SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
KNICKERBOCKER VILLAGE, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|_| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value transaction:
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5. Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
KNICKERBOCKER VILLAGE, INC.
10 MONROE STREET
NEW YORK, NEW YORK 10002
-----------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on November , 2000
------------------------
To the Shareholders of KNICKERBOCKER VILLAGE, INC. :
As a shareholder of Knickerbocker Village, Inc., a New York corporation
(the "Company"), you are invited to be present in person or to be represented by
proxy at the Special Meeting of Shareholders (the "Special Meeting"), to be held
at the Williams Club, 24 East 39th Street, New York, New York, on Tuesday,
November , 2000, at 10:00 a.m., New York time, for the following purposes:
1. To elect six (6) directors.
2. Consider and vote upon a proposal to authorize an amendment to the
Company's Restated Certificate of Incorporation to effect a reverse
stock split that would result in the issuance of one (1) share of
Common Stock (the "Shares") for each four thousand (4,000) Shares of
Common Stock held.
3. To ratify the selection of Held, Kranzler, McCosker, and Pulice, LLP
("Held Kranzler") as the Company's independent auditors for the year
ending December 31, 2000.
4. To adopt new By-Laws.
5. Transact such other business as may be properly brought before the
Special Meeting and any adjournments thereof.
Shareholders of the Company of record at the close of business on October,
2000 are entitled to vote at the Special Meeting and all adjournments thereof.
A majority of the outstanding shares of Common Stock of the Company must
be represented at the Special Meeting to constitute a quorum. Therefore, all
shareholders are urged either to attend the Special Meeting or to be represented
by proxy. If a quorum is not present at the Special Meeting, a vote for
adjournment will be taken among the shareholders present or represented by
proxy. If a majority of the shareholders present or represented by proxy vote
for adjournment, it is the Company's intention to adjourn the Special Meeting
until a later date and to vote proxies received at such adjourned meeting(s).
If you do not expect to attend the Special Meeting in person, please
complete, sign, date and return the accompanying proxy card in the enclosed
business reply envelope. If you later find that you can be present or for any
other reason desire to revoke your proxy, you may do so at any time before the
voting.
By order of the Board of Directors,
Melvin Gershon,
Secretary
October , 2000
<PAGE>
PRELIMINARY PROXY STATEMENT
OF
KNICKERBOCKER VILLAGE, INC.
10 MONROE STREET
NEW YORK, NEW YORK 10002
------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board of Directors") of Knickerbocker Village, Inc.
(the "Company") of proxies to be voted at the Special Meeting of Shareholders
(the "Special Meeting") to be held on ____day, November, 2000 at The Williams
Club, 24 East 39th Street, New York, New York, at 10:00 a.m., New York time, and
at any adjournment thereof. Each holder of record at the close of business on
October ___ , 2000 (the "Record Date") of shares of the Company's common stock,
par value $2.15 per share (the "Shares"), will be entitled to one (1) vote for
each Share so held. As of October ___, 2000 there were 147,464 Shares issued and
outstanding.
Shares represented by properly executed proxy cards received by the
Company at or prior to the Special Meeting will be voted according to the
instructions indicated on the proxy card. Unless contrary instructions are
given, the persons named on the proxy card intend to vote the shares so
represented for an amendment to the Company's Restated Certificate of
Incorporation to effect a reverse stock split that would result in the issuance
of one (1) Share of the Company's common stock, for each four thousand (4,000)
Shares held. As to any other business which may properly come before the Special
Meeting, the persons named on the proxy card will vote according to their
judgment. The enclosed proxy may be revoked prior to the Special Meeting by
written notice to the Secretary of the Company at 10 Monroe Street, New York,
New York 10002 or by written or oral notice to the Secretary at the Special
Meeting at any time prior to being voted. This Proxy Statement and the Proxy
Card enclosed herewith were first sent to Shareholders of the Company on or
about October ___, 2000.
If a quorum is not present at the Special Meeting, a vote for adjournment
will be taken among the shareholders present or represented by proxy. If a
majority of the shareholders present or represented by proxy vote for
adjournment, it is the Company's intention to adjourn the Special Meeting until
a later date and to vote proxies received at such adjourned meeting(s).
Under the laws of New York, the Company's state of incorporation, "votes
cast" at a meeting of shareholders by the holders of shares entitled to vote are
determinative of the outcome of the matter subject to vote. Abstentions and
broker non-votes will not be considered "votes cast" based on the Company's
understanding of state law requirements. A "broker non-vote" occurs if a broker
or other nominee does not have discretionary authority and has not received
instructions with respect to a particular item. Shareholders may not cumulate
their votes.
PROPOSAL NO. 1
ELECTION OF DIRECTORS.
At the Special Meeting, six (6) directors are to be elected to serve until
the next annual meeting or until their successors are elected and qualified. The
persons named in the enclosed form of proxy have advised that, unless contrary
instructions are received, they intend to vote FOR the election of the six (6)
individuals named in the following table, all of whom are currently directors of
the Company. The Board of Directors does not expect that any of the nominees
will be unavailable for election as a director. If by reason of an unexpected
occurrence, one or more of the nominees is not available for election, however,
the persons named in the form of proxy have advised that they will vote for such
substitute nominees as the Board of Directors of the Company may propose. The
following information is as of the Record Date.
<PAGE>
<TABLE>
<CAPTION>
Position with Held Principal
Name Age Company Since Occupation
---- --- -------------------- ----- ----------------------------
<S> <C> <C> <C> <C>
Irene Pletka (1) 58 President and 1977 Photographer
Director
Peter Pletka (1) 62 Vice President and 1992 Physician
Nominee for Director
Robert Gershon (2) 63 Director, Vice 1977 Principal in the
President and firm of Carl Gershon &
Treasurer Co., a Real Estate Brokerage.
Melvin Gershon (2) 57 Director and 1977 Principal in the
Secretary Gershon & firm of Carl Co.
Loretta Jefferson (3) 57 Director 1993 Housing Management
Representative, New York
State Division of Housing
and Community Renewal
(the "DHCR").
Howard Kestenberg 43 Director 1992 Real Estate Entrepreneur
</TABLE>
----------
(1) Dr. Peter Pletka and Mrs. Irene Pletka are husband and wife.
(2) Mr. Melvin Gershon and Mr. Robert Gershon are brothers.
(3) Pursuant to the Article IV (Limited Dividend Housing Companies) of the
Private Housing Finance Law (the "Article"), the New York State Division
of Housing and Community Renewal (the "DHCR") has the right to nominate
one (1) member of the Company's Board of Directors. Ms. Jefferson is the
DHCR's designated nominee.
The respective terms of the officers and directors of the Company will
continue until the next Annual Meeting of Shareholders or until their
successors have been elected and qualified in accordance with the
Company's By-Laws.
The Manhattan, New York housing complex known as Knickerbocker Village,
which is the principal asset of the Company, is managed by Cherry Green
Property Corp. Several officers and directors of the Company are
shareholders, officers and directors of Cherry Green Property Corp. Since
Cherry Green Property Corp. owns more than ninety five percent (95%) of
the Shares of the Company, approval of Proposal No. 1 is assured.
The Board of Directors recommends a vote FOR each of the above-named
nominees.
2
<PAGE>
PROPOSAL No. 2
TO AMEND THE RESTATED CERTIFICATE OF INCORPORATION
TO EFFECT THE REVERSE STOCK SPLIT.
The Board of Directors of the Company has approved a proposal (the
"Reverse-Split Proposal") authorizing, subject to shareholder approval, an
amendment to the Company's Restated Certificate of Incorporation (the
"Certificate of Incorporation") to effect a reverse stock split of the Company's
outstanding shares of Common Stock, on the basis of one (1) new share of Common
Stock ("New Common Stock") for each four thousand (4,000) shares of outstanding
Common Stock ("Old Common Stock"). The certificate of amendment ("Certificate of
Amendment") to effect the Reverse-Split Proposal is in the form attached to this
Proxy Statement as Annex A-1. Upon the approval of the Reverse Split Proposal,
Cherry Green Property Corp. will be the sole Shareholder of the Company and all
other Shareholders shall receive a fractional Share of New Common Stock which
will be repurchased by the Company as outlined below. Shareholders will receive
$6.15 for their fractional share of New Common Stock based upon a repurchase
price calculated at $2.15 per each Share of Old Common Stock plus $4.00 per
share of cumulative unpaid dividends. See "Fairness of the Reverse Split." There
are approximately 6,730 Shares of Old Common Stock outstanding that are not
owned by Cherry Green Property Corp. Approval of the Reverse-Split Proposal by
Shareholders requires the affirmative vote of the holders of a majority of the
outstanding Shares of the Common Stock. Since Cherry Green Property Corp. owns
over ninety five percent (95%) of the outstanding Shares of the Company,
approval of Proposal No. 2 is assured.
GENERAL
The Company's Limited Dividend Capital Stock, par value $2.15 ("Capital
Stock"), is traded over-the-counter. No established trading market exists with
respect to such stock since approximately 140,734 shares (approximately 95%) of
the 147,464 shares outstanding are owned by Cherry Green Property Corp. The
Capital Stock is not a marketable security in that since 1971, no bid and asked
prices have been reported by the National Quotation Bureau, Inc.
No dividends have been paid since 1968. At any time, the holders of
Capital Stock cannot receive repayment of their investment in excess of the par
value of the Capital Stock, together with cumulative unpaid dividends at the
rate of six percent (6%) of par value ($2.15 per share) per annum (without
interest). Dividends amounting to $19,023 were declared during 1979, but were
not paid as of December 31, 1999. No dividends were declared or paid in 1999 or
1998. Cumulative dividends unpaid as of December 31, 1999 and December 31, 1998
amounted to approximately $590,000 and $571,000 (approximately $4.00 per share
and $3.87 per share), respectively.
There are approximately 340 holders of record of the Company's Capital
Stock as of March 1, 2000. The Company is presently authorized to issue up to
348,837 shares of Common Stock, $2.15 par value, of which 147,464 shares are
issued and outstanding. The Reverse-Split Proposal would effect a reverse stock
split on the basis of one (1) share of New Common Stock for each four thousand
(4,000) shares of outstanding Old Common Stock. The authorized number of shares
of New Common Stock, however, will not change. Furthermore, all minority
Shareholders (other Cherry Green Property Corp.) will receive $2.15 plus their
pro rata portion of cumulative unpaid dividends for each share of Old Common
Stock.
PRINCIPAL EFFECTS OF REVERSE STOCK SPLIT.
The principal effects of the Reverse-Split Proposal will be:
1. Based upon the 147,464 shares of Old Common Stock outstanding as of
October 10, 2000, the adoption of the Reverse-Split Proposal would decrease the
outstanding shares of Old Common Stock by approximately four thousand percent
(4000%), and thereafter approximately thirty-eight and eighty-six hundredths
(38.86) shares of New Common Stock would be outstanding. The reverse split will
not affect any shareholder's proportionate equity interest in the Company,
subject to the provisions for the elimination of fractional shares as described
above and below.
3
<PAGE>
2. The Company is authorized under the Certificate of Incorporation to
issue up to 348,837 shares of Common Stock. The Company is not proposing to
reduce the amount of its authorized Common Stock. If the Reverse-Split Proposal
is adopted, the New Common Stock issued and outstanding will represent
approximately .00001 of the Company's authorized Common Stock whereas the Old
Common Stock currently issued and outstanding represents approximately forty
three percent (43%) of the authorized Common Stock. After giving effect to the
Reverse-Split Proposal, approximately 348,802 shares of Common Stock will be
available for future issuance by the Board of Directors without further action
by the shareholders.
3. As of October 1, 2000 there were no outstanding options or warrants to
purchase shares of Common Stock of the Company.
4. As a result of the reverse stock split and repurchase of the Company's
fractional Shares, the Company will have one (1) shareholder of record, Cherry
Green Property Corp. In order to terminate the registration of a class of
securities under Reg. Section 240.12g-4 of the Securities Exchange Act of 1934,
as amended (the "Act"), the Company must certify on Form 15 under the Act. Thus,
the Company will cease to be a publicly reporting Company under the Act after
completion of the reverse stock split and redemption and/or escrow funds for
sufficient number of fractional interests in the Company's Shares held by
minority shareholders. Accordingly, after the reverse stock split and repurchase
of the fractional shares, the Company, whose principal asset is a housing
development located in Manhattan, New York, will continue operation as a public
limited dividend housing company subject to the supervision of the DHCR, and the
manager of the aforesaid housing development, Cherry Green Property Corp., will
become the sole Shareholder of the Company.
Assuming the Reverse-Split Proposal is approved and implemented, the
Certificate of Amendment amending the Certificate of Incorporation will be filed
with the Secretary of State of New York as promptly as practicable thereafter.
The reverse stock split would become effective as of the close of business on
the date of such filing (the "Effective Date").
REASONS FOR THE REVERSE STOCK SPLIT.
The Board of Directors on September 20, 2000 authorized the Reverse Stock
Split in connection with the Company's ongoing efforts to reduce costs and
improve productivity. Reducing the number of its stockholders of record to less
than three hundred (300) would permit the Company to discontinue the
registration of its common stock under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Termination of the Company's status as a public
reporting company under federal securities laws would allow the Company to
achieve additional reductions in costs by reducing the general and
administrative costs incurred in connection with maintaining such status. The
Company believes that the adoption of the Reverse-Split Proposal would decrease
the administration expenses associated with maintaining the Company's status as
a publicly reporting/traded company. The Company spends approximately $40,000
per year to maintain its public company status, with approximately $30,000 in
auditing fees and approximately $10,000 in legal fees. Since over ninety five
percent (95%) of the Company's shares are owned by Cherry Green Property Corp.,
the minority shareholders have no control over the Company's business and
affairs.
The Board of Directors believes that neither the Company nor its
stockholders derive any material benefit from the continued registration of the
Company's Common Stock under the Exchange Act. The Company incurs significant
direct and indirect costs, however, as a result of the requirement that it
comply with the filing and reporting requirements applicable to public
companies. The Board of Directors believes that the expense and burden to the
Company of continued registration, including the requirement to file annual and
quarterly reports, proxy statements and other documents with the Securities and
Exchange Commission (the "SEC") significantly outweigh any benefits to the
Company or its stockholders as a result of such registration. The Company
expects to achieve annual cost savings of at least $40,000 as a result of the
Reverse Stock Split. The Board of Directors have determined that the Reverse
Stock
4
<PAGE>
Split is the most cost- effective method of changing the Company's status from
that of a publicly held reporting company to that of a non-reporting company.
In making this determination, the Board of Directors considered other
means of achieving this result, such as making privately or publicly negotiated
purchases of outstanding shares of its common stock, including making a public
tender offer for shares, but rejected these alternatives because they believed
that the Reverse Stock Split would be simpler and more-cost effective.
LACK OF APPRAISAL RIGHTS.
Pursuant to the New York Business Corporation Law, dissenting stockholders
will not have appraisal rights if the Reverse Stock Split is effected.
Stockholders who believe that they may be aggrieved by the Reverse Stock Split
may have other rights under federal law or common law, such as rights relating
to the fairness of the Reverse Stock Split and arising from possible breaches of
the fiduciary responsibilities of corporate officers, directors and
stockholders. The nature and extent of such rights, if any, may vary depending
upon the facts and circumstances.
EXCHANGE OF STOCK CERTIFICATES; CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.
If the Reverse Stock Split is effected, the stock certificates formerly
representing shares of Old Shareholders' Common Stock will represent the right
to receive shares of New Common Stock into which they have been converted,
and/or the right to receive a cash payment in lieu of shares, as the case may
be, as described below. Enclosed is a Letter of Transmittal for use in
exchanging stock certificates of Old Common Stock for stock certificates of New
Common Stock and/or a cash payment. Stockholders should not send Letters of
Transmittal to the Company, but to Continental Stock Transfer & Trust Company,
the transfer agent and registrar for the Old Common Stock.
FINANCING OF THE REVERSE STOCK SPLIT.
The Company estimates that it will incur transactional expenses of
approximately $45,000 in connection with the Reverse Stock Split. In addition,
the Company will pay $41,390 to repurchase fractional interests of minority
Shareholders. The Company intends to finance such costs from its working
capital.
FAIRNESS OF THE REVERSE STOCK SPLIT .
The Board of Directors have reviewed and considered the terms and
conditions of the Reverse Stock Split and have unanimously determined that the
Reverse Stock Split, taken as a whole, is fair to, and in the best interests of,
the Company and its stockholders. Accordingly, the Amended Certificate of
Incorporation, dated August 3, 1953 mirrors Section 30 (13) of the statute
governing New York Public Limited Dividend Housing Companies, which provides
that in repayment for their Common Stock, holders are entitled to no more than
par value of their Common Stock along with cumulative dividends not to exceed
six percent (6%) per annum. Cumulative paid dividends were $590,000 as of
December 31, 1999 and would be equal to $4.00 per share of old Common Stock. Any
amounts exceeding those provided by statute and in the Amended Certificate of
Incorporation, dated August 3, 1953, revert back to the State of New York. The
Board of Directors did not retain an unaffiliated representative to act solely
on the behalf of the unaffiliated stockholders of the Company for the purposes
of negotiating the terms of the Reverse Stock Split.
5
<PAGE>
The Board of Directors believes that the payment of cash in the amount of
$2.15 per share of Old Common Stock plus accrued unpaid dividends in lieu of the
issuance of fractional shares of New Common Stock to persons who would hold
fractional shares of New Common Stock after the Reverse Stock Split, will enable
such stockholders to liquidate their shares easily and at a fair price which is
at a premium to recent prevailing market prices (of which there is none) of the
Company's common stock. In addition, by having shares of Old Common Stock
exchanged for cash by the Company, a stockholder will be able to liquidate his
investment, or fraction thereof, in the Company without incurring brokerage
costs which, in the case of a holder of a small quantity of Old Common Stock,
could materially reduce or eliminate the actual net proceeds of sale to the
shareholder.
POSTPONEMENT OR ABANDONMENT OF THE REVERSE STOCK SPLIT.
The Company's Board of Directors may postpone, revise or abandon the
Reverse Stock Split at any time prior to its consummation, for any reason,
including, without limitation, if, in the Directors' sole judgment, consummation
of the Reverse Stock Split would unduly deplete the Company's working capital or
would render the Reverse Stock Split unfair to the Company and its continuing
stockholders due to an adverse change in the Company's financial condition.
CONDUCT OF THE COMPANY'S BUSINESS AFTER THE REVERSE STOCK SPLIT.
The Company believes that the Reverse Stock Split will not have any effect
on its business and operations and expects to continue to conduct such business
and operations as they are currently being conducted. Any future changes to the
business and regulation of the Company will require approval of the DHCR and
pursuant to applicable New York Law.
TERMINATION OF REPORTING COMPANY STATUS.
If the Reverse Stock Split is effected, the Company expects to cease to be
a reporting company under the Exchange Act. As a result, the Company would no
longer file annual and quarterly reports, proxy statements, and other documents
with the SEC. In addition, the Company would no longer be required to comply
with the proxy rules of Regulation 14A promulgated under Section 14 of the
Exchange Act, and its officers, directors and 10%-or-greater stockholders would
no longer be subject to the reporting requirements and "short-swing" insider
trading restrictions under Section 16 of the Exchange Act. Continuing
stockholders would no longer be entitled to receive annual reports and proxy
statements required by the Exchange Act and would most likely no longer have the
benefit of a public market for their shares of the Company's common stock.
RULE 13E-3 TRANSACTION STATEMENT.
In connection with the Reverse Stock Split, the Company has filed with the
SEC a Rule 13e-3 Transaction Statement on Schedule 13e-3. See "Other
information; Documents Incorporated by Reference."
CHANGES TO AUTHORIZED CAPITAL STOCK; TERMS OF STOCK UNCHANGED.
If the Reverse Stock Split is effected, the number of authorized shares of
the Company's common stock will not be reduced other than the number of issued
and outstanding Shares will be reduced.
6
<PAGE>
EXCHANGE OF STOCK CERTIFICATES AND ELIMINATION OF FRACTIONAL SHARE INTERESTS.
As soon as practicable after the Effective Date, shareholders will be
notified and requested to surrender their Old Common Stock certificates for new
certificates representing the number of shares of New Common Stock after the
reverse stock split. Until so surrendered, each current certificate representing
shares of Old Common Stock will be deemed for all corporate purposes after such
Effective Date to evidence ownership of New Common Stock in the appropriately
reduced number. Continental Stock Transfer & Trust Company, will be appointed
exchange agent (the "Exchange Agent") to act for shareholders in effecting the
exchange of their certificates.
Interest will not be paid on the amounts payable upon surrender of
Certificates which formerly represented shares of Common Stock. Therefore, the
Company recommends that shareholders surrender their Certificates promptly after
the reverse split is completed. If the Company is unable to locate a shareholder
or a shareholder refuses to submit his/her stock certificate, the Corporation
may hold the redemption price subject to any applicable abandoned property,
escheat or similar law. The Corporation will not be liable to any person in
respect of any cash delivered to a public official or entity under any
applicable abandoned property, escheat or similar law.
Each stockholder of record who holds shares of Old Common Stock should use
the enclosed Letter of Transmittal (See Annex A-2) to surrender his old stock
certificate(s) and to receive a total of $6.15 per Share.
There were approximately 340 shareholders of record of the Company as of
October 10, 2000. The Reverse-Split Proposal, if adopted, is expected to cause a
significant change in the number of shareholders. The Company plans for the
cancellation or purchase of its shares from individuals holding a nominal number
of such shares if the Reverse-Split Proposal is adopted. Thereafter, the Company
will file a Form 15 in accordance with the reporting requirements of the Act.
FEDERAL INCOME TAX CONSEQUENCES.
1. The shares of New Common Stock in the hands of a shareholder will have an
aggregate basis for computing gain or loss equal to the aggregate basis of
shares of Old Common Stock held by that shareholder immediately prior to
the adoption of the Reverse-Split Proposal reduced by the amount of
proceeds, if any, received from the sale of fractional interests and
increased by any gain recognized on that sale.
2. For purposes of calculating gain or loss on the sale or disposition of New
Common Stock, a shareholder's holding period for the New Common Stock will
be the same as the holding period of the Old Common Stock exchanged
therefor.
3. Shareholders who receive cash for all of their stock holdings (as a result
of owning less than one share) will recognize a gain or loss for federal
income tax purposes as a result of the disposition of their shares of
Common Stock. Although the tax consequences to shareholders who receive
cash for some of their holdings are not entirely certain, those
shareholders in all likelihood, will recognize a gain or loss for federal
income tax purposes as a result of the disposition of a portion of their
shares of Common Stock. Shareholders who do not receive any cash for their
holdings will not recognize any gain or loss for federal income tax
purposes as a result of the proposed reverse stock split.
VOTE REQUIRED.
Approval by shareholders of the proposed amendment to the Company's
Restated Certificate of Incorporation in the form set forth on Appendix A
hereto, effecting the proposed reverse stock split of the Common Stock requires
the affirmative vote of the holders of a majority of the outstanding shares of
the Company's Common Stock. Cherry Green Property Corp. will be in a position to
vote more than 95% of the outstanding shares in favor of the Reverse-Split
Proposal. Since Cherry Green Property Corp. owns more than ninety five percent
(95%) of the Shares of the Company, approval of Proposal No. 2 is assured.
For the reasons set forth above, the Board of Directors unanimously
recommends a vote FOR the reverse-split proposal, Proposal No. 2.
7
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS.
The Board of Directors recommends that the Shareholders ratify the
selection of Held, Kranzler, certified public accountants, as independent
auditors to audit the accounts of the Company for the fiscal year ending
December 31, 2000. The selection of Held Kranzler was approved by the Board of
Directors. Held, Kranzler are currently the independent auditors for the
Company.
Since Cherry Green Property Corp. owns more than ninety five percent (95%)
of the Shares of the Company, approval of Proposal No. 3 is assured.
The Board of Directors recommends a vote FOR this Proposal No. 3.
PROPOSAL NO. 4
ADOPTION OF BY-LAWS.
The Company's Board of Directors has approved new amended and restated
By-Laws of the Company (a copy of which is annexed hereto as Annex A-3 and which
is incorporated herein by reference as if fully set forth herein). The proposed
By-Laws are submitted to shareholders for approval by the Board of Directors to
allow the officers and directors of the Company greater flexibility in the
management and affairs of the Company. The Company's current By-Laws dated back
to 1957. Since such time, the New York Business Corporation Law has been amended
to provide greater flexibility to management in calling shareholder meetings, in
holding meetings telephonically and by unanimous written consent, etc.
The Board of Directors recommends that the Shareholders ratify the
proposed By-Laws.
Since Cherry Green Property Corp. owns more than ninety five percent (95%)
of the Shares of the Company, approval of Proposal No. 4 is assured.
The Board of Directors recommends a vote FOR this Proposal No. 4.
INFORMATION CONCERNING MEETINGS OF THE BOARD OF DIRECTORS
AND BOARD COMMITTEES AND DIRECTOR COMPENSATION.
During fiscal year 1999, the Board of Directors held no meetings. In June
2000, the Board of Directors held one meeting, approving all of the matters
submitted in this Proxy to shareholders.
The Board of Directors does not have standing Audit, Nominating,
Compensation and Stock Option Committees.
All officers of the Company serve at the discretion of the Board of
Directors. See "Security Ownership of Certain Beneficial Owners and Management"
and "Executive Compensation".
8
<PAGE>
The Company does not pay directors of the Company any compensation for
services as a director. See "Security Ownership of Certain Beneficial Owners and
Management" and "Executive Compensation." In the future, the Company does not
anticipate that it will pay any directors retainers.
EXECUTIVE OFFICERS
The Company does not have any Executive Officers.
Summary Compensation Table
The Company's directors and officers received no compensation in
connection with their service on the Board and to the Company.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a)OF THE ACT.
<TABLE>
<CAPTION>
Position with Held Principal
Name Age Company Since Occupation
---- --- -------------------- ----- ----------------------------
<S> <C> <C> <C> <C>
Irene Pletka (1)(2) 58 President and 1977 Photographer
Director
Peter Pletka (1)(2) 62 Vice President 1992 Physician
and nominee
for Director
Howard Kestenberg 43 Director 1992 Real Estate Entrepreneur
Robert Gershon (2)(4) 63 Director, Vice 1977 Principal in the firm
President and of Carl Gershon & Co., a Real
Treasurer Estate brokerage.
Melvin Gershon (2)(4) 57 Director and 1977 Principal in the firm
Secretary of Carl Gershon & Co.
Loretta Jefferson (3) 57 Director 1998 Housing Management
Representative, New York State
Division of Housing and
Community Renewal.
</TABLE>
----------
(1) Dr. Peter Pletka and Mrs. Irene Pletka are husband and wife.
(2) Mr. Melvin Gershon and Mr. Robert Gershon are brothers.
(3) Pursuant to the Article IV (Limited Dividend Housing Companies) of the
Private Housing Finance Law (the "Article"), the DHCR has the right to
nominate one (1) member of the Company's Board of Directors. Ms. Jefferson
is the DHCR's designated nominee.
9
<PAGE>
The respective terms of the officers and directors of the Company will
continue until the next Annual Meeting of Shareholders or until their
successors have been elected and qualified in accordance with the
Company's By-Laws.
The Manhattan, New York housing complex known as Knickerbocker Village,
which is the principal asset of the Company, is managed by Cherry Green
Property Corp. Several officers and directors of the Company are
shareholders, officers and directors of Cherry Green Property Corp. Since
Cherry Green Property Corp. owns more than ninety five percent (95%) of
the Shares of the Company.
EXECUTIVE COMPENSATION.
During the year ended December 31, 1999, no officer or director of the
Company received any compensation from the Company for his or her services as an
officer or director of the Company. The Company did not grant or award stock
options, stock appreciation rights or long-term incentive plans to any of its
executive officers in the last fiscal year. The Company does not presently
maintain a pension plan or other retirement plan for its named executive
officers.
The housing complex known as Knickerbocker Village located in Manhattan,
New York, is owned by the Company and is managed by Cherry Green Property Corp.
pursuant to a management contract approved by the New York State DHCR Cherry
Green Property Corp. was granted increases in its annual management fee of 5.5%
and 1.4%, effective July 1, 1998 and July 1, 1999, respectively, pursuant to a
Contract for Managing Agents Extension Agreement, approved by the DHCR on
September 22, 1999. Such management fee is reviewed and adjusted annually
effective July 1 of each year, by the DHCR. Cherry Green Property Corp. owns
more than 95% of the Company's Capital Stock. Several officers and directors of
Cherry Green Property Corp. are officers and directors of the Company. During
1999, the Company paid Cherry Green Property Corp. a management and
administrative fee of approximately $966,000. Such management fee was approved
by the DHCR.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security Ownership of Certain Beneficial Owners. Following is a list of
those persons known by the Company to be the beneficial owners of more
than 5% of the outstanding Capital Stock of the Company as of December 31,
1999:
Name and Address Amount and Nature Title of Class and
of Beneficial Owner of Beneficial Percent of Ownership
------------------- ----------------- --------------------
Cherry Green Property Corp. 140,734 Shares of Capital Stock - 95%
(Record and Beneficial) Capital Stock (par
10 Monroe Street value $2.15)
New York, New York
(b) Security Ownership of Management.
As of December 31, 1999, no Directors or Officers owned any shares of the
Company's Limited Dividend Capital Stock, $2.15 par value. However, the
following Officers and Directors of the Company own of record and
beneficially that percentage of Common Stock of Cherry Green Property
Corp. as set forth below:
10
<PAGE>
Percent Owned of Cherry Green Property Corp.
Percent Owned of
Name Position with Company Cherry Green Property Corp.
---- --------------------- ---------------------------
Irene Pletka (1) Director and President 28.3%
Peter Pletka (1) Vice President 25%
Howard Kestenberg Director 18.3%
Robert Gershon (2) Director, Vice President 9.6%
and Treasurer
Melvin Gershon (2) Director and Secretary 6.3%
----------
(1) Dr. Peter Pletka and Mrs. Irene Pletka are husband and wife and own such
percentages as indicated above in their own name.
(2) Mr. Melvin Gershon and Mr. Robert Gershon are brothers.
(3) Pursuant to the Article IV (Limited Dividend Housing Companies) of the
Private Housing Finance Law (the "Article"), the DHCR has the right to
nominate one (1) member of the Company's Board of Directors. Ms. Jefferson
is the DHCR's designated nominee.
(c) Change in control.
There are no known arrangements, the application of which may at a
subsequent date result in a change in control of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company is managed by Cherry Green Property Corp., the owner of over
95% of the Company's outstanding Capital Stock. Several officers and directors
of the Company are shareholders, officers and directors of Cherry Green Property
Corp. During 1999, the Company paid Cherry Green Property Corp. a management and
administrative fee of approximately $966,000. Such fee was approved by the DHCR
pursuant to a contract, with increases effective July 1, 1998 and July 1, 1999.
SHAREHOLDER PROPOSALS.
Any shareholder proposals to be included in the Board of Directors'
solicitation of proxies for the 2001 Annual Meeting of Shareholders must be
received by Melvin Gershon, Secretary, at c/o Knickerbocker Village, Inc., 10
Monroe Street, New York, New York 10002, no later than June 1, 2001.
ANNUAL REPORT.
A copy of the Company's 1999 Annual Report in Form 10-KSB to Shareholders,
accompanies this Proxy Statement. Any shareholder who has not received a copy of
the 1999 Annual Report to Shareholders and wishes to do so should contact Mr.
Melvin Gershon, Secretary, by mail at the address set forth on the Notice of
Annual Meeting or by telephone at (212) 227-0955. The information disclosed
therein is important for proper consideration of the matters to come before the
Special Meeting. The 1999 Annual Report is not incorporated into this Proxy
Statement and shall not be considered a part of this solicitation material.
11
<PAGE>
GENERAL AND OTHER MATTERS
The Board of Directors knows of no matter, other than those referred to in
this Proxy Statement, which will be presented at the Special Meeting. However,
if any other matters are properly brought before the Special Meeting or any of
its adjournments, the person or persons voting the proxies will vote them in
accordance with their judgment on such matters.
The cost of preparing, assembling, and mailing this Proxy Statement, the
enclosed proxy card and the Notice of Special Meeting will be paid by the
Company. Additional solicitation by mail, telephone, telegraph or personal
solicitation may be done by directors, officers, and regular employees of the
Company. Such persons will receive no additional compensation for such services.
Brokerage houses, banks and other nominees, fiduciaries and custodians nominally
holding shares of Common Stock of record will be requested to forward proxy
soliciting material to the beneficial owners of such shares, and will be
reimbursed by the Company for their reasonable expenses. The Company has
retained Rosen & Tetelman, LLP to assist in such solicitation and has agreed to
pay reasonable and customary fees for its services and to reimburse it for
reasonable out-of-pocket expenses in connection therewith.
You are urged to complete, sign, date and return your proxy promptly. You
may revoke your proxy at any time before it is voted. If you attend the Special
Meeting, as we hope you will, you may vote your shares in person.
By order of the Board of Directors,
Melvin Gershon,
Secretary
October , 2000
12
<PAGE>
ANNEX A-1
CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF
KNICKERBOCKER VILLAGE, INC.
Under Section 801 of the Business Corporation Law
WE, THE UNDERSIGNED, Irene Pletka and Melvin Gershon being, respectively,
the President and Secretary of Knickerbocker Village, Inc., do hereby certify:
1. The name of the Corporation is Knickerbocker Village, Inc. (the
"Corporation").
2. The Certificate of Incorporation of said Corporation was filed by the
Department of State, State of New York, on the 5th day of September, 1933, and
its restated certificate of incorporation was filed by the Department of State
on the 14th day of August, 1953.
3. Immediately upon the effectiveness of this amendment to the
Corporation's Certificate of Incorporation pursuant to the New York Business
Corporation Law (the "Effective Time"), each four thousand (4,000) issued and
outstanding shares of the Corporation's Common Stock, par value $2.15 per share
("Old Common Stock"), shall automatically, without further action on the part of
the Corporation or any holder of such Old Common Stock, be converted into one
(1) new share of the Corporation's Common Stock, $8,600 par value per share
("New Common Stock"), as constituted following the Effective Time. The
conversion of the Old Common Stock into New Common Stock, will be deemed to
occur at the Effective Time, regardless of when the certificates representing
such Old Common Stock are physically surrendered to the Corporation for exchange
into certificates representing New Common Stock. After the Effective Time,
certificates representing the Old Common Stock will, until such shares are
surrendered to the Corporation for exchange into New Common Stock, represent the
number and class of New Common Stock into which such Old Common Stock shall have
been converted pursuant to this amendment.
In cases in which the conversion of the Old Common Stock into New Common
Stock results in any shareholder holding a fraction of a share, the Company will
pay the shareholder for such fractional interest on the basis of the par value
of the Old Common Stock.
4. At a meeting of the Board of Directors held on September 20, 2000, and
at a meeting of the shareholders held on November , 2000, the foregoing
amendment was approved by more than a majority of the votes cast by the holders
of the outstanding shares of Common Stock entitled to vote thereon, all in
accordance with Section 614 of the New York Business Corporation Law.
IN WITNESS WHEREOF, this certificate has been signed and the truth of the
statements therein affirmed under penalty of perjury, on this day of November,
2000.
--------------------------------------
Irene Pletka, President
--------------------------------------
Melvin Gershon, Secretary
<PAGE>
KNICKERBOCKER VILLAGE, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR SPECIAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Knickerbocker Village, Inc., a New York
corporation (the "Company"), hereby appoints Irene Pletka, Peter Pletka, Robert
Gershon, Melvin Gershon and Loretta Jefferson, or any one of them, attorneys,
agents and proxies of the undersigned, with full power of substitution to each
of them, to vote all the shares of Common Stock, par value $2.15 per share, of
the Company which are entitled to one (1) vote per share and which the
undersigned may be entitled to vote at the Special Meeting of Shareholders of
the Company to be held at The Williams Club, 24 East 39th Street, New York, New
York, on, November __, 2000, at 10:00 A.M., New York time, and at any
adjournment of such Special Meeting, with all powers which the undersigned would
possess if personally present:
1. To elect six (6) directors.
2. Consider and vote upon a proposal to authorize an amendment to the
Company's Restated Certificate of Incorporation to effect a reverse stock split
that would result in the issuance of one (1) share of Common Stock for each four
thousand (4,000) shares held.
3. To ratify the selection of Held Kranzler as the Company's independent
auditors for the year ending December 31, 2000.
4. To adopt new By-Laws.
5. Vote upon such other matters as may be properly brought before the
Special Meeting or any adjournment thereof hereby revoking all previous proxies
and ratifying all that any said proxies, their substitutes, or any of them, may
lawfully do by virtue hereof.
IF NO DIRECTIONS ARE GIVEN, THE INDIVIDUALS DESIGNATED ABOVE WILL VOTE FOR
THE ABOVE PROPOSALS AND, AT THEIR DISCRETION, ON ANY OTHER MATTER THAT MAY COME
BEFORE THE SPECIAL MEETING.
The undersigned acknowledges receipt of the Notice of Special Meeting of
Shareholders and Proxy Statement of the Company.
(CONTINUED AND TO BE VOTED, DATED AND SIGNED ON REVERSE SIDE)
<PAGE>
KNICKERBOCKER VILLAGE, INC.
Common Stock Proxy One (1) Vote Per Share
SPECIAL NOTES
I plan to attend the meeting |_|
PLEASE MARK VOTES |_| or |X|
Signature(s) should agree with names on Stock Certificates as shown herein.
Attorneys, executors, administrators, trustees, guardians or custodians should
give full title as:____________________
No. 1. To elect the following directors
Irene Pletka FOR AGAINST ABSTAIN
|_| |_| |_|
Peter Pletka FOR AGAINST ABSTAIN
|_| |_| |_|
Robert Gershon FOR AGAINST ABSTAIN
|_| |_| |_|
Melvin Gershon FOR AGAINST ABSTAIN
|_| |_| |_|
Loretta Jefferson FOR AGAINST ABSTAIN
|_| |_| |_|
No. 2. Consider and vote upon a proposal to authorize an amendment to the
Company's Restated Certificate of Incorporation to effect a reverse stock split
that would result in the issuance of one (1) share of Common Stock for each four
thousand (4,000) shares held.
FOR AGAINST ABSTAIN
|_| |_| |_|
No. 3. To ratify the selection of Held Kranzler as the Company's independent
auditors for the year ending December 31, 2000.
FOR AGAINST ABSTAIN
|_| |_| |_|
No. 4. To adopt new By-Laws.
FOR AGAINST ABSTAIN
|_| |_| |_|
<PAGE>
No. 5. Vote upon such other matters as may be properly brought before the
Special Meeting or any adjournment thereof hereby revoking all previous proxies
and ratifying all that any said proxies, their substitutes, or any of them, may
lawfully do by virtue hereof.
FOR AGAINST ABSTAIN
|_| |_| |_|
complete, date and sign this proxy and return it promptly in the enclosed
envelope whether or not you plan to attend the Special Meeting.
Dated: ________________________, 2000
_________________________________________
_________________________________________
Signature of Shareholder(s)
Insert Number of Shares Held: ___________
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
<PAGE>
Annex A-2
LETTER OF TRANSMITTAL
To Accompany Certificates Representing Limited Dividend Capital
Stock Shares (hereinafter "Stock") of Knickerbocker Village, Inc.
(hereinafter "Knickerbocker") to be Exchanged for
Cash Payments
SHAREHOLDERS: PLEASE READ CAREFULLY THE
IMPORTANT INSTRUCTIONS ON THE LAST PAGE
OF THIS LETTER OF TRANSMITTAL
To: Continental Stock Transfer and Trust Company
2 Broadway, 19th Floor
New York, NY 10004
List of Certificates Enclosed and Number
of Shares of Knickerbocker Stock
Name and Address of Registered Owner Represented by each Certificate
------------------------------------ ----------------------------------------
Cert. No. No. Shares
--------- ----------
Pursuant to Knickerbocker's Proxy Statement dated October ___, 2000,
enclosed are the above listed stock certificates representing shares of Common
Stock, par value $.01 per share (hereinafter the "Shares") of Knickerbocker
Stock to be exchanged for cash payment.
I, the undersigned shareholder of Knickerbocker Stock, holding of record
as of the ___ of October, 2000 (hereinafter the "Effective Date") ______ Shares
of Knickerbocker hereby exchange said Shares for a cash payment of Six Dollars
and Fifteen Cents ($6.15) per share and hereby transfer said shares to
Knickerbocker free and clear of all liens, claims, and encumbrances.
Please sign below exactly how your name appears on your stock
certificate(s), if acting as attorney, executor, trustee, or in other
representative capacity, please give full title as such. If stock is held
jointly, all owners should sign.
Dated:_______________ _____________________________
Signature
Print Name:__________________
Dated:_______________ _____________________________
Signature of Joint Owner
Print Name:__________________
______________________________
Signature of Joint Owner
Print Name:__________________
<PAGE>
SHAREHOLDER: PLEASE NOTE THE FOLLOWING
IMPORTANT INSTRUCTIONS
o All Stock Certificates submitted should be duly endorsed for transfer to
Continental Stock Transfer & Trust Co.
o Knickerbocker's Board of Directors may postpone or abandon the Proposed
Reverse Stock Split at any time prior to its consummation, for any reason,
including without limitation, if, the Directors, in their sole judgment,
determine that consummation of the Reverse Stock Split would unduly
deplete Knickerbocker's working capital. In such event, your enclosed
Stock Certificate will be returned to you.
o To avoid back-up withholding with respect to cash payments, please
complete, date, sign, and return the enclosed form W-9, or a substitute
form W-9.
<PAGE>
ANNEX A-3
BYLAWS
OF
KNICKERBOCKER VILLAGE, INC.
(A New York Corporation)
ARTICLE I.
OFFICE.
The principal office of the Corporation in the State of New York, is at 10
Monroe Street, New York, New York, County of New York.
ARTICLE II.
STOCKHOLDERS' MEETINGS.
Section 1. Annual Meetings.
(a) The annual meeting of the stockholders of the Corporation, commencing with
the year 2000 shall be held at the principal office of the Corporation in
the State of Incorporation or at any other place within or without the
State of Incorporation as may be determined by the Board of Directors and
as may be designated in the notice of that meeting.
The meeting shall be held on the first Wednesday in June of each year. If
that day is a legal holiday, the meeting shall be held on the next
succeeding day not a legal holiday. The business to be transacted at the
meeting shall be the election of directors and such other business as
properly brought before the meeting.
(b) If the election of directors shall not be held on the day herein
designated for any annual meeting, or at any adjournment of that meeting,
the Board of Directors shall call a special meeting of the stockholders as
soon as possible thereafter.
At this meeting the election of directors shall take place, and the
election and any other business transacted shall have the same force and
effect as at an annual meeting duly called and held.
(c) No change in the time or place for a meeting for the election of directors
shall be made within 20 days preceding the day on which the election is to
be held. Written notice of any change shall be given each stockholder at
least 20 days before the election is held, either in person or by letter
mailed to the stockholder at the address last shown on the books of the
Corporation.
<PAGE>
(d) In the event the annual meeting is not held at the time prescribed in
Article II, Section I(a) above, and if the Board of Directors shall not
call a special meeting as prescribed in Article II, Section l(b) above
within three months after the date prescribed for the annual meeting, then
any stockholder may call that meeting, and at that meeting the
stockholders may elect the directors and transact other business with the
same force and effect as at an annual meeting duly called and held.
Section 2. Special Meetings.
Special meetings of the stockholders may be called by the President or by the
holders of at least ten percent (10%) of the stock entitled to vote at that
meeting. At any time, upon the written request of any person or persons entitled
to call a special meeting, it shall be the duty of the Secretary to send out
notices of the meeting, to be held within or without the State of Incorporation
and at such time, but not less than 20 days nor more than 45 days after receipt
of the request, as may be fixed by the Board of Directors. If the Board of
Directors fails to fix a time or place, the meeting shall be held at the
principal office of the Corporation at a time as shall be fixed by the Secretary
within the above limits.
Section 3. Notice and Purpose of Meetings; Waiver.
Each stockholder of record entitled to vote at any meeting shall be given in
person, or by mail, or by prepaid telegram, written or printed notice of the
purpose or purposes, and the time and place within or outside the State of
Incorporation of every meeting of stockholders. This notice shall be delivered
not less than 10 days nor more than 50 days before the meeting. If mailed or
telegraphed, it should be directed to the stockholder at the address last shown
on the books of the Corporation. No publication of the notice of meeting shall
be required. A stockholder may waive the notice of meeting by attendance, either
in person or by proxy, at the meeting, or by so stating in writing, either
before or after the meeting. Attendance at a meeting for the express purpose of
objecting that the meeting was not lawfully called or convened shall not,
however, constitute a waiver of notice. Except where otherwise required by law,
notice need not be given of any adjourned meeting of the stockholders.
Section 4. Quorum.
Except as otherwise provided by law, a quorum at all meetings of stockholders
shall consist of the holders of record of a majority of the shares entitled to
vote present in person or by proxy.
Section 5. Closing of Transfer Books; Record Date.
(a) In order to determine the holders of record of the Corporation's stock who
are entitled to notice of meetings, to vote at a meeting or its
adjournment, to receive payment of any dividend, or to make a
determination of the stockholders of record for any other proper purpose,
the Board of Directors of the Corporation may order that the Stock
Transfer
<PAGE>
Books be closed for a period not to exceed sixty days. If the purpose of
this closing is to determine who is entitled to notice of a meeting and to
vote at such meeting, the Stock Transfer Books shall be closed for at
least thirty days preceding such meeting.
(b) In lieu of closing the Stock Transfer Books, the Board of Directors may
fix a date as the record date for the determination of stockholders. This
date shall be no more than sixty days prior to the date of the action
which requires the determination, nor, in the case of a stockholders'
meeting, shall it be less than thirty days in advance of such meeting.
(c) If the Stock Transfer Books are not closed and no record date is fixed for
the determination of the stockholders of record, the date of which notice
of the meeting is mailed, or on which the resolution of the Board of
Directors declaring a dividend is adopted, as the case may be, shall be
the record date for the determination of stockholders.
(d) When a determination of stockholders entitled to vote at any meeting has
been made as provided in this section, this determination shall apply to
any adjournment of the meeting, except when the determination has been
made by the closing of the Stock Transfer Books and the stated period of
closing has expired.
Section 6. Presiding Officer; Order of Business.
(a) Meetings of the stockholders shall be presided over by the Chairman of the
Board, or, if he or she is not present, by the Chief Executive Officer, or
if not present, by the President, or if he or she is not present, by a
Vice-President, or if neither the Chairman of the Board nor the Chief
Executive Officer nor the President nor a Vice-President is present, by a
chairman to be chosen by a majority of the stockholders entitled to vote
at the meeting who are present in person or by proxy. The Secretary of the
Corporation, or, in her or his absence, an Assistant Secretary, shall act
as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the stockholders present at the meeting
shall choose any person present to act as secretary of the meeting.
(b) The order of business shall be as follows:
1. Call of meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous annual meeting.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Miscellaneous business.
Section 7. Voting.
(a) Except in the election of directors, at which time the stockholders shall
be entitled to
3
<PAGE>
cumulate their votes, and except as otherwise provided in the Articles of
Incorporation, the Bylaws, or the laws of the State of Incorporation at
every meeting of the stockholders, each stockholder of the Corporation
entitled to vote at the meeting shall have, as to each matter submitted to
a vote, one vote in person or by proxy for each share of stock having
voting rights registered in his or her name on the books of the
Corporation. A stockholder may vote his or her shares through a proxy
appointed by a written instrument signed by the stockholder or by a duly
authorized attorney-in-fact and delivered to the secretary of the meeting.
No proxy shall be valid after three months from the date of its execution
unless a longer period is expressly provided.
(b) A majority vote of those shares entitled to vote and represented at the
meeting, a quorum being present, shall be the act of the meeting except
that in electing directors a plurality of the votes cast shall elect.
(c) At all elections of directors, the voting shall be by ballot.
Section 8. List of Stockholders.
(a) A complete list of the stockholders of the Corporation entitled to vote at
the ensuing meeting, arranged in alphabetical order, and showing the
address of, and number of shares owned by, each stockholder shall be
prepared by the Secretary, or other officer of the Corporation having
charge of the Stock Transfer Books. This list shall be kept on file for a
period of at least thirty days prior to the meeting at the principal
office of the Corporation and shall be subject to inspection during the
usual business hours of such period by any stockholder. This list shall
also be available at the meeting and shall be open to inspection by any
stockholder at any time during the meeting.
(b) The original Stock Transfer Books shall be prima facie evidence as to who
are the stockholders entitled to examine the list or to vote at any
meeting of the stockholders.
(c) Failure to comply with the requirements of this section shall not affect
the validity of any action taken at any meetings of the stockholders.
ARTICLE III.
DIRECTORS.
Section 1. Number, Qualification, Term, Quorum, and Vacancies.
(a) Th number of the directors of the Corporation shall be five (5), unless
and until otherwise determined by vote of a majority of the entire Board
of Directors. The number of Directors shall not be less than three, unless
all the outstanding shares are owned beneficially and of record by less
than three shareholders, in which event the number of Directors shall not
be less than the number of Shareholders. One of such directors shall
always be appointed by the Commissioner of the New York State Division of
Housing and Community Renewal of the State of New York (hereinafter
called the "DHCR"),
4
<PAGE>
whose designee shall at all times be accepted by the Corporation as a
member of the Board of Directors thereof, if and to the extent such
designee shall be required by law or by valid and applicable regulations
of the DHCR.
(b) The number of directors may be increased or decreased from time to time by
an amendment to these Bylaws. Any increased number of directors shall be
elected by the stockholders at the next regular annual meeting or at a
special meeting called for that purpose.
(c) Directors need not be stockholders of the Corporation.
(d) A majority of the directors in office shall be necessary to constitute a
quorum for the transaction of business. If, at any meeting of the Board of
Directors, there shall be less than a quorum present, a majority of those
present may adjourn the meeting, without further notice, from time to time
until a quorum shall have been obtained. In case there are vacancies on
the Board of Directors, other than vacancies created by the removal of a
director or directors by the stockholders or by an increase in the number
of directors, the remaining directors, although less than a quorum, may by
a majority vote elect a successor or successors for the unexpired term or
terms.
Section 2. Meetings.
Meetings of the Board of Directors may be held either within or without the
State of Incorporation. Meetings of the Board of Directors shall be held at
those times as are fixed from time to time by resolution of the Board. Special
meetings may be held at any time upon call of the Chairman of the Board, the
Chief Executive Officer, the President, or a Vice-President, or a majority of
directors, upon written or telegraphic notice deposited in the U.S. mail or
delivered to the telegraph company at least thirty days prior to the day of the
meetings. A meeting of the Board of Directors may be held without notice
immediately following the annual meeting of the stockholders. Notice need not be
given of regular meetings of the Board of Directors held at times fixed by
resolution of the Board of Directors nor need notice be given of adjourned
meetings. Meetings may be held at any time without notice if all the directors
are present or if, before the meeting, those not present waive such notice in
writing. Notice of a meeting of the Board of Directors need not state the
purpose of, nor the business to be transacted at, any meeting.
Section 3. Removal.
(a) At any meeting of the stockholders, any director or directors may be
removed from office, without assignment of any reason, by a majority vote
of the shares or class of shares, as the case may be, which elected the
director or directors to be removed, provided, however, that if less than
all the directors are to be removed, no individual director shall be
removed if the number of votes cast against her or his removal would be
sufficient, if cumulatively voted at an election of the entire board, to
elect one or more
5
<PAGE>
directors.
(b) When any director or directors are removed, new directors may be elected
at the same meeting of the stockholders for the unexpired term of the
director or directors removed. If the stockholders fail to elect persons
to fill the unexpired term or terms of the director or directors removed,
these unexpired terms shall be considered vacancies on the board to be
filled by the remaining directors.
Section 4. Indemnification.
(a) The Corporation shall indemnify each of its directors, officers, and
employees whether or not then in service as such (and his or her executor,
administrator and heirs), against all reasonable expenses actually and
necessarily incurred by him or her in connection with the defense of any
litigation to which the individual may have been made a party because he
or she is or was a director, officer or employee of the Corporation. The
individual shall have no right to reimbursement, however, in relation to
matters as to which he or she has been adjudged liable to the Corporation
for negligence or misconduct in the performance of his or her duties, or
was derelict in the performance of his or her duty as director, officer or
employee by reason of willful misconduct, bad faith, gross negligence or
reckless disregard of the duties of his or her office or employment. The
right to indemnity for expenses shall also apply to the expenses of suits
which are compromised or settled if the court having jurisdiction of the
matter shall approve such settlement.
(b) The foregoing right of indemnification shall be in addition to, and not
exclusive of, all other rights to that which such director, officer or
employee may be entitled.
Section 5. Compensation.
Subject to the approval of the DHCR, if and to the extent that such approval
shall be required by law or by valid and applicable regulations of DHCR,
directors, and members of any committee of the Board of Directors, shall be
entitled to any reasonable compensation for their services as directors and
members of any committee as shall be fixed from time to time by resolution of
the Board of Directors, and shall also be entitled to reimbursement for any
reasonable expense incurred in attending those meetings. The compensation of
directors may be on any basis as determined in the resolution of the Board of
Directors. Any director receiving compensation under these provisions shall not
be barred from serving the Corporation in any other capacity and receiving
reasonable compensation for such other services.
Section 6. Committees.
(a) The Board of Directors, by a resolution or resolutions adopted by a
majority of the members of the whole Board, may appoint an Executive
Committee, an Audit Committee, and any other committees as it may deem
appropriate. Each committee shall consist of at least three members of the
Board of Directors. Each committee shall have and may exercise any and all
powers as are conferred or authorized by the resolution
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appointing it. A majority of each committee may determine its action and
may fix the time and place of its meetings, unless provided otherwise by
the Board of Directors. The Board of Directors shall have the power at any
time to fill vacancies in, to change the size of membership of, and to
discharge any committee.
(b) Each committee shall keep a written record of its acts and proceedings and
shall submit that record to the Board of Directors at each regular meeting
and at any other times as requested by the Board of Directors. Failure to
submit the record, or failure of the Board to approve any action indicated
therein will not, however, invalidate the action to the extent it has been
carried out by the Corporation prior to the time the record of such action
was, or should have been, submitted to the Board of Directors as provided.
Section 7. Dividends.
Subject always to the provisions of law and the Articles of Incorporation, the
Board of Directors shall have full power to determine whether any, and, if so,
what part, of the funds legally available for the payment of dividends shall be
declared in dividends and paid to the stockholders of the Corporation. The Board
of Directors may fix a sum which may be set aside or reserved over and above the
paid-in capital of the Corporation for working capital or as a reserve for any
proper purpose, and from time to time may increase, diminish, and vary this fund
in the Board's absolute judgment and discretion.
ARTICLE IV.
OFFICERS.
Section 1. Number.
The officers of the Corporation shall be a Chairman of the Board, a Chief
Executive Officer, a President, one or more Vice-Presidents, a Treasurer, a
Controller, a Secretary, and one or more Assistant Secretaries. In addition,
there may be such subordinate officers as the Board of Directors may deem
necessary. Any person may hold two, but no more than two, offices.
Section 2. Term of Office.
The principal officers shall be chosen annually by the Board of Directors at the
first meeting of the Board following the stockholders' annual meeting, or as
soon as is conveniently possible. Subordinate officers may be elected from time
to time. Each officer shall serve until his or her successor shall have been
chosen and qualified, or until his, death, resignation, or removal.
Section 3. Removal.
Any officer may be removed from office with or without cause, at any time by the
affirmative vote of a majority of the Board of Directors then in office. Such
removal shall not prejudice the contract rights, if any, of the person so
removed.
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Section 4. Vacancies.
Any vacancy in any office from any cause may be filled for the unexpired portion
of the term by the Board of Directors.
Section 5. Duties.
(a) The Chairman of the Board shall preside at all meetings of the
stockholders and the Board of Directors. Except where, by law, the
signature of the President is required, the Chairman shall possess the
same power as the President to sign all certificates, contracts, and other
instruments of the Corporation which may be authorized by the Board of
Directors.
(b) The Chief Executive Officer shall have general active management of the
business of the corporation, and in the absence of the Chairman of the
Board, shall preside at all meetings of the shareholders and the Board of
Directors; and shall see that all orders and resolutions of the Board of
Directors are carried into effect.
(c) The President, in the absence of the Chairman of the Board, shall preside
at all meetings of the stockholders and the Board of Directors. She or he
shall have general supervision of the affairs of the Corporation, shall
sign or countersign all certificates, contracts, or other instruments of
the Corporation as authorized by the Board of Directors, shall make
reports to the Board of Directors and stockholders, and shall perform any
and all other duties as are incident to her or his office or are properly
required of him or her by the Board of Directors.
(d) The Vice-Presidents, in the order designated by the Board of Directors,
shall exercise the functions of the President during the absence or
disability of the President. Each Vice-President shall have any other
duties as are assigned from time to time by the Board of Directors.
(e) The Secretary, the Treasurer, and the Controller shall perform those
duties as are incident to their offices, or are properly required of them
by the Board of Directors, or are assigned to them by the Articles of
Incorporation or these Bylaws. The Assistant Secretaries, in the order of
their seniority, shall, in the absence of the Secretary, perform the
duties and exercise the powers of the Secretary, and shall perform any
other duties as may be assigned by the Board of Directors.
(f) Other subordinate officers appointed by the Board of Directors shall
exercise any powers and perform any duties as may be delegated to them by
the resolutions appointing them, or by subsequent resolutions adopted from
time to time.
(g) In case of the absence or disability of any officer of the Corporation and
of any person
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authorized to act in his or her place during such period of absence or
disability, the Board of Directors may from time to time delegate the
powers and duties of that officer to any other officer, or any director,
or any other person whom it may select.
Section 6. Salaries.
The salaries of all officers of the Corporation shall be fixed by the Board of
Directors. No officer shall be ineligible to receive such salary by reason of
the fact that he is also a Director of the Corporation and receiving
compensation therefor.
ARTICLE V.
CERTIFICATES OF STOCK.
Section 1. Form.
(a) The interest of each stockholder of the Corporation shall be evidenced by
certificates for shares of stock, certifying the number of shares
represented thereby and in such form not inconsistent with the Articles of
Incorporation as the Board of Directors may from time to time prescribe.
(b) The certificates of stock shall be signed by the President or a
Vice-President and by the Secretary or an Assistant Secretary or the
Treasurer, and sealed with the seal of the corporation. This seal may be a
facsimile, engraved or printed. Where any certificate is manually signed
by a transfer agent or a transfer clerk and by a registrar, the signatures
of the President, Vice-President, Secretary, Assistant Secretary, or
Treasurer upon that certificate may be facsimiles, engraved or printed. In
case any officer who has signed or whose facsimile signature has been
placed upon any certificate shall have ceased to be an officer before the
certificate is issued, it may be issued by the corporation with the same
effect as if that officer had not ceased to be so at the time of its
issue.
Section 2. Subscriptions for Shares.
Unless the subscription agreement provides otherwise, subscriptions for shares,
regardless of the time when they are made, shall be paid in full at that time,
or in installments and at any periods, as shall be specified by the Board of
Directors. All calls for payments on subscriptions shall carry the same terms
with regard to all shares of the time class.
Section 3. Transfers.
(a) Transfers of shares of the capital stock of the Corporation shall be made
only on the books of the Corporation by the registered owner, or by his or
her duly authorized attorney, with a transfer clerk or transfer agent
appointed as provided in Section 5 of this Article of the Bylaws, and on
surrender of the certificate or certificates for those shares properly
endorsed with all taxes paid.
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(b) The person in whose name shares of stock stand on the books of the
Corporation shall be deemed by the Corporation to be the owner thereof for
all purposes. However, if any transfer of shares is made only for the
purpose of furnishing collateral security, and that fact is made known to
the Secretary of the Corporation, or to the Corporation's transfer clerk
or transfer agent, the entry of the transfer may record that fact.
Section 4. Lost, Destroyed, or Stolen Certificates.
No certificate for shares of stock in the Corporation shall be issued in place
of any certificate alleged to have been lost, destroyed, or stolen except on
production of evidence, satisfactory to the Board of Directors, of that loss,
destruction or theft, and, if the Board of Directors so requires, upon the
furnishing of an indemnity bond in such amount (but not to exceed twice the
value of the shares represented by the certificate) and with such terms and
surety as the Board of Directors, if any, in its discretion, require.
Section 5. Transfer Agent and Registrar.
The Board of Directors may appoint one or more transfer agents or transfer
clerks and one or more registrars, and may require all certificates for shares
to bear the signature or signatures of any of them.
Section 6. Fractional Share Interests.
The corporation may, but shall not be required to, issue fractions of a share.
If the corporation does not issue fractions of a share, it shall (1) arrange for
the disposition of fractional interests by those entitled thereto, (2) pay in
cash the fair or par value of fractions of a share as of the time when those
entitled to receive such fractions are determined, or (3) issue scrip or
warrants in registered form (either represented by a certificate or
uncertificated) or bearer form (represented by a certificate or uncertificated)
or bearer form (represented by a certificate) which shall entitle the holder to
receive a full share upon the surrender of such scrip or warrants aggregating a
full share. A certificate for a fractional share or an uncertificated fractional
share shall, but scrip or warrants shall not unless otherwise provided therein,
entitle the holder to exercise voting rights, to receive dividends thereon, and
to participate in any of the assets of the corporation in the event of
liquidation. The Board of Directors may cause scrip or warrants to be issued
subject to the conditions that they shall become void if not exchanged for
certificates representing the full shares or uncertificated full shares before a
specified date, or subject to the conditions that the shares for which scrip or
warrants are exchangeable may be sold by the corporation and the proceeds
thereof distributed to the holders of scrip or warrants, or subject to any other
conditions which the Board of Directors may impose.
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ARTICLE VI.
CORPORATE ACTIONS.
Section 1. Deposits.
The Board of Directors shall select banks, trust companies, or other
depositories in which all funds of the Corporation not otherwise employed shall,
from time to time, be deposited to the credit of the Corporation.
Section 2. Voting Securities Held by the Corporation.
Unless otherwise ordered by the Board of Directors, the President shall have
full power and authority on behalf of the Corporation to attend, act, and vote
at any meeting of security holders of other corporations in which the
Corporation may hold securities. At that meeting the President shall possess and
may exercise any and all rights and powers incident to the ownership of those
securities which the corporation might have possessed and exercised if it had
been present. The Board of Directors may, from time to time, confer like powers
upon any other person or persons.
ARTICLE VII.
CORPORATE SEAL.
The corporate seal of the Corporation shall consist of two concentric circles,
between which shall be the name of the Corporation, and in the center of which
shall be inscribed the year of its incorporation and the words "Corporate Seal,
State of New York."
ARTICLE VIII.
AMENDMENT OF BYLAWS.
The Board of Directors shall have the power to amend, alter or repeal these
Bylaws, and to adopt new Bylaws, from time to time, by an affirmative vote of a
majority of the whole Board as then constituted, provided that notice of the
proposal to make, alter, amend, or repeal the Bylaws was included in the notice
of the directors' meeting at which such action takes place. At the next
stockholders' meeting following any action by the Board of Directors, the
stockholders, by a majority vote of those present and entitled to vote, shall
have the power to alter or repeal Bylaws newly adopted by the Board of
Directors, or to restore to their original status Bylaws which the Board may
have altered or repealed, and the notice of such stockholders' meeting shall
include notice that the stockholders will be called on to ratify the action
taken by the Board of Directors with regard to the Bylaws.
ARTICLE IX.
APPROVAL OF DHCR
Anything contained in these By laws to the contrary notwithstanding, all acts of
the Corporation shall be subject to the approval of the DHCR, if and to the
extent that such approval shall be required by law or by valid and applicable
regulations of the DHCR.
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