def14a-105598_freit.htm
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington D.C.
20549
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
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the Registrant þ
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a Party other than the Registrant o
Check the
appropriate box:
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Proxy Statement
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for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
(Name of
Registrant as Specified in its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
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of Filing Fee (Check the appropriate box):
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required
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of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of
transaction:
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identify the filing for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the Form or Schedule
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(1)
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No.:
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PROXY
STATEMENT
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
505
Main Street, P.O. Box 667
Hackensack,
New Jersey 07602
NOTICE
OF ANNUAL MEETING OF HOLDERS
OF
SHARES OF BENEFICIAL INTEREST
April
7, 2010
TO THE
HOLDERS OF SHARES OF BENEFICIAL INTEREST OF FIRST REAL ESTATE INVESTMENT TRUST
OF NEW JERSEY
The Annual Meeting of the holders (the
“Shareholders”) of shares of beneficial interest without par value of First Real
Estate Investment Trust of New Jersey (the “Trust”) will be held on Wednesday,
April 7, 2010, at the Trust’s executive offices, 505 Main Street, Hackensack,
New Jersey at 7:30 p.m., Eastern Daylight Savings Time, for the following
purposes:
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1.
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To
elect two Trustees for terms of three years or until their successors have
been elected and qualify; and
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2.
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To
transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
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The Shareholders of record at the close
of business on February 17, 2010 are entitled to notice of and to vote at the
meeting.
Hackensack,
New Jersey
February
26, 2010
YOU
ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO ENSURE YOUR REPRESENTATION AT
THE MEETING, HOWEVER, YOU ARE URGED TO SIGN AND DATE THE ACCOMPANYING PROXY AND
MAIL IT AT ONCE IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR
COOPERATION WILL BE APPRECIATED.
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
PROXY
STATEMENT
General
Information
This Proxy Statement is furnished to
the holders (the “Shareholders”) of shares of beneficial interest without par
value (the “Shares”) of First Real Estate Investment Trust of New Jersey (the
“Trust”) in connection with the solicitation of proxies for use at the Annual
Meeting of the Shareholders to be held on Wednesday, April 7, 2010 and any
adjournment or postponement thereof (the “Annual Meeting”), pursuant to the
accompanying Notice of Annual Meeting of Holders of Shares of Beneficial
Interest. The Shares represent beneficial interests in the Trust, and
the Shares are the only authorized, issued and outstanding class of equity of
the Trust. A form of proxy for use at the Annual Meeting is also
enclosed. The Trust anticipates mailing this Proxy Statement to its
Shareholders beginning on or about March 1, 2010. The executive
offices of the Trust are located at 505 Main Street, Hackensack, New Jersey
07602.
Shareholders may revoke the authority
granted by their execution of proxies at any time before the effective exercise
of proxies by filing written notice of such revocation with the Secretary of the
Annual Meeting. Presence at the Annual Meeting does not of itself
revoke the proxy. All Shares represented by executed and unrevoked
proxies will be voted in accordance with the instructions
therein. Proxies submitted without indication will be voted FOR the
nominees for Trustee named in this Proxy Statement. The Board of
Trustees of the Trust (the “Board of Trustees”) is not aware, as of the date
hereof, of any matters to be presented at the Annual Meeting other than the
election of Trustees as described in this Proxy Statement, but if any other
matter incident to the Annual Meeting is properly presented, the persons named
in the proxy will vote thereon according to their best judgment.
The cost of preparing, assembling and
mailing the proxy materials is to be borne by the Trust. Proxies for
use at the Annual Meeting are being solicited by the Board of
Trustees. It is not anticipated that any compensation will be paid
for soliciting proxies and the Trust does not intend to employ specially engaged
personnel in the solicitation of proxies. It is contemplated that
proxies will be solicited principally through the mail. Members of
the Board of Trustees and executive officers of the Trust (“Executive Officers”)
may also, without additional compensation, solicit proxies, personally or by
mail, special letter, telephone, telegraph, facsimile transmission or other
electronic means.
Voting
Securities
The only voting securities entitled to
vote at the Annual Meeting are the Shares. Each Share entitles its
owner to one vote on an equal basis. There were 6,942,143 Shares
issued and outstanding on the record date, February 17, 2010. Only
Shareholders of record on the books of the Trust at the close of business on
February 17, 2010 are entitled to notice of and to vote at the Annual
Meeting. The holders of a majority of the outstanding Shares, present
in person or represented by proxy, will constitute a quorum at the Annual
Meeting. Abstentions and broker
non-votes
will be counted for purposes of determining whether a quorum is present at the
Annual Meeting.
A plurality of the votes cast at the
Annual Meeting by the holders of Shares present in person or represented by
proxy and entitled to vote is required in order to elect the nominees for
Trustee. The proxy card provides space for a Shareholder to withhold
his or her vote for a nominee to the Board of Trustees.
All votes will be tabulated by the
inspector of election appointed for the Annual Meeting who will separately
tabulate affirmative and negative votes, authority withheld for the nominees for
Trustee, abstentions and broker non-votes. Any proxy submitted and
containing any abstention or a broker non-vote will not be counted as a vote
cast with respect to the election of Trustees or any other matter to which it
relates.
Security
Ownership of Certain Beneficial Owners and Management
The following table sets forth
information, as of February 17, 2010, with respect to beneficial ownership, as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), of beneficial interests in the Trust, as represented by the
Shares, for each Trustee, nominee for Trustee, and Executive Officer of the
Trust. The only persons who beneficially own greater than 5% of the
Shares are three of the Trustees named in the table below.
Amount and Nature of
Beneficial Ownership
Name of Beneficial Owner
(1)
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(A)
Number
of Shares Beneficially
Owned
(2)
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(B)
Number
of Shares Acquirable within
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(C)
Aggregate
Number
of Shares
Deemed
to be
Beneficially
Owned
(Column
A plus
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Robert
S. Hekemian (4)
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361,643 |
(5) |
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-- |
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361,643 |
(5) |
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5.2 |
% |
Donald
W. Barney (4)
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240,835 |
(6) |
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-- |
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240,835 |
(6) |
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3.5 |
% |
Herbert
C. Klein, Esq. (7)
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359,512 |
(8) |
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-- |
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359,512 |
(8) |
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5.2 |
% |
Ronald
J. Artinian (7)
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429,942 |
(9) |
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-- |
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429,942 |
(9) |
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6.2 |
% |
Alan
L. Aufzien (7)
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32,000 |
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-- |
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32,000 |
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(10 |
) |
David
F. McBride, Esq. (7)
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1,000 |
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-- |
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1,000 |
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(10 |
) |
Robert
S. Hekemian, Jr. (7)
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242,611 |
(11) |
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-- |
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242,611 |
(11) |
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3.5 |
% |
John
A. Aiello, Esq. (12)
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-- |
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-- |
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-- |
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-- |
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All
Trustees, Nominees for Trustee and Executive Officers as a group (8
persons) (5)(6)(8)(9)(11)
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1,667,543 |
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-- |
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1,667,543 |
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24.0 |
% |
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(1)
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All
Trustees and Executive Officers listed in this table, with the exception
of Mr. Aiello, maintain a mailing address at 505 Main Street, P.O. Box
667, Hackensack, New Jersey 07602. Mr. Aiello maintains a
mailing address at 125 Half Mile Road, P.O. Box 190, Middletown, New
Jersey 07748.
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(2)
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Except
as otherwise indicated, all of the Shares are held beneficially and of
record. All share amounts have been adjusted, as appropriate,
to take into account the October 2001 and March 2004 share
splits.
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(3)
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Shares
subject to currently exercisable options granted under the Trust’s Equity
Incentive Plan, as amended (the “Equity Incentive
Plan”).
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(4)
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A
Trustee and Executive Officer of the
Trust.
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(5)
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Includes
74,392 Shares held by Mr. Hekemian’s wife, with respect to which Mr.
Hekemian disclaims beneficial ownership. Also includes (i)
102,072 Shares held by the Hekemian & Co., Inc. Pension Plan of which
Mr. Hekemian is a trustee and a participant, (ii) an aggregate of 45,116
Shares which are held by certain partnerships in which Mr. Hekemian is a
partner, (iii) 14,196 Shares held in certain trusts for which Mr. Hekemian
is a trustee and one trust in which Mr. Hekemian is a beneficiary, and
(iv) 67,740 Shares held by the Robert and Mary Jane Hekemian Foundation,
Inc. of which Mr. Hekemian is the President, all of such Shares with
respect to which Mr. Hekemian disclaims beneficial ownership thereof
except to the extent of his pecuniary interest in the pension plan,
partnerships and trusts.
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(6)
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Includes
23,464 Shares held by the estate of Mr. Barney’s wife, of which Mr. Barney
is the administrator.
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(7)
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A
Trustee of the Trust.
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(8)
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Includes
189,879 Shares held by Mr. Klein’s wife and 27,000 Shares held in the
Krieger charitable trust of which Mr. Klein’s wife is trustee, with
respect to both of which Mr. Klein disclaims beneficial
ownership. Also includes 7,390 Shares held by The Herbert &
Jacqueline Klein Family Foundation,
Inc.
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(9)
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Includes
3,800 Shares which are held by Mr. Artinian’s son and 2,100 Shares which
are held by Mr. Artinian’s daughter, with respect to which Mr. Artinian
disclaims beneficial ownership.
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(10)
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Shares
beneficially owned do not exceed 1% of the Trust’s issued and outstanding
Shares.
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(11)
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Includes
(i) 1,000 Shares held by Mr. Hekemian’s wife, (ii) an aggregate of 72,216
Shares which are held by certain partnerships in which Mr. Hekemian is a
partner, (iii) 9,238 Shares which are held in trust by Mr. Hekemian for
the benefit of his children, and (iv) 3,200 Shares which are held in
certain trusts for the benefit of Mr. Hekemian’s nephews and of which Mr.
Hekemian is trustee, all of such Shares with respect to which Mr. Hekemian
disclaims beneficial ownership thereof except to the extent of his
pecuniary interest in the partnerships. Also includes 21,208
Shares held in a trust of which Mr. Hekemian is a beneficiary, with
respect to which Shares Mr. Hekemian disclaims beneficial ownership except
to the extent of his pecuniary interest in such
trust.
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(12)
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An
Executive Officer of the Trust.
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The Board of Trustees governs the
Trust. The Declaration of Trust provides that the Board of Trustees
will consist of not fewer than five nor more than nine Trustees.
The Board of Trustees has fixed the
number of Trustees at seven. The term of two Trustees shall expire at
the Annual Meeting. In order to allow the Board of Trustees to be
able to strike a balance with respect to the number of Trustees whose terms are
expiring at each annual meeting of the Shareholders, the Declaration of Trust
authorizes the Board of Trustees to designate whether the term of a nominee for
Trustee shall either be two years or three years at the time a Trustee is
nominated for election.
Nominees
Consistent
with the recommendation of the Nominating Committee, the Board of Trustees has
nominated each of Ronald J. Artinian and Alan L. Aufzien for election at the
Annual Meeting to a three-year term as a Trustee to commence at the Annual
Meeting.
Ronald J. Artinian and Alan L. Aufzien
are currently members of the Board of Trustees, with their terms of office
scheduled to expire as of the date of the Annual Meeting. Please see
the section captioned “Board of Trustees” below for a description of the
business experience of and other relevant information with respect to Ronald J.
Artinian and Alan L. Aufzien.
It is the intention of the persons
named in the accompanying proxy to vote, unless otherwise instructed, in favor
of the election of each of Ronald J. Artinian and Alan L. Aufzien to a
three-year term as Trustee. Should Mr. Artinian or Mr. Aufzien be
unable to serve, the proxies will be voted for the election of such other person
or persons as shall be determined by the persons named in the proxy in
accordance with their judgment, and any such person elected in the place of Mr.
Artinian or Mr. Aufzien shall be elected to a three year term as a
Trustee. Management of the Trust is not aware of any reason why
either Mr. Artinian or Mr. Aufzien, if elected, would be unable to serve as a
Trustee.
The Board of Trustees recommends a vote
FOR the election of
Ronald J. Artinian and Alan L. Aufzien to three-year terms as
Trustees.
Board
of Trustees
The
members of the Board of Trustees of the Trust are:
Name
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Age
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Year
First Elected to
the Board of
Trustees
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|
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Robert
S. Hekemian
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78
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1980
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Donald
W. Barney
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69
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1981
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Herbert
C. Klein, Esq.
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79
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1961
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Ronald
J. Artinian
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61
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1992
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Alan
L. Aufzien
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80
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1992
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David
F. McBride, Esq.
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62
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2007
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Robert
S. Hekemian, Jr.
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50
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2007
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There are no family relationships among
the Trustees and the Executive Officers, except as between Robert S. Hekemian,
Jr. who is the son of Robert S. Hekemian, the Trust’s Chairman of the Board and
Chief Executive Officer. None of the nominees for Trustee or
Executive Officers of the Trust are directors of any company with a class of
securities registered pursuant to Section 12 of the Exchange Act or subject to
the requirements of Section 15(d) of the Exchange Act or any company registered
as an investment company under the Investment Company Act of 1940, as amended,
except Robert S. Hekemian, Jr. who is a director of Oritani Financial
Corp. (ORIT),
the holding company for Oritani Bank, of which he is also a director, and Mr.
Artinian who is a director of NYMAGIC, Inc. (NYM), an insurance holding company.
Biographical
Information
Robert S. Hekemian has been
active in the real estate industry for more than 54 years. Mr. Hekemian has
served as Chairman of the Board and Chief Executive Officer of the Trust since
1991, and as a Trustee since 1980. From 1981 to 1991, Mr. Hekemian
was President of the Trust. From 2002 to 2003, Mr. Hekemian served as
Chief Financial Officer of the Trust. His current term as
a member of the Board of Trustees is scheduled to expire in April
2011. Since 1983, Mr. Hekemian has also been the Chairman of the
Board and Chief Executive Officer of Hekemian & Co., Inc. (“Hekemian &
Co.”), a real estate brokerage and management company which manages the Trust’s
properties and owns and develops real estate assets throughout the Northeast and
Mid-Atlantic regions of the United States. Mr. Hekemian is a director
of Pascack Community Bank. See the section entitled “Certain
Relationships and Related Party Transactions” in this Proxy
Statement. He is also a director, a partner and an officer in
numerous private real estate corporations and partnerships.
Donald W. Barney has served as
President of the Trust since 1993, as Treasurer and Chief Financial Officer of
the Trust since 2003, and as a Trustee since 1981. His current term
as a member of the Board of Trustees is scheduled to expire in April
2012. Mr. Barney devotes approximately 15% of his time to perform his
duties as an Executive Officer of the Trust. Mr. Barney was
associated with Union Camp Corporation, a diversified manufacturer of paper,
packaging products, chemicals and wood products, from 1969 through 1998 in
various positions, including Vice President and Treasurer. Mr. Barney
is a director and Vice Chairman of Hilltop Community Bank. He is also
a partner and director in several private real estate investment
companies.
Herbert C. Klein, Esq., has
served continuously as a Trustee since 1961 except for the two-year period from
January 1993 to January 1995, when Mr. Klein served as an elected member of the
United States Congress, House of Representatives, for the 8th Congressional
District of New Jersey. His current term as a member of the Board of
Trustees is scheduled to expire in April 2012. From 1991 through the
end of 1992, Mr. Klein served as President of the Trust. Mr. Klein
has been an attorney since 1956 with a practice devoted to real estate,
corporate matters and government relations. Since January 1999, Mr.
Klein has been a Partner in the law firm of Nowell Amoroso Klein Bierman P.A.,
with offices located in Hackensack, New Jersey
and New
York City. See the section entitled “Certain Relationships and
Related Party Transactions” in this Proxy Statement. Mr. Klein is a
former member of the New Jersey State Assembly. Mr. Klein is also a
partner and principal in numerous private investment real estate
companies. He is a member of the Board of Directors of the Rutgers
University Foundation (the “Foundation”), a member of the Audit and
Executive Committees of the Board of Directors of the Foundation, and a member
of the board of directors of numerous philanthropic organizations.
Ronald J. Artinian has served
as a Trustee since 1992. His current term as a member of the Board of
Trustees is scheduled to expire in April 2010. Mr. Artinian worked in
the financial services industry for 26 years, including with Smith Barney, Inc.
from 1989 to 1998, where Mr. Artinian held positions as a Managing Director and
National Sales Manager. Mr. Artinian retired from Smith Barney in
January 1998 in order to pursue other business interests as a private
investor. Mr. Artinian joined the board of The Reserve, a money
market fund, in 2007. Mr. Artinian joined the board of NYMAGIC, Inc.,
an insurance holding company specializing in commercial lines property and
casualty and ocean marine insurance, in 2008.
Alan L. Aufzien has served as
a Trustee since 1992. His current term as a member of the Board of
Trustees is scheduled to expire in April 2010. Since 1986, Mr.
Aufzien has been Chairman and Managing Partner of The Norall Organisation, an
investment company. From 1980 to 1998, Mr. Aufzien was a partner in
the Meadowlands Basketball Association, t/a New Jersey Nets (Member of the
National Basketball Association), and was its Chairman and Chief Executive
Officer, and then its Secretary and Treasurer, as well as a member of its Board
of Directors.
David F. McBride, Esq. was
elected as a trustee in 2007. His current term as a member of the
Board of Trustees is scheduled to expire in April 2011. Mr. McBride
brings with him over 30 years of diversified real estate experience to the
Board. Since 2006 he has been the Chairman of the Board of the Saddle
River Valley Bank, a federally chartered community bank, since 2001 a Partner in
the law firm of Harwood Lloyd, LLC, specializing in real estate matters, and
since 1987 the Chief Executive Officer of McBride Enterprises, Inc., a family
owned real estate company. Mr. McBride was also instrumental in
forming the Keystone Property Trust (NYSE) in 1998 and served as its Chairman of
the Board until its sale to ProLogis in 2004. Since 1998, he has also
served as the Chairman and President of the Mountain Club, t/a High Mountain
Golf Club.
Robert S. Hekemian, Jr. was
elected as a trustee in 2007. His current term as a member of the
Board of Trustees is scheduled to expire in April 2011. Mr. Hekemian
has been involved in real estate activities for over 25 years, including
property management, leasing, mortgage financing, construction and acquisitions
of residential and commercial properties located throughout the Northeast and
Mid-Atlantic regions of the United States. He has served as President
and Chief Operating Officer of Hekemian and Co. since 2004. From 1983
to 2003, Mr. Hekemian served as Executive Vice President of Hekemian and
Co. Mr. Hekemian is principally responsible for identifying real
estate acquisitions and evaluating the performance of the real estate properties
managed by Hekemian & Co. with a view toward maintaining or altering
management and/or leasing strategies. Mr. Hekemian also serves on the
Boards of Directors of Oritani Bank and Oritani Financial Corp., the holding
company for the bank, and the New York Philharmonic. Mr. Hekemian is
Chairman of the Bergen Community College
Foundation. He
is a Member of the Board of Governors, Hackensack University Medical Center, and
a Trustee of the Hackensack University Medical Center Foundation.
Executive
Officers
Name
|
Age
|
Office
|
Robert
S. Hekemian
|
78
|
Chief
Executive Officer
|
Donald
W. Barney
|
69
|
President,
Treasurer and Chief Financial Officer
|
John
A. Aiello, Esq.
|
60
|
Secretary
and Executive Secretary
|
Each of
the Executive Officers of the Trust serves in his office(s) until such time as
his successor is elected and qualified.
Biographical
Information
Please
see “Board of Trustees” above for biographical information for Robert S.
Hekemian and Donald W. Barney.
John A. Aiello, Esq. has
served as the Secretary and Executive Secretary of the Trust since
2003. Mr. Aiello is a shareholder and officer at the law firm of
Giordano, Halleran & Ciesla, P.C.
Meetings
of the Board of Trustees
During the fiscal year ended October
31, 2009, the Board of Trustees held twelve meetings. During fiscal
2009, each incumbent member of the Board of Trustees attended at least 75% of the aggregate number
of (i) meetings of the Board of Trustees, and (ii) meetings of the committees of
the Board of Trustees on which he served. John A. Aiello, Secretary
and Executive Secretary of the Trust, attends meetings of the Board of Trustees
and each of its committees in a non-voting capacity.
Trustee
Attendance at Annual Meeting
The Trust encourages all of the
Trustees to attend the Annual Meeting, and expects that all Trustees will attend
the Annual Meeting absent a valid reason such as a scheduling
conflict. All of the Trustees attended the Annual Meeting of
Shareholders held on April 7, 2009.
Committees
of the Board of Trustees
The Board of Trustees has three
standing committees: (i) the Executive Committee, (ii) the Nominating Committee,
and (iii) the Audit Committee. The Board of Trustees does not have a
compensation committee. The Board has determined that a separate
compensation committee is not necessary, and accordingly, matters regarding
compensation are acted upon by the full Board of Trustees. The Board
of Trustees believes that it is appropriate for the full Board to act on
compensation matters inasmuch as there is a substantial number of disinterested
Trustees to deliberate and act on such matters. Any Trustee who is an
Executive Officer does not participate in deliberations relating to, or vote
upon, his own compensation. Furthermore, the Board of Trustees meets
with sufficient regularity to give the Board the opportunity to address
compensation matters in a timely manner.
(a) Executive
Committee
The Executive Committee of the Board of
Trustees is authorized to make policy and certain business decisions during any
interval between meetings of the Board of Trustees. All decisions of
the Executive Committee are reported to the Board of Trustees on a regular
basis. During fiscal 2009, the members of the Executive Committee
were, and currently are Messrs. Robert S. Hekemian, Donald W. Barney,
Herbert C. Klein, Esq., Ronald J. Artinian and Alan L. Aufzien. Mr. Hekemian is the
Chairman of the Executive Committee. The Executive Committee did not
meet during fiscal 2009.
(b) Nominating
Committee
The
Nominating Committee is authorized to identify, evaluate and recommend to the
Board of Trustees prospective nominees for Trustee, periodically review the
Trust’s governance guidelines and make recommendations to the Board of Trustees
from time to time as to matters of governance. The Nominating
Committee also periodically reviews the performance of the Board of Trustees and
its members and makes recommendations to the Board of Trustees on the number,
function, and composition of the Board of Trustees and the committees of the
Board of Trustees, and on the terms of the Trustees. The Nominating
Committee’s charter is available on the Trust’s website at www.freitnj.com under
the “About FREIT” and “Corporate Governance” tabs.
The
Nominating Committee reviews the qualifications of various persons to determine
whether they might make good candidates for consideration for membership on the
Board of Trustees, without a particular focus on diversity. The
Nominating Committee considers the nominee’s business judgment, skill and
experience, the nominee’s understanding of the Trust’s business and industry and
other related industries, the nominee’s integrity, reputation and independence,
and such other factors as the Nominating Committee determines are relevant in
light of the needs of the Board of Trustees and the Trust and its
Shareholders. With respect to any nominee up for re-election to the
Board of Trustees, the Nominating Committee is authorized to consider the
nominee’s performance on the Board of Trustees before nominating the Trustee for
re-election at an annual meeting. The Trust does not pay a fee to any
third party to identify or assist in identifying or evaluating potential
nominees.
The Nominating Committee will also
consider candidates for Trustee recommended by the Shareholders. The
process by which a Shareholder may suggest a candidate to be nominated for
election to the Board of Trustees can be found in the section of this Proxy
Statement entitled “Shareholder Proposals and Recommendations for Nomination of
Trustees.” The Nominating Committee will apply the same criteria
described above in reviewing and evaluating the qualifications of any candidate
recommended by a Shareholder, provided that it remains in the sole discretion of
the Nominating Committee whether any such potential nominee suggested by a
Shareholder is recommended by the Nominating Committee to the Board of
Trustees.
The current members of the Nominating
Committee of the Board of Trustees are Robert S. Hekemian, Herbert C. Klein,
Donald W. Barney and David F. McBride. Although Messrs. Klein and
McBride meet the requirements for independence set forth in the definition of
“independent director” in the listing requirements of the National Association
of Securities Dealers Automated Quotations (“NASDAQ”), Messrs. Hekemian and
Barney are not considered independent under the NASDAQ definition of
“independent director” since each of them is an Executive Officer of the
Trust. In fiscal 2009, the Nominating Committee acted by unanimous
written consent to recommend to the Board of Trustees that each of Ronald J.
Artinian and Alan L. Aufzien be nominated for re-election as Trustees at the
Annual Meeting each to a three year term. The Board of Trustees
subsequently approved such nominees.
(c) Audit
Committee
The current members of the Audit
Committee of the Board of Trustees are Ronald J. Artinian, Alan L. Aufzien and
Herbert C. Klein. Mr. Artinian is the Chairman of the Audit
Committee. Each of Mr. Artinian and Mr. Aufzien satisfies the audit
committee qualifications under the NASDAQ listing requirements and is
independent, as independence for audit committee members is defined in the
NASDAQ listing requirements. Although Mr. Klein meets the
requirements for independence set forth in the NASDAQ definition of “independent
director,” he does not meet the criteria for independence set forth in Exchange
Act Rule 10A-3(b)(1) because the law firm of Nowell, Amoroso, Klein, Bierman,
P.A., in which Mr. Klein is currently a partner, has received and will continue
to receive legal fees from the Trust for legal services provided and to be
provided to the Trust. See the Section of this Proxy Statement
entitled “Certain Relationships and Related Party
Transactions.” Accordingly, Mr. Klein does not satisfy the
independence requirement for qualification as an audit committee member under
the NASDAQ listing requirements. The Board of Trustees has appointed
Mr. Klein to the Audit Committee since the Board of Trustees believes that his
background and experience and the valuable contributions that he makes to the
Audit Committee sufficiently mitigate any concerns
arising
out of the fact that he does not satisfy the independence requirement of the
audit committee qualifications under the NASDAQ listing
requirements.
The Audit Committee held four meetings
during fiscal 2009. The Audit Committee selects the independent
registered public accounting firm (the “Independent Auditors”) to audit the
books and accounts of the Trust. In addition, the Audit Committee
reviews and pre-approves the scope and costs of all services (including
non-audit services) provided by the Independent Auditors. The Audit
Committee also monitors the effectiveness of the audit effort and financial
reporting and inquires into the adequacy of the Trust’s financial and operating
controls.
Based on its review of the criteria of
an Audit Committee Financial Expert under the rule adopted by the SEC, the Board
of Trustees believes that the members of the Trust’s Audit Committee may not
qualify as Audit Committee Financial Experts.
Each of Mr. Artinian, Mr. Aufzien and
Mr. Klein has made significant contributions and provided valuable service to
the Trust and its Shareholders as members of the Audit Committee. The
Board of Trustees believes that each of Mr. Artinian, Mr. Aufzien and Mr. Klein
has demonstrated that he is capable of (i) understanding accounting principles
generally accepted in the United States of America (“GAAP”), (ii) assessing the
general application of GAAP principles in connection with the accounting for
estimates, accruals and reserves, (iii) understanding financial statements and
analyzing and evaluating the Trust’s financial statements, (iv) understanding
internal controls and procedures for financial reporting, and (v) understanding
audit committee functions, all of which are attributes of an Audit Committee
Financial Expert under the rule adopted by the SEC. Given the
business experience and acumen of Mr. Artinian, Mr. Aufzien and Mr. Klein and
their long standing service as members of the Board of Trustees and its various
committees, including the Trust’s Audit Committee, the Board of Trustees
believes that each of Mr. Artinian, Mr. Aufzien and Mr. Klein is qualified to
carry out all duties and responsibilities of the Trust’s Audit
Committee.
The Board of Trustees believes that one
of its members, Donald W. Barney, would qualify as an Audit Committee Financial
Expert. Mr. Barney resigned from the Audit Committee in connection
with his appointment to the office of Treasurer of the Trust and his assumption
of the role of Chief Financial Officer of the Trust. As Chief
Financial Officer of the Trust, Mr. Barney has made and will continue to make
the certifications required under the Sarbanes-Oxley Act of 2002 and the related
rules adopted by the SEC with respect to (i) the Trust’s financial statements
and other financial information included in periodic reports filed with the SEC,
(ii) the Trust’s disclosure controls and procedures regarding the disclosure to
the certifying officers of material information relating to the Trust, and (iii)
the Trust’s internal controls and the adequacy of the design and operation of
such internal controls. As a certifying officer of the Trust, Mr.
Barney will meet with and make reports to the Audit Committee with respect to
the items which are the subject matter of his certifications. The
Board of Trustees believes that it is important to maintain independence between
the Audit Committee and the certifying officers of the Trust, and that the
significance and importance of maintaining such an independent relationship
outweigh the importance of having a person who technically satisfies the
definition of an Audit Committee Financial Expert serve on the Audit
Committee.
At this time, the Board of Trustees
does not believe that it is necessary to actively search for an outside person
to serve on the Board of Trustees who would qualify as an Audit Committee
Financial Expert.
Audit
Committee Report
The following Report of the Audit
Committee does not constitute soliciting material and should not be deemed filed
or incorporated by reference into any other Trust filing under the Securities
Act of 1933, as amended, or the Exchange Act, except to the extent the Trust
specifically incorporates this Report by reference therein.
The Audit Committee meets each quarter
during the fiscal year with the Trust’s Independent Auditors and members of
Hekemian & Co. and focuses on the following areas:
|
(1)
|
the
adequacy of the Trust’s internal controls and financial reporting process
and the reliability of its financial
statements;
|
|
(2)
|
the
independence and performance of the Trust’s Independent Auditors and the
cooperation received by the Independent Auditors from Hekemian & Co;
and
|
|
(3)
|
the
Trust’s compliance with all legal and regulatory requirements with
particular emphasis upon all disclosures made by the Trust in its
quarterly and annual reports to the
SEC.
|
The Audit Committee meets separately
with Hekemian & Co. and the Trust’s Independent Auditors. The
Independent Auditors have unrestricted access to the Audit
Committee. The Independent Auditors make a quarterly report directly
to the Audit Committee out of the presence of Hekemian & Co. concerning
their functions as the Trust’s Independent Auditors.
The Board of Trustees has adopted a
written charter setting out the audit related functions. The Audit
Committee’s charter is available on the Trust’s website at www.freitnj.com under
the “About FREIT” and “Corporate Governance” tabs. The Audit
Committee reviews its charter on an annual basis and updates the charter as
necessary.
Hekemian & Co. has primary
responsibility for the Trust’s financial statements and the preparation of all
financial statements and the maintenance of the Trust’s internal
controls.
The Independent Auditors audit the
annual financial statements prepared by Hekemian & Co., express an opinion
as to whether those financial statements fairly present the financial position,
results of operations and cash flows of the Trust in conformity with GAAP and
discuss with the Audit Committee any issues they believe should be
raised.
For fiscal 2009, the Audit Committee
reviewed the Trust’s audited financial statements and met with both Hekemian
& Co. and Eisner LLP to review all financial statements. Hekemian & Co.
has represented to the Audit Committee that the financial statements were
prepared in conformity with GAAP.
The Audit Committee has received from
and discussed with Eisner LLP the written disclosure and the letter required by
Independence Standards Board Standard No. 1 (Independence Discussion with Audit
Committees). These items relate to that firm’s independence from the
Trust. The Audit Committee also discussed with Eisner LLP any
matters
required
to be discussed by the statement on Auditing Standards No. 61, as amended
(Communication with Audit Committees), as adopted by the Public Company
Accounting Oversight Board in Rule 3200T.
On the basis of these reviews and
discussions, the Audit Committee recommended to the Board of Trustees that the
Trust’s audited financial statements be included in the Trust’s Annual Report on
Form 10-K for the fiscal year ended October 31, 2009, for filing with the
SEC.
Submitted
by:
|
Ronald
J. Artinian, Chairman
|
|
Alan
L. Aufzien
|
|
Herbert
C. Klein, Esq.
|
Corporate
Governance
The Trust
has a Code of Ethics that is applicable to all Trustees, officers and management
employees of the Trust, including, without limitation, the Trust’s principal
executive and senior financial officers. The Audit Committee is
charged with administering and interpreting the Code of Ethics. The
Code of Ethics is available on the Trust’s website at www.freitnj.com under
the tabs “About FREIT” and “Corporate Governance.”
Robert S.
Hekemian serves as both the Chairman of the Board and Chief Executive Officer of
the Trust. The Trust believes that the combination of these two roles
is the optimal structure for the Chief Executive Officer to efficiently and
effectively execute his duties and fulfill his responsibilities as the principal
executive officer of the Trust and to keep the Board informed about matters
affecting the Trust. The Board of Trustees does not have a “lead”
independent director.
The Audit
Committee of the Board of Trustees is responsible for matters relating to risk
oversight. Among other things, the Audit Committee (i) reviews and
assesses risk relative to insurance coverage for the Trust’s operating activity
and financial investments, including the investment of liquid assets; (ii)
evaluates the impact, if any, of changes in interest rates and energy prices and
oversees actions taken to mitigate risk associated with fluctuations in interest
rates and energy prices; (iii) conducts internal control reviews and reports any
material issues raised in the course of such reviews; and (iv) reviews, with the
Independent Auditors, internal controls on financial reporting. The
Audit Committee presents reports to the full Board of Trustees on a quarterly
basis and reports any matters relative to risk oversight that require the
attention or action of the full Board.
EXECUTIVE
COMPENSATION
The
following compensation discussion and analysis presents information regarding
the compensation of our Chief Executive Officer and other Executive Officers for
whom compensation is disclosed in the tables below. Our executive
compensation program and structure is established and overseen by the Board of
Trustees.
Background
The full
Board of Trustees determines the amounts of the annual executive officer,
Trustee retainer and meeting fees paid to the Executive Officers and Trustees of
the Trust. The Board of Trustees reviews the performance of the Trust and the
contributions of each Executive Officer and the Trustees to the business of the
Trust.
Compensation
Objectives and Policies
The
objective of the Trust’s executive compensation program is to assist the Trust
in retaining and motivating skilled executives and employees by rewarding
dedication, hard work and success.
The Trust
does not maintain any employee benefit plans, other than the Equity Incentive
Plan. There are no employment contracts between the Trust and any of
the Executive Officers, nor is there any compensatory plan or arrangement
between the Trust and any of the Executive Officers pursuant to which an
Executive Officer would receive payments as the result of his resignation or
retirement as an Executive Officer, or any other event resulting in the
termination of his relationship with the Trust as an Executive Officer, or as a
result of a change in control of the Trust. The Trust’s Equity
Incentive Plan provides that in the event of (i) a “change in control,” as such
term is defined in the Equity Incentive Plan, or (ii) a sale of all or
substantially all of the assets of the Trust, other than a sale of assets to a
subsidiary or other affiliated entity of the Trust, all outstanding options
shall become exercisable (to the extent not already exercisable) immediately
before or contemporaneously with the occurrence of such change in control or
sale, and each outstanding restricted share award shall immediately become free
of all restrictions, conditions and forfeiture provisions. As of
October 31, 2009, there were no unexercised options or restricted share awards
outstanding.
Mr.
Robert S. Hekemian, Chairman of the Board and Chief Executive Officer of the
Trust, is Chairman of the Board and Chief Executive Officer of Hekemian &
Co, the managing agent of the Trust. Mr. Robert S. Hekemian, Jr.,
Trustee of the Trust, is the President and Chief Operating Officer of Hekemian
& Co. Pursuant to the terms of the Management Agreement by and
between Hekemian & Co. and the Trust, Hekemian & Co. is entitled to
receive a termination fee from the Trust under certain circumstances, including
the non-renewal of the Management Agreement by the Trust, termination of the
Management Agreement by the Trust without cause, or termination of the
Management Agreement by the Trust following an acquisition of the
Trust. See the section of this Proxy Statement entitled “Certain
Relationships, Related Party Transactions and Director
Independence.”
Elements
of the Executive Compensation Program
Other
than the annual executive officer fees and the accrued interest thereon for such
fees which have been deferred, and the grant of options under the Trust’s Equity
Incentive Plan, the Trust has not made available or paid any compensation or
benefits to its Executive Officers, whether it be in the form of bonus,
long-term incentive compensation, perquisites, rights, warrants, convertible
securities, performance units, performance shares or other similar
instruments.
Fiscal 2009
Compensation
With
respect to fees for the Executive Officers for the 2009 fiscal year, including
with respect to both Mr. Hekemian in his capacity as Chairman of the Board and
Chief Executive Officer, and Mr. Barney in his capacity as President, Treasurer
and Chief Financial Officer, the Board of Trustees considered, among other
things, fees paid by other real estate investment trusts, the duties and
responsibilities of the Executive Officers and the value of the services
provided by them, and the Trust’s operating results. See “Fiscal 2009
Compensation: Trustees” for amounts payable to Mr. Hekemian and Mr. Barney for
services in their capacities as Trustees. For the 2009 fiscal year,
the Board of Trustees determined that the compensation paid to its Executive
Officers would remain the same as in the prior year.
Equity
Compensation
The Board
of Trustees approved the Equity Incentive Plan at its meeting on September 10,
1998, subject to approval by the Trust’s Shareholders. The
Shareholders of the Trust approved the Equity Incentive Plan at their annual
meeting on April 7, 1999, and the Equity Incentive Plan became effective as of
that date. The general nature and purpose of the Equity Incentive
Plan is to enhance the ability of the Trust to attract and retain the services
of employees and other persons who have made or are expected to make significant
contributions to the business of the Trust and its subsidiaries by providing
such persons with an opportunity to acquire Shares of the Trust, or receive
other stock-based awards.
The Board
of Trustees administers the Equity Incentive Plan and may grant options,
restricted share awards, and other share based awards under the Equity Incentive
Plan to eligible participants. In 1998, the Trust granted options to
purchase Shares pursuant to the Equity Incentive Plan to certain eligible
participants, including Executive Officers and Trustees of the
Trust. Since that time, no other grants have been made under the
Equity Incentive Plan.
On
February 15, 2007, the Board of Trustees approved, subject to Shareholder
approval, (i) an amendment to the Equity Incentive Plan to increase the number
of Shares of the Trust reserved for issuance thereunder by 300,000 Shares; and
(ii) an amendment to the Equity Incentive Plan to extend the term of the Equity
Incentive Plan, which would have expired on September 10, 2008, until September
10, 2018. The Shareholders approved such amendments at the annual meeting held
on April 4, 2007.
No
determinations have been made by the Board of Trustees with respect to the
granting, if at all, of awards under the Equity Incentive Plan in the 2010
fiscal year.
Officers
and/or Trustees Deferred Fee Plan
Effective November 1, 2000, the Board
of Trustees adopted a deferred fee plan, which was amended and restated
effective December 31, 2008 (the “Deferred Fee Plan”), for its Executive
Officers and its Trustees. Pursuant to the Deferred Fee Plan, any
Executive Officer or Trustee may elect to defer receipt of any executive
officer, Trustee retainer, meeting attendance, or property site inspection
fee. The Trust has agreed to pay any Executive Officer or Trustee,
who elects to participate in the Deferred Fee Plan, interest on any deferred
fees at the rate of 9% per annum, compounded quarterly. Any such
deferred fee and the interest accrued thereon shall be paid at either: (i) the
retirement age specified by the Executive Officer or Trustee in the deferral
election; or (ii) actual retirement of the Executive Officer or Trustee; or
(iii) upon the earlier cessation of duties as an Executive Officer or Trustee of
the Trust. The Deferred Fee Plan provides that any such deferred fees
will be paid in a lump sum or in annual installments over a period not to exceed
10 years, at the election of the Executive Officer or Trustee. The
Trust has not created and will not create a cash sinking fund for such deferred
fees. As a result, any Executive Officer or Trustee who elects to
participate in the Deferred Fee Plan is an unsecured creditor of the Trust with
respect to any such deferred fee. As of October 31, 2009,
approximately $2,848,000 of fees have been deferred, including accrued deferred
interest of approximately $1,075,000.
Risk
Management
The Board
of Trustees does not believe that the Trust’s executive compensation program
gives rise to any risks that are reasonably likely to have a material adverse
effect on the Trust. Executive Officers are compensated on a fixed
salary basis and have not been awarded any bonuses or other compensation that
might encourage the taking of unnecessary or excessive risks that threaten the
long-term value of the Trust. The Board has sought to align the
interests of the Trustees and Executive Officers with the long-term interests of
the Trust and the Shareholders though grants of stock options under the Equity
Incentive Plan, thereby giving the Trustees and Executive Officers additional
incentives to protect the long-term value of the Trust.
Compensation
Committee Interlocks and Insider Participation
For the
fiscal year ended October 31, 2009, the full Board of Trustees performed the
functions of a board compensation committee. Executive officers who
served on the Board during fiscal 2009 were Mr. Robert S. Hekemian, Chairman of
the Board and Chief Executive Officer, and Mr. Donald W. Barney, President,
Treasurer and Chief Financial Officer. No action was taken with
respect to matters of compensation for the Chairman of the Board and Chief
Executive Officer and the President, Treasurer and Chief Financial Officer for
the fiscal year ended October 31, 2009, and the compensation paid to them
remained the same as in the prior year.
Compensation
Committee Report
The Board
of Trustees has discussed and reviewed the foregoing Compensation Discussion and
Analysis with management. Based upon this review and discussion, the
Board of Trustees has determined that the Compensation Discussion and Analysis
be included in this Proxy Statement.
Submitted
by:
|
Robert
S. Hekemian, Chairman
|
|
|
Alan
L. Aufzien
|
Robert
S. Hekemian, Jr.
|
|
Ronald
J. Artinian
|
Herbert
C. Klein, Esq.
|
|
Donald
W. Barney
|
David
F. McBride, Esq.
|
SUMMARY COMPENSATION
TABLE
The following table sets forth
information concerning the compensation of all of the Executive Officers of the
Trust as of October 31, 2007, October 31, 2008 and October 31, 2009 for services
in all capacities to the Trust for the 2007, 2008 and 2009 fiscal years,
respectively. During the fiscal year ended October 31, 2009, Robert
S. Hekemian served as Chairman of the Board and Chief Executive Officer of the
Trust. Mr. Hekemian devotes approximately 70% of his business
activities to the Trust. During the fiscal year ended October 31,
2009, Donald W. Barney served as President, Treasurer and Chief Financial
Officer of the Trust. Mr. Barney devotes approximately 15% of his
business activities to the Trust. During the fiscal year ended
October 31, 2009, John A. Aiello, Esq. served as the Secretary and the Executive
Secretary of the Trust. Mr. Aiello devotes approximately 7% of his
business activities to the Trust. With respect to all compensation,
the term “paid” shall mean actually paid or deferred.
|
Name
and Principal
Position
(1)
|
Year
|
Salary
($)(2)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(3)
|
All
Other
Compensation
($)
|
Total
($)
|
Robert
S. Hekemian,
Chairman
of the
Board
and Chief
Executive
Officer
|
2009
2008
2007
|
$
205,000
$
205,000
$
205,000
|
$ ---
$ ---
$ ---
|
$ ---
$
---
$
---
|
$ ---
$ ---
$ ---
|
$ ---
$ ---
$ ---
|
$ 30,356
$
24,044
$
17,732
|
$
178,488(4)
$
149,790(4)
$
125,050(4)
|
$
413,844
$
378,834
$
347,782
|
Donald
W. Barney,
President,
Treasurer
and
Chief Financial
Officer
|
2009
2008
2007
|
$
50,000
$
50,000
$
50,000
|
$ ---
$ ---
$ ---
|
$ ---
$ ---
$ ---
|
$ ---
$ ---
$ ---
|
$ ---
$ ---
$ ---
|
$
10,464
$
8,432
$
6,361
|
$
71,135(5)
$
61,746(5)
$
54,691(5)
|
$
131,599
$
120,178
$
111,052
|
John
A. Aiello, Esq.,
Executive
Secretary
and
Secretary
|
2009
2008
2007
|
$
30,000
$
30,000
$
30,000
|
$ ---
$ ---
$ ---
|
$ ---
$ ---
$ ---
|
$ ---
$ ---
$ ---
|
$ ---
$ ---
$ ---
|
$
---
$
---
$
---
|
$
13,200(6)
$
12,800(6)
$
11,600(6)
|
$
43,200 (7)
$42,800 (7)
$41,600 (7)
|
______________________________
(1)
|
Represents
the positions held by each Executive Officer for the fiscal years ended
October 31, 2009, October 31, 2008 and October 31,
2007.
|
(2)
|
Represents
payment to the Executive Officers for their services as Executive Officers
of the Trust. With the exception of Mr. Aiello, the Executive
Officers have elected to defer such amounts pursuant to the terms of the
Deferred Fee Plan. See “Compensation Discussion and Analysis -
Deferred Fee Plan.”
|
(3)
|
Represents
the interest rate spread due to the above-market accrued interest earned
on deferred executive officer and other fees payable to the Executive
Officer for service as an Executive Officer and Trustee in fiscal 2009,
2008 and 2007, but deferred at the election of the Executive Officer
pursuant to the terms of the Deferred Fee Plan. Above-market
interest was calculated using a rate equal to 120% of the applicable
federal long-term rate in effect in November 2000, the month in which the
Deferred Fee Plan was established. See “Compensation Discussion
and Analysis - Deferred Fee Plan.”
|
(4)
|
Of
these amounts, $101,620, $79,740 and $59,860 represent accrued interest
earned on deferred executive officer fees payable to the Executive Officer
for service as an Executive Officer in fiscal 2009, 2008 and 2007,
respectively, but deferred at the election of the Executive Officer
pursuant to the terms of the Deferred Fee Plan, pursuant to which payment
of accrued interest is deferred until such time that the deferred
executive officer fees are paid to the Executive Officer; $43,600, $43,200
and $44,400 represent annual retainer fees, meeting fees and other fees
paid to the Executive Officer in fiscal 2009, 2008 and 2007, respectively,
as consideration for his service on the Board of Trustees and, if
applicable, its committees, but deferred at the election of the Executive
Officer pursuant to the terms of the Deferred Fee Plan; $33,268, $26,850
and $20,790 represent accrued interest earned on deferred annual retainer
fees, meeting fees and other fees payable to the Executive Officer in
fiscal 2009, 2008 and 2007, respectively, for service on the Board of
Trustees and, if applicable, its committees, but deferred at the election
of the Executive Officer pursuant to the terms of the Deferred Fee
Plan. See “Compensation Discussion and Analysis - Deferred Fee
Plan.”
|
(5)
|
Of
this amount, $21,343, $16,608 and $12,161 represent accrued interest
earned on deferred executive officer fees payable to the Executive Officer
for service as an Executive Officer in fiscal 2009, 2008 and 2007,
respectively, but deferred at the election of the Executive Officer
pursuant to the terms of the Deferred Fee Plan, pursuant to which payment
of accrued interest is deferred until such time that the deferred
executive officer fees are paid to the Executive Officer; $25,000, $24,600
and $25,801 represent annual retainer fees, meeting fees and other fees
paid to the Executive Officer in fiscal 2009, 2008 and 2007, respectively,
as consideration for his service on the Board of Trustees and, if
applicable, its committees, but deferred at the election of the Executive
Officer pursuant to the terms of the Deferred Fee Plan; $24,792, $20,538
and $16,729 represent accrued interest earned on deferred annual retainer
fees, meeting fees and other fees payable to the Executive Officer in
fiscal 2009, 2008 and 2007, respectively, for service on the Board of
Trustees and, if applicable, its committees, but deferred at the election
of the Executive Officer pursuant to the terms of the Deferred Fee
Plan. See “Compensation Discussion and Analysis - Deferred Fee
Plan.”
|
(6)
|
During
each of the fiscal years ended October 31, 2009, 2008 and 2007, the
Executive Secretary was entitled to receive (i) meeting attendance fees in
the amount of $800 for each meeting of the Board of Trustees and its
committees attended, $400 for each meeting participated in by
teleconference; and (ii) property site inspection fees in the amount of
$800 for each site inspection attended and reimbursement of all reasonable
and verified out-of-pocket expenses incurred in connection with the site
visit.
|
(7)
|
Mr.
Aiello is an officer and shareholder in the law firm of Giordano, Halleran
& Ciesla, P.C. During fiscal 2009, 2008 and 2007, Mr.
Aiello paid to the law firm the retainer and meeting fees which he
received in connection with his services as Secretary and Executive
Secretary of the Trust during fiscal 2009, 2008 and
2007.
|
The
following table sets forth information concerning the compensation of the
Executive Officers of the Trust which was deferred pursuant to the Deferred Fee
Plan, described under Compensation Discussion and Analysis above, for the fiscal
year ended October 31, 2009:
FISCAL
2009 NONQUALIFIED DEFERRED COMPENSATION
Name
(1)
|
|
(a)
(2)
Executive
Contributions
in
Last FY
($)
|
|
(b)
(2)
Registrant
Contributions
in
Last FY
($)
|
|
(c)
Aggregate
Earnings
in
Last FY
($)
|
|
(d)
Aggregate
Withdrawals/
Distributions
($)
|
|
(e)
(2)
Aggregate
Balance
at
Last FYE
($)
|
Robert
S. Hekemian
|
|
$ |
248,600 |
|
|
$ |
--- |
|
|
$ |
165,245 |
|
|
$ |
--- |
|
|
$ |
2,096,119 |
|
Donald
W. Barney
|
|
$ |
75,000 |
|
|
$ |
--- |
|
|
$ |
56,599 |
|
|
$ |
--- |
|
|
$ |
711,942 |
|
John
A. Aiello, Esq.
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Effective
November 1, 2000, the Board of Trustees adopted the Deferred Fee Plan for
its Executive Officers and its Trustees. The Deferred Fee Plan
was amended and restated on December 30, 2008, effective as of December
31, 2008. Pursuant to the Deferred Fee Plan, any Executive
Officer or Trustee may elect to defer receipt of any executive officer,
Trustee retainer, meeting attendance, or property site inspection
fee.
|
(2)
|
All
amounts reported in columns (a) and (b) are reported as compensation to
the named executive officer in the fiscal year ended October 31, 2009 in
the Summary Compensation Table above. All amounts reported in
column (e) have been previously reported as compensation to the named
executive officer in the Summary Compensation Table for previous
years.
|
Outstanding
Equity Awards at Fiscal Year-End
There
were no outstanding stock options or other equity compensation awards held by
Executive Officers as of October 31, 2009.
Fiscal
2009 Option Exercises and Stock Vested
There
were no exercises of stock options or vesting of stock held by Executive
Officers in the fiscal year ended October 31, 2009.
Securities
Authorized for Issuance under Equity Compensation Plans
The
number of stock options outstanding under the Equity Incentive Plan, the
weighted-average exercise price of the outstanding options, and the number of
securities remaining available for issuance, as of October 31, 2009, were as
follows:
EQUITY
COMPENSATION PLAN TABLE
Plan
category
|
|
Number
of securities
to
be issued upon
exercise
of outstanding
options,
warrants and
rights
(a)
|
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
(b)
|
|
Number
of securities
remaining
available
for
future issuance
under
equity
compensation
plans
(excluding
securities
reflected
in column (a))
(c)
|
Equity
compensation plans approved by security holders (1)(2)
|
|
|
--- |
|
|
|
--- |
|
|
|
466,000 |
|
Equity
compensation plans not approved by security holders
|
|
|
--- |
|
|
|
--- |
|
|
|
--- |
|
Total
|
|
|
--- |
|
|
|
--- |
|
|
|
466,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
Trust currently has no equity compensation plans other than the Equity
Incentive Plan described herein.
|
(2)
|
The
amounts have been adjusted, as appropriate, to take into account the
October 2001 and March 2004 share
splits.
|
Grants
of Plan Based Awards
No awards were made to the Executive
Officers or any other participants under the Equity Incentive Plan during the
fiscal year ended October 31, 2009.
Fiscal
2009 Compensation: Trustees
During the fiscal year ended October
31, 2009, each Trustee, including every such Trustee who also served as an
Executive Officer of the Trust, was entitled to receive an annual retainer fee
in the amount of $15,000. The Trustees were also entitled to receive
meeting attendance fees in the amount of $800 for each meeting of the Board of
Trustees and its committees attended and $400 for each meeting participated in
by teleconference. The Chairman of the Board, for each Board of
Trustees meeting attended, and the chairman of each committee of the Board of
Trustees, for each committee meeting attended, were entitled to receive meeting
attendance fees of $1,100. In addition, the Chairman of the Audit
Committee was entitled to receive an annual retainer fee in the amount of
$10,000. The Trustees were also entitled to receive property site
inspection fees in the amount of $800 for each site inspection attended, plus
the reimbursement of all reasonable and verified out-of-pocket expenses incurred
in connection with the site visit. The Trustees are entitled to defer
all or any part of their retainer, meeting and property site inspection fees
pursuant to the terms of the Deferred Fee Plan. See “Compensation
Discussion and Analysis – Deferred Fee Plan.”
For the fiscal year ended October 31,
2009, the Trustees were paid or elected to defer annual retainer fees, meeting
attendance fees, site inspection fees and accrued interest in an aggregate
amount of $776,826 as consideration for
their services to the Board of Trustees and its committees.
FISCAL 2009 TRUSTEE
COMPENSATION
|
|
|
|
Fees
Earned
or
Paid in
Cash
|
|
Stock
Awards
|
|
Option
Awards
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
|
|
All
Other
Compensation
($)
|
|
Total
|
Herbert
C. Klein, Esq.
|
|
$ |
45,833 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
4,253 |
|
|
$ |
-- |
|
|
$ |
50,086 |
|
Ronald
J. Artinian
|
|
$ |
63,784 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
9,104 |
|
|
$ |
-- |
|
|
$ |
72,888 |
|
Alan
L. Aufzien
|
|
$ |
49,454 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
4,901 |
|
|
$ |
-- |
|
|
$ |
54,355 |
|
David
F. McBride, Esq.
|
|
$ |
27,781 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
791 |
|
|
$ |
-- |
|
|
$ |
28,572 |
|
Robert
S. Hekemian, Jr.
|
|
$ |
28,004 |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
848 |
|
|
$ |
-- |
|
|
$ |
28,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
See
the Summary Compensation Table above for information regarding
compensation paid to each of Robert S. Hekemian and Donald W. Barney in
connection with his membership on the Board of
Trustees.
|
|
(2)
|
Represents
the interest rate spread due to the above-market accrued interest earned
on deferred fees payable to the Trustee for service as a Trustee in fiscal
2009, but deferred at the election of the Trustee pursuant to the terms of
the Deferred Fee Plan. Above-market interest was calculated
using a rate equal to 120% of the applicable federal long-term rate in
effect in November 2000, the month in which the Deferred Fee Plan was
established. See “Compensation Discussion and Analysis –
Officers and/or Trustees Deferred Fee
Plan.”
|
Performance
Graph
The graph below compares the cumulative
total return on the Shares for the period covering the five fiscal years ended
October 31, 2009 with the performance of the Russell 2000 Index and the FTSE
NAREIT Equity REIT Index. The graph assumes that $100 was invested on
October 31, 2004 in the Trust’s Shares, the Russell 2000 Index, and the FTSE
NAREIT Equity REIT Index, and that all dividends were reinvested. The
closing price used in the analysis for the performance graph below is $17.20 per
share at October 31, 2009.
|
|
Cumulative
Total Return
|
|
|
10/04
|
10/05
|
10/06
|
10/07
|
10/08
|
10/09
|
|
|
|
|
|
|
|
|
First
Real Estate Investment Trust of New Jersey
|
100.00
|
148.54
|
113.62
|
115.68
|
108.25
|
100.23
|
Russell
2000
|
|
100.00
|
112.08
|
134.47
|
146.94
|
96.74
|
102.99
|
FTSE
NAREIT Equity REITs
|
|
100.00
|
117.95
|
160.84
|
161.76
|
97.13
|
97.19
|
Certain
Relationships and Related Party Transactions; Director Independence
Of the
seven members of the Board of Trustees, Ronald J. Artinian, Alan L. Aufzien and
David F. McBride qualify as “independent directors” in accordance with the
applicable NASDAQ and SEC rules. The independence of the Trustees
serving on committees of the Board of Trustees is discussed elsewhere in this
proxy statement.
The Board
of Trustees has adopted a written charter for the Audit Committee (see “Audit
Committee Report”) whereby the Audit Committee oversees and evaluates all
related party transactions proposed to be entered into by the
Trust. In addition, the Trust’s Declaration of Trust, as amended,
contains procedures in the event of any proposed purchase or sale of any
properties between the Trust and any Trustee, officer of the Trust or any firm,
partnership or corporation in which such Trustee or officer has or may have an
interest. Further, the Trust has adopted a Code of Ethics applicable
to all Trustees, officers and management employees of the Trust (see “Corporate
Governance”), which Code of Ethics promotes the honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships.
Robert S.
Hekemian, Chairman of the Board and Chief Executive Officer of the Trust, and
his sons, Robert S. Hekemian, Jr., Trustee of the Trust, Bryan S. Hekemian and
David B. Hekemian, are the sole shareholders of Hekemian and
Co. Robert S. Hekemian holds a 0.2% interest in Hekemian & Co.
and Robert S. Hekemian, Jr. holds a 33.3% interest in Hekemian &
Co. The balance of the interests in Hekemian & Co. are held by
Bryan Hekemian and David Hekemian. Robert S. Hekemian is currently
the Chairman of the Board and Chief Executive Officer of Hekemian &
Co. Each of Robert S. Hekemian’s sons and his brother-in-law are also
officers of Hekemian & Co. and serve in the positions set forth opposite
their names.
Robert S. Hekemian, Jr. (son) -
President and Chief Operating Officer
Bryan S. Hekemian (son) - Vice
President and Secretary
David B. Hekemian (son) - Vice
President and Treasurer
Serge Krikorian (brother-in-law) - Vice
President-Insurance Department
On April 10, 2002, the Trust and
Hekemian & Co. entered into a new Management Agreement, effective as of
November 1, 2001, replacing the Management Agreement dated December 20, 1961, as
extended. The term of the Management Agreement was automatically
renewed as of November 1, 2009 for a two-year period, which will expire on
October 31, 2011. The term of the Management Agreement automatically
renews for periods of two years unless either party gives not less than six
months prior notice to the other of non-renewal. The Trust may
terminate the Management Agreement (i) without cause upon one year’s prior
written notice, (ii) for cause if Hekemian & Co. has not cured an event of
default within 30 days of receipt of notice of termination from the Trust, or
(iii) in the event of an acquisition of the Trust where the Trust ceases to
effectively exist as an operating entity. The Management Agreement
provides for a termination fee in the event of a termination by the Trust
without cause or following an acquisition of the Trust.
Under the Management Agreement,
Hekemian & Co. serves as Managing Agent for the Trust and the Trust’s
properties which the Trust owned on November 1, 2001. The Trust may
retain Hekemian & Co. or other managing agents to manage its properties
acquired after November 1, 2001 and to perform various other duties such as
sales, acquisitions, and development with respect to any or all of the Trust’s
properties. However, Hekemian & Co. currently manages all
properties owned by the Trust or any subsidiary or affiliate of the Trust,
except for the Rotunda, a mixed use (office/retail) property located in
Baltimore, Maryland which was acquired in July 2005 by Grande Rotunda, LLC
(“Grande Rotunda”), a limited liability company in which the Trust owns a 60%
equity interest. Hekemian & Co. is not the exclusive advisor for
the Trust to locate and recommend to the Trust investments deemed suitable for
the Trust, and it is not required to offer potential acquisition properties
exclusively to the Trust before acquiring those properties for Hekemian &
Co.’s own account or for others, including shareholders and employees of
Hekemian & Co.
The Trust retained Hekemian & Co.
to manage the Preakness Shopping Center which was acquired on November 1, 2002
by WaynePSC, LLC (“WaynePSC”), a limited liability company in which the Trust
owns a 40% membership interest, and the Damascus Shopping Center which was
acquired on July 31, 2003 by Damascus Centre, LLC (“Damascus Centre”), a limited
liability company in which the Trust owns a 70% equity interest. In
fiscal 2004, the Trust retained Hekemian & Co. to manage The Pierre Towers,
an apartment complex acquired on April 15, 2004 by S And A Commercial Associates
Limited Partnership (“S&A”), a limited partnership in which the Trust owns a
65% equity interest. In fiscal 2005, the Trust retained Hekemian
& Co to provide supervisory and management services to Grande Rotunda,
although the Trust did not retain Hekemian & Co. to manage the Rotunda
property.
Pursuant to the terms of the Management
Agreement, the Trust pays Hekemian & Co. certain basic management fees,
mortgage fees, administrative fees, other miscellaneous fees and leasing
commissions as compensation for its services. The Management
Agreement includes a detailed schedule of such fees and commissions for those
services which the Managing Agent may be called upon to
perform. During the fiscal year ended October 31, 2009, the Trust
paid or accrued to Hekemian & Co. management fees in the approximate
aggregate amount of $2,249,000, which includes the management fees described in
more detail below, and leasing fees in the approximate aggregate amount of
$176,072.
The Trust
also uses the resources of Hekemian & Co.’s insurance department to secure
insurance coverage for its properties and subsidiaries. Hekemian
& Co. is paid a commission for these services, which amounted to
approximately $110,000 in fiscal 2009.
During
the fourth quarter of fiscal 2007, the Board of Trustees approved development
fee arrangements for supervising the Rotunda and Damascus Center redevelopment
projects and the South Brunswick development project. These
development fees payable to Hekemian & Co., or an affiliate of Hekemian
& Co., in connection with these projects are as follows: the Rotunda, owned
by Grande Rotunda, 6.375% of development costs of up $136,000,000; Damascus,
owned by Damascus Centre, 7% of development costs of up to $17,328,000; and
South Brunswick, 7% of development costs of up to $21,000,000. Such
development costs may be modified should the Board of Trustees approve a change
in the scope of any of these projects. Hekemian Development
Resources, LLC, a wholly-owned subsidiary of Hekemian & Co. (“Hekemian
Resources”), entered into Agency Agreements with each of Grande Rotunda and
Damascus Centre for the performance of management services pursuant to the fee
arrangements described
above in
connection with the Rotunda and Damascus Center redevelopment projects on
December 10, 2009 and August 13, 2008, respectively. The Trust
incurred fees to Hekemian Resources of $2,000,000 and $226,769 for development
activities at the Rotunda and Damascus Center, respectively, during the fiscal
year ended October 31, 2009. Subsequent to October 31, 2009 and upon
execution of the Agency Agreement between Grande Rotunda and Hekemian Resources,
Grande Rotunda paid to Hekemian Resources the sum of $3,000,000 for services
rendered or to be rendered by Hekemian Resources, including obtaining approvals
from governmental authorities, the coordination of architectural, engineering
and legal services necessary to obtain governmental approvals and building
permits, and services rendered prior to the execution of the agreement in
connection with the Rotunda redevelopment project. All of the
aforementioned paid fees have been capitalized and are included in “Construction
in Progress” on the Trust’s Consolidated Balance Sheet as of October 31, 2009,
filed with the Trust’s annual report on Form 10-K. The development
fee arrangement with respect to the South Brunswick property is subject to the
execution of a definitive contract, which has not yet been finalized and
approved.
From time to time, the Trust engages
Hekemian & Co. to provide certain additional services, such as consulting
services related to development and financing activities of the
Trust. Separate fee arrangements are negotiated between the Trust and
Hekemian & Co. with respect to such services. The Trust also
reimburses Hekemian & Co. for the salaries, payroll taxes, insurance costs
and certain other costs of personnel employed at the Trust’s properties by
Hekemian & Co. on behalf of the Trust.
The Trust’s investments in real estate
may be in the form of wholly owned fee interests or, if the circumstances
warrant, joint venture interests. From time to time, in order to
diversify risk, rather than acquire wholly owned fee interests in real estate,
the Trust will invest in a joint venture with other parties and the joint
venture will acquire the real estate. The Trust has invested in joint
ventures with employees and affiliates of Hekemian & Co. and Trustees of the
Trust. To the extent that the Trust invests in real estate requiring
development and potentially more risk in order to reach its investment
objectives, it may make such investments on a joint venture basis in order to
diversify risk.
The Trust owns a 60% equity interest in
and is the managing member of Grande Rotunda. Rotunda 100, LLC, a New
Jersey limited liability company (“Rotunda 100”), owns a 40% interest in Grande
Rotunda. Robert S. Hekemian and members of his immediate family,
including Robert S. Hekemian, Jr., a Trustee of the Trust, and other employees
of Hekemian & Co. have majority managing control in Rotunda
100. In July 2005, Grande Rotunda completed the acquisition of the
Rotunda for a purchase price of approximately $31 million (inclusive of
transaction costs), which was financed in part from an acquisition loan in the
amount of $22.5 million, and the balance of which was contributed in cash by the
members of Grande Rotunda in proportion to their membership
interests. As an incentive to the employees of Hekemian & Co. to
identify and provide real estate investment opportunities for the Trust, the
Trust agreed to advance to the employees of Hekemian & Co. who are members
of Rotunda 100 (including Robert S. Hekemian, Jr. and certain other members of
the immediate family of Robert S. Hekemian), 50% of the amount of the equity
capital required to be contributed by them to Rotunda 100 in connection with the
acquisition and operation of the Rotunda. The Trust has loaned an
aggregate amount of approximately $1.9 million to those Hekemian & Co.
employees (including approximately $1.7 million to Robert S. Hekemian, Jr., a
Trustee of the Trust, and
certain
other members of the immediate family of Robert S. Hekemian) with respect to
their equity capital contributions (the “Rotunda Notes”). These loans
bear interest that floats at 225 basis points over the ninety (90) day London
Interbank Offered Rate (“LIBOR”), as adjusted each November 1, February 1, May 1
and August 1. Interest only payments are required to be made
quarterly. No principal payments are required during the term of the
Rotunda Notes, except that the borrowers are required to pay to the Trust all
refinancing proceeds and other cash flow they receive from their interests in
Grande Rotunda. These payments shall be applied first to accrued and
unpaid interest and then any outstanding principal. The Rotunda Notes
mature at the earlier of (a) ten (10) years after issue, on June 19, 2015, or,
(b) at the election of the Trust, ninety (90) days after the borrower terminates
employment with Hekemian & Co., at which time all outstanding unpaid
principal is due. The loans are secured by such employees’ membership
interests in Rotunda 100. On May 8, 2008, the
Board of Trustees approved amendments to the existing loan agreements with the
Hekemian & Co. employees to increase the aggregate amount that the Trust may
advance to such Hekemian & Co. employees to $4 million. During the fiscal year
ended October 31, 2009, accrued and unpaid interest under the notes aggregated
approximately $80,000. At October 31, 2009, the outstanding principal
balance on the Rotunda Notes was $1,872,000.
The Trust
owns a 70% membership interest in Damascus Centre, which is the owner of the
Damascus Shopping Center. During fiscal 2005, the Trust’s Board, in
order to incentivize employees of Hekemian & Co., authorized an investor
group, comprised principally of Hekemian employees (including Robert S.
Hekemian, Robert S. Hekemian, Jr. and certain other members of the immediate
family of Robert S. Hekemian) (the “Hekemian Group”), to acquire a 30% equity
interest in Damascus Centre through Damascus 100, LLC (“Damascus
100”). The sale of an equity interest in Damascus Centre to Damascus
100 was completed on October 31, 2006, at a sales price of $3,224,000, of which
the Trust financed approximately $1,451,000. The Trust agreed to
advance to the Hekemian Group up to 50% of the amount of the equity purchase
price required to be paid by them (including approximately $1.3 million to
Robert S. Hekemian, Jr., a Trustee of the Trust, and certain other members of
the immediate family of Robert S. Hekemian) (the “Damascus
Notes”). These advances are in the form of secured loans that bear
interest that floats at 225 basis points over the ninety (90) day LIBOR rate, as
adjusted each November 1, February 1, May 1 and August 1. Interest only payments
are required to be made quarterly. No principal payments are required
during the term of the Damascus Notes, except that the borrowers are required to
pay to the Trust all refinancing proceeds and other cash flow they receive from
their interests in Damascus Centre. These payments shall be applied
first to accrued and unpaid interest and then any outstanding
principal. The Damascus Notes mature at the earlier of (a) ten (10)
years after issue, on September 30, 2016, or, (b) at the election of
the Trust, ninety (90) days after the borrower terminates employment with
Hekemian & Co., at which time all outstanding unpaid principal is
due. The loans are secured by such employees’ membership interests in
Damascus 100. During the fiscal year ended October 31, 2009, accrued
and unpaid interest under the notes aggregated approximately
$62,000. At October 31, 2009, the outstanding principal balance on
the Damascus Notes was $1,451,000. Damascus Centre paid Hekemian
& Co. $52,000 in management fees during fiscal 2009, which is included in
the $2,249,000 mentioned above.
The Trust owns a 40% membership
interest in Westwood Hills, LLC (“Westwood Hills”), which is the owner of a
210-unit residential apartment complex in Westwood, New Jersey. In
addition, certain Trustees (Robert S. Hekemian, Donald W. Barney, Herbert C.
Klein,
Esq.,
Ronald J. Artinian and Robert S. Hekemian, Jr.) and members of the immediate
families of certain Trustees (Robert S. Hekemian and Herbert C. Klein, Esq.)
beneficially own 35% of the membership interests in Westwood
Hills. Pursuant to the terms of an operating agreement, the Trust is
the Managing Member of Westwood Hills. Hekemian & Co. currently
serves as the Managing Agent for Westwood Hills. During the fiscal
year ended October 31, 2009, Westwood Hills paid Hekemian & Co.
$177,000 in
management fees, which is included in the $2,249,000 mentioned
above.
The Trust owns a 40% equity interest in
WaynePSC. H-TPKE, LLC (“H-TPKE”), a New Jersey limited liability
company, acquired a 60% equity interest in WaynePSC. Robert S.
Hekemian and members of his immediate family, including Robert S. Hekemian, Jr.,
a Trustee of the Trust, who are also officers of Hekemian & Co., and other
employees of Hekemian & Co. control approximately 73% of the membership
interests in H-TPKE. The Trust is the Managing Member of
WaynePSC. WaynePSC owns a 323,000 +/- sq. ft. community shopping
center located in Wayne, New Jersey, known as the Preakness Shopping
Center. Hekemian & Co. is the Managing Agent for the Preakness
Shopping Center. During the fiscal year ended October 31, 2009,
WaynePSC paid Hekemian & Co. an annual property management fee in the
approximate amount of $235,000, which is included in the $2,249,000 mentioned
above, and leasing fees in the amount of $49,000.
The Trust owns a 65% equity interest in
and is the managing and general partner of S&A. The remaining 35%
of equity interests in S&A are owned by Robert S. Hekemian and members of
his immediate family, including Robert S. Hekemian, Jr., a Trustee of the Trust,
who are also officers of Hekemian & Co. and by other employees of Hekemian
& Co. and/or affiliates of Hekemian & Co. The Trust, in
accordance with its investment policy, allowed the minority owners of S&A to
make a cash contribution to S&A of approximately $1.3 million that increased
their ownership interest in S&A from approximately 25% to
35%. This additional investment, which approximates market value, was
made in February 2005. On April 15, 2004, S&A purchased The Pierre Towers, a
residential apartment complex located in Hackensack, New
Jersey. During the fiscal year ended October 31, 2009, Pierre Towers,
LLC on behalf of S&A paid Hekemian & Co. management fees in the amount
of $294,000, which is included in the $2,249,000 mentioned above.
The law firm of Nowell Amoroso Klein
Bierman, P.A. was retained by the Trust during fiscal 2009 to furnish legal
services and received $18,000 in
legal fees from the Trust for its services. Mr. Klein, a Trustee, is
a partner in the law firm.
The law firm of Giordano, Halleran
& Ciesla, P.C. was retained by the Trust during fiscal 2009 to furnish legal
services. Mr. Aiello, an Executive Officer of the Trust, is an
officer and shareholder in the law firm. During fiscal 2009,
Giordano, Halleran & Ciesla, P.C. received $101,400 in fees from the Trust
for its services. In addition, Mr. Aiello paid to the law firm the
amount of $43,200, representing retainer and meeting fees, which Mr. Aiello
received in connection with his services as Secretary and Executive Secretary of
the Trust during fiscal 2009.
OTHER
MATTERS
The Board of Trustees does not know of
any other business which will be presented for consideration at the Annual
Meeting. Except as the Board of Trustees may otherwise permit, only
the business set forth and discussed in the Notice of Meeting and this Proxy
Statement may be acted on at the Annual Meeting. If any other
business incident to the Annual Meeting is properly presented at the Annual
Meeting, or any adjournment thereof, the proxy holders will vote in regard
thereto according to their discretion insofar as such proxies are not limited to
the contrary.
RELATIONSHIP
WITH INDEPENDENT AUDITORS
The Audit Committee makes the selection
of the Independent Auditors for the Trust. Eisner LLP has served as
the Trust’s independent registered public accounting firm for fiscal 2008 and
2009, and has been selected by the Audit Committee to serve as the Trust’s
independent registered public accounting firm for fiscal 2010. All
audit and non-audit services provided by the Trust’s independent registered
public accounting firm and the fees associated therewith are pre-approved by the
Audit Committee in accordance with the written charter of the Audit Committee
adopted by the Board of Trustees. The Audit Committee gives due
consideration to the potential impact of all non-audit services on auditor
independence. The engagement of Eisner LLP, which was pre-approved by
the Audit Committee, did not make use of the de minimis exception for
pre-approval contained in the rules of the SEC which permit limited engagements
for non-audit services involving amounts under a specified
threshold.
In accord with Independent Standard
Board Standards No. 1 (Independence Discussion with Audit Committees) the Trust
received a letter and verbal communication from Eisner LLP that it knows of no
state of facts which would impair its status as the Trust’s Independent
Auditors. The Audit Committee has considered whether the non-audit
services provided by Eisner LLP are compatible with maintaining its independence
and has determined that the nature and substance of any such limited non-audit
services have not impaired Eisner LLP’s status as the Trust’s Independent
Auditors.
Audit
Fees
Audit fees billed by Eisner LLP to the
Trust totaled $351,000 and $319,000, respectively, for fiscal 2009 and 2008, for
professional services rendered in connection with audit services rendered to the
Trust during such fiscal years.
Audit-Related
Fees
Eisner LLP did not bill the Trust for
any audit related services during fiscal 2009 and 2008.
Tax
Fees
Eisner LLP billed the Trust $25,000 for
the preparation of the Trust’s 2008 tax return during fiscal 2009, and $13,000
for other tax related services. Eisner LLP billed the Trust $31,000
for the preparation of the Trust’s 2007 tax return during fiscal
2008.
All
Other Fees
Eisner LLP did not bill the Trust for
any other services during fiscal 2009 or fiscal 2008.
Presence
at Annual Meeting
Representatives of Eisner LLP will be
present at the Annual Meeting and will have an opportunity to make a statement
if the representatives desire to do so and will be available to respond to
appropriate questions.
ANNUAL
REPORT
The Annual Report to Shareholders (the
“Annual Report”) for the fiscal year ended October 31, 2009 accompanies this
Proxy Statement. The Trust’s Annual Report on Form 10-K for the
fiscal year ended October 31, 2009, which the Trust has filed with the SEC, is
included in the Annual Report, excluding exhibits. Eisner LLP has
audited the financial statements of the Trust for the fiscal year ended October
31, 2009, which financial statements are contained in the Annual
Report. Such Annual Report, including the audited financial
statements contained therein, is not incorporated in this Proxy Statement and is
not deemed to be part of the proxy soliciting material.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act
requires the Trust’s Executive Officers and Trustees, and persons who own more
than 10% of the Shares, to file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the SEC. Executive Officers, Trustees and
greater than 10% Shareholders are required by SEC regulation to furnish the
Trust with copies of all Forms 3, 4 and 5 they file.
Based solely on the Trust’s review of
the copies of such forms it has received, the Trust believes that all of its
Trustees, Executive Officers and greater than 10% Shareholders complied with all
filing requirements applicable to them with respect to reports required to be
filed by Section 16(a) of the Exchange Act during fiscal 2009, except for a Form
5 for Robert S. Hekemian, Jr., which has been filed with the SEC.
SHAREHOLDER
COMMUNICATIONS WITH TRUSTEES
The Board of Trustees has adopted a
formal process to be followed by those Shareholders who wish to communicate
directly with the Board of Trustees or any individual Trustee, or group of
Trustees of the Trust. A Shareholder can contact the Board of
Trustees or any individual Trustee or group of Trustees, by sending a written
communication to: The Board of Trustees, or any specifically
identified Trustee(s), First Real Estate Investment Trust of New Jersey, c/o
Secretary, 505 Main Street, P.O. Box 667, Hackensack, New Jersey
07602. A Shareholder’s letter should also indicate that he or she is
a Shareholder of the Trust. Any such communication received by the
Secretary of the Trust will be distributed to the Board of Trustees, or a member
or members thereof, as appropriate depending on the facts and circumstances
described in the communication received. If a Shareholder
communication is addressed to one or more Trustees, but not the entire Board of
Trustees, the Secretary of the Trust shall notify any Trustees to whom such
communication was not addressed that such communication was received and shall
provide
a copy of
such communication upon request. Communications which are primarily
commercial in nature, or related to an improper or irrelevant topic, will not be
forwarded to the Board of Trustees or any Trustee. If the Secretary
of the Trust believes that the management of the Trust can adequately handle the
Shareholder’s inquiry or request, the Secretary will forward such communication
to the appropriate person(s). At each meeting of the Board of
Trustees, a summary of all communications received since the last Board of
Trustees’ meeting which the Secretary elected not to forward to the Board of
Trustees or a Trustee(s) shall be presented, and all such communications shall
be made available to the Trustees upon request.
SHAREHOLDER
PROPOSALS AND RECOMMENDATIONS
FOR
NOMINATION OF TRUSTEES
Shareholder
proposals for presentation at the Trust’s 2011 Annual Meeting of Shareholders
must be received by the Trust at its principal executive offices for inclusion
in its proxy statement and form of proxy relating to that meeting no later than
October 31, 2010. A Shareholder wishing to submit a proposal should
write to the Trust’s Secretary and include a detailed description of such
proposal. The Nominating Committee or the Board of Trustees will also
consider candidates for nomination as Trustees who are recommended by one or
more Shareholders applying the same criteria for nominees described in the
section of this Proxy Statement entitled “Committees of the Board of Trustees –
Nominating Committee.” A Shareholder who wishes to suggest a
candidate for nomination as a Trustee should write to the Trust’s Secretary and
include the following information: (1) the name and contact
information for the candidate; (2) a statement of the candidate’s business
experience and educational background; (3) a detailed description describing any
relationship between the candidate and the proposing Shareholder; (4) a
statement by the Shareholder explaining why he or she believes that the
candidate is qualified to serve on the Board of Trustees and how his or her
service would benefit the Trust and its Shareholders; and (5) a statement that
the candidate is willing to be considered and willing to serve as a Trustee of
the Trust if nominated and elected. A Shareholder wishing to suggest
to the Nominating Committee a candidate for election at the Trust’s 2011 Annual
Meeting of Shareholders must submit the required information to the Trust and
such information must be received by the Trust no later than October 31,
2010.
THE BOARD
OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR OF THE
NOMINEES, RONALD J. ARTINIAN AND ALAN L. AUFZIEN, FOR THREE-YEAR TERMS TO THE
BOARD OF TRUSTEES.
THIS
PROXY STATEMENT AND THE ANNUAL REPORT TO SHAREHOLDERS ARE AVAILABLE ON THE
TRUST’S WEBSITE AT WWW.FREITNJ.COM UNDER THE “INVESTOR RELATIONS” TAB AND THE
“PROXY MATERIALS” AND “ANNUAL REPORTS” TABS. REQUESTS FOR DIRECTIONS
TO ATTEND THE ANNUAL MEETING IN PERSON SHOULD BE DIRECTED TO SHAREHOLDER
RELATIONS, FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, 505 MAIN STREET,
P.O. BOX 667, HACKENSACK, NEW JERSEY 07602.
ON
WRITTEN REQUEST, THE TRUST WILL PROVIDE WITHOUT CHARGE TO EACH RECORD OR
BENEFICIAL HOLDER OF SHARES OF BENEFICIAL INTEREST IN THE TRUST, A COPY OF THE
TRUST’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED OCTOBER 31, 2009, AS FILED
WITH THE SEC. REQUESTS SHOULD BE ADDRESSED TO SHAREHOLDER RELATIONS,
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, 505 MAIN STREET, P.O. BOX 667,
HACKENSACK, NEW JERSEY 07602. IT SHOULD BE NOTED THAT A COPY OF THE
ANNUAL REPORT ON FORM 10-K IS INCLUDED WITH THE ANNUAL REPORT TO SHAREHOLDERS
WHICH ACCOMPANIES THIS PROXY STATEMENT.
ALL SHAREHOLDERS ARE URGED TO MARK,
SIGN, DATE AND SEND THEIR PROXIES WITHOUT DELAY TO REGISTRAR AND TRANSFER
COMPANY, 10 COMMERCE DRIVE, CRANFORD, NEW JERSEY 07016. PROMPT
RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
February
26, 2010
REVOCABLE
PROXY
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|X|
PLEASE MARK VOTES AS IN THIS EXAMPLE
Annual
Meeting of Holders of Shares of Beneficial Interest
April
7, 2010
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF TRUSTEES. The undersigned hereby nominates and appoints
Robert S. Hekemian and John A. Aiello, Esq. and each of them, the true and
lawful attorneys, agents and proxies of the undersigned, with full power of
substitution, to vote with respect to all of the shares, representing beneficial
interests, of FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY (the “Trust”)
standing in the name of the undersigned at the close of business on February 17,
2010, at the annual meeting of holders of shares of beneficial interest to be
held at the Trust’s headquarters, 505 Main Street, Hackensack, New Jersey 07602,
on April 7, 2010 at 7:30 p.m., and at any and all adjournments or postponements
thereof, with all powers that the undersigned would possess if personally
present and especially (but without limiting the general authorization and power
hereby given) to vote as indicated hereon.
1. ELECTION
OF TRUSTEE:
Ronald
J. Artinian for a three (3) year term
|
For ¨
|
Withhold ¨
|
Alan
L. Aufzien for a three (3) year term
|
For ¨
|
Withhold ¨
|
2. In
their discretion upon such other matters as may properly come before the meeting
or any adjournment or postponement thereof. The shares represented by
this Proxy will be voted in the manner directed, and, if no instructions to the
contrary are indicated, will be voted FOR the election of the nominees indicated
on this Proxy.
IMPORTANT: Please
sign exactly as your name appears. When signing as attorney,
executor, administrator, trustee or guardian, please set forth your full
title. If signer is a corporation, please sign the full corporate
name by a duly authorized officer. Joint owners should each
sign.
Shareholder
sign above
Co-holder
(if any) sign above
Please be
sure to sign and date this Proxy in the box below
Date: _______________, 2010
Detach
above card, sign, date and mail in postage paid envelope provided.
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
PLEASE
ACT PROMPTLY
SIGN,
DATE & MAIL YOUR PROXY CARD TODAY
IF YOUR
ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.