As filed with the Securities and Exchange Commission on December 3, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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HOME PROPERTIES OF NEW YORK, INC.
(Exact name of registrant as specified in charter)
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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)
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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
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
-------------------
Copies to:
Deborah McLean Quinn, Esq.
Nixon Peabody LLP
900 Clinton Square
Rochester, New York 14604
(716) 263-1307
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Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
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/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number
of the earlier registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Proposed Amount
Class of Amount to Maximum Maximum of
Securities to be Offering Price Aggregate Registra-
Registered Registered Per Share (1) Offering Price tion Fee
Common Stock
par value $.01 5,832,174 sh. $ 25.0625 $146,168,861 $38,589
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933 and based upon the prices
reported on the New York Stock Exchange on November 26, 1999 of $25.0625.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
PROSPECTUS 5,832,174 Shares
HOME PROPERTIES OF NEW YORK, INC.
COMMON STOCK
($.01 par value)
-------------------
All of the shares of the common stock, par value $.01 per share of
Home Properties of New York, Inc. offered hereby are being offered by the
Selling Shareholders of Home Properties. See "Selling Shareholders." We will
not receive any proceeds from the sale of the shares offered hereby. The
Common Stock is listed on the New York Stock Exchange under the symbol "HME".
On November 26, 1999, the closing price of the common stock on the New York
Stock Exchange was $25.0625 per share.
---------------
An investment in the common stock involves risk. See the "Risk Factors"
referred to on page 1.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is December __, 1999
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
Where you can find more information i
Special Note regarding forward looking information i
The Company 1
Use of Proceeds 1
Risk Factors 1
Description of Capital Stock 2
Federal Income Tax Considerations 7
ERISA Considerations 23
Selling Shareholders 24
Plan of Distribution 27
Legal Matters 27
Experts 27
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy reports, statements or other
information at the SEC's public reference rooms in Washington D.C., New York,
New York or Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the SEC at HTTP://www.SEC.GOV. You can also review
copies of our SEC filings at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005.
We have filed with the SEC a registration statement on Form S-3 to
register the securities. This prospectus is part of that registration
statement and, as permitted by the SEC's rules, does not contain all the
information set forth in the registration statement. For further information
you may refer to the registration statement and to the exhibits and schedules
filed as part of the registration statement. You can review and copy the
registration statement and its exhibits and schedules at the public reference
facilities maintained by the SEC as described above. The registration
statement, including its exhibits and schedules, is also available on the SEC's
web site.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and the information that we file with
the SEC later will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
- - Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
- - Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1999, June 30, 1999 and September 30, 1999;
- - Current Reports on Form 8-K and Form 8-K/A dated July 2, 1999, July
29, 1999, July 30, 1999, October 5, 1999 and November 12, 1999; and
- - The description of the common stock contained in our registration
statement on Form 8-A filed under Section 12 of the Securities
Exchange Act, including all amendments and reports filed for the
purpose of updating that description.
You may request a copy of these filings, at no cost, by writing or telephoning
us at: Home Properties of New York, Inc., Attention: Ann M. McCormick,
Secretary, 850 Clinton Square, Rochester, New York 14604; telephone number
(716) 546-4900.
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR PROVIDED
IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE
ELSE TO PROVIDE YOU WITH DIFFERENT OR ADDITIONAL INFORMATION. YOU SHOULD NOT
ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS
OF ANY DATE OTHERTHAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this prospectus or in the information
incorporated by reference may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
information may involve known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.
<PAGE>
THE COMPANY
Home Properties is a fully integrated, self-managed real estate
investment trust which operates 292 communities containing 45,475 apartment
units. Of these, 33,807 units in 126 communities are wholly owned directly or
indirectly by the Company, 7,710 units are partially owned and managed by the
Company as general partner, and 3,958 units are managed for other owners. The
communities are located throughout the Northeastern quadrant of the United
States, including New York, Michigan, New Jersey, Pennsylvania, Maryland,
Illinois, Maine, Virginia, Connecticut, Indiana, Delaware and Ohio. Home
Properties also manages 1.7 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. The Company is also
the sole shareholder of Home Properties Trust (the "QRS"), a Maryland real
estate trust, which is a limited partner of the Operating Partnership, and
various affilites of the Company and the Operating Partnership. To comply with
certain technical requirements of the Internal Revenue Code, 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.
USE OF PROCEEDS
The Company will not receive any cash proceeds as a result of this
offering. The Company will, however, acquire additional partnership units in
the Operating Partnership in exchange for the shares of Common Stock issued
to the Selling Shareholders which are being sold hereunder. See "Selling
Shareholders" below.
RISK FACTORS
An investment in the Common Stock involves certain risks. You should
review the information set forth under the heading "Risk Factors" in the
Prospectus Supplement, dated June 16, 1998, filed as part of our Registration
Statement on Form S-3 (No. 333-52601), filed with the Securities and Exchange
Commission on May 14, 1998.
1
<PAGE>
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of Home Properties consists of 80 million
shares of Common Stock, par value $.01 per share ("Common Stock"), 10 million
shares of excess stock ("Excess Stock"), par value $.01 per share, and 10
million shares of preferred stock ("Preferred Stock"), par value $.01 per
share. The following summary description of the Common Stock and the Preferred
Stock sets forth certain general terms and conditions of the capital stock of
Home Properties. The descriptions below do not purport to be complete and are
qualified entirely by reference to Home Properties' Articles of Amendment and
Restatement of Articles of Incorporation, as amended ("Articles of
Incorporation").
COMMON STOCK
All shares of Common Stock offered will be duly authorized, fully
paid, and nonassessable. Holders of the Common Stock will have no conversion,
redemption, sinking fund or preemptive rights; however, shares of Common
Stock will automatically convert into shares of Excess Stock as described
below. Under the Maryland General Corporation Law ("MGCL"), stockholders
are generally not liable for Home Properties' debts or obligations, and the
holders of shares will not be liable for further calls or assessments by Home
Properties. Subject to the provisions of Home Properties' Articles of
Incorporation regarding Excess Stock described below, all shares of Common
Stock have equal dividend, distribution, liquidation and other rights and
will have no preference or exchange rights.
Subject to the right of any holders of Preferred Stock to receive
preferential distributions, the holders of the shares of Common Stock will be
entitled to receive distributions in the form of dividends if and when declared
by the Board of Directors of Home Properties out of funds legally
available therefor, and, upon liquidation of Home Properties, each outstanding
share of Common Stock will be entitled to participate pro rata in the assets
remaining after payment of, or adequate provision for, all known debts and
liabilities of Home Properties, including debts and liabilities arising out of
its status as general partner of the Operating Partnership, and any liquidation
preference of issued and outstanding Preferred Stock. Home Properties
intends to continue paying quarterly distributions.
The holder of each outstanding share of Common Stock will be entitled
to one vote on all matters presented to stockholders for a vote, subject to the
provisions of Home Properties' Articles of Incorporation regarding Excess Stock
described below. As described below, the Board of Directors of Home Properties
may, in the future, grant holders of one or more series of Preferred Stock the
right to vote with respect to certain matters when it fixes the attributes of
such series of Preferred Stock. Pursuant to the MGCL, Home Properties cannot
dissolve, amend its charter, merge another entity, sell all or substantially
all its assets, engage in a share exchange or engage in similar transactions
unless such action is approved by stockholders holding a majority of the
outstanding shares entitled to vote on such matter. In addition, the Second
Amended and Restated Partnership Agreement of the Operating Partnership, as
amended (the "Partnership Agreement") requires that any merger or sale of all
or substantially all of the assets of Operating Partnership be approved by
partners holding a majority of the outstanding Units, excluding Operating
Partnership Units held by Home Properties. Home Properties' Articles of
Incorporation provide that its Bylaws may be amended by its Board of Directors.
The holder of each outstanding share of Common Stock will be entitled
to one vote in the election of directors who serve for terms of one year.
Holders of the shares of Common Stock will have no right to cumulative voting
for the election of directors. Consequently, at each annual meeting of
stockholders, the holders of a majority of the shares entitled to vote in the
election of directors will be able to elect all of the directors. Directors
may be removed only for cause and only with the affirmative vote of the holders
of a majority of the shares entitled to vote in the election of directors. The
State Treasurer of the State of Michigan, as custodian of various public
employee retirement systems (the "Michigan Retirement System") owns the Class A
interest in the Operating Partnership which is, under certain circumstances,
convertible into 1,666,667 shares of Common Stock (subject to adjustment).
Under the purchase agreement with respect to that Class A interest, the
Michigan Retirement System has the right to nominate one person to stand for
election to the Home Properties' Board of Directors. If the preferred return
on the Class A interest is not paid by the Operating Partnership, the Michigan
Retirement System may nominate additional directors. The Michigan Retirement
System also owns a substantial number of shares of Common Stock.
PREFERRED STOCK
Preferred Stock may be issued from time to time, in one or more
series, as authorized by the Board of Directors of Home Properties.
The Board of Directors will fix the attributes of any Preferred Stock that
it authorizes for issuance. Because the Board of Directors has the power
to establish the preferences and rights of each series of Preferred Stock,
it may afford the holders of any series of Preferred Stock preferences,
powers and rights, voting or otherwise, senior to the rights of holders of
shares of Common Stock. The issuance of Preferred Stock could have the effect
of delaying or preventing a change in control of Home Properties.
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of Home Properties, then, before any distribution or payment
shall be made to the holders of any shares of Common Stock, any Excess Shares
or any other class or series of capital stock of Home Properties ranking
junior to any outstanding Preferred Stock in the distribution of assets
upon any liquidation, dissolution or winding up of Home Properties, the holders
of shares of each series of Preferred Stock shall be entitled to receive out
of assets of Home Properties legally available for distribution to shareholders
liquidating distributions in the amount of the liquidation preference per
share, plus an amount equal to all dividends accrued and unpaid thereon
(which shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such shares of Preferred Stock do not have
cumulative dividend). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of shares of Preferred
Stock will have no right or claim to any of the remaining assets of Home
Properties. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of Home Properties
are insufficient to pay the amount of the liquidating distributions on all
outstanding shares of Preferred Stock and the corresponding amounts payable on
all shares of other classes or series of capital stock of Home Properties
ranking on a parity with such shares of Preferred Stock in the distribution
of assets, then the holders of such shares of Preferred Stock and all other
such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
Home Properties expects to file Articles Supplementary to its Articles of
Incorporation to create a series of preferred stock designated as "Series A
Convertible Preferred Stock" which is expected to have substantially the same
rights, privileges and preferences as the Class A limited partnership interest
in the Operating Partnership currently held by the State of Michigan Retirement
System. Once the Series A Convertible Preferred Stock is created, Home
Properties expects that the State of Michigan Retirement System will exchange
its Class A Limited Partnership interest for 1,666,667 shares of the Series A
Convertible Preferred Stock.
On September 30, 1999, Home Properties issued 2,000,000 shares of its
newly authorized Series B Convertible Cumulative Preferred Stock in a private
placement. The Articles Supplementary to the Articles of Incorporation
establishing the Series B Convertible Cumulative Preferred Stock sets forth the
rights, privileges and preferences of that stock. The Series B Stock is junior
to the right of payment to the Series A Convertible Preferred Stock, is
entitled to a liquidation preference of $25.00 per shares and dividends equal
to the greater of the dividends payable on the Common Stock, or 8.36% of the
liquidation preference (or $2.09 per share) each year. Upon the occurrence of
certain events, the dividends on the Series B Convertible Cumulative Preferred
Stock increase, the stock may be subject to a mandatory offer of redemption by
Home Properties at a premium and the holders may be entitled to elect two
directors to the Board of Directors of Home Properties. The Series B Preferred
Stock is convertible into Common Stock on a one-for-one basis, subject to
adjustment.
RESTRICTIONS ON TRANSFER
OWNERSHIP LIMITS. Home Properties' Articles of Incorporation contain
certain restrictions on the number of shares of capital stock that
stockholders may own. For Home Properties to qualify as a REIT under the Code,
no more than 50% in value of its outstanding shares of capital stock may be
owned, directly or indirectly, by five or fewer individuals (as defined in
the Code to include certain entities) during the last half of a taxable year or
during a proportionate part of a shorter taxable year. The capital stock must
also be beneficially owned by 100 or more persons during at least 335 days of a
taxable year or during a proportionate part of a shorter taxable year.
Because Home Properties expects to continue to qualify as a REIT, its Articles
of Incorporation contain restrictions on the ownership and transfer of shares
of its capital stock intended to ensure compliance with these requirements.
Subject to certain exceptions specified in the Articles of
Incorporation, no holder may own, or be deemed to own by virtue of the
attribution provisions of the Code, more than 8.0% (the "Ownership Limit") of
the value of the issued and outstanding shares of capital stock of Home
Properties. Certain entities, such as qualified pension plans, are treated as
if their beneficial owners were the holders of the Common Stock held by such
entities. Stockholders ("Existing Holders") whose holdings exceeded the
Ownership Limit immediately after Home Properties' initial public offering of
its Common Stock, assuming that all Units of the Operating Partnership are
counted as shares of Common Stock, are permitted to continue to hold the number
of shares they held on such date and may acquire additional shares of capital
stock upon (i) the exchange of Units for Shares, (ii) the exercise of stock
options or receipt of grants of shares of capital stock pursuant to a
stock benefit plan, (iii) the acquisition of shares of capital stock pursuant
to a dividend reinvestment plan, (iv) the transfer of shares of capital stock
from another Existing Holder or the estate of an Existing Holder by devise,
gift or otherwise, or (v) the foreclosure on a pledge of shares of
capital stock; provided, no such acquisition may cause any Existing Holder to
own, directly or by attribution, more than 17.5% (the "Existing Holder Limit")
of the issued and outstanding Shares, subject to certain additional
restrictions. The Board of Directors of Home Properties may increase or
decrease the Ownership Limit and Existing Holder Limit from time to time,
but may not do so to the extent that after giving effect to such increase or
decrease (i) five beneficial owners of Shares could beneficially own in the
aggregate more than 49.5% of the aggregate value of the outstanding capital
stock of Home Properties or (ii) any beneficial owner of capital stock would
violate the Ownership Limit or Existing Holder Limit as a result of a
decrease. The Board of Directors may waive the Ownership Limit or the
Existing Holder Limit with respect to a holder if such holder provides
evidence acceptable to the Board of Directors that such holder's
ownership will not jeopardize Home Properties' status as a REIT.
Any transfer of outstanding capital stock of Home Properties
("Outstanding Stock") that would (i) cause any holder, directly or by
attribution, to own capital stock having a value in excess of the Ownership
Limit or Existing Holder Limit, (ii) result in shares of capital stock other
than Excess Stock, if any, to be owned by fewer than 100 persons, (iii) result
in Home Properties being closely held within the meaning of section 856(h) of
the Code, or (iv) otherwise prevent Home Properties from satisfying any
criteria necessary for it to qualify as a REIT, is null and void, and the
purported transferee acquires no rights to such Outstanding Stock.
Outstanding Stock owned by or attributable to a stockholder or shares
of Outstanding Stock purportedly transferred to a stockholder which cause
such stockholder or any other stockholder to own shares of capital stock in
excess of the Ownership Limit or Existing Holder Limit will automatically
convert into shares of Excess Stock. Such Excess Stock will be transferred
by operation of law to a separate trust, with Home Properties acting as
trustee, for the exclusive benefit of the person or persons to whom such
Outstanding Stock may be ultimately transferred without violating the
Ownership Limit or Existing Holder Limit. Excess Stock is not treasury stock,
but rather constitutes a separate class of issued and outstanding stock of
Home Properties. While the Excess Stock is held in trust, it will not be
entitled to vote, will not be considered for purposes of any stockholder vote
or the determination of a quorum for such vote and will not be entitled to
participate in dividends or other distributions. Any record owner or
purported transferee of Outstanding Stock which has converted
into Excess Stock (the "Excess Holder") who receives a dividend or
distribution prior to the discovery by Home Properties that such Outstanding
Stock has been converted into Excess Stock must repay such dividend or
distribution upon demand. While Excess Stock is held in trust, Home Properties
will have the right to purchase it from the trust for the lesser of (i) the
price paid for the Outstanding Stock which converted into Excess Stock by the
Excess Holder (or the market value of the Outstanding Stock on the date of
conversion if no consideration was given for the Outstanding Stock)or (ii)
the market price of shares of capital stock equivalent to the Outstanding
Stock which converted into Excess Stock (as determined in the manner set
forth in the Articles of Incorporation) on the date Home Properties exercises
its option to purchase. Home Properties must exercise this right within the
90-day period beginning on the date on which it receives written notice of
the transfer or other event resulting in the conversion of Outstanding Stock
into Excess Stock. Upon the liquidation of Home Properties, distributions
will be made with respect to such Excess Stock as if it consisted of the
Outstanding Stock from which it was converted.
Any Excess Holder, with respect to each trust created upon the
conversion of Outstanding Stock into Excess Stock, may designate any individual
as a beneficiary of such trust; provided, such person would be permitted to own
the Outstanding Stock which converted into the Excess Stock held by the trust
under the Ownership Limit or Existing Holder Limit and the consideration paid
to such Excess Holder in exchange for designating such person as the
beneficiary is not in excess of the price paid for the Outstanding Stock
which converted into Excess Stock by the Excess Holder (or the market value of
the Outstanding Stock on the date of conversion if no consideration was given
for the Outstanding Stock). Home Properties' redemption right must have expired
or been waived prior to such designation. Immediately upon the designation of
a permitted beneficiary, the Excess Stock, if any, will automatically convert
into shares of the Outstanding Stock from which it was converted and Home
Properties as trustee of the trust will transfer such shares, if any, and any
proceeds from redemption or liquidation to the beneficiary.
If the restrictions on ownership and transfer, conversion provisions
or trust arrangements in Home Properties' Articles of Incorporation are
determined to be void or invalid by virtue of any legal decision, statute,
rule or regulation, then the Excess Holder of any Outstanding Stock that
would have converted into shares of Excess Stock if the conversion provisions
of the Articles of Incorporation were enforceable and valid shall be deemed
to have acted as an agent on behalf of Home Properties in acquiring such
Outstanding Stock and to hold such Outstanding Stock on behalf of Home
Properties unless Home Properties waives its right to this remedy.
The foregoing ownership and transfer limitations may have the effect
of precluding acquisition of control of Home Properties without the consent of
its Board of Directors. All certificates representing shares of capital stock
will bear a legend referring to the restrictions described above. The
foregoing restrictions on transferability and ownership will not apply if the
Board of Directors determines, and the stockholders concur, that it is no
longer in the best interests of Home Properties to attempt to qualify, or to
continue to qualify, as a REIT. Approval of the limited partners of the
Operating Partnership to terminate REIT status is also required.
OWNERSHIP REPORTS. Every owner of more than 5% of the issued and
outstanding shares of capital stock of Home Properties must file a written
notice with Home Properties containing the information specified in the
Articles of Incorporation no later than January 31 of each year. In addition,
each stockholder shall, upon demand, be required to disclose to Home
Properties in writing such information as Home Properties may request in
order to determine the effect of such stockholder's direct, indirect and
attributed ownership of shares of capital stock on Home Properties' status
as a REIT or to comply with any requirements of any taxing authority or
other governmental agency.
CERTAIN OTHER PROVISIONS OF MARYLAND LAW AND CHARTER DOCUMENTS
The following discussion summarizes certain provisions of MGCL and
Home Properties' Articles of Incorporation and Bylaws. This summary does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Articles of Incorporation and Bylaws, copies of which are
filed as exhibits to the Registration Statement of which this Prospectus
constitutes a part. See "Additional Information."
LIMITATION OF LIABILITY AND INDEMNIFICATION. The Articles of
Incorporation and Bylaws limit the liability of directors and officers to Home
Properties and its stockholders to the fullest extent permitted from time to
time by the MGCL and require Home Properties to indemnify its directors,
officers and certain other parties to the fullest extent permitted from time
to time by the MGCL.
BUSINESS COMBINATIONS. Under the MGCL, certain "business
combinations" (including a merger, consolidation, share exchange or, in certain
circumstances, an asset transfer or issuance or reclassification of equity
securities) between a Maryland corporation and any person who beneficially
owns 10% or more of the voting power of the outstanding voting stock of the
corporation or an affiliate or associate of the corporation who, at any time
within the two-year period immediately prior to the date in question, was the
beneficial owner, directly or indirectly, of 10% or more of the voting power
of the then-outstanding voting stock of the corporation (an "Interested
Stockholder") or an affiliate thereof, are prohibited for five years after
the most recent date on which the Interested Stockholder became an Interested
Stockholder. Thereafter, in addition to any other required vote, any such
business combination must be recommended by the board of directors of such
corporation and approved by the affirmative vote of at least (i) 80% of the
votes entitled to be cast by holders of outstanding shares of voting stock
of the corporation, voting together as a single voting group, and (ii)
two-thirds of the votes entitled to be cast by holders of voting stock of
the corporation (other than voting stock held by the Interested Stockholder
who will, or whose affiliate will, be a party to the business
combination or by an affiliate or associate of the Interested Stockholder)
voting together as a single voting group. The extraordinary voting provisions
do not apply if, among other things, the corporation's stockholders receive a
price for their shares determined in accordance with the MGCL and the
consideration is received in cash or in the same form as previously paid by
the Interested Stockholder for its shares. These provisions of the MGCL do not
apply, however, to business combinations that are approved or exempted by the
board of directors of the corporation prior to the time that the Interested
Stockholder becomes an Interested Stockholder. The Articles of Incorporation of
Home Properties contain a provision exempting from these provisions of the MGCL
any business combination involving the Leenhoutses (or their affiliates) or any
other person acting in concert or as a group with any of the foregoing persons.
In addition, as a condition to its investments in the Company and the Operating
Partnership, the State of Michigan requested, and was granted, an exemption
from the applicability of the "business combination" provisions of the MGCL.
CONTROL SHARE ACQUISITIONS. The MGCL provides that "control shares"
of a Maryland corporation acquired in a "control share acquisition" have no
voting rights except to the extent approved by the affirmative vote of
two-thirds of the votes entitled to be cast on the matter other than
"interested shares" (shares of stock in respect of which any of the following
persons is entitled to exercise or direct the exercise of the voting power
of shares of stock of the corporation in the election of directors: an
"acquiring person," an officer of the corporation or an employee of the
corporation who is also a director). "Control shares" are shares of stock
which, if aggregated with all other such shares of stock owned by the
acquiring person, or in respect of which such person is entitled to exercise
or direct the exercise of voting power of shares of stock of the corporation
in electing directors within one of the following ranges of voting power:
(i) one-fifth or more but less than one-third, (ii) one-third or more but
less than a majority, or (iii) a majority of more of all voting power.
Control shares do not include shares the acquiring person is entitled to vote
as a result of having previously obtained stockholder approval. The control
share acquisition statute does not apply to shares acquired in a
merger, consolidation or share exchange if the corporation is a party to
the transaction, or to acquisitions approved or exempted by the charter or
bylaws of the corporation.
A person who has made or proposes to make a control share
acquisition, under certain conditions (including an undertaking to pay
expenses), may compel the board of directors to call a special meeting of
stockholders to be held within 50 days of demand to consider the voting
rights of the control shares upon delivery of an acquiring person statement
containing certain information required by the MGCL, including a
representation that the acquiring person has the financial capacity to make
the proposed control share acquisition, and a written undertaking to pay the
corporation's expenses of the special meeting (other than the expenses of
those opposing approval of the voting rights). If no request for a meeting
is made, the corporation may itself present the question at any stockholders
meeting.
If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by the MGCL,
then, subject to certain conditions and limitations, the corporation may redeem
any or all of the control shares (except those for which voting rights have
previously been approved) for fair value, determined without regard to the
absence of voting rights for control shares, as of the date of the last control
share acquisition or, if a stockholder meeting is held, as of the date of the
meeting of stockholders at which the voting rights of such shares are
considered and not approved. If voting rights for control shares are approved
at a stockholders' meeting before the control share acquisition and the
acquiring person becomes entitled to exercise or direct the exercise of a
majority or more of all voting power, all other stockholders may exercise
rights of objecting shareholders under Maryland law to receive the fair value
of their Shares. The fair value of the Shares for such purposes may not be
less than the highest price per share paid by the acquiring person in the
control share acquisition. Certain limitations and restrictions otherwise
applicable to the exercise of objecting shareholders' rights do not apply in
the context of a control share acquisition.
The Articles of Incorporation contain a provision exempting from the
control share acquisition statute any and all acquisitions to the extent that
such acquisitions would not violate the Ownership Limit or Existing Owner
Limit. There can be no assurance that such provision will not be amended or
eliminated at any point in the future. In addition, as a condition to its
investment in the Company and the Operating Partnership, the State of Michigan
requested, and was granted, an exemption from the control share acquisition
statute.
FEDERAL INCOME TAX CONSIDERATIONS
An investment in the common stock involves certain income tax
considerations. You should review the information set forth under "Federal
Income Tax Considerations" in the Prospectus Supplement dated June 16, 1998,
filed as part of our Registration Statement on Form S-3 (No. 333-52601), filed
with Securities and Exchange Commission on May 14, 1998.
SELLING SHAREHOLDERS
The partners of the Operating Partnership may from time to time tender
their Units of limited partnership interest to the Operating Partnership.
The Company may give notice to such partners that the Company will acquire such
Units in exchange for shares of Common Stock (the "LP Purchase Right"). All of
the shares being offered hereby are being sold by the partners in the
Operating Partnership who may acquire shares of Common Stock in exchange for
their Units pursuant to the LP Purchase Right (all of such persons being
collectively referred to as the "Selling Shareholders"). Although none of
the Selling Shareholders has indicated a present intent to tender their Units
which would trigger the Company's right to issue shares of Common Stock to
them under the LP Purchase Right, the Company is required, pursuant to the
terms of various registration rights agreements, to file the registration
statement of which this Prospectus forms a part registering such shares for
resale under the Securities Act. The Company is bearing all costs of this
registration. The Company will not receive any proceeds from the sale of the
shares offered hereby.
The following table sets forth certain information regarding the
Selling Shareholders' ownership of Units and the number of shares of Common
Stock which may be issued pursuant to the LP Purchase Right which are
registered for resale. Because the Selling Shareholders may sell all, some
or none of the shares registered for resale, no estimate can be made
concerning the number shares of Common Stock issued in exchange for Units
that will be offered hereby or the number of shares or Units that each Selling
Shareholder will own upon completion of the offering contemplated by this
Prospectus.
<PAGE>
Number of Shares
Units Owned Registered for Sale
Name Prior to Offering in Offering
- ------------------------------- ----------------- --------------------
C.O.F., INC. 21,280 21,280
C. TERRANCE BUTWID 1,970 1,970
TIMOTHY FOURNIER 2,000 2,000
JOHN OSTER 1,419 1,419
THE ENID BARDEN TRUST OF
JUNE 28, 1995 11,758 11,758
FAIRWAY PROPERTY COMPANY 5,324 5,324
DAVID A. GUMENICK 7,454 7,454
DAVID HERSKOVITZ 2,130 2,130
CONSTANCE W. JACOB 2,662 2,662
THE HOWARD J. LESHMAN REVOCABLE 7,839 7,839
TRUST DATED MAY 20, 1983 AS AMENDED
AND RESTATED ON MARCH 4, 1998
LYLE PROPERTIES LIMITED PARTNERSHIP 11,758 11,758
MARVIN NOVICK 331 331
DAVID K. PAGE 7,986 7,986
KEITH J. POMEROY TRUST OF 12/13/76 22,406 22,406
AS AMENDED AND RESTATED 6/28/95
DAVID SILLMAN 31,965 31,965
LIONEL J. STOBER TRUST 5,324 5,324
RUTH STOBER 5,324 5,324
ARI STUTZ 2,662 2,662
JONAH L. STUTZ 5,324 5,324
LEAH STUTZ 2,662 2,662
STEVEN I. VICTOR TRUST 5,324 5,324
WOODRIDGE PROPERTIES LIMITED 15,972 15,972
PARTNERSHIP
RICHARD BACAS 2,136 2,136
JULIE BELINKIE 7,854 7,854
DAVID BENDER 7,854 7,854
JAY BENDER 6,283 6,283
LISA BENDER-FELDMAN 6,283 6,283
SCOTT BENDER 6,283 6,283
BARBARA BENDER-LASKOW 7,854 7,854
CAPLIN FAMILY INVESTMENTS, LLC 111,705 111,705
MICHAEL A. CAPLIN 26,284 26,284
JEREMY O. CAPLIN 39,425 39,425
CATHERINE CAPLIN 32,854 32,854
THE CAPLIN FAMILY TRUST 32,854 32,854
YETTA K. COHEN 150,991 150,991
COMMUNITY REALTY COMPANY, INC. 160,360 160,360
BENEDICT C. COSIMANO 2,136 2,136
SAMUEL DIENER, JR. REVOCABLE TRUST 16,758 16,758
CLARENCE DODGE, JR. REVOCABLE TRUST 154,036 154,036
DATED 1/10/92
MARCIA ESTERMAN LIVING TRUST 7,900 7,900
LYDIA FUNGER MCCLAIN 21,807 21,807
WILLIAM S. FUNGER 21,807 21,807
KEITH P. FUNGER 21,807 21,807
MORTON FUNGER 150,898 150,898
BERNARD S. GEWIRZ 66,219 66,219
CARL S. GEWIRZ 23,071 23,071
STEVEN B. GEWIRZ 7,150 7,150
MICHAEL AK GEWIRZ 9,534 9,534
DIANE GOLDBLATT 5,713 5,713
HERBERT GOLDBLATT 5,713 5,713
BARBARA GOLDMAN 7,900 7,900
THEODORE L. GRAY 1,971 1,971
EILEEN GREENBERG 7,854 7,854
HERMEN GREENBERG 1,006,836 1,006,836
WILLIAM KAPLAN 83,779 83,779
HERMAN KRAFT 2,628 2,628
PATRICIA A. MANCUSO 493 493
CHARLES AND LUPE MANCUSO, T.B.T.E. 493 493
MELANIE F. NICHOLS 21,801 21,801
JEFFREY W. OCHSMAN 21,807 21,807
BRUCE D. OCHSMAN 21,807 21,807
RALPH OCHSMAN 150,898 150,898
MICHAEL P. & ESTHER K. OCHSMAN 21,807 21,807
SHARON LYNN OCHSMAN 21,807 21,807
WENDY A. OCHSMAN 21,807 21,807
RALMOR CORPORATION 392,503 392,503
JEROME SHAPIRO 7,903 7,903
SOPHIE B. SHAPIRO FAMILY TRUST 62,369 62,369
ALBERT H. SMALL 1,006,836 1,006,836
DAVID STEARMAN 83,779 83,779
JUANITA H. WEST TRUST 19,255 19,255
MARTIN R. WEST, III 5,776 5,776
ARTHUR BAITCH 14,785 14,785
STUART BRAGER 4,290 4,290
DAVID C. BROWNE 77,222 77,222
C. COLEMAN BUNTING, JR. 15,369 15,369
GENINE MACKS FIDLER 101,126 101,126
JOSH E. FIDLER 72,539 72,539
THOMAS O'R. FRECH 9,473 9,473
MELVIN FRIEDMAN, M.D. 10,738 10,738
GEORGE H. GREENSTEIN 9,771 9,771
MILDRED HEMSTETTER 2,123 2,123
SANFORD G. JACOBSON 17,620 17,620
JAMES C. JOHNSON AND 2,145 2,145
SANDRA J. JOHNSON
WILLIAM R. KAHN 8,279 8,279
KANODE PARTNERSHIP 77,222 77,222
ALLAN KRUMHOLZ AND 4,290 4,290
FRANCINE KRUMHOLZ
BURTON H. LEVINSON 22,947 22,947
EUGENE K. LEWIS/SUZANNE D. LEWIS 3,600 3,600
ARTHUR M. LOPATIN REVOCABLE TRUST 4,931 4,931
LAWRENCE MACKS 173,664 173,664
MARTHA MACKS 90,886 90,886
MORTON J. MACKS 343,442 343,442
JOSEPH M. MOSMILLER 4,290 4,290
N & C PARTNERSHIP 9,982 9,982
ORLINSKY FAMILY LIMITED PARTNERSHIP 2,145 2,145
ALBERT PERLOW 4,290 4,290
ANNE LOUISE PERLOW 6,435 6,435
ALLECK A. RESNICK 4,290 4,290
HARRIET RESNICK
STANLEY SAFIER 4,290 4,290
ARNOLD SAGNER 11,065 11,065
DONALD I. SALTZMAN 5,434 5,434
MURRAY SALTZMAN 2,145 2,145
WILLIAM G. SCAGGS 8,579 8,579
EARLE K. SHAWE 29,645 29,645
STEVEN D. SHAWE 5,014 5,014
KAROLYN SOLOMON 4,991 4,991
WILLIAM B. WARREN 2,145 2,145
ROBERT M. WERTHEIMER 2,145 2,145
LEONARD KLORFINE 170,312 170,312
GREENACRES ASSOCIATES 59,896 59,896
RIDLEY BROOK ASSOCIATES 97,917 97,917
COMMUNITY INVESTMENT STRATEGIES, INC. 64,150 64,150
-------- --------
Total 5,832,174 5,832,174
PLAN OF DISTRIBUTION
The shares offered hereby may be offered and sold from time to time as
market conditions permit on the New York Stock Exchange, or otherwise, at
prices and terms then prevailing, at prices related to the then-current
market price, or in negotiated transactions by the holders thereof, which may
include donees and pledgees. The shares may be sold by one or more of the
following methods, without limitation: (a) a block trade in which a broker or
dealer so engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate a transaction; (b)
purchases by a broker or a dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus; (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (d)
face-to-face transactions between sellers and purchasers without a broker or
dealer. In effecting sales, brokers or dealers engaged by one or more of the
Selling Shareholders may arrange for other brokers or dealers to participate.
The Selling Shareholders and such brokers or dealers may receive commissions
or discounts from Selling Shareholders in amounts to be negotiated. Such
brokers and dealers and any other participating brokers or dealers may be
deemed "underwriters" under the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Nixon Peabody LLP. In addition, Nixon Peabody
LLP will provide an opinion with respect to certain tax matters which form
the basis of the discussion under "Federal Income Tax Considerations".
EXPERTS
The financial statements incorporated by reference in this Prospectus
or elsewhere in the Registration Statement have been incorporated herein in
reliance on the reports of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.
<PAGE>
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 .................................. $ 38,589.00
NYSE Listing Fee ...................................... 2,000.00*
Legal Fees and Expenses ............................... 2,000.00*
Accounting Fees and Expenses .......................... 1,000.00*
Miscellaneous ......................................... 2,000.00*
----------
Total ......................................... $ 45,589.00*
*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 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 certain of its officers. The indemnification
agreements require, among other things, that Home Properties indemnify its
directors and those 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 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
3.1 Articles Supplementary to the Amended and Restated Articles of
Incorporation*
5.1 Opinion of Nixon Peabody LLP as to legality of common stock*
23.1 Consent of Nixon Peabody LLP (included as part of Exhibit 5.1)
23.2 PricewaterhouseCoopers LLP*
25 Power of Attorney (included on signature page)
* Included with this filing.
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
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 that:
(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) 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) 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 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
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.
(4) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
<PAGE>
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 30th day of
November, 1999.
HOME PROPERTIES OF NEW YORK, INC.
By: /s/ Amy L. Tait
Amy L. Tait
Executive Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby severally constitutes and appoints Norman P.
Leenhouts, Nelson B. Leenhouts, Richard J. Crossed 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 such
attorney-in-fact and agents, and each of them, full power and authority
to do and person each and every act and thing requisite or necessary that
he might do in person.
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.
Signature Title Date
/S/NORMAN P. LEENHOUTS Director, Chairman November 30, 1999
Norman P. Leenhouts and Co-Chief Executive Officer
(Principal Executive Officer)
/S/ NELSON B. LEENHOUTS Director, President November 30, 1999
Nelson B. Leenhouts and Co-Chief Executive Officer
(Principal Executive Officer)
/S/ RICHARD J. CROSSED Director, Executive Vice November 30, 1999
Richard J. Crossed President
/S/ AMY L. TAIT Director, Executive Vice November 30, 1999
Amy L. Tait President and Chief
Operating Officer
/S/ DAVID P. GARDNER Vice President,Chief November 30, 1999
David P. Gardner Financial Officer and Treasurer
(Principal Financial and
Accounting Officer)
/S/ BURTON S. AUGUST, SR Director November 30, 1999
Burton S. August, Sr
/S/ WILLIAM BALDERSTON, III Director November 30, 1999
William Balderston, III
/S/ LEONARD F. HELBIG, III Director November 30, 1999
Leonard F. Helbig, III
/S/ ALAN L. GOSULE Director November 30, 1999
Alan L. Gosule
/S/ ROGER W. KOBER Director November 30, 1999
Roger W. Kober
Director November 30, 1999
Albert Small
/S/ CLIFFORD W. SMITH, JR Director November 30, 1999
Clifford W. Smith, Jr
/S/ PAUL L. SMITH Director November 30, 1999
Paul L. Smith
<PAGE>
EXHIBIT INDEX
Home Properties of New York, Inc. (the "Company")
Registration Statement on Form S-3 No. 333-______
NUMBER DESCRIPTION LOCATION
3.1 Articles Supplementary to the Amended and *
Restated Articles of Incorporation
5.1 Opinion of Nixon Peabody LLP *
regarding the legality of the Common Stock
being registered
23.1 Consent of Nixon Peabody LLP Included
with Exhibit 5.1
23.2 Consent of PricewaterhouseCoopers LLP *
23 Power of Attorney Included on
signature page
* Filed herewith
Exhibit 3.1
Series B Convertible Cumulative
Preferred Stock
ARTICLES SUPPLEMENTARY
HOME PROPERTIES OF NEW YORK, INC.
Articles Supplementary of Board of Directors
Classifying and Designating a Series of
Preferred Stock as
Series B Convertible Cumulative
Preferred Stock and
Fixing Distribution and Other Preferences
and Rights of Such Series
Dated as of September 29, 1999
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
Articles Supplementary of Board of Directors
Classifying and Designating a Series of
Preferred Stock as
Series B Convertible Cumulative
Preferred Stock and
Fixing Distribution and Other Preferences
and Rights of Such Series
Home Properties of New York, Inc., a Maryland corporation (the
"CORPORATION"), hereby certifies to the State Department of Assessments and
Taxation of Maryland pursuant to section 2-602(b) of the Annotated Code of
Maryland that:
FIRST: Pursuant to authority granted by the Amended and Restated Articles
of Incorporation of the Corporation, the Board of Directors adopted a
resolution at a meeting held on September 28, 1999 designating and classifying
2,000,000 unissued and undesignated shares of preferred stock as Series B
Convertible Cumulative Preferred Stock.
SECOND: The following is a description of the Series B Convertible
Cumulative Preferred Stock, including the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption thereof:
Section . NUMBER OF SHARES AND DESIGNATION. This class of preferred
stock shall be designated as Series B Convertible Cumulative Preferred Stock
and the number of shares which shall constitute such series shall not be more
than 2,000,000 shares, par value $0.01 per share, which number may be decreased
(but not below the number thereof then outstanding) from time to time by the
Board of Directors.
Section . DEFINITIONS. For purposes of the Series B Preferred Stock,
the following terms shall have the meanings indicated:
"BOARD OF DIRECTORS" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Series B
Preferred Stock.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
a day on which state or federally chartered banking institutions in New
York City, New York are not required to be open.
"CALL DATE" shall mean the date specified in the notice to holders
required under Section 5(e) as the Call Date.
"CHANGE OF CONTROL" shall mean each occurrence of any of the
following:
(i) the acquisition, directly or indirectly, by any individual or
entity or group (as such term is used in Section 13(d)(3) of the
Exchange Act) of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act, except that such individual or entity shall
be deemed to have beneficial ownership of all shares that any such
individual or entity has the right to acquire, whether such right
is exercisable immediately or only after passage of time) of more
than 25% of the Corporation's outstanding capital stock or more
than 25% of the voting power, under ordinary circumstances, to
elect directors of the Corporation or more than 25% of the equity
interests in the Operating Partnership; or
(ii)(A) the Corporation consolidates with or merges into another
entity or conveys, transfers, or leases outside the ordinary course
of business all or substantially all of its assets (including, but
not limited to, real property investments) to any individual or
entity, or (B) any entity consolidates with or merges into the
Corporation which, in the case of a merger or consolidation under
(A) or (B) is pursuant to a transaction in which the outstanding
Common Stock is reclassified or changed into or exchanged for cash,
securities or other property; PROVIDED, HOWEVER, that the events
described in this clause (ii) shall not be deemed to be a Change of
Control if the sole purpose of such event is that the Corporation
is seeking to change its domicile or to change its form of
organization from a corporation to a statutory business trust.
"CHANGE OF CONTROL PRICE" shall mean: (i) from the Issue Date
through the day preceding the fifth anniversary of the Issue Date, an
amount per share of Series B Preferred Stock equal to the Stated Value
plus an amount equal to a 15% annual return thereon from the Issue Date
until the date of redemption of such share of Series B Preferred Stock,
compounded annually, less an amount equal to the sum of the aggregate
amount of cash dividends theretofore paid or payable concurrently with
such redemption on such share of Series B Preferred Stock, plus an amount
equal to a 15% annual return on such cash dividends from the date of
payment until the date of redemption of such share of Series B Preferred
Stock and (ii) beginning on the fifth anniversary of the Issue Date, an
amount equal to 100% of the Liquidation Preference, plus all accumulated,
accrued and unpaid dividends to the date of repurchase.
"CLASS A INTERESTS" shall mean Class A Limited Partnership Units as
that term is defined in the Second Amended and Restated Agreement of
Limited Partnership of the Operating Partnership.
"COMMON STOCK" shall mean the shares of Common Stock, par value
$0.01 per share, of the Corporation.
"CONSTITUENT PERSON" shall have the meaning set forth in Section
7(e).
"CONVERSION PRICE" shall mean the conversion price per share of
Common Stock into which the shares of Series B Preferred Stock are
convertible, as such Conversion Price may be adjusted pursuant to Section
7. The initial conversion price shall be $ 29.77 (equivalent to a
conversion rate of 0.8398 shares of Common Stock for each share of Series
B Preferred Stock).
"CURRENT MARKET PRICE" of publicly traded shares of Common Stock or
any other class of shares of capital stock or other security of the
Corporation or any other issuer for any day shall mean the last reported
sales price, regular way on such day, or, if no sale takes place on such
day, the average of the reported closing bid and asked prices on such
day, regular way, in either case as reported on the New York Stock
Exchange ("NYSE") or, if such security is not listed or admitted for
trading on the NYSE, on the principal national securities exchange on
which such security is listed or admitted for trading or, if not listed
or admitted for trading on any national securities exchange, on the
Nasdaq Stock Market ("NASDAQ") National Market System or, if such
security is not quoted on such National Market System, the average of the
closing bid and asked prices on such day in the over-the-counter market
as reported by NASDAQ or, if bid and asked prices for such security on
such day shall not have been reported through NASDAQ, the average of the
bid and asked prices on such day as furnished by any NYSE member firm
regularly making a market in such security selected for such purpose by
the Board of Directors.
"DIVIDEND PAYMENT DATE" shall mean (i) for any Dividend Period with
respect to which the Corporation pays a dividend on the Common Stock, the
date on which such dividend is paid, or (ii) for any Dividend Period with
respect to which the Corporation does not pay a dividend on the Common
Stock, the 25{th} day of February, May, August and November or, if such
date is not a Business Day, the next succeeding Business Day.
"DIVIDEND PERIODS" shall mean quarterly dividend periods commencing
on January 1, April 1, July 1 and October 1 of each year and ending on
and including the day preceding the first day of the next succeeding
Dividend Period (other than the initial Dividend Period, which shall
commence on the Issue Date and end on and include the last calendar day
of the calendar quarter containing the Issue Date, and other than the
Dividend Period during which any shares of Series B Preferred Stock shall
be redeemed pursuant to Section 5 or repurchased pursuant to Section 6,
which shall end on and include the Call Date with respect to the shares
of Series B Preferred Stock being redeemed or the Repurchase Date for the
shares being repurchased, as the case may be).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXPIRATION TIME" shall have the meaning set forth in Section
7(d)(iv).
"FAIR MARKET VALUE" shall mean the average of the daily Current
Market Prices of a share of Common Stock on the five (5) consecutive
Trading Days selected by the Corporation commencing not more than 20
Trading Days before, and ending not later than, the earlier of the day in
question and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. The term "ex date," when used
with respect to any issuance or distribution, means the first day on
which the shares of Common Stock trade regular way, without the right to
receive such issuance or distribution, on the exchange or in the market,
as the case may be, used to determine that day's Current Market Price.
"FULLY JUNIOR STOCK" shall mean the Common Stock and any other
class or series of shares of capital stock of the Corporation now or
hereafter issued and outstanding over which the Series B Preferred Stock
has preference or priority in both (i) the payment of dividends and (ii)
the distribution of assets on any liquidation, dissolution or winding up
of the Corporation.
"FUNDAMENTAL CHANGE" shall mean each occurrence of any of the
following:
(i) the acquisition, directly or indirectly, by any individual or
entity or group (as such term is used in Section 13(d)(3) of the
Exchange Act) of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act, except that such individual or entity shall
be deemed to have beneficial ownership of all shares that any such
individual or entity has the right to acquire, whether such right
is exercisable immediately or only after passage of time) of more
than 25% of the Corporation's outstanding capital stock or more
than 25% of the voting power, under ordinary circumstances, to
elect directors of the Corporation or more than 25% of the equity
interests in the Operating Partnership;
(ii) other than with respect to the election, resignation or
replacement of any director designated, appointed or elected by the
holders of the Series A Preferred Stock or any other series of
preferred stock of the Corporation (each a "PREFERRED DIRECTOR"),
during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the
Corporation (together with any new directors whose election by such
Board of Directors or whose nomination for election by the
stockholders of the Corporation was approved by a vote of a
majority of the directors of the Corporation (excluding Preferred
Directors) then still in office who were either directors at the
beginning of such period, or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office;
(iii) the Corporation or one of its Subsidiaries is not the sole
general partner of the Operating Partnership;
(iv) (A) the Corporation consolidates with or merges into another
entity or the Corporation conveys, transfers or leases outside the
ordinary course of business all or substantially all of its assets
(including, but not limited to, real property investments) to any
individual or entity, or (B) any entity consolidates with or merges
into the Corporation, which in the case of a merger or
consolidation under either (A) or (B) is pursuant to a transaction
in which the outstanding common stock of the Corporation is
reclassified or changed into or exchanged for cash, securities or
other property; PROVIDED, HOWEVER, that the events described in
clause (iv) shall not be deemed to be a Fundamental Change if the
sole purpose of such event is that the Corporation is seeking to
change its domicile or to change its form of organization from a
Corporation to a statutory business trust;
(v) the Corporation or any direct or indirect subsidiary of the
Corporation, in one transaction or a series of related
transactions, acquires from any individual or entity, whether by
way of merger, consolidation, purchase of stock or assets, lease or
other form of business combination, any entity, assets or business
(x) for aggregate consideration payable in cash, securities, other
property or any combination of the foregoing, with a fair market
value (as determined in good faith by the Board of Directors of the
Corporation) exceeding 50% of Total Market Capitalization
determined prior to giving effect to the transaction or series of
related transactions described in this clause (v) or in exchange
for a number of shares of Common Stock or common equity interests
of the Operating Partnership (or securities convertible into,
exercisable for or exchangeable for such securities) representing,
in the aggregate, more than 40% of the combined sum of the shares
outstanding immediately prior to such transaction or series of
related transactions of Common Stock and the common equity
interests in the Operating Partnership not held by the Corporation
or any direct or indirect subsidiary immediately prior to such
transaction or series of related transactions.
(vi) the Corporation effects any recapitalization or restructuring
as a result of which more than 25% of the Common Stock is
reclassified into shares of preferred stock or changed into or
exchanged for cash, preferred stock, evidences of indebtedness,
other property (other than Common Stock of the Corporation) or any
combination of the foregoing.
(vii) the Corporation shall have incurred or suffered to exist
Indebtedness (as defined in the Purchase Agreement) exceeding 70%
of Total Market Capitalization and such condition continues to
exist 30 days after notice in writing by any holder of Series B
Preferred Stock to the Corporation.
"FUNDS FROM OPERATIONS" shall mean net income (loss) (computed in
accordance with generally accepted accounting principles) excluding gains
(or losses) from debt restructuring, and distributions in excess of
earnings allocated to other Operating Partnership interests or minority
interests (as reflected in the financial statements of the Corporation)
plus depreciation/amortization of assets unique to the real estate
industry, all computed in a manner consistent with the revised definition
of Funds From Operations adopted by the National Association of Real
Estate Investment Trusts (NAREIT), in its White Paper dated March 1995,
as such definitions may be modified from time to time, as determined by
the Corporation in good faith.
"ISSUE DATE" shall mean the date on which the shares of Series B
Preferred Stock are issued.
"JUNIOR STOCK" shall mean the Common Stock and any other class or
series of capital stock of the Corporation now or hereafter issued and
outstanding over which the Series B Preferred Stock has preference or
priority in the payment of dividends or in the distribution of assets on
any liquidation, dissolution or winding up of the Corporation.
"LIQUIDATION PREFERENCE" shall have the meaning set forth in
Section 4(a).
"NON-ELECTING SHARE" shall have the meaning set forth in Section
7(e).
"OPERATING PARTNERSHIP" shall mean Home Properties of New York,
L.P., a New York limited partnership.
"PARITY STOCK" shall have the meaning set forth in Section 9(b).
"PERSON" shall mean any individual, firm, partnership, corporation,
limited liability company or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"PURCHASED SHARES" shall have the meaning set forth in Section
7(d)(iv).
"PURCHASE AGREEMENT" shall mean the Purchase Agreement dated as of
September 29, 1999 by and among the Corporation, the Operating
Partnership and GE Equity Investments, Inc.
"REIT TERMINATION EVENT" shall mean the earliest to occur of:
(i) the filing of a federal income tax return by the Corporation
for any taxable year on which the Corporation does not elect
to be taxed as a real estate investment trust;
(ii) the approval by the stockholders of the Corporation of a
proposal for the Corporation to cease to qualify as a real
estate investment trust;
(iii) the public announcement by the Corporation that it has ceased
to qualify as a real estate investment trust;
(iv) a determination by the Board of Directors of the Corporation,
based on the advice of counsel, that the Corporation has
ceased to qualify as a real estate investment trust; or
(v) the Corporation or its duly authorized representatives shall
receive a determination or conclusion, whether in proposed or
final form, from the Internal Revenue Service or one of its
representatives that the Corporation has failed to meet the
requirements for REIT qualification and taxation as a REIT
under Sections 856-860 of the Internal Revenue Code of 1986,
as amended, for one or more taxable years, occurring from and
after January 1, 1994, including, without limitation, a
statutory notice of deficiency, a notice of proposed
deficiency, a proposed or final revenue agent's report, a
Field Service Advice, Technical Advice Memorandum, or similar
conclusion; PROVIDED, HOWEVER, that if the determination or
conclusion is in proposed or draft form, such receipt shall
not constitute a "REIT Termination Event" unless such
determination or conclusion is not withdrawn or otherwise
terminated within 270 days following such receipt, or if the
Company receives an opinion of its independent counsel or
accountants that the Company's REIT status should be upheld.
"REPURCHASE DATE" shall mean the date of repurchase of the shares
of Series B Preferred Stock or the date such payment is made available as
provided in Section 6(a)(iii).
"REPURCHASE OFFER" shall have the meaning set forth in Section
6(a)(ii).
"REPURCHASE PRICE" shall have the meaning set forth in Section
6(a)(i).
"SECURITIES" and "SECURITY" shall have the meanings set forth in
Section 7(d)(iii).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SENIOR STOCK" shall mean any class or series of capital stock of
the Corporation hereafter issued and outstanding which has preference or
priority over the Series B Preferred Stock in the payment of dividends or
in the distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
"SERIES B PREFERRED STOCK" shall mean the shares of Series B
Convertible Cumulative Preferred Stock.
"SET APART FOR PAYMENT" shall be deemed to include, without any
action other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other distribution
by the Board of Directors, the allocation of funds to be so paid on any
series or class of shares of capital stock of the Corporation; PROVIDED,
HOWEVER, that if any funds for any class or series of Junior Stock or any
class or series of shares of capital stock ranking on a parity with the
Series B Preferred Stock as to the payment of dividends are placed in a
separate account of the Corporation or delivered to a disbursing, paying
or other similar agent, then "set apart for payment" with respect to the
Series B Preferred Stock shall mean placing such funds in a separate
account or delivering such funds to a disbursing, paying or other similar
agent.
"STATED VALUE" shall mean $25.00 per share of Series B Preferred
Stock.
"TOTAL MARKET CAPITALIZATION" shall have the meaning set forth in
the Purchase Agreement.
"TRADING DAY" shall mean any day on which the securities in
question are traded on the NYSE, or if such securities are not listed or
admitted for trading on the NYSE, on the principal national securities
exchange on which such securities are listed or admitted, or if not
listed or admitted for trading on any national securities exchange, on
the National Market System of NASDAQ, or if such securities are not
quoted on such National Market System, in the securities market in which
the securities are traded.
"TRANSACTION" shall have the meaning set forth in Section 7(e).
"TRANSFER AGENT" shall mean Chase Manhattan Shareholder Services or
such other agent or agents of the Corporation as may be designated by the
Board of Directors or their designee as the transfer agent, registrar and
dividend disbursing agent for the Series B Preferred Stock.
"UNITS" shall mean Partnership Units as that term is defined in the
Second Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, as amended.
"VOTING PREFERRED STOCK" shall have the meaning set forth in
Section 10.
Section 3. DIVIDENDS.
(a) The holders of shares of Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends accrued, cumulative
preferential dividends payable in arrears in cash in an amount per share
equal to the greater of: (i) 8.36% of the Liquidation Preference per
annum (equivalent to $ 2.09 per share of Series B Preferred Stock), or
(ii) the ordinary cash dividends (determined on each Dividend Payment
Date) on the shares of Common Stock, or portion thereof, into which a
share of Series B Preferred Stock is convertible. The dividends referred
to in clause (ii) of the preceding sentence shall equal the number of
shares of Common Stock, or portion thereof, into which a share of Series
B Preferred Stock is convertible, multiplied by the most current
quarterly dividend on a share of Common Stock declared on or before the
applicable Dividend Payment Date. If the Corporation declares and pays
an ordinary cash dividend on the Common Stock with respect to a Dividend
Period after a Dividend Payment Date is determined pursuant to clause
(ii) of the definition of Dividend Payment Date and the dividend
calculated pursuant to clause (ii) of this paragraph (a) with respect to
such Dividend Period is greater than the dividend previously declared on
the Series B Preferred Stock with respect to such Dividend Period, the
Corporation shall pay an additional dividend to the holders of the Series
B Preferred Stock on the date on which the dividend on the Common Stock
is paid, in an amount equal to the difference between (y) the dividend
calculated pursuant to clause (ii) of this paragraph (a) and (z) the
amount of dividends previously declared on the Series B Preferred Stock
with respect to such Dividend Period.
The dividends shall begin to accrue and shall be fully cumulative
from the first day of the applicable Dividend Period, whether or not in
any Dividend Period or Periods there shall be funds of the Corporation
legally available for the payment of such dividends, and shall be payable
quarterly in arrears, when, as and if declared by the Board of Directors,
on Dividend Payment Dates. Each such dividend shall be payable in
arrears to the holders of record of shares of Series B Preferred Stock as
they appear in the records of the Corporation at the close of business on
such record dates, not fewer than 5 nor more than 50 days preceding such
Dividend Payment Dates thereof, as shall be fixed by the Board of
Directors. Accrued and unpaid dividends for any past Dividend Periods
may be declared and paid at any time and for such interim periods,
without reference to any regular Dividend Payment Date, to holders of
record on such date, not fewer than 5 nor more than 50 days preceding the
payment date thereof, as may be fixed by the Board of Directors. Any
dividend payment made on Series B Preferred Stock shall first be credited
against the earliest accrued but unpaid dividend due with respect to
Series B Preferred Stock which remains payable.
(b) The amount of dividends referred to in clause (i) of Section
3(a) payable for each full Dividend Period on the Series B Preferred
Stock shall be computed by dividing the annual dividend rate by four.
The initial Dividend Period will include a partial dividend for the
period from the Issue Date until the last calendar day of the calendar
quarter containing the Issue Date. The amount of dividends payable
either under clause (i) or clause (ii) for such period, or any other
period shorter than a full Dividend Period, on the Series B Preferred
Stock shall be computed on the basis of a 360-day year of twelve 30-day
months and the amount of such dividend shall equal the dividend payable
with respect to the Dividend Period multiplied by a fraction (x) the
numerator of which is (i) the number of days from the Issue Date to the
end of the Dividend Period, or (ii) the number of days from the beginning
of the Dividend Period to the Call Date or the Repurchase Date, as the
case may be, and (y) the denominator of which is 90. Holders of shares
of Series B Preferred Stock shall not be entitled to any dividends,
whether payable in cash, property or shares, in excess of cumulative
dividends, as herein provided, on the Series B Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Series B Preferred
Stock which may be in arrears.
(c) If at any time the Corporation shall have breached the covenant
set forth in Section 5.9 of the Purchase Agreement and such breach
continues thirty (30) days after notice in writing by any holder of
Series B Preferred Stock to the Corporation, the dividend rate payable
upon the shares of Series B Preferred Stock pursuant to paragraph (a) of
this Section 3 shall be increased by 1.00% per annum, from the date of
such breach until the date such breach shall have been cured and shall no
longer be continuing, subject to revesting in the event of any subsequent
breach of such covenant which continues as aforesaid.
(d) So long as any shares of Series B Preferred Stock are
outstanding, no dividends, except as described in the immediately
following sentence, shall be declared or paid or set apart for payment on
any class or series of Parity Stock for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payment on the Series B Preferred Stock for all Dividend Periods
terminating on or prior to the dividend payment date on such class or
series of Parity Stock. When dividends are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon Series B Preferred Stock and all dividends declared upon
any other class or series of Parity Stock shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid
on the Series B Preferred Stock and accumulated and unpaid on such Parity
Stock.
(e) So long as any shares of Series B Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid
solely in shares of, or options, warrants or rights to subscribe for or
purchase shares of, Fully Junior Stock) shall be declared or paid or set
apart for payment or other distribution shall be declared or made or set
apart for payment upon Junior Stock, nor shall any Junior Stock be
redeemed, purchased or otherwise acquired (other than a redemption,
purchase or other acquisition of Common Stock made for purposes of an
employee incentive or benefit plan of the Corporation or any subsidiary)
for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any Junior Stock) by the Corporation,
directly or indirectly (except by conversion into or exchange for Fully
Junior Stock), unless in each case (i) the full cumulative dividends on
all outstanding Senior Stock, Series B Preferred Stock and any other
Parity Stock of the Corporation shall have been or contemporaneously are
declared and paid or declared and set apart for payment for all dividend
periods with respect to the Senior Stock, all past Dividend Periods with
respect to the Series B Preferred Stock and all past dividend periods
with respect to such Parity Stock, (ii) sufficient funds shall have been
or contemporaneously are set apart for the payment in full of the
dividend for the current dividend period with respect to the Senior
Stock, the current Dividend Period with respect to the Series B Preferred
Stock and the current dividend period with respect to such Parity Stock
and (iii) sufficient funds shall have been or contemporaneously are set
apart for payment in full of any obligations of the Corporation in
respect of Series B Preferred Stock called for redemption by the
Corporation pursuant to Section 5 or required to be repurchased by any
Holder pursuant to Section 6.
(f) No distributions on Series B Preferred Stock shall be declared
by the Board of Directors or paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of
the Corporation, including any agreement relating to its indebtedness,
prohibits such declaration, payment or setting apart for payment or
provides that such declaration, payment or setting apart for payment
would constitute a breach thereof or a default thereunder, or if such
declaration or payment shall be restricted or prohibited by law.
Section 4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or
surplus) shall be made to or set apart for the holders of Junior Stock,
the holders of shares of the Series B Preferred Stock shall be entitled
to receive Twenty Five Dollars ($25.00) (the "LIQUIDATION PREFERENCE")
per share of Series B Preferred Stock plus an amount equal to all
dividends (whether or not declared) accumulated, accrued and unpaid
thereon to the date of final distribution to such holders; but such
holders shall not be entitled to any further payment; PROVIDED, that the
dividend payable with respect to the Dividend Period containing the date
of final distribution shall be equal to the greater of (i) the dividend
provided in Section 3(a)(i) or (ii) the dividend determined pursuant to
Section 3(a)(ii) for the preceding Dividend Period. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of
the Corporation, or proceeds thereof, distributable among the holders of
the shares of Series B Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any
other shares of any class or series of Parity Stock, then such assets, or
the proceeds thereof, shall be distributed among the holders of Series B
Preferred Stock and any such other Parity Stock ratably in accordance
with the respective amounts that would be payable on such Series B
Preferred Stock and any such other Parity Stock if all amounts payable
thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Corporation with one or more corporations,
real estate investment trusts or other entities, (ii) a sale, lease or
conveyance of all or substantially all of the Corporation's property or
business, or (iii) a statutory share exchange shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Corporation.
(b) Subject to the rights of the holders of shares of any series or
class or classes of shares of capital stock ranking on a parity with or
prior to the Series B Preferred Stock upon liquidation, dissolution or
winding up, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of
the Series B Preferred Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed, and the
holders of the Series B Preferred Stock shall not be entitled to share
therein.
Section 5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Except as provided in paragraph (b) below, the Series B
Preferred Stock shall not be redeemable by the Corporation prior to the
fifth anniversary of the Issue Date. The Series B Preferred Stock may be
redeemed, in whole or in part, at the option of the Corporation at any
time on or after the fifth anniversary of the Issue Date out of funds
legally available therefor at a redemption price payable in cash equal to
the Liquidation Preference per share of Series B Preferred Stock (plus
all accumulated, accrued and unpaid dividends as provided below).
(b) If a Change of Control shall occur, the Corporation shall have
the right, to the extent that the Corporation shall have funds legally
available therefor, to redeem, in whole, but not in part, the outstanding
shares of Series B Preferred Stock at a redemption price payable in cash
in an amount equal to the Change of Control Price, by notice in writing
to the holders of Series B Preferred Stock no later than 30 days
following the occurrence of such Change of Control.
(c) Upon any redemption of shares of Series B Preferred Stock
pursuant to this Section 5, and except for dividends paid pursuant to the
next sentence, the Corporation shall pay all accrued and unpaid
dividends, if any, thereon to the Call Date, without interest. If the
Call Date falls after a dividend payment record date and prior to the
corresponding Dividend Payment Date, then each holder of shares of Series
B Preferred Stock at the close of business on such dividend payment
record date shall be entitled to the dividend payable on such shares on
the corresponding Dividend Payment Date notwithstanding any redemption of
such shares before such Dividend Payment Date. Except as provided above,
the Corporation shall make no payment or allowance for unpaid dividends,
whether or not in arrears, on shares of Series B Preferred Stock called
for redemption.
(d) If full cumulative dividends on the Series B Preferred Stock
and any other class or series of Parity Stock of the Corporation have not
been declared and paid or declared and set apart for payment, the Series
B Preferred Stock may not be redeemed under paragraph (a) of this Section
5 in part and the Corporation may not purchase or acquire shares of
Series B Preferred Stock, otherwise than pursuant to a purchase or
exchange offer made on the same terms to all holders of Series B
Preferred Stock.
(e) Notice of the redemption of any shares of Series B Preferred
Stock under this Section 5 shall be mailed by first-class mail to each
holder of record of shares of Series B Preferred Stock to be redeemed at
the address of each such holder as shown on the Corporation's records,
not fewer than 20 nor more than 60 days prior to the Call Date. Neither
the failure to mail any notice required by this paragraph (e), nor any
defect therein or in the mailing thereof, to any particular holder, shall
affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which was
mailed in the manner herein provided shall be conclusively presumed to
have been duly given on the date mailed whether or not the holder
receives the notice. Each such mailed notice shall state, as
appropriate: (1) the Call Date; (2) the number of shares of Series B
Preferred Stock to be redeemed and, if fewer than all the shares held by
such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the place or places at
which certificates for such shares are to be surrendered; (5) the then-
current Conversion Price; and (6) that dividends on the shares to be
redeemed shall cease to accrue on such Call Date except as otherwise
provided herein. Notice having been mailed as aforesaid, from and after
the Call Date (unless the Corporation shall fail to make available an
amount of cash necessary to effect such redemption), (i) except as
otherwise provided herein, dividends on the shares of Series B Preferred
Stock so called for redemption shall cease to accrue, (ii) such shares
shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of shares of Series B Preferred Stock of the
Corporation shall cease (except the rights to convert and to receive the
redemption price, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any
dividends accrued and payable thereon to the Call Date). The
Corporation's obligation to provide cash in accordance with the preceding
sentence shall be deemed fulfilled if, on or before the Call Date, the
Corporation shall deposit with a bank or trust company (which may be an
affiliate of the Corporation) that has an office in the Borough of
Manhattan, City of New York, and that has, or is an affiliate of a bank
or trust company that has, capital and surplus of at least $500,000,000,
the funds in cash necessary for such redemption, in trust, with
irrevocable instructions that such cash be applied to the redemption of
the shares of Series B Preferred Stock so called for redemption. No
interest shall accrue for the benefit of the holders of shares of Series
B Preferred Stock to be redeemed on any cash so set aside by the
Corporation. Subject to applicable escheat laws, any such cash unclaimed
at the end of 6 months from the Call Date shall revert to the general
funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of
the Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with
such notice of the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require
and if the notice shall so state), such shares shall be exchanged for the
redemption price (without interest thereon) for which such shares have
been redeemed. In the case of a redemption pursuant to paragraph (a) of
this Section 5, if fewer than all the outstanding shares of Series B
Preferred Stock are to be redeemed, shares to be redeemed shall be
selected by the Corporation from outstanding shares of Series B Preferred
Stock not previously called for redemption pro rata (as nearly as may
be), by lot or by any other method determined by the Corporation in its
sole discretion. In the case of a redemption pursuant to paragraph (a) of
this Section 5, if fewer than all the shares of Series B Preferred Stock
represented by any certificate are redeemed, then new certificates
representing the unredeemed shares shall be issued without cost to the
holder thereof.
Section 6. REPURCHASE UPON FUNDAMENTAL CHANGE OR REIT TERMINATION EVENT.
(a) If a Fundamental Change or REIT Termination Event shall occur:
(i) Each holder of shares of Series B Preferred Stock shall have
the right to require the Corporation, to the extent that the
Corporation shall have funds legally available therefor, to
repurchase, in whole or in part, such holder's shares of
Series B Preferred Stock held on the date that such holder
receives the notice described in subsection 6(a)(ii) at a
repurchase price (the "REPURCHASE PRICE") payable in cash in
an amount equal to (x) in the case of a Fundamental Change,
100% of the Liquidation Preference or (y) in the case of a
REIT Termination Event, 105% of the Liquidation Preference
(plus, in the case of each of (x) and (y), all accumulated,
accrued and unpaid dividends to the date of repurchase) in
each case as described below; PROVIDED, HOWEVER, that if a
REIT Termination Event occurs subsequent to five (5) years
following the Issue Date, the Repurchase Price shall equal
100% of the Liquidation Preference plus all accumulated,
accrued and unpaid dividends to the date of repurchase.
(ii) Within 15 days following the Corporation becoming aware that
a Fundamental Change or REIT Termination Event has occurred,
the Corporation shall mail by first class mail or overnight
courier a notice (the "REPURCHASE OFFER") to each holder of
shares of Series B Preferred Stock stating (A) that a
Fundamental Change or REIT Termination Event has occurred,
describing in general terms the nature of such event, and
that such holder has the right to require the Corporation to
repurchase all shares of Series B Preferred Stock then held
by such holder in cash; (B) the Repurchase Date (which shall
be a Business Day, no earlier than 20 days and no later than
60 days from the date such notice is mailed, or such later
date as may be necessary to comply with the requirements of
the Exchange Act); (C) the Repurchase Price; (D) the place or
places at which certificates for such shares are to be
surrendered; (E) that dividends on the shares to be
repurchased shall cease to accrue on such Repurchase Date
except as otherwise provided herein; and (F) the instructions
determined by the Corporation, consistent with this
subsection, that such holder must follow in connection with
the repurchase of its shares of Series B Preferred Stock.
(iii) On the Repurchase Date, the Corporation shall, to the extent
lawful (and to the extent any payment is unlawful, promptly
after the date on which such payment thereafter becomes
lawful), accept for payment the shares of Series B Preferred
Stock tendered pursuant to the Repurchase Offer described in
Subsection 6(a)(ii). The Corporation's obligation to provide
cash in accordance with Subsection 6(a)(ii) shall be deemed
fulfilled if, on or before the Repurchase Date, the
Corporation shall deposit with a bank or trust company (which
may be an affiliate of the Corporation) that has an office in
the Borough of Manhattan, City of New York, and that has, or
is an affiliate of a bank or trust company that has, capital
and surplus of at least $500,000,000, the funds in cash
necessary for such repurchase of all shares of Series B
Preferred Stock so tendered, in trust, with irrevocable
instructions that such cash be applied to the repurchase of
the shares of Series B Preferred Stock so tendered for
repurchase. No interest shall accrue for the benefit of the
holders of shares of Series B Preferred Stock to be
repurchased on any cash so set aside by the Corporation.
Subject to applicable escheat laws, any such cash unclaimed
at the end of six months from the Repurchase Date shall
revert to the general funds of the Corporation, after which
reversion the holders of such shares so called for repurchase
shall look only to the general funds of the Corporation for
the payment of such cash.
(iv) As promptly as practicable after the surrender in accordance
with such notice of the certificates for any such shares so
redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and if the notice shall so
state), such shares shall be exchanged for any cash (without
interest thereon) for which such shares have been
repurchased.
(b) Notwithstanding anything else herein, to the extent they are
applicable to any such repurchase, the Corporation will comply with any
federal and state securities laws, rules and regulations and all time
periods and requirements shall be adjusted accordingly.
(c) The Corporation may, upon ten (10) Business Days' advance
notice to the holders of the Series B Preferred Stock of a Fundamental
Change, request a waiver of such holders' rights under this Section 6;
PROVIDED, HOWEVER, that the failure of such holders to respond to or
otherwise act upon such request shall not be deemed to create or imply a
waiver or otherwise affect such holders' rights under this Section 6.
Section 7. CONVERSION. Holders of shares of Series B Preferred Stock
shall have the right to convert all or a portion of such shares into shares of
Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7 and the provisions of Article VII of the Corporation's Articles
of Incorporation, a holder of shares of Series B Preferred Stock shall
have the right, at any time, at his or her option, to convert such shares
into the number of fully paid and non-assessable shares of Common Stock
obtained by dividing the aggregate Liquidation Preference of such shares
(exclusive of accrued but unpaid dividends) by the Conversion Price (as
in effect at the time and on the date provided for in the last paragraph
of paragraph (b) of this Section 7); PROVIDED, HOWEVER, that the right to
convert shares called for redemption pursuant to Section 5 or to be
repurchased pursuant to Section 6 shall terminate at the close of
business on the fifth Business Day prior to the date fixed for such
redemption or repurchase, unless the Corporation shall default in making
payment of the cash payable upon such redemption or repurchase under
Section 5 or Section 6, as the case may be.
(b) In order to exercise the conversion right, the holder of each
share of Series B Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied
by written notice to the Corporation that the holder thereof elects to
convert such share of Series B Preferred Stock. Unless the shares
issuable on conversion are to be issued in the same name as the name in
which such Series B Preferred Stock is registered, each share surrendered
for conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).
Holders of shares of Series B Preferred Stock at the close of
business on a dividend payment record date shall be entitled to receive
the dividend payable on such shares on the corresponding Dividend Payment
Date notwithstanding the conversion thereof following such dividend
payment record date and prior to such Dividend Payment Date. Except as
provided above, the Corporation shall make no payment or allowance for
unpaid dividends on converted shares or for dividends on the shares of
Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
shares of Series B Preferred Stock as aforesaid (and in any event within
three business days following such surrender), the Corporation shall
issue and shall deliver at such office to such holder, or on his or her
written order, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such shares in
accordance with provisions of this Section 7, and any fractional interest
in respect of a share of Common Stock arising upon such conversion shall
be settled as provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for
the shares of Series B Preferred Stock to be converted shall have been
surrendered and such notice shall have been received by the Corporation
as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become the holder or holders
of record of the shares represented thereby at such time on such date and
such conversion shall be at the Conversion Price in effect at such time
on such date unless the share transfer books of the Corporation shall be
closed on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such share transfer books
are open, but such conversion shall be at the Conversion Price in effect
on the date on which such surrendered shares shall have been surrendered
and such notice is received by the Corporation.
(c) No fractional shares or scrip representing fractions of shares
of Common Stock shall be issued upon conversion of the shares of Series B
Preferred Stock. Instead of any fractional interest in a share of Common
Stock that would otherwise be deliverable upon the conversion of a share
of Series B Preferred Stock, the Corporation shall pay to the holder of
such share an amount in cash based upon the Current Market Price of the
Common Stock on the Trading Day immediately preceding the date of
conversion. If more than one share shall be surrendered for conversion
at one time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of Series B Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Corporation shall, after the Issue Date: (A) pay a
dividend or make a distribution on its capital shares in shares of
Common Stock, (B) subdivide its outstanding shares of Common Stock
into a greater number of shares, (C) combine its outstanding shares
of Common Stock into a smaller number of shares or (D) issue any
shares of capital stock by reclassification of its shares of Common
Stock, the Conversion Price in effect at the opening of business on
the day following the date fixed for the determination of
stockholders entitled to receive such dividend or distribution or
at the opening of business on the Business Day next following the
day on which such subdivision, combination or reclassification
becomes effective, as the case may be, shall be adjusted so that
the holder of any shares of Series B Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number
of shares of Common Stock that such holder would have owned or
have been entitled to receive after the happening of any of the
events described above as if such shares of Series B Preferred
Stock had been converted immediately prior to the record date in
the case of a dividend or distribution or the effective date in the
case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become
effective immediately after the opening of business on the Business
Day next following the record date (except as provided in paragraph
(h) below) in the case of a dividend or distribution and shall
become effective immediately after the opening of business on the
Business Day next following the effective date in the case of a
subdivision, combination or reclassification.
(ii) If the Corporation shall issue after the Issue Date
rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 days after the
record date mentioned below) to subscribe for or purchase shares of
Common Stock at a price per share less than of the Fair Market
Value per share of Common Stock on the record date for the
determination of stockholders entitled to receive such rights,
options or warrants, then the Conversion Price in effect at the
opening of business on the Business Day next following such record
date shall be adjusted to equal the price determined by multiplying
(A) the Conversion Price in effect immediately prior to the opening
of business on the Business Day next following the date fixed for
such determination by (B) a fraction, the numerator of which shall
be the sum of (x) the number of shares of Common Stock outstanding
on the close of business on the date fixed for such determination
and (y) the number of shares that the aggregate proceeds to the
Corporation from the exercise of such rights, options or warrants
for shares of Common Stock would purchase at Fair Market Value, and
the denominator of which shall be the sum of (x) the number of
shares of Common Stock outstanding on the close of business on the
date fixed for such determination and (y) the number of additional
shares of Common Stock offered for subscription or purchase
pursuant to such rights, options or warrants. Such adjustment
shall become effective immediately after the opening of business on
the day next following such record date (except as provided in
paragraph (h) below). In determining whether any rights, options
or warrants entitle the holders of shares of Common Stock to
subscribe for or purchase shares of Common Stock at less than Fair
Market Value, there shall be taken into account any consideration
received by the Corporation upon issuance and upon exercise of such
rights, options or warrants, the value of such consideration, if
other than cash, to be determined by the Board of Directors.
(iii) If the Corporation shall distribute to all holders of
Common Stock any securities of the Corporation (other than shares
of Common Stock) or evidence of its indebtedness or assets
(excluding cumulative cash dividends or distributions paid with
respect to the shares of Common Stock after December 31, 1998 which
are not in excess of the following: the sum of (A) the
Corporation's cumulative undistributed Funds from Operations at
December 31, 1998, plus (B) the cumulative amount of Funds from
Operations, as determined by the Board of Directors, after December
31, 1998, minus (C) the cumulative amount of dividends accrued or
paid in respect of the Series B Preferred Stock or any other class
or series of preferred stock of the Corporation after the Issue
Date) or rights, options or warrants to subscribe for or purchase
any of its securities (excluding those rights, options and warrants
issued to all holders of shares of Common Stock entitling them for
a period expiring within 45 days after the record date referred to
in subparagraph (ii) above to subscribe for or shares of purchase
Common Stock, which rights and warrants are referred to in and
treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) collectively called the
"SECURITIES" and individually a "SECURITY"), then in each such case
the Conversion Price shall be adjusted so that it shall equal the
price determined by multiplying (x) the Conversion Price in effect
immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such
distribution by (y) a fraction, the numerator of which shall be the
Fair Market Value per share of Common Stock on the record date for
the determination of stockholders entitled to receive such
distribution less the then fair market value (as determined by the
Board of Directors, whose determination shall be conclusive), of
the portion of the Securities or assets or evidences of
indebtedness so distributed or of such rights, options or warrants
applicable to one share of Common Stock, and the denominator of
which shall be the Fair Market Value per share of Common Stock on
the record date for the determination of stockholders entitled to
receive such distribution. Such adjustment shall become effective
immediately at the opening of business on the Business Day next
following (except as provided in paragraph (h) below) the record
date for the determination of stockholders entitled to receive such
distribution. For the purposes of this subparagraph (iii), the
distribution of a Security, which is distributed not only to the
holders of the shares of Common Stock on the date fixed for the
determination of stockholders entitled to such distribution of such
Security, but also is distributed with each share of Common Stock
delivered to a Person converting a share of Series B Preferred
Stock after such determination date, shall not require an
adjustment of the Conversion Price pursuant to this subparagraph
(iii); PROVIDED that on the date, if any, on which a person
converting a share of Series B Preferred Stock would no longer be
entitled to receive such Security with a share of Common Stock
(other than as a result of the termination of all such Securities),
a distribution of such Securities shall be deemed to have occurred
and the Conversion Price shall be adjusted as provided in this
subparagraph (iii) (and such day shall be deemed to be "the date
fixed for the determination of the stockholders entitled to receive
such distribution" and "the record date" within the meaning of the
two preceding sentences).
(iv) In case a tender or exchange offer (which term shall not
include open market repurchases by the Corporation) is made by the
Corporation or any subsidiary of the Corporation for all or any
portion of the shares of Common Stock shall expire and such tender
or exchange offer shall involve the payment by the Corporation or
such subsidiary of consideration per share of Common Stock having a
fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in
a resolution of the Board of Directors), at the last time (the
"EXPIRATION TIME") tenders or exchanges may be made pursuant to
such tender or exchange offer, that exceeds the Current Market
Price per share of Common Stock on the Trading Day next succeeding
the Expiration Time, the Conversion Price shall be reduced to equal
the price determined by multiplying the Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subparagraph, by a fraction of which
the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the
Expiration Time, multiplied by the Current Market Price per share
of Common Stock on the Trading Day next succeeding the Expiration
Time, and the denominator shall be the sum of (A) the fair market
value (determined as aforesaid) of the aggregate consideration
payable to stockholders based upon the acceptance (up to any
maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of
the Expiration Time (the shares deemed so accepted, up to any
maximum, being referred to as the "PURCHASED SHARES") and (B) the
product of the number of shares of Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the Current Market
Price per share of Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the
Expiration Time.
(v) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or
decrease of at least 1% in such price; PROVIDED, HOWEVER, that any
adjustments that by reason of this subparagraph (v) are not
required to be made shall be carried forward and taken into account
in any subsequent adjustment until made; and PROVIDED, FURTHER,
that any adjustment shall be required and made in accordance with
the provisions of this Section 7 (other than this subparagraph (v))
not later than such time as may be required in order to preserve
the tax-free nature of a distribution to the holders of shares of
Common Stock. Notwithstanding any other provisions of this Section
7, the Corporation shall not be required to make any adjustment of
the Conversion Price for the issuance of any shares of Common Stock
pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the
investment of additional optional amounts of cash in shares of
Common Stock under such plan. All calculations under this Section
7 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a share (with .05 of a share
being rounded upward), as the case may be. Anything in this
paragraph (d) to the contrary notwithstanding, the Corporation
shall be entitled, to the extent permitted by law, to make such
reductions in the Conversion Price, in addition to those required
by this paragraph (d), as it in its discretion shall determine to
be advisable in order that any share dividends, subdivision of
shares, reclassification or combination of shares, distribution of
rights or warrants to purchase shares or securities, or
distribution of other assets (other than cash dividends) hereafter
made by the Corporation to its stockholders shall not be taxable.
(e) If the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, statutory share
exchange, self tender offer for all or substantially all of its Common
Stock, sale of all or substantially all of the Corporation's assets or
recapitalization of the shares of Common Stock and excluding any
transaction as to which subparagraph (d)(i) of this Section 7 applies)
(each of the foregoing being referred to herein as a "TRANSACTION"), in
each case as a result of which all or substantially all of the shares of
Common Stock are converted into the right to receive shares, securities
or other property (including cash or any combination thereof), each share
of Series B Preferred Stock which is not redeemed or converted into the
right to receive shares, securities or other property prior to such
Transaction shall thereafter be convertible into the kind and amount of
shares, securities and other property (including cash or any combination
thereof) receivable upon the consummation of such Transaction by a holder
of that number of shares of Common Stock into which one share of Series B
Preferred Stock was convertible immediately prior to such Transaction,
assuming such holder of Common Stock (i) is not a Person with which the
Corporation consolidated or into which the Corporation merged or which
merged into the Corporation or to which such sale or transfer was made,
as the case may be ("CONSTITUENT PERSON"), or an affiliate of a
Constituent Person and (ii) failed to exercise his rights of election, if
any, as to the kind or amount of shares, securities and other property
(including cash) receivable upon such Transaction (provided that if the
kind or amount of shares, securities and other property (including cash)
receivable upon such Transaction is not the same for each share of Common
Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such
rights of election shall not have been exercised ("NON-ELECTING SHARE"),
then for the purpose of this paragraph (e) the kind and amount of shares,
securities and other property (including cash) receivable upon such
Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the Non-Electing
Shares). The Corporation shall not be a party to any Transaction unless
the terms of such Transaction are consistent with the provisions of this
paragraph (e), and it shall not consent or agree to the occurrence of any
Transaction until the Corporation has entered into an agreement with the
successor or purchasing entity, as the case may be, for the benefit of
the holders of the shares of Series B Preferred Stock that will contain
provisions enabling the holders of the shares of Series B Preferred Stock
that remain outstanding after such Transaction to convert into the
consideration received by holders of shares of Common Stock at the
Conversion Price in effect immediately prior to such Transaction. The
provisions of this paragraph (e) shall similarly apply to successive
Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock (other than cash dividends or
distributions paid with respect to the shares of Common Stock after
December 31, 1998 not in excess of the sum of the Corporation's
cumulative undistributed Funds from Operations at December 31,
1998, plus the cumulative amount of Funds from Operations, as
determined by the Board of Directors, after December 31, 1998,
minus the cumulative amount of dividends accrued or paid in respect
of the shares of Series B Preferred Stock or any other class or
series of preferred stock of the Corporation after the Issue Date);
or
(ii) the Corporation shall authorize the granting to all
holders of shares of Common Stock of rights, options or warrants to
subscribe for or purchase any shares of any class or any other
rights, options or warrants; or
(iii) there shall be any reclassification of the shares of
Common Stock (other than an event to which subparagraph (d)(i) of
this Section 7 applies) or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders
of the Corporation is required, or a statutory share exchange, or a
self tender offer by the Corporation for all or substantially all
of its outstanding shares of Common Stock or the sale or transfer
of all or substantially all of the assets of the Corporation as an
entirety; or
(iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;
then the Corporation shall cause to be filed with the Transfer Agent and
shall cause to be mailed to the holders of shares of Series B Preferred
Stock at their addresses as shown on the records of the Corporation a
notice stating (A) the date on which a record is to be taken the "RECORD
DATE") for the purpose of such dividend, distribution or granting of
rights, options or warrants, or, if a record is not to be taken, the date
as of which the holders of shares of Common Stock of record to be
entitled to such dividend, distribution or rights, options or warrants
are to be determined or (B) the date on which such reclassification,
consolidation, merger, statutory share exchange, sale, transfer,
liquidation, dissolution or winding up is expected to become effective
(the "EFFECTIVE DATE"), and the date as of which it is expected that
holders of shares of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, liquidation, dissolution or winding up.
Such notice shall be given to the holders of shares of Series B Preferred
Stock as promptly as possible, but in all cases at least 10 days prior to
the Record Date for purposes of clause (A) above and the Effective Date
for purposes of clause (B) above, as the case may be. Failure to give or
receive such notice or any defect therein shall not affect the legality
or validity of the proceedings described in this Section 7.
(g) Whenever the Conversion Price is adjusted as herein provided,
the Corporation shall promptly file with the Transfer Agent an officer's
certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such
certificate, the Corporation shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion Price and the
effective date of such adjustment and shall mail such notice of such
adjustment of the Conversion Price to the holder of each share of Series
B Preferred Stock at such holder's last address as shown on the records
of the Corporation.
(h) In any case in which paragraph (d)of this Section 7 provides
that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence
of such event (A) issuing to the holder of any share of Series B
Preferred Stock converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the shares of Common Stock issuable upon such conversion
before giving effect to such adjustment and (B) paying to such holder any
amount of cash in lieu of any fraction pursuant to paragraph (c) of this
Section 7.
(i) There shall be no adjustment of the Conversion Price in case of
the issuance of any shares of capital stock of the Corporation in a
reorganization, acquisition or other similar transaction except as
specifically set forth in this Section 7. If any action or transaction
would require adjustment of the Conversion Price pursuant to more than
one paragraph of this Section 7, only one adjustment shall be made and
such adjustment shall be the amount of adjustment that has the highest
absolute value.
(j) If the Corporation shall take any action affecting the shares of
Common Stock, other than actions described in this Section 7, that in the
opinion of the Board of Directors would materially and adversely affect
the conversion rights of the holders of the shares of Series B Preferred
Stock, the Conversion Price for the shares of Series B Preferred Stock
may be adjusted, to the extent permitted by law, in such manner, if any,
and at such time, as the Board of Directors, in its sole discretion, may
determine to be equitable in the circumstances.
(k) The Corporation covenants that it will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock, for the purpose of
effecting conversion of the shares of Series B Preferred Stock, the full
number of shares of Common Stock deliverable upon the conversion of all
outstanding shares of Series B Preferred Stock not theretofore converted.
For purposes of this paragraph (k), the number of shares of Common Stock
that shall be deliverable upon the conversion of all outstanding shares
of Series B Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued
upon conversion of the shares of Series B Preferred Stock shall be
validly issued, fully paid and non-assessable. Before taking any action
that would cause an adjustment reducing the Conversion Price below the
then-par value of the shares of Common Stock deliverable upon conversion
of the shares of Series B Preferred Stock, the Corporation will take any
action that, in the opinion of its counsel, may be necessary in order
that the Corporation may validly and legally issue fully paid and
(subject to any customary qualification based upon the nature of a real
estate investment trust) non-assessable shares of Common Stock at such
adjusted Conversion Price.
The Corporation shall endeavor to list the shares of Common Stock
required to be delivered upon conversion of the shares of Series B
Preferred Stock, prior to such delivery, upon each national securities
exchange, if any, upon which the outstanding shares of Common Stock are
listed at the time of such delivery.
The Corporation shall endeavor to comply with all federal and state
securities laws and regulations thereunder in connection with the
issuance of any securities that the Corporation shall be obligated to
deliver upon conversion of the shares of Series B Preferred Stock. The
certificates evidencing such securities shall bear such legends
restricting transfer thereof in the absence of registration under
applicable securities laws or an exemption therefrom as the Corporation
may in good faith deem appropriate.
(l) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or
delivery of shares of Common Stock or other securities or property on
conversion of the shares of Series B Preferred Stock pursuant hereto;
PROVIDED, HOWEVER, that the Corporation shall not be required to pay any
tax that may be payable in respect of any transfer involved in the issue
or delivery of shares of Common Stock or other securities or property in
a name other than that of the holder of the shares of Series B Preferred
Stock to be converted, and no such issue or delivery shall be made unless
and until the person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
Section 8. SHARES TO BE RETIRED. All shares of Series B Preferred Stock
which shall have been issued and reacquired in any manner by the Corporation
shall be restored to the status of authorized but unissued shares of capital
stock of the Corporation, without designation as to class or series.
Section 9. RANKING. Any class or series of shares of capital stock of
the Corporation shall be deemed to rank:
(a) prior to the shares of Series B Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall
be entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of shares of Series B Preferred Stock;
(b) on a parity with the shares of Series B Preferred Stock, as to
the payment of dividends and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per
share thereof shall be different from those of the shares of Series B
Preferred Stock, if the holders of such class or series and the shares of
Series B Preferred Stock shall be entitled to the receipt of dividends
and of amounts distributable upon liquidation, dissolution or winding up
in proportion to their respective amounts of accrued and unpaid dividends
per share or liquidation preferences, without preference or priority one
over the other ("PARITY STOCK");
(c) junior to the shares of Series B Preferred Stock, as to the
payment of dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, if such class or series shall be
Junior Stock; and
(d) junior to the shares of Series B Preferred Stock, as to the
payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up, if such class or series shall be
Fully Junior Stock.
Section 10. VOTING. If and whenever six quarterly dividends (whether or
not consecutive) payable on the shares of Series B Preferred Stock or any
series or class of Parity Stock shall be in arrears (which shall, with respect
to any such quarterly dividend, mean that any such dividend has not been paid
in full), whether or not declared, the number of directors then constituting
the Board of Directors shall be increased by two and the holders of Series B
Preferred Stock, together with the holders of shares of every other series of
Parity Stock (any such other series, the "VOTING PREFERRED STOCK"), voting as a
single class regardless of series, shall be entitled to elect the two
additional directors to serve on the Board of Directors at any annual meeting
of stockholders or special meeting held in place thereof, or at a special
meeting of the holders of the shares of Series B Preferred Stock and the Voting
Preferred Stock called ashereinafter provided. Whenever all arrears in
dividends on the shares of Series B Preferred Stock and the Voting Preferred
Stock then outstanding shall have been paid and dividends thereon for the
current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the shares of Series B
Preferred Stock and the Voting Preferred Stock to elect such additional two
directors shall cease (but subject always to the same provision for the vesting
of such voting rights in the case of any similar future arrearage in quarterly
dividends), and the terms of office of all persons elected as directors by the
holders of the shares of Series B Preferred Stock and the Voting Preferred
Stock shall forthwith terminate and the number of the Board of Directors shall
be reduced accordingly. At any time after such voting power shall have been so
vested in the holders of shares of Series B Preferred Stock and the Voting
Preferred Stock, the Secretary of the Corporation may, and upon the written
request of any holder of shares of Series B Preferred Stock (addressed to the
Secretary at the principal office of the Corporation) shall, call a special
meeting of the holders of the shares of Series B Preferred Stock and of the
Voting Preferred Stock for the election of the directors to be elected by them
as herein provided, such call to be made by notice similar to that provided in
the Bylaws of the Corporation for a special meeting of the stockholders or as
required by law. If any such special meeting required to be called as above
provided shall not be called by the Secretary within 20 days after receipt of
any such request, then any holder of shares of Series B Preferred Stock may
call such meeting, upon the notice above provided, and for that purpose shall
have access to the records of the Corporation. The directors elected at any
such special meeting shall hold office until the next annual meeting of the
stockholders or special meeting held in lieu thereof if such office shall not
have previously terminated as above provided. If any vacancy shall occur among
the directors elected by the holders of the shares of Series B Preferred Stock
and the Voting Preferred Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then-remaining director elected by the
holders of the shares of Series B Preferred Stock and the Voting Preferred
Stock or the successor of such remaining director, to serve until the next
annual meeting of the stockholders or special meeting held in place thereof if
such office shall not have previously terminated as provided above.
So long as any shares of Series B Preferred Stock are outstanding, in
addition to any other vote or consent of stockholders required by law or by the
Corporation's Articles of Incorporation, the affirmative vote of at least 66-
2/3% of the votes entitled to be cast by the holders of the shares of Series B
Preferred Stock given in person or by proxy, either in writing without a
meeting or by vote at any meeting called for the purpose, shall be necessary
for effecting or validating:
(a) Any amendment, alteration or repeal of any of the provisions of
the Corporation's Articles of Incorporation, the Corporation's By-Laws or
these Articles Supplementary that materially and adversely affects the
voting powers, rights or preferences of the holders of the shares of
Series B Preferred Stock; PROVIDED, HOWEVER, that the amendment of the
provisions of the Corporation's Articles of Incorporation so as to
authorize or create shares of a series of preferred stock of the
Corporation in exchange for the Class A Interests having an aggregate
stated value of $35,000,000 and having rights, privileges and
designations comparable to those of the Class A Interests ("SERIES A
PREFERRED STOCK") or to authorize or create or increase the authorized
amount of any shares of Fully Junior Stock, any shares of Junior Stock
that are not senior in any respect to the Series B Preferred Stock, or
any shares of Parity Stock shall not be deemed to materially adversely
affect the voting powers, rights or preferences of the holders of shares
of Series B Preferred Stock; or
(b) A share exchange that affects the shares of Series B Preferred
Stock, a consolidation with or merger of the Corporation into another
entity, or a consolidation with or merger of another entity into the
Corporation, unless in each such case each share of Series B Preferred
Stock (i) shall remain outstanding without a material and adverse change
to its terms and rights or (ii) shall be converted into or exchanged for
convertible preferred stock of the surviving entity having preferences,
conversion or other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms or conditions of redemption
thereof identical to that of a share of Series B Preferred Stock (except
for changes that do not materially and adversely affect the holders of
the shares of Series B Preferred Stock); or
(c) Except for the authorization or creation of the Series A
Preferred Stock in exchange for the Class A Interests, the authorization,
reclassification or creation of, or the increase in the authorized amount
of, any shares of any class or series or any security convertible into
shares of any class ranking prior to the shares of Series B Preferred
Stock in the distribution of assets on any liquidation, dissolution or
winding up of the Corporation or in the payment of dividends; or
(d) Any increase in the authorized amount of shares of Series B
Preferred Stock or decrease in the authorized amount of shares of Series
B Preferred Stock below the number of shares then issued and outstanding;
PROVIDED, HOWEVER, that no such vote of the holders of shares of Series B
Preferred Stock shall be required if, at or prior to the time when such
amendment, alteration or repeal is to take effect, or when the issuance of any
such prior shares or convertible security is to be made, as the case may be,
provision is made for the redemption or repurchase of all shares of Series B
Preferred Stock at the time outstanding to the extent such redemption or
repurchase is authorized by Sections 5 or 6 of these Articles Supplementary.
For purposes of the foregoing provisions of this Section 10, each share
of Series B Preferred Stock shall have one (1) vote per share, except that when
any other series of Preferred Stock shall have the right to vote with the
shares of Series B Preferred Stock as a single class on any matter, then the
shares of Series B Preferred Stock and such other series shall have with
respect to such matters one (1) vote per $25.00 of stated Liquidation
Preference. Except as otherwise required by applicable law or as set forth
herein, the shares of Series B Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other than as
set forth herein, and the consent of the holders thereof shall not be required
for the taking of any Corporation action.
Section 11. RECORD HOLDERS. The Corporation and the Transfer Agent may
deem and treat the record holder of any shares of Series B Preferred Stock as
the true and lawful owner thereof for all purposes, and neither the Corporation
nor the Transfer Agent shall be affected by any notice to the contrary.
IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to
be signed its name and on its behalf by its authorized officers who acknowledge
that these Articles Supplementary are the act of the Corporation, that to the
best of their knowledge, information and belief, all matters and facts set
forth herein relating to the authorization and approval of this document are
true in all material respects and this statement is made under penalties of
perjury.
September 29, 1999.
HOME PROPERTIES OF NEW YORK, INC.
By: /s/ David P. Gardner
Name: David P. Gardner
Its: Vice President
I, Ann M. McCormick, Secretary, hereby acknowledge on behalf of Home
Properties of New York, Inc. that the foregoing Articles Supplementary
are the corporate act of said corporation under penalties of perjury.
Attest:
/s/ Ann M. McCormick
NAME Ann M. McCormick
Secretary
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 30, 1999 relating to the
consolidated financial statements, which appears in Home Properties of New
York, Inc.'s Annual Report on Form 10-K as of December 31, 1998. We also
consent to the incorporation by reference of our report dated January 30, 1999
relating to the financial statement schedule, which appears in such Annual
Report on Form 10-K. We also consent to the incorporation by reference of our
reports (1) dated June 18, 1999 on our audit of the CRC Portfolio for the year
ended December 31, 1998, which report is included in Form 8-K/A Amendment No. 1
dated July 1, 1999 and filed on July 29, 1999, (2) dated July 1, 1999 on our
audit of the Mid-Atlantic Portfolio for the year ended December 31, 1998, which
report is included in Form 8-K dated July 15, 1999 and filed on July 30, 1999,
and (3) dated October 26, 1999 and November 2, 1999 on our audits of the Ridley
Portfolio and Colony Apartments, respectively, for the year ended December 31,
1998, which are included in Form 8-K/A Amendment No. 1 dated February 18, 1999
and filed on November 12, 1999. We also consent to the reference to us under
the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Rochester, New York
December 2, 1999
Exhibit 5.1
Nixon, Hargrave, Devans & Doyle LLP
Attorneys and Counselors at Law
Clinton Square Post Office Box 1051
Rochester, New York 14603-1051
(716) 263-1000
Fax: (716) 263-1600
December 2, 1999
Home Properties of New York, Inc.
850 Clinton Square
Rochester, New York 14604
Ladies and 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, filed
today, by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to the offer and sale of up to
5,832,174 of shares of common stock, par value $0.01 per share (the "Common
Stock"), which may be issued from time to time to the "Selling
Shareholders" named in the prospectus ("Prospectus") forming a portion of
the Registration Statement. This opinion is being provided to you in
connection with the filing of the Registration Statement.
We have examined the originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and all such
agreements, certificates of public officials, certificates of officers o
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 Amendment and Restatement of the Articles of Incorporation of
the Company, as amended to the date hereof (the "Articles of
Incorporation"), (ii) the Amended and Restated By-Laws of the Company, as
amended to the date hereof (the "By-Laws"), (iii) certified copies of
certain resolutions duly adopted by the Board of Directors of the Company,
and (iv) the Second Amended and Restated Agreement of Limited Partnership,
as amended (the "Partnership Agreement") of Home Properties of New York,
L.P. (the "Operating Partnership"). As to factual matters material to the
opinions set forth below we have relied, without investigation, upon the
representations and statements of the Company in the Registration Statement
and in such certificates of government officials and officers of the
Company as we have deemed necessary for the purposed of the opinions
expressed herein. The opinions stated herein are limited to the federal
laws of the United States, the laws of the State of New York and the
General Corporation Law of the State of Maryland.
Based upon and subject to the conditions and limitations set forth
herein, we are of the opinion that:
When the Registration Statement has become effective under the Act and the
shares of Common Stock have been issued in exchange for Units as described
in the Partnership Agreement, and the certificates representing such shares
of Common Stock are authenticated and delivered, such shares of Common
Stock issued will be duly authorized, validly issued, fully paid and non-
assessable by the Company.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced 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 Peabody LLP