-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D5QBXwbbpdcInQbgCFl62Gm75QcBeBJnztE69fXpfqD+YswntYcrawlG1q4teuBR 7xclw26OhU9jNrDOxDSdJg== 0000914317-01-000151.txt : 20010308 0000914317-01-000151.hdr.sgml : 20010308 ACCESSION NUMBER: 0000914317-01-000151 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010131 FILED AS OF DATE: 20010307 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY CENTRAL INDEX KEY: 0000036840 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 221697095 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25043 FILM NUMBER: 1562497 BUSINESS ADDRESS: STREET 1: 505 MAIN ST STREET 2: P O BOX 667 CITY: HACKENSACK STATE: NJ ZIP: 07602 BUSINESS PHONE: 2014886400 MAIL ADDRESS: STREET 1: P O BOX 667 STREET 2: 505 MAIN STREET CITY: HACKENSACK STATE: NJ ZIP: 07602 10-Q 1 0001.txt 10-Q FIRST REAL ESTATE INVESTMENT TRUST OF NJ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended January 31, 2001 Commission File No. 2-27018 FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY - -------------------------------------------------------------------------------- (exact name of registrant as specified in its charter) New Jersey 22-1697095 - ------------------------------- ----------------------- (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 505 Main Street, P.O. Box 667, Hackensack, New Jersey 07602 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 201-488-6400 ------------ _______________________________________________________________________________ Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes XX No ---- --- FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY ------------------------------------------------ INDEX ----- Part I: Financial Information Item 1: Unaudited Condensed Consolidated Financial Statements a.) Balance Sheets as at January 31, 2001 and October 31, 2000; b.) Statements of Income, Comprehensive Income, and Undistributed Earnings For the Three Months Ended January 31, 2001 and 2000; c.) Statements of Cash Flows for the Three Months Ended January 31, 2001 and 2000; d.) Notes to Consolidated Financial Statements. Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 3: Quantitative and Qualitative Disclosures of Market Risk. Part II: Other Information Item 6. Exhibits and Reports on Form 8-K Item 1: Financial Statements FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, October 31, 2001 2000 --------------- ---------------- (Unaudited) (See Note 1) (In Thousands of Dollars) ASSETS Real estate and equipment, at cost, net of accumulated depreciation $77,663 $78,038 Investments in marketable securities 9,506 9,451 Cash & cash equivalents 2,259 2,925 Due from related party 1,087 1,066 Tenants' security accounts 776 766 Sundry receivables 2,028 1,794 Prepaid expenses and other assets 1,241 1,361 Deferred charges, net 1,346 1,380 --------------- ---------------- Totals $95,906 $96,781 =============== ================ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgages payable $70,005 $70,214 Accounts payable and accrued expenses 836 854 Cash distributions in excess of earnings and investment in affiliate 386 352 Dividends payable 936 1,794 Tenants' security deposits 1,075 1,073 Deferred revenue 231 303 --------------- ---------------- Total liabilities 73,469 74,590 --------------- ---------------- Minority interest 1,057 1,047 --------------- ---------------- Commitments and contingencies Shareholders' equity: Shares of beneficial interest without par value; 1,790,000 shares authorized; 1,559,788 shares issued and outstanding 19,314 19,314 Undistributed earnings 2,060 1,879 Accumulated other comprehensive income (loss) 6 (49) --------------- ---------------- Total shareholders' equity 21,380 21,144 --------------- ---------------- Totals $95,906 $96,781 =============== ================
See Notes to financial Statements FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND UNDISTRIBUTED EARNINGS THREE MONTHS ENDED JANUARY 31, 2001 AND 2000 UNAUDITED
2001 2000 ---- ---- (In Thousands of Dollars Except Per Share Amounts) ------------------------- INCOME ------ Revenue: Rental income $ 3,869 $ 3,334 Reimbursements 656 476 Equity in income of affiliate 30 24 Investment income 218 254 Sundry income 45 50 ----------------- ---------------- Totals 4,818 4,138 ----------------- ---------------- Expenses: Operating expenses 1,006 934 Management fees 175 153 Real estate taxes 579 511 Financing costs 1,378 1,150 Depreciation 548 432 Minority interest 10 0 ----------------- ---------------- Totals 3,696 3,180 ----------------- ---------------- Income before state income taxes 1,122 958 Provision for state income taxes 5 3 ----------------- ---------------- Net income $ 1,117 $ 955 ================= ================ Basic earnings per share $ 0.72 $ 0.61 ================= ================ Basic weighted average shares outstanding 1,560 1,560 ================= ================ COMPREHENSIVE INCOME -------------------- Net income $ 1,117 $ 955 Other comprehensive income (loss)-unrealized gain (loss) on marketable securities 55 (139) ----------------- ---------------- Comprehensive income $ 1,172 $ 816 ================= ================ UNDISTRIBUTED EARNINGS ---------------------- Balance, beginning of period $ 1,879 $ 1,253 Net income 1,117 955 Less dividends (936) (780) ----------------- ---------------- Balance, end of period $ 2,060 $ 1,428 ================= ================ Dividends per share $ 0.60 $ 0.50 ================= ================
See Notes to Financial Statements FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED JANUARY 31, 2001 AND 2000 UNAUDITED
2001 2000 ---- ---- (In Thousands of Dollars) Operating activities: Net income $ 1,117 $ 955 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 601 473 Equity in income of affiliate (30) (24) Deferred revenue (72) 15 Minority interest 10 Changes in operating assets and liabilities: Tenants' security accounts (10) 17 Sundry receivables, prepaid expenses and other assets (154) (395) Accounts payable and accrued expenses (18) (177) Tenants' security deposits 2 (31) ----------------- ----------------- Net cash provided by operating activities 1,446 833 ----------------- ----------------- Investing activities: Capital expenditures (173) (184) Distributions from affiliate 64 72 Acquisition deposit 0 (200) ----------------- ----------------- Net cash used in investing activities (109) (312) ----------------- ----------------- Financing activities: Dividends paid (1,794) (1,638) Repayment of mortgages (209) (194) ----------------- ----------------- Net cash used in financing activities (2,003) (1,832) ----------------- ----------------- Net decrease in cash and cash equivalents (666) (1,311) Cash and cash equivalents, beginning of period 2,925 2,083 ----------------- ----------------- Cash and cash equivalents, end of period $ 2,259 $ 772 ================= ================= Supplemental disclosure of cash flow data: Interest paid $ 1,347 $ 1,127 ================= ================= Income taxes paid $ 5 $ 3 ================= ================= Supplemental disclosure of noncash financing activities: Dividends declared but not paid $ 936 $ 780 ================= =================
See Notes to Financial Statements FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Organization and significant accounting policies: First Real Estate Investment Trust of New Jersey (the "Trust") was organized November 1, 1961 as a New Jersey Business Trust. The Trust is engaged in owning residential and commercial income producing properties located primarily in New Jersey, Maryland and New York. The Trust has elected to be taxed as a Real Estate Investment Trust under the provisions of Sections 856-860 of the Internal Revenue Code, as amended. Accordingly, the Trust does not pay Federal income tax on income whenever income distributed to shareholders is equal to at least 95% of real estate investment trust taxable income. Further, the Trust pays no Federal income tax on capital gains distributed to shareholders. Basis of presentation: The accompanying condensed consolidated financial statements have been prepared without audit, in accordance with accounting principles generally accepted in the United States of America for interim financial statements and pursuant to the rules of the Securities and Exchange Commission. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements have been omitted. It is the opinion of management that all adjustments considered necessary for a fair presentation have been included, and that all such adjustments are of a normal recurring nature. The consolidated results of operations for the three months ended January 31, 2001 are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Trust's Annual Report on Form 10-K for the year ended October 31, 2000. Earnings per share: The Trust has presented "basic" earnings per share in the accompanying condensed consolidated statements of income in accordance with the provisions of Statement of Financial Accounting Standards No. 128, Earnings per Share ("SFAS 128"). SFAS 128 also requires the presentation of "diluted" earnings per share if the amount differs from basic earnings per share. Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during each period. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, such as those issuable upon the exercise of stock options and warrants, were issued during the period. For the three months ended January 31, 2001 and 2000, diluted earnings per share have not been presented because prices of all of the outstanding stock options approximated the average fair market value and there were no additional shares derived from the assumed exercise of stock options and the application of the treasury stock method. Basic earnings per share, based on the weighted average number of shares outstanding during each period, are comprised of ordinary income. Principles of consolidation: The condensed consolidated financial statements include the accounts of the Trust and, subsequent of March 29, 2000, its 75% owned subsidiary S and A Commercial Associates Limited Partnership ("S and A"). The condensed consolidated financial statements include 100% of S and A's assets, liabilities, operations and cash flows with the 25% interest not owned by the Trust reflected as "minority interest." All significant intercompany accounts and transactions have been eliminated in consolidation (see Note 2). Note 2 - Investment in affiliates: The Trust is a 40% member of Westwood Hills, LLC ("WHLLC"), a limited liability company that is managed by Hekemian & Co., Inc. ("Hekemian"), a company which manages all of the Trust's properties and in which one of the trustees of the Trust is the chairman of the board. Certain other members of WHLLC are either trustees of the Trust or their families or officers of Hekemian. WHLLC owns a residential apartment complex located in Westwood, New Jersey. Summarized unaudited financial information of WHLLC as of January 31, 2001 and October 31, 2000, and for the three months ended January 31, 2001 and 2000 is as follows:
January October 31, 31, 2001 2000 ---------- ---------- (In Thousands of Dollars) Balance sheet data: Assets: Real estate and equipment, net $13,881 $13,942 Other 684 756 ---------- ---------- Total assets $14,565 $14,698 ========== ========== Liabilities and members' deficiency: Liabilities: Mortgage payable $15,139 $15,185 Other 394 398 ---------- ---------- Totals 15,533 15,583 ---------- ---------- Members' deficiency: Trust (386) (352) Others (582) (533) ---------- ---------- Totals (968) (885) ---------- ---------- Total liabilities and members' deficiency $14,565 $14,698 ========== ==========
Three Month ended January 31, 2001 2000 ------ ------ (In Thousands of Dollars) Income statement data: Rental revenue $ 738 $ 696 Rental expenses 662 636 ----- ----- Net income $ 76 $ 60 ===== ===== On March 29, 2000, the Trust acquired 100% of S and A, whose primary asset is a neighborhood shopping center in Olney, Maryland. The shopping center contains approximately 98,800 square feet of gross leaseable area situated on approximately 13 acres of land. Approximately 11 acres of the land are subject to a ground lease expiring in 2078, and approximately 2 acres are owned in Fee simple. The purchase price of S and A was approximately $15,648,000 of which $4,728,000 was paid in cash and $10,920,000 was financed by the proceeds of a mortgage. The Trust has agreed in principle to sell a 25% interest in S and A, as of March 29, 2000, to a group consisting principally of employees of Hekemian on the same basis and cost to the Trust. The Trust advanced this group $1,016,000 towards the purchase price of S and A. The advance accrues interest at 8.44% and amounted to approximately $21,000 during the three months ended January 31, 2001. As of January 31, 2001, the group owes an aggregate amount of $1,087,000. The receivable and accrued interest are expected to be paid within the next quarter. The following unaudited pro forma information (in thousands of dollars, except per share amounts) shows the results of operations for the three months ended January 31, 2000 as though S and A had been acquired at the beginning of fiscal 2000: Revenue $4,587 Expenses 3,647 ------ Income before minority interest 940 Minority interest (9) ------ Net income $ 931 ====== Earnings per share $ .60 ====== The unaudited pro forma results include adjustments for depreciation based on the purchase price, increased interest expense and reduced net investment income related to assets utilized to make the acquisition, and obligations incurred to complete the transaction. The unaudited pro forma results of operations set forth above are not necessarily indicative of the results that would have occurred had the acquisition been made at the beginning of fiscal 2000 or of future results of operations of the Trust's combined properties. Note 3 - Commitments and contingencies: Leases: Retail tenants: The Trust leases retail space having a net book value of approximately $70,074,000 at January 31, 2001 to tenants for periods of up to twenty-five years. Most of the leases contain clauses for reimbursement of real estate taxes, maintenance, insurance and certain other operating expenses of the properties. Minimum rental income (in thousands of dollars) to be received from noncancelable operating leases in years subsequent to January 31, 2001 are as follows: Year Ending January 31, Amount ------------ --------- 2002 $ 7,832 2003 7,657 2004 7,027 2005 6,294 2006 5,945 Thereafter 45,433 -------- Total $ 80,188 ======== The above amounts assume that all leases which expire are not renewed and, accordingly, neither minimal rentals nor rentals from replacement tenants are included. Minimum future rentals do not include contingent rentals, which may be received under certain leases on the basis of percentage of reported tenants' sales volume or increases in Consumer Price Indices. Contingent rentals included in income for the three months ended January 31, 2001 and 2000 were not material. Residential tenants: Lease terms for residential tenants are usually one year or less. Environmental concerns: In accordance with applicable regulations, the Trust reported to the New Jersey Department of Environmental Protection ("NJDEP") that a historical discharge of hazardous material was discovered in 1997 at the renovated Franklin Lakes shopping center (the "Center"). In November 1999, the Trust received a no further action letter from the NJDEP concerning the historical discharge at the Center. However, the Trust is required to continue monitoring such discharge, the cost of which will not be material. Note 4 - Equity incentive plan: On September 10, 1998, the Board of Trustees approved the Trust's Equity Incentive Plan (the "Plan") which was ratified by the Trust's shareholders on April 7, 1999, whereby up to 230,000 of the Trust's shares of beneficial interest may be granted to key personnel in the form of stock options, restricted share awards and other share-based awards. In connection therewith, the Board of Trustees approved an increase of 230,000 shares in the Trust's number of authorized shares of beneficial interest. Key personnel eligible for these awards include trustees, executive officers and other persons or entities including, without limitation, employees, consultants and employees of consultants, who are in a position to make significant contributions to the success of the Trust. Under the Plan, the exercise price of all options will be the fair market value of the shares on the date of grant. The consideration to be paid for restricted share and other share-based awards shall be determined by the Board of Trustees, with the amount not to exceed the fair market value of the shares on the date of grant. The maximum term of any award granted may not exceed ten years. The Board of Trustees will determine the actual terms of each award. Upon ratification of the Plan on April 7,1999, the Trust issued 188,500 stock options which it had previously granted to key personnel on September 10, 1998. The fair value of the options on the date of grant was $30 per share. The options, all of which are outstanding at January 31, 2001, are exercisable through September 2008. In accordance with the provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), the Trust will recognize compensation costs as a result of the issuance of restricted share and other share-based awards based on the excess, if any, of the fair value of the underlying stock at the date of grant or award (or at an appropriate subsequent measurement date) over the amount the recipient must pay to acquire the stock. Therefore, the Trust will not be required to recognize compensation expense as a result of any grants of stock options, restricted share and other share-based awards at an exercise price that is equivalent to or greater than fair value. The Trust will also make pro forma disclosures, as required by Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), of net income or loss as if a fair value based method of accounting for stock options had been applied instead if such amounts differ materially from the historical amounts. In the opinion of management, if compensation cost for the stock options granted in 1999 had been determined based on the fair value of the options at the grant date under the provisions of SFAS 123 using the Black-Scholes option pricing model and assuming a risk-free interest rate of 5.25%, expected option lives of ten years, expected volatility of 1% and expected dividends of 7.13%, the Company's pro forma net income and pro forma basic net income per share arising from such computation would not have differed materially from the corresponding historical amounts. Note 5 - Deferred fee plan: During the three months ended January 31, 2001, the Board of Trustees adopted a deferred fee plan (the "Plan") for its Officers and its Trustees. Pursuant to the Plan, any Officer or Trustee may elect to defer receipt of any fees which would be due them. The Trust has agreed to pay any participant in the Plan ("Participant"), interest on any deferred fee at the rate of nine percent (9%) per annum, compounded quarterly. Any such deferred fee is to be paid to Participants at the later of: (i) the retirement age specified in the deferral election; (ii) actual retirement; or (iii) upon cessation of a Participants duties as an Officer or Trustee. The Plan provides that any such deferral fee will be paid in a lump sum or in annual installments over a period not to exceed 10 years, at the election of the Participant. As of January 31, 2001, approximately $25,000 has been deferred. * * * Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The Registrant is an equity REIT that owns a portfolio of residential apartment and retail properties. The Registrant's revenues consist primarily of fixed rental income and additional rent in the form of expense reimbursements derived from its income producing retail properties. The Registrant also receives income from its 40% owned affiliate, Westwood Hills LLC ("Westwood Hills"), which owns a residential apartment property. The Registrant's policy has been to acquire real property for long-term investment. The following discussion should be read in conjunction with the Registrant's financial statements and related notes included elsewhere in this Form 10-Q and its Annual Report on Form 10-K for the year ended October 31, 2000. Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" may constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although the Registrant believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties, including those discussed elsewhere in this Form 10-Q, that could cause actual results to differ materially from those projected. Results of Operations: Quarters ended January 31, 2001 and 2000 Revenues For the quarter ended January 31, 2001 ("Current Quarter"), total revenues increased $680,000 (16.4%) to $4,818,000 compared to the quarter ended January 31, 2000 ("Prior Quarter"). The revenue increase results from the following: Increased revenues from real estate operations $ 710,000 Increase in Equity of Earnings of Affiliate 6,000 Decrease in Investment Income (36,000) ----------- Net Increase $ 680,000 =========== Real Estate Operations: Revenues from real estate operations increased $710,000 - ----------------------- (18.4%), to $4,570,000 for the Current Quarter compared to $3,860,000 for the Prior Quarter. The principal increase, $553,000, came from Olney Town Center ("Olney"), which was acquired on March 29, 2000, and not included in operations for the Prior Quarter. Additionally, significant increases were recorded from operations at the Franklin Crossing shopping center and from the Registrant's residential properties. Investment Income: Investment income during the Current Quarter was derived - ------------------- principally from three major sources: 1. Government agency bonds ........ $9,506,000 Fixed Interest 2. Institutional Money Market...... $1,975,000 Variable Interest 3. Related Party................... $1,016,000 Fixed Interest The decline in Investment Income of $36,000 results primarily from the sale of approximately $5 million of Government Agency Bonds, the proceeds of which were used to acquire the Olney Town Center during March 2000. This interest decline was partially offset by interest earned on the amount due from related party. Earnings From 40% Owned Affiliate: Earnings at the Trust's affiliate which owns - ---------------------------------- a 210 unit garden apartment community in Westwood, NJ, increased 26.7% for the Current Quarter over the Prior Quarter. This increase resulted in the increase in the Trust's Equity in income of affiliate. On a historical cost basis, the Trust's investment in its affiliate (Westwood Hills, LLC) is carried on the Trust's balance sheet as a liability (negative basis) of $386,000. This represents the cumulative amounts of cash flow distributions and mortgage re-financings proceeds distributed to the Trust in excess of the Trust's investment Expenses: Total expenses before state income taxes increased 16.2% to $3,696,000 for the Current Quarter compared to $3,180,000 for the Prior Quarter. Substantially, all of the increase is attributable to expenses at Olney, which was not included in the Prior Quarter - See Table below (in thousands of dollars): EXPENSE COMPARISON Quarter Ended 1/31/01 --------------------------------- Quarter Without Ended Consolidated Olney Olney 1/31/00 Change ------------ ----- ----- ------- ------ Operating Expenses $ 1,006 $ 109 $ 897 $ 934 $(37) Management Fees 175 13 162 153 9 Real Estate Taxes 579 50 529 511 18 Financing Costs 1,378 243 1,135 1,150 (15) Depreciation 548 94 454 432 22 Minority interest 10 10 - - ------------ ----- ------ ------- ------ $ 3,696 $ 519 $3,177 $3,180 $ (3) ============ ===== ====== ======= ======
While Utility and Snow Removal cost increases did materialize, they were offset by reductions in other operating expenses, including a 29% reduction in the Trust's General Administrative expenses. Net Income: For the Current Quarter Net Income increased $162,000 (17%) to $1,117,000 from $955,000 for the Prior Quarter. The changes that affected Net Income are summarized in the following table (in thousands): Real estate Operations $ 387 Income from Affiliate 6 Investment income (36) Financing costs (228) General Administrative 33 ------ $ 162 ====== Real Estate Operations: Earnings from real estate operations (before financing - ------------------------ costs) increased $387,000 (19.9%) during the Current Quarter over the Prior Quarter. This increase resulted from increased earnings at the Trust's residential properties due to rent increases out pacing expenses. Earnings at the Trust's retail properties increased primarily from the inclusion during the Current Quarter of Olney's operations (see above), and from increased profitability at the Trust's Franklin Crossing shopping center in Franklin Lakes, NJ. Grand Union Bankruptcy: As previously reported, the Registrant has two Grand Union supermarkets, one at Franklin Crossing (Franklin Lakes, NJ), and one at Westwood Plaza (Westwood, NJ). The leases for these supermarkets are about to be acquired from Grand Union by C&S Wholesaler Inc. ("C&S"). C&S will then sell the leases to The Stop & Shop Supermarket Company ("Stop & Shop"). Stop & Shop operates 274 superstores and supermarkets in Connecticut, Massachusetts, New Jersey, New York, and Rhode Island. Stop & Shop has notified the Trust that the Franklin Crossing supermarket will be converted to, and operated as a Stop & Shop. As of this date, the Trust has received no notification as to Stop & Shop's intentions with the lease at the Westwood Plaza Shopping Center. How these transactions will affect the short-term operations of the centers where these supermarkets are located cannot be measured at this time. Income from Affiliate: See Revenues above. - ---------------------- Investment Income: See Revenues above. - ------------------ Financing Costs: This increase is principally attributable to the debt service - ---------------- incurred to acquire Olney. See Expense Comparison Table above. General Administrative: Reduced Trustee's fee, professional fees, and corporate - ----------------------- overhead resulted in the Current Quarter's reductions. Funds From Operations ("FFO") FFO is considered by many as a standard measurement of a REIT's performance. The Registrant computes FFO as follows (in thousands of dollars): Quarter Ended --------------------------------- 1/31/01 1/31/00 --------------- -------------- Net Income $ 1,117 $ 955 Depreciation - Real Estate 548 432 Amortization of Deferred Mortgage Costs 32 23 Deferred Rents (107) (93) Capital Improvements - Apartments (100) (60) Other 36 22 --------------- ------------- Funds From Operations $ 1,526 $ 1,279 =============== ============= FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles ("GAAP"), and therefore should not be considered a substitute for net income as a measure of results of operations or for cash flow from operations as a measure of liquidity. Additionally, the application and calculation of FFO by certain other REITs may vary materially from that of the Registrant, and therefore the Registrant's FFO and the FFO of other REITs may not be directly comparable. Liquidity and Capital Resources At January 31, 2001, the Registrant's cash, cash equivalents and marketable securities totaled $11,765,000 compared to $12,376,000 at October 31, 2000. These funds and the funds generated from operations are available for property acquisitions. At January 31, 2001, the Registrant's aggregate outstanding mortgage debt was approximately $70 million. Approximately $59.1 million bears a fixed weighted average interest cost of 7.59%, and an average life of 8.87 years. Approximately $10.9 million of mortgage debt bears an interest rate equal to 175 basis points over LIBOR and resets every 90 days. The Registrant anticipates that the cash flow from operations will be more than sufficient to meet the Registrant's operational needs and mortgage obligations. As a result of the long-term fixed rate financing, the Registrant believes that its exposure to market risk relating to interest rate risk is not material. The Registrant has invested approximately $9.5 million in short-to-intermediate fixed rate Government Agency Bonds. These bonds yield a weighted average interest of 6.489% and have a weighted maturity of 26.7 months. Since the market value of these bonds are interest rate sensitive, a sale of all or a portion of these bonds prior to maturity in a high interest rate environment, may result in a loss to the Registrant (See Investment Income above). The Registrant makes capital improvements to its properties when it deems such improvements to be necessary or appropriate. The short-term impact of such capital outlays will be to depress the Registrant's current cash flow. The Registrant is now experiencing the benefits of these expenditures by preserving the physical integrity of its properties and securing increased rentals. Other than the apartment rehabilitation program described above, the Registrant has made no commitments and has no understandings for any material capital expenditure during fiscal 2001 other than in the ordinary course of business. Dividends For the quarter ended January 31, 2001, the Registrant has declared a dividend of $.60 per share payable on March 16, 2001 to share holders of record on March 2, 2001. This compares to a $.50 per share dividend paid for the quarter ended January 31, 2000. Inflation The Registrant anticipates that the U.S. Mid-Atlantic States will continue to experience moderate growth with limited inflation. Any sustained inflation may, however, negatively impact the Registrant in at least two areas: (i) the interest costs of the Registrant's LIBOR based mortgage and on any new mortgage financing; and (ii) higher real estate operating costs, especially in those areas where such costs are not chargeable to commercial tenants. Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK See "Liquidity and Capital Resources" above. Part II: Other Information Item 6. Exhibits and Reports of Form 8-K A) On December 15, 2001, the Registrant filed a Report on Form 8-K, which is incorporated herein by reference. The Form 8-K reported the Registrant's results or operations for the twelve and three months ended October 31, 2000 and included a copy of Registrant's press release. B) Exhibit 10. Deferred Fee Plan (for Officers and/or Trustees) and Amendment No. I to the Plan. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY ---------------------------- (Registrant) Date: March 7, 2001 /s/ William R. DeLorenzo, Jr. ----------------------------- (Signature)* William R. DeLorenzo, Jr. Executive Secretary and Treasurer *Print name and title of the signing officer under his signature. EX-10 2 0002.txt DEFERRED FEE PLAN Exhibit 10 OFFICERS AND/OR TRUSTEES DEFERRED FEE PLAN ARTICLE I BACKGROUND PURPOSE AND EFFECTIVE DATE ------------------------------------- Section 1.01 Background and Purpose of the Plan, Certain Definitions - --------------------------------------------------------------------- First Real Estate Investment Trust of New Jersey, a New Jersey business trust (the "Trust"), has established the Officers and Trustees: Deferred Fee Plan (the "Plan") to allow its Officers and Trustees the opportunity to defer payment of all or a portion of the fees they receive for serving as an Officer and/or Trustee of the Trust. Section 1.02 Effective Date and Term - ------------------------------------- The Plan is effective as of November 1, 2000, and shall remain in effect until otherwise amended or terminated by the Board of Trustees of the Trust. ARTICLE II CONTRIBUTIONS Section 2.01 Deferred Fees - --------------------------- With respect to each month, beginning with November, 2000, and continuing during the period in which this Plan remains in effect, the Trust shall credit an Officer and/or Trustee Deferred Fee Account, as hereinafter defined, with the amount of future fees such Officer and/or Trustee elects in writing (on a form provided by the Trust) to defer (hereinafter "Deferred Fees"). Each officer and trustee can elect to defer all or a portion of his or her annual fees and/or his or her meeting fees. Except in the case of the year 2000, an election to defer shall be made prior to the calendar year for which it is effective. With respect to the year 2000, an election to defer shall be made not later than November 15, 2000 and shall be effective with respect to fees that are earned subsequent to the date of the election. An election shall be irrevocable with respect to the calendar year to which it applies (or, in the case of the year 2000, for the remainder of 2000) and shall remain in effect for future calendar years unless a new election is made by such Officer and/or Trustee effective with respect to a calendar year and delivered to the Trust by the December 31 preceding such calendar year, or except to the extent set forth in the next sentence. In the event an Officer and/or Trustee has elected an in-service distribution date on a prior year's deferral form and fails to file a new deferral form for the current deferral period so that the previously elected in-service distribution date is then 24 months or less from the current deferral period, the Officer and/or Trustee will be deemed to have filed a new election for the current deferral period to have the amounts deferred for such period paid to him at retirement. The crediting of the amounts deferred under this Plan shall be made on the date on which such amounts would otherwise have been paid to the Officer and/or Trustee. ARTICLE III ACCOUNT AND INVESTMENT ---------------------- Section 3.01 The Deferred Fee Account ------------------------------------- 1. Maintenance of the Account. The Trust shall maintain for each Officer and/or Trustee who has elected to defer fees pursuant to Section 2.01 one or more accounts (the "Deferred Fee Account(s)") to which it shall credit all amounts allocated thereto in accordance with Section 2.01. Each Officer's and/or Trustee's Deferred Fee Account(s) shall be adjusted no less often than quarterly to reflect the net market value of assets in the Deferred Fee Account(s) under Section 2.01 and pursuant to Section 3.02. Such adjustments shall be made until no amounts remain in the Deferred Fee Account(s). 2. A Deferred Fee Account does not constitute a trust fund or escrow. 3. Each Officer's and/or Trustee's interest in his or her Deferred Fee Account(s) is limited to the right to receive payments under this Plan, and the Officer's and/or Trustee's position is that of a general unsecured creditor of the Trust. Section 3.02 Power to Invest - ----------------------------- 1. The Deferred Fee Account(s) shall be credited with interest on the amount in such account at the beginning of every month at a rate equal to the lower of the Composite Prime Rate as published from time to time in the Wall Street Journal, as determined on November 1, February 1, May 1 and August 1 of each year, or nine (9%) percent. The Committee in its sole discretion may permit an Officer and/or Trustee to request that the amounts represented by one or more of his or her Deferred Fee Account(s) be invested in equity securities, fixed income securities, money market accounts and cash, as the Trust shall from time to time allow as permitted investments under the Plan (an "Alternative Investment"). Any request by an Officer and/or Trustee as to an Alternative Investment shall be made in writing to the Committee and is subject to the discretion of the Committee. The Deferred Fee Account(s) shall be credited with earnings or losses (if any) based on the Alternative Investment selected, and as and for the period as reported to the Committee. Amounts invested in an Alternative Investment are not guaranteed by the Trust, and are subject to the risk of loss of principal and earnings. The Committee shall determine the frequency with which an Officer and/or Trustee may change his or her Alternative Investments. 2. Any change in net market value of assets in the Deferred Fee Account(s) shall be reflected in the Deferred Fee Account(s) on a quarterly basis (or on such less frequent basis as reported to the Trust as to the Alternative Investment). 3. The Trust shall not be liable to the Officer and/or Trustee or his or her beneficiary for any loss or other claim arising under this Plan except for that caused by its gross negligence or willful misconduct. Section 3.03 Vesting - --------------------- At all times an Officer and/or Trustee shall have a 100% nonforfeitable right to the amounts credited to his or her Deferred Fee Account(s); provided that neither an Officer and/or Trustee nor his or her Beneficiary shall be entitled to receive any amount in the Officer's and/or Trustee's Deferred Fee Account(s) if it is determined at any time that Officer and/or Trustee engaged in a dishonest act in the Officer's and/or Trustee's relationship with the Trust. ARTICLE IV BENEFITS -------- Section 4.01 Payment of Benefits - --------------------------------- 1. At Retirement Age. At the time of entering into a deferral election, an Officer and/or Trustee may elect to receive all or a part of his or her Deferred Fee Account(s), including adjustments that continue to be made pursuant to Article III (the "Plan Benefit") at the later of the retirement age specified by the Officer and/or Trustee in his deferral election, or actual retirement. After attainment of such retirement age or actual retirement, the value of the Plan Benefit, shall be paid to him in a lump sum, or in a number of substantially equal annual installments (not to exceed 10), as elected by an Officer and/or Trustee at the same time and in the same manner as the election to defer is made pursuant to Section 2.01. Such payments shall commence on the first day of the first calendar year following the Officer's and/or Trustee's attainment of retirement age or actual retirement of the Officer and/or Trustee, whichever is later. Upon Cessation of Service as an Officer and/or Trustee. Following an Officer's and/or Trustee's cessation of service as an Officer and/or Trustee for any reason prior to retirement (as set forth above) or death (the date of which shall be referred to as the "Date of Cessation") the Trust shall, at the election of the Officer and/or Trustee as set forth in his deferral election, pay to the Officer and/or Trustee the Plan Benefit, in a lump sum or a number of substantially equal annual payments (not to exceed 10), as elected by the Officer and/or Trustee at the same time and in the same manner as the election to defer is made pursuant to Section 2.01, Such payments shall commence on the first day of the calendar year after the Date of Cessation of the Officer and/or Trustee. In-Service Distributions. At the time of entering into a deferral election, an Officer and/or Trustee may elect to receive all or a part of his or her Plan Benefit as an in-service distribution at some designated time in the future, provided that the in-service distribution date shall be no earlier than the January 1st of the calendar year that is at least two years following the year for which the deferral election is made. All amounts deferred, including earnings thereon, for which a specific in-service distribution year ("In-Service Distribution Year") is elected, shall be allocated to a Deferred Fee Account that will be maintained separately from the Deferred Fee Account(s) maintained under (a) or (b) above. If amounts are deferred in two or more separate calendar years but are designated for distribution in the same In-Service Distribution Year, then such amounts shall be allocated to the same Deferred Fee Account. Upon attainment of the In-Service Distribution Year, Plan Benefits designated for the in-service distribution shall be paid to an Officer and/or Trustee in a lump sum, or in a number of substantially equal annual installments (not to exceed 10), as elected by an Officer and/or Trustee at the same time and in the same manner as the election to defer is made pursuant to Section 2.01. Such payments shall commence on the first day of the In-Service Distribution Year. Change in Control. An Officer and/or Trustee may also, solely to the extent permitted by the Committee, direct that all of the amounts then allocated to the Officer's and/or Trustee's Deferred Fee Account(s) be distributable to the Officer and/or Trustee upon a Change in Control of the Trust. For purposes of this Plan, a Change in Control shall be deemed to have occurred, if at any time, the Trust shall be acquired by any other Real Estate Investment Trust, a limited liability company, partnership, corporation or other person or group. Change in Payment Election. Notwithstanding the preceding provisions of this Section 4.01 to the contrary, an Officer and/or Trustee may subsequently elect, in such form and manner as prescribed by the Committee, that the amounts credited to one or more of his Deferred Fee Account(s) be distributed commencing on a date other than that originally selected, provided that any such election is modified at least twelve (12) months (and more than one calendar year) prior to (i) the date payments would otherwise commence (other than on account of an Unforeseeable Emergency or a Change in Control) or (ii) the Officer's and/or Trustee's termination of service for any reason as a member of the Board or as an Officer of the Trust. For these purposes, a change in election on December 31, 2009 for benefits to be paid on January 1, 2011 (rather than on January 1, 2015) will satisfy the foregoing because the change is made at least 12 months prior to the new distribution date and there is an intervening calendar year (i.e., 2010) between the time of the the Committee, that the amounts credited to his or her Deferred Fee Account(s) be paid in any one of the forms of benefit payment provided under this Section in lieu of the form of payment initially modification and the new distribution date. Further, notwithstanding the preceding provisions of this Section to the contrary, an Officer and/or Trustee may also subsequently elect, in such form and manner as may be prescribed by selected, provided that any such election is made at least twelve (12) months (and more than one calendar year) prior to the earlier of the date payments would otherwise commence (other than on account of an Unforseen Emergency or a Change in Control) or the Officer's and/or Trustee's termination of service for any reason as a member of the Board or as an Officer of the Trust. Section 4.02 Upon Death - ------------------------ 1. Prior to Commencement of Payment of the Benefit. In the event of the death prior to the commencement of payment of the Plan Benefit under Section 4.01, of an Officer and/or Trustee, the Trust shall pay the Plan Benefit to the Officer's and/or Trustee's Beneficiary, in a lump sum payment or in that number of substantially equal annual payments (not to exceed 10) as elected by the Officer and/or Trustee in his deferral election form. The Survivor Benefit shall be payable at the time specified in the deferral election. 1. After Commencement of Payment of the Benefit. In the event of the death of an Officer and/or Trustee after commencement of the Payment of the Plan Benefit under Section 4.01, the Trust shall continue Payment of the remaining balance of the Plan Benefit to the Officer's and/or Trustee's Beneficiary in the same manner and at the same times as if the Officer and/or Trustee had not died. Section 4.03 Unforeseeable Emergency - ------------------------------------- 1. In the case of an unforeseeable emergency, as defined below, an Officer and/or Trustee may submit a written request to the Committee for (1) a cessation of deferrals under this Plan and a distribution of all or a part of his or her Deferred Fee Account(s) prior to the date benefits otherwise would be payable, or (2) an acceleration of the payment of installment payments which have already begun. Withdrawals or acceleration because of an unforeseeable emergency shall be permitted only to the extent reasonably necessary to satisfy the emergency. 1. An unforeseeable emergency is a severe financial hardship resulting from extraordinary and unforeseeable circumstances arising as a result of one or more recent events beyond the control of the Officer and/or Trustee. The need to send the Officer's and/or Trustee's child to college or the desire to purchase a residence will not be considered unforeseeable emergencies. Withdrawals or acceleration will not be permitted to the extent such emergency is or may be relieved: (1) through reimbursement or compensation by insurance or otherwise, (2) by liquidation of the Officer's and/or Trustee's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or (3) by cessation of deferrals under this Plan. ARTICLE V ADMINISTRATION -------------- The Plan shall be administered by a Committee appointed by the Board of Trustees of the Trust (hereinafter the "Committee"). The initial Committee shall consist of the members of the Executive Committee. The Committee shall be authorized to interpret the Plan and to make decisions regarding any questions arising thereunder. Any such interpretation or decision of the Committee shall, unless overruled or modified by the Board of Trustees, be final, conclusive and binding upon all Officers and/or Trustees of the Trust and its subsidiaries and upon any person claiming benefits or rights under the Plan by or through any such individual. No member of the Committee shall be entitled to act on or decide any matter relating solely to himself or herself or any of his or her rights or benefits under the Plan. The Committee may, in its discretion, designate a person or persons to carry out such duties or functions as the Committee determines. Notwithstanding any provision of the Plan to the contrary, any duty or function which may be performed by the Committee or its delegates under the Plan may instead be performed by the Board of Trustees if the Board of Trustees so determines in its sole discretion. ARTICLE VI AMENDMENT, SUSPENSION, OR TERMINATION ------------------------------------- Section 6.01 Amendment, Suspension, or Termination - --------------------------------------------------- The Board of Trustees of the Trust may amend, suspend or terminate the Plan, in whole or in part, at any time and from time to time by resolution adopted at a regular or special meeting of such Board, and only in such manner. Section 6.02 No Reduction - -------------------------- No amendment, suspension or termination shall operate to adversely affect the existing accrued benefit of any Officer and/or Trustee who is in service or the Plan Benefit otherwise available to an Officer and/or Trustee if the Officer and/or Trustee had ceased being an Officer and/or Trustee as of the effective date of such amendment, suspension, or termination. Any Benefit determined as of such date shall continue to be adjusted for net market value of assets remaining in the Deferred Fee Account(s) adjusted as provided in Article III and payable as provided in Article IV. ARTICLE VII MISCELLANEOUS PROVISIONS ------------------------ Section 7.01 Beneficiary - ------------------------- "Beneficiary" shall mean any one or more persons, corporation or trusts, or any combination thereof, last designated by an Officer and/or Trustee to receive the Benefit provided under this Plan. Any designation made hereunder shall be revocable, shall be in writing either on a facsimile of the form annexed hereto as Schedule 1 or in a written instrument containing the information requested in Schedule 1, and shall be effective when delivered to the Trust at its principal office. If the Trust in its sole discretion determines that there is not a valid designation, the Beneficiary shall be the executor or administrator of the Officer's and/or Trustee's estate. Section 7.02 Nonassignability - ------------------------------ The interest of any person under this Plan (other than the Trust) shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, attachment or encumbrance, or to the claims of creditors of such person, and any attempt to effectuate any such actions shall be void. Section 7.03 Interest of Officer and/or Trustee - ----------------------------------------------- The Officer and/or Trustee and any Beneficiary shall be, in respect to the Deferred Fee Account(s) and any Plan Benefit to be paid, and shall remain, simply a creditor of the Trust in the same manner as any other creditor having a general claim for compensation, if and when the Officer's and/or Trustee's or Beneficiary's rights to receive payments shall mature and become payable. At no time shall the Officer and/or Trustee be deemed to have any right, title or interest, legal or equitable, in any asset of the Trust, including, but not limited to, any investments which represent amounts credited to the Deferred Fee Account(s). Section 7.04 Withholding - ------------------------- The Trust shall have the right to deduct or withhold from the Plan Benefits paid under this Plan all taxes which may be required to be deducted or withheld under any provision of law (including, but not limited to, Social Security payments, income tax withholding and any other deduction or withholding required by law) now in effect or which may become effective any time during the term of this Plan. Section 7.05 Exclusivity of Plan - --------------------------------- This Plan is intended solely for the purpose of deferring fees to the Officer and/or Trustee to the mutual advantage of the parties. Nothing contained in this Plan shall in any way affect or interfere with the right of an Officer and/or Trustee to participate in any other benefit plan in which he or she may be entitled to participate. Section 7.06 No Right to Continued Service - ------------------------------------------- This Plan shall not confer any right to continued service on an Officer and/or Trustee of the Trust. Section 7.07 Notice - -------------------- Each notice and other communication to be given pursuant to this Plan shall be in writing and shall be deemed given only when (a) delivered by hand, (b) transmitted by facsimile (provided that a copy is sent at approximately the same time by registered or certified mail, return receipt requested), (c) received by the addressee, if sent by registered or certified mail, return receipt requested, or (d) by Express Mail, Federal Express or other overnight delivery service, to the Trust at its principal office and to an Officer and/or Trustee at the last known address of such Officer and/or Trustee (or to such other address or facsimile number as a party may specify by notice given to the other party pursuant to this Section). Section 7.08 New Jersey Law Controlling - ---------------------------------------- This Plan shall be construed in accordance with the laws of the State of New Jersey. Section 7.09 Binding on Successors - ----------------------------------- This Plan shall be binding upon the Officers and/or Trustees and the Trust, and their heirs, successors, legal representatives and assigns. FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY OFFICERS AND/OR TRUSTEES Deferral of Fees Form Name:__________________________________________________________________________ Address: ______________________________________________________________________ ______________________________________________________________________ Telephone (daytime) _________________________ Social Security Number: _____________________ I am an _____OFFICER _____TRUSTEE of First Real Estate Investment Trust of New Jersey I elect to defer the following fees in the following amounts or percentages: TYPE OF FEE AMOUNT OR PERCENTAGE DEFERRED - ----------- ----------------------------- Officer's annual fee __________ _____________________________ Officer's meeting fee __________ _____________________________ Trustee's annual fee __________ _____________________________ Trustee's meeting fee __________ _____________________________ Date of this election:____________________ Officer's Signature:_______________________________________________________ Trustee's Signature:_______________________________________________________ Received by:(Signature) ___________________________________________________ Date:__________________________ Title:______________________________________ OFFICERS AND/OR TRUSTEES Payment Election Form With respect to the fees deferred pursuant to my Deferral of Fees dated _________________, I, ________________, hereby elect to have my Plan Benefit commence and the form of Plan Benefit payment to be as follows: 1. Retirement Benefit ------------------ I elect to receive my Plan Benefits as follows: Benefit to commence: At retirement age of _________, or actual retirement, if later. Benefit to be paid: (check one) [__]Lump sum [__] Installments over ___ years (not to exceed 10). 1. Termination Benefit ------------------- If my employment terminates before I am eligible to retire, I elect to receive my benefits as follows: Benefit to commence: [___] At termination [___] At the retirement age set forth above. Benefit to be paid: (check one) [___] Lump sum [___] Installments over ___ years (not to exceed 10). 1. In-Service Distribution ----------------------- I elect to receive my Plan Benefit during service as follows: Benefit to commence in ____ calendar year (must be at least 2 calendar years after the year for which deferrals are made.) Benefit to be paid: (check one) [__] Lump sum [__] Installments over ____ years (not to exceed 10). 1. Survivor Benefit ---------------- If my death occurs prior to commencement of my retirement benefit, I elect to have survivor benefits paid as follows: Benefit to commence: [___] Immediately [___] When it would have been otherwise paid to me as elected above. Benefit to be paid: [___] Lump sum [___] Installments over ____ years (not to exceed 10). I designate the following as my beneficiary:___________________________________ Payment Election Form Page 2 1. Change in Control ----------------- If a Change in Control occurs, I elect to receive my Plan Benefit paid as follows: Benefit to commence: [___] Immediately [___] When it would have been otherwise paid to me as elected above. Benefit to be paid: [___] Lump sum [___] Installments over ____ years (not to exceed 10). I understand that if I change in the date at which a Plan Benefit is to commence, the change shall supersede the date of payment herein selected. Any such change must be made on forms provided by the Company and must be made at least twelve (12) months (and more than one calendar year) prior to the earlier of (i) the date payments would otherwise commence (other than on account of an Unforeseeable Emergency or a Change in Control as defined in the Plan) or (ii) my termination of service for any reason as a member of the Board. I understand that if I change the form of Plan Benefit payment, the change shall supersede the form of payment herein selected. Any change must be made on forms provided by the Company and must be made at least twelve (12) months (and more than one calendar year) prior to the earlier of (i) the date payments would otherwise commence (other than on account of an Unforeseeable Emergency or a Change in Control as defined in the Plan) or (ii) my termination of service for any reason as a member of the Board. Dated: Officer's Signature: ________________________________________________________ Trustee's Signature: _________________________________________________________ OFFICERS AND/OR TRUSTEES Change of Payment Election Form With respect to the fees deferred pursuant to my Deferral of Fees dated _____________, ____________, I hereby elect to change the date at which my Plan Benefit is to commence and/or the form of Plan Benefit payment as follows: 1. Retirement Benefit ------------------ I elect to receive my Plan Benefits as follows: Benefit to commence: At retirement age of _________, or actual retirement, if later. Benefit to be paid: (check one) [__]Lump sum [__] Installments over ___ years (not to exceed 10). 1. Termination Benefit ------------------- If my employment terminates before I am eligible to retire, I elect to receive my benefits as follows: Benefit to commence: [___] At termination [___] At the retirement age set forth above. Benefit to be paid: (check one) [___] Lump sum [___] Installments over ___ years (not to exceed 10). 1. In-Service Distribution ----------------------- I elect to receive my Plan Benefit during service as follows: Benefit to commence in _____ calendar year (must be at least 2 calendar years after the year for which deferrals are made.) Benefit to be paid: (check one) [__] Lump sum [__] Installments over ____ years (not to exceed 10). 1. Survivor Benefit ---------------- If my death occurs prior to commencement of my retirement benefit, I elect to have survivor benefits paid as follows: Benefit to commence: [___] Immediately [___] When it would have been otherwise paid to me as elected above. Benefit to be paid: [___] Lump sum [___] Installments over ____ years (not to exceed 10). Change of Payment Election Form Page 2 1. Change in Control ----------------- If a Change in Control occurs, I elect to receive my Plan Benefit paid as follows: Benefit to commence: [___] Immediately [___] When it would have been otherwise paid to me as elected above. Benefit to be paid: [___] Lump sum [___] Installments over ____ years (not to exceed 10). I understand that any change in the date at which a Plan Benefit is to commence shall supersede the date of payment previously selected, provided it is made at least twelve (12) months (and more than one calendar year) prior to the earlier of (i) the date payments would otherwise commence (other than on account of an Unforeseeable Emergency or a Change in Control as defined in the Plan) or (ii) my termination of service for any reason as a member of the Board. I understand that any change in the form of Plan Benefit payment shall supersede the form of payment previously selected, provided it is made at least twelve (12) months (and more than one calendar year) prior to the earlier of (i) the date payments would otherwise commence (other than on account of an Unforeseeable Emergency or a Change in Control as defined in the Plan) or (ii) my termination of service for any reason as a member of the Board. Dated: Officer's Signature: ________________________________________________________ Trustee's Signature: _________________________________________________________ Amendment No. I --------------- Officers and/or Trustees Deferred Fee Plan ------------------------------------------ This Amendment No. I to the Officers and/or Trustees Deferred Fee Plan (the "Plan") is made as of November 1, 2000. 1. Article III, Section 3.02, Paragraph 1 of the Plan is amended to read as follows: Section 3.02 Power to Invest 1. The Deferred Fee Account(s) shall be credited with interest, at the rate of nine percent (9.0%) per annum, on November 1, February 1, May 1 and August 1 of each year; interest to be compounded on a quarterly basis. The Committee, in its sole discretion, may permit an Officer and/or Trustee to request that the amounts represented by one or more of his or her Deferred Fee Account(s) be invested in equity securities, fixed income securities, money market accounts and cash, as the Trust shall from time to time allow as permitted investments under the Plan (an "Alternative Investment"). Any request by an Officer and/or Trustee as to an Alternative Investment shall be made in writing to the Committee and is subject to the discretion of the Committee. The Deferred Fee Account(s) shall be credited with earnings or losses (if any) based on the Alternative Investment selected, and as and for the period as reported to the Committee. Amounts invested in an Alternative Investment are not guaranteed by the Trust, and are subject to the risk of loss of principal and earnings. The Committee shall determine the frequency with which an Officer and/or Trustee may change his or her Alternative Investments. 2. All other terms and conditions of the Plan remain as stated therein. IN WITNESS WHEREOF, the undersigned has executed this Amendment No. I as the authorized Officer of First Real Estate Investment Trust of New Jersey pursuant to the resolution adopted on January 31, 2001 by the Executive Committee of the Board of Trustees. ATTEST: FIRST REAL ESTATE INVESTMENT TRUST __________________________________ by: __________________________________ William R. DeLorenzo, Jr. Robert Hekemian, Chairman Executive Secretary -----END PRIVACY-ENHANCED MESSAGE-----