARS
ON VALUE AND SARS AT 12/31/01 AT 12/31/01
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- -------- -------- ------------------------- -------------------------
Steven Roth.................. -- $-- 234,500/115,500 $0/0
Michael D. Fascitelli........ -- -- 450,500/49,500 0/0
Joseph Macnow................ -- -- 23,450/11,550 0/0
Steven Mann.................. -- -- 6,700/3,300 0/0
</Table>
EMPLOYMENT CONTRACTS
Effective March 2, 1995, Mr. Mann became Chairman of the Board of Directors
and entered into an employment agreement under which he is paid $250,000 per
annum. Mr. Mann's original three-year employment agreement, which had a term
expiring in March 2001, has been extended through the date of the 2003 Annual
Meeting of Stockholders of the Company. In the event of termination of the
employment agreement by the Company without just cause, or if Mr. Mann resigns
for good reason, Mr. Mann will continue to be paid his base salary until the end
of the term provided for under the employment agreement.
COMPENSATION OF DIRECTORS
Directors who are not compensated as officers of the Company receive an
annual retainer of $13,500 and $500 for each Board or Committee meeting
attended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The Company has a Compensation Committee, consisting of Mr. Mann and Mr.
DiBenedetto. There are no interlocking relationships involving the Company's
Board of Directors which require disclosure under the executive compensation
rules of the Securities and Exchange Commission.
9
CERTAIN TRANSACTIONS
Steven Roth is Chief Executive Officer and a Director of the Company, the
Managing Partner of Interstate Properties ("Interstate") and Chairman of the
Board and Chief Executive Officer of Vornado Realty Trust ("Vornado").
Interstate owns 27.1% of the outstanding Common Stock of the Company and owns
11.7% of the outstanding common shares of beneficial interest of Vornado. In
addition, Mr. Roth owns 1.5% of the outstanding common shares of beneficial
interest of Vornado. Mr. Roth, Interstate and the other two general partners of
Interstate, David Mandelbaum and Russell B. Wight, Jr. (who are also directors
of the Company and trustees of Vornado) own, in the aggregate, 14.4% of the
outstanding common shares of beneficial interest of Vornado. Vornado owns 33.1%
of the outstanding Common Stock of the Company.
The Company is managed by and its properties are redeveloped and leased by
Vornado, pursuant to agreements with a one-year term which are automatically
renewable.
The annual management fee payable by the Company to Vornado is equal to the
sum of (i) $3,000,000, (ii) 3% of the gross income from the Kings Plaza Mall
($522,000 for the year ended December 31, 2001), plus (iii) 6% of development
costs with minimum guaranteed fees of $750,000 per annum. The leasing agreement
for the Company's properties other than the Kings Plaza Mall provides for the
Company to pay a fee to Vornado equal to (i) 3% of the gross proceeds, as
defined, from the sale of an asset and (ii) in the event of a lease or sublease
of an asset, 3% of lease rent for the first ten years of a lease term, 2% of
lease rent for the eleventh through the twentieth years of a lease term and 1%
of lease rent for the twenty-first through thirtieth year of a lease term. Such
amount is payable annually in an amount not to exceed $2,500,000, until the
present value of such installments (calculated at a discount rate of 9% per
annum) equals the amount that would have been paid had it been paid at the time
the transactions which gave rise to the commissions occurred. Pursuant to the
leasing agreement, in the event third party real estate brokers are used, the
fees to Vornado increase by 1% and Vornado is responsible for the fees to the
third party real estate brokers. At December 31, 2001 the Company owes Vornado
$2,249,000 in leasing fees. During the year ended December 31, 2001, Vornado
through Interstate was paid $915,000 by the Kings Plaza Mall for performing
leasing services.
As of December 31, 2001, the Company was indebted to Vornado in the amount
of $119,000,000, bearing interest at 13.74% and due March 15, 2002, including
$24,000,000 drawn under a $50,000,000 secured line of credit. The maturity date
of these loans has been extended to April 15, 2003 and the interest rate has
been reset to 12.48% (and will reset quarterly thereafter) using the existing
spread to treasuries with a 3.00% floor for treasuries. The Company incurred
interest on the loan of $17,455,000 for the year ended December 31, 2001.
In connection with tax planning for the development of the Company's
Lexington Avenue property, 100 shares of $0.1 par value preferred stock was sold
by 59th Street Corporation (a wholly-owned subsidiary of the Company) to Vornado
on August 1, 2001 for $1,200,000. The non-convertible preferred stock entitles
the holder to cumulative 10% dividends payable semi-annually and is redeemable
at any time at the option of 59th Street Corporation. On December 28, 2001, 59th
Street Corporation redeemed this issue and paid a $49,000 dividend.
During the year ended December 31, 2001, Winston & Strawn, a law firm in
which Neil Underberg, a director of the Company, is a partner, performed legal
services for the Company for which it was paid $170,051.
10
REPORT OF THE AUDIT COMMITTEE
The Audit Committee's purpose is to assist the Board of Directors in its
oversight of the Company's internal controls and financial statements and the
audit process. The Board of Directors, in its business judgment, has determined
that all members of the Committee are "independent", as required by applicable
listing standards of the New York Stock Exchange. The Committee operates
pursuant to a Charter that was adopted by the Board on May 31, 2000; a copy of
the current Charter was attached to the proxy statement for the Company's 2001
Annual Meeting of Stockholders.
Management is responsible for the preparation, presentation and integrity
of the Company's financial statements, accounting and financial reporting
principles and internal controls and procedures designed to assure compliance
with accounting standards and applicable laws and regulations. The independent
auditors, Deloitte & Touche LLP, are responsible for performing an independent
audit of the consolidated financial statements in accordance with generally
accepted auditing standards.
In performing its oversight role, the Audit Committee has considered and
discussed the audited financial statements with management and the independent
auditors. The Committee has also discussed with the independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as currently in effect. The Committee has
received the written disclosures and the letter from the independent auditors
required by Independence Standards Board No. 1, Independence Discussions with
Audit Committees, as currently in effect. The Committee has also considered
whether the provision of non-audit services provided by the independent auditors
is compatible with maintaining the auditors' independence and has discussed with
the auditors the auditors' independence.
Based on the reports and discussions described in this report, and subject
to the limitations on the role and responsibilities of the Committee referred to
below and in the Charter, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Annual Report
on Form 10-K for the fiscal year ended December 31, 2001.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including in respect of auditor independence. Members of
the Committee rely without independent verification on the information provided
to them and on the representations made by management and the independent
auditors. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or appropriate internal controls
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
the Company's financial statements has been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
Deloitte & Touche LLP is in fact "independent".
Richard West
Thomas DiBenedetto
Neil Underberg
March 11, 2002
11
INFORMATION RESPECTING THE COMPANY'S INDEPENDENT AUDITORS
AUDIT FEES
The aggregate fees billed by Deloitte & Touche LLP, the Company's
independent auditors for the year ended December 31, 2001, for professional
services rendered for the audit of the Company's annual financial statements for
that fiscal year and for the reviews of the financial statements included in the
Company's quarterly reports on Form 10-Q for that fiscal year were $145,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed to the Company by Deloitte & Touche LLP for
professional services rendered for information technology services relating to
financial information systems design and implementation for the year ended
December 31, 2001.
ALL OTHER FEES
The aggregate fees billed for services rendered to the Company by Deloitte
& Touche LLP, other than the services described above under "Audit Fees" and
"Financial Information Systems Design and Implementation Fees," for the year
ended December 31, 2001, were $148,000, including audit related services of
$129,000 and non-audit services of $19,000. Audit related services generally
include fees for stand-alone audits of subsidiaries and reviews of other filings
or registration statements under the Securities Act of 1933 and Securities
Exchange Act of 1934 and non-audit services generally include fees for tax
consultations regarding return preparation and real estate investment trust tax
law compliance.
RETENTION OF INDEPENDENT AUDITORS FOR THE YEAR 2002
The Board has retained Deloitte & Touche LLP to act as independent auditors
for the fiscal year ending December 31, 2002. The firm of Deloitte & Touche LLP
was engaged as independent auditors for the 2001 fiscal year, and
representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
ADDITIONAL MATTERS TO COME BEFORE THE MEETING
The Board does not intend to present any other matter, nor does it have any
information that any other matter will be brought before the Annual Meeting.
However, if any other matter properly comes before the Annual Meeting, it is the
intention of the person named in the enclosed proxy to vote said proxy in
accordance with his judgment on such matters.
ADVANCE NOTICE BYLAW
The By-laws of the Company provide that in order for a stockholder to
nominate a candidate for election as a director at an annual meeting of
stockholders or propose business for consideration at such meeting, notice must
be given to the Secretary of the Company no more than 150 days nor less than 120
days prior to the first anniversary of the preceding year's annual meeting.
12
STOCKHOLDER PROPOSALS
Stockholder proposals for the 2003 Annual Meeting of Stockholders of the
Company must be received at the principal executive office of the Company, 888
Seventh Avenue, New York, New York 10019, Attention: Secretary, not later than
January 6, 2003 for inclusion in the 2003 proxy statement and form of proxy.
By Order of the Board of Directors,
Larry Portal
Corporate Secretary
April 30, 2002
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS ARE
URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE.
13
ALEXANDER'S, INC.
The undersigned, revoking all prior proxies, hereby appoints Steven Roth
proxy, with full power of substitution, to attend, and to vote all shares the
undersigned is entitled to vote, at the Annual Meeting of Stockholders of
Alexander's, Inc. (the "Company") to be held at the Marriott Hotel, Interstate
80 and the Garden State Parkway, Saddle Brook, New Jersey 07663 on Wednesday,
May 29, 2002, at 3:30 P.M., local time, upon any and all business as may
properly come before the meeting and all adjournments thereof. Said proxy is
authorized to vote as directed below upon the proposals, which are more fully
set forth in the Proxy Statement and otherwise in his discretion upon such other
business as may properly come before the meeting and all adjournments thereof,
all as more fully set forth in the Notice of Meeting and Proxy Statement,
receipt of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. WHEN PROPERLY EXECUTED,
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER.
IF THIS PROXY IS EXECUTED, BUT NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS.
(Continued and to be executed on reverse side)
<Table>
1. ELECTION OF DIRECTORS:
The Board of Directors recommends a Vote "FOR" Election of
Directors
[ ] FOR all nominees listed below
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below
Nominees: David Mandelbaum
Richard West
Neil Underberg
(Instructions: To withhold authority to vote for any
individual nominee, write that nominee's name in the space
provided below.)
- -
</Table>
Please date and sign exactly as
your name or names appear
hereon. Each joint owner must
sign. (Officers, Executors,
Administrators, Trustees, etc.
will kindly so indicate when
signing.)
Dated
------------------------------------------------------------------------,
2002
--------------------------------
Signature(s) of Stockholder(s)
VOTES MUST BE INDICATED (X) IN
BLACK OR BLUE INK. [X]
PLEASE VOTE, DATE AND SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.