Edgar Filing: VORNADO REALTY TRUST

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934

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Vornado Realty Trust
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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 Registrant)

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[VORNADO LOGO]

NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS

AND

PROXY STATEMENT
---- [DIAMOND GRAPHIC]----
2 0 0 2

[VORNADO LOGO]
888 SEVENTH AVENUE
NEW YORK, NEW YORK 10019
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 29, 2002
------------------------

To our Shareholders:

The Annual Meeting of Shareholders of Vornado Realty Trust, a Maryland real
estate investment trust (the "Company"), will be held at the Marriott Hotel,
Interstate 80 and the Garden State Parkway, Saddle Brook, New Jersey 07663, on
Wednesday, May 29, 2002, beginning at 12:00 p.m., local time, for the following
purposes:

(1) The election of four persons to the Board of Trustees of the Company,
three for a term of three years and one for a term of two years;

(2) The approval of a proposal to amend the Declaration of Trust of the
Company to permit the Board of Trustees to exempt any individual person from the
Ownership Limit;

(3) The approval of a proposal to adopt the 2002 Omnibus Share Plan;

(4) The consideration of and action upon one shareholder proposal relating
to the declassification of the Board of Trustees; and

(5) The transaction of such other business as may properly come before the
meeting or any adjournment or postponement thereof.

Pursuant to the Bylaws of the Company, the Board of Trustees of the Company
has fixed the close of business on April 22, 2002, as the record date for
determination of shareholders entitled to notice of and to vote at the meeting.

Your attention is called to the attached proxy statement. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, YOU ARE URGED TO COMPLETE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE TO WHICH NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING IN PERSON, YOU
MAY REVOKE YOUR PROXY AND VOTE YOUR OWN SHARES.

By Order of the Board of Trustees,

Larry Portal
Corporate Secretary

April 30, 2002

[VORNADO LOGO]
888 SEVENTH AVENUE
NEW YORK, NEW YORK 10019

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PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 29, 2002

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The enclosed proxy is being solicited by the Board of Trustees (the
"Board") of Vornado Realty Trust, a Maryland real estate investment trust (the
"Company"), for use at the Annual Meeting of Shareholders of the Company to be
held at the Marriott Hotel, Interstate 80 and the Garden State Parkway, Saddle
Brook, New Jersey 07663 on Wednesday, May 29, 2002 beginning at 12:00 p.m.,
local time (the "Annual Meeting"). The proxy may be revoked by the shareholder
at any time prior to its exercise at the Annual Meeting by executing and
delivering to the Company at its principal office a written revocation or later
dated proxy or by attending the Annual Meeting and voting in person. The cost of
soliciting proxies will be borne by the Company. MacKenzie Partners, Inc. has
been engaged by the Company to solicit proxies, at a fee not to exceed $5,000.
In addition to solicitation by mail and by telephone, arrangements may be made
with brokerage houses and other custodians, nominees and fiduciaries to send
proxies and proxy material to their principals and the Company may reimburse
them for their expenses in so doing.

Only shareholders of record at the close of business on April 22, 2002 are
entitled to notice of and to vote at the Annual Meeting. There were on such date
106,499,930 common shares of beneficial interest, par value $.04 per share (the
"Shares"), of the Company outstanding, each entitled to one vote at the Annual
Meeting.

The holders of a majority of the outstanding Shares on April 22, 2002
present in person or represented by proxy and entitled to vote, will constitute
a quorum for the transaction of business at the Annual Meeting.

The principal executive office of the Company is located at 888 Seventh
Avenue, New York, New York 10019. The accompanying notice of the Annual Meeting,
this proxy statement and the enclosed proxy will be mailed on or about April 30,
2002 to the Company's shareholders of record as of the close of business on
April 22, 2002.

ELECTION OF TRUSTEES

The Amended and Restated Declaration of Trust of the Company, as amended
and supplemented (the "Declaration of Trust"), provides that the Board shall be
divided into three classes. One class of trustees is elected at each annual
meeting of shareholders to hold office for a term of three years and until their
successors are duly elected and qualify. At this year's annual meeting, in
addition to electing a class of three trustees to serve until the annual meeting
in 2005, shareholders are also being asked to elect one trustee to the class of
trustees serving until the annual meeting in 2004.

Unless otherwise directed in the proxy, each of the persons named in the
enclosed proxy, or his substitute, will vote such proxy for the election of the
four nominees listed below as trustees, three for a three-year term and one for
a two-year term and until their respective successors are duly elected and
qualify. If any nominee at the time of election is unable to serve, a
contingency not presently anticipated, it is intended that each of the persons
named in the proxy, or his substitute, will vote for an alternate nominee who
will be designated by the Board. Proxies may be voted only for the nominees
named or such alternates.

Under the Company's Bylaws, the affirmative vote of a plurality of all the
votes cast at the Annual Meeting, assuming a quorum is present, is sufficient to
elect a trustee. Under Maryland law, proxies marked "withhold authority" will be
counted for the purpose of determining the presence of a quorum but will not be
counted as votes cast in the election of trustees and thus will have no effect
on the result of the vote.

The following table sets forth the nominees (all of whom are presently
members of the Board) and the other present members of the Board. With respect
to each such person, the table sets forth the age, principal occupation,
position presently held with the Company, and the year in which the person first
became a trustee of the Company or a director of its predecessor, Vornado, Inc.

YEAR
PRINCIPAL OCCUPATION TERM
AND PRESENT POSITION WILL INITIAL
NAME AGE WITH THE COMPANY EXPIRE ELECTION
---- --- -------------------- ------ --------

NOMINEES FOR ELECTION TO SERVE AS TRUSTEES UNTIL THE ANNUAL MEETING IN 2005
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Stanley Simon(1)(2)(3) 84 Owner of Stanley Simon and Associates, management and 2002 1960
financial consultants
Ronald Targan(1) 75 A member of the law firm of Schechner and Targan, 2002 1980
P.A.; President of Malt Products Corporation of New
Jersey, a producer of malt syrup
Robert H. Smith(3) 73 Chairman of the Charles E. Smith Commercial Realty 2002 2002
Division of the Company, Trustee of Archstone-Smith
Trust

NOMINEE FOR ELECTION TO SERVE AS TRUSTEE UNTIL THE ANNUAL MEETING IN 2004
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Robert P. Kogod 70 Trustee of Archstone-Smith Trust 2002 2002

YEAR
PRINCIPAL OCCUPATION TERM
AND PRESENT POSITION WILL INITIAL
NAME AGE WITH THE COMPANY EXPIRE ELECTION
---- --- -------------------- ------ --------

PRESENT TRUSTEES ELECTED TO SERVE UNTIL THE ANNUAL MEETING IN 2004
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David Mandelbaum 66 A member of the law firm of Mandelbaum & Mandelbaum, 2004 1979
P.C.; a general partner of Interstate Properties
("Interstate")
Richard West(1)(2) 64 Dean Emeritus, Leonard N. Stern School of Business, 2004 1982
New York University

PRESENT TRUSTEES ELECTED TO SERVE UNTIL THE ANNUAL MEETING IN 2003
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Steven Roth(3) 60 Chairman of the Board and Chief Executive Officer of 2003 1979
the Company; Managing General Partner of Interstate
Michael D.
Fascitelli(3) 45 President of the Company 2003 1996
Russell B. Wight,
Jr.(3) 62 A general partner of Interstate 2003 1979

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(1) Member of the Audit Committee of the Board of the Company.

(2) Member of the Compensation Committee of the Board of the Company.

(3) Member of the Executive Committee of the Board of the Company.

Mr. Simon has been the owner of Stanley Simon and Associates since 1958.

Mr. Targan has been President of Malt Products Corporation of New Jersey
since 1962. Since 1964, he has been a member of the law firm of Schechner and
Targan, P.A.

Mr. Smith was appointed Trustee of the Company and Chairman of the Charles
E. Smith Commercial Realty Division of the Company on January 1, 2002, the date
Charles E. Smith Commercial Realty L.P. merged into a subsidiary of the Company.
Mr. Smith was Co-Chief Executive Officer and Co-Chairman of the Board of
Directors of Charles E. Smith Commercial Realty L.P. from October 1997 until
December 31, 2001. Mr. Smith is also a trustee of Archstone-Smith Trust.

Mr. Kogod was appointed Trustee of the Company on January 1, 2002, the date
Charles E. Smith Commercial Realty L.P. merged into a subsidiary of the Company.
Mr. Kogod was Co-Chief Executive Officer and Co-Chairman of the Board of
Directors of Charles E. Smith Commercial Realty L.P. from October 1997 through
December 31, 2001. Mr. Kogod is also a trustee of Archstone-Smith Trust.

Mr. Mandelbaum has been a member of Mandelbaum & Mandelbaum, P.C. since
1967. Since 1968, he has been a general partner of Interstate. Mr. Mandelbaum is
also a director of Alexander's, Inc. ("Alexander's").

Mr. West is Dean Emeritus at the Leonard N. Stern School of Business, New
York University. He was a professor there from September 1984 until September
1995. He was also Dean from September 1984 until August 1993. Prior thereto, Mr.
West was Dean of the Amos Tuck School of Business Administration at Dartmouth
College. Mr. West is also a director or a trustee of Vornado Operating Company
("Vornado Operating"), Alexander's, Bowne & Co., Inc. and various investment
companies managed by Merrill Lynch investment managers.

Mr. Roth has been Chairman of the Board and Chief Executive Officer of the
Company since May 1989 and Chairman of the Executive Committee of the Board of
the Company since April 1988. Since 1968, he has been a general partner of
Interstate and, more recently, he has been Managing General Partner. On March 2,
1995, he became Chief Executive Officer of Alexander's. Mr. Roth is also a
director of Alexander's and Capital Trust, Inc. and Chairman of the Board of
Directors and Chief Executive Officer of Vornado Operating.

Mr. Fascitelli has been the President and a Trustee of the Company since
December 2, 1996. From December 1992 to December 1996, Mr. Fascitelli was a
partner at Goldman, Sachs & Co., in charge of its real estate practice and was a
vice president there prior to 1992. He is also a director and President of
Alexander's and a director and President of Vornado Operating.

Mr. Wight has been a general partner of Interstate since 1968. Mr. Wight is
also a director of Alexander's and Vornado Operating.

Interstate is a New Jersey partnership formed in 1968. Messrs. Roth, Wight
and Mandelbaum have at all times been the general partners of Interstate.
Interstate is an owner of shopping centers and an investor in securities and
partnerships.

The Company is not aware of any family relationships among any trustees or
executive officers of the Company or person nominated or chosen by the Company
to become a trustee or executive officer. Messrs. Roth, Wight and Mandelbaum are
affiliated with each other as general partners of Interstate and in other
businesses. Messrs. Mandelbaum and Targan are affiliated with each other in
businesses and in the practice of law.

In connection with the January 1, 2002 merger of Charles E. Smith
Commercial Realty L.P. with and into a subsidiary of the Company, Mr. Roth, Mr.
Fascitelli and Interstate, who collectively beneficially own, as of April 22,
2002, 14,915,340 Shares representing 14.0% of the outstanding Shares, have
entered into an agreement with Mr. Smith and Mr. Kogod and Charles E. Smith
Commercial Realty L.L.C. pursuant to which they are obligated to vote all Shares
which they own (or over which they exercise voting control) in favor of the
election of Mr. Smith and Mr. Kogod (or their permitted designees) to the
Company's Board of Trustees until the earlier to occur of (i) January 1, 2008 or
(ii) the date on which, under the terms of the merger agreement for the above
merger, none of Mr. Smith, Mr. Kogod or their respective designees is entitled
to be nominated for election to the Board of Trustees. Under the terms of the
merger agreement, upon the death of Mr. Smith, the Smith family will no longer
have the right to designate a nominee for election to the Board of Trustees and
upon the death of Mr. Kogod, the Kogod family will no longer have the right to
designate a nominee for election to the Board of Trustees. In the event of the
deaths of both Mr. Smith and Mr. Kogod, the Smith and Kogod families will have
the right jointly to appoint one designee approved by the Company to complete
any unexpired term and to be nominated for election as a trustee for the
remaining six-year period that Mr. Smith and Mr. Kogod would have been entitled
to be nominated for election to the Board of Trustees. Furthermore, if the
members of the Smith family or the Kogod family and their permitted transferees
beneficially own less than 75% in number of the Vornado Realty L.P. Class A
Units issued to such family in the merger, the Company will no longer be
obligated to provide Mr. Smith or Mr. Kogod, respectively, or their designees,
the rights described above. Upon the termination of such rights, the obligations
of Mr. Roth, Mr. Fascitelli and Interstate under the voting agreement shall
terminate.

COMMITTEES OF THE BOARD OF TRUSTEES

The Board has an Executive Committee, an Audit Committee and a Compensation
Committee. The Board does not have a Nominating Committee.

The Board held thirteen meetings during 2001. Each trustee of the Company
attended at least 75% of the combined total of meetings of the Board and all
committees on which he served during that period.

Executive Committee

The Executive Committee possesses and may exercise certain powers of the
Board in the management of the business affairs of the Company, except those
reserved to the Board under Maryland law. The Executive Committee consists of
Messrs. Roth, Fascitelli, Simon, Smith, and Wight. Mr. Roth is Chairman of the
Executive Committee. The Executive Committee did not meet in 2001.

Audit Committee

The purposes of the Audit Committee are to assist the Board: (i) in its
oversight of the Company's accounting and financial reporting principles and
policies and internal controls and procedures; (ii) in its oversight of the
Company's financial statements and the independent audit thereof; (iii) in
selecting, evaluating and, where deemed appropriate, replacing the outside
auditors; and (iv) in evaluating the independence of the outside auditors. The
function of the Audit Committee is oversight. The management of the Company is
responsible for the preparation, presentation and integrity of the Company's
financial statements and for maintaining appropriate accounting and financial
reporting principles and policies and internal controls and procedures designed
to assure compliance with accounting standards and applicable laws and
regulations. The outside auditors are responsible for planning and carrying out
a proper audit and reviews and other procedures. The Board of Trustees has
adopted a written Audit Committee Charter which was attached as Annex A to the
Company's proxy statement for its 2001 Annual Meeting of Shareholders. The Audit
Committee, which held four meetings during 2001, consists of three members,
Messrs. Simon, Targan and West. Mr. West is the Chairman of the Audit Committee.

Compensation Committee

The Compensation Committee is responsible for establishing the terms of the
compensation of the executive officers and the granting of awards under the 1993
Omnibus Share Plan of Vornado Realty. The Committee, which held three meetings
during 2001, consists of two members, Mr. Simon and Mr. West. Mr. Simon is the
Chairman of the Compensation Committee.

COMPENSATION COMMITTEE
OF THE BOARD OF TRUSTEES
REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee (the "Committee") of the Board is responsible
for establishing the terms of the compensation of the Company's executive
officers.

Each of the executive officers receives a base salary. The Committee
periodically reviews and adjusts each executive officer's base salary. Mr.
Roth's current base salary of $1,000,000 was established in March 2001. Mr.
Roth's previous salaries of $650,000 and $625,000 were established in January
2000 and November 1991, respectively. Mr. Fascitelli's base salary of $1,000,000
was established in March 2001. Mr. Fascitelli's previous salary of $625,000 was
set in accordance with the employment agreement entered into on December 2,
1996. The base salary of Mr. Greenbaum is $525,000 in accordance with the
employment agreement entered into on April 15, 1997. The base salary of Mr.
Macnow is $520,000 in accordance with the employment agreement entered into as
of January 1, 1998. The employment agreement for Mr. Macnow provides for an
annual adjustment of his base salary equal to 125% of the percentage increase in
the prior year's consumer price index. The base salary of Mr. Blum is $520,000
in accordance with the employment agreement entered into as of January 24, 2000.
See "Executive Compensation -- Employment Contracts".

The factors and criteria which the Committee utilizes in establishing the
compensation of the Company's executive officers include an evaluation of the
Company's overall financial and business performance, the officer's overall
leadership and management and contributions by the officer to the Company's
acquisitions or investments. The Committee also considers the compensation
provided in the prior year and estimates of compensation to be provided by
similar companies in the current year. The primary objective of the Committee in
establishing the terms of the executive officers' compensation is to provide
strong financial incentives for the executive officers to maximize shareholder
value. The Committee believes that the best way to accomplish this objective is
to grant substantial share options on a fixed share basis without adjusting the
number of shares granted to offset changes in the Company's Share price.

In January 2002, Mr. Roth was granted options to purchase 750,000 Shares,
exercisable at the current market price on the date the options were granted.
The options were granted in respect of services rendered in 2001. At December
31, 2001, the outstanding principal amount of loans by the Company to Mr. Roth,
due January 2006, in connection with his stock option exercises in 1993 was
$13,122,500 bearing interest at 4.49% per annum (based on the Applicable Federal
Rate). Mr. Roth has also been provided with the right to draw up to $15,000,000
of additional loans on a revolving basis. Each additional loan will bear
interest, payable quarterly, at the Applicable Federal Rate on the date the loan
is made and will mature on the sixth anniversary of the loan. Mr. Roth's loan
and any additional loans drawn under the arrangement described above are secured
by 1,500,000 Shares.

The 1996 employment agreement of Michael D. Fascitelli, President, provided
in addition to his annual salary, that he receive a deferred payment (the
"Deferred Payment") consisting of $5,000,000 in cash (which has been invested in
marketable securities at the direction of Mr. Fascitelli) and a $20,000,000
convertible obligation payable in 919,540 Shares which are being
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held in an irrevocable trust for the benefit of Mr. Fascitelli. The Deferred
Payment obligation to Mr. Fascitelli vested on December 2, 1997 and was
scheduled to convert into Shares on November 30, 2001. The conversion date was
extended to November 30, 2004. In addition, Mr. Fascitelli's 1996 employment
agreement provided that he may borrow up to $10,000,000 from the Company during
the term of his employment. As of December 31, 2001, the outstanding principal
amount of loans by the Company to Mr. Fascitelli was $8,600,000. The loans,
which were scheduled to mature in 2003, have been extended to 2006 in connection
with the extension of Mr. Fascitelli's employment agreement, discussed below.
The interest on the loans, which is payable quarterly, is 3.97% (based on the
Applicable Federal Rate on the date the loans were extended). Further, in
January 2002, Mr. Fascitelli was granted options to purchase 750,000 Shares,
exercisable at the current market price on the date the options were granted.
The options were granted in respect of services rendered in 2001.

Effective January 1, 2002, the Company extended its employment agreement
with Mr. Fascitelli for a five-year period through December 31, 2006. Pursuant
to the extended employment agreement, he is entitled to receive a deferred
payment on December 31, 2006 of 626,566 Shares, which are valued for
compensation purposes at $27,500,000 (the value of Shares on March 8, 2002, the
date the extended employment agreement was signed). The number of Shares was set
by the Committee in December 2001 to achieve a value of $25,000,000, and has
appreciated $2,500,000 to March 8, 2002. The Shares are being held in an
irrevocable trust for the benefit of Mr. Fascitelli and will vest on December
31, 2002. Mr. Fascitelli will also receive regular annual cash compensation as
determined by the Committee. Mr. Fascitelli may also borrow up to $20,000,000
from the Company during the term of his 2002 employment agreement reduced by the
amount of his outstanding loans under his 1996 employment agreement, which was
$8,600,000. Each loan will bear interest, payable quarterly, at the Applicable
Federal Rate on the date the loan is made and will mature on the fifth
anniversary of the loan. Payment of the additional loans and the outstanding
$8,600,000 loan may be accelerated by the Company to the extent that the
aggregate principal amount of such loans exceeds 50% of the sum of (i) the value
of the 919,540 Shares payable to Mr. Fascitelli under the 1996 employment
agreement and the 626,566 Shares payable to him under his extended employment
agreement, and (ii) the amount by which the value of the Shares subject to
options granted to Mr. Fascitelli by the Company exceeds the aggregate exercise
price of such options.

The employment agreement of David R. Greenbaum, President of the New York
Office Division, provides that the Company will use best efforts annually to
cause the Committee to grant Mr. Greenbaum an amount of options to purchase
Shares that is comparable to the amount of options granted to senior executive
officers of the Company. In January 2002, Mr. Greenbaum was granted options to
purchase 125,000 Shares, exercisable at the current market price on the date the
options were granted. The options were granted in respect of services rendered
in 2001. Mr. Greenbaum's employment agreement provides that he may borrow up to
$10,000,000 from the Company bearing interest at the Applicable Federal Rate.
There were no outstanding loans as of December 31, 2001.

The employment agreement of Joseph Macnow, Executive Vice
President -- Finance and Administration and Chief Financial Officer, provides
that the Company will use best efforts annually to cause the Compensation
Committee of the Board to grant Mr. Macnow options to purchase 75,000 Shares at
a purchase price equal to the fair market value of the Shares on the dates the
7

options are granted. In January 2002, Mr. Macnow was granted options to purchase
100,000 Shares, exercisable at the current market price on the date the option
was granted. The options were granted in respect of services rendered in 2001.

The employment agreement of Melvyn Blum, Executive Vice
President -- Development Division, provides that the Company will use best
efforts annually to cause the Compensation Committee of the Board to grant Mr.
Blum options to purchase 100,000 Shares at a purchase price equal to the fair
market value of the Shares on the dates the options are granted. In January
2002, Mr. Blum was granted options to purchase 125,000 Shares, exercisable at
the current market price on the date the options were granted. The options were
granted in respect of services rendered in 2001. Mr. Blum's employment agreement
provides that he may borrow up to $2,000,000 from the Company during the term of
the agreement bearing interest at the Applicable Federal Rate. As of December
31, 2001, the outstanding principal amount of loans by the Company to Mr. Blum
was $1,000,000.

Section 162(m) of the Internal Revenue Code, which was adopted in 1993,
provides that, in general, publicly traded companies may not deduct, in any
taxable year, compensation in excess of $1,000,000 paid to any individual named
in the Summary Compensation Table which is not "performance based", as defined
in Section 162(m). The Committee believes that it is in the best interests of
the Company and its shareholders to comply with the limitations of Section
162(m) of the Code to the extent practicable and consistent with retaining,
attracting and motivating the Company's executive officers. Accordingly, to
maintain flexibility in compensating executive officers in a manner designed to
promote the goals of the Company and its shareholders, the Committee has not
adopted a policy that all executive compensation must be deductible. The
deferred payments made to Mr. Fascitelli pursuant to both his 1996 employment
agreement and his 2002 employment agreement do not meet the requirements of
Section 162 (m) and will thus be subject to the $1,000,000 limitation when paid.

STANLEY SIMON
RICHARD WEST

APPROVAL OF PROPOSAL TO AMEND THE DECLARATION OF TRUST
OF THE COMPANY TO PERMIT THE BOARD OF TRUSTEES TO EXEMPT ANY
INDIVIDUAL PERSON FROM THE OWNERSHIP LIMIT

The Board of Trustees believes that it is in the best interests of the
Company and its shareholders to amend the Declaration of Trust to increase the
Board of Trustees' flexibility with respect to restrictions on the ownership of
shares of the Company while at the same time maintaining safeguards against an
inadvertent loss of the Company's status as a real estate investment trust
("REIT").

The Declaration of Trust contains a number of provisions that restrict the
ownership and transfer of shares. These provisions seek to safeguard the Company
against an inadvertent loss of its REIT status and to deter non-negotiated
acquisitions of, and proxy fights for, the Company by a third party. For the
Company to maintain its qualification as a REIT under the Internal Revenue Code
(the "Code"), not more than 50% of the value of its outstanding shares of
beneficial interest may be owned, directly or indirectly, by five or fewer
individuals at any time during the last half of a taxable year.

The Declaration of Trust restricts, with some exceptions, shareholders from
owning more than 6.7% of the Shares (the "Ownership Limit"). The current
provisions of the Declaration of Trust give the Board limited flexibility with
respect to the Ownership Limit. First, the Board has the authority to increase
up to 9.9% the Ownership Limit with respect to an entire class of shares of the
Company. Second, the Board, with a ruling from the Internal Revenue Service or
an opinion of counsel, has the authority to exempt certain entities from the
Ownership Limit with respect to a class of shares of the Company. However, these
provisions do not authorize the Board to exempt individuals. The Board believes
it needs greater flexibility to exempt key employees and other individuals from
the Ownership Limit (within appropriate parameters) in situations where it
believes doing so is in the best interests of the Company and its shareholders.
If this proposal is approved, the Board intends to grant Mr. Fascitelli, the
Company's President, an exemption from the Ownership Limit based upon the number
of Shares he currently owns and has rights to acquire. Any such exemption would
not exceed the 9.9% limit.

Accordingly, the Board of Trustees has unanimously adopted a resolution
declaring that it is advisable and in the best interests of the Company to make
the changes to Article VI, Section 6.6(l)(1) of the Declaration of Trust that
are indicated in the attached Annex A of this proxy statement.

The proposed amendment will permit the Board of Trustees to exempt any
individual from the Ownership Limit with respect to a class of the Company's
shares so long as that individual does not acquire Beneficial Ownership of more
than 9.9% of the shares of that class. Without this amendment, the Board of
Trustees would have to increase the Ownership Limit with respect to an entire
class of shares if it wanted any individual's ownership to exceed the then
current Ownership Limit. At the same time, the amended Declaration of Trust will
maintain safeguards against an inadvertent loss of the Company's REIT status and
continue to deter non-negotiated acquisitions of, and proxy fights for, the
Company by a third party. The Board of Trustees will only grant an exemption to
any individual person, if the Board of Trustees is satisfied that the exemption
is in the best interests of the Company and its shareholders.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO
AMEND ARTICLE VI, SECTION 6.6(l)(1) OF THE COMPANY'S DECLARATION OF TRUST TO
PERMIT THE BOARD OF TRUSTEES TO EXEMPT ANY INDIVIDUAL PERSON FROM THE OWNER-
9

SHIP LIMIT. Proxies will be voted for the proposal unless specified otherwise
in the proxies. The affirmative vote of holders of at least two-thirds of the
outstanding Shares is required for approval of this proposal. Consequently, any
shares not voted (whether by abstentions, broker non-votes or otherwise) will
have the same effect as votes against the proposed amendment to the Company's
Declaration of Trust. If this proposal is approved by the shareholders, it will
become effective upon the filing of Articles of Amendment with the State
Department of Assessments and Taxation of Maryland, which will occur as soon as
reasonably practicable after approval.

APPROVAL OF PROPOSAL TO ADOPT THE 2002
OMNIBUS SHARE PLAN

The Board of Trustees is asking shareholders to approve and adopt the 2002
Omnibus Share Plan of Vornado Realty Trust (the "Omnibus Share Plan" or the
"Plan"). The Omnibus Share Plan is intended to supersede and replace the 1993
Omnibus Share Plan currently in effect and the allocation of Shares thereunder.

The purpose of the Omnibus Share Plan is to promote the financial interests
of the Company by encouraging its employees and the employees of its
subsidiaries, including officers (together, the "Employees"), its non-employee
trustees and non-employee directors of its subsidiaries (together, the
"Non-Employee Trustees"), and certain non-employee advisors and consultants that
provide bona fide services to the Company or its subsidiaries (together, the
"Consultants") to acquire an ownership position in the Company, enhancing its
ability to attract and retain Employees, Non-Employee Trustees and Consultants
of outstanding ability and providing such Employees, Non-Employee Trustees and
Consultants with a way to acquire or increase their proprietary interest in the
Company's success. This is the same general purpose as that of the 1993 Omnibus
Share Plan.

The Board of Trustees and the Compensation Committee have determined that
it is in the best interest of the Company and its shareholders to adopt the
Omnibus Share Plan and to terminate the 1993 Omnibus Share Plan upon approval of
the Omnibus Share Plan by the shareholders. No further grants will be awarded
under the 1993 Omnibus Share Plan following the approval of this Plan. The term
of the 1993 Omnibus Share Plan currently in effect is scheduled to expire on May
6, 2003. Approval of the Omnibus Share Plan will permit the continuation of the
purpose of the 1993 Omnibus Share Plan through the awards of stock options and
other equity related grants. In addition, approval of the Omnibus Share Plan
will insure that there is an adequate number of Shares available for awards
under the Omnibus Share Plan by providing for a maximum aggregate of 10,000,000
Shares for which awards may be granted. Of the 25,000,000 Shares currently
authorized under the 1993 Omnibus Share Plan, 2,700,436 Shares remained
available for issuance as of April 22, 2002. The Omnibus Share Plan will also
increase from 5,000,000 under the 1993 Omnibus Share Plan to 10,000,000 the
maximum number of Shares which may be subject to awards of stock options and
stock appreciation rights to any participant. Finally, the Omnibus Share Plan
will extend the eligibility under the Plan to include Non-Employee Trustees and
Consultants. The other material terms of the Omnibus Share Plan are discussed
below.

A copy of the full text of the Omnibus Share Plan is attached as Annex B to
this proxy statement and the summary below of the Omnibus Share Plan is
qualified in its entirety by the attached copy of the Plan. For additional
information regarding stock options granted to executive officers, see
"Executive Compensation".

TERMS OF THE OMNIBUS SHARE PLAN

Under the Omnibus Share Plan, eligible participants in the Plan may be
granted awards of stock options, stock appreciation rights, performance shares
and restricted stock. With respect to Employees and Consultants, the Omnibus
Share Plan is administered by the Compensation Committee, and with respect to
Non-Employee Trustees by the Board of Trustees. We refer to the Board of
Trustees and the Compensation Committee in their capacity as administrator of
the Omnibus Share Plan as the Applicable Plan Administrator. The Compensation
Committee is authorized to select Employees and Consultants and the Board of
Trustees is authorized to select Non-Employee Trustees, in each case, to receive
awards, determine the type of awards to be made, determine the number of Shares
or Share units subject to any award and the other terms and conditions of such
awards. All Employees who have demonstrated significant management potential or
who have the capacity for contributing in a substantial measure to the
successful performance of the Company, as determined by the Compensation
Committee, are eligible to receive awards under the Plan. As such criteria are
subjective in nature, the Company cannot accurately estimate the number of
persons who may be included in the class of Employees or Consultants eligible to
receive awards from time to time. Also eligible are Non-Employee Trustees, as
determined by the Board of Trustees.

Except as determined by the Applicable Plan Administrator, with respect to
the transferability of stock options by a participant to such participant's
immediate family members (or trusts, partnerships or limited liability companies
established for such immediate family members), the awards are not assignable or
transferable except by will or the laws of descent and distribution and no right
or interest of any participant may be subject to any lien, obligation or
liability of the holder.

The maximum aggregate number of Shares which may be issued under the Plan
will be 10,000,000. The fair market value of one Share of the Company on April
22, 2002 was $44.60 per Share.

The Omnibus Share Plan will be effective upon approval and adoption by the
shareholders and has a term of ten years from its effective date. The Board of
Trustees may amend or terminate the Omnibus Share Plan or any portion of the
Omnibus Share Plan at any time. However, the Internal Revenue Code and the rules
of the New York Stock Exchange may require shareholder approval of certain
amendments.

Stock Options

Stock options entitle the holder to purchase the Company's Shares at a per
Share price determined by the Applicable Plan Administrator, which in no event
may be less than the fair market value of the Shares on the date of grant.
Options may be either "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code or "non-qualified" stock options. Stock options
are exercisable for such period as is determined by the Applicable Plan
Administrator, but in no event may options be exercisable after 10 years from
the date of grant. The option price for Shares purchased upon the exercise of an
option must be paid in full at the time of exercise and may be paid in cash, by
tender of Shares, by such other consideration as Applicable Plan Administrator
deems appropriate or by a combination of cash, Shares and such other
consideration.

The Plan provides for the grant of "reload stock options", at the
discretion of Applicable Plan Administrator to a participant who uses Shares
owned by the participant to pay all or a part of the exercise price of a stock
option (including a reload stock option). A reload stock option will cover the
number of Shares tendered in payment of the exercise price and will have a per
Share exercise price not less than the fair market value of the Shares on the
date of grant of the reload stock option.

Upon the grant or exercise of an incentive stock option, no income will be
recognized by the optionee for Federal income tax purposes, and the Company will
not be entitled to any deduction. If the Shares acquired upon exercise are not
disposed of within the one-year period beginning on the date of the transfer of
the Shares to the optionee, nor within the two-year period beginning on the date
of the grant of the option, any gain or loss realized by the optionee upon the
disposition of such Shares will be taxed as long-term capital gain or loss. In
such event, no deduction will be allowed to the Company. If such Shares are
disposed of within the one-year or two-year periods referred to above, the
excess of the fair market value of the Shares on the date of exercise (or, if
less, the fair market value on the date of disposition) over the exercise price
will be taxable as ordinary income to the optionee at the time of disposition,
and the Company will be entitled to a corresponding deduction. The amount by
which the fair market value of the Shares at the time of exercise of an
incentive stock option exceeds the option price will constitute an item of tax
preference which could subject the optionee to the alternative minimum tax.
Whether the optionee will be subject to such tax depends on the facts and
circumstances applicable to the individual.

Upon the grant of a non-qualified option, no income will be realized by the
optionee, and the Company will not be entitled to any deduction. Upon the
exercise of such an option, the amount by which the fair market value of the
Shares at the time of exercise exceeds the exercise price will be taxed as
ordinary income to the optionee and the Company will be entitled to a
corresponding deduction. All option grants to Non-Employee Trustees and
Consultants are treated as non-qualified options for Federal income tax
purposes.

Under Section 162(m) of the Internal Revenue Code and the regulations
issued thereunder, the Company's Federal income tax deduction for compensation
paid in any year to the Company's chief executive officer or any of its other
four most highly compensated named executive officers is limited to $1,000,000,
except to the extent it is considered to be performance-based compensation.
Compensation realized upon the exercise of stock options and stock appreciation
rights under the Omnibus Share Plan will be treated as performance-based
compensation.

Stock Appreciation Rights

Stock appreciation rights entitle the holder to receive from the Company an
amount equal to the amount by which the fair market value of a Share on the date
of exercise exceeds the grant price. Stock appreciation rights may be granted in
tandem with a stock option, in addition to a stock option or may be freestanding
and unrelated to a stock option and may not be exercised earlier than six months
after grant except in the event of the holder's death or disability. The
Applicable Plan Administrator is authorized to determine whether a stock
appreciation right will be settled in cash, Shares or a combination thereof.

Performance Shares

Performance share awards consist of a grant of actual Shares or Share units
having a value equal to an identical number of the Company's Shares in amounts
determined by the Applicable Plan Administrator at the time of grant.
Performance share awards consisting of actual Shares entitle the holder to
receive Shares in an amount based upon performance conditions of the Company
over a performance period as determined by the Applicable Plan Administrator at
the time of grant. Such performance share awards may provide the holder with
dividends and voting rights prior to vesting. Performance share awards
consisting of Share units entitle the holder to receive the value of such units
in cash, Shares or a combination thereof based upon performance conditions and
over a performance period as determined by the Applicable Plan Administrator at
the time of grant. Such performance share awards may provide the holder with
dividend equivalents prior to vesting.

Restricted Stock

Restricted stock awards consist of a grant of actual Shares or Share units
having a value equal to an identical number of Shares of the Company. Restricted
stock awards consisting of actual Shares entitle the holder to receive Shares of
the Company. Such restricted stock awards may provide the holder with dividends
and voting rights prior to vesting. Restricted stock awards consisting of Share
units entitle the holder to receive the value of such units in cash, Shares or a
combination thereof as determined by the Applicable Plan Administrator. Such
restricted stock awards may provide the holder with dividend equivalents prior
to vesting. The employment conditions and the length of the period for vesting
of restricted stock awards are established by the Applicable Plan Administrator
at time of grant.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO
ADOPT THE COMPANY'S 2002 OMNIBUS SHARE PLAN. Proxies will be voted for the
proposal unless specified otherwise in the proxies. The affirmative vote of
holders of the majority of the votes cast on the proposal is required for
approval of the 2002 Omnibus Share Plan, provided that the total vote cast on
the proposal represents a majority in interest of all securities entitled to
vote on the proposal. For purposes of the vote on this proposal, abstentions and
broker non-votes will have the effect of a vote against the proposal, unless
holders of a majority in interest of all securities entitled to vote on the
proposal cast votes, in which event neither an abstention nor a broker non-vote
will have any effect on the result of the vote.

SHAREHOLDER PROPOSAL RELATING TO
DECLASSIFICATION OF THE BOARD OF TRUSTEES

In accordance with the rules of the Securities and Exchange Commission, we
have set forth below a shareholder proposal, along with the supporting statement
of the shareholder proponent, for which the Company and the Board accept no
responsibility. The shareholder proposal is required to be voted upon at the
Annual Meeting only if properly presented at the Annual Meeting by the
shareholder proponent. As explained below, the Board of Trustees recommends that
you vote AGAINST the shareholder proposal.

Service Employees International Union, 1313 L Street NW, Washington, D.C.
20005, reporting beneficial ownership of 96 Shares, has given notice that it
intends to present the following resolution at the Annual Meeting.

RESOLUTION

RESOLVED: That the shareholders of Vornado Realty Trust urge the Board of
Trustees take the necessary steps to declassify the Board of Trustees for the
purpose of Trustee elections. The Board declassification shall be done in a
manner that does not affect the unexpired terms of Trustees previously elected.

SUPPORTING STATEMENT

We believe the election of Trustees is the most powerful way that
shareholders influence the strategic direction of our company. Currently the
Board of Trustees of Vornado Realty Trust is divided into three classes serving
staggered three-year terms. It is our belief that the classification of the
Board of Trustees is not in the best interests of Vornado Realty Trust and its
shareholders. The elimination of the staggered board would require each Trustee
to stand for election annually. This procedure would allow shareholders an
opportunity to annually register their views on the performance of the board
collectively and each Trustee individually. Concerns that the annual election of
Trustees would leave Vornado Realty Trust without experienced board members in
the event that all incumbents are voted out are unfounded. If the owners should
choose to replace the entire board, it would be obvious that the incumbent
Trustees' contributions were not valued.

A classified Board of Trustees protects the incumbency of the Board of
Trustees and current management, which in turn limits accountability to
stockholders. It is our belief Vornado Realty Trust's corporate governance
procedures and practices, and the level of management accountability they
impose, are related to the financial performance of the Company. While Vornado
Realty Trust's current performance is good, we believe sound corporate
governance practices, such as the annual election of Trustees, will impose the
level of management accountability necessary to help insure that a good
performance record continues over the long term.

Classified boards like ours have become increasingly unpopular in recent
years. Last year a majority of shareholders supported proposals asking their
boards to repeal classified board structures at a number of respected companies,
including Kroger, Merck, Airborne, Albertson's Inc., U.S. Bancorp, Delphi
Automotive, Maytag, United Health Group, Wisconsin Energy, and Alaska Air Group.

For a greater voice in the governance of Vornado Realty Trust and annual
Board of Trustees accountability, we ask shareholders to vote YES on this
proposal.

BOARD OF TRUSTEES STATEMENT OPPOSING
SHAREHOLDER PROPOSAL

The Board believes that declassification of the Board of Trustees would not
serve the best interests of the Company and its shareholders. Accordingly, the
Board of Trustees recommends a vote AGAINST the proposed resolution for reasons
explained below.

The Company's Declaration of Trust provides for the Board to be divided
into three classes of trustees serving staggered three-year terms (classified
board). The Company has achieved its current size and success under the guidance
of a classified board.

The classified board provides enhanced continuity and stability in the
Board's business strategies and policies. At all times, two-thirds of the
trustees will have had prior experience and familiarity with the Company's
business and affairs. This enables the trustees to build on past experience and
plan for a reasonable period into the future. A classified board encourages long
term focus in the management of the business and affairs of the Company. In
addition to providing experienced trustees, a staggered board helps the Company
attract and retain highly qualified individuals willing to commit the time and
resources necessary to understand the Company, its operations and its
competitive environment.

Board classification may further give the Company valuable protection
against an unsolicited takeover unfavorable to shareholders. A classified board
permits a more orderly process for trustees to consider any takeover bids and to
explore all alternatives to maximize shareholder value. The classified board
makes it more likely that persons who may seek to acquire control of the Company
will initiate such action through negotiations with the Board. At least two
meetings of shareholders would generally be required to replace a majority of
the Board. By reducing the threat of an abrupt change in the composition of the
entire Board, classification of trustees provides the Board with an adequate
opportunity to fulfill its duties to the Company's shareholders to review any
takeover proposal, study appropriate alternatives and act in the best interests
of the Company.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE PROPOSAL
RELATING TO THE DECLASSIFICATION OF THE BOARD OF TRUSTEES. The affirmative vote
of a majority of all the votes cast at the Annual Meeting, assuming a quorum is
present, is necessary for approval of this proposal. Abstentions and broker
non-votes will not be counted as votes cast and will have no effect on the
result of the vote, although they will count towards the presence of a quorum.
Shareholder approval of this proposal would not result in annual election of
Trustees because this is only a recommendation to the Board of Trustees who must
propose an amendment of the Declaration of Trust subject to a separate
shareholder vote to declassify the Board of Trustees.

PERFORMANCE GRAPH

The following performance graph compares the Company's Share price
performance to the Standard & Poor's 500 Composite Stock Price Index (the "S&P
500 Index") and to the published National Association of Real Estate Investment
Trusts ("NAREIT") All Equity Index (excluding Health Care REITs). The graph
assumes that $100 was invested on December 31, 1996 in each of the Shares, the
S&P 500 Index and the NAREIT All Equity Index, and that all dividends were
reinvested. THERE CAN BE NO ASSURANCE THAT PERFORMANCE OF THE COMPANY'S SHARES
WILL CONTINUE IN LINE WITH THE SAME OR SIMILAR TRENDS DEPICTED IN THE GRAPH
BELOW.

[PERFORMANCE LINE GRAPH]

------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
------------------------------------------------------------------------------------------------------------------------

Vornado 100 184 137 140 172 186
S&P 500 Index 100 133 171 208 189 166
The NAREIT All Equity Index(1) 100 120 99 95 120 136

---------------
(1) Excluding Health Care REITs.

PRINCIPAL SECURITY HOLDERS

The following table sets forth the beneficial ownership of Shares and Class
A Units and those units convertible into Class A Units of limited partnership
interest (collectively, "Units") in Vornado Realty L.P., a Delaware limited
partnership (the "Operating Partnership"), of (i) each person holding more than
a 5% interest in the Company or the Operating Partnership (other than the
Company), (ii) trustees of the Company, (iii) the executive officers of the
Company named in the Summary Compensation Table set forth below, and (iv) the
trustees and executive officers of the Company as a group. Unless otherwise
noted, the address of all such persons is c/o Vornado Realty Trust, 888 Seventh
Avenue, New York, New York 10019.

NUMBER OF
SHARES OF
COMMON STOCK PERCENT OF
AND UNITS PERCENT OF ALL SHARES
BENEFICIALLY ALL SHARES AND UNITS
NAME OF BENEFICIAL OWNER OWNED(1)(2) (1)(2)(3) (1)(2)(4)
------------------------ ------------ ---------- ----------

NAMED EXECUTIVE OFFICERS AND TRUSTEES
Steven Roth(5)(6)(7)...................................... 17,500,800 15.9% 12.6%
Russell B. Wight, Jr.(5)(8)............................... 12,949,800 12.2% 9.5%
David Mandelbaum(5)....................................... 13,261,998 12.5% 9.8%
Michael D. Fascitelli(7)(9)............................... 6,607,540 5.9% 4.7%
Robert P. Kogod........................................... 4,067,885 3.8% 3.0%
Robert H. Smith........................................... 4,425,476 4.1% 3.3%
David R. Greenbaum(7)..................................... 1,752,422 1.6% 1.3%
Joseph Macnow(7).......................................... 627,200 * *
Melvyn Blum(7)............................................ 298,898 * *
Ronald Targan............................................. 750,000 * *
Stanley Simon............................................. 75,000 * *
Richard West(10).......................................... 21,000 * *
All trustees and executive officers as a group (19
persons)................................................ 38,534,408 32.5% 26.1%
OTHER BENEFICIAL OWNERS
Interstate(5)............................................. 12,443,000 11.7% 9.2%
Cohen & Steers Capital Management, Inc.(11)............... 8,932,250 8.4% 6.6%

---------------
* Less than 1%.

(1) Unless otherwise indicated, each person is the direct owner of, and has
sole investment power with respect to, such Shares and Units. Numbers and
percentages in table are based on 106,499,930 Shares and 29,157,292 Units
(other than Units held by the Company) outstanding as of April 22, 2002.

(2) In April 1997, the Company transferred substantially all of its assets to
the Operating Partnership. As a result, the Company now conducts its
business through, and substantially all of its interests in properties are
held by, the Operating Partnership. The Company is the sole general partner
of, and owned approximately 79% of the common limited partnership

interest in, the Operating Partnership as of April 22, 2002. At any time
after one year from the date of issuance (or two years in the case of
certain holders), holders of Units (other than the Company) have the right
to have their Units redeemed in whole or in part by the Operating
Partnership for cash equal to the fair market value, at the time of
redemption, of one Share for each Unit redeemed or, at the option of the
Company, one Share for each Unit tendered, subject to customary
antidilution provisions (the "Unit Redemption Right"). Holders of Units may
be able to sell Shares received upon the exercise of their Unit Redemption
Right in the public market pursuant to registration rights agreements with
the Company. The Company has filed registration statements with the
Securities and Exchange Commission to register certain of the Shares
issuable upon the exercise of the Unit Redemption Right.

(3) Assumes that all Units held by the beneficial owner are redeemed for
Shares. The total number of Shares or Units outstanding used in calculating
this percentage assumes that all Shares or Units that each person has the
right to acquire within 60 days pursuant to the exercise of options or upon
the redemption of Units for Shares are deemed to be outstanding, but are
not deemed to be outstanding for the purpose of computing the ownership
percentage of any other person.

(4) Assumes that all Units with the right to redeem within 60 days are redeemed
for Shares.

(5) Interstate, a partnership of which Messrs. Roth, Wight and Mandelbaum are
the three general partners, owns 12,443,000 Shares. These Shares are
included in the total Shares and the percentage of class for each of them
and for Interstate. Messrs. Roth, Wight and Mandelbaum share voting power
and investment power with respect to these Shares.

(6) Includes 52,800 Shares owned by the Daryl and Steven Roth Foundation, over
which Mr. Roth holds sole voting power and investment power. Does not
include 36,000 Shares owned by Mr. Roth's wife, as to which Mr. Roth
disclaims any beneficial interest.

(7) The number of Shares beneficially owned by the following persons includes
the number of Shares indicated due to the vesting of options: Steven
Roth -- 3,505,000; Michael D. Fascitelli -- 5,688,000; David R.
Greenbaum--1,004,000; Joseph Macnow -- 625,500; Melvyn Blum -- 150,750; and
all trustees and executive officers as a group -- 12,043,511.

(8) Includes 51,800 Shares owned by the Wight Foundation, over which Mr. Wight
holds sole voting power and investment power. Does not include 2,000 shares
owned by Mr. Wight's children and 15,000 shares owned by Mr. Wight's wife,
as to which Mr. Wight disclaims any beneficial interest.

(9) Includes 919,540 Shares held in a trust for the benefit of Mr. Fascitelli.
Amount does not include Mr. Fascitelli's right to receive 626,566 Shares
pursuant to his 2002 employment agreement, which right will vest on
December 31, 2002. Although these shares have been issued, Mr. Fascitelli
does not have the right to vote or dispose of these shares.

(10) Mr. West and his wife own 3,000 of these Shares jointly. Mr. West holds
18,000 of these Shares in self-directed Keogh accounts.

(11) Based on Schedule 13G filed on February 13, 2002, Cohen & Steers Capital
Management, Inc. has the sole power to vote or to direct the vote of
7,744,550 Shares and has the sole power to dispose or to direct the
disposition of 8,932,250 Shares. The address of this beneficial owner is
757 Third Avenue, New York, New York 10017. These numbers do not include
the 884,543 Shares that the Company sold to Cohen & Steers Quality Income
Realty Fund, Inc. pursuant to a purchase agreement dated February 25, 2002
by and between the Company, Vornado Realty L.P. and the fund, and as
further described in the Company's prospectus supplement filed with the SEC
on February 27, 2002.

EXECUTIVE COMPENSATION

The following table summarizes the compensation during each of the past
three fiscal years for each of the five highest paid executive officers of the
Company whose total compensation aggregated $100,000 or more in 2001 ("Covered
Executives").

SUMMARY COMPENSATION TABLE

LONG
ANNUAL COMPENSATION TERM
---------------------------------------- COMPEN-
PARK SATION
LAUREL AWARDS
INCENTIVE ---------- ALL OTHER
COMPEN- SECURITIES COMPEN-
NAME AND SALARY BONUS SATION OTHER UNDERLYING SATION
PRINCIPAL POSITION YEAR ($) ($) PLAN(1) ($)(2) OPTIONS(3) ($)(4)
------------------ ---- --------- ------- --------- ------ ---------- ---------

Steven Roth 2001 1,000,000 550,000 1,500,000 -- 750,000 80,641
Chairman and Chief 2000 650,000 600,000 -- -- 1,500,000 80,919
Executive Officer 1999 625,000 400,000 -- -- 1,000,000 73,145
Michael Fascitelli 2001 1,000,000 550,000 1,500,000 -- 750,000 10,799
President 2000 625,000 625,000 -- -- 1,400,000 9,545
1999 600,000 400,000 -- -- 750,000 5,629
David R. Greenbaum 2001 525,000 350,000 350,000 -- 125,000 28,816
Chief Executive 2000 500,000 300,000 -- -- 200,000 32,156
Officer of the 1999 450,000 100,000 -- -- 150,000 12,115
New York Office
Division
Joseph Macnow 2001 520,000 150,000 350,000 -- 100,000 88,043
Executive Vice 2000 500,000 150,000 -- 74,817 150,000 86,357
President -- Finance 1999 450,000 100,000 -- 69,271 125,000 84,870
and Administration,
Chief Financial Officer
Melvyn Blum 2001 520,000 250,000 350,000 -- 125,000 39,138
Executive Vice 2000 451,923 200,000 -- -- 225,000 31,861
President --
Development
Division(5)

---------------
(1) Represents one-time awards that were granted pursuant to the Park Laurel
Joint Venture's incentive compensation plan. The Park Laurel Joint Venture,
of which the Company owns a 69% interest, was formed in 1997 to develop and
sell residential condominiums at a property in New York City. In its 2001
financial statements, the Company recorded a pre-tax gain of $22,736,000
which is after a charge of $5,779,000 ($3,953,000 after tax benefit) for
awards paid under the joint venture's incentive compensation plan, including
those noted above.

(2) Represents the forgiveness by the Company of one-fifth of the loan amount
(together with interest) due from Mr. Macnow. The loan was issued in
connection with Mr. Macnow's option exercises in prior years. The Company
agreed that on each January 1st (commencing January 1, 1997) it would
forgive one-fifth of the amount due from Mr. Macnow, provided he remained an
employee of the Company. As of December 31, 2001, the loan has been
completely forgiven.

(3) Options are exercisable 34% twelve months after grant, and 33% after each of
the following two twelve-month periods.

(4) Represents annual amounts of (i) employer-paid contributions to the
Company's 401(k) retirement plan and (ii) Company-paid whole life insurance
premiums. Employer contributions to the Company's 401(k) retirement plan
become vested 100% after the completion of five years of eligible service.
The whole life insurance policies provide coverage in an amount equal to the
excess of the amount covered under the Company's non-discriminatory group
term life insurance benefit for all full-time employees (i.e., two times
salary) over the benefit cap imposed by the term insurance carrier.

(5) Mr. Blum's employment with the Company commenced on January 24, 2000.

The following table lists all grants of share options to the Covered
Executives made in respect of services performed in 2001 and their potential
realizable values, assuming annualized rates of share price appreciation of 5%
and 10% over the term of the grant. All of such grants were made on January 28,
2002. The Company has not, to date, granted any share appreciation rights.

OPTION GRANTS FOR 2001

POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT
---------------------- ASSUMED ANNUAL
% OF TOTAL RATES OF
NUMBER OF OPTIONS SHARE PRICE
SHARES GRANTED TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM(2)
OPTIONS IN FISCAL PRICE PER EXPIRATION -------------------------
NAME GRANTED YEAR SHARE(1) DATE 5% 10%
---- ---------- ---------- --------- ---------- ----------- -----------

Steven Roth 750,000 18% $42.13 1/28/2012 $19,871,498 $50,358,277
Michael D. Fascitelli 750,000 18% $42.13 1/28/2012 $19,871,498 $50,358,277
David R. Greenbaum 125,000 3% $42.13 1/28/2012 $ 3,311,916 $ 8,393,046
Joseph Macnow 100,000 2% $42.13 1/28/2012 $ 2,649,533 $ 6,714,437
Melvyn Blum 125,000 3% $42.13 1/28/2012 $ 3,311,916 $ 8,393,046

---------------
(1) The exercise or base price per Share is equal to the current market price on
the date the option was granted.

(2) Potential Realizable Value is based on the assumed annual growth rates for
the market value of the Shares shown over the option's ten-year term. For
example, a 5% growth rate, compounded annually, results in a price of $68.63
per Share and a 10% growth rate, compounded annually, results in a price of
$109.27 per Share. These Potential Realizable Values are listed to comply
with the regulations of the Securities and Exchange Commission, and the
Company cannot predict whether these values will be achieved. Actual gains,
if any, on share option exercises are dependent on the future performance of
the Shares.

The following table summarizes all exercises of options during 2001, and
the number and value of options held at December 31, 2001, by the Covered
Executives.

AGGREGATED OPTION EXERCISES IN 2001 AND YEAR END OPTION VALUES

NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS AT
ACQUIRED 12/31/01 12/31/01
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- -------- -------- ------------------- ----------------------

Steven Roth -- -- 2,680,000/1,320,000 $10,905,000/13,365,000
Michael D. Fascitelli -- -- 4,978,500/1,171,500 72,645,420/11,987,580
David R. Greenbaum -- -- 888,500/181,500 7,961,980/1,826,220
Joseph Macnow -- -- 534,750/140,250 7,747,545/1,402,830
Melvyn Blum -- -- 76,500/148,500 827,730/1,606,770

EMPLOYEE RETIREMENT PLAN

Effective December 31, 1997, the Company froze the employee retirement plan
which provided retirement benefits to full-time employees of the Company.
Benefits under the plan will continue to vest upon the completion of five years
of service for all eligible employees. However, employees do not earn any
additional benefits after December 31, 1997. In addition, no new participants
are eligible to enter the frozen plan. Annual retirement benefits are equal to
1% of the participant's base salary for each year of service. However, the
portion of retirement benefits payable for service prior to plan participation
is equal to 1% of the participant's base salary as of December 31 of the year
before the participant began to participate in the plan for each year of the
participant's past service.

The amounts shown below are the estimated annual benefits (payable in the
form of a life annuity) for each of the Covered Executives who is a participant
in the plan payable upon normal retirement at age 65. The estimated annual
benefit payable at age 65 to Mr. Roth is $45,003; and to Mr. Macnow, $29,002.

EMPLOYMENT CONTRACTS

Michael D. Fascitelli

Mr. Fascitelli had a five-year employment agreement which commenced on
December 2, 1996 pursuant to which he served as President of the Company. The
employment agreement had an initial term of five years and provided that,
commencing on December 1, 2000, and on each December 1 thereafter, the
employment term would automatically be extended for one additional year unless
either the Company or Mr. Fascitelli gave written notice not to extend the
agreement three months before such date. Mr. Fascitelli's agreement provided for
an annual base salary of not less than $600,000. In January 2000, Mr.
Fascitelli's base salary was increased to $625,000 and in March 2001 it was
increased to $1,000,000. In addition to his annual salary, at the commencement
of Mr. Fascitelli's 1996 employment agreement, Mr. Fascitelli received a
deferred payment (the "Deferred Payment") consisting of $5,000,000 in cash
(which has been invested in marketable securities at the direction of Mr.
Fascitelli) and a $20,000,000 convertible obligation payable in 919,540 Shares
which are being held in an irrevocable trust for the benefit of Mr. Fascitelli.
The

Deferred Payment obligation to Mr. Fascitelli vested on December 2, 1997 and was
scheduled to convert into Shares on November 30, 2001. The conversion date was
extended to November 30, 2004. In addition, Mr. Fascitelli's 1996 employment
agreement provided that he may borrow up to $10,000,000 from the Company during
the term of his employment. As of December 31, 2001, the outstanding principal
amount of loans by the Company to Mr. Fascitelli was $8,600,000. The loans,
which were scheduled to mature in 2003, have been extended to 2006 in connection
with the extension of Mr. Fascitelli's employment agreement, discussed below. In
January 2002, Mr. Fascitelli was granted options to purchase 750,000 Shares,
exercisable at the current market price on the date the option was granted.
These options were granted in respect of services rendered in 2001.

Effective January 1, 2002, the Company extended its employment agreement
with Mr. Fascitelli for a five-year period through December 31, 2006. The 2002
employment agreement provides that, commencing on January 1, 2006, and on each
January 1 thereafter, the employment term will automatically be extended for one
additional year unless either the Company or Mr. Fascitelli gives written notice
not to extend the agreement three months before such date. The 2002 employment
agreement provides for an annual base salary of not less than $1,000,000. In
addition to his annual salary, he will be entitled to a deferred payment
consisting of 626,566 convertible units on December 31, 2006, with each unit
representing one Share. Accordingly, 626,566 Shares are being held in an
irrevocable trust for the benefit of Mr. Fascitelli. The 626,566 Shares will
vest on December 31, 2002 unless he voluntarily terminates his employment with
the Company without good reason or the Company terminates his employment for
cause. Mr. Fascitelli may also borrow up to $20,000,000 from the Company during
the term of his 2002 employment agreement reduced by the amount of his
outstanding loans under his 1996 employment agreement, which was $8,600,000. The
loans will bear interest at the Applicable Federal Rate and will mature on the
fifth anniversary the loan was made. Payment of the additional loans and the
outstanding $8,600,000 loan may be accelerated by the Company to the extent that
the aggregate principal amounts of such loans exceeds 50% of the sum of (i) the
value of the 919,540 Shares payable to Mr. Fascitelli under the 1996 employment
agreement and the 626,566 Shares payable to him under his extended employment
agreement, and (ii) the amount by which the value of the Shares subject to
options granted to Mr. Fascitelli by the Company exceeds the aggregate exercise
price of such options. In accordance with the terms of his employment agreement,
Mr. Fascitelli has also been given the use of a company automobile. The 2002
agreement also provides (as did the 1996 agreement) that if his employment is
terminated by the Company without cause or by him for good reason (as defined in
the agreement to include a change in Mr. Fascitelli's responsibilities, change
in control of the Company, relocation of the Company or the failure of the
Company to comply with the terms of the agreement), payment of his base salary
shall continue for three years, offset in the second and third years for
compensation received from another employer, and benefits to him and his family
shall continue for three years. The agreement further provides that if his
employment is terminated by him without good reason or by the Company for cause
(as defined in the agreement to include conviction of, or plea of guilty or nolo
contendere to, a felony, failure to perform his duties or willful misconduct)
payment of salary will cease.

David R. Greenbaum

Mr. Greenbaum has an employment agreement which commenced on April 15, 1997
pursuant to which he serves as President of the New York Office Division of the
Company. The employment

agreement provides that, commencing on April 30, 2000, and on each April 30
thereafter, the employment term shall automatically be extended for one
additional year unless either the Company or Mr. Greenbaum give written notice
not to extend the agreement three months before such date. The employment
agreement provides for annual base salary of not less than $425,000. In March
2001, Mr. Greenbaum's base salary was increased to $525,000. Mr. Greenbaum's
employment agreement provides that the Company shall use best efforts to cause
the Compensation Committee of the Board to grant Mr. Greenbaum a number of
options that is comparable to the number of shares granted to other senior
executives of the Company. In January 2002, Mr. Greenbaum was granted options to
purchase 125,000 Shares, exercisable at the current market price on the date of
grant. These options were granted in respect of services rendered in 2001. Mr.
Greenbaum also may receive loans of up to $10,000,000 from the Company during
the term of the employment agreement. During 2001, Mr. Greenbaum had borrowed
$1,000,000 from the Company which was fully repaid on December 28, 2001. In
accordance with the terms of his employment agreement, he has also been given
the use of a Company automobile.

The agreement also provides that if his employment is terminated by the
Company without cause or by him for good reason (as defined in the agreement to
include, among other things, a change in Mr. Greenbaum's responsibilities,
change in control of the Company, relocation of the New York Office Division's
principal executive offices or the failure of the Company to comply with the
terms of the agreement), Mr. Greenbaum will receive (a) a lump sum payment of
three times the sum of (i) his annual base compensation plus (ii) the average of
the annual bonuses earned by him in the two fiscal years ending immediately
prior to his termination and (b) continued provision of benefits to him and his
family for three years. The agreement further provides that if his employment is
terminated by him without good reason or by the Company for cause (as defined in
the agreement to include conviction of, or plea of guilty or nolo contendere to,
a felony, failure to perform his duties or willful misconduct) payment of salary
will cease.

Joseph Macnow

Mr. Macnow has an employment agreement which commenced on January 1, 1998
pursuant to which Mr. Macnow serves as Executive Vice President -- Finance and
Administration and Chief Financial Officer. The employment agreement provides
that, commencing on December 31, 2003, and on each December 31 thereafter, the
employment term shall automatically be extended for one additional year unless
either the Company or Mr. Macnow gives written notice not to extend the
agreement three months before such date. The employment agreement provides for
annual base salary of not less than $520,000, subject to increases in the second
and third years by a factor equal to 125% of the percentage increase in the
prior year's consumer price index; use of a company automobile; and an
undertaking by the Company to use best efforts to cause the Compensation
Committee of the Board to grant Mr. Macnow options to purchase 75,000 Shares
during each of the three years at a purchase price equal to the fair market
value of the Shares on the dates the options are granted. In January 2002, Mr.
Macnow was granted options to purchase 100,000 Shares exercisable at the current
market price on the date the options were granted. The options were granted in
respect of services rendered in 2001.

The agreement also provides that if Mr. Macnow's employment is terminated
by the Company without cause or by him for good reason (as defined in the
agreement to include, among other things, a change in his responsibilities,
change in control of the Company, relocation of Vornado's

principal executive offices or the failure of the Company to comply with the
terms of the agreement), he will receive: (a) a lump sum payment of three times
the sum of (i) his annual base compensation plus (ii) the average of the annual
bonuses earned by him in the two fiscal years ending immediately prior to his
termination; (b) immediate vesting in any stock options granted to him by the
Board; and (c) continued provision of benefits to him and his family for three
years. The agreement further provides that if Mr. Macnow's employment is
terminated by him without good reason or by the Company for cause (as defined in
the agreement to include conviction of, or plea of guilty or nolo contendere to,
a felony, failure to perform his duties or willful misconduct) payment of salary
will cease.

Melvyn Blum

Mr. Blum has an employment agreement which commenced on January 24, 2000
pursuant to which he serves as Executive Vice-President -- Development Division
of the Company. The employment agreement provides that, commencing on January
23, 2005, and on each January 23 thereafter, the employment term shall
automatically be extended for one additional year unless either the Company or
Mr. Blum give written notice not to extend the agreement three months before
such date. The employment agreement provides for annual base salary of not less
than $500,000. Mr. Blum also received 148,148 restricted Shares that vest over a
five-year period. Mr. Blum's employment agreement provides that the Company
shall use best efforts to cause the Compensation Committee of the Board to grant
Mr. Blum options to purchase 100,000 Shares during each of the five years of his
original employment agreement at a purchase price equal to the fair market value
of the Shares on the dates the options are granted. In January 2002, Mr. Blum
was granted options to purchase 125,000 Shares, exercisable at the current
market price on the date of grant. The options were granted in respect of
services rendered in 2001. Mr. Blum also may receive loans of up to $2,000,000
from the Company during the term of the employment agreement. As of December 31,
2001, Mr. Blum had borrowed $1,000,000 from the Company.

The agreement also provides that if his employment is terminated by the
Company without cause or by him for good reason (as defined in the agreement to
include, among other things, a change in Mr. Blum's responsibilities, change in
control of the Company, relocation of Vornado's principal executive offices or
the failure of the Company to comply with the terms of the agreement), Mr. Blum
will receive (a) a lump sum payment of three times the sum of (i) his annual
base compensation plus (ii) the average of the annual bonuses earned by him in
the two fiscal years ending immediately prior to his termination; (b) immediate
vesting in any stock options and restricted shares granted to him by the Board;
and (c) continued provision of benefits to him and his family for three years.
The agreement further provides that if his employment is terminated by him
without good reason or by the Company for cause (as defined in the agreement to
include conviction of, or plea of guilty or nolo contendere to, a felony,
failure to perform his duties or willful misconduct) payment of salary will
cease.

COMPENSATION OF TRUSTEES

Trustees who are not employees of the Company are compensated with an
annual fee for their services as trustees plus meeting fees for each meeting of
the Board or any committee of the Board which the respective trustee attended.
The Company compensated Messrs. Wight, Mandelbaum and Targan at a rate of
$25,000 per year for serving as trustees plus $750 for each meeting of the

Board or of any committee of the Board which the trustee attended. The Company
compensated Stanley Simon and Richard West at a rate of $50,000 per year in
addition to $750 for each meeting. Messrs. Roth and Fascitelli received no
compensation for their serving as trustees.

Mr. Kogod will be compensated at a rate of $25,000 per year for serving as
trustee plus $750 for each meeting of the Board which he will attend. Mr. Smith
will be compensated as an executive officer of the Company and will receive no
compensation for his serving as trustee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS

The Compensation Committee, consisting of Messrs. Simon and West, grants
awards under the Company's 1993 Omnibus Share Plan and makes all other executive
compensation determinations. Messrs. Roth and Fascitelli are the only officers
or employees of the Company or any of its subsidiaries who are members of the
Board. There are no interlocking relationships involving the Company's Board
which require disclosure under the executive compensation rules of the
Securities and Exchange Commission.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Formation of the Operating Partnership and Transactions Involving the Mendik
Group

In April 1997, the Company transferred substantially all of its assets to
the Operating Partnership. As a result, the Company conducts its business
through, and substantially all of its interests in properties are held by, the
Operating Partnership. The Company is the sole general partner of, and owned an
approximate 79% common limited partnership interest in, the Operating
Partnership as of April 22, 2002.

Simultaneously with the formation of the Operating Partnership, the Company
consummated the acquisition of interests in all or a portion of seven Manhattan
office buildings (the "Mendik Properties") and the management company owned by
the estate of Bernard H. Mendik, formerly Co-Chairman of the Board of the
Company, and David R. Greenbaum, Chief Executive Officer of the New York Office
Division of the Company, and certain entities controlled by them (the "Mendik
Group") and certain of its affiliates (the "Mendik Transaction").

Pursuant to the Mendik Transaction, Mendik Management Company Inc. ("MMC")
was formed. On July 9, 2001, MMC changed its name to Vornado Office, Inc.
("VOI"). Prior to January 1, 2001, Steven Roth, Chairman of the Board of the
Company, Michael Fascitelli, President and Trustee of the Company, and David
Greenbaum owned the voting common stock of VOI. VOI allocated expenses to the
Operating Partnership to the extent that VOI employees perform services on
behalf of the Operating Partnership. Effective January 1, 2001, the Operating
Partnership owns 100% of VOI's voting and nonvoting common stock.

The Mendik Group owns an entity which provides cleaning and related
services and security services to office properties. The Company has entered
into contracts with the Mendik Group to provide such services in the Company's
Manhattan office buildings. Although the contracts pursuant to which these
services are provided were not negotiated at arm's length, the Company believes,
based upon comparable amounts charged to other real estate companies, that the
terms and conditions of such contracts are fair to the Company. In connection
with these contracts, the Company paid $51,280,000 for the year ended December
31, 2001, a portion of which is expected to be reimbursed to the Company by its
tenants.

Transactions Involving Vornado Operating

General. In October 1998, Vornado Operating was spun off from the Company
in order to own assets and conduct activities that, in order to maintain its
REIT status, the Company could not itself own and conduct. The Company and
Vornado Operating are parties to certain agreements described below.

Revolving Credit Agreement. Vornado Operating was granted a $75,000,000
unsecured credit facility from the Company (the "Revolving Credit Agreement")
which expires on December 31, 2004. Borrowings under the Revolving Credit
Agreement bear interest at LIBOR plus 3% (4.87% at December 31, 2001). The
Company receives a commitment fee equal to 1% per annum on the average daily
unused portion of the facility. No amortization is required to be paid under the
Revolving Credit Agreement during this term. The Revolving Credit Agreement
prohibits Vornado Operating from incurring indebtedness to third parties (other
than certain purchase money debt and certain other exceptions) and prohibits
Vornado Operating from paying dividends. As of December 31, 2001, $31,424,000
was outstanding under the Revolving Credit Agreement, which was the largest
outstanding balance under the agreement during the last fiscal year.

Agreement with Vornado Operating. The Company and Vornado Operating are
parties to an agreement (the "Vornado Agreement") pursuant to which, among other
things, (a) the Company will under certain circumstances offer Vornado Operating
an opportunity to become the lessee of certain real property owned now or in the
future by the Company (under mutually satisfactory lease terms) and (b) Vornado
Operating will not make any real estate investment or other REIT-qualified
investment unless it first offers the Company the opportunity to make such
investment and the Company has rejected that opportunity.

Under the Vornado Agreement, the Company provides Vornado Operating with
certain administrative, corporate, accounting, financial, insurance, legal, tax,
data processing, human resources and operational services. For these services,
Vornado Operating compensates the Company in an amount determined in good faith
by the Company as the amount an unaffiliated third party would charge Vornado
Operating for comparable services and reimburses the Company for certain costs
incurred and paid to third parties on behalf of Vornado Operating. For the year
ended December 31, 2001, approximately $371,000 of compensation for such
services was charged pursuant to the Vornado Agreement.

Vornado Operating and the Company each have the right to terminate the
Vornado Agreement if the other party is in material default of the Agreement or
upon 90 days' written notice to the other party at any time after December 31,
2003. In addition, the Company has the right to terminate the Vornado Agreement
upon a change in control of Vornado Operating.

Vornado Operating's Management. Messrs. Roth, Fascitelli, West and Wight
are directors of Vornado Operating. Mr. Roth is also Chairman of the Board and
Chief Executive Officer of Vornado Operating, Mr. Fascitelli is also President
of Vornado Operating, and certain other members of the Company's senior
management hold corresponding positions with Vornado Operating.

The Temperature Controlled Logistics Business. On October 31, 1997,
partnerships (the "Vornado/Crescent Partnerships" or the "Landlord") in which
affiliates of the Company have a 60% interest and affiliates of Crescent Real
Estate Equities Company have a 40% interest acquired each of AmeriCold
Corporation ("Americold") and URS Logistics, Inc. ("URS"). In June 1998, the

Vornado/Crescent Partnerships acquired the assets of Freezer Services, Inc. and
in July 1998 acquired the Carmar Group (Americold, URS, Freezer Services, Inc.
and the Carmar Group, collectively, the "Temperature Controlled Logistics
Companies").

On March 11, 1999, the Vornado/Crescent Partnerships sold all of the
non-real estate assets of the Temperature Controlled Logistics Companies
encompassing the operations of the Temperature Controlled Logistics business for
approximately $48,700,000 to a new partnership "Americold Logistics" owned 60%
by Vornado Operating and 40% by Crescent Operating Inc. Americold Logistics
leases the underlying Temperature Controlled Logistics warehouses used in this
business from the Vornado/Crescent Partnerships which continue to own the real
estate. The leases, as amended, generally had a 15 year term with two five year
renewal options and provided for the payment of fixed base rent and percentage
rent based on customer revenues. On February 22, 2001, the Landlord restructured
the Americold Logistics leases to, among other things, (i) reduce 2001's
contractual rent to $146,000,000, (ii) reduce 2002's contractual rent to
$150,000,000 (plus contingent rent in certain circumstances), (iii) increase the
Landlord's share of annual maintenance capital expenditures by $4,500,000 to
$9,500,000 effective January 1, 2000 and (iv) extend the deferred rent period to
December 31, 2003 from March 11, 2002. On December 31, 2001 the Landlord
released Americold Logistics from its obligation to pay a portion of deferred
rent in the amount of $39,812,000, of which the Company's share was $23,887,000.

Transactions Involving Interstate and Alexander's

As of December 31, 2001, Interstate and its partners owned approximately
14.4% of the Shares of the Company and 27.5% of Alexander's common stock.
Interstate is a general partnership in which Steven Roth, David Mandelbaum and
Russell B. Wight, Jr. are the three general partners. Mr. Roth is the Chairman
of the Board and Chief Executive Officer of the Company, the Managing General
Partner of Interstate, the Chairman of the Board and Chief Executive Officer of
Vornado Operating and the Chief Executive Officer and a director of Alexander's.
Mr. Wight is a Trustee of the Company and is also a director of both Alexander's
and Vornado Operating. Mr. Mandelbaum is a Trustee of the Company and is also a
director of Alexander's.

The Company manages and leases the real estate assets of Interstate
pursuant to a management agreement for which the Company receives a quarterly
fee equal to 4% of base rent and percentage rent and certain other commissions.
The management agreement has a term of one year and is automatically renewable
unless terminated by either of the parties on sixty days' notice at the end of
the term. Although the management agreement was not negotiated at arm's length,
the Company believes, based upon comparable fees charged by other real estate
companies, that its terms are fair to the Company. For the year ended December
31, 2001, $1,655,000 of management fees were earned by the Company pursuant to
the management agreement.

The Company owns 33.1% of the outstanding shares of common stock of
Alexander's. At December 31, 2001, the Company has loans receivable from
Alexander's of $119,000,000, bearing interest at 13.74% and due March 15, 2002,
including $24,000,000 drawn under a $50,000,000 secured line of credit. The
maturity date of these loans has been extended to April 15, 2003 and the
interest rate has been reset to 12.48% (and will reset quarterly thereafter)
using the existing spread to treasuries with a 3.00% floor for treasuries.

Alexander's is managed by and its properties are leased and developed by,
the Company, pursuant to agreements with a one-year term which automatically
renew.

The annual management fee payable to the Company by Alexander's is equal to
the sum of (i) $3,000,000, (ii) 3% of the gross income from the Kings Plaza Mall
($522,000 for the year ended December 31, 2001), plus (iii) 6% of development
costs with minimum guaranteed fees of $750,000 per annum.

The leasing agreement provides for the Company to generally receive a fee
of (i) 3% of sales proceeds and (ii) 3% of lease rent for the first ten years of
a lease term, 2% of lease rent for the eleventh through the twentieth years of a
lease term and 1% of lease rent for the twenty-first through thirtieth years of
a lease term. Such amount is receivable annually in an amount not to exceed
$2,500,000 until the present value of such installments (calculated at a
discount rate of 9% per annum) equals the amount that would have been paid had
it been paid on September 21, 1993, or at the time the transactions which gave
rise to the commissions occurred, if later. At December 31, 2001, Alexander's
owed the Company $2,249,000 for leasing fees.

On July 6, 1995, the Company assigned its management agreement with
Alexander's to Vornado Management Corp. ("VMC"), a New Jersey corporation. In
exchange, the Company received 100% of the nonvoting stock of VMC, which
entitled it to 95% of net operating cash flow distributed by VMC to its
shareholders. Mr. Roth and Mr. West, trustees of the Company, owned all of the
voting stock of VMC. VMC is responsible for its pro rata share of compensation
and fringe benefits of common employees and 30% of other common expenses. On
January 2, 2001, the Company purchased the voting stock from Mr. Roth and Mr.
West.

Transactions With Archstone-Smith Trust

The Company has agreements with the Charles E. Smith Residential Division
of Archstone-Smith Trust pursuant to which the Company receives engineering and
tenant build-out services. In addition, the Company leases office space to
Archstone-Smith Trust and shares the cost of certain office-related services
with them. These agreements were entered into by Charles E. Smith Commercial
Realty in 1997, prior to the Company's January 1, 2002 acquisition of Charles E.
Smith Commercial Realty, at a time when Mr. Smith and Mr. Kogod were in control
of both Charles E. Smith Commercial and Residential. Mr. Smith and Mr. Kogod,
who became members of the board of trustees of the Company on January 1, 2002,
are also members of the board of trustees of Archstone-Smith Trust and are
shareholders thereof.

Certain Other Transactions

During 2001, the Company paid $136,000 for legal services to the firm of
Schechner and Targan, P.A., of which Ronald Targan is a member.

At December 31, 2001, the loan due from Mr. Roth in connection with his
stock option exercises in 1993 was $13,122,500 ($4,705,000 of which is shown as
a reduction in shareholders' equity) bearing interest at 4.49% per annum (based
on the Applicable Federal Rate). The loan is secured by 1,500,000 Shares.

At December 31, 2001, the loan due from Mr. Fascitelli, in accordance with
his employment agreement, was $8,600,000. The loan matures in 2006 and bears
interest, payable quarterly, at a

rate of 3.97% (based on the Applicable Federal Rate). Payment of the loan may be
accelerated by the Company to the extent that the aggregate principal amount of
the loan exceeds 50% of the sum of (i) the value of the 919,540 Shares payable
to Mr. Fascitelli under the 1996 employment agreement and the 626,566 Shares
payable to him under his extended employment agreement, and (ii) the amount by
which the value of the Shares subject to options granted to Mr. Fascitelli by
the Company exceeds the aggregate exercise price of such options.

At December 31, 2001, the loan due from Mr. Blum, in accordance with his
employment agreement, was $1,000,000. The loan matures in 2005 and bears
interest, payable quarterly, at a rate of 6.61% per annum (based on the
Applicable Federal Rate).

REPORT OF THE AUDIT COMMITTEE

The Audit Committee's purpose is to assist the Board of Trustees in its
oversight of the Company's internal controls and financial statements and the
audit process. The Board of Trustees, in its business judgment, has determined
that all members of the Committee are "independent", as required by applicable
listing standards of the New York Stock Exchange. The Committee operates
pursuant to a Charter that was adopted by the Board on May 31, 2000; a copy of
the current Charter was attached to the Company's proxy statement for the 2001
Annual Meeting of Shareholders.

Management is responsible for the preparation, presentation and integrity
of the Company's financial statements, accounting and financial reporting
principles and internal controls and procedures designed to assure compliance
with accounting standards and applicable laws and regulations. The independent
auditors, Deloitte & Touche LLP, are responsible for performing an independent
audit of the consolidated financial statements in accordance with generally
accepted auditing standards.

In performing its oversight role, the Audit Committee has considered and
discussed the audited financial statements with management and the independent
auditors. The Committee has also discussed with the independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as currently in effect. The Committee has
received the written disclosures and the letter from the independent auditors
required by Independence Standards Board No. 1, Independence Discussions with
Audit Committees, as currently in effect. The Committee has also considered
whether the provision of non-audit services provided by the independent auditors
is compatible with maintaining the auditors' independence and has discussed with
the independent auditors the auditors' independence.

Based on the reports and discussions described in this report, and subject
to the limitations on the role and responsibilities of the Committee referred to
below and in the Charter, the Audit Committee recommended to the Board of
Trustees that the audited financial statements be included in the Annual Report
on Form 10-K for the fiscal year ended December 31, 2001.

The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including in respect of auditor independence. Members of
the Committee rely without independent verification on the information provided
to them and on the representations made by management and the independent
auditors. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or appropriate internal controls
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
the Company's financial statements has been carried out in accordance with
generally accepted auditing standards, that the

financial statements are presented in accordance with generally accepted
accounting principles or that Deloitte & Touche LLP is in fact "independent".

RICHARD WEST
STANLEY SIMON
RONALD TARGAN

April 30, 2002

INFORMATION RESPECTING THE COMPANY'S
INDEPENDENT AUDITORS

Audit Fees

The aggregate fees billed by Deloitte & Touche LLP, the Company's
independent auditors, for professional services rendered for the audit of the
Company's annual financial statements for the year ended December 31, 2001 and
for the reviews of the financial statements included in the Company's Quarterly
Reports on Form 10-Q for that fiscal year were $901,000.

Financial Information Systems Design and Implementation Fees

There were no fees billed to the Company by Deloitte & Touche LLP for
professional services rendered for information technology services relating to
financial information systems design and implementation for the year ended
December 31, 2001.

All Other Fees

The aggregate fees billed by Deloitte & Touche LLP for services rendered to
the Company, other than the services described above under "Audit Fees" and
"Financial Information Systems Design and Implementation Fees," for the fiscal
year ended December 31, 2001 were $3,101,000, including audit related services
of $2,105,000 and non-audit services of $996,000. Audit related services
generally include fees for consents, comfort letters, stand-alone audits of
subsidiaries and the Company's employee benefit plans, due diligence and
consultations regarding business transactions, and reviews of other filings or
registration statements under the Securities Act of 1933 and Securities Exchange
Act of 1934. Non-audit services generally include fees for tax consultations
regarding return preparation and real estate investment trust tax law
compliance. Of the all other fees, $1,243,000 relate to the Company's
acquisition of Charles E. Smith Commercial Realty, L.P., and the Company's
efforts in acquisitions not consummated, primarily the World Trade Center.

Retention of Independent Auditors for the Year 2002

The Board has retained Deloitte & Touche LLP to act as independent auditors
for the fiscal year ending December 31, 2002. The firm of Deloitte & Touche LLP
was engaged as independent auditors for the 2001 fiscal year, and
representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.

ADDITIONAL MATTERS TO COME BEFORE
THE MEETING

The Board does not intend to present any other matter, nor does it have any
information that any other matter will be brought before the Annual Meeting.
However, if any other matter properly comes before the Annual Meeting, it is the
intention of each of the persons named in the enclosed proxy to vote said proxy
in accordance with their best judgement on such matters.

ADVANCE NOTICE FOR SHAREHOLDER NOMINATIONS
AND PROPOSALS OF NEW BUSINESS

In order for shareholder proposals otherwise satisfying the eligibility
requirements of Rule 14a-8 under the Securities Exchange Act of 1934 to be
considered for inclusion in the Company's Proxy Statement for the 2003 Annual
Meeting, the proposals must be received at the principal executive office of the
Company, 888 Seventh Avenue, New York, New York 10019, Attention: Secretary, on
or before December 31, 2002.

In addition, in accordance with our Bylaws, if a shareholder desires to
bring business (including trustee nominations) before the 2003 Annual Meeting
that is not the subject of a proposal timely submitted for inclusion in the
Company's Proxy Statement, written notice of such business, as prescribed in the
Bylaws, must be received by the Company's Secretary at the principal executive
office of the Company between January 29, 2003 and February 28, 2003. For
additional requirements, a shareholder may refer to the Bylaws, a copy of which
may be obtained from the Company's Secretary. If the Company does not receive
timely notice pursuant to the Bylaws, the proposal may be excluded from
consideration at the meeting.

By Order of the Board of Trustees,

Larry Portal
Corporate Secretary

April 30, 2002

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS ARE
URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE.

ANNEX A

Section 6.6(l)(1) of the Declaration of Trust. Additions are printed in
bold, deletions are shown with the text stricken through. For the purpose of the
EDGAR filing, the stricken text is shown below within brackets.

The Board of Trustees, with a ruling from the Internal Revenue Service or
an opinion of counsel, may exempt a Person from the Ownership Limit with respect
to a class of Shares or an Existing Holder Limit, as the case may be, if [such
Person is not an individual for purposes of Section 542(a)(2) of the Code and]
the Board of Trustees obtains such representations and undertakings from such
Person as are reasonably necessary to ascertain that no individual's Beneficial
Ownership of Shares of such class will violate the Ownership Limit with respect
to such class or any applicable Existing Holder Limit, IN EITHER CASE WITH
RESPECT TO SUCH INDIVIDUAL, and such Person ACKNOWLEDGES AND agrees that any
violation or attempted violation will result in, to the extent necessary, the
exchange of Shares held by such Person for Excess Stock in accordance with
Section 6.6(c). IN NO EVENT SHALL ANY EXEMPTION GRANTED PURSUANT TO THIS SECTION
6.6(l)(1) to a Person that is an individual for purposes of Section 542(a)(2) of
the Code permit such individual to have Beneficial Ownership with respect to any
class of Shares in excess of 9.9% of the outstanding Shares of such class.

ANNEX B

VORNADO REALTY TRUST 2002 OMNIBUS SHARE PLAN

1. Purpose. The purpose of the 2002 Omnibus Share Plan of Vornado Realty
Trust (the "Plan") is to promote the financial interests of Vornado Realty Trust
(the "Trust"), including its growth and performance, by encouraging employees of
the Trust and its subsidiaries, including officers (together, the "Employees"),
its non-employee trustees of the Trust and non-employee directors of its
subsidiaries (together, the "Non-Employee Trustees"), and certain non-employee
advisors and consultants that provide bona fide services to the Trust or its
subsidiaries (together, the "Consultants") to acquire an ownership position in
the Trust, enhancing the ability of the Trust and its subsidiaries to attract
and retain Employees, Non-Employee Trustees and Consultants of outstanding
ability, and providing Employees, Non-Employee Trustees and Consultants with a
way to acquire or increase their proprietary interest in the Trust's success.

2. Shares Subject to the Plan. Subject to adjustment as provided in
Section 14, the number of common shares, par value $.04, of beneficial interest
in the Trust (the "Shares") which shall be available for the grant of awards
under the Plan shall not exceed 10,000,000. No Participant (as defined in
Section 3) shall be granted stock options and stock appreciation rights with
respect to more than an aggregate number of 10,000,000 Shares, subject to
adjustment as provided in Article 14. The Shares issued under the Plan may be
authorized and unissued Shares or treasury Shares, as the Trust may from time to
time determine.

Shares subject to an award that expires unexercised, that is forfeited,
terminated or cancelled, in whole or in part, or is paid in cash in lieu of
Shares, shall thereafter again be available for grant under the Plan.

3. Administration. With respect to Employees and Consultants, the Plan
shall be administered by the Compensation Committee (the "Committee") of the
Trustees of the Trust. A majority of the Committee shall constitute a quorum,
and the acts of a majority shall be the acts of the Committee. With respect to
Non-Employee Trustees, the Plan shall be administered by the Board of Trustees.

Subject to the provisions of the Plan, the Committee shall select the
Employees and Consultants who will be participants in the Plan and the Board of
Trustees shall select the Non-Employee Trustees who will be participants in the
Plan (together, the "Participants"). Each of the Committee and the Board of
Trustees, respectively, shall (i) determine the type of awards to be made to
Participants, determine the Shares or share units subject to awards, and (ii)
shall have the authority to interpret the Plan, to establish, amend, and rescind
any rules and regulations relating to the Plan, to determine the terms and
provisions of any agreements entered into hereunder, and to make all other
determinations necessary or advisable for the administration of the Plan. Each
of the Committee and the Board of Trustees, respectively, may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any
award in the manner and to the extent it shall deem desirable to carry it into
effect. The determinations of the Committee and the Board of Trustees in their
respective administration of the Plan, as described herein, shall be final and
conclusive. If the there is an inconsistency between the determinations of the
Committee and of the Board of Trustees, the determinations by the Board of
Trustees shall be final and conclusive.

B-1

4. Eligibility. All Employees who have demonstrated significant
management potential or who have the capacity for contributing in a substantial
measure to the successful performance of the Trust, as determined by the
Committee, and Consultants, as determined by the Committee, are eligible to be
Participants in the Plan. Non-Employee Trustees are also eligible Participants
under the Plan, as determined by the Board of Trustees.

5. Awards. Awards under the Plan may consist of the following: stock
options (either incentive stock options within the meaning of Section 422 of the
Internal Revenue Code or non-qualified stock options), stock appreciation
rights, performance shares, or grants of restricted stock. Awards of performance
shares and restricted stock may provide the Participant with dividends or
dividend equivalents and voting rights prior to vesting (whether based on a
period of time or based on attainment of specified performance conditions).

6. Stock Options. The Committee or the Board of Trustees, in each case,
shall establish the option price at the time each stock option is granted, which
price shall not be less than 100% of the fair market value of the Shares on the
date of grant. Stock options shall be exercisable for such period as specified
by the Committee or Board of Trustees, in each case, but in no event may options
be exercisable more than ten years after their date of grant. The option price
of each Share as to which a stock option is exercised shall be paid in full at
the time of such exercise. Such payment shall be made in cash, by tender of
Shares owned by the Participant valued at fair market value as of the date of
exercise, in such other consideration as the Committee or the Board of Trustees,
in each case, deems appropriate, or by a combination of cash, Shares and such
other consideration.

If determined by the Committee or the Board of Trustees, in each case, at
or subsequent to the date of grant of a stock option, in the event a Participant
pays the exercise price of such stock option (in whole or in part) by tendering
Shares owned by the Participant, such Participant shall automatically be granted
a reload stock option for the number of Shares used to pay the exercise price.
The reload stock option shall have terms and conditions determined by the
Committee or Board of Trustees, in each case, consistent with this Section. If a
reload stock option is granted as set forth above, one or more successive reload
stock options shall automatically be granted, unless otherwise determined by the
Committee or the Board of Trustees, in each case, to a Participant who pays all
or part of the exercise price of any such reload stock option by tendering
Shares owned by the Participant. Such reload stock option grants shall not be
treated as Shares under the Plan in determining the aggregate number of Shares
available for the grant of awards pursuant to the first sentence of Section 2.

7. Stock Appreciation Rights. Stock appreciation rights may be granted in
tandem with a stock option, in addition to a stock option, or may be
freestanding and unrelated to a stock option. Stock appreciation rights granted
in tandem with or in addition to a stock option may be granted either at the
same time as the stock option or at a later time. No stock appreciation right
shall be exercisable earlier than six months after grant, except in the event of
the Participant's death or disability. A stock appreciation right shall entitle
the Participant to receive from the Trust an amount equal to the increase of the
fair market value of the Share on the exercise of the stock appreciation right
over the grant price. The Committee or the Board of Trustees, in each case, in
its sole discretion, shall determine whether the stock appreciation right shall
be settled in cash, Shares or a combination of cash and Shares.

B-2

8. Performance Shares. Performance shares may be granted in the form of
actual Shares or share units having a value equal to an identical number of
Shares. In the event that a certificate is issued in respect of Shares subject
to a grant of performance shares, such certificate shall be registered in the
name of the Participant but shall held by the Trust until the time the Shares
subject to the grant of performance shares are earned. The performance
conditions and the length of the performance period shall be determined by the
Committee or the Board of Trustees, respectively. The Committee or the Board of
Trustees, in each case, in its sole discretion, shall determine whether
performance shares granted in the form of share units shall be paid in cash,
Shares, or a combination of cash and Shares.

9. Restricted Stock. Restricted stock may be granted in the form of
actual Shares or share units having a value equal to an identical number of
Shares. In the event that a certificate is issued in respect of Shares subject
to a grant of restricted stock, such certificate shall be registered in the name
of the Participant but shall be held by the Trust until the end of the
restricted period. The employment conditions and the length of the period for
vesting of restricted stock shall be established by the Committee or the Board
of Trustees, in each case, at time of grant. The Committee or the Board of
Trustees, in each case, in its sole discretion, shall determine whether
restricted stock granted in the form of share units shall be paid in cash,
Shares, or a combination of cash and Shares.

10. Award Agreements. Each award under the Plan shall be evidenced by an
agreement setting forth the terms and conditions, as determined by the Committee
or the Board of Trustees, respectively, which shall apply to such award, in
addition to the terms and conditions specified in the Plan.

11. Withholding. The Trust shall have the right to deduct from any
payment to be made pursuant to the Plan, or to require prior to the issuance or
delivery of any Shares or the payment of cash under the Plan, any taxes required
by law to be withheld therefrom. The Committee, in its sole discretion, may
permit a Participant who is an employee of the Trust or its subsidiaries to
elect to satisfy such withholding obligation by having the Trust retain the
number of Shares whose fair market value equals the amount required to be
withheld. Any fraction of a Share required to satisfy such obligation shall be
disregarded and the amount due shall instead be paid in cash to the Participant.

12. Nontransferability. Except as may otherwise be determined by the
Committee or the Board of Trustees with respect to the transferability of stock
options by the Participant to such Participant's immediate family members (or
trusts, partnerships, or limited liability companies established for such
immediate family members), no award under the Plan shall be assignable or
transferable except by will or the laws of descent and distribution, and no
right or interest of any Participant shall be subject to any lien, obligation or
liability of the Participant. For this purpose, immediate family member means,
except as otherwise defined by the Committee or the Board of Trustees, the
Participant's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters), in-laws
and persons related by reason of legal adoption. Such transferees may transfer a
stock option only by will or the laws of descent or distribution. A stock option
transferred pursuant to this Section 12 shall remain subject to the provisions
of the Plan, and shall be subject to such other rules as the Committee or the
Board of Trustees shall determine. Upon transfer of a stock option, any related
stock appreciation right shall

B-3

be canceled. Except in the case of a holder's incapacity, an award shall be
exercisable only by the holder thereof.

13. No Right to Employment. No person shall have any claim or right to be
granted an award, and the grant of an award shall not be construed as giving a
Participant any right to continue his or her service to the Trust or its
subsidiaries as an Employee, Non-Employee Trustee or Consultant. Further, the
Trust and its subsidiaries expressly reserve the right at any time to dismiss a
Participant free from any liability, or any claim under the Plan, except as
provided herein or in any agreement entered into hereunder.

14. Adjustment of and Changes in Shares. In the event of any change in
the outstanding Shares by reason of any share dividend or split,
recapitalization, merger, consolidation, spinoff, combination or exchange of
Shares or other corporate change, or any distributions to common shareholders
other than regular cash dividends, the Committee or the Board of Trustees,
respectively, may make such substitution or adjustment, if any, as it deems to
be equitable, as to the number or kind of Shares or other securities issued or
reserved for issuance pursuant to the Plan and to outstanding awards.

15. Amendment. The Trustees may amend or terminate the Plan or any
portion thereof at any time, provided that no amendment shall be made without
shareholder approval if such approval is necessary under the Internal Revenue
Code or the rules of the New York Stock Exchange.

16. Effective Date. The Plan shall be effective as of the date of the
approval by the shareholders of the Trust. Subject to earlier termination
pursuant to Section 15, the Plan shall have a term of ten years from its
effective date.

B-4

[VORNADO LOGO]

888 Seventh Avenue, New York, New York 10019

VORNADO REALTY TRUST

PROXY

The undersigned shareholder, revoking all prior proxies, hereby appoints
Steven Roth and Michael Fascitelli, and each of them, as proxies, each with full
power of substitution, to attend, and to cast all votes which the undersigned
shareholder is entitled to cast at the Annual Meeting of Shareholders of Vornado
Realty Trust, a Maryland real estate investment trust (the "Company"), to be
held at the Marriott Hotel, Interstate 80 and the Garden State Parkway, Saddle
Brook, New Jersey 07663 on Wednesday, May 29, 2002 at 12:00 P.M., local time,
upon any and all business as may properly come before the meeting and all
postponements or adjournments thereof. Said proxies are authorized to vote as
directed on the reverse side hereof upon the proposals which are more fully set
forth in the Proxy Statement and otherwise in their discretion upon such other
business as may properly come before the meeting and all postponements or
adjournments thereof, all as more fully set forth in the Notice of Meeting and
Proxy Statement, receipt of which is hereby acknowledged.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE COMPANY. WHEN
PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF THIS PROXY IS EXECUTED BUT NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF TRUSTEES, "FOR" THE APPROVAL OF
THE AMENDMENT TO THE COMPANY'S DECLARATION OF TRUST, "FOR" THE APPROVAL TO ADOPT
THE 2002 OMNIBUS SHARE PLAN, "AGAINST" THE PROPOSAL TO DECLASSIFY THE BOARD OF
TRUSTEES, AND OTHERWISE IN THE DISCRETION OF THE PROXIES.

(Continued and to be Executed, on Reverse side)

(Continued from other side)

1. ELECTION OF TRUSTEES:
The Board of Trustees recommends a Vote "FOR" Election of the nominees for Trustees listed below.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees
Nominees for Election to Serve as Trustees Until the Annual Meeting in 2005: Stanley Simon Ronald Targan Robert H.
Smith
Nominee for Election to Serve as Trustee Until the Annual Meeting in 2004: Robert P. Kogod
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.

------------------------------------------------------------------------------------------------------------------------
2. APPROVAL OF THE AMENDMENT TO THE COMPANY'S DECLARATION OF TRUST: The Board of Trustees recommends a Vote "FOR" approval
of the Amendment to the Company's Declaration of Trust. FOR [ ] AGAINST [ ] ABSTAIN [ ]
------------------------------------------------------------------------------------------------------------------------
3. APPROVAL TO ADOPT THE COMPANY'S 2002 OMNIBUS SHARE PLAN: The Board of Trustees recommends a Vote "FOR" approval to
adopt the Company's 2002 Omnibus Share Plan. FOR [ ] AGAINST [ ] ABSTAIN [ ]
------------------------------------------------------------------------------------------------------------------------
4. SHAREHOLDER PROPOSAL TO DECLASSIFY THE BOARD OF TRUSTEES: The Board of Trustees recommends a Vote "AGAINST" the
proposal to declassify the Board of Trustees. FOR [ ] AGAINST [ ] ABSTAIN [ ]
------------------------------------------------------------------------------------------------------------------------

Address Change and / or Comments [ ]

Please date and sign as your
name or names appear hereon.
Each joint owner must sign.
(Officers, Executors,
Administrators, Trustees,
etc., will kindly so indicate
when signing.)

Dated ---------- 2002
--------------------------------
Signature(s) of Shareholder(s)

INDICATE YOUR VOTE (X) IN
BLACK OR BLUE INK. [X]

PLEASE VOTE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.