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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
For Annual Report of Employee Stock Purchase, Savings and Similar Plans Pursuant
to Section 15 (d) of the Securities Exchange Act of 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 1-13762
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
RECKSON MANAGEMENT GROUP, INC. 401(K) PLAN
B. Name of issuer of the securities held pursuant of the plan and the
address of its principal executive office:
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
(631) 694-6900
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FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Reckson Management Group, Inc. 401(k) Plan
Year Ended December 31, 2000 with Report of Independent Auditors
Reckson Management Group, Inc. 401(k) Plan
Financial Statements
and Supplemental Schedule
Year ended December 31, 2000
CONTENTS
Report of Independent Auditors...........................................................................1
Financial Statements
Statements of Net Assets Available for Benefits as of December 31, 2000 and 1999.........................2
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 2000...................................................................................3
Notes to Financial Statements............................................................................4
Supplemental Schedule
Schedule H, Line 4(i) - Assets Held for Investment at December 31, 2000................................10
Report of Independent Auditors
Plan Administrator
Reckson Management Group Inc. 401(k) Plan
Retirement and Benefits Committee
We have audited the accompanying statements of net assets available for benefits
of Reckson Management Group, Inc. 401(k) Plan as of December 31, 2000 and 1999,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 2000. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2000 and 1999, and the changes in its net assets available for
benefits for the year ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment at December 31, 2000 is presented for purposes of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst Young LLP
New York, New York
June 26, 2001
Reckson Management Group, Inc. 401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31,
2000 1999
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ASSETS
Investments (Note 3) $2,815,868 $3,386,260
Receivables:
Participant contributions 3,707 46,883
Participant loans 56,948 56,527
Cash 297,983 235,329
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Net assets available for benefits $3,174,506 $3,724,999
===========================
See accompanying notes.
2
Reckson Management Group, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2000
Additions:
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 197,354
Participant contributions 1,089,344
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Total additions 1,286,698
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Deductions:
Net realized and unrealized depreciation in fair value of
investments (Note 3)
(1,564,056)
Benefits paid to participants (273,135)
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Total deductions (1,837,191)
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Net decrease in net assets available for benefits (550,493)
Net assets available for benefits:
Beginning of year 3,724,999
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End of year $ 3,174,506
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See accompanying notes.
3
Reckson Management Group, Inc. 401(k) Plan
Notes To Financial Statements
December 31, 2000
1. DESCRIPTION OF THE PLAN
The following description of the Reckson Management Group, Inc. 401(k) Plan (the
"Plan") provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
GENERAL
The purpose of the Plan is to provide eligible employees of Reckson Management
Group, Inc. (the "Employer") and its related companies (collectively, the
"Affiliates") that participate in the Plan (collectively, the "Participating
Employers") with an opportunity to increase their savings on a tax-favored
basis. Shares of the Class A common stock of Reckson Associates Realty Corp.
("Reckson") and the common stock of FrontLine Capital Group ("FrontLine") are
among the investment options offered to participants pursuant to the Plan.
The Plan is a defined contribution plan sponsored by the Employer covering all
eligible full-time employees of the following Participating Employers who have
completed six months of service and are age twenty-one or older. The following
Participating Employers participated in the Plan during the years ended December
31, 2000 and 1999:
FrontLine Capital Group
Reckson Management Group, Inc.
Reckson Construction Group, Inc. ("RCG")
RANY Management Group, Inc. ("RANY")
Reckson Strategic Venture Partners, LLC ("RSVP")
Additionally, the Plan is subject to the provisions of the Employee Retirement
Income Security Act ("ERISA"). FrontLine and RSVP ceased to be affiliates of the
Employer under ERISA at the time they were spun-off by Reckson, in June 1998.
4
Reckson Management Group, Inc. 401(k) Plan
Notes To Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS
Each year, participants may contribute up to 15 percent of pretax annual
compensation, as defined in the Plan (subject to the limitations of section
401(k) of the Internal Revenue Code). Participants may also rollover amounts
representing distributions from other qualified benefit or defined contribution
plans. Participants direct the investment of their contributions into various
investment options offered by the Plan. As of December 31, 2000, the Plan
offered 15 mutual funds, the Class A common stock of Reckson and the common
stock of FrontLine as investment options for participants. Additional
discretionary matching contributions may be contributed at the option of the
Participating Employers. Contributions are subject to certain limitations.
For the years ended December 31, 2000 and 1999, the Participating Employers have
not made any contributions to the Plan.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of Plan earnings, and charged with an allocation of the Plan's
administrative expenses, if not paid by the Employer. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING
Participants are immediately 100% vested in their contributions. Additionally, a
participant vests ratably in employer matching contributions, if any, based on
five years of credited service.
PARTICIPANT LOANS
Participants may borrow from their fund accounts up to 50 percent of their
vested account balance. The loans are secured by the balance in the
participant's account and bear interest at the U.S. prime lending rate plus
one-half percentage point.
5
Reckson Management Group, Inc. 401(k) Plan
Notes To Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PAYMENT OF BENEFITS
On termination of service, a participant may elect to receive either a lump-sum
amount equal to the value of the participant's vested interest in his or her
account, or receive annual installments.
PLAN TERMINATION
On January 1, 2001, the Plan was amended to, among other things, change the
employer and administrator under the Plan from the Employer to FrontLine (see
note 7). Additionally in 2001, FrontLine terminated the Plan subject to the
provisions of ERISA.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan are prepared under the accrual basis of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Quoted market prices are used
to value investments. Shares of mutual funds are valued at the net asset value
of shares held by the Plan at year-end. The participant loans are valued at
their outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that effect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
6
Reckson Management Group, Inc. 401(k) Plan
Notes To Financial Statements (continued)
3. INVESTMENTS
The following investments represent 5% or more of the Plan's net assets
available for benefits:
DECEMBER 31,
2000 1999
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Merrill Lynch Balanced Capital Fund, Inc. $ 200,910 $ *
Merrill Lynch Global Allocation Fund 370,349 252,979
Merrill Lynch Growth Fund 526,403 786,996
Merrill Lynch S&P 500 Index Fund 387,353 299,053
Merrill Lynch Fundamental Growth 181,477 *
Reckson Associates Realty Corp.
Class A Common Stock 339,640 200,627
FrontLine Capital Group Common Stock 318,334 1,357,477
* Investment was less than 5% of the Plan's net assets available for benefits.
During the year ended December 31, 2000, the investments of the Plan appreciated
(depreciated) in fair value as follows:
Merrill Lynch Balanced Capital Fund, Inc. $ (9,796)
Merrill Lynch Corp. Bond Fund/ Invest. Grade 2,024
Merrill Lynch Fundamental Growth (30,652)
Merrill Lynch Global Allocation Fund 4,213
Merrill Lynch Growth Fund (160,941)
Merrill Lynch S&P 500 Index Fund (36,243)
Merrill Lynch Global Growth Fund (12,899)
Merrill Lynch Global Technology Fund (19,809)
AIM Balanced Fund (570)
AIM Blue Chip Fund (6,020)
Alliance Premium Growth Fund (38,536)
Alliance Technology Fund (44,917)
Merrill Lynch Global Value Fund (26,261)
Mercury International Fund (38)
Merrill Lynch International Equity Fund (676)
Reckson Associates Realty Corp. Class A Common Stock 55,821
FrontLine Capital Group Common Stock (1,238,756)
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Net realized and unrealized depreciation in fair value of investments $(1,564,056)
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7
Reckson Management Group, Inc. 401(k) Plan
Notes To Financial Statements (continued)
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The Form 5500 of the Plan was prepared on a cash basis. The following is a
reconciliation of net assets available for benefits per the financial statements
to Form 5500:
DECEMBER 31,
2000 1999
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Net assets available for benefits per the
financial statements $ 3,174,506 $ 3,724,999
Participant contributions receivable (3,707) (46,883)
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Net assets available for benefit per
Form 5500 $ 3,170,799 $ 3,678,116
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5. RELATED PARTY TRANSACTIONS
During the years ended December 31, 2000 and 1999, the Plan received $17,008 and
$18,438 , respectively, in common stock dividends from Reckson.
6. INCOME TAX STATUS
The Internal Revenue Service issued an opinion dated June 29, 1993, stating that
the written form of the underlying prototype plan document is qualified under
Section 401(a) of the Internal Revenue Code (the "Code"), and that any employer
adopting this form of the Plan will be considered to have a plan qualified under
Section 401(a) of the Code. Therefore, the related trust is exempt from
taxation. Once qualified, the Plan is required to operate in conformity with the
Code to maintain its qualification. The Plan Sponsor has indicated that it will
take the necessary steps, if any, to maintain the Plan's qualified status.
7. SUBSEQUENT EVENT
On January 1, 2001, the Employer created the Reckson 401(k) Plan (the "2001
Plan") for the benefit of its employees of the Employer, RCG and RANY. In
addition, RSVP created its own 401(k) plan for the benefit of its employees. As
a result, the Employer, RCG, RANY and RSVP ceased to be Participating Employers
under the Plan leaving FrontLine as the sole remaining Participating Employer
under the Plan and the administrator of the Plan. During 2001, FrontLine
terminated the Plan and distributed the remaining Plan assets to the remaining
participants.
8
Reckson Management Group, Inc. 401(k) Plan
Notes To Financial Statements (continued)
7. SUBSEQUENT EVENT (CONTINUED)
The 2001 Plan provides eligible employees with benefits similar to those of the
Plan. Eligible employees began making contributions to the 2001 Plan in January
2001 based upon December 2000 salary deferrals. Assets and liabilities
attributable to the employees in the Plan were transferred to the respective
plans maintained by the Employer and RSVP.
9
SUPPLEMENTAL SCHEDULE
Reckson Management Group, Inc. 401(k) Plan
Schedule H, Line 4(i) - Assets Held for Investment
December 31, 2000
FAIR MARKET
INVESTMENT VALUE
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Merrill Lynch Balanced Capital Fund, Inc. (*) $ 200,910
Merrill Lynch Corp. Bond Fund/Invest. Grade(*) 95,893
Merrill Lynch Fundamental Growth(*) 181,477
Merrill Lynch Global Allocation Fund(*) 370,349
Merrill Lynch Growth Fund(*) 526,403
Merrill Lynch S&P 500 Index Fund(*) 387,353
Merrill Lynch Global Growth Fund(*) 44,711
Merrill Lynch Global Technology Fund(*) 36,781
AIM Balanced Fund 6,538
AIM Blue Chip Fund 59,848
Alliance Premium Growth Fund 124,082
Alliance Technology Fund 110,868
Merrill Lynch Global Value Fund (*) 4,724
Mercury International Fund(*) 3,256
Merrill Lynch International Equity Fund(*) 4,701
Reckson Associates Realty Corp. Class A Common Stock(*) 339,640
FrontLine Capital Group Common Stock(*) 318,334
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$2,815,868
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Loans to participants at interest rates between 8.33% and 10.00% $ 56,948
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(*) Indicates party-in-interest to the Plan as defined under ERISA.
10
RECKSON MANAGEMENT GROUP, INC. 401(K) PLAN
Exhibits
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23.0 Consent of Independent Auditors
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other person who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Reckson Management Group, Inc. 401(k) Plan
By: FrontLine Capital Group, as Plan Administrator
Date: June 28, 2001 By: /s/ Michael Maturo
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Michael Maturo
Director and Treasurer