SCHEDULE
14A
(Rule
14A-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
DEF14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934
Filed by
the Registrant
x
Filed by
a Party other than the Registrant
o
Check the
appropriate box:
o
Preliminary
Proxy Statement
o
Confidential,
for Use of the
Commission
Only (as permitted
by Rule
14a-6(e)(2))
x
Definitive
Proxy Statement
o
Definitive
Additional Materials
o
Soliciting
Material Under Rule.14a-12
Winthrop
Realty Trust
(Name of
Registrant as Specified in its Charter)
(Name of
Person(s) Filing Proxy Statement if other than the Registrant):
Payment
of Filing Fee (Check the appropriate box):
x
No fee
required
o
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
N/A
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2)
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Aggregate
number of securities to which transaction applies:
N/A
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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):
N/A
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4)
|
Proposed
maximum aggregate value of transaction:
N/A
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o
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Fee
paid previously with preliminary
materials.
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x
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its
filing.
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1)
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Amount
Previously Paid:
N/A
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2)
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Form,
Schedule, or Registration Statement No.:
N/A
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WINTHROP
REALTY TRUST
7
Bulfinch Place
Suite
500
Boston,
Massachusetts 02114
(617)
570-4614
|
________________________________
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
You are
cordially invited to attend the 2008 Annual Meeting of Shareholders of Winthrop
Realty Trust to be held Wednesday, May 21, 2008, at 11:00 A.M., local time, at
the 11
th
Floor
Conference Center in the offices of Katten Muchin Rosenman, 575 Madison Avenue,
New York, New York 10022, to consider and act upon the following:
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1.
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To
elect seven trustees to our Board of Trustees to serve for a term of one
year and until their respective successors shall be elected and shall
qualify;
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2.
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To
ratify the selection of PricewaterhouseCoopers LLP as our independent
registered public accounting firm for the 2008 fiscal
year;
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3.
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To
consider and act upon such other matters as may properly come before the
Annual Meeting or any adjournment
thereof.
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Only
holders of common shares of beneficial interests of record at the close of
business on April 15, 2008 shall be entitled to receive notice of, and to vote
at, the Annual Meeting, and at any adjournment or adjournments
thereof.
All
Shareholders are cordially invited to attend the Annual
Meeting. Whether or not you plan to attend the Annual Meeting, please
complete, date and sign the enclosed proxy, which is solicited by our Board of
Trustees, and mail it promptly in the enclosed envelope to make sure that your
shares are represented at the Annual Meeting. In the event you decide
to attend the Annual Meeting in person, you may, if you desire, revoke your
proxy and vote your shares in person.
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By order of the Board of
Trustees,
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John
Alba
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Secretary
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Boston,
Massachusetts
April 21,
2008
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PLEASE COMPLETE, SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED OR
AUTHORIZE YOUR PROXY BY INTERNET OR TELEPHONICALLY BY FOLLOWING THE
PROCEDURES DESCRIBED ON THE ENCLOSED PROXY CARD, WHETHER OR NOT YOU PLAN
TO ATTEND THE 200
8
ANNUAL MEETING. The Proxy may
be revoked by you at any time by written notice to the Company prior to
its exercise or by submitting a later dated or authorized proxy. Giving
your proxy will not affect your right to vote in person if you attend the
meeting and affirmatively indicate your intention to vote at such
meeting.
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WINTHROP
REALTY TRUST
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
MAY
21, 2008
TABLE
OF CONTENTS
Page
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General
Information
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1
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Record
Date and Voting Securities
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1
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Attending
the Annual Meeting
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1
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Solicitation
of Votes
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2
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Voting
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2
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Quorum;
Method of Tabulation
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2
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Vote
Required
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2
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Annual
Report
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3
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Proposal
No. 1 – Election of Trustees
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3
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General
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3
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Information
as to Trustees
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3
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Recommendation
of the Board
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5
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Executive
Officers
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5
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Security
Ownership of Certain Beneficial Owners and Management
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6
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The
Board, its Committees and Other Corporate Governance
Information
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9
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Board
Meetings
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9
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Board
Committees
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9
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Audit
Committee
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9
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Compensation
Committee
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10
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Nominating
And Corporate Governance Committee
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10
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Conflicts
Committee
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11
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Independence
of Trustees
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11
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Meetings
of Non-Management Trustees
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12
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Communication
with Trustees
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12
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Compensation
of Trustees
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12
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Code
of Ethics
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13
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Compensation
Discussion and Analysis
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13
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General
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13
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Executive
Compensation Principles
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13
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Share
Options/Grants
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13
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Compensation
Committee Report
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14
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Compensation
Committee Interlocks and Insider Participation
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14
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Audit
Committee Report
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14
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Section
16(a) Beneficial Ownership Reporting Compliance
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15
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Certain
Relationships and Related Transactions
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16
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Proposal
No. 2 – Selection of the Independent Registered Public Accounting
Firm
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17
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Recommendation
of the Board
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18
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Procedures
for Audit Committee Pre-Approval of Audit and Permissible
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Non-Audit
Services of Independent Registered Public Accountant
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18
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Shareholder
Proposals
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19
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Annual
Report
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19
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Miscellaneous
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19
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WINTHROP
REALTY TRUST
7
Bulfinch Place
Suite
500
Boston,
Massachusetts 02114
(617)
570-4617
PROXY
STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY
21, 2008
______________
GENERAL
INFORMATION
We are
sending this Proxy Statement in connection with the solicitation of proxies by
our Board of Trustees for the 2008 Annual Meeting of Shareholders to be held at
the 11
th
Floor
Conference Center in the offices of Katten Muchin Rosenman, 575 Madison Avenue,
New York, New York 10022, on Wednesday May 21, 2008 at 11:00 A.M., and at any
adjournment or adjournments thereof, which we refer to as the “Annual
Meeting”. We are first mailing this Proxy Statement and the
accompanying form of proxy to Shareholders on or about April 21,
2008. In this Proxy Statement, all references to the “Trust,” “we,”
“our” and “us” mean Winthrop Realty Trust, an Ohio business
trust. All references to “Shareholder” and “you” refer to a holder of
record of our beneficial interests designated as common shares, par value $1.00
per share, which we refer to as Common Shares.
At the
meeting you will be asked to consider and vote on the following
matters:
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1.
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To
elect seven trustees to our Board of Trustees to serve for a term of one
year and until their respective successors shall be elected and shall
qualify;
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2.
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To
ratify the selection of PricewaterhouseCoopers LLP as our independent
registered public accounting firm for the 2008 fiscal
year;
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3.
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To
consider and act upon such other matters as may properly come before the
Annual Meeting or any adjournment
thereof.
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Record
Date and Voting Securities
This
Proxy Statement is being furnished to all holders of record of Common Shares as
of the close of business on April 15, 2008, which we refer to as the “Record
Date”.
Attending the Annual
Meeting
If you
would like to attend the Annual Meeting in person, you will need to bring an
account statement or other evidence acceptable to us of ownership of your Common
Shares as of the close of business on the Record Date. If you hold
Common Shares in “street name” (i.e., through a bank, broker or other nominee)
and wish to vote at the Annual Meeting, you will need to contact your nominee
and obtain a proxy from your nominee and bring it to the Annual
Meeting.
Solicitation
of Votes
The Board
is soliciting a proxy in the form accompanying this Proxy Statement for use at
the Annual Meeting, and will not vote the proxy at any other meeting.
Mr. Michael L. Ashner and Mr. Peter Braverman, or each acting individually,
are the persons named as proxies on the proxy card accompanying this Proxy
Statement, who have been selected by the Board to serve in such
capacity. Both Messrs. Ashner and Braverman are members of the Board
and executive officers of the Trust.
We will
pay the cost of soliciting proxies. We have hired Mackenzie Partners, Inc. to
solicit proxies for a fee not to exceed $5,000. In addition to
solicitation by mail, by telephone and by e-mail or the Internet, arrangements
may be made with brokerage houses and other custodians, nominees and fiduciaries
to send proxies and proxy materials to their principals and we may reimburse
them for their expenses in so doing. If you hold shares in “street
name” (i.e., through a bank, broker or other nominee), you will receive
instructions from your nominee which you must follow in order to have your proxy
authorized or you may contact your nominee directly to request these
instructions.
Voting
Shareholders
may vote on the matters to be voted upon at the Annual Meeting either in person
at the Annual Meeting or by proxy. If you choose to vote by proxy,
you may do so in one of three ways, over the Internet, by telephone or by
executing and returning the enclosed proxy card. Once you authorize a
proxy, you may revoke that proxy by (1) executing and submitting a later
dated proxy card, (2) subsequently authorizing a proxy through the Internet
or by telephone, (3) sending a written revocation of proxy to our Secretary
at our principal executive office, 7 Bulfinch Place, Suite 500, Boston,
Massachusetts 02114, or (4) attending the Annual Meeting and voting in
person. Attending the Annual Meeting without submitting a new proxy
or voting in person will not automatically revoke your prior authorization of
your proxy. Only the last vote of a Shareholder will be
counted.
Quorum;
Method of Tabulation
The
holders of a majority of the outstanding Common Shares as of the close of
business on the Record Date, present in person or by proxy, will constitute a
quorum for the transaction of business at the Annual
Meeting. Abstentions and broker “non-votes” are included in the
determination of the number of shares present at the Annual Meeting for quorum
purposes but broker “non-votes” are not counted in the tabulations of the votes
cast on proposals presented to Shareholders. A broker “non-vote”
occurs when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received instructions from the beneficial
owner.
A proxy,
in the accompanying form, which is properly executed, duly returned to us and
not revoked, will be voted in accordance with the instructions contained therein
and, in the absence of specific instructions, will be voted (i) FOR the
election, as trustees, of the seven persons who have been nominated by the
Board, (ii) FOR the ratification of the selection of PricewaterhouseCoopers LLP,
which we refer to as “PwC”, as the independent registered public accounting firm
to audit and report upon the consolidated financial statements of the Trust for
the 2008 fiscal year, and (iii) in accordance with the judgment of the person or
persons voting the proxies on any other matter that may be properly brought
before the Annual Meeting.
Vote
Required
The seven
nominees for election as trustees who receive the greatest number of votes
properly cast for the election of trustees shall be elected
trustees. The affirmative vote of a majority of the votes in
attendance at the Annual Meeting (at which a quorum is present), present in
person or represented by proxy, that are properly cast is necessary to ratify
PwC as the Trust’s independent registered public accounting firm to audit and
report upon the consolidated financial statements of the Trust for the 2008
fiscal year.
Annual
Report
Our
Annual Report to Shareholders, which includes financial statements for the
fiscal year ended December 31, 2007, is being mailed together with this Proxy
Statement to Shareholders entitled to vote at the Annual Meeting. The
Annual Report is not to be regarded as proxy soliciting material.
PROPOSAL
NO. 1 – ELECTION OF TRUSTEES
General
The Board
currently consists of seven members, six of which are elected by the holders of
Common Shares and one of which is elected by the holders of the Series B-1
Shares. The Board has determined, in accordance with our By-laws, to
increase the number of members of the Board to eight
persons. Accordingly, seven persons, which constitutes all of the
members of the Board that are elected by the Shareholders, will be elected at
the Annual Meeting to serve for a term of one year and until their respective
successors shall have been elected and shall qualify. The Board of
Trustees has nominated Michael L. Ashner, Arthur Blasberg, Jr., Peter Braverman,
Talton Embry, Howard Goldberg and Steven Zalkind for re-election as trustees,
and has nominated Thomas F. McWilliams for election to the Board to fill the
vacancy created by the increase in the number of members of the
Board.
Shareholders
do not have cumulative voting rights with respect to the election of
trustees. It is the intention of the persons named in the enclosed
Proxy Card to vote such proxy "FOR" the election of the named nominees for
trustee unless authorization is withheld on the Proxy Card. Should
any nominee be unable or unwilling to serve as a trustee, which is not
anticipated, it is intended that the named proxies will vote for the election of
such other person or persons as they, in their discretion, may
choose. Each of the nominees has represented that they are
willing to serve as a trustee if elected.
Information
as to Trustees
Set forth below is the business
experience of, and certain other information regarding, the nominees for
election as trustees as well as Mr. Steven Mandis who is a trustee elected by
the holders of the Series B-1 Shares. There are no family
relationships among our trustees and executive officers.
|
Name
and year first appointed or
nominated as a
Trustee
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Age
|
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Principal Occupation during the past Five
Years
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Michael
L. Ashner
2004
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55
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|
Mr.
Ashner has been the Chief Executive Officer of the Trust since December
31, 2003 and Chairman since April 2004. Mr. Ashner also served as the
Executive Chairman and a trustee of Lexington Realty Trust (“Lexington”),
a New York Stock Exchange listed real estate investment trust, from
December 31, 2006 when Newkirk Realty Trust, Inc. (“Newkirk”) was merged
into Lexington to March 20, 2008. Mr. Ashner previously served
as a director and the Chairman and Chief Executive Officer of Newkirk
until it was merged into Lexington. Mr. Ashner also currently
serves as the Chief Executive Officer of Winthrop Realty Partners, L.P., a
real estate investment and management company, positions he has held since
1996. Mr. Ashner previously served as a director and Chief
Executive Officer of Shelbourne Properties I, Inc., Shelbourne Properties
II, Inc. and Shelbourne Properties III, Inc. (collectively, the
“Shelbourne Entities”), three real estate investment trusts, from August
2002 until their liquidation in April 2004. Mr. Ashner serves on the Board
of Directors of NBTY, Inc., a manufacturer and distributor of nutritional
supplements as well as Lexington.
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Name
and year first appointed or
nominated as a
Trustee
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Age
|
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Principal Occupation during the past Five
Years
|
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Arthur
Blasberg, Jr.
2003
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80
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|
Mr.
Blasberg's activities for the past five years include serving as a
receiver appointed by the Superior Court in Massachusetts and as a trustee
of various businesses, including real estate investment firms and
industrial companies. Mr. Blasberg was a director and chairman
of the audit committee of each of the Shelbourne Entities from August 2002
to their liquidation in April 2004. Mr. Blasberg also has served as
a director of several private companies. He is an attorney
admitted to practice in the Supreme Court of the United States, various
federal courts and state courts and served for five years in the general
counsel's office of the Securities and Exchange
Commission.
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Peter
Braverman
2004
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56
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Mr.
Braverman currently serves as the President and a trustee of the
Trust. From January 8, 2004 to August 4, 2004, Mr. Braverman
was the Executive Vice President of the Trust. Mr. Braverman
also currently serves as the Executive Vice President of Winthrop Realty
Partners, L.P., a real estate investment and management company, a
position he has held since January 1996. Mr. Braverman served as a
director and President of Newkirk until it was merged into Lexington and
as a director and Executive Vice President of each Shelbourne Entity from
August 2002 until their liquidation in April 2004.
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Talton
Embry
2000
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61
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Mr.
Embry has been the Chairman of Magten Asset Management Corp. ("Magten"), a
private investment management company, since 1978. Mr. Embry has been
associated with Magten in various capacities since 1978. Mr. Embry is also
a director of National Patent Development.
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Howard
Goldberg
2003
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62
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|
Mr.
Goldberg has been a private investor in both real estate and start-up
companies and has provided consulting services to start-up companies
since 1999. From 1994 through 1998, Mr. Goldberg served as
President, CEO, and Board member of Player’s International, a
publicly-traded company in the gaming business prior to its sale to
Harrah's Entertainment Inc. From 2003 through 2005, Mr.
Goldberg served as a part-time consultant to Laser Lock Technologies,
Inc., LLTI.OB, a publicly-traded development stage company, engaged in the
development and marketing of technologies for the prevention of product
and document counterfeiting and electronic article surveillance. From 1995
through 2000, Mr. Goldberg served on the board of directors and audit
committee of Imall Inc., a publicly-traded company that provided
on-line shopping prior to its sale to Excite-at-Home. Mr.
Goldberg served as a member of the board of directors and the
audit committees of the Shelbourne Entities from August 2002 until
their liquidation in April 2004. Mr. Goldberg has a law degree
from New York University and was previously the managing partner of a New
Jersey law firm where he specialized in gaming regulatory law and
real estate from 1970 through
1994.
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Name
and year first appointed or
nominated as a
Trustee
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Age
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Principal Occupation during the past Five
Years
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Steven
G. Mandis
2005
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37
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|
Mr.
Mandis is currently the Vice Chairman and Chief Investment Officer of
Halcyon Structured Asset Management L.P. ("Halcyon"), an investment
management firm based in New York City. Mr. Mandis joined Halcyon in 2004.
Prior to joining Halcyon, Mr. Mandis who had worked at Goldman Sachs
since 1992, acted as a portfolio manager in its Special Situations
Investing Group, a multi-billion dollar proprietary investing area within
Goldman Sachs' Fixed Income Division. Before joining the Fixed
Income Division, Mr. Mandis worked in Goldman Sachs' Principal Investment
Area and Mergers & Acquisitions Department.
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Thomas
F. McWilliams
2008
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65
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Mr.
McWilliams is currently the managing partner of the investment committee
of Court Square Capital Partners, a private equity company that manages
approximately $6 billion in capital, a position he has held since 2006
when Court Square Capital Partners was formed. From 1983 to
2006, Mr. McWilliams held a similar position with Citigroup Venture
Capital, the private equity arm of Citigroup.
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Steven
Zalkind
2008
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66
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Mr.
Zalkind has been a principal of Resource Investments Limited, LLC
(“Resource”), a real estate investment firm, since 1975 acting as either
an officer of the General Partner or Managing Member in the acquisition of
over 26,000 multi-family apartment units and 2,000,000 square feet of
commercial shopping centers and office buildings. Mr. Zalkind
currently serves as the Chairman and Chief Executive Officer of
Resource. Mr. Zalkind was a director of each of the Shelbourne
Entities from August 2002 to their liquidation in April 2004 and a
director of Newkirk from November 2005 until its merger with Lexington in
December 2006.
|
Recommendation
of the Board
The Board
unanimously recommends a vote in favor of the election of Messrs. Ashner,
Blasberg, Braverman, Embry, Goldberg, McWilliams and Zalkind to the
Board. Unless otherwise indicated, the accompanying form of proxy
will be voted for the nominees listed above.
EXECUTIVE
OFFICERS
All
officers serve at the discretion of the Board. Set forth below is
certain information regarding our executive officers at April 21, 2008
(biographical information with respect to Messrs. Ashner and Braverman is set
forth above on pages 3 and 4):
|
Name
|
|
Age
|
|
Current
Position
|
|
Michael
L. Ashner
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|
55
|
|
Chairman
and Chief Executive Officer
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Peter
Braverman
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56
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President
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Thomas
Staples
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52
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Chief
Financial Officer
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John
Alba
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|
37
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Chief
Investment Officer and Secretary
|
Mr.
Staples has been our Chief Financial Officer since January 8,
2004. Mr. Staples has been with Winthrop Realty Partners, L.P. since
1994 and has served as its Chief Financial Officer since January
1999. He also served as the Chief Financial Officer of Newkirk until
December 31, 2006 when it was merged into Lexington. Mr. Staples also served as
Assistant Treasurer of the Shelbourne Entities from August 2002 until their
liquidation in April 2004. Mr. Staples is a certified public
accountant.
Mr. Alba
was appointed our Chief Investment Officer in October 2005 and Secretary in May
2007. He has served as a Vice President of Winthrop Realty Partners,
L.P. since January 1998.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information as of March 15, 2008 (except as
otherwise indicated) regarding the ownership of our common shares by (i) each
person who is known to us to be the beneficial owner of more than 5% of the
outstanding shares of our common shares, (ii) each trustee and nominee for
trustee, (iii) each executive officer named herein, and (iv) all current
executive officers and trustees as a group. Except as otherwise
indicated, each such Shareholder has sole voting and investment power with
respect to the shares beneficially owned by such Shareholder.
|
Name
and Address
of Beneficial Owner
|
|
Position
with
the Trust
|
|
|
Amount
and Nature of
Beneficial Ownership
|
|
|
Percent
of Class
|
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FUR
Investors, LLC (1)
FUR
Holdings LLC
WEM-FUR
Investors LLC
|
|
|
--
|
|
|
|
11,100,000
|
|
|
|
16.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
Alba (1)
|
|
Chief
Investment Officer
|
|
|
|
--
|
(4)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
L. Ashner(1)
|
|
Chairman
and Chief Executive Officer
|
|
|
|
11,152,000
|
(2)
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arthur
Blasberg, Jr. (3)
|
|
Trustee
|
|
|
|
137,091
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter
Braverman(1)
|
|
President
and Trustee
|
|
|
|
10,833
|
(4)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Talton
Embry (5)
|
|
Trustee
|
|
|
|
1,143,386
|
(5)
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Howard
Goldberg (3)
|
|
Trustee
|
|
|
|
204,335
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
G. Mandis (6)
|
|
Trustee
|
|
|
|
6,157,399
|
(7)
|
|
|
8.5
|
%(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
F. McWilliams
|
|
Trustee
Nominee
|
|
|
|
--
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
Staples(3)
|
|
Chief
Financial Officer
|
|
|
|
--
|
(4)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
Zalkind(3)
|
|
Trustee
|
|
|
|
14,472
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
trustees, trustee nominees and executive officers as a
group
|
|
|
|
|
|
|
18,808,683
|
(8)
|
|
|
25.9
|
%(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fairholme
Associates L.P. (10)
Fairholme
Partners, L.P.
Fairholme
Ventures II LLC
Fairholme
Holdings, Ltd.
Fairholme
Capital Management, LLC
Bruce
R. Berkowitz
|
|
|
--
|
|
|
|
4,480,474
|
(11)
|
|
|
6.4
|
%(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vornado
Investments L.L.C. (12)
|
|
|
--
|
|
|
|
4,054,222
|
(12)
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellington
Management Company, LLP(13)
|
|
|
--
|
|
|
|
1,900,200
|
(13)
|
|
|
2.8
|
%
|
|
Name
and Address
of Beneficial Owner
|
|
Position
with
the Trust
|
|
|
Amount
and Nature of
Beneficial Ownership
|
|
|
Percent
of Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HBK
Investments, L.P.(14)
HBK
Services LLC
HBK
Partners II L.P.
HBK
Management LLC
HBK
Fund L.P.
|
|
|
--
|
|
|
|
4,846,388
|
(14)
|
|
|
6.8
|
%(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
King
Street Capital, L.P.(15)
King
Street Advisors, L.L.C.
King
Street Capital Management, L.L.C.
O.
Francis Biondi, Jr.
Brian
J. Higgins
|
|
|
--
|
|
|
|
5,244,444
|
(15)
|
|
|
7.2
|
%(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Abrams
Capital, LLC (16)
Pamet
Capital Management, LLC
Pamet
Capital Management, L.P.
David
Abrams
|
|
|
--
|
|
|
|
3,855,000
|
(16)
|
|
|
5.7
|
%
|
*Less
than 1%
|
(1)
|
The
address for each of FUR Investors LLC, FUR Holdings LLC, WEM-FUR Investors
LLC, Mr. Alba, Mr. Ashner and Mr. Braverman is Two Jericho Plaza, Wing A,
Suite 111, Jericho, NY 11753
|
|
(2)
|
Comprised
of 11,100,000 shares owned by FUR Investors LLC and 52,000 shares held
directly by Mr. Ashner. Mr. Ashner is the managing member of WEM-FUR
Investors LLC, the managing member of FUR Holdings, LLC, the sole member
of FUR Investors LLC. As such, Mr. Ashner may be deemed to beneficially
own all shares owned by Investors.
|
|
(3)
|
The
address for each of Messrs. Blasberg, Goldberg, Staples and Zalkind is c/o
of Winthrop Realty Trust, 7 Bulfinch Place, Suite 500, Boston, MA
02114.
|
|
(4)
|
Messrs.
Alba, Braverman, and Staples are members of WEM-FUR Investors LLC, the
managing member of FUR Holdings, LLC, the sole member of FUR Investors
LLC. Accordingly, Messrs. Alba, Braverman and Staples have an
indirect pecuniary interest in approximately 115,440, 273,060 and 133,200,
respectively, of the shares of Common Shares owned by FUR Investors
LLC. However, Messrs. Alba, Braverman and Staples do not
exercise investment control over the shares held by FUR Investors
LLC. Accordingly, Messrs. Alba, Braverman and Staples are not
deemed to beneficially own any of such shares under Section 13 or Section
16 of the Securities Exchange Act of 1934, as
amended.
|
|
(5)
|
The
address for Mr. Embry is c/o Magten Asset Management Corp., 410 Park
Avenue, 15th Floor, New York, New York 10022. The number of
shares reported consists of (i) 963,490 shares held in an IRA for the
benefit of Mr. Embry, (ii) 94,033 shares held in an IRA for the
benefit of Mr. Embry’s spouse, (iii) 51,413 shares held in a trust account
in which Mr. Embry is the trustee and which is for the benefit of Mr.
Embry’s minor son, and (iv) 34,450 shares held in a trust account in
which Mr. Embry is the trustee and which is for the benefit of Mr. Embry’s
minor daughter. Amount excludes 120,548 shares owned in
discretionary accounts in which Mr. Embry has no pecuniary
interest.
|
|
(6)
|
The
address for Mr. Mandis is c/o Halcyon Management Company, 477 Madison
Avenue, 8th Floor, New York, New York
10022.
|
|
(7)
|
Number
of shares represents 1,025,038 common shares and 5,132,361 common shares
issuable upon conversion of 923,825 Series B-1 Shares held by investment
funds for which Halcyon Structured Asset Management, LP is directly or
indirectly the investment manager. Mr. Mandis is the Chief
Investment Officer of Halcyon Structured Asset Management, LP, indirectly
the investment manager of the Halcyon Structured Opportunities Fund, L.P.
and Halcyon Fund, L.P. Mr. Mandis disclaims beneficial ownership of all
such securities except to the extent of his pecuniary interest
therein. Percentage assumes conversion of only all Series B-1
Shares held by investment funds for which Halcyon Structured Asset
Management, LP and its affiliates serves as investment
manager.
|
|
(8)
|
The
total number of shares held by directors and executive officers, excluding
shares issuable upon conversion of Series B-1 Shares held by trustees, is
13,661,850.
|
|
(9)
|
Percentage
represents the total number of shares held by trustees and executive
officers including shares issuable upon conversion of the Series B-1
Shares held by trustees over total number of shares outstanding on March
15, 2007 plus shares issuable upon conversion of the Series B-1 Shares
held by trustees. Excluding shares issuable upon conversion of the Series
B-1 Shares held by trustees, the percentage ownership of shares held by
trustees and executive officers is
20.2%.
|
|
(10)
|
The
address for Fairholme Associates L.P., Fairholme Partners, L.P., Fairholme
Ventures II LLC, Fairholme Holdings, Ltd., Fairholme Capital Management,
LLC and Mr. Berkowitz is c/o Fairholme Capital Management, LLC, 1001
Brickell Bay Drive, Suite 3112, Miami, Florida
33131.
|
|
(11)
|
Number
of shares consists of (i) 42,122 common shares owned directly by Mr.
Berkowitz, (ii) 1,081,875.6 common shares owned by Fairholme Ventures II,
LLC, an entity in which Fairholme Capital Management is the managing
member, (iii) 16,476.15 common shares owned by Fairholme Holdings Ltd., an
entity in which Fairholme Capital Management is the investment manager,
(iv) 930,373.7 owned by Fairholme Associates, L.P., an entity in which
Fairholme Capital Management is the general partner, and (v)
2,222,222 common shares issuable upon the conversion of the 400,000 Series
B-1 Shares held by Fairholme Ventures II, LLC. Mr. Berkowitz is
the managing member of Fairholme Capital Management. Furthermore, Mr.
Berkowitz and Fairholme Capital Management have disavowed management and
supervision with respect to 573,521 shares of common stock held in the
separate accounts of advisory clients, and, accordingly, Mr. Berkowitz and
Fairholme Capital Management do not attribute such
shares. Percentage assumes conversion of only 400,000 Series
B-1 Shares held by Fairholme Ventures II,
LLC.
|
|
(12)
|
The
address for Vornado Realty Trust is 888 Seventh Ave. New York, New York
10019. Information is derived from the 13-G filing by Vornado
Realty Trust with the SEC on May 24,
2006.
|
|
(13)
|
The
address for Wellington Management Company LLP is 75 State Street, Boston,
Massachusetts 02109. Information is derived from the 13-G/A
filing by Wellington Management Company LLP with the SEC on February 14,
2008.
|
|
(14)
|
The
address for HBK Investments L.P., HBK Services LLC, HBK Partners II L.P.,
HBK Management LLC, and HBK Fund L.P. (collectively, “HBK”) is 300
Crescent Court, Suite 700, Dallas, Texas 75201. Information is
derived from the 13-G/A filing by HBK with the SEC on February 13,
2008. Shares include 4,000,000 common shares issuable upon
conversion of 720,000 Series B-1 Shares held by HBK and percentage assumes
conversion of all Series B-1 Shares held by HBK Investments, L.P.
only.
|
|
(15)
|
The
address for each of these Shareholders is 65 East 55th Street, 30th Floor,
New York, New York 10022. Information is derived from the
13-G/A filing by King Street Capital, L.P., King Street Advisors, L.L.C.,
King Street Capital Management, L.L.C., O. Francis Biondi, Jr. and Brian
J. Higgins with the SEC on March 2, 2006. Shares represents
common shares issuable upon conversion of 944,000 Series B-1 Shares held
by King Street Capital, L.P. and percentage assumes conversion of all
Series B-1 Shares held by these Shareholders
only.
|
|
(16)
|
The
address for Abrams Capital, LLC, Pamet Capital Management, LLC, Pamet
Capital Management, L.P. and David Abrams (collectively, “Abrams”) is c/o
Pamet Capital Management, L.P., 222 Berkeley Street, 22nd Floor, Boston,
MA 02116. Information is derived from the 13-G/A filing by
Abrams with the SEC on February 13,
2008.
|
OTHER
CORPORATE GOVERNANCE INFORMATION
Board
Meetings
During
2007, the Board met or acted through written consent 16 times. Each
of the trustees attended either in person or telephonically 75% or more of the
aggregate number of meetings of the Board and Board committees on which the
trustee served in 2007. It is the policy of the Board to have all
members of the Board in attendance at the Annual Meeting, or if unavailable to
attend in person, to make arrangement, if possible, to participate by telephone
or video conference. All members of the Board attended, either in
person or by telephone conference call, the 2007 Annual Meeting of
Shareholders.
Board
Committees
Our
By-laws give the Board the authority to delegate its powers to a committee
appointed by the Board. All committees are required to conduct
meetings and take action in accordance with the directions of the Board and the
provisions of our By-laws. The Board has appointed four standing committees: an
audit committee, a compensation committee, a nominating and corporate governance
committee, and a conflicts committee. Certain of the committees'
principal functions are described below.
Audit
Committee
The Audit
Committee:
|
|
·
|
reviews
annual and quarterly consolidated financial statements with our management
and independent registered public accounting
firm;
|
|
|
·
|
recommends
the appointment and reviews the performance, independence, and fees of our
independent registered public accounting firm and the professional
services they provide;
|
|
|
·
|
oversees
our system of internal accounting controls and the internal audit
function; and
|
|
|
·
|
discharges
such other responsibilities specified in the listing standards of the New
York Stock Exchange for audit
committees.
|
The Board
has adopted a written charter for the Audit Committee, which is available at our
website www.winthropreit.com, under the link “Corporate
Governance”. A printed copy of the charter is also available to any
Shareholder who requests it in writing to the Trust’s Secretary at 7 Bulfinch
Place, Suite 500, Boston, Massachusetts 02114.
From
January 1, 2007 through March 14, 2008, the Audit Committee consisted of Arthur
Blasberg, Jr. (Chairman), Bruce Berkowitz and Howard
Goldberg. Following Mr. Berkowitz’ resignation as a trustee effective
March 14, 2008, and Mr. Zalkind’s election as trustee on March 17, 2008, Mr.
Zalkind was appointed to the Audit Committee. The Audit Committee
held five meetings during the 2007 fiscal year. All members of the
Audit Committee attended either in person or by telephone conference call all
meetings of the Audit Committee. Representatives of Deloitte &
Touche LLP, which we refer to as “Deloitte”, our independent registered public
accounting firm for the year ended December 31, 2006, attended all meetings of
the Audit Committee at which our consolidated financial statements for the year
ended December 31, 2006 were discussed and representatives of PwC, our
independent registered public accounting firm for the year ended December 31,
2007, attended all other meetings of the Audit Committee except for the meeting
at which it was determined to change our independent registered public
accounting firm. On March 4 and 5, 2008, the Audit Committee met with
representatives of PwC to discuss our 2007 consolidated financial
statements.
The Board
has concluded that each member of the Audit Committee is “financially literate”
as such term is defined in the listing standards of the New York Stock Exchange
and that Mr. Blasberg, the chairman of the Audit Committee, meets the Securities
and Exchange Commission definition of "audit committee financial
expert". We are currently in compliance with the listing requirements
of the New York Stock Exchange relating to audit committee qualification, and
the Board has determined that its Audit Committee possesses sufficient financial
expertise to effectively discharge its obligations.
For
further information with respect to the Audit Committee, see “AUDIT COMMITTEE
REPORT” which begins on page 14 of this Proxy Statement.
Compensation
Committee
The
Compensation Committee:
|
|
·
|
recommends
to the Board the compensation policies and arrangements for our officers,
trustees, advisors and affiliates;
|
|
|
·
|
discharges
such other responsibilities specified in the listing standards of the New
York Stock Exchange for compensation committees;
and
|
|
|
·
|
reviews
the “Compensation Discussion and Analysis” section of this Proxy Statement
set forth on page 13 of this Proxy Statement and issues its report which
can be found on page 14 of this Proxy
Statement.
|
The Board
has adopted a written charter for the Compensation Committee, which is available
at our website www.winthropreit.com, under the link “Corporate
Governance”. A printed copy of the charter is also available to any
Shareholder who requests it in writing to the Trust’s Secretary at 7 Bulfinch
Place, Suite 500, Boston, Massachusetts 02114.
From
January 1, 2007 through March 14, 2008, the Compensation Committee consisted of
Talton Embry (Chairman), Bruce Berkowitz, Arthur Blasberg, Jr., Howard Goldberg
and Steven Mandis. Following Mr. Berkowitz’ resignation as a trustee
effective March 14, 2008, and Mr. Zalkind’s election as trustee on March 17,
2008, Mr. Zalkind was appointed to the Compensation Committee. The
Compensation Committee held one meeting during the 2007 fiscal year which was
attended in person or by telephone conference call by all members of the
Compensation Committee.
Nominating
and Corporate Governance Committee
The
Nominating and Corporate Governance Committee:
|
|
·
|
reviews
the qualifications of current and potential trustees including determining
whether they are “independent” under the listing standards of the New York
Stock Exchange;
|
|
|
·
|
reviews
each trustee's continued service on the
Board;
|
|
|
·
|
reviews
outside activities of Board members and resolves any issue of possible
conflict of interest related
thereto;
|
|
|
·
|
considers
nominees for trustees submitted in writing to the Chairman of the
Nominating Committee (along with other information submitted in accordance
with our By-laws and Declaration of Trust), which are submitted by our
executive officers, current trustees, search firms engaged by the
Nominating Committee, if any, by others in its discretion and, nominees
for trustee proposed by a Shareholder in accordance with the terms of our
By-laws and Declaration of Trust;
|
|
|
·
|
considers
proposals submitted by Shareholders for inclusion in the proxy statement
for our Annual Meeting of Shareholders if they are submitted in writing to
the Chairman of the Nominating Committee at our principal address in
accordance with the provisions of our By-laws and Declaration of Trust and
so long as the submitting Shareholder meets the qualifications and
complies with the procedures provided in the proxy rules of the Securities
and Exchange Commission. All such proposals shall be
accompanied by information with respect to the submitting Shareholder
sufficient for the committee to determine whether such qualifications are
met;
|
|
|
·
|
reviews
any other Shareholder communications intended for our
management;
|
|
|
·
|
recommends
nominations for members of the
Board;
|
|
|
·
|
reviews
and assesses the adequacy of the Audit Committee’s, Compensation
Committee’s and Conflicts Committee’s charters;
and
|
|
|
·
|
discharges
such other responsibilities specified in the listing standards of the New
York Stock Exchange for nominating and corporate governance
committees.
|
The Board
has adopted a written charter for the Corporate Governance and Nominating
Committee, which is available at our website www.winthropreit.com, under the
link “Corporate Governance”. The Board has also adopted Corporate
Governance Guidelines which is also available at our website
www.winthropreit.com, under the link “Corporate Governance.” A
printed copy of the charter and the guidelines are also available to any
Shareholder who requests it in writing to the Trust’s Secretary at 7 Bulfinch
Place, Suite 500, Boston, Massachusetts 02114.
From
January 1, 2007 through March 14, 2008, the Nominating and Corporate Governance
Committee consisted of Bruce Berkowitz (Chairman), Arthur Blasberg, Jr., Talton
Embry and Howard Goldberg. Following Mr. Berkowitz’ resignation as a
trustee effective March 14, 2008, and Mr. Zalkind’s election as trustee on March
17, 2008, Mr. Zalkind was appointed to the Nominating and Corporate Governance
Committee and Mr. Goldberg was appointed the Chairman of the Nominating and
Corporate Governance Committee. The Nominating and Corporate
Governance Committee held one meeting during the 2007 fiscal year which was
attended in person or by telephone conference call by all members of the
Nominating and Corporate Governance Committee.
Conflicts
Committee
In
November 2005, the Board determined to establish a Conflicts
Committee. The Conflicts Committee :
|
|
·
|
considers
and approves, on behalf of the Trust, all material transactions that
relate to conflicts of interests between us and our affiliates, on the one
hand, and (i) FUR Advisors LLC, which we refer to as “FUR Advisors”, our
external advisor (and any successor advisor), Michael Ashner, and any of
their affiliates, (ii) Lexington Realty Trust, The Lexington Master
Limited Partnership, or Apollo Real Estate Investment Fund III, L.P. or
any of their respective affiliates, (iii) a beneficial owner of more than
4.9% of the issued and outstanding Common Shares, either directly or upon
the conversion of any of our preferred shares of beneficial interest, or
(iv) a beneficial owner of more than 4.9% of any other entity in which we
hold a 10% or greater interest; and
|
|
|
·
|
advises
the Board on actions to be taken by us or matters related to us upon
request of the Board or the Nominating or Corporate Governance Committee,
which may include conflicts of
interest.
|
The Board
has adopted a written charter for the Conflicts Committee, which is available at
our website www.winthropreit.com, under the link “Corporate
Governance”. A printed copy of the charter is also available to any
Shareholder who requests it in writing to the Trust’s Secretary at 7 Bulfinch
Place, Suite 500, Boston, Massachusetts 02114.
From
January 1, 2007 through March 14, 2008, the Conflicts Committee consisted of
Bruce Berkowitz, Arthur Blasberg, Jr. (Chairman), Talton Embry and Howard
Goldberg. Following Mr. Berkowitz’ resignation as a trustee effective
March 14, 2008, and Mr. Zalkind’s election as trustee on March 17, 2008, Mr.
Zalkind was appointed to the Conflicts Committee. The Conflicts
Committee held one meeting during the 2007 fiscal year which was attended either
in person or by telephone conference call by all members of the Conflicts
Committee.
Independence
of Trustees
Pursuant to the Nominating and
Corporate Governance Committee’s Charter, the Committee undertook its annual
review of trustee independence in March 2008 and, with respect to Mr.
McWilliams, April 2008. During this review, the Committee considered
transactions and relationships between each trustee or any member of his or her
immediate family and the Trust and its subsidiaries and affiliates, including
those reported under “Certain Relationships and Related Transactions” below. The
Committee also examined transactions and relationships between trustees or their
affiliates and members of our senior management or their
affiliates. The purpose of this review was to determine whether any
such relationships or transactions were inconsistent with a determination that
the trustee is independent in accordance with Section 303A.02(a) and (b) of the
listing standards of the New York Stock Exchange. In particular, the
Committee reviewed with counsel responses given by the trustees in their Trustee
Questionnaires, asked counsel if it was aware of any relationships between the
trustees and us or our affiliates and reviewed the bright-line independence
tests set forth in Section 303A.02(b).
As a
result of this review, the Board affirmatively determined that each of Messrs.
Berkowitz, Blasberg, Embry, Goldberg, Mandis, McWilliams and Zalkind are
independent of the Trust and its management in accordance with Section
303A.02(a) and (b) of the listing standards of the New York Stock
Exchange. Mr. Ashner and Mr. Braverman are not considered independent
because of their acting as our executive officers as well as their ownership
interest in FUR Advisors. See “Certain Relationships and Related
Transactions” below.
Meetings
of Non-Management Trustees
Prior to
or following every regularly scheduled quarterly meeting of the Board, the
non-management trustees meet without management present. There is not
a predetermined non-management trustee who presides over all such
meetings. At each meeting, the non-management trustees choose a
presiding member for such meeting, based upon the topics to be
discussed. "Non-management" trustees are all those trustees who are
not executive officers, and may include trustees who are not considered to be
independent under regulations issued by the SEC or the New York Stock
Exchange. Our current non-management trustees are: Arthur
Blasberg, Jr., Talton Embry, Howard Goldberg, Steven Mandis and Steven
Zalkind.
Communication
with Trustees
Shareholders
and any other interested party wishing to communicate with the Board may do so
in one of four ways: in person at our annual Shareholders meeting, by mail, by
telephone or via the internet. Any Shareholder can mail
correspondence to any trustee, or the Board as a whole, by addressing it to our
general outside counsel, Post Heymann & Koffler, LLP, Two Jericho Plaza,
Wing A, Suite 211, Jericho, New York 11753, Attention: David J.
Heymann. After the mail is opened and screened for security purposes,
it will be logged in, and (other than mail that Mr. Heymann determines to be
trivial or obscene) then forwarded to the particular trustee identified, or the
Board as a whole, as requested in the Shareholder's
correspondence. Trivial items will be delivered to the trustees at
the next scheduled Board meeting. Obscene items will not be
forwarded.
Shareholders
and any other interested party wishing to communicate only with non-management
trustees may do so in the manner described above or by calling toll free at
866-241-4955 or via the internet through the Investor Relations page on our
website, www.winthropreit.com
.
All
communications through the toll-free number or our website are forwarded solely
to Mr. Heymann and will be handled in the same manner as written correspondence
described above.
Compensation
of Trustees
The
following table sets forth a summary of the compensation received by our
non-officer trustees during 2007:
|
Name
|
|
Fees
Earned or Paid in Cash
|
|
Stock
Awards
|
|
Option
Awards
|
|
All
Other Compensation
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce
Berkowitz(1)
|
|
$43,000
|
|
-
|
|
-
|
|
-
|
|
$43,000
|
|
Arthur
Blasberg, Jr.
|
|
$73,000
|
|
-
|
|
-
|
|
-
|
|
$73,000
|
|
Talton
Embry
|
|
$30,000
|
|
-
|
|
-
|
|
-
|
|
$30,000
|
|
Howard
Goldberg
|
|
$43,000
|
|
-
|
|
-
|
|
-
|
|
$43,000
|
|
Steven
Mandis
|
|
$30,000
|
|
-
|
|
-
|
|
-
|
|
$30,000
|
|
Steven
Zalkind(2)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
(1) Resigned
as a trustee effective March 14, 2008.
(2) Elected
as a trustee effective March 17, 2008.
The
current non-officer trustees, Messrs. Blasberg, Embry, Goldberg, Mandis and
Zalkind, each receive $30,000 annually for their services as
trustees. In addition, each member of the audit committee received
$10,000 for serving on the Audit Committee in 2007, which amount has been
increased to $15,000 for 2008, $500 for each committee meeting they attend and
the chairman of the Audit Committee receives an additional $30,000
annually. Trustees who are also our officers receive no compensation
for serving on the Board. However, all trustees are reimbursed for
travel expenses and other out-of-pocket expenses incurred in connection with
their service on the Board.
CODE
OF ETHICS
We have
adopted a Code of Ethics, which is applicable to all trustees and our executive
officers, including the principal executive officer, the principal financial
officer and the principal accounting officer, as well as FUR Advisors and its
employees. The Code of Ethics can be obtained upon request from our
Secretary and at our website www.winthropreit.com under the link “Corporate
Governance”.
COMPENSATION
DISCUSSION AND ANALYSIS
General
As
described above under “Board of Trustees-Board Committees-Compensation
Committee” on page 10 of this Proxy Statement, the Compensation Committee is
responsible for recommending to the Board the compensation policies and
arrangements for the Trust's officers, trustees, advisors and
affiliates. The Compensation Committee acts pursuant to the
Compensation Committee Charter and is comprised of five members who were
independent within the meaning of Section 303A.02 of the listing standards of
the New York Stock Exchange. A copy of the Compensation Committee
Charter is available upon request from the Trust’s Secretary at 7 Bulfinch
Place, Suite 500, Boston, Massachusetts 02114 and at our website
www.winthropreit.com.
Executive
Compensation Principles
We do not
provide any remuneration to our executive officers and do not have any direct
employees. We retain FUR Advisors to provide substantially all of our
asset management, accounting and investor services.
At
present, the Compensation Committee reviews annually the terms of the advisory
agreement with FUR Advisors to determine their consistency with market terms and
whether the retention of an outside advisor is more favorable to us than
retaining direct employees. The Compensation Committee reviews the
fees payable to FUR Advisors in comparison to the general and administration
costs of other public real estate investment trusts. Based on its
review, the Compensation Committee recommended to the Board that the advisory
agreement with FUR Advisors be renewed.
If we
were to retain our executive officers directly, the Compensation Committee
would, in making its compensation recommendations to the Board likely consider
(1) the potential holding periods of our assets, (2) the number of individual
investments held by us, (3) the amount of asset management required with respect
to our assets, (4) our overall investment prospects and our short and long-term
business plan, and (5) with respect to a specific executive officer, such
officer's responsibilities, experience and overall performance. The
Compensation Committee would further seek to attract and retain highly qualified
executives and to motivate them to work together as a team to maximize our
financial performance on an annual and long-term basis thereby resulting in
increased shareholder value.
Share
Options/Grants
From
March 2005 to May 2007, we did not maintain any share option or share grant
plans in effect pursuant to which we could issue options. In May
2007, our Shareholders approved the Winthrop Realty Trust 2007 Long Term
Incentive Plan pursuant to which share options or share grants can be
granted. No such share options or share grants were granted during
the year ended December 31, 2007.
COMPENSATION
COMMITTEE REPORT
The
Compensation Committee is comprised entirely of independent
directors. The Compensation Committee has reviewed the Compensation
Discussion and Analysis required by Item 402(b) of Regulation S-K with
management and, based on such review and discussions, the Compensation Committee
recommended to the Board that the Compensation Discussion and Analysis be
included in this Annual Report.
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Members
of the Compensation Committee
Talton
Embry (Chairman)
Arthur
Blasberg, Jr.
Howard
Goldberg
Steven
Mandis
Steven
Zalkind
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The
preceding “Compensation Committee Report” shall not be deemed soliciting
material or to be filed with the Securities and Exchange Commission, nor shall
any information in this report be incorporated by reference into any past or
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent we specifically
incorporate it by reference into such filing.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There
were no relationships among members of the Compensation Committee, members of
the Board or our executive officers who served during our 2007 fiscal year that
require disclosure under Item 407(e)(4) of Regulation S-K promulgated
under the Securities Exchange Act of 1934, as amended. All current
members of the Compensation Committee are considered independent under our
Corporate Governance Guidelines.
AUDIT
COMMITTEE REPORT
The Audit
Committee acts pursuant to the Audit Committee Charter and is comprised of three
members who are independent within the meaning of Section 303A.02 of the listing
standards of the New York Stock Exchange. A copy of the Audit
Committee Charter can be obtained upon request from our Secretary at 7 Bulfinch
Place, Suite 500, Boston, Massachusetts 02114 and at the Trust’s website
www.winthropreit.com.
The Audit
Committee is responsible for the appointment, compensation, retention and
oversight of the accounting firm engaged as the Trust's independent registered
public accounting firm. Management is responsible for the Trust's
internal controls and financial reporting process. The independent
registered public accounting firm is responsible for performing an independent
audit of the Trust's consolidated financial statements in accordance with
generally accepted auditing standards and for issuing a report thereon and
expressing an opinion on the effectiveness of the Trust’s internal control over
financial reporting. The Audit Committee's responsibility is to
oversee these processes.
In
carrying out these responsibilities, the Audit Committee, among other
things:
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•
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monitors
preparation of, and reviews, the quarterly and annual financial reports by
the Trust’s management;
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•
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supervises
the relationship between the Trust and its independent registered public
accounting firm, including having direct
responsibility for
their appointment, compensation and retention; reviewing the scope of
their audit services; approving non-audit services; and confirming the
independence of the independent registered public accounting
firm;
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•
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reviews
and discusses the Trust’s policies with respect to risk assessment and
risk management; and
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•
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oversees
management’s implementation and maintenance of effective systems of
internal and disclosure controls, including review of the Trust’s policies
relating to legal and regulatory compliance, ethics and conflicts of
interest and review of the Trust’s internal auditing
program.
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In this
context, the Audit Committee has met and held discussions with management and
Pricewaterhouse Coopers LLP, the Trust’s independent registered public
accounting firm for 2007, regarding the fair and complete presentation of the
Trust’s financial results and the assessment of the Trust’s internal control
over financial reporting. The Audit Committee has discussed
significant accounting policies applied by the Trust in its consolidated
financial statements, as well as alternative treatments. Management
represented to the Audit Committee that the Trust’s consolidated financial
statements were prepared in accordance with accounting principles generally
accepted in the United States of America, and the Audit Committee has reviewed
and discussed the consolidated financial statements with management and the
independent registered public accounting firm.
The Audit
Committee met, discussed and reviewed with PricewaterhouseCoopers LLP all
matters required to be discussed by
Statement on Auditing Standards No.
61, as amended (Communication with Audit Committees)
. The
Audit Committee also discussed with PricewaterhouseCoopers LLP matters relating
to its independence, including a review of audit and non-audit fees and the
written disclosures and letter from Pricewaterhouse Coopers LLP to the Audit
Committee pursuant to
Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees)
,
"Communication with Audit Committees". The Audit Committee also has
considered whether PricewaterhouseCoopers LLP’s provision of non-audit services
to the Trust is compatible with its independence. The Audit Committee
has concluded that PricewaterhouseCoopers LLP is independent from the Trust and
its management.
The Audit
Committee discussed with the Trust’s internal and independent registered public
accounting firm the overall scope and plans for their respective
audits. The Audit Committee met with the internal and independent
registered public accounting firm, with and without management present, to
discuss the results of their examinations of the Trust’s consolidated financial
statements for the year ended December 31, 2007, the evaluations of the Trust’s
internal controls, and the overall quality of the Trust’s financial
reporting.
In
reliance upon the Audit Committee's reviews and discussions referred to above
and the Audit Committee's review of the representations of management, and the
report of the independent registered public accounting firm, the Audit Committee
recommended that the Board of Trustees include the audited consolidated
financial statements in the Trust's Annual Report on Form 10-K for the year
ended December 31, 2007, as filed with the Securities and Exchange
Commission. The Audit Committee believes that it has satisfied its
responsibilities under its charter.
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Members
of the Audit Committee
Arthur
Blasberg, Jr. - Chairman
Howard
Goldberg
Steven
Zalkind
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The
preceding “Audit Committee Report” shall not be deemed soliciting material or to
be filed with the Securities and Exchange Commission, nor shall any information
in this report be incorporated by reference into any past or future filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, except to the extent the Trust specifically incorporates it by
reference into such filing.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers, trustees and persons who beneficially own greater than 10% of a
registered class of our equity securities to file certain reports which we refer
to as “Section 16 Reports” with the Securities and Exchange Commission with
respect to ownership and changes in ownership of our common shares and other
equity securities. Based solely on our review of the Section 16
Reports furnished to us as well as written representations from certain
reporting persons, our officers, trustees and greater than 10% beneficial
owners, such persons have complied with all Section 16(a) requirements
applicable to them.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
FUR
Advisors administers our business pursuant to the terms of an advisory
agreement. FUR Advisors is controlled by and partially owned by our
executive officers. Pursuant to the terms of the advisory agreement,
FUR Advisors is responsible for providing asset management services to us and
coordinating with our Shareholder transfer agent and property
managers. The quarterly base management fee payable to FUR Advisors
for providing such services equals the lesser of an asset based fee or an equity
based fee as determined in accordance with the terms of the advisory agreement
which are calculated as follows:
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Asset
based fee equals 1% of our gross asset value up to $100,000,000, 0.75% of
our gross asset value between $100,000,000 and $250,000,000, 0.625% of our
gross asset value between $250,000,000 and $500,000,000 and 0.50% of our
gross asset value in excess of $500,000,000 (in light of the net lease
nature of our 16 net lease properties, FUR Advisors agreed to reduce its
fee for these properties to 0.25% of the gross asset value for the portion
of that portfolio that is subject to
leverage).
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·
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Equity
based fee equals (i) 1.5% of our issued and outstanding equity securities
plus (ii) .25% of any equity contribution by a third party to a joint
venture managed by us. For purposes of the equity based
calculation, the 31,058,913 Common Shares outstanding at January 1, 2005
are to be valued as follows: $2.30 (FUR Investors LLC’s tender offer price
in its December 2003 tender offer) with respect to 26,058,913 Common
Shares and $2.60 (the purchase price paid by FUR Investors LLC) with
respect to the 5,000,000 Common Shares acquired on December 31,
2003. Our Series A preferred shares were valued at their
liquidation preference amount of $25 per share until their conversion into
Common Shares on February 7, 2006, at which time the Common Shares issued
in connection therewith are valued at $5.0825 per Common
Share. All preferred and Common Shares issued subsequent to
January 1, 2005 are to be valued at the net issuance price including any
Common Shares issued in connection with the conversion of the preferred
shares.
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FUR
Advisors is entitled under both the asset based fee and the equity based fee to
receive (i) property and construction management fees at commercially reasonable
rates as determined by the independent trustees and (ii) an incentive
fee. The incentive fee entitles FUR Advisors to receive (a) an amount
equal to 20% of all distributions paid on our common shares after December 31,
2003 in excess of the Threshold Amount, hereinafter defined, and, (b) upon the
termination of the advisory agreement, an amount equal to 20% of our
“liquidation value” in excess of the Threshold Amount at the termination
date. As defined in the advisory agreement, the Threshold Amount is
equal to (x) $71,300,000, increased by the net issuance price of all of our
common shares, with an adjustment for preferred shares converted, issued after
December 31, 2003, and decreased by the redemption price of all our common
shares redeemed after December 31, 2003, plus (y) a return on the amount, as
adjusted, set forth in (x) equal to 7% per annum compounded annually. The
incentive fee is reduced by any direct damages to us if the advisory agreement
is terminated by us for cause. No incentive fee was payable
during the year ended December 31, 2007.
Winthrop
Management L.P., an affiliate of FUR Advisors and our executive officers,
provides property management responsibilities for certain of our
properties. Pursuant to the terms of the property management
agreement, Winthrop Management L.P. receives a fee equal to 3% of the monthly
revenues of such properties.
The
following table sets forth the fees and reimbursements paid by us for the years
ended December 31, 2007, 2006 and 2005 to FUR Advisors and Winthrop Management
L.P. (in thousands):
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2007
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2006
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2005
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Asset
Management (1)
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$
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5,263,000
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(3)
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$
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3,681,000
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(4)
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$
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2,660,000
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Property
Management (2)
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269,000
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217,000
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44,000
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Construction
Management (2)
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9,000
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-
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-
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(1)
Payable to FUR Advisors
(2)
Payable to Winthrop Management L.P.
(3)
Before credit of $189,000 discussed below
(4)
Before credit of $4,400,000 discussed below
In
connection with the merger of Newkirk with and into Lexington Corporate
Properties Trust, the advisory agreement between NKT Advisors (an affiliate of
FUR Advisors) and Newkirk was terminated, and NKT Advisors received a payment of
$5,500,000 attributable to its incentive fee. As a result of the
incentive fee being paid by Newkirk and in accordance with our advisory
agreement with FUR Advisors, we received a $4,400,000 credit (80% of total fee
paid) to be utilized on a go forward basis in offsetting the quarterly advisory
fees payable under the advisory agreement or in cash if the credit was not fully
utilized. We utilized $3,241,000 and $1,159,000 of this amount to offset the
base management fee payable for the years ended December 31, 2007 and 2006,
respectively. As of December 31, 2007, we had fully utilized the
credit to offset future base management fees.
During
the year ended December 31, 2006, the operating agreement for Concord Debt
Holdings LLC, which we refer to as Concord, our 50-50 venture with Lexington,
provided that Concord would pay to such person, including a member of Concord or
its affiliate, a fee in the amount not to exceed 50 basis points of the face
value of any loan acquired. In lieu of paying the full 50 basis point fee,
Concord paid to an affiliate of FUR Advisors, a total fee of approximately
$1,066,000 which represented the costs of the employees dedicated to Concord’s
business and equaled approximately 21 basis points of the face value of the
loans acquired. The fee for the period March 31, 2006 (the date of
the Trust’s initial investment) to December 31, 2006 was $980,000.
In
addition, an affiliate of FUR Advisors, which we refer to as the Concord
Advisor, provided accounting, collateral management and loan brokerage services
to Concord and its subsidiaries. For providing these services,
Concord reimburses the Concord Advisor for the costs incurred by Concord Advisor
solely for the benefit of Concord, including salaries of employees dedicated to
Concord’s business. These costs amounted to $2,571,000 and $1,066,000
in 2007 and 2006, respectively. The fee for the period March 31, 2006
(the date of the Trust’s initial investment) to December 31, 2006 was
$980,000. An affiliate of both of FUR Advisors and the Concord
Advisor provides accounting and other non-loan origination and loan acquisition
services for the Concord Advisor. In connection with providing these
services, the Concord Advisor reimburses such affiliate for the estimated costs
associated with providing these services, which we refer to as the “Concord
Credit Amount”. Because we hold a 50% interest in Concord, we
effectively pay 50% of the Concord Credit Amount. Accordingly,
because the Concord Credit Amount is paid to an affiliate of FUR Advisors, we
receive a credit against the advisory fee payable to FUR Advisors equal to 50%
of the Concord Credit Amount, which credit amounted to $189,000 for
2007.
PROPOSAL
NO. 2 – SELECTION OF THE INDEPENDENT REGISTERED
PUBLIC
ACCOUNTING FIRM
At the
recommendation of the Audit Committee, the Board has selected PwC to serve as
the independent registered public accounting firm of the Trust for its fiscal
year ending December 31, 2008.
During
our past two fiscal years, there were: (i) no disagreements with either PwC or
Deloitte, our independent registered public accounting firm for the years ended
December 31, 2006 and 2007, on any matter of accounting principle or practice,
financial statement disclosure, or auditing scope or procedure which
disagreements, if not resolved to PwC and/or Deloitte’s satisfaction, would have
caused them to make reference to the subject matter in connection with their
report on the Trust’s financial statements for such year; and (ii) no reportable
events as defined in Item 304(a)(1)(v) of Regulation S-K promulgated under the
Securities Exchange Act of 1934, as amended. Further, neither PwC’s
report on our consolidated financial statements as of and for the year ended
December 31, 2007 nor Deloitte’s report on our consolidated financial statements
as of and for the year ended December 31, 2006 contained any adverse opinion or
a disclaimer of opinion nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles.
Although
Shareholder ratification of the Board’s action in this respect is not required,
the Board considers it desirable for Shareholders to pass upon the selection of
independent registered public accounting firm and, if the Shareholders
disapprove of the selection, intends to consider other firms for selection as
the independent registered public accounting firm for the current fiscal
year.
It is
expected that representatives of PwC will be present either in person or by
telephone conference at the Annual Meeting.
Aggregate
fees billed to us for the year ended December 31, 2007 and 2006 represents fees
billed by PwC in 2007 for audit and audit related fees and by Deloitte for 2006
fees and tax fees in 2007.
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Type of
Fee
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Fiscal
2007
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Fiscal
2006
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Audit
Fee
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$
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775,000
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$
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700,000
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Audit
Related Fees
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200,000
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273,000
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Tax
Fees
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133,000
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136,000
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Total
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$
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1,108,000
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$
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1,109,000
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Audit
fees for the years
ended December 31, 2007 and 2006 were for professional services rendered in
connection with the integrated audit of our consolidated financial statements
and internal control over financial reporting.
Audit
Related
fees for
the year ended December 31, 2007 were for services related to responding to an
SEC comment letter and the restatement of our financial statements for the year
ended December 31, 2006.
Audit
Related fees for the year ended December 31, 2006 were for services related to
(i) our sale of common shares in 2006 ($170,000), (ii) the restatement of our
financial statements for year ended December 31, 2005 and the quarterly period
ended March 31, 2006 ($75,000) and (iii) our registration statement on Form S-3
relating to the Dividend Reinvestment Plan ($28,000).
Tax
fees as of the years
ended December 31, 2007 and 2006 were for services related to tax compliance,
tax planning and strategies, and state and local tax advice.
Recommendation
of the Board
The Board
unanimously recommends a vote in favor of the ratification of the election of
PwC to serve as the independent registered public accounting firm of the Trust
for its fiscal year ending December 31, 2008.
Procedures
for Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Registered Public Accountant
We have a
policy of requiring that the Audit Committee pre-approve all audit and non-audit
services provided to us by the independent registered public accounting
firm. During 2007, the Audit Committee approved all of the fees paid
by us to PwC.
SHAREHOLDER
PROPOSALS
Any
Shareholder proposals intended to be presented at the 2009 Annual Meeting of
Shareholders must be received by us for inclusion in our proxy statement and
form of proxy relating to that meeting on or before January 22,
2009. In addition, under our By-laws, Shareholders must comply with
specified procedures to nominate persons for election as trustees or introduce
an item of business at an annual meeting. Trustee nominations or an
item of business to be introduced at an annual meeting must be submitted in
writing and received by us not less than 120 days in advance of an annual
meeting. To be in proper written form, a Shareholder’s notice must
contain the specific information required by our By-laws. A copy of
our By-laws, which specifies the advance notice procedures, can be obtained from
us by request to the Trust’s Secretary. Any Shareholder who wishes to
submit a Shareholder proposal, should send it to, Winthrop Realty Trust, 7
Bulfinch Place, Suite 500, Boston, Massachusetts 02114,
Attention: Secretary.
ANNUAL
REPORT
Copies of
our Annual Report for the fiscal year ended December 31, 2007 are being mailed
to Shareholders of record on the Record Date together with this Proxy
Statement.
MISCELLANEOUS
As of the
date of this Proxy Statement, the Board does not know of any other matter to be
brought before the Annual Meeting. However, if any other matters not
mentioned in the Proxy Statement are brought before the Annual Meeting or any
adjournments thereof, the persons named in the enclosed Proxy or their
substitutes will have discretionary authority to vote proxies given in said form
or otherwise act, in respect of such matters, in accordance with their best
judgment.
We have
retained MacKenzie Partners, Inc. to aid in the solicitation of proxies
.
MacKenzie
Partners, Inc. will receive a fee not to exceed $5,000, as well as reimbursement
for certain out of pocket expenses incurred by them in connection with their
services, all of which will be paid by us. All of the costs and
expenses in connection with the solicitation of proxies with respect to the
matters described herein will be borne by us. In addition to solicitation of
proxies by use of the mails, our trustees, officers and employees (who will
receive no compensation therefor in addition to their regular remuneration) may
solicit the return of proxies by telephone, telegram or personal interview. We
will request banks, brokerage houses and other custodians, nominees and
fiduciaries to forward copies of the proxy materials to their principals and to
request instructions for voting the proxies. We may reimburse such banks,
brokerage houses and other custodians, nominees and fiduciaries for their
expenses in connection therewith.
A copy of
our annual report on Form 10-K/A for the fiscal year ended December 31, 2007 as
filed with the Securities and Exchange Commission may be obtained by
Shareholders without charge by written request addressed to: Tom Staples, Chief
Financial Officer, Winthrop Realty Trust, 7 Bulfinch Place, Suite 500, Boston,
MA 02114 or may be accessed on our website at www.winthropreit.com under the
link “SEC Filings”.
It is
important that proxies be returned promptly. Shareholders are,
therefore, urged to fill in, date, sign and return the Proxy immediately. No
postage need be affixed if mailed in the enclosed envelope in the United
States.
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By
order of the Board of Trustees
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Michael
L. Ashner
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Chairman
and Chief Executive Officer
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April 21,
2008