SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
SL GREEN REALTY CORP.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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/ / Fee paid previously with preliminary materials.
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Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
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Schedule and the date of its filing.
(1) Amount Previously Paid:
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SL GREEN REALTY CORP.
420 Lexington Avenue
New York, New York 10170-1881
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 15, 2001
------------------------
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Stockholders (the
"Annual Meeting") of SL Green Realty Corp. (the "Company") will be held on
May 15, 2001 at 10:00 a.m. at the Grand Hyatt New York Hotel, Park Avenue at
Grand Central Terminal, 109 East 42nd Street, New York, New York, for the
following purposes:
1. To elect one Class I director of the Company to serve until the 2004
Annual Meeting of Stockholders and until his successor is duly elected
and qualified;
2. To ratify the selection of Ernst & Young LLP as the independent auditors
of the Company for the fiscal year ending December 31, 2001; and
3. To consider and act upon any other matters that may properly be brought
before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned, or to which the Annual Meeting
may be postponed.
The Board of Directors has fixed the close of business on March 19, 2001 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournments or postponements thereof.
Only stockholders of record of the Company's common stock, $.01 par value per
share, at the close of business on that date will be entitled to notice of and
to vote at the Annual Meeting and at any adjournments or postponements thereof.
You are requested to fill in and sign the enclosed form of proxy, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
BY ORDER OF THE BOARD OF DIRECTORS
[LOGO]
ANDREW S. LEVINE
SECRETARY
New York, New York
March 30, 2001
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
SL GREEN REALTY CORP.
420 Lexington Avenue
New York, New York 10170
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PROXY STATEMENT
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FOR 2001 ANNUAL MEETING OF STOCKHOLDERS
to be held on May 15, 2001
------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of SL Green Realty Corp. (the "Company") for
use at the 2001 Annual Meeting of Stockholders of the Company to be held on
May 15, 2001, and at any adjournments or postponements thereof (the "Annual
Meeting"). At the Annual Meeting, stockholders will be asked (1) to vote upon
the election of one Class I director of the Company, (2) to ratify the selection
of Ernst & Young LLP as the independent auditors of the Company for the fiscal
year ending December 31, 2001, and (3) to consider and act upon any other
matters that may properly be brought before the Annual Meeting and at any
adjournments or postponements thereof.
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to stockholders on or about March 30, 2001. The Board
of Directors has fixed the close of business on March 19, 2001 as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"). Only stockholders of record of the
Company's common stock, par value $.01 per share (the "Common Stock"), at the
close of business on the Record Date will be entitled to notice of and to vote
at the Annual Meeting. As of the Record Date, there were 24,687,497 shares of
Common Stock outstanding and entitled to vote at the Annual Meeting. Holders of
Common Stock outstanding as of the close of business on the Record Date will be
entitled to one vote for each share held by them.
The presence, in person or by proxy, of holders of at least a majority of
the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. The vote of a plurality of all of the votes cast at a meeting at which
a quorum is present is necessary for the election of the Class I director. The
affirmative vote of the holders of a majority of the shares of Common Stock cast
at the Annual Meeting at which a quorum is present is required for the
ratification of the Company's auditors and the approval of any other matters
properly presented at the Annual Meeting for stockholder approval. Under
Maryland law, abstentions do not constitute a vote "for" or "against" a matter
and will be disregarded in determining "votes cast." Broker "non-votes," or
proxies from brokers or nominees indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote such
shares on a particular matter with respect to which the broker or nominee does
not have discretionary voting power, will be treated in the same manner as
abstentions.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY RECEIVED PRIOR TO THE
VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL MEETING
AS DIRECTED ON THE PROXY. IF A PROPERLY EXECUTED PROXY IS SUBMITTED AND NO
INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEE
FOR CLASS I DIRECTOR OF THE COMPANY NAMED IN THIS PROXY STATEMENT AND FOR
RATIFICATION OF THE BOARD OF DIRECTORS' SELECTION OF ERNST & YOUNG LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001. IT
IS NOT ANTICIPATED THAT ANY MATTERS OTHER THAN
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THOSE SET FORTH IN THE PROXY STATEMENT WILL BE PRESENTED AT THE ANNUAL MEETING.
IF OTHER MATTERS ARE PRESENTED, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE
DISCRETION OF THE PROXY HOLDERS.
A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Company at
the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not a proxy has been previously
given, but the presence (without further action) of a stockholder at the Annual
Meeting will not constitute revocation of a previously given proxy.
The Company's 2000 Annual Report, including financial statements for the
fiscal year ended December 31, 2000, has been mailed to stockholders concurrent
with the mailing of this Proxy Statement. The Annual Report, however, is not
part of the proxy solicitation material.
PROPOSAL 1: ELECTION OF DIRECTOR
The Board of Directors of the Company consists of five members and is
divided into three classes, with the directors in each class serving for a term
of three years and until their successors are duly elected and qualified. The
term of one class expires at each annual meeting of stockholders.
At the Annual Meeting, one director will be elected to serve until the 2004
Annual Meeting and until his successor is duly elected and qualified. The Board
of Directors has nominated Mr. Edwin Thomas Burton, III to serve as the Class I
director (the "Nominee"). The Nominee is currently serving as a Class I director
of the Company. The Board of Directors anticipates the Nominee will serve, if
elected, as a director. However, if the person nominated by the Board of
Directors is unable to accept election, the proxies will be voted for the
election of such other person as the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEE.
INFORMATION REGARDING THE NOMINEE AND THE CONTINUING DIRECTORS
The following table and biographical descriptions set forth certain
information with respect to each Nominee for election as a Class I director at
the Annual Meeting and the continuing directors whose terms expire at the annual
meetings of stockholders in 2002 and 2003, based upon information furnished to
the Company by each director.
AMOUNT AND NATURE OF
DIRECTOR BENEFICIAL OWNERSHIP OF PERCENT OF
NAME AGE SINCE COMMON STOCK (1) CLASS (2)(3)
---- -------- -------- ----------------------- ------------
CLASS I NOMINEE DIRECTOR (TERM EXPIRES IN 2004)
Edwin Thomas Burton, III......................... 58 1997 18,462 *
CLASS II CONTINUING DIRECTORS (TERMS EXPIRE IN
2002)
Benjamin P. Feldman.............................. 48 1997 214,360(4)(5) *
John S. Levy..................................... 65 1997 18,462 *
CLASS III CONTINUING DIRECTORS (TERMS EXPIRE IN
2003)
John H. Alschuler, Jr............................ 52 1997 19,622 *
Stephen L. Green................................. 62 1997 2,190,784(6) 8.9%
------------------------------
(1) All information has been determined as of March 19, 2001. For purposes of
this table a person is deemed to have "beneficial ownership" of the number
of shares of Common Stock that such person has the right to acquire pursuant
to the exercise of stock options exercisable within sixty days or the
redemption of units (the "Units") of limited partnership interests in SL
Green Operating Partnership, L.P., a Delaware limited partnership (the
"Operating Partnership") of which the Company is the general partner
(assuming the Company elects to issue Common Stock rather than pay cash upon
such redemption). See "Executive Compensation" for a discussion of the
vesting of stock options granted to directors and officers. Pursuant to the
terms of the First Amended and Restated Agreement of Limited Partnership of
the Operating Partnership, dated as of August 20, 1997, as
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amended, upon a notice of redemption from a Unit holder, the Operating
Partnership is obligated to redeem Units for cash, or, at the option of the
Company, shares of Common Stock.
(2) For purposes of computing the percentage of outstanding shares of Common
Stock held by each person, any share of Common Stock which such person has
the right to acquire pursuant to the exercise of a stock option exercisable
within 60 days is deemed to be outstanding, but is not deemed to be
outstanding for the purpose of computing the percent ownership of any other
person.
(3) "*" represents less than 1% of class.
(4) Mr. Feldman holds certain of such shares through a family limited liability
company of which he is the managing member.
(5) Includes 18,698 Units.
(6) Includes 2,140,784 Units.
CLASS I NOMINEE FOR ELECTION--TERM EXPIRES IN 2004
EDWIN THOMAS BURTON, III has served as a director of the Company since 1997
and serves as Chairman of the Audit Committee, and is a member of the
Compensation Committee. Mr. Burton is a member, and from 1997 until March 2001
served as Chairman of the Board of Trustees, of the Investment Advisory
Committee of the Virginia Retirement System ("VRS") for state and local
employees of the Commonwealth of Virginia ($30 billion in assets). Mr. Burton
served as the Chairman of the VRS Special Committee on the sale of RF&P
Corporation, a $570 million real estate company. Since 1988, he has served as a
professor of economics at the University of Virginia. Mr. Burton is currently a
director of Virginia National Bank and several private companies. From 1994
until 1995, Mr. Burton served as Senior Vice President, Managing Director and
member of the Board of Directors of Interstate Johnson Lane, Incorporated, an
investment banking firm where he was responsible for the Corporate Finance and
Public Finance Divisions. From 1987 to 1994, Mr. Burton served as President of
Rothschild Financial Services, incorporated (a subsidiary of Rothschild, Inc. of
North America), an investment banking company headquartered in New York City
that is involved in proprietary trading, securities lending and other investment
activities. Mr. Burton also serves as a consultant to numerous companies on
investment strategy and investment banking. Mr. Burton served on the Board of
Directors of Capstar, a publicly traded hotel company, and SNL Securities, a
private securities data company. He has also served on the Board of Directors of
Virginia National Bank since 1998 and is currently Chairman of the Compensation
Committee. He has held various teaching positions at York College, Rice
University and Cornell University and has written and lectured extensively in
the field of economics. Mr. Burton also serves as a member of the Children's
Medical Center Committee of the University of Virginia Hospital Advisory Board.
Mr. Burton received a B.A. and an M.A. in economics from Rice University and a
Ph.D. in economics from Northwestern University.
CLASS II CONTINUING DIRECTORS--TERMS EXPIRE IN 2002
BENJAMIN P. FELDMAN served as Executive Vice President and General Counsel
of the Company from 1997 until his retirement from the Company as of
November 3, 2000. Mr. Feldman currently serves as a consultant to the Company.
He served as a Director and member of the Executive Committee of the Board of
Directors between 1997 and the date of his retirement. He served as General
Counsel of SL Green Properties, Inc. ("SL Green Properties") from 1987 until
1997. Prior to joining the Company, Mr. Feldman was vice-president and general
counsel for Bruce Berger Realty. Mr. Feldman received a B.A. degree from
Columbia University and a J.D. degree from Columbia University School of Law.
JOHN S. LEVY has served as a director of the Company since 1997 and serves
on the Audit Committee and Compensation Committee of the Board of Directors.
Mr. Levy is a private investor. He also serves as a director of the Bear Stearns
Funds. Mr. Levy was associated with Lehman Brothers Inc. (or its corporate
predecessors) from 1983 until 1995. During that period, Mr. Levy served as
Managing Director and Chief Administrative Officer of the Financial Services
Division, Senior Executive Vice President and Co-Director of the International
Division overseeing the International Branch System, and Managing
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Partner of the Equity Securities Division, where he managed the International,
Institutional, Retail and Research Departments. Prior to that period, Mr. Levy
was associated with A.G. Becker Incorporated (or its corporate predecessors)
from 1960 until 1983. At A.G. Becker, Mr. Levy served as Managing Director of
the Execution Services Division, Vice President-Manager of Institutional and
Retail Sales, Manager of the Institutional Sales Division, Manager of the New
York Retail Office and a Registered Representative. Mr. Levy received a B.A.
degree from Dartmouth College.
CLASS III CONTINUING DIRECTORS--TERMS EXPIRE IN 2003
JOHN H. ALSCHULER, JR. has served as a director of the Company since 1997
and serves on the Audit Committee, the Executive Committee and the Compensation
Committee of the Board of Directors. He is the President of Hamilton,
Rabinowitz & Alschuler, Inc. ("HR&A") and the Partner in Charge of its New York
office. HR&A is a nationally recognized consulting firm with 20 years of
experience in real estate, advisory services, policy, and management consulting.
Mr. Alschuler conducts a broad range consulting practice focused on the
revitalization of urban communities and the construction of significant places
with sound economic and social foundations. He has advised a wide range of
development clients including the Alliance for Downtown New York, the New Jersey
Performing Arts Center, The Guggenheim Foundation, The Related Companies,
Madison Square Garden, Brookfield Properties, the Government of Kuwait, Queens
West Development Corporation, Empire State Development Corporation, and the
State of New York, among others. He has also advised a large array of public
organizations and elected officials, including the Mayor and Governor of the
State of New York and a variety of State Governors across the nation on issues
including economic development, real estate development, capital construction,
etc. Most recently, he led the advisory team that shaped Mayor Rudolph
Giuliani's and Governor George Pataki's plan for the redevelopment of Governor's
Island. He currently serves as the Chief Consultant for the redevelopment of the
Brooklyn Waterfront. He also assists the office of the Deputy Mayor of
Washington, D.C. develop new initiatives and has managed a variety of large
scale privatizations, including one recently completed for the MBTA.
Mr. Alschuler is also an Adjunct Associate Professor at Columbia University
where he teaches real estate development. Mr. Alschuler received a B.A. degree
from Wesleyan University and Ed.D. degree from the University of Massachusetts
at Amherst.
STEPHEN L. GREEN has served as the Chairman and member of the Executive
Committee of the Board of Directors and Chief Executive Officer of the Company
since 1997. Mr. Green founded S.L. Green Real Estate in 1980. Since then he has
been involved in the acquisition of over 50 Manhattan office buildings
containing in excess of twenty million square feet. His clients have included
Aldrich Eastman & Waltch, Bank of New York, CalPERS, Dai-Ichi Kangyo Bank, and
CS First Boston. Mr. Green is a Governor of the Real Estate Board of New York
and an at-large member of the Executive Committee of the Board of Governors of
the Real Estate Board of New York. Additionally, Mr. Green is a Co-Chairman of
the Real Estate Tax Fairness Coalition. Mr. Green received a B.A. degree from
Hartwick College and a J.D. degree from Boston College Law School.
BIOGRAPHICAL INFORMATION REGARDING EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
DAVID J. NETTINA has served as President since 1998, Chief Operating
Officer since 1997 and served as Chief Financial Officer of the Company from
1997 to 1998. Mr. Nettina will leave the Company effective March 31, 2001, but
will continue to serve as an advisor to the Company until September 30, 2001.
Prior to joining the Company, Mr. Nettina worked for The Pyramid Companies
("Pyramid"), based in Syracuse, NY, in various positions from March 1986 to
June 1997. From 1990 to 1997, Mr. Nettina was a partner and Chief Financial
Officer of Pyramid. From 1989 to 1990, Mr. Nettina was a development partner at
the Boston, MA office of Pyramid. Mr. Nettina was the Director of Corporate
Finance of the Pyramid Development Group from 1987 to 1989. From 1986 to 1987,
Mr. Nettina was Chief Operating Officer of the Pyramid Management Group.
Mr. Nettina served as President of Citibank (Maine), N.A. from 1983 to 1986.
From 1980 to 1983, Mr. Nettina was Assistant Vice President of Citibank (NYS),
N.A. in Rochester,
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NY. Mr. Nettina was in the U.S. Army from 1976 until he completed service as a
Captain in 1980. Mr. Nettina received a B.S. degree in 1974 and an MBA in 1976
from Canisius College. Mr. Nettina is 48 years old.
MARC HOLLIDAY joined the Company as Chief Investment Officer in July, 1998
and will become President of the Company effective April 1, 2001. Since joining
the Company, Mr. Holliday has developed the Company's business strategy that
featured the repositioning and strategic upgrading of the portfolio to larger
avenue properties with high quality tenants through selective acquisitions and
dispositions coupled with joint ventures and structured finance programs. While
continuing to concentrate on the Company's investment activities,
Mr. Holliday's increased responsibilities will include developing corporate
strategies to increase shareholder value and long-term capital planning. Prior
to joining the Company he was Managing Director and Head of Direct Originations
for New York-based Capital Trust (NYSE:CT). While at Capital Trust, a specialty
real estate finance company, Mr. Holliday was in charge of originating direct
principal investments for the firm, consisting of mezzanine debt, preferred
equity and first mortgage bridge loans. Mr. Holliday served in various
management positions, including Senior Vice President, at New York-based Victor
Capital Group, a private real estate investment bank specializing in advisory
services, investment management and debt and equity placements. Mr. Holliday
received a Bachelor of Science degree in Business and Finance from Lehigh
University in 1988, as well as a Master of Science degree in Real Estate
Development from Columbia University in 1990. Mr. Holliday is 34 years old.
MICHAEL W. REID joined the Company as Chief Operating Officer in February,
2001. Mr. Reid will oversee finance, capital markets activity, investor
relations and corporate administration. Prior to joining the Company, Mr. Reid
was a Managing Director at Lehman Brothers in the Global Real Estate Department.
While at Lehman Brothers, Mr. Reid headed the Real Estate Group's Equity
Practice from 1993. In this capacity, he led S. L. Green's IPO in 1997 and was
involved in over $7 billion in equity offerings, including 10 lead managed IPOs
for a diverse group of real estate companies. In over 17 years of investment
banking, Mr. Reid has also been involved in over $8 billion in mortgage and
unsecured debt transactions, as well as a full range of strategic and corporate
advisory assignments. From 1984 - 1987, Mr. Reid worked at The First Boston
Corporation where he worked on asset sales, mortgage financings, leasing and
strategic advisory. From 1982 - 1984, Mr. Reid worked at Landauer Associates
where he worked in the Marketing Division specializing in leasing. Mr. Reid
received a Bachelor of Arts from Yale University in 1975 and a Master of
Divinity from Yale University in 1978. Mr. Reid is 47 years old.
GERARD NOCERA has served as Executive Vice President-Leasing of the Company
since 1997. From 1991 to 1997, Mr. Nocera was responsible for the development
and implementation of marketing and leasing programs at SL Green Properties
owned and managed properties. Prior to joining SL Green Properties, Mr. Nocera
worked for The Cohen Brothers as a landlord representative. Mr. Nocera is a
member of the Real Estate Board of New York. Mr. Nocera received a B.A. degree
from Duquesne University. Mr. Nocera is 44 years old.
THOMAS E. WIRTH has served as Chief Financial Officer since June 1999 and
joined the Company in 1997 as Vice President-Finance. Prior to joining the
Company, from 1995 to 1997 Mr. Wirth was Vice President of Financial Reporting
and Analysis for Greenwich, Connecticut based United Waste System, Inc., a waste
management company acquired in 1997 by USA Waste Services, Inc. Mr. Wirth also
spent 10 years with Ernst & Young LLP in various positions, including senior
manager. Mr. Wirth received his Bachelor of Arts degree in business management
and accounting from Gettysburg College and is a licensed CPA. Mr. Wirth is
37 years old.
ANDREW S. LEVINE joined the Company as General Counsel, Executive Vice
President and Secretary in November, 2000. Prior to joining the Company,
Mr. Levine was a partner at the law firm of Pryor, Cashman, Sherman & Flynn,
LLP. Mr. Levine was also a partner at the firm of Dreyer & Traub. As a member of
the REIT and Real Estate Transactions and Business groups at Pryor Cashman,
Mr. Levine has been counsel to a diverse client base of public and private real
estate companies, national retailers, REITs,
5
private developers, investment advisers and lenders. Mr. Levine received a B.A.
degree from the University of Vermont in 1980 and a J.D. from Rutgers School of
Law in 1984. Mr. Levine is 42 years old.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company is managed by a five member Board of Directors, a majority of
whom are independent of the Company's management. The Board of Directors held 3
meetings during fiscal year 2000. Each of the directors attended at least 75% of
the total number of meetings of the Board of Directors during 2000.
AUDIT COMMITTEE. The Company has a standing Audit Committee. Information
regarding the functions performed by the Audit Committee and its membership, is
set forth in the "Audit Committee Report, "and the "Audit Committee Charter"
included in this annual proxy statement. The Audit Committee held 3 meetings
during fiscal year 2000. Each of the committee members attended at least 75% of
the total meetings of the Audit Committee.
EXECUTIVE COMMITTEE. Subject to the supervision and oversight of the Board
of Directors, the Executive Committee, which consists of Stephen L. Green,
Benjamin P. Feldman and John H. Alschuler, Jr., has the authority to approve the
acquisition, financing and disposition of investments by the Company and to
authorize the execution of certain contracts and agreements, including those
relating to the borrowing of money by the Company and to exercise generally all
other powers of the Board of Directors, except for those which require action by
all Directors or the Independent Directors under the Articles of Incorporation
or Bylaws of the Company or under applicable law. The Executive Committee held
no meetings during fiscal year 2000.
COMPENSATION COMMITTEE. The Compensation Committee, which consists of John
H. Alschuler, Jr., Edwin Thomas Burton, III and John S. Levy, makes
recommendations and exercises all powers of the Board of Directors in connection
with compensation matters, including incentive compensation and benefit plans.
The Compensation Committee also has authority to grant awards under the
Company's 1997 Stock Option and Incentive Plan, as amended by the Board of
Directors (the "Amended 1997 Stock Option and Incentive Plan"). The Compensation
Committee held 1 meeting during fiscal year 2000.
The Board of Directors does not have a standing nominating committee. The
full Board of Directors performs the functions of such a committee.
DIRECTOR COMPENSATION
Each of the non-employee directors of the Company receives an annual
director's fee of $12,000. Each non-employee director also receives $1,000 for
each meeting of the Board of Directors attended and $500 for each committee
meeting attended, provided such committee meeting does not occur on a day on
which a Board of Directors meeting is held. The annual fee is payable half in
stock and half in cash each year. The meeting fees are paid in cash. Each
non-employee director, upon initial election to the Board of Directors, received
options under the 1997 Stock Option and Incentive Plan to purchase 6,000 shares
of Common Stock at the market price of the Common Stock on the date of grant,
which vested one year from the date of grant, on May 19, 1999, received options
under such plan to purchase an additional 6,000 shares of Common Stock at the
market price of the Common Stock on the date of grant, all of which vested on
the date of grant and on May 31, 2000, received options under such plan to
purchase an additional 6,000 shares of Common Stock on the date of grant, all of
which vested on the date of grant.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has selected the accounting firm of Ernst & Young LLP to serve as
independent auditors of the Company for the fiscal year ending December 31,
2001, subject to ratification of this appointment by the stockholders of
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the Company. Ernst & Young LLP has served as the Company's independent auditors
since the Company's formation in June 1997 and is considered by management of
the Company to be well qualified. That firm has advised the Company that neither
it nor any member thereof has any financial interest, direct or indirect, in the
Company or any of its subsidiaries in any capacity.
FEE DISCLOSURE
AUDIT FEES
The aggregate fees billed by Ernst & Young LLP for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended December 31, 2000 and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for that
fiscal year were $253,000. Audit related fees for the fiscal year were $58,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Ernst & Young LLP did not provide any services relating to financial
information systems design and implementation for the fiscal year ended
December 31, 2000.
ALL OTHER FEES
The aggregate fees billed by Ernst & Young LLP for services rendered to the
Company, other than the services described under "Audit Fees" and "Financial
Information Systems Design and Implementation Fees," for the fiscal year ended
December 31, 2000 were $735,000, which primarily related to a tax engagement
which assisted the Company in identifying asset classifications of its
commercial real estate assets for the purpose of maximizing tax depreciation.
A representative of Ernst & Young LLP will be present at the Annual Meeting,
will be given the opportunity to make a statement if he or she so desires and
will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF THE INDEPENDENT AUDITORS.
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AUDIT COMMITTEE REPORT
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors, in accordance with the "Audit Committee
Charter," a copy of which appears as Exhibit A to this annual proxy statement.
Management has the primary responsibility for the financial statements and the
reporting process including the systems of internal controls. In fulfilling its
oversight responsibilities, the Audit Committee reviewed the audited financial
statements in the Annual Report with management including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with accounting principles generally accepted in the United
States, their judgments as to the quality, not just the acceptability, of the
Company's accounting principles and such other matters as are required to be
discussed with the Audit Committee under auditing standards generally accepted
in the United States. In addition, the Audit Committee has discussed with the
independent auditors the auditors' independence from management and the Company
including the matters in the written disclosures required by the Independence
Standards Board and considered the compatiability of non-audit services with the
auditors' independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their respective audits. The Audit Committee meets
with the independent auditors, with and without management present, to discuss
the results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on
Form 10-K for the year ended December 31, 2000 for filing with the Securities
and Exchange Commission.
SUBMITTED BY THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
Edwin Thomas Burton, III (Chairman)
John H. Alschuler, Jr.
John S. Levy
8
EXECUTIVE COMPENSATION
The following table sets forth information regarding the base compensation
awarded to the Company's Chief Executive Officer and each of the Company's other
four most highly compensated executive officers (collectively, the "Named
Executive Officers") whose base salary, on an annualized basis, exceeded
$100,000 during the fiscal year ended December 31, 2000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------------------------------------------------------------
OTHER RESTRICTED LONG TERM ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUSES($) ANNUAL STOCK AWARDS OPTIONS(1) ($)
--------------------------- -------- --------- ---------- -------- ------------ ---------- ---------
Stephen L. Green, 2000 $350,000 $325,000 -0- -0- 300,000 -0-
Chairman of the Board, 1999 $250,000 $325,000 -0- 300,000 -0-
Chief Executive Officer....... 1998 $250,000 -0- -0- 125,000 -0-
David J. Nettina, 2000 $300,000 $175,000 $171,250 $432,500 -0- $264,000
President and 1999 $300,000 $100,000 -0- -0- $300,000
Chief Operating Officer....... 1998 $200,000 $100,000 -0- 100,000 $300,000
Marc Holliday, 2000 $300,000 $100,000 $133,047 $534,375 40,000 $300,000
Chief Investment 1999 $300,000 $100,000 -0- 100,000 -0-
Officer....................... 1998 $126,923 $ 50,000 -0- 300,000 -0-
Gerald T. Nocera, 2000 $200,000 $125,000 $ 38,531 $ 97,313 30,000 -0-
Executive Vice President- 1999 $175,000 $125,000 -0- -0- -0-
Leasing....................... 1998 $175,000 $ 75,000 -0- 75,000 -0-
Benjamin P. Feldman, 2000 $151,442 $ 42,250 $ 38,531 $ 97,313 -0- -0-
Executive Vice President 1999 $175,000 $ 50,000 -0- -0- -0-
and General Counsel........... 1998 $150,000 $ 50,000 -0- 50,000 -0-
------------------------
(1) As of December 31, 2000, options to purchase a total of 2,440,966 shares of
Common Stock have been granted to directors and employees of the Company,
including options to purchase 1,595,000 shares of Common Stock granted to
the Named Executive Officers.
9
The following table sets forth the options granted with respect to the
fiscal year ended December 31, 2000 to the Company's Named Executive Officers.
OPTION GRANTS IN FISCAL YEAR 2000
PERCENT OF
TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS EXERCISE VALUE AT ASSUMED ANNUAL
SECURITIES GRANTED PRICE RATES OF SHARE PRICE
UNDERLYING TO PER APPRECIATION FOR OPTION
OPTIONS EMPLOYEES SHARE OF TERM (3)
GRANTED IN FISCAL COMMON EXPIRATION ---------------------------
NAME (1) YEAR STOCK (2) DATE 5%(4) 10%(5)
---- ---------- ---------- --------- ---------- ---------- -----------
Stephen L. Green............ 300,000 47.9% $25.25 10/24/10 $4,763,877 $12,072,599
David J. Nettina............ - 0 - - 0 - N/A N/A N/A N/A
Benjamin P. Feldman......... - 0 - - 0 - N/A N/A N/A N/A
Gerard T. Nocera............ 30,000 4.8% $25.25 10/24/10 $ 476,388 $ 1,207,260
Marc Holliday............... 40,000 6.4% $25.25 10/24/10 $ 635,184 $ 1,609,680
------------------------
(1) All options are granted at the fair market value of the common stock at the
date of grant. These options will vest in five equal annual installments
(rounded to the nearest whole share) over five years.
(2) The exercise price for the options was based on the market price of the
Common Stock on the date of issuance.
(3) In accordance with the rules of the Commission, these amounts are the
hypothetical gains or "option spreads" that would exist for the respective
options based on assumed rates of annual compound share price appreciation
of 5% and 10% from the date the options were granted over the full option
term. No gain to the optionee is possible without an increase in the price
of the Common Stock, which would benefit all stockholders.
(4) An annual compound share price appreciation of 5% from the issuance price of
the Common Stock yields a price of $41.1296 per share of Common Stock.
(5) An annual compound share price appreciation of 10% from the issuance price
of the Common Stock yields a price of $65.5920 per share of Common Stock.
David Nettina exercised 50,000 options with a market value of $237,500
during the year ended December 31, 2000. No other Named Executive Officer
exercised options in 2000.
The following table sets forth the value of options held at the end of 2000
by the Company's Named Executive Officers.
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTION IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END (#1) AT FISCAL YEAR-END ($)(1)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------------------- -------------------------
Stephen L. Green............................ 50,000/675,000 $478,125/$3,698,437
David J. Nettina............................ 65,000/60,000 $557,500/$573,750
Benjamin P. Feldman......................... 70,000/30,000 $541,250/$286,875
Gerard T. Nocera............................ 80,000/75,000 $636,875/$512,812
Marc Holliday............................... 120,000/320,000 $510,000/$1,593,750
------------------------
(1) The value of unexercised in-the-money options at fiscal year-end based on
the fair market value for Common Stock, $28.00 share, as of December 31,
2000.
10
EMPLOYMENT AND NONCOMPETITION AGREEMENTS
Benjamin P. Feldman and Gerard T. Nocera each entered into an amended and
restated employment and noncompetition agreement, effective as of October 1,
1998. Each agreement has a three-year term, will automatically renew for
additional one-year terms unless notice of non-renewal is given and provides for
certain severance payments in the event of the Named Executive Officer's death,
disability, termination "without cause" or resignation with "good reason" (as
such terms are defined in the agreements). Each such employment and
noncompetition agreement, subject to certain exceptions, prohibits the Named
Executive officer from engaging, directly or indirectly, in any business which
engages or attempts to engage, directly or indirectly, in any material
acquisition, development, construction, operation, management or leasing of any
commercial real estate property within specified portions of the New York City
metropolitan area during the one-year period following the executive's
termination of employment with the Company. Effective November 3, 2000,
Mr. Feldman retired from the Company.
In October 1998, as amended in January 2000, David J. Nettina also entered
into a generally similar amended and restated employment and noncompetition
agreement with the Company. However, the scheduled expiry of Mr. Nettina's
agreement was July 8, 2001 and the agreement would not automatically renew. The
agreement, through July 8, 2000, provided for a minimum yearly bonus of
$100,000, and the award of $200,000 worth of shares of Common Stock on the
annual anniversary dates of his employment. The agreement also provided that if
Mr. Nettina voluntarily terminated his employment for a reason other than
disability or "good reason" and did not provide at least 12 months advance
notice to the Company ("Sufficient Notice"), certain stock options and shares of
restricted stock granted to him would be forfeited and/or subject to repurchase
by the Company. Subject to certain exceptions, if Mr. Nettina's employment was
terminated without Sufficient Notice, the agreement prohibited Mr. Nettina from
engaging in certain competitive activities within the New York City metropolitan
area during the period beginning on the date of the termination of his
employment with the Company and ending on the later of (i) three years from his
commencement of such employment and (ii) one year from the termination of such
employment. Mr. Nettina's agreement was subject to extension by mutual agreement
between Mr. Nettina and the Company.
In addition, pursuant to the terms of Mr. Nettina's prior employment
agreement, Mr. Nettina received a loan from the Company on August 14, 1997 to
purchase shares of Common Stock issued under the 1997 Stock Option and Incentive
Plan (a "Stock Loan"). The principal amount of the Stock Loan was $300,000. On
August 14, 1999, the Stock Loan was cancelled and replaced with a new loan from
the Company in the principal amount of $100,000 (the "New Loan"). The New Loan
was forgiven in accordance with its terms.
In July, 1998, Marc Holliday entered into an employment and noncompetition
agreement with the Company. The term of the agreement was five (5) years, which
term did not renew automatically. Pursuant to the agreement, Mr. Holliday
received, among other things, (i) an interest free loan from the Company in the
amount of $300,000 (which was forgiven in its entirety because Mr. Holliday
remained in the employ of the Company after January 10, 2000); (ii) options to
purchase 300,000 shares of SL Green Common Stock, which options vest equally
over a five year period; and (iii) 150,000 shares of restricted SL Green Common
Stock, subject to vesting as described below (the "Holliday Restricted Stock").
The Holliday Restricted Stock vests over five years, with 15% vesting after
years one, two and three, 20% vesting after year four and the remaining 35%
vesting after year five. However, the vesting of the Holliday Restricted Stock
is further conditioned upon the attainment of specified financial performance
goals during the vesting period. On the fifth anniversary of Mr. Holliday's
employment with SL Green, if Mr. Green is no longer the Chairman of the Board of
Directors of the Company and the total value (such value being the "Total
Value") of Mr. Holliday's stock options, the Holliday Restricted Stock and any
other shares of restricted stock received by Mr. Holliday as compensation is
less than $1,500,000, Mr. Holliday may, at his option, either require SL Green
to pay to him the difference between $1,500,000 and the Total Value or retain
such options and shares. In the event Mr. Holliday requires the Company to pay
such
11
difference, the Company may, at its option, purchase from Mr. Holliday all such
shares and options for a purchase price of $1,500,000.
On January 17, 2001, Marc Holliday entered into an amended and restated
employment and noncompetition agreement with the Company. The term of the
agreement is six (6) years, which shall automatically renew for successive nine
(9) month periods unless either Mr. Holliday or the Company serves the required
notice under the said agreement.
Finally, in connection with the IPO, Stephen L. Green entered into an
employment and noncompetition agreement with the Company that is substantially
similar to the amended and restated employment and noncompetition agreements of
Messrs. Feldman and Nocera. Mr. Green's agreement has been extended so as to
expire on August 30, 2002. Mr. Green's agreement, subject to certain exceptions,
prohibits him from engaging in certain competitive activities within the New
York metropolitan area during the period beginning on the date of the
termination of his employment with the Company and ending on the later of
(i) three years from the closing of the IPO and (ii) one year from the
termination of such employment.
DEFERRED COMPENSATION AWARDS
In September 2000, the Company's preferred equity interest in 1370 Avenue of
the Americas was redeemed and the Company recognized a gain of $8.6 million. As
a result of the sale, a $2.8 million compensation award was granted to certain
members of management. This award, which will be paid out over a three-year
period solely at the option of the Company beginning in 2001, will be disclosed
as "other annual" compensation in future proxy statements to the extent payments
are made to one of the named executives. No awards were paid in 2000.
REPORT ON EXECUTIVE COMPENSATION
The following is a report by the Company's Compensation Committee regarding
the Company's executive compensation objectives, executive compensation program
and the compensation of the Company's chief executive officer.
EXECUTIVE COMPENSATION OBJECTIVES. The objective of the Company's executive
compensation program is to attract, retain and motivate talented executives that
will maximize stockholder value. In order to achieve this objective, in addition
to annual base salaries, the executive compensation program utilizes a
combination of long-term incentives through equity-based compensation and annual
incentives through cash bonuses. The program is intended to align the interests
of executives with those of the Company's stockholders by linking a portion of
executive compensation directly to increases in stockholder value. The Company
seeks to provide total compensation to its executive officers which is
competitive with total compensation paid by REITs similar to the Company.
PROCEEDINGS OF THE COMPENSATION COMMITTEE. The Compensation Committee
determines compensation for the Company's executive officers and is comprised of
three non-employee directors, John H. Alschuler, Jr., Edwin Thomas Burton, III
and John S. Levy. Final compensation determinations for each fiscal year
generally are made after the end of the fiscal year and after audited financial
statements for such year become available. At that time, base salaries for the
following fiscal year are set to the extent not already dictated by the terms of
existing employment agreements, cash bonuses, if any, will be determined for the
past year's performance, and option grants, if any, will generally be made.
The Compensation Committee exercises independent discretion in respect of
executive compensation matters. With respect to the compensation of the Named
Executive Officers other than Mr. Stephen L. Green, the Compensation Committee
reviews the recommendations of Mr. Stephen L. Green.
12
The following is a discussion of each element of the Company's executive
compensation:
ANNUAL BASE SALARY. Base salaries for each of the Named Executive Officers
are the subject of the employment agreement between the Company and each such
executive as indicated above.
ANNUAL INCENTIVES. Annual incentives are provided in the form of cash
bonuses to be paid if certain performance objectives are achieved. The
Compensation Committee may in the future award cash bonuses based primarily upon
the Company's level of Funds from Operations. Cash bonuses will also be subject
to adjustment based upon the Compensation Committee's evaluation of an
executive's personal performance. Mr. Nettina's employment and noncompetition
agreement provides for a minimum annual cash bonus (commencing on the first
anniversary of the date of the agreement) of $100,000.
LONG-TERM INCENTIVES. Long-term incentives are provided through the grant
of stock options. The grant of stock options are intended to align the
executive's long-term objectives with those of the Company's stockholders. The
Amended 1997 Stock Option and Incentive Plan is administered by the Compensation
Committee, which has the discretion to determine those individuals to whom
options will be granted, the number of shares subject to options and other terms
and conditions of the options. In the year 2000, as a long-term incentive award,
Marc Holliday received 40,000 stock options and Gerald Nocera received 30,000
options.
2000 CHIEF EXECUTIVE OFFICER COMPENSATION. For the fiscal year ended
December 31, 2000, the Compensation Committee awarded to Stephen L. Green
300,000 stock options and a $325,000 cash bonus. These awards were determined by
the Compensation Committee substantially in accordance with the policies
described above relating to all Named Executive Officers of the Company. In
making such determinations, the Compensation Committee noted several factors,
including the Company's achievement of a 17% increase in Funds from Operations
per share in 2000 over levels achieved in 1999.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162 (m) of the
Internal Revenue Code of 1986, as amended, limits the deductibility on the
Company's tax return of compensation over $1 million to any of the Named
Executive Officers of the Company unless, in general, the compensation is paid
pursuant to a plan which is performance-related, non-discretionary and has been
approved by the Company's stockholders. The Compensation Committee's policy with
respect to Section 162 (m) is to make every reasonable effort to ensure that
compensation is deductible to the extent permitted while simultaneously
providing Company executives with appropriate compensation for their
performance. The Company did not pay any compensation during 2000 that would be
subject to the limitations set forth in Section 162(m).
SUBMITTED BY THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
John H. Alschuler, Jr.
Edwin Thomas Burton, III
John S. Levy
13
STOCK PERFORMANCE GRAPH(1)
The following graph provides a comparison of the cumulative total
shareholder return on the Common Stock from the IPO price to the NYSE closing
price per share on December 31, 2000 with the cumulative total return on the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") and the
Standard & Poor's REIT Composite Index (the "S&P REIT Index"). Total return
values were calculated based on cumulative total return assuming (i) the
investment of $100 in the Common Stock on August 15, 1997 (the IPO purchase
date), in the S&P 500 on August 31, 1997 and in the S&P REIT Index on
October 31, 1997 (first day of publication for the S&P REIT Index) and
(ii) reinvestment of dividends.
TOTAL RETURNS BASED ON THE FOLLOWING DATA:
15-AUG-97 (1) DEC-97 DEC-98 DEC-99 DEC-00
------------- -------- -------- -------- --------
SL Green................................ 100.00 105.81 93.62 100.88 137.74
S&P 500................................. 100.00 108.42 139.40 168.73 153.38
S&P REIT................................ 100.00 104.00 83.54 72.99 87.21
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
15-AUG-97 DEC-97 DEC-98 DEC-99 DEC-00
SL Green 100 105.81 93.62 100.88 137.74
S&P 500 100 108.42 139.4 168.73 153.38
S&P REIT 100 104 83.54 72.99 87.21
SOURCE: STANDARD & POOR'S
------------------------
(1) Assumes an initial investment of $100 on August 15, 1997 (the IPO purchase
date) with respect to shares of the Company's Common Stock; on August 31,
1997 with respect to the S&P 500; and October 31, 1997 with respect to the
S&P REIT Index (first day of publication of the S&P REIT Index).
14
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth the beneficial ownership of Common Stock for
(i) each stockholder of the Company holding more than a 5% beneficial interest
in the Company, (ii) each executive officer of the Company who is not a director
of the Company and (iii) the directors and executive officers of the Company as
a group as of March 19, 2001. Stock ownership of the Directors of the Company
appears under the heading "Information Regarding the Nominee and Directors" in
this Proxy Statement.
SHARES OF COMMON STOCK
BENEFICIALLY OWNED (1) (2)
-----------------------------
NAME OF BENEFICIAL OWNERS NUMBER PERCENT OF TOTAL
------------------------- ---------- ----------------
David J. Nettina(3)......................................... 207,830 *
Gerard T. Nocera(3)......................................... 189,088 *
Marc Holliday (3)........................................... 270,000 1.1
Thomas E. Wirth (3)......................................... 32,000 *
Cohen & Steers Capital Management, Inc.(4).................. 2,595,500 10.6
Capital Growth Management LP (5)............................ 1,309,000 5.3
EII Realty Securities Inc.(6)............................... 2,327,804 9.5
Deutsche Bank A.G. (7)...................................... 1,415,771 5.8
Lend Lease Real Estate Investments, Inc. (8)................ 1,705,150 6.9
All directors and executive officers as a group (9 persons)
(9)....................................................... 3,160,608 12.9
------------------------
(1) The number of Common Shares beneficially owned is reported on the basis of
regulations of the SEC governing the determination of beneficial ownership
of securities, which includes stock options exercisable within sixty days of
the date of this Proxy Statement. Assumes 24,582,497 shares of Common Stock
outstanding. Assumes that all Units held by the person (and no other person)
are redeemed for shares of Common Stock. The total number of shares of
Common Stock outstanding used in calculating this percentage assumes that
none of the Units held by other persons are redeemed for shares of Common
Stock.
(2) "*" represents less than 1% of class.
(3) The business address for this stockholder is 420 Lexington Avenue, New York,
New York 10170.
(4) The business address for this stockholder is 757 Third Avenue, New York, New
York 10017. Pursuant to a Schedule 13G filed with the SEC, as of
December 31, 2000, this stockholder may have direct or indirect voting
and/or investment discretion over these shares of Common Stock which are
held for the benefit of its clients by its separate accounts, externally
managed accounts, registered investment companies, subsidiaries and/or other
affiliates. This stockholder is reporting the combined holdings of the
entities for the purpose of administrative convenience.
(5) The business address for this stockholder is One International Place,
Boston, MA 02110. Pursuant to a Schedule 13G filed with the SEC, as of
December 31, 2000, this stockholder may have direct or indirect voting
and/or investment discretion over these shares of Common Stock which are
held for the benefit of its clients by its separate accounts, externally
managed accounts, registered investment companies, subsidiaries and/or other
affiliates. This stockholder is reporting the combined holdings of the
entities for the purpose of administrative convenience.
(6) The business address for this stockholder is 667 Madison Avenue, New York,
NY 10021. Pursuant to a Schedule 13G filed with the SEC, as of December 31,
2000, this stockholder may have direct or indirect voting and/or investment
discretion over these shares of Common Stock which are held for the benefit
of its clients by its separate accounts, externally managed accounts,
registered investment companies, subsidiaries and/or other affiliates. This
stockholder is reporting the combined holdings of the entities for the
purpose of administrative convenience.
(7) The business address for this stockholder is Taunusanlange 12, D-60325,
Frankfurt am Main, Federal Republic of Germany. Pursuant to a Schedule 13G
filed with the SEC, as of December 31, 2000, this stockholder may have
direct or indirect voting and/or investment discretion over these shares of
Common Stock which are held for the benefit of its clients by its separate
accounts, externally managed accounts, registered investment companies,
subsidiaries and/or other affiliates. This
15
stockholder is reporting the combined holdings of the entities for the
purpose of administrative convenience.
(8) The business address for this stockholder is 1995 University Avenue, Suite
550, Berkeley, CA 94704. Pursuant to a Schedule 13G filed with the SEC, as
of December 31, 2000, this stockholder may have direct or indirect voting
and/or investment discretion over these shares of Common Stock which are
held for the benefit of its clients by its separate accounts, externally
managed accounts, registered investment companies, subsidiaries and/or other
affiliates. This stockholder is reporting the combined holdings of the
entities for the purpose of administrative convenience.
(9) Includes shares held by Mr. Feldman through a family limited liability
company of which he is the managing member.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities ("10% Holders"), to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and the
New York Stock Exchange. Officers, directors and 10% Holders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms that
they file. To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company, all Section 16(a) filing requirements
applicable to its executive officers, directors and 10% Holders were satisfied
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CLEANING SERVICES
First Quality Maintenance, L.P. ("First Quality") provides cleaning and
related services with respect to certain of the properties owned by the Company.
First Quality is owned by Gary Green, a son of Stephen L. Green. First Quality
also provides additional services directly to tenants on a separately negotiated
basis. The aggregate amount of fees to First Quality for services provided
(excluding services provided directly to tenants) was approximately $1,056,000
in 1998, $2,843,000 in 1999 and $2,837,000 in 2000. In addition, the cleaning
entity has the non-exclusive opportunity to provide cleaning and related
services to individual tenants at the Company's properties on a basis separately
negotiated with any tenant seeking such additional services. The cleaning entity
will provide such services to individual tenants pursuant to agreements on
customary terms (including at market rates). First Quality leases 3,740 square
feet of space at 70 West 36th Street pursuant to a lease that expires on
December 31, 2005 and provides for annual rental payments of approximately
$93,038.
LEASES
Nancy Peck and Company leases 2,013 square feet of space at 420 Lexington
Avenue, New York, New York 10170 pursuant to a lease that expires on June 30,
2005 and provides for annual rental payments of approximately $52,020.
SECURITY SERVICES
Classic Security LLC ("Classic Security") provides security services with
respect to certain of properties owned by the Company. Classic Security is owned
by Gary Green, a son of Stephen L. Green. The aggregate amount of fees for such
services was approximately $566,000 in 1998, $1,864,000 in 1999 and $1,807,000
in 2000.
OTHER MATTERS
SOLICITATION OF PROXIES
The Company will pay the cost of solicitation of proxies. In addition to the
solicitation of proxies by mail, the directors, officers and employees of the
Company may also solicit proxies personally or by telephone without additional
compensation for such activities. The Company will also request persons,
16
firms and corporations holding shares in their names or in the names of their
nominees, which are beneficially owned by others, to send proxy materials to and
obtain proxies from such beneficial owners. The Company will reimburse such
holders for their reasonable expenses. In addition, the Company intends to
utilize the proxy solicitation services of Morrow & Co., Inc. at an aggregate
estimated cost of $4,500 plus out-of-pocket expenses.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2002 annual meeting of
stockholders must be received by the Secretary of the Company no later than
December 1, 2001 in order to be considered for inclusion in the Company's proxy
statement relating to the 2002 meeting pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended ("Rule 14a-8").
For a proposal of a stockholder to be presented to the Company's 2002 annual
meeting of stockholders, other than a stockholder proposal included in the
Company's proxy statement pursuant to Rule 14a-8, it must be received at the
principal executive offices of the Company after November 16, 2001 and on or
before March 1, 2002, unless the 2002 annual meeting of stockholders is
scheduled to take place before April 30, 2002. The Company's Bylaws provide that
any stockholder wishing to nominate a director or have a stockholder proposal
other than a stockholder proposal included in the Company's proxy statement
pursuant to Rule 14a-8, considered at an annual meeting must provide written
notice of such nomination or proposal and appropriate supporting documentation,
as set forth in the Bylaws, to the Company at its principal executive offices
not less than 75 days nor more than 180 days prior to the anniversary of the
immediately preceding annual meeting of stockholders (the "Anniversary Date");
provided, however, that in the event that the annual meeting is scheduled to be
held more than seven calendar days prior, or more than 60 days subsequent, to
the Anniversary Date, such nominations or proposals must be delivered to the
Company not earlier than the 180th day prior to such meeting and not later than
the later of the 75th day prior to such annual meeting or the twentieth day
following the earlier of the day on which public announcement of the meeting is
first made or notice of the meeting is mailed to stockholders. Any such proposal
should be mailed to: SL Green Realty Corp., 420 Lexington Avenue, New York, New
York 10170-1881, Attn: Andrew S. Levine, Secretary.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
BY ORDER OF THE BOARD OF DIRECTORS
[LOGO]
Andrew S. Levine
SECRETARY
New York, New York
March 30, 2001
17
EXHIBIT A
AUDIT COMMITTEE CHARTER
ORGANIZATION
There shall be a committee of the board of directors to be known as the
audit committee. The audit committee shall be composed of directors who are
independent of the management of the corporation and are free of any
relationship that, in the opinion of the board of directors, would interfere
with their exercise of independent judgment as a committee member.
STATEMENT OF POLICY
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the corporation, and the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the audit committee to
maintain free and open means of communication between the directors, the
independent auditors, and the financial management of the corporation.
RESPONSIBILITIES
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
- Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the corporation and its
subsidiaries.
- Meet with the independent auditors and financial management of the
corporation to review the scope of the proposed audit for the current year
and the audit procedures to be utilized, and at the conclusion thereof
review such audit, including any comments or recommendations of the
independent auditors.
- Review with the independent auditors and financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the corporation, and elicit any recommendations for the
improvement of such internal control procedures or particular areas where
new or more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose any payments, transactions, or procedures that might be deemed
illegal or otherwise improper. Further, the committee periodically should
review company policy statements to determine their adherence to the code
of conduct.
- Review the internal audit function with financial management of the
corporation including the independence and authority of its reporting
obligations, the proposed audit plans for the coming year, and the
coordination of such plans with the independent auditors.
- Review with internal and external counsel, where appropriate, any legal
matters that could have a significant impact on the corporation's
financial statements.
- Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the shareholders.
Any changes in accounting principles should be reviewed.
- Provide sufficient opportunity for the financial management and
independent auditors to meet with the members of the audit committee
without other members of management present. Among the items to be
discussed in these meetings are the independent auditors' evaluation of
the corporation's financial, accounting, and auditing personnel, and the
cooperation that the independent auditors received during the course of
the audit.
- Review accounting and financial human resources and succession planning
within the company.
- Submit the minutes of all meetings of the audit committee to, or discuss
the matters discussed at each committee meeting with, the board of
directors.
- Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, that is appropriate.
v Please Detach and Mail in the Envelope Provided v
|x| Please mark your votes as
indicated in this example
1. To elect Mr. Edwin Thomas Burton, III to serve FOR WITHHOLD
as the Class I director of the Company until AUTHORITY
the 2004 Annual Meeting of Stockholders and |_| |_|
until his successor is duly elected and
qualified
2. To ratify the selection of Ernst & Young LLP FOR ABSTAIN AGAINST
as the independent auditors of the company for |_| |_| |_|
the fiscal year ending December 31, 2001.
3. To consider and act upon any other matters that may properly be brought
before the Annual Meeting and at any adjournments or postponements
thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGE(S)
RECEIPT OF A COPY OF THE ACCOMPANYING NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS, THE PROXY
STATEMENT WITH RESPECT THERETO TO
STOCKHOLDERS AND HEREBY REVOKE(S) ANY PROXY
OR PROXIES HERETOFORE GIVEN. THIS PROXY MAY
BE REVOKED AT ANY TIME BEFORE IT IS
EXERCISED.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT
LEFT |_|
shareholder name & address
do not print in this area
Please Detach and Mail in the Envelope Provided
SEE REVERSE
SIDE