AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON OCTOBER 8, 1997
REGISTRATION NO.333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HOME PROPERTIES OF NEW YORK, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
MARYLAND 16-1455126
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
850 CLINTON SQUARE
ROCHESTER, NEW YORK 14604
(716) 546-4900
(ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ANN M. MCCORMICK, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
HOME PROPERTIES OF NEW YORK, INC.
850 CLINTON SQUARE
ROCHESTER, NEW YORK 14604
(716) 246-4105
FACSIMILE: (716) 546-5433
(NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
COPIES TO:
DEBORAH MCLEAN QUINN, ESQ.
NIXON, HARGRAVE, DEVANS & DOYLE LLP
ONE CLINTON SQUARE
ROCHESTER, NEW YORK 14604
(716) 263-1307
FACSIMILE: (716) 263-1600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
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If only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.
/X/
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
class of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered per unit offering price fee
- ------------- ---------- -------------- -------------- ------------
Common stock,
par value
$.01 750,000 sh. $26.00(1) $19,500,000(1)(2) $5,909.09(2)
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 and based upon prices
on the New York Stock Exchange on October 1, 1996.
(2) Pursuant to Rule 429 under the Securities Act of 1933, as of the date
hereof, (a) 1,010 shares of the Registrant's Common Stock were still available
for sale under the Registrant's Registration Statement on Form S-3, No. 333-
30835 and a registration fee of $6.70 was paid on July 7, 1997 with respect to
such shares; and (b)843,610 shares of the Registrant's Common Stock were still
available for sale under the Registrant's Registration Statement on Form S-3,
No. 33-96004 and a registration fee of $5,127.15 was paid on August 16, 1995
with respect to such shares.
The Prospectus contained in this Registration Statement is also the
Prospectus under the Registrant's Registration Statement on Form S-3, No. 33-
96004, No. 333-13723 and No. 333-30835 for purposes of Section 10 of the
Securities Act of 1933, as amended, pursuant to Rule 429 under such Act.
<PAGE>
PROSPECTUS SUPPLEMENT
HOME PROPERTIES OF NEW YORK, INC.
DIVIDEND REINVESTMENT, STOCK PURCHASE
RESIDENT STOCK PURCHASE AND EMPLOYEE STOCK PURCHASE PLAN
This supplements the Prospectus of Home Properties of New York, Inc. dated
November 5, 1995, as amended by Prospectus Supplements dated July 15, 1996,
October 8, 1996, and July 7, 1997.
Home Properties is a self-managed real estate investment trust which
manages 134 communities with 16,004 apartment units. Of these, 9,756 units in
44 communities are owned outright, 4,782 units are managed by the Company as
general partner and 1,466 are managed for other owners, primarily affiliates of
the Company. The majority of the communities are located throughout New York,
with additional holdings in Pennsylvania, Ohio, and New Jersey. Home
Properties also owns a 202-site manufactured home community and manages 1.6
million square feet of commercial space. Home Properties conducts
substantially all of its business and owns all of its properties through Home
Properties of New York, L.P. (the "Operating Partnership"), of which the
Company is the general partner. To comply with certain technical requirements
of the Internal Revenue Code of 1986, as amended, the Operating Partnership
carries out portions of its property management and development activities
through management companies beneficially owned by the Operating Partnership or
controlled by one or more officers of Home Properties (the "Management
Companies").
The Company's executive offices are located at 850 Clinton Square,
Rochester, New York 14604. Its telephone number is (716) 546-4900.
The Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and
Employee Stock Purchase Plan, as amended and restated (the "Plan") of Home
Properties of New York, Inc. ("Home Properties" of the "Company")has been
amended to increase the number of shares of Home Properties' common stock
("Common Stock") available for voluntary cash payments. The Board of Directors
of Home Properties has increased by 750,000 shares to 2,250,000 shares of the
Common Stock offered under the Plan, are available for purchase with optional
cash payments. Home Properties will received the proceeds of the sale of newly
issued Common Stock. In each place in the enclosed Prospectus where the
aggregate number of shares of Common Stock initially available under the Plan
is referred to, the number 2,400,000 shares is replaced with the number
3,150,000 shares, and at each reference to the aggregate number of shares
available for voluntary cash purchases the number 1,500,000 shares is replaced
by the number 2,250,000 shares. As of the date of this Prospectus Supplement,
an aggregate of 1,498,990 has been purchased through voluntary cash purchases
and 56,390 shares had been purchased through the dividend reinvestment feature
of the Plan.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is October 8, 1997
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE COMPANY IS UNLAWFUL.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
ANY OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH OFFER IS UNLAWFUL.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, which have been filed by Home Properties under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated into this Prospectus Supplement by reference: The Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996; the
Company's Quarterly Reports on Form 10-Q for the quarterly periods ending March
30, 1997 and June 30, 1997; the Company's Current Reports on Form 8-K filed
January 7, 1997, as amended on February 4, 1997, filed June 6, 1997, as amended
on August 11, 1997, filed July 7, 1997, filed September 25, 1997, filed October
3, 1997 and filed October 7, 1997; and all other reports filed by the Company
pursuant to Section 13(a) of the Exchange Act since December 31, 1996.
Documents incorporated herein by reference are available to any shareholder of
the Company, on written or oral request, without charge, from the Company.
Requests should be directed to David P. Gardner, Chief Financial Officer, Home
Properties of New York, Inc., 850 Clinton Square, Rochester, New York 14604,
telephone (716) 546-4900. Copies of documents so requested will be sent by
first class mail, postage paid.
RECENT LEGISLATION
The Taxpayer Relief Act of 1997 was signed into law on August 5, 1997.
Since the Taxpayer Relief Act of 1997 was recently enacted, and since the IRS
has not yet issued regulations under it, certain aspects of its application to
REITs are unclear. Stockholders should consult their tax advisors regarding
changes made by the Taxpayer Relief Act of 1997 on REITs. The following
paragraphs summarize certain provisions of the Taxpayer Relief Act of 1997
which should be read in conjuction with the information under the heading
"Federal Income Tax Considerations" in the accompanying Prospectus.
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In determining whether a REIT satisfies the income tests for qualification,
for taxable years beginning after August 5, 1997, the Taxpayer Relief Act of
1997 repeals the requirement that less than 30% of gross income come from gain
from the sale or other disposition of stock or securities held for less than
one year, gain from prohibited transactions and gain on the sale or other
disposition of real property held for less than four years (apart from
involuntary conversions and sale of foreclosure property).
Also, for taxable years beginning after August 5, 1997, the Taxpayer Relief
Act of 1997 permits a REIT to render a de minimis amount of otherwise
impermissable services to tenants, or in connection with the management of
property, and still treat amounts received with respect to that property as
rent. The value of such services must not exceed 1% of all amounts received or
accrued during the year, directly or indirectly, from the property. The amount
received for any such impermissable service or management operation for this
purpose will be deemed to be not less than 150% of the direct cost to the REIT
in furnishing or rendering the service or management operation.
For taxable years beginning after August 5, 1997, the Taxpayer Relief Act
of 1997 permits a REIT to designate the amount of its undistributed net long-
term capital gains received during the taxable year which its stockholders are
to include in their taxable income as long-term capital gains by a notice
mailed to stockholders within 60 days after the end of the taxable year (or in
a notice mailed with its annual report for the taxable year). If Home
Properties made this designation, the stockholders would include in their
income as long-term capital gains their proportionate share of the
undistributed long-term capital gains as designated by Home Properties. Home
Properties would pay income tax on such retained net long-term capital gains
and the stockholders would be deemed to have paid their proportionate share of
the tax, which would be credited to the stockholders. The basis of the
stockholders' shares would be increased by the amount of the undistributed
long-term capital gains (less the amount of capital gains tax paid by the REIT)
included in the stockholders' long-term capital gains.
The Taxpayer Relief Act of 1997 made certain changes with respect to
taxation of long-term capital gains earned by taxpayers other than
corporations. In general, assets sold after July 29, 1997 by an individual
will be subject to a maximum tax rate on net long-term capital gains (the
excess of net long-term capital gain over short-term capital loss) of 20% if
the shares were held for at least eighteen months. Capital gain on the
disposition of assets on or after July 29, 1997 held for more than one year but
less than eighteen months at the time of disposition will be taxed at a maximum
rate of 28%. Other transition rules may also apply. A maximum federal income
tax rate of 25% applies to "unrecaptured section 1250 gain." "Unrecaptured
1250 gain" generally includes the long-term capital gain realized on (i) the
sale after May 6, 1997 of a real property asset described in Section 1250 of
the Code or (ii) the sale after July 28, 1997 of a real property asset
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described in Section 1250 of the Code which the taxpayer held for more than
eighteen months, but in each case not in excess of the amount of depreciation
(less the gain, if any, treated as ordinary income under Section 1250) taken
on such asset. In certain cases, an 18% maximum rate will apply instead
after December 31, 2000.
<PAGE>
PROSPECTUS SUPPLEMENT
HOME PROPERTIES OF NEW YORK, INC.
DIVIDEND REINVESTMENT, STOCK PURCHASE
RESIDENT STOCK PURCHASE AND EMPLOYEE STOCK PURCHASE PLAN
This supplements the Prospectus of Home Properties of New York, Inc.
November 6, 1995, as amended by prospectus Supplements dated July 15, 1996.
The Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and
Employee Stock Purchase Plan, as amended and restated (the "Plan") of Home
Properties of New York, Inc. ("Home Properties" of the "Company")has been
amended to increase the number of shares of Home Properties' common stock
("Common Stock") available for voluntary cash payments. The Board of Directors
of Home Properties has increased by 420,000 shares to 1,500,000 shares of the
Common Stock offered under the Plan, are available for purchase with optional
cash payments. Home Properties will received the proceeds of the sale of newly
issued Common Stock. In each place i the enclosed Prospectus where the
aggregate number of shares of Common Stock initially available under the Plan
is referred to, the number 1,400,000 shares is replaced with the number
2,400,000 shares, and at each reference to the aggregate number of shares
available for voluntary cash purchases the number 1,080,000 shares is replaced
by the number 1,500,000 shares. As of the date of this Prospectus Supplement,
an aggregate of 1,055,360 has been purchased through voluntary cash purchases
and 23,155 shares had been purchased through the dividend reinvestment feature
of the Plan.
The Prospectus is further amended by replacing the information under
the heading "Experts" in its entirety with the following:
The consolidated balance sheets of Home Properties New York, Inc. as of
December 31, 1996 and 1995 and the consolidated results of operations
and its cash flows for each of the two years in the period ended
December 31, 1996, and for the period August 4, 1994 through December
31, 1994 and the combined results of operations and cash flows of the
Original Properties for the period January 1, 1994 through August 3,
1994, incorporated by reference in this prospectus, have been
incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is July 7, 1997
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE COMPANY IS UNLAWFUL.
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THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
ANY OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH OFFER IS UNLAWFUL.
PROSPECTUS SUPPLEMENT
HOME PROPERTIES OF NEW YORK, INC.
DIVIDEND REINVESTMENT, STOCK PURCHASE
RESIDENT STOCK PURCHASE AND EMPLOYEE STOCK PURCHASE PLAN
The Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and
Employee Stock Purchase Plan of Home Properties of New York, Inc., as amended
and restated (the "Plan") provides the stockholders of Home Properties of New
York, Inc. ("Home Properties" or the "Company") an opportunity to automatically
invest their cash dividends received on shares of Home Properties' common stock
("Common Stock"), in additional shares of Common Stock as well as to make
monthly or other voluntary cash investments in shares of Common Stock. The
Plan also provides the residents of multifamily residential properties owned or
managed by Home Properties or its affiliates ("Residents") with the opportunity
to make voluntary cash investments in shares of Common Stock through regular
monthly payments or other voluntary cash investments. Employees of Home
Properties and its affiliates ("Employees") are also provided with the
opportunity to make voluntary cash investments in shares of Common Stock
through payroll deductions or other voluntary cash investments. Persons who
are not already stockholders of Home Properties and who are not Residents or
Employees may also purchase shares of Common Stock under the Plan through
voluntary cash investments.
Under the Plan, American Stock Transfer & Trust Company, or any successor
bank or trust company as may from time to time be designated by the Company
(the "Agent"), will use dividends on the Common Stock held, and optional cash
payments made, by the participants in the Plan, to acquire additional Common
Stock for the accounts of participants in the Plan. The Agent will buy, at
Home Properties' direction, newly issued shares of Common Stock from Home
Properties or Common Stock in the open market or in negotiated transactions
with third parties.
The price to be paid for Common Stock purchased by the Agent with the
proceeds of cash dividends will reflect a discount of 3% from the Market Price
(as defined in Question 20 below) for the Common Stock for the relevant
investment date. The price to be paid for Common Stock purchased by the Agent
with optional cash payments made by stockholders of record of Home Properties
("Stockholders"), limited partners ("Partners") of Home Properties of New York,
L.P. ("Operating Partnership"), Residents and Employees, will also reflect a
discount of 3% from the Market Price for the Common Stock for the relevant
investment date. The price to be paid for Common Stock purchased by the Agent
with optional cash payments made by persons who are not Stockholders, Partners,
Residents or Employees will be 100% of the Market Price for the Common Stock
for the relevant investment date. The Board of Directors of Home Properties
has increased by 580,000
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shares to 1,080,000 shares of the Common Stock offered
under the Plan, are available for purchase with optional cash payments. Home
Properties will receive the proceeds of the sale of newly issued Common Stock.
In each place in the enclosed Prospectus, dated November 5, 1995, where the
aggregate number of shares of Common Stock initially available under the Plan
is referred to, the number 1,400,000 shares is replaced with the number
1,980,000 shares, and at each reference to the aggregate number of shares
available for voluntary cash purchases the number 500,000 shares is replaced
by the number 1,080,000 shares. As of the date of this Prospectus Supplement,
an aggregate of 426,120.384 shares had been purchased through voluntary cash
purchases and 7,569.550 shares had been purchased through the dividend
reinvestment feature of the Plan.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is October 8, 1996
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH OFFER IS UNLAWFUL.
<PAGE>
PROSPECTUS SUPPLEMENT, DATED JULY 15, 1996
HOME PROPERTIES OF NEW YORK, INC.
DIVIDEND REINVESTMENT, STOCK PURCHASE
RESIDENT STOCK PURCHASE AND EMPLOYEE STOCK PURCHASE PLAN
This supplements the Prospectus (the "Prospectus") of Home Properties of
New York, Inc., dated November 6, 1995.
The provisions of the Dividend Reinvestment, Stock Purchase, Resident Stock
Purchase and Employee Stock Purchase Plan (the "Plan") of Home Properties of
New York, Inc. ("Home Properties" or the "Company") permit optional cash
payments to be made to purchase Common Stock of the Company. As described in
Question 20 of the Prospectus, upon receipt of an opinion of counsel or
favorable letter ruling from the Internal Revenue Service covering certain
issues, the purchase price for shares of Common Stock on such cash purchases
made by stockholders of record of Home Properties, limited partners of Home
Properties of New York, L.P., residents of multifamily residential properties
owned or managed by Home Properties or its affiliates and employees of Home
Properties or its affiliates would reflect a discount of 3% from the Market
Price (as defined in Question 20). The Company has received an opinion of
counsel acceptable to it.
As of August 1, 1996, the purchase price of Common Stock purchase with
optional cash payments received from stockholders, partners, residents and
employees will be 97% of the Market Price.
<PAGE>
PROSPECTUS
HOME PROPERTIES OF NEW YORK, INC.
DIVIDEND REINVESTMENT, STOCK PURCHASE
RESIDENT STOCK PURCHASE AND EMPLOYEE STOCK PURCHASE PLAN
The Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and
Employee Stock Purchase Plan of Home Properties of New York, Inc. (the "Plan")
provides the stockholders of Home Properties of New York, Inc. ("Home
Properties" or the "Company") an opportunity to automatically invest their cash
dividends received on shares of Home Properties' common stock ("Common Stock"),
in additional shares of Common Stock as well as to make monthly or other
voluntary cash investments in shares of Common Stock. The Plan also provides
the residents of multifamily residential properties owned or managed by Home
Properties or its affiliates ("Residents") with the opportunity to make
voluntary cash investments in shares of Common Stock through regular monthly
payments or other voluntary cash investments. Employees of Home Properties and
its affiliates ("Employees") are also provided with the opportunity to make
voluntary cash investments in shares of Common Stock through payroll deductions
or other voluntary cash investments. Persons who are not already stockholders
of Home Properties and who are not Residents or Employees may also purchase
shares of Common Stock under the Plan through voluntary cash investments.
Under the Plan, American Stock Transfer & Trust Company, or any successor
bank or trust company as may from time to time be designated by the Company
(the "Agent"), will use dividends on the Common Stock held, and optional cash
payments made, by the participants in the Plan, to acquire additional Common
Stock for the accounts of participants in the Plan. The Agent will buy, at
Home Properties' direction, newly issued shares of Common Stock from Home
Properties or Common Stock in the open market or in negotiated transactions
with third parties.
The price to be paid for Common Stock purchased by the Agent with the
proceeds of cash dividends will reflect a discount of 3% from the Market Price
(as defined in Question 20 below) for the Common Stock for the relevant
investment date. The price to be paid for Common Stock purchased by the Agent
with optional cash payments made by stockholders of record of Home Properties
("Stockholders"), limited partners ("Partners") of Home Properties of New York,
L.P. ("Operating Partnership"), Residents and Employees, subject to the
issuance of an opinion of counsel or a favorable letter ruling by the Internal
Revenue Service as set forth in Question 20, will also reflect a discount of 3%
from the Market Price for the Common Stock for the relevant investment date.
The price to be paid for Common Stock purchased by the Agent with optional cash
payments made by persons who are not Stockholders, Partners, Residents or
Employees will be 100% of the Market Price for the Common Stock for the
relevant investment date. Up to 500,000 shares of the Common Stock offered
hereby will be available for purchase with optional cash payments. Home
Properties will receive the proceeds of the sale of newly issued Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
<PAGE>
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November 5, 1995
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH OFFER IS UNLAWFUL.
<PAGE>
PROSPECTUS SUMMARY
The Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and
Employee Stock Purchase Plan (the "Plan") of Home Properties of New York, Inc.
("Home Properties" or the "Company") offers 1,400,000 shares of the Common
Stock, par value $.01 per share, to stockholders of Home Properties for
reinvestment of any cash dividends and to stockholders, residents of
multifamily residential properties owned and managed by Home Properties or its
affiliates ("Residents"); employees of Home Properties or its affiliates
("Employees") and others the opportunity to purchase shares of Common Stock
through voluntary cash purchases. The balance of this Prospectus contains
questions and answers designed to explain the operation of the Plan and various
investment considerations.
The price to be paid for Common Stock purchased by the Agent with the
proceeds of cash dividends will reflect a discount of 3% from the Market Price
as described in Question 20. The price to be paid for Common Stock purchased
by the Agent with optional cash payments by stockholders of record
("Stockholders"), Residents, Employees and limited partners ("Partners") of
Home Properties of New York, L.P. (the "Operating Partnership") will be the
Market Price, unless or until Home Properties receives a favorable opinion of
counsel or letter ruling from the Internal Revenue Service, and thereafter will
reflect a 3% discount from the Market Price. Optional cash payments by persons
who are not Stockholders, Residents, Employees or Partners will be 100% of the
Market Price. The Company does not currently anticipate adjusting the amount
of the discount from Market Price except under unusual conditions for optional
cash purchases in excess of $25,000 as described in
Question 15.
Stockholders may invest the full amount of any cash dividends under the
Plan and Partners may invest the full amount of any periodic distributions.
Optional cash payments may not exceed $5,000 per month. Minimum optional cash
payments are $50 per month for Stockholders, Partners, Residents and Employees
and $2,000 per month for others. Home Properties may give prior approval for
optional cash payments in excess of $5,000 per month, up to $25,000 per month.
As described in Question 15, Home Properties may approve Additional Investment
Requests for optional cash payments in excess of $25,000 from time to time
based on a variety of factors, however, grants of permission to purchase Common
Stock in excess of $25,000 per month will be made by Home Properties in its
sole discretion. A maximum of 500,000 shares of Common Stock is available for
purchase with additional cash payments under the Plan. Additional Investment
Requests will be considered on the basis of a variety of factors, which may
include: Home Properties' current and projected capital requirements,
alternatives available to Home Properties to meet those requirements,
prevailing market prices for the Common Stock and other Home Properties'
securities, general economic and market conditions, expected aberrations in the
price or trading volume of Home Properties' securities, the number of shares
held by the participant submitting the Additional Investment Request, the
participant's investment
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intent, the aggregate amount of optional cash payments for which such
Additional Investment Requests have been submitted and the administrative
constraints associated with granting such Additional Investment Requests.
Grants of permission to purchase Common Stock in excess of $25,000 per month
will be made in the absolute discretion of Home Properties.
In addition to the considerations for evaluation of Additional Investment
Requests, any requests may be denied if Home Properties determines that the
participant is making excessive optional cash payments through multiple
stockholder accounts or is engaging in arbitrage activities or is otherwise
engaging in activities under the Plan in a manner which is not in the best
interest of the Company or which may cause the participant to be treated as an
underwriter under the federal securities laws. The Company has not entered
into and has no present intention of entering into any formal or informal
arrangements with any financial intermediaries which would engage in
underwriting type transactions under the Plan by purchasing shares of Common
Stock at a discount and reselling them to recapture the discount.
The discount from Market Price, to the extent it is available for cash
purchases as described in Question 20, may permit those institutions or
individuals which engage in transactions in the securities markets to make
cash purchases at the discount and resell the Common Stock in the market to
earn the discount. These persons may purchase through various accounts,
staying below the $5,000 threshold for permission for additional investments
described in Question 15. Persons engaging in such transactions may be deemed
underwriters under the federal securities laws. Home Properties does not
expect that this type of transaction will be engaged in to any significant
extent because of the limited number of shares available for cash purchases and
the requirement for prior approval for purchases over $5,000 a month.
ADDITIONAL INFORMATION
Home Properties has filed with the Securities and Exchange Commission (the
"Commission"), 450 Fifth Street, N.W., Washington, D.C. 20549, a Registration
Statement on Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder, with
respect to the Common Stock offered pursuant to this Prospectus. This
Prospectus, which is part of the Registration Statement, does not contain all
of the information set forth in the Registration Statement and the exhibits
thereto. For further information with respect to the Company and the Common
Stock, reference is made to the Registration Statement and such exhibits,
copies of which may be examined without charge at, or obtained upon payment of
prescribed fees from, the Public Reference Section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and will
also be available for inspection and copying at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
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Statements contained in this Prospectus as to the contents of any contract
or other document which is filed as an exhibit to the Registration Statement
are not necessarily complete, and each such statement is qualified in its
entirety by reference to the full text of such contract or document.
Home Properties is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and proxy statements and other information
with the Commission. Such reports, proxy statements and other information can
be inspected and copied at the locations described above. Copies of such
materials can be obtained from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, the Common Stock is listed on the New York Stock Exchange and similar
information concerning the Company can be inspected at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
Home Properties furnishes its Shareholders with annual reports containing
audited financial statements with a report thereon by its independent public
accountants.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, which have been filed by Home Properties under the
Exchange Act with the Commission, are incorporated in this Prospectus by
reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994.
2. The Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1995.
3. The Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1995.
4. The Company's Current Report on Form 8-K dated May 16, 1995.
5. The Company's Current Report on Form 8-K dated September 14,
1995.
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6. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A dated June 8, 1994
and the information thereby incorporated by reference contained
in the Company's Registration Statement on Form S-11 (No. 33-
78862), as amended, or a prospectus subsequently filed pursuant
to Rule 424 under the heading "Description of Capital Stock."
7. All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since June 30, 1995.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in and to be a part of
this Prospectus from the date of filing of such reports and documents
(provided, however, that the information referred to in item 402(2)(8) is not
incorporated herein by reference).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in the Registration Statement containing this Prospectus or in any other
subsequently filed documents which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any and all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to those documents. Requests should be directed to: David
P. Gardner, Chief Financial Officer, Home Properties of New York, Inc., 850
Clinton Square, Rochester, New York 14604 (716) 546-4900.
THE COMPANY
AS USED IN THIS SECTION, THE TERMS "HOME PROPERTIES" AND "COMPANY",
INCLUDES HOME PROPERTIES OF NEW YORK, INC., A MARYLAND CORPORATION, HOME
PROPERTIES OF NEW YORK, L.P., A NEW YORK LIMITED PARTNERSHIP AND HOME
PROPERTIES MANAGEMENT, INC., A MARYLAND CORPORATION.
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Home Properties of New York, Inc. is a self-administered, self-managed,
fully integrated real estate investment trust formed in November, 1993 to
continue and expand the multifamily residential real estate business of Home
Leasing Corporation, which was organized in 1967. The Company is one of the
largest owners and operators of multifamily residential properties in Upstate
New York (based on the number of apartment units) and the only publicly traded
real estate investment trust headquartered and active in the area. Home
Properties is fully integrated with operations that include multifamily
acquisitions, development, redevelopment, management, marketing, finance,
leasing and asset management.
The Company's executive offices are located at 850 Clinton Square,
Rochester, New York 14604. Its telephone number is (716) 546-4900.
RISK FACTORS
An investment in the shares of Common Stock involves various risks.
Prospective investors should consider, among other things, the following
factors:
DEPENDENCE ON UPSTATE NEW YORK REGION
All but one of the properties owned or managed by Home Properties are
located in the Upstate New York Region. A decline in the economy in this
region generally may result in a decline in the demand for apartments and
commercial space which may adversely affect the ability of the Company to make
distributions to stockholders.
DEBT FINANCING; NO LIMITATION ON DEBT
The Company is subject to the customary risks associated with debt
financing including the potential inability to refinance existing mortgage
indebtedness upon maturity unfavorable terms. The Board of Directors has
adopted a policy of limiting the Company's indebtedness to approximately 50% of
its market capitalization (i.e., the market value of issued and outstanding
shares of Common Stock and Units plus total debt), but the organizational
documents of the Company do not contain any limitation on the amount of
percentage of indebtedness, funded or otherwise, the Company may incur.
Accordingly, the Board of Directors could alter or eliminate its current policy
on borrowing. If this policy were changed, the Company could become more
highly leveraged, resulting in an increase in debt service that could adversely
affect the Company's ability to make expected
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distributions to its stockholders
and an increased risk of default on the Company's indebtedness.
FAILURE TO QUALIFY AS A REIT
Although the Company believes that it is organized and operated to qualify
as a real estate investment trust (a "REIT") under the Internal Revenue Code of
1986, as amended (the "Code"), no assurance can be given that the Company will
remain so qualified. If in any taxable year the Company fails to qualify as a
REIT, the Company would not be allowed a deduction for distributions to
shareholders in computing its taxable income and would be subject to Federal
income tax (including any applicable alternative minimum tax) on its taxable
income at regular corporate rates. As a result, the amount available for
distribution to the Company's shareholders would be reduced for the year or
years involved. In addition, unless entitled to relief under certain statutory
provisions, the Company would also be disqualified from treatment as a REIT for
the four taxable years following the year during which qualification was lost.
REAL ESTATE INVESTMENT CONSIDERATIONS
General. Investment in real estate involves certain risks, including the
following:
- The Company's ability to finance its operations and pay expected
dividends is dependent on the ongoing ability of its residents to pay rents,
which may be adversely affected by a general or regional economic downturn.
- Real estate is a relatively illiquid asset, thus the Company is not
likely to be able to sell a property quickly to satisfy any cash needs.
- The Company is subject to numerous laws and regulations governing its
properties. Compliance with applicable regulations can be expensive and the
Company cannot predict what new regulation may be applicable to its properties
from time to time nor the cost of compliance.
- The Company's properties are all located in areas where other apartment
communities, traditional single family housing and condominiums compete with
the Company's properties for residents. While the Company believes its
properties are very attractive, newer properties, if built, could attract some
individuals who might otherwise reside in the Company's properties.
- The Company engages in an ongoing program of maintenance but capital
improvements are periodically required for the Company's properties. If
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the Company does not have sufficient operating income to fund capital
improvements or any uninsured losses, it may need to seek financing through
loans or a sale of a property.
HUD Contracts. Approximately 15% of the multifamily residential units owned by
the Company are currently entitled to the benefits of Housing Assistance
Payments contracts ("HAP Contracts") with the U.S. Department of Housing and
Urban Development. The future of the federal HAP Contract program is
uncertain. If the contracts are not renewed as they expire, there could be an
adverse effect on the cash flow of the properties affected.
LIMITS ON OWNERSHIP AND CHANGE OF CONTROL
In order to maintain its qualification as a REIT, not more than 50% in
value of the outstanding stock of Home Properties may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) at any time during the last half of its taxable year. Home
Properties has limited ownership of the issued and outstanding Shares by any
single stockholder to 8.0% of the outstanding Shares.
The percentage ownership limit, the issuance of preferred stock in the
future and the absence of cumulative voting rights could have the effect of (i)
delaying or preventing a change of control of Home Properties even if a
change in control were in stockholders' interest; (ii) deterring tender offers
for the Shares that may be beneficial to the stockholders; or (iii) limiting
the opportunity for stockholders to receive a premium for their Shares that
might otherwise exist if an investor attempted to assemble a block of Shares in
excess of the percentage ownership limit or otherwise to effect a change of
control of Home Properties.
CONFLICTS OF INTEREST WITH RESPECT TO PROPERTY MANAGEMENT
Unlike persons acquiring Common Stock, the Company's executive officers
own most of their interest in the Company through units of limited partnership
interest in the Operating Partnership. As a result of their status as holders
of units, the executive officers and other limited partners may have interests
that conflict with stockholders with respect to business decisions affecting
the Company and the Operating Partnership. In addition, management of the
Company has a significant interest in certain of the properties managed by the
Company. Accordingly, they will have conflicts of interest between their
fiduciary obligations to the partnerships that own such managed properties and
their fiduciary obligations as officers and directors of the Company,
particularly with respect to the enforcement of the management contracts and
timing of the sale of the managed properties.
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THE PLAN
The following questions and answers describe the Dividend Reinvestment,
Stock Purchase, Resident Stock Purchase and Employee Stock Purchase Plan (the
"Plan") of Home Properties of New York, Inc.
PURPOSES AND ADVANTAGES
1. WHAT ARE THE PURPOSES OF THE PLAN?
The purposes of the Plan are to provide Stockholders, Partners, Residents,
Employees and other interested persons with a simple and convenient method of
investing in the Company's Common Stock without payment of any brokerage
commissions, service charges, or other expenses. In addition, the price of
Common Stock purchased under the Plan with reinvested cash dividends will be
97% of the Market Price for such Common Stock for the relevant investment date.
Subject to receipt of an opinion of counsel or the issuance of a favorable
letter ruling by the Internal Revenue Service as set forth in Question 20, the
price to be paid for Common Stock purchased under the Plan with optional cash
payments made by Stockholders, Partners, Residents and Employees on a relevant
investment date also will be 97% of the Market Price for such Common Stock for
the relevant investment date.
2. HOW MAY STOCKHOLDERS PURCHASE COMMON STOCK UNDER THE PLAN?
Holders of record of the Company's Common Stock may (i) have cash
dividends on all or a portion of the shares registered in their name
automatically reinvested in additional Common Stock; (ii) continue to receive
cash dividends on shares registered in their name and purchase Common Stock by
making optional cash payments of not less than $50 or more than $5,000 per
month; or (iii) invest both cash dividends and optional cash payments.
Beneficial owners of Common Stock registered in the name of a broker, bank or
other nominee may participate in the dividend reinvestment portion of the Plan
either by having their Common Stock transferred into their own names or by
making appropriate arrangements with their nominee record holder to participate
on their behalf.
3. HOW MAY RESIDENTS PURCHASE COMMON STOCK UNDER THE PLAN?
Residents may purchase Common Stock under the Plan by making optional cash
payments of not less than $50 nor more than $5,000 per month directly to the
Agent either at the same time as they make their monthly rental payment to Home
Properties or otherwise.
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4. HOW MAY EMPLOYEES PURCHASE COMMON STOCK UNDER THE PLAN?
Employees may purchase Common Stock under the Plan by making optional cash
payments of not less than $50 nor more than $5,000 per month either by payroll
deduction through the Company or otherwise directly to the Agent.
5. HOW MAY PARTNERS PURCHASE COMMON STOCK UNDER THE PLAN?
Partners may purchase Common Stock under the Plan by making optional cash
payments of not less than $50 nor more than $5,000 per month, such payments to
be made directly to the Agent. In addition, Partners may direct Home
Properties to automatically invest all or a portion of the cash distributions
paid by the Operating Partnership in shares of Common Stock.
6. HOW MAY PERSONS WHO ARE NOT STOCKHOLDERS, PARTNERS, RESIDENTS, OR
EMPLOYEES PURCHASE COMMON STOCK UNDER THE PLAN?
Persons who are not Stockholders, Partners, Residents, or Employees may
purchase Common Stock under the Plan by making optional cash payments of not
less than $2,000 nor more than $5,000 per month, such payments to be made
directly to the Agent.
7. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF PARTICIPATION IN THE PLAN?
Participants in the Plan receive full investment of their dividends and
optional cash payments because they are not required to pay brokerage
commissions or other expenses in connection with the purchases of Common Stock
under the Plan and because the Plan permits fractional shares of Common Stock
as well as whole shares of Common Stock to be purchased. In addition,
dividends on all whole and fractional shares of Common Stock credited to
participants' accounts are automatically reinvested in
additional whole or fractional shares of Common Stock. Participants also avoid
the necessity for safe-keeping certificates representing the Common Stock
credited to their accounts and have increased protection against loss, theft or
destruction of such certificates. Furthermore, underlying certificates for
Common Stock may be deposited for safe keeping as more fully explained in the
answer to Question 27. A regular statement for each account provides the
participant with a record of each transaction.
The price of Common Stock purchased under the Plan with either reinvested
cash dividends or, subject to the conditions described in Question 20, optional
cash payments made by Stockholders, Residents, Partners and Employees as of a
relevant investment date is 97% of the Market Price for the applicable
investment date.
<PAGE>
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The Plan has certain disadvantages over purchases of Common Stock through
brokers or otherwise. No interest will be paid by the Company or Agent on
dividends held pending reinvestment or on any optional cash payments. The
Agent, not the participant, determines the timing of investments as described
in Question 19. Accordingly, the purchase price for the Common Stock may vary
from that which would otherwise have been obtained by directing a purchase
through a broker or in a negotiated transaction and the actual number of shares
acquired by the participant will not be known until after the investment date,
as described in Question 21. Optional cash investments in excess of $5,000 per
month may be returned to the participant if the participant did not obtain Home
Properties' prior approval (including completion and acceptance by Home
Properties of an Additional Investment Request for optional cash payments in
excess of $25,000) as described in Question 15. The discount from the Market
Price may create additional taxable income to the Participant and, as described
in Question 42, commissions paid by Home Properties in connection with any open
market purchases by the Agent will be taxable income to the participant.
ELIGIBILITY AND PARTICIPATION
8. WHO IS ELIGIBLE TO BECOME A PARTICIPANT?
Any person who has reached the age of majority in his or her state of
residence is eligible to participate in the Plan through optional cash
payments. In addition, any holder of record of the Company's Common Stock who
has reached the age of majority may elect to have dividends on all or a portion
of such Common Stock reinvested under the Plan. If a beneficial owner has
Common Stock registered in a name other than his or her own, such as that of a
broker, bank nominee or trustee, the beneficial owner may be able to arrange
for that entity to handle the reinvestment of dividends. Stockholders should
consult directly with the entity holding their Common Stock to determine if
they can enroll in the Plan. If not, the Stockholder should request his or her
bank, broker or trustee to transfer some or all of his or her Common Stock into
the beneficial owner's own name in order to participate directly.
Stockholders who are citizens or residents of a country other than the
United States, its territories and possessions should make certain that their
participation does not violate local laws governing such things as taxes,
currency and exchange controls, stock registration, foreign investments and
related matters.
In order to be entitled to the 3% discount described in Question 7, a
Participant must either be a Stockholder, a Partner, a Resident, or an Employee
as of the relevant investment date.
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To qualify as a Resident, an individual must have signed a currently
effective Lease with respect to a multifamily residential property owned or
managed by Home Properties or one of its affiliates. To qualify as an
Employee, the Participant must be employed by Home Properties, Home Properties
of New York, L.P., Home Properties Management, Inc. or an entity under the
control of one of those entities on the relevant investment date.
9. HOW DOES AN ELIGIBLE PERSON BECOME A PARTICIPANT?
An eligible person may elect to become a participant in the Plan at any
time. If you wish to become a participant, all you need to do is complete an
Authorization Form and mail it to American Stock Transfer and Trust Company,
Attn: Dividend Reinvestment, 40 Wall Street, New York, New York 10005.
(Telephone Number 212-936-5100; Telecopy Number 718-236-4588.) Authorization
Forms may be obtained by writing to the same address. Partners who wish to
direct that their distributions from the Operating Partnership be invested in
Common Stock must complete the Distribution Reinvestment Form and return it to
Home Properties, Attn: Chief Financial Officer, 850 Clinton Square, Rochester,
New York 14604. In addition, Employees who wish to participate by means of
payroll deductions, must complete the Payroll Deduction Authorization and
return it to Home Properties, Attn: Payroll Department, 850 Clinton Square,
Rochester, New York 14604.
10. WHAT DOES THE AUTHORIZATION FORM PROVIDE?
The Authorization Form authorizes the Agent to apply any optional cash
payments made by the participant and, if applicable, dividends on Common Stock
registered in the participant's name to the purchase of full and fractional
shares of Common Stock for the participant's account under the Plan. The
Authorization Form offers three investment options:
- - FULL DIVIDEND REINVESTMENT. To reinvest automatically all cash dividends
on all Common Stock registered in the participant's name.
- - PARTIAL REINVESTMENT. To reinvest automatically only the cash dividends
paid on a specified number of shares of Common Stock (not fewer than 100)
registered in the participant's name and to receive dividends on any
remaining shares in cash.
- - OPTIONAL CASH PAYMENTS ONLY. To invest only optional cash payments of not
less than $50 nor more than $5,000 per monthly period (not cumulative from
month to month) to be applied to the purchase of Common Stock.
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A participant may change his or her election by completing and signing a
new Authorization Form and returning it to the Agent. Any election or change
of election concerning the reinvestment of dividends must be received by the
Agent at least one business day prior to the record date for the dividend
payment in order for the election or change to become effective with that
dividend. If a participant signs and returns an Authorization Form without
checking a desired option, or checks a partial dividend reinvestment option
without specifying a number of shares, the participant will be deemed to have
selected the full dividend reinvestment option.
REGARDLESS OF WHICH METHOD OF PARTICIPATION IS SELECTED, ALL CASH DIVIDENDS
PAID ON WHOLE OR FRACTIONAL SHARES CREDITED TO A PARTICIPANT'S PLAN ACCOUNT
WILL BE REINVESTED AUTOMATICALLY.
REINVESTMENT OF DIVIDENDS
11. WHEN WILL DIVIDENDS BE REINVESTED TOWARD THE PURCHASE OF ADDITIONAL COMMON
STOCK?
If a properly completed Authorization Form specifying "full dividend
reinvestment" or "partial reinvestment" is received by the Agent at least one
business day prior to the record date established for a particular dividend
payment, reinvestment of dividends will begin with that dividend payment. If
the Authorization Form is received after one day prior to the record date
established for a particular dividend payment that dividend will be paid in
cash and participation in the Plan for the reinvestment of dividends will not
commence until the next succeeding dividend payment. A dividend record date
normally precedes the payment of dividends by approximately ten days.
12. HOW AND WHEN CAN A PARTICIPANT CHANGE THE AMOUNT OF DIVIDENDS TO BE
REINVESTED?
A participant may change the dividend reinvestment option any time by
submitting a newly executed Authorization Form to the Agent or by writing to
the Agent. Any change in the number of shares of Common Stock with respect to
which the Agent is authorized to reinvest cash dividends must be received by
the Agent at least one day prior to the record date for a dividend payment to
permit the new amount to apply to that dividend.
OPTIONAL CASH PAYMENTS
13. WHO IS ELIGIBLE TO MAKE OPTIONAL CASH PAYMENTS?
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Any person who has submitted a signed Authorization Form is eligible to
make optional cash payments, whether or not the person is a Stockholder,
Partner, Resident or Employee. Stockholders may make optional cash payments
whether or not they have also elected to invest dividends on Common Stock
registered in their name. Common Stock purchased by the Plan for persons who
are Stockholders, Partners, Residents or Employees on the relevant investment
date, subject to the conditions described in Question 20, will be purchased at
97% of the Market Price.
14. HOW DOES THE OPTIONAL CASH PAYMENT OPTION WORK?
Each participant may purchase additional Common Stock by making optional
cash payments at any time. Participants have no obligation to make any cash
payments. Optional cash payments may be made at irregular intervals and the
amount of each cash payment may vary. Any optional cash payment may be made by
a participant sending the Agent a check or money order payable to: American
Stock Transfer and Trust Company (a) with a completed Authorization Form when
enrolling; or (b) thereafter, with an optional cash payment form, which will be
attached to each statement of account sent to the participant.
Optional cash payments must be in United States dollars. DO NOT SEND
CASH. Checks not drawn on a United States' bank are subject to collection and
collection fees and will be invested on the investment date following
collection.
Partners may make optional cash payments by executing a Distribution
Reinvestment Form directing that their distributions from the Operating
Partnership be invested in Common Stock.
Employees may also make optional cash payments by completing a Payroll
Deduction Authorization and returning it to the Company. The Company will
thereafter automatically deduct the indicated amount from the Employee's
paycheck and forward the deducted amount to the Agent to be used for the
purchase of Common Stock for the Employee Participant's account.
NO INTEREST IS PAID BY THE COMPANY OR AGENT ON OPTIONAL CASH PAYMENTS.
15. WHAT LIMITATIONS APPLY TO OPTIONAL CASH PAYMENTS?
Each optional cash payment made by Stockholders, Partners, Residents and
Employees is subject to a minimum calendar month purchase limit of $50 and a
maximum calendar month limit of $5,000. Optional cash payments made by
Partners through investment of distributions made by the Operating Partnership
shall not be subject to these limitations. Each optional cash payment made by
any other person is subject to a minimum calendar month
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purchase limit of $2,000 and a maximum calendar month limit of $5,000.
For purposes of these limitations, all Plan accounts under the common
control, or management, of a participant will be aggregated.
Optional cash deposits of less than the minimum monthly purchase limit
and that portion of any optional cash payment which exceeds the maximum
monthly purchase limit, unless such limit has been waived by the Company,
are subject to return to the participant without interest.
Regardless of the number of shares of Common Stock held by a participant
as of the related record or investment date, participants may make optional
cash payments of up to $5,000 each calendar month without the prior approval
of Home Properties.
Optional cash payments in excess of $5,000, but not greater than $25,000,
may be made with the prior approval of Home Properties. Requests by
participants for approval to make optional cash payments in excess of $5,000
per month will be considered on a case by case basis. The considerations may
include the cash needs of the Company, the participant's investment intent and
the period of time over which the participant desires to make the larger
payments. Optional cash payments in excess of $25,000 may be made by a
participant only upon acceptance by the Company of a written Additional
Investment Request by such participant. No pre-established maximum limit
applies to optional cash payments that may be made pursuant to an Additional
Investment Request, however, participants may not acquire more than 8% of the
Common Stock outstanding at any time as described in Question 43. A maximum of
500,000 shares of Common Stock is currently available under the Plan for
purchase with optional cash payments. Prior approval or acceptance of an
Additional Investment Request with respect to the amount of the optional cash
payment must be obtained each calendar month prior to the respective investment
date. Participants interested in making optional cash payments in excess of
$5,000 or in obtaining an Additional Investment Request should contact David
Gardner, Home Properties' Chief Financial Officer and Vice President at (716)
546-4900.
Additional Investment Requests will be considered on the basis of a
variety of factors, which may include: Home Properties' current and projected
capital requirements, alternatives available to Home Properties to meet those
requirements, prevailing market prices for the Common Stock and other Home
Properties' securities, general economic and market conditions, expected
aberrations in the price or trading volume of Home Properties' securities, the
number of shares held by the participant submitting the Additional Investment
Request, the participant's investment intent, the aggregate amount of
optional cash payments for which such Additional Investment Requests have been
submitted and the administrative constraints associated with granting such
Additional Investment Requests. Grants of permission to purchase Common Stock
in excess of $25,000 per month will be made in the absolute discretion of Home
Properties.
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Home Properties may deny any request for optional payments in excess of
$5,000 for any reason. In addition to the considerations described above for
evaluation of Additional Investment Requests, any requests may be denied if
Home Properties believes the investor is making excessive optional cash
payments through multiple stockholder accounts, is engaging in arbitrage
activities such as "flipping" or is otherwise engaging in activities under the
Plan in a manner which is not in the best interest of the Company or which may
cause the participant to be treated as an underwriter under the federal
securities laws.
Unless it waives its right to do so, Home Properties may establish from
time to time a minimum price (the "Established Price"), which applies only to
the investment of optional cash payments made pursuant to an Additional
Investment Request. The Established Price will be a stated dollar amount that
the closing price of the Common Stock on the New York Stock Exchange for the
respective investment date must equal or exceed. Home Properties reserves the
right to change the Established Price at any time. The Established Price will
be determined at Home Properties' sole discretion after a review of current
market conditions and other relevant factors. In the event that the
Established Price is not satisfied for the respective investment date, each
participant's optional cash payment made pursuant to an Additional Investment
Request would be returned, without interest, to each participant by check.
This return procedure will apply regardless of whether shares are purchased by
the Agent in the open market or directly from Home Properties. ONLY OPTIONAL
CASH PAYMENTS IN EXCESS OF $25,000 PER MONTH ARE AFFECTED BY THE RETURN
PROCEDURE AND THE ESTABLISHED PRICE PROVISION DESCRIBED IN THIS PARAGRAPH. ALL
OTHER OPTIONAL CASH PAYMENTS WILL BE MADE WITHOUT REGARD TO THE ESTABLISHED
PRICE PROVISION. FOR ANY INVESTMENT DATE, THE COMPANY MAY WAIVE ITS RIGHT TO
SET AN ESTABLISHED PRICE FOR OPTIONAL CASH PAYMENTS IN EXCESS OF $25,000.
SETTING AN ESTABLISHED PRICE FOR AN INVESTMENT DATE SHALL NOT AFFECT THE
SETTING OF AN ESTABLISHED PRICE FOR ANY SUBSEQUENT INVESTMENT DATE.
Participants may obtain the Established Price applicable to the next
investment date by telephoning David Gardner, the Company's Chief Financial
Officer and Vice President, at (716) 546-4900.
THE ESTABLISHED PRICE PROVISION AND RETURN PROCEDURES DISCUSSED ABOVE
APPLY ONLY TO OPTIONAL CASH PAYMENTS MADE PURSUANT TO AN ADDITIONAL INVESTMENT
REQUEST AND DO NOT APPLY TO REINVESTMENT OF DIVIDENDS OR TO INVESTMENT OF
DISTRIBUTIONS PAID TO PARTNERS BY THE OPERATING PARTNERSHIP.
16. WHEN WILL OPTIONAL CASH PAYMENTS RECEIVED BY THE AGENT BE INVESTED?
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The Agent will apply any optional cash payments received from a
participant at least three business days before an investment date to the
purchase of Common Stock for the account of the participant on such investment
date if such Common Stock is purchased from the Company. Common Stock to be
purchased by the Agent on the open market will be purchased by the Agent as
promptly as practicable, consistent with the provisions of any applicable
securities laws and market conditions, and in no event will dividends or
optional cash payments be invested more than 30 days after receipt by the
Agent, except where necessary to comply with applicable laws and regulations.
The exact timing of open market purchases, including determining the number of
shares, if any, to be purchased on any day or at any time of that day, the
prices paid for such shares, the markets on which such purchases are made and
the persons (including brokers and dealers) from or through which such
purchases are made shall be determined by the Agent or the broker selected by
it for that purpose. The Agent may
<PAGE>
purchase Common Stock in advance of a dividend payment date or interim
investment date for settlement on or after such date. No interest will be paid
on funds held by the Agent pending investment.
With respect to optional cash payments made by Employees by means of a
payroll deduction, Home Properties will transmit promptly all such funds to the
Agent or to a segregated escrow account for the benefit of participants. Any
such optional cash payments received at least five business days before an
investment date will be applied for the purchase of Common Stock for the
account of the participant on such investment date if such Common Stock is
purchased from the Company, and as soon as practicable after such investment
date if such Common Stock is purchased on the open market.
With respect to optional cash payments made by Partners through investment
of distributions made by the Operating Partnership, the Agent will apply all
funds received from Home Properties for such purposes on or prior to the
relevant dividend payment date to purchase Common Stock on the relevant
dividend payment date.
17. MAY OPTIONAL CASH PAYMENTS BE RETURNED TO A PARTICIPANT?
Optional cash payments received by the Agent will be returned to a
participant upon written request received by the Agent at least two business
days prior to the next investment date. Additionally, the portion of each
optional cash payment that exceeds $25,000 will be returned by check, without
interest, as soon as practicable after the investment date if the Established
Price is not met. Also, each optional cash payment, to the extent that it does
not conform to the limitations described in Question 15 will be subject to
return to the participant.
<PAGE>
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PURCHASES
18. WHAT IS THE SOURCE OF THE COMMON STOCK PURCHASED UNDER THE PLAN?
Purchases of Common Stock of Home Properties by the Agent for the Plan may
be made, at Home Properties' option, either: (i) from Home Properties, out of
its authorized but non-outstanding shares; or (ii) in the open market (on the
New York Stock Exchange or any securities exchange where the Common Stock is
then traded, in the over-the-counter market or in negotiated transactions).
Although no assurances can be given, the Company anticipates that the Common
Stock purchased for participant's accounts under the Plan will be purchased by
the Agent from the Company out of its authorized but unissued shares. Home
Properties may not change its designation as to whether shares of Common Stock
will be purchased from Home Properties or on the open market more than once in
any three month period and only, to the extent required by applicable law,
rules or regulations, if Home Properties' needs to raise additional capital has
changed, or another valid reason exists for the change.
19. WHEN WILL COMMON STOCK BE PURCHASED FOR PARTICIPANT'S ACCOUNT?
Purchases from Home Properties of Common Stock will be made on the
relevant investment date. Purchases in the open market will begin on the
investment date and will be completed no later than 30 days from such date
except where completion at a later date is necessary or advisable under any
applicable securities laws or regulations. The exact timing of open market
purchases, including determining the number of shares of Common Stock, if any,
to be purchased on any day or any time of that day, prices paid for such Common
Stock, the markets on which such purchases are made and the persons (including
brokers and dealers) from or through which such purchases are made shall be
determined by the Agent or the broker selected by it for that purpose. Neither
Home Properties or the Agent shall be liable when conditions, including
compliance with the rules and regulations of the Securities and Exchange
Commission, prevent the purchase of Common Stock or interfere with the timing
of such purchases. The Agent may purchase Common Stock in advance of a
dividend payment date for settlement on or after such date.
Notwithstanding the above, funds shall be returned to participants if not
used to purchase Common Stock: (i) within 35 days of receipt of optional cash
payments; or (b) within 30 days of the dividend date for dividend
reinvestments.
With respect to the reinvestment of dividends, the investment date in any
month that a dividend is paid is the dividend payment date. With respect to
the investment of cash distributions paid by the Operating
<PAGE>
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Partnership, the investment date in any month that a distribution is paid is
the distribution payment date. With respect to all other optional cash
purchases, the investment date will be on or about the tenth day of that
month.
In making purchases for a participant's account, the Agent may commingle
the participant's funds with those of other participants in the Plan.
20. WHAT IS THE PRICE OF COMMON STOCK PURCHASED BY PARTICIPANTS UNDER THE
PLAN?
The purchase price of Common Stock purchased with reinvested cash
dividends will be 97% of the Market Price for the Common Stock for the relevant
investment date. The Company intends, and the Plan provides, that the purchase
price of Common Stock purchased with optional cash payments received from
Stockholders, Partners, Residents and Employees will also be 97% of the Market
Price for the Common Stock for the relevant investment date. Due to certain
tax issues, however, the 3% discount on optional cash investments will not be
available until the Company receives an opinion of counsel based upon a
favorable letter ruling from the IRS in response to the request of other real
estate investment trusts having plans similar to the Plan or the Company
receives a favorable letter ruling with respect to the Plan. In that event,
the Company or the Agent will notify all existing
participants of the applicability of the 3% discount to the Market Price for
Common Stock purchased under the Plan with optional cash payments. The
purchase price of Common Stock purchased with optional cash payments received
from persons who are not Stockholders, Partners, Residents or Employees on the
relevant investment date will be 100% of the Market Price for the Common Stock
for the relevant investment date.
As used herein, the "Market Price" shall be average of the daily high and
low sale prices of the Common Stock on the New York Stock Exchange for the
period of five trading days ending on the relevant investment date and with
respect to Common Stock purchased on the open market or in negotiated
transactions, the weighted average price for all Common Stock purchased under
the Plan with respect to that investment date.
No participant shall have any authority or power to direct the time or
price at which Common Stock may be purchased.
21. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR A PARTICIPANT?
The number of shares of Common Stock to be purchased for a participant's
account as of any investment date will be equal to the total dollar amount to
be invested for the participant divided by the applicable
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purchase price computed to the third decimal place. For a participant who
has elected to reinvest dividends on Common Stock registered in a participant's
name, the total dollar amount to be invested as of any dividend payment date
will be the sum of (a) the dividend on all or a part of the Common Stock
registered in the participant's own name, (b) any optional cash payments to
be invested as of that investment date; and (c) the dividends on all Common
Stock (including fractional shares of Common Stock) previously credited to the
participant's Plan account.
The amount to be invested for a participant with reinvested cash dividends
will be reduced by any amount the Company is required to deduct for federal tax
withholding purposes.
PLAN ADMINISTRATION
22. WHO ADMINISTERS THE PLAN?
The American Stock Transfer and Trust Company, as Agent for Plan
participants, administers the Plan, keeps records, sends statements of account
to participants and performs other duties relating the Plan. All costs of
administering the Plan are paid by Home Properties. Common Stock purchased
under the Plan is issued in the name of the Agent or its nominee, as Agent for
participants in the Plan.
The following address may be used to obtain information about the Plan:
American Stock Transfer and Trust Company, Attention: Dividend Reinvestment,
40 Wall Street, New York, New York 10005. (Telephone Number 212-936-5100;
Telecopy Number 718-236-4588.)
Be sure to mention Home Properties of New York, Inc. and, if you are
already a Plan participant, your account number in any communication.
23. WHAT REPORTS ARE SENT TO PARTICIPANTS IN THE PLAN?
After an investment is made for a participant's account, whether by
reinvestment of dividends or by optional cash payment, the participant will be
sent a statement which will provide a record of the costs of the Common Stock
purchased for that account, the date on which the shares were purchased and the
number of shares of Common Stock in that account. These statements should be
retained for income tax purposes. In addition, each participant will be sent
the same communication sent to every holder of Common Stock, including the
Company's annual reports, notice of annual meeting and proxy statement, and
income tax information for reporting dividends paid.
<PAGE>
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All reports and notices from the Agent to a participant will be addressed
to the participant's last known address. Participants should notify the Agent
promptly in writing of any change of address.
24. WHAT IS THE RESPONSIBILITY OF THE COMPANY AND THE AGENT UNDER THE PLAN?
The Company and the Agent, in administering the Plan, are not liable for
any act done in good faith or for any good faith omission to act, including,
without limitation, any claim of liability arising out of failure to terminate
a participant's account upon such participant's death prior to receipt by the
Agent of notice in writing of such death, with respect to the prices and times
at which Common Stock is purchased or sold for a participant, or with respect
to any fluctuation in market value before or after any purchase or sale of
shares. Neither the Company nor the Agent can provide any assurance of a
profit, or protect a participant from a loss, on shares of Common Stock
purchased under the Plan. These limitations of liability do not affect any
liabilities arising under the federal securities laws, including the Securities
Act of 1933.
The Agent may resign as administrator of the Plan at any time, in which
case the Company shall appoint a successor administrator. In addition, the
Company may replace the Agent with a successor administrator at any time.
SHARE CERTIFICATES
25. ARE CERTIFICATES ISSUED TO PARTICIPANTS FOR COMMON STOCK PURCHASED UNDER
THE PLAN?
Common Stock purchased under the Plan is registered in the name of the
Agent or its nominee, as agent for the participants in the Plan.
A certificate for any number of whole shares of Common Stock credited to a
participant's Plan account will be issued to the participant upon written
request to the Agent. Such requests will be handled by the Agent, normally
within two weeks, at no charge to the participant. Any remaining whole shares
of Common Stock and a fractional share of a Common Stock will continue to be
credited to the participant's account. Certificates for fractional shares will
not be issued under any circumstances.
26. WHAT IS THE EFFECT ON A PARTICIPANT'S PLAN ACCOUNT IF A PARTICIPANT
REQUESTS A CERTIFICATE FOR WHOLE SHARES OF COMMON STOCK HELD IN THE
ACCOUNT?
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If a participant maintains an account for reinvestment of dividends, all
dividends on the Common Stock for which a certificate is requested would
continue to be reinvested under the Plan so long as such Common Stock remains
registered in the participant's name. If the participant maintains a Plan
account only for optional cash payments, dividends on Common Stock for which a
certificate is requested would no longer be reinvested under the Plan unless
and until the participant submits an Authorization Form to authorize
reinvestment of dividends on Common Stock registered in the participant's name.
27. MAY SHARES OF COMMON STOCK HELD IN CERTIFICATE FORM BE DEPOSITED IN A
PARTICIPANT'S PLAN ACCOUNT?
Yes, whether or not the participant has previously authorized reinvestment
of dividends, certificates registered in participant's name may be surrendered
to Agent for deposit in participant's Plan account. All dividends on any
Common Stock evidenced by certificates deposited in accordance with the Plan
will automatically be reinvested. The participant should contact the Agent for
the proper procedure to deposit certificates.
WITHDRAWAL FROM THE PLAN
28. MAY A PARTICIPANT WITHDRAW FROM THE PLAN?
Yes, by providing written notice instructing the Agent to terminate the
account.
29. WHAT HAPPENS WHEN A PARTICIPANT TERMINATES AN ACCOUNT?
If a participant's notice of termination is received by the Agent at least
five business days prior to the record date for the next dividend payment date,
reinvestment of dividends will cease as of the date notice of termination is
received by the Agent. If the notice of termination is received later than
five business days prior to the record date for a dividend payment date, the
termination may not become effective until after the investment of any
dividends to be invested as of that dividend payment date. Optional cash
payments can be refunded if the written notice of
termination is received by the Agent at least two business days prior to the
next investment date.
When terminating an account, the participant may request that a share
certificate be issued for all whole shares of Common Stock held in the account.
As soon as practicable after notice of termination is received, the Agent will
send to the participant (a) a certificate for all whole shares of Common Stock
held in the account and (b) a check representing any
<PAGE>
-22-
uninvested optional cash payments remaining in the account and the value
of any fractional shares of Common Stock held in the account.
After an account is terminated, all dividends for the terminated account
will be paid to the stockholder unless the stockholder re-elects to
participate in the Plan.
When terminating an account, the participant may request that all shares
of Common Stock, both full and fractional, credited to the Plan account be sold
or that certain of the Common Stock be sold and a certificate be issued for the
remaining shares of Common Stock. The Agent will remit to the participant the
proceeds of any sale of Common Stock, less any related brokerage commission,
transfer tax or other fees incurred by the Agent allocable to the sale of such
Common Stock.
30. WHEN MAY A FORMER PARTICIPANT RE-ELECT TO PARTICIPATE IN THE PLAN?
Generally, any former participant may re-elect to participate at any time.
However, the Agent reserves the right to reject any Authorization Form on the
grounds of excessive joining and withdrawing. Such reservation is intended to
minimize unnecessary administrative expense and to encourage use of the Plan as
a long-term investment service.
SALE OF COMMON STOCK
31. MAY A PARTICIPANT REQUEST THE COMMON STOCK HELD IN A PLAN ACCOUNT BE SOLD?
Yes. A participant may request that all or any part of the Common Stock
held in a Plan account be sold, either when an account is being terminated (see
Question 29) or without terminating the account. However, a fractional share
of Common Stock will not be sold unless all Common Stock held in the account is
sold.
Within seven days after receipt of a participant's written request to sell
Common Stock held in a Plan account, the Agent will place a sell order through
a broker or dealer designated by the Agent. The participant will receive the
proceeds of the sale less any brokerage commission, transfer tax or other fees
incurred by the Agent allocable to the sale of such Common Stock. No
participant shall have the authority or power to direct
the date or sales price at which Common Stock may be sold. Proceeds of the
sale will be forwarded by the Agent to the participant within thirty days after
receipt of participant's request to sell.
<PAGE>
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32. WHAT HAPPENS WHEN A PARTICIPANT SELLS OR TRANSFERS ALL THE COMMON STOCK
REGISTERED IN THE PARTICIPANT'S NAME?
Once a Stockholder becomes a participant in the Plan, the Stockholder may
remain a participant even if the participant thereafter disposes of all Common
Stock registered in the participant's name. If a participant disposes of all
Common Stock registered in the participant's name, the participant may continue
to make optional cash payments, and the Agent will continue to reinvest the
dividends on the Common Stock credited to the participant's account under the
Plan unless the participant notifies the Agent that he or she wishes to
terminate the account.
OTHER INFORMATION
33. MAY COMMON STOCK HELD IN THE PLAN BE PLEDGED OR ASSIGNED?
Common Stock while credited to the account of a participant under the Plan
may not be pledged, sold or otherwise transferred, and any such purported
pledge or sale shall be void. A participant who wishes to pledge, sell or
transfer such Common Stock must request that a certificate for such Common
Stock first be issued in the participant's name.
34. WHAT HAPPENS IF THE COMPANY AUTHORIZES A SHARE DIVIDEND OR SPLITS ITS
SHARES?
In the event of a share split or a dividend payable in Common Stock, the
Agent will receive and credit to the participant's Plan account the applicable
number of whole and/or fractional shares of Common Stock based both on the
number of shares of Common Stock held in the participant's Plan account and the
number of shares of Common Stock registered in the participant's own name as of
the record date for the share dividend or split.
35. WHAT HAPPENS IF THE COMPANY HAS A RIGHTS OFFERING?
If the Company has a rights offering in which separately tradeable and
exercisable rights are issued to registered holders of Common Stock, the rights
attributable to whole shares of Common Stock held in a participant's Plan
account will be transferred to the Plan participant as promptly as practicable
after the rights are issued. Rights attributable to fractional shares of
Common Stock will be sold, and the proceeds will be treated as an optional cash
payment.
36. HOW ARE A PARTICIPANT'S SHARES OF COMMON STOCK VOTED AT SHAREHOLDER
MEETINGS?
<PAGE>
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Common Stock held for a participant in the Plan will be voted at
shareholder meetings as such participant directs. Participants will receive
proxy materials from Home Properties. Common Stock credited to a participant's
Plan account may also be voted in person at the meeting.
37. MAY THE PLAN BE SUSPENDED OR TERMINATED?
While the Company expects to continue the Plan indefinitely, the Company
may suspend or terminate the Plan at any time. The Company also reserves the
right to refuse optional cash payments from any person who, in the sole
discretion of Home Properties, is attempting to circumvent the interests of the
Plan by making excessive optional cash payments through multiple stockholder
accounts or by engaging in arbitrage activities. Home Properties may also
suspend, terminate or refuse participation in the Plan to any person if
participation or any increase in the number of shares held by such person,
would, in the opinion of the Board of Directors of Home Properties, jeopardize
the status of the Company as a real estate investment trust.
38. MAY THE PLAN BE AMENDED?
The Plan may be amended or supplemented by Home Properties at any time or
times, but except when necessary or appropriate to comply with law or the rules
or policies of the Securities and Exchange Commission, the Internal Revenue
Service or other regulatory authority or modification or amendments which do
not materially affect the rights of participants, such amendment or supplement
shall only be effective upon mailing appropriate written notice at least 30
days prior to the effective date thereof to each participant. The amendment or
supplement shall be deemed to be accepted by a participant unless prior to the
effective date thereof, Agent receives written notice of the termination of a
participant's account. Any such amendment may include an appointment by Agent
of a successor bank or Agent in which event Home Properties is authorized to
pay such successor bank or Agent for the account of the participant, all
dividends and distributions payable on Home Properties' shares of Common Stock
held by the participant for application by such successor bank or Agent as
provided in the Plan.
39. WHAT HAPPENS IF THE PLAN IS TERMINATED?
Each participant will receive (a) a certificate for all whole shares of
Common Stock held in the participant's account and (b) a check representing the
value of any fractional shares of Common Stock held in the participant's
account and any uninvested dividends or optional cash payments held in the
account.
<PAGE>
-25-
40. WHO INTERPRETS AND REGULATES THE PLAN?
The Company is authorized to issue such interpretations, adopt such
regulations and take such action as it may deem reasonably necessary to
effectuate the Plan. Any action to effectuate the Plan taken by the Company or
the Agent in the good faith exercise of its judgment will be binding on
participants.
41. WHAT LAW GOVERNS THE PLAN?
The terms and conditions of the Plan and its operation shall be governed
by the laws of the State of New York.
FEDERAL INCOME TAX CONSEQUENCES
42. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
Participants are encouraged to consult their personal tax advisors with
specific reference to their own tax situations and potential changes in the
applicable law as to all federal, state, local, foreign and other tax matters
in connection with the reinvestment of dividends and purchases of Common Stock
under the Plan, the participant's tax basis and holding period for Common Stock
acquired under the Plan and the character, amounts and tax treatment of any
gain or loss realized on the disposition of Common Stock. The income tax
consequences for participants who are not United States citizens or resident
aliens are not discussed herein. The following is a brief summary of the
material federal income tax considerations applicable to the Plan, is for
general information only, and is not tax advice.
DIVIDEND REINVESTMENT
In the case of Common Stock purchased by the Agent from the Company, a
participant will be treated for federal income tax purpose as having received a
dividend equal to the fair market value, as of the Investment Date, of the
Common Stock purchased with reinvested dividends. With respect to Common Stock
purchased by the Agent in open-market transactions, the Internal Revenue
Service has indicated in somewhat similar situations that the amount of
dividend received by a participant would include the fair market value of the
Common Stock purchased with reinvested dividends and a pro-rata share of any
brokerage commissions or other related charges (hereafter "Commissions") paid
by the Company in connection with the Agent's purchase of the Common Stock on
behalf of the participant. The 3% discount will be treated as being part of
the dividend received, as will any excess of the fair market value of the
Common Stock on the Investment
<PAGE>
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Date over the Market Price for the Common Stock
under the Plan. As in the case of nonreinvested cash dividends, the dividends
described above will constitute taxable "dividend" income to participants to
the extent of the Company's current and accumulated earnings and profits
allocable to the dividends and any excess dividends will constitute a return of
capital which reduces the basis of a participant's Common Stock or results in
gain to the extent such excess dividend exceeds the participant's tax basis in
his or her Common Stock. In addition, if the Company designates part or
all of its dividends as capital gain dividends, such designated amounts would
be treated by a participant as long-term capital gains.
A participant's tax basis in his or her Common Stock acquired under the
Plan will generally equal the total amount of dividends a participant is
treated as receiving (as described above). A participant's holding period in
such Common Stock generally begins on the day following the date on which such
Common Stock is credited to the participant's Plan account.
OPTIONAL PURCHASES
The Internal Revenue Service has indicated in somewhat similar situations
that a participant who makes an optional cash purchase of Common Stock under
the Plan will be treated as having received a distribution equal to the excess
of the fair market value on the Investment Date of such Common Stock over the
amount of optional cash payment made by the participant. Also, if the Common
Stock is acquired by the Agent in an open-market transaction, then the Internal
Revenue Service may assert that a participant will be treated as receiving an
additional distribution equal to a pro-rata share of any Commissions paid by
the Company on behalf of the participant. Any such distributions which the
Participant is treated as receiving, including the 3% discount and the excess
of the fair market value of the Common Stock on the Investment Date over the
Market Price for the Common Stock under the Plan, would be taxable income or
gain or reduce basis in Common Stock (or some combination thereof) under the
rules described above.
A participant's tax basis in his Common Stock acquired through an optional
cash purchase under the Plan will generally equal the total amount of
distributions a participant is treated as receiving (as described above). A
participant's holding period for Common Stock purchased under the Plan
generally will begin on the day following the date on which Common Stock
credited to the participant's Plan account.
In addition, all cash distributions paid with respect to all Common Stock
credited to a participant's Plan account will be reinvested automatically. In
that regard, see "Dividend Reinvestment" above.
<PAGE>
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BACKUP WITHHOLDING AND ADMINISTRATIVE EXPENSES
In general, any dividend reinvested under the Plan is not subject to federal
income tax withholding. The Company or the Agent may be required, however, to
deduct as "backup withholding" thirty-one percent (31%) of all dividends paid
to any shareholder, regardless of whether such dividends are reinvested
pursuant to the Plan. Similarly, the Agent may be required to deduct backup
withholding from all proceeds of sales of Common Stock held in a Plan account.
A participant is subject to backup withholding if: (a) the participant has
failed to properly furnish the Company and the Agent with his or her correct
tax identification number ("TIN"), (b) the Internal Revenue Service notifies
the Company or the Agent that the TIN furnished by the participant is
incorrect, (c) the Internal Revenue Service notifies the
Company or the Agent that backup withholding should be commenced because the
participant failed to report properly dividends paid to him or her or (d) when
required to do so, the participant fails to certify, under penalties of
perjury, that the participant is not subject to backup withholding. Backup
withholding amounts will be withheld from dividends before such dividends are
reinvested under the Plan. Therefore, dividends to be reinvested under the
Plan by participants who are subject to backup withholding will be reduced by
the backup withholding amount. Such withheld amounts constitute a credit on
the participant's income tax return.
While the matter is not free from doubt, the Company intends to take the
position that administrative expenses of the Plan paid by the Company are not
constructive distributions to participants.
DISPOSITION
A participant may recognize a gain or loss upon receipt of a cash payment
for a fractional share of Common Stock credited to a Plan account or when the
Common Stock held in that account is sold at the request of the participant. A
gain or loss may also be recognized upon a participant's disposition of Common
Stock received from the Plan. The amount of any such gain or loss will be the
difference between the amount realized (generally the amount of cash received)
for the whole or fractional shares of Common
Stock and the tax basis of such Common Stock. Generally, gain or loss
recognized on the disposition of Common Stock acquired under the Plan will be
treated for federal income tax purposes as a capital gain or loss.
43. WHAT HAPPENS IF REINVESTMENT OF A PARTICIPANT'S DIVIDENDS OR OPTIONAL CASH
PAYMENTS WOULD CAUSE THE PARTICIPANT OR ANY OTHER PERSON TO EXCEED THE
OWNERSHIP LIMIT SET FORTH IN THE COMPANY'S ARTICLES OF INCORPORATION, OR
WOULD OTHERWISE VIOLATE THE COMPANY'S ARTICLES OF INCORPORATION?
<PAGE>
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The Company's Articles of Incorporation places certain restrictions upon
the ownership, directly or constructively, of the Common Stock, including the
limitation of ownership of the Common Stock by any one person to 8% of the
outstanding shares (the "Ownership Limit"), subject to certain exceptions. To
the extent any reinvestment of dividends elected by a shareholder or investment
of an optional cash payment would cause such shareholder, or any other person
to exceed the Ownership Limit or otherwise violate the Company's Articles of
Incorporation, such reinvestment or investment, as the case may be, would be
void AB INITIO, and such shareholder will be entitled to receive dividends or a
refund of his or her optional cash payment (each without interest) in lieu of
such reinvestment or investment.
USE OF PROCEEDS
The Company will receive proceeds from the sale of Common Stock purchased
by the Agent directly from the Company. The proceeds from the
<PAGE>
sale of Common Stock offered pursuant to the Plan will be used for general
Company purposes. The Company has no basis for estimating either the number of
Common Stock that will be sold pursuant to the Plan or the prices at which such
Common Stock will be sold. The Company will not receive any proceeds from
purchases of Common Stock by the Agent in the open market or in negotiated
transactions.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Nixon,
Hargrave, Devans & Doyle LLP, Rochester, New York.
EXPERTS
The audited financial statements and schedule incorporated by reference in
this Prospectus to the extent and for the periods indicated in their report
have been audited by Coopers & Lybrand L.L.P., independent public accountants,
and are incorporated by reference herein in reliance upon the authority of said
firm as experts in giving said report.
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE ANY SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
SUMMARY
TABLE OF CONTENTS
PAGE
Prospectus Summary
Additional Information
Documents Incorporated by Reference
The Company
Risk Factors
The Plan
Federal Income Tax
Consequences
Use of Proceeds
Legal Matters
Experts
<PAGE>
II -1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table is an itemized listing of expenses to be incurred by the
Company in connection with the issuance and distribution of the shares of
Common Stock being registered hereby, other than discounts and commissions:
SEC Registration Fee $
NYSE Listing Fee *
Legal Fees and Expenses 500.00*
Accounting Fees and Expenses 500.00*
Blue Sky Fees and Expenses 250.00*
Total $*
=========
*Estimate
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's officers and directors are and will be indemnified under
Maryland law, the Articles of Incorporation of Home Properties and the
Partnership Agreement ("Operating Partnership Agreement") of Home Properties of
New York, L.P., a New York limited partnership of which the Company is the
general partner, against certain liabilities. The Articles of Incorporation
require the Company to indemnify its directors and officers to the fullest
extent permitted from time to time by the laws of Maryland. The Bylaws contain
provisions which implement the indemnification provisions of the Articles of
Incorporation.
The Maryland General Corporation Law ("MGCL") permits a corporation to
indemnify its directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by them
in connection with any proceeding to which they may be made a party by reason
of their service in those or other capacities unless it is established that the
act or omission of the director or officer was material to the matter giving
rise to the proceeding and was committed in bad faith or was the result of
active and deliberate dishonesty, or the director or officer actually received
an improper personal benefit in money, property or services, or in the case of
any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission was unlawful. No amendment of the Articles of
Incorporation of Home Properties shall limit or eliminate the right to
indemnification
<PAGE>
II -2
provided with respect to acts or omissions occurring prior to such amendment or
repeal. Maryland law permits Home Properties to provide indemnification to an
officer to the same extent as a director, although additional indemnification
may be provided if such officer is not also a director.
The MGCL permits the articles of incorporation of a Maryland corporation to
include a provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, subject to specified
restrictions. The MGCL does not, however, permit the liability of directors
and officers to the corporation or its stockholders to be limited to the extent
that (1) it is proved that the person actually received an improper benefit or
profit in money, property or services (to the extent such benefit or profit was
received) or (2) a judgment or other final adjudication adverse to such person
is entered in a proceeding based on a finding that the person's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. The Articles of
Incorporation of Home Properties contain a provision consistent with the MGCL.
No amendment of the Articles of Incorporation shall limit or eliminate the
limitation of liability with respect to acts or omissions occurring prior to
such amendment or repeal.
The Operating Partnership Agreement also provides for indemnification of
Home Properties and its officers and directors to the same extent
indemnification is provided to officers and directors of the Company in its
Articles of Incorporation, and limits the liability of Home Properties and its
officers and directors to the Operating Partnership and its partners to the
same extent liability of officers and directors of the Company to Home
Properties and its stockholders is limited under Home Properties' Articles of
Incorporation.
Home Properties has entered into indemnification agreements with each of
Home Properties' directors and officers. The indemnification agreements
require, among other things, that Home Properties indemnify its directors and
officers to the fullest extent permitted by law, and advance to the directors
and officers all related expenses, subject to reimbursement if it is
subsequently determined that indemnification is not permitted. Home Properties
also must indemnify and advance all expenses incurred by directors and officers
seeking to enforce their rights under the indemnification agreements, and cover
directors and officers under Home Properties' directors' and officers'
liability insurance. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by provisions in the Articles
of Incorporation and the Bylaws and the Operating Partnership Agreement of the
Operating
<PAGE>
II -3
Partnership, it provides greater assurance to directors and officers that
indemnification will be available, because, as a contract, it cannot be
modified unilaterally in the future by the Board of Directors or by the
stockholders to eliminate the rights it provides.
Home Properties has purchased insurance under a policy that insures both
Home Properties and its officers and directors against exposure and liability
normally insured against under such policies, including exposure on the
indemnities described above.
ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION
4 Amended and Restated Dividend Reinvestment, Stock Purchase,
Resident Stock Purchase and Employee Stock Purchase Plan
5 Opinion of Nixon, Hargrave, Devans & Doyle LLP regarding
the validity of the securities being registered.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Nixon, Hargrave, Devans & Doyle LLP (included as
part of Exhibit 5).
25 Power of Attorney (included on signature page)
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of
<PAGE>
II-4
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such information in the
Registration Statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities registered which remain unsold at the termination of the
offering.
(4) That for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rochester, New York, on the 8th day of October,
1997.
HOME PROPERTIES OF NEW YORK, INC.
By: /S/ NORMAN LEENHOUTS
----------------------
Norman P. Leenhouts
Chairman and Co-Chief
Executive Officer
By: /S/ NELSON B. LEENHOUTS
------------------------
Nelson B. Leenhouts
President and Co-Chief
Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Norman P. Leenhouts,
Nelson B. Leenhouts, ___________ and Amy L. Tait, and each of them, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that each said attorneys-in-
fact and agents or any of them or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<PAGE>
II-6
Signature Title Date
- --------------- ----- -----
/S/ NORMAN P. LEENHOUTS Director, Chairman October __, 1997
Norman P. Leenhouts and Co-Chief Executive
Officer (Principal
Executive Officer)
/S/ NELSON B. LEENHOUTS Director, President October __, 1997
Nelson B. Leenhouts and Co-Chief Executive
Officer (Principal
Executive Officer)
/S/ RICHARD J. CROSSED Director, Executive Vice October __, 1997
Richard J. Crossed President
/S/ AMY L. TAIT Director, Executive Vice October __, 1997
Amy L. Tait President and Chief
Operating Officer
/S/ DAVID P. GARDNER Vice President, Chief October __, 1997
David P. Gardner Financial Officer and
Treasurer
(Principal Financial and
Accounting Officer)
/S/ BURTON S. AUGUST, SR. Director October __, 1997
Burton S. August, Sr.
/S/ WILLIAM BALDERSTON, III Director October __, 1997
William Balderston, III
/S/ ALAN L. GOSULE Director October __, 1997
Alan L. Gosule
/S/ LEONARD F. HELBIG, III Director October __, 1997
Leonard F. Helbig, III
<PAGE>
II-7
/S/ ROGER W. KOBER Director October __, 1997
Roger W. Kober
/S/ CLIFFORD W. SMITH, JR. Director October __, 1997
Clifford W. Smith, Jr.
/S/ PAUL L. SMITH Director October __, 1997
Paul L. Smith
<PAGE>
Home Properties of New York, Inc.
EXHIBIT INDEX
to
Registration Statement on Form S-3
File No. 333 ___-_____
Exhibit DESCRIPTION
NO.
4 Amended and Restated Dividend Incorporated by
Reinvestment, Stock Purchase, reference to Form
Resident Stock Purchase and 8-K, dated October
Employee Stock Purchase Plan 8, 1997
5 Opinion of Nixon, Hargrave, Devans Filed herewith
& Doyle LLP regarding the validity
of the securities being registered
23.1 Consent of Coopers & Lybrand L.L.P. Filed herewith
23.2 Consent of Nixon, Hargrave, Devans Included as part
& Doyle LLP of Exhibit 5
25 Power of Attorney Included on
signature page
Nixon, Hargrave, Devans & Doyle LLP
Attorneys and Counsellors at Law
Clinton Square
Post Office Box 1051
Rochester, New York 14603-1051
(716) 263-1000
Fax: (716)263-1600
October 8, 1997
Home Properties of New York, Inc.
850 Clinton Square
Rochester, New York 14604
Gentlemen:
We have acted as counsel to Home Properties of New York, Inc. (the
"Company") in connection with the Registration Statement on Form S-3 (the
"New Registration Statement") which relates to the issuance of an
additional 750,000 shares (the "Additional Shares") of Common Stock, par
value $.01 per share, under the Company's Dividend Reinvestment, Stock
Purchase, Resident Stock Purchase and Employee Stock Purchase Plan (the
"Plan"). The New Registration Statement supplements and amends the
prospectus contained Registration Statement on Form S-3, Registration Nos.
33-96004 333-13723 333-30835 filed by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
We have examined the originals or copies, certified or otherwise
identified to our satisfaction, of all such records of the Company and all
such agreements, certificates of public officials, certificates of officers
or other representatives of the Company, and such other documents,
certificates and corporate or other records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein, including (i) the
Articles of Incorporation of the Company, as amended to the date hereof,
(ii) the By-Laws of the Company, as amended to the date hereof, (iii)
certified copies of certain resolutions duly adopted by the Board of
Directors and stockholders of the Company, and (iv) the Plan.
Based upon the foregoing, it is our opinion that the Additional Shares
have been duly authorized, and, after the Additional Shares shall have been
issued and delivered as
<PAGE>
-2-
described in such New Registration Statement and the Plan and the
consideration therefor shall have been received by the Company, such
Additional Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced New Registration Statement and to the use of our name as
it appears under the caption "Legal Matters" in the prospectus contained in
such Registration Statement.
Very truly yours,
/s/ Nixon, Hargrave, Devans & Doyle LLP
Exhibit 23.1
Consent of Independent Accountants
We consent to the incorporation by reference in this Registration Statement
on Form S-3 related to the Dividend Reinvestment, Stock Purchase, Resident
Stock Purchase and Employee Stock Purchase Plan to be filed by Home
Properties of New York, Inc. of our reports, (1) dated February 3, 1997,
on our audits of the consolidated financial statements and financial statement
schedule of Home Properties of New York, Inc. as of December 31, 1996 and 1995,
for the years ended December 31, 1996 and 1995, and the period from August 4,
1994 through December 31, 1994, and the combined results of operations and
cash flows of the Original Properties for the period January 1, 1994
through August 3, 1994, which report was included in the 1996 Annual
Report on Form 10-K (2) dated January 22, 1997 and January 24, 1997 on
our audits of Hudson Valley Properties and Valley Park South Apartments,
respectively, for the year ended December 31, 1995, which reports are included
in Form 8-K/A Amendment No. 1, dated January 5, 1997 and filed on February 4,
1997 and (3) dated July 15, 1997 and July 22, 1997 on our audits of Royal
Gardens Apartments and Lake Grove Apartments, respectively for the years
ended December 31, 1996 and March 31, 1996, respectively, which reports are
included in Form 8 K/A Amendment No.1, dated June 6, 1997 and filed on
August 11, 1997. We also consent to the reference to our firm under the
caption "Experts".
/s/ Coopers & Lybrand LLP
Rochester, New York
October 8, 1997
