UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(C) or
Section 240.14a-12
Home Properties of New York, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate Number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously by written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule O-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1) Amount Previously Paid:
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(2) Form Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
Suite 850
Clinton Square
Rochester, New York 14604
March 30, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Home Properties of New York, Inc. The Annual Meeting will be
held on Tuesday, May 2, 2000 at 2:00 p.m. at The Strong Museum, One Manhattan
Square, Rochester, New York 14607.
A Notice of Annual Meeting and a Proxy Statement are enclosed. They
describe the matters to be acted upon at the Annual Meeting. Your vote on
these matters is very important. Please sign, date and return the enclosed
proxy card in the envelope provided. This will insure that your shares are
represented at the meeting, whether or not you plan to attend in person.
We look forward to seeing you at the meeting.
Norman P. Leenhouts
CHAIRMAN AND CO-CHIEF EXECUTIVE
OFFICER
Nelson B. Leenhouts
PRESIDENT AND CO-CHIEF EXECUTIVE
OFFICER
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
Suite 850
Clinton Square
Rochester, New York 14604
_______________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 2, 2000
_______________________________________
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
Home Properties of New York, Inc. (the "Company") will be held on Tuesday,
May 2, 2000 at 2:00 p.m. at The Strong Museum, One Manhattan Square, Rochester,
New York 14607 for the following purposes:
1. To elect twelve directors of the Company to serve until the 2001
Annual Meeting of Stockholders and until their respective successors are
elected;
2. To ratify the Board of Director's appointment of
PricewaterhouseCoopers LLP as the Company's independent auditors for
2000;
3. To approve the Company's 2000 Stock Benefit Plan; and
4. To consider and act upon any other matters that are properly
brought before the Annual Meeting and at any adjournments or
postponements thereof.
The Board of Directors set the close of business on March 17, 2000
as the record date. Only stockholders whose names appear on the stock register
of the Company at the close of business on the record date will be entitled to
notice of and to vote at the Annual Meeting and at any adjournments or
postponements. (If you hold your stock in the name of a brokerage firm, bank
or other nominee, only that entity can vote your shares. Please give
instructions for your shares to be voted to the person responsible for your
account.)
Please complete and sign the enclosed proxy card. The proxy
represented by this card is solicited by the Board of Directors of the Company.
Please mail the card promptly in the enclosed postage-prepaid envelope. You
may change the votes on any proxy by sending a written notice to Ann M.
McCormick, Secretary of the Company at 850 Clinton Square, Rochester, New York
14604 before the Annual Meeting, by sending a different proxy card with a later
date before the Annual Meeting or by voting in person by ballot at the Annual
Meeting. Stockholders of record who attend the Annual Meeting may vote in
person, even if they have previously delivered a signed proxy.
Rochester, New York By Order of the Board of Directors
March 30, 2000
/s/ Ann M. McCormick
Ann M. McCormick
Secretary
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY CARD. IF YOU ATTEND THE ANNUAL MEETING, YOU
MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY
CARD.
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
Suite 850
Clinton Square
Rochester, New York 14604
_______________________________________
PROXY STATEMENT
_______________________________________
FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 2, 2000
March 30, 2000
This Proxy Statement is delivered to you in connection with the
solicitation of proxies by the Board of Directors of Home Properties of New
York, Inc. (the "Company") for use at the 2000 Annual Meeting of Stockholders
of the Company (the "Annual Meeting"). The Annual Meeting will be held on
Tuesday, May 2, 2000 at 2:00 p.m. at The Strong Museum, One Manhattan Square,
Rochester, New York 14607.
This Proxy Statement is first being sent to stockholders on or
about March 30, 2000. The Board of Directors set the close of business on
March 17, 2000 as the record date (the "Record Date") for determining which
stockholders are entitled to notice of and to vote at the Annual Meeting
(including any adjournments or postponements). Only holders of the Company's
Common Stock ("Common Stock") whose names appear on the stock registers of the
Company at the close of business on the Record Date will be entitled to notice
of and to vote at the Annual Meeting. As of the Record Date, there were
20,070,166 shares of Common Stock outstanding and entitled to vote at the
Annual Meeting. Stockholders are entitled to one vote for each share of Common
Stock they hold.
Please complete, sign, date and promptly return the accompanying
Proxy Card. An envelope with prepaid postage is enclosed. The persons named
on the Proxy Card will vote the shares of Common Stock as directed on properly
executed cards if they are received before the vote at the Annual Meeting and
not revoked. If a proxy is submitted without any instructions, the proxy will
be voted FOR Proposal 1 for the election of the twelve nominees for directors
of the Company named in this Proxy Statement; FOR Proposal 2 to ratify the
appointment of PricewaterhouseCoopers LLP as independent auditors; and FOR
Proposal 3 to approve the Company's 2000 Stock Benefit Plan. The Company does
not expect any matters which are not described in this Proxy Statement to be
presented at the Annual Meeting. If other matters are presented, proxies will
be voted in accordance with the discretion of the proxy holders.
For the Company to be able to act on the listed matters at the
Annual Meeting, at least a majority of the total number of outstanding shares
of Common Stock entitled to vote must be present, either in person or by proxy.
Under Maryland law, if a stockholder abstains on a vote, the abstention does
not constitute a vote "for" or "against" a matter. Thus, abstentions are
disregarded in determining the "votes cast". With respect to certain matters,
including Proposals 1 and 2, brokers and certain other nominees are entitled to
vote in their discretion if the beneficial owner or person entitled to vote
does not give the broker or nominee instructions on how to vote. If, however,
the brokers or nominees do not receive instructions from the beneficial owner
or other person entitled to vote such shares on Proposal 3 regarding the
approval of the 2000 Stock Benefit Plan, they may not vote on that proposal
and their "non-votes" will be treated like abstentions. Proposal 3 must be
approved by a majority of the votes cast so long as the total of votes cast on
the proposal is more than 50% of the total number of shares entitled to vote.
A stockholder of record who submits a proxy may revoke it at any
time before the vote at the Annual Meeting: (i) by giving a written revocation
to Ann M. McCormick, the Secretary of the Company, at 850 Clinton Square,
Rochester, New York 14604; (ii) by filing another properly executed proxy with
a later date; or (iii) by attending the Annual Meeting in person and voting by
ballot. Any stockholder of record as of the Record Date who attends the Annual
Meeting may vote in person even if they have previously sent in a proxy card.
If a stockholder attends the Annual Meeting but does not complete a ballot
their shares of Common Stock will be voted in accordance with their previously
given proxy.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, twelve individuals will be elected to serve as
directors until the 2001 Annual Meeting and until their successors are elected.
The Board of Directors has nominated Norman P. Leenhouts, Nelson B. Leenhouts,
Richard J. Crossed, Amy L. Tait, Burton S. August, Sr., William Balderston,
III, Alan L. Gosule, Leonard F. Helbig, III, Roger W. Kober, Albert H. Small,
Clifford W. Smith, Jr., and Paul L. Smith to serve as directors (the
"Nominees"). Each of the Nominees is currently serving as a director of the
Company. The Board of Directors anticipates that each of the Nominees will
serve as a director if elected. If any person nominated by the Board of
Directors is unable to accept election, the proxies will be voted for the
election of another person recommended by the Board of Directors.
The favorable vote of the holders of a majority of the shares of Common
Stock cast at the Annual Meeting is required for the election of the nominees
as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.
INFORMATION REGARDING NOMINEES FOR DIRECTOR
Brief biographical descriptions of the Nominees follow. The information
was furnished to the Company by the Nominees. The information is up to date
through March 17, 2000.
Norman P. Leenhouts, 64, has served as Chairman of the Board of
Directors, Co-Chief Executive Officer and a director of the Company since its
inception in 1993. He has also served as Chairman of the Board of Home
Properties Management, Inc. ("HP Management") and as a director of Conifer
Realty Corporation ("Conifer Realty") since their formation. Norman Leenhouts
is a co-owner, together with Nelson Leenhouts, of Home Leasing Corporation, the
Company's predecessor ("Home Leasing"), and served as Chairman of Home Leasing
since 1971. He is a director of Hauser Corporation and Rochester Downtown
Development Corporation and is a member of the Board of Trustees of Roberts
Wesleyan College. He is a graduate of the University of Rochester and is a
certified public accountant. He is the twin brother of Nelson Leenhouts.
Nelson B. Leenhouts, 64, has served as President, Co-Chief Executive
Officer and a director of the Company since its inception in 1993. He has also
served as President and Chief Executive Officer of HP Management and as a
director of Conifer Realty since their formation. He is also a Vice President
of Conifer Realty. Nelson Leenhouts was the founder, and a co-owner, together
with Norman Leenhouts, of Home Leasing, and served as President of Home Leasing
since 1967. He is a director of Hauser Corporation and a member of the Board
of Directors of the National Multi Housing Council. Nelson Leenhouts is a
graduate of the University of Rochester. He is the twin brother of Norman
Leenhouts.
Richard J. Crossed, 60, has served as Executive Vice President and a
director of the Company and as a director, President and Chief Executive
Officer of Conifer Realty since January 1, 1996. He is also Executive Vice
President of HP Management. He served as President and Chief Executive Officer
of Conifer Development, Inc. and C.O.F., Inc. (formerly Conifer Realty, Inc.)
(collectively, "Conifer") from 1985. Before becoming President of Conifer, he
served as Director of Development for Conifer. Mr. Crossed is a director of
the St. Joseph's Villa and is active in many housing organizations. He has
served on the New York State Housing Turnkey Task Force and New York State Low-
Income Housing Tax Credit Task Force. Mr. Crossed is a graduate of Bellarmine
College.
Amy L. Tait, 41, has served as Executive Vice President and a director of
the Company since its inception in 1993. She has also served as a director of
HP Management since its formation. Mrs. Tait joined Home Leasing in 1983 and
has had several positions, including Senior and Executive Vice President and
Chief Operating Officer. She currently serves on the M & T Bank Advisory Board
and the boards of the United Way of Rochester, Geva Theatre and The Commission
Project. Mrs. Tait is also a member of the Board of Directors of the National
Multi Housing Council. Mrs. Tait is a graduate of Princeton University and
holds an MBA Degree from the William E. Simon Graduate School of Business
Administration of the University of Rochester. She is the daughter of Norman
Leenhouts.
Burton S. August, Sr., 84, has been a director of the Company since
August, 1994. Mr. August is currently a director of Monro Muffler Brake, Inc.,
a publicly traded company where Mr. August served as Vice President from 1969
until he retired in 1980. Mr. August is honorary Vice Chairman of the Board of
Trustees of Rochester Institute of Technology, on the Board of Directors of
Park Ridge Health Systems and Hillside Children's Center Foundation, on the
cabinet of the Al Sigl Center and on the Finance Committee of the United Way of
Greater Rochester.
William Balderston, III, 72, has been a director of the Company since
August, 1994. From 1991 to the end of 1992, he was an Executive Vice President
of The Chase Manhattan Bank, N.A. From 1986 to 1991, he was President and
Chief Executive Officer of Chase Lincoln First Bank, N.A., which was merged
into The Chase Manhattan Bank, N.A. He is a Trustee of the University of
Rochester and a member of the Board of Governors of the University of Rochester
Medical Center. Mr. Balderston is also a Trustee of the Genesee Country
Village Museum, as well as a member of the board of the Genesee Valley
Conservancy. He is a graduate of Dartmouth College.
Alan L. Gosule, 59, has been a director of the Company since December,
1996. Mr. Gosule has been a partner in the law firm of Clifford Chance Rogers
& Wells LLP, New York, New York, since August, 1991 and prior to that time was
a partner in the law firm of Gaston & Snow. He serves as Chairman of the
Clifford Chance Rogers & Wells LLP Tax Department and Real Estate Securities
practice group. Mr. Gosule is a graduate of Boston University and its Law
School and received a LL.M. from Georgetown University. Mr. Gosule also serves
on the Boards of Directors of 32 funds of the Pilgrim Capital Corporation, the
Simpson Housing Limited Partnership, F.L. Putnam Investment Management
Company, CORE Cap, Inc. and Colonnade Partners. Clifford Chance Rogers & Wells
LLP acted as counsel to Coopers & Lybrand LLP in its capacity as advisor to the
State Treasurer of the State of Michigan in connection with its investment of
retirement funds in Home Properties of New York, L.P. (the "Operating
Partnership") and Mr. Gosule was the nominee of the State Treasurer under the
terms of the investment agreements relating to that transaction.
Leonard F. Helbig, III, 54, has been a director of the Company since
August, 1994. Since 1999, Mr. Helbig has been President of Financial Services
for Cushman & Wakefield, Inc. Prior to that, Mr. Helbig served as Executive
Managing Director of the Asset Services and Financial Services Groups since
1984. He joined Cushman & Wakefield in 1980 and is also a member of that
firm's Executive Committee and Board of Directors. Mr. Helbig is a member of
the Urban Land Institute, the Pension Real Estate Association and the
International Council of Shopping Centers. Mr. Helbig is a graduate of LaSalle
University and holds the MAI designation of the American Institute of Real
Estate Appraisers.
Roger W. Kober, 66, has been a director of the Company since August,
1994. Mr. Kober is currently a director of RGS Energy Corporation and its
wholly owned subsidiary, Rochester Gas and Electric Corporation. He was
employed by Rochester Gas and Electric Corporation from 1965 until his
retirement on January 1, 1998. From March, 1996 until January 1, 1998, Mr.
Kober served as Chairman and Chief Executive Officer of Rochester Gas and
Electric Corporation. He is also a member of the Board of Trustees of
Rochester Institute of Technology. Mr. Kober is a graduate of Clarkson
College and holds a Masters Degree in Engineering from Rochester Institute of
Technology.
Albert H. Small, 74, has been a director of the Company since July, 1999.
Mr. Small, who has been active in the construction industry for 50 years, is
President of Southern Engineering Corporation. He is a member of the Urban
Land Institute, National Association of Home Builders and currently serves on
the Board of Directors of the National Symphony Orchestra, National Advisory
Board Music Associates of Aspen, Department of State Diplomatic Rooms Endowment
Fund, James Madison Council of the Library of Congress, Tudor Place Foundation,
The Life Guard of Mount Vernon, Historical Society of Washington, DC and the
National Archives Foundation. Mr. Small is a graduate of the University of
Virginia. In connection with the acquisition of a portfolio of properties
located in the suburban markets surrounding Washington, D.C., Mr. Small and
others received approximately 4,086,000 operating partnership units in the
Operating Partnership. Mr. Small is the nominee of the former owners of that
portfolio under the terms of the acquisition documents.
Clifford W. Smith, Jr., 53, has been a director of the Company since
August, 1994. Mr. Smith is the Epstein Professor of Finance of the William E.
Simon Graduate School of Business Administration of the University of
Rochester, where he has been on the faculty since 1974. He has written
numerous books and articles on a variety of financial, capital markets and risk
management topics and has held editorial positions for a variety of journals.
Mr. Smith is a graduate of Emory University and holds a PhD from the University
of North Carolina at Chapel Hill.
Paul L. Smith, 64, has been a director of the Company since August, 1994.
Mr. Smith was a director, Senior Vice President and the Chief Financial Officer
of the Eastman Kodak Company from 1983 until he retired in 1993. He is
currently a director of Canandaigua Brands, Inc. and Performance Technologies,
Incorporated. He is also a member of the Board of Trustees of the George
Eastman House and Ohio Wesleyan University. Mr. Smith is a graduate of Ohio
Wesleyan University and holds an MBA Degree in finance from Northwestern
University.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
BOARD OF DIRECTORS. The Company is managed by a Board of Directors
composed of twelve members, a majority of whom are independent of the Company's
management (the "Independent Directors"). The Board of Directors met six times
in 1999. Each of the directors, except for Mr. Helbig and Mr. Small, attended
at least 75% of the meetings of the Board of Directors during 1999.
AUDIT COMMITTEE. Alan Gosule, Leonard Helbig, Roger Kober and Paul Smith
form the Audit Committee of the Board of Directors. Paul Smith is the
Chairperson of the Audit Committee. The Audit Committee recommends the
engagement of independent public accountants, reviews the scope of the audit
engagement and any other services, reviews the independent public accountants'
letter of comments and management's responses to those comments, approves other
professional services provided by the independent public accountants, reviews
the independence of the independent public accountants, reviews any major
accounting changes made or contemplated and reviews the adequacy of the
Company's internal accounting controls. The Audit Committee consists solely of
Independent Directors. It met twice during 1999, with each of the members
attending both meetings, except Mr. Helbig who attended one of the meetings.
MANAGEMENT AND DIRECTORS COMMITTEE. Burton August, William Balderston,
Alan Gosule and Clifford Smith form the Management and Directors Committee of
the Board of Directors. Clifford Smith is the Chairperson of the Management
and Directors Committee. The Management and Directors Committee was formerly
known as the Management Committee and prior to that, it was known as the
Compensation Committee. It performs the traditional functions of a
compensation committee, including establishing remuneration levels for officers
and directors of the Company, reviewing significant employee benefit programs
and establishing and administering executive compensation programs, including
bonus plans, stock option and other equity-based programs, deferred
compensation plans and any other cash or stock incentive programs. The
Management and Directors Committee consists solely of Independent Directors and
met three times during 1999, with each of the members attending more than 75%
of the meetings.
The Board of Directors does not have a standing nominating committee.
The entire Board of Directors considers Board composition and nominees,
performing the function of a nominating committee.
COMPENSATION OF DIRECTORS
In 1999, the Company paid its Independent Directors an annual stipend of
$10,000 plus $1,000 per day for attendance (in person or by telephone) at Board
and committee meetings. Pursuant to the Director's Stock Grant Plan approved
by the stockholders at the 1998 Annual Meeting of Stockholders, in lieu of an
increase in cash compensation, the Independent Directors were also issued 250
shares of the Company's Common Stock. Pursuant to the Company's prior Stock
Benefit Plan (the "1994 Stock Benefit Plan"), each Independent Director was
granted options to purchase 3,500 shares of Common Stock immediately following
the annual meeting of stockholders in 1997, 1998 and 1999. The options have an
exercise price equal to the fair market value of the Company's Common Stock on
the date of grant.
After studying the compensation paid to the outside directors of twenty
other apartment REITs, the Board of Directors approved certain changes to the
compensation to be paid to its Independent Directors for 2000. Instead of
issuing shares under the Director's Stock Grant Plan, the annual cash stipend
paid to the Independent Directors was increased to $20,000. An additional
annual stipend in the amount of $3,000 is to be paid to the Chairpersons of
each of the Audit and Management and Directors Committees. Independent
Directors are also paid $1,000 per day for attendance (in person or by
telephone) at Board and committee meetings. In addition, pursuant to a new
stock benefit plan approved by the Board (the "2000 Stock Benefit Plan"), each
of the Directors is to be granted options to purchase 7,000 shares of Common
Stock immediately following the annual meeting of stockholders in 2000, 2001
and 2002. The options are to have an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant.
In 1999, the Board also approved a Director Deferred Compensation Plan
for Independent Directors. Under the Plan, the Independent Directors can defer
up to 100% of their total annual cash compensation (including meeting fees) for
three, five or ten years. The Company contributes 10% of the deferred amount,
which amount vests after three years. A "phantom" stock account is established
for both amounts. Each deferral and Company contribution is reflected by
crediting those accounts with the number of shares of the Company's Common
Stock that could be purchased with the amounts deferred and contributed at the
Common Stock's fair market value. Participant's accounts are also credited
with the number of shares of the Company's Common Stock that could be purchased
with hypothetical dividends that would be paid with respect to shares
previously allocated to the accounts on the same date and at the same price
that shares are purchased for participants in the dividend reinvestment feature
of the Company's Dividend Reinvestment and Direct Stock Purchase Plan. The
Director Deferred Compensation Plan is designed to provide substantially the
same benefits to the Independent Directors as is provided to eligible employees
under the Company's Deferred Bonus Plan. The Director Deferred Compensation
Plan is available for compensation earned during and after 2000. Under the
Plan, seven of the eight Independent Directors elected to defer some or all of
the compensation earned by them in 2000.
Directors of the Company who are employees of the Company do not receive
any compensation for their services as directors. All directors are reimbursed
for their expenses incurred in attending directors' meetings.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid during 1997,
1998 and 1999 to the Company's two Co-Chief Executive Officers and the other
four most highly compensated executive officers (collectively the "Named
Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
AWARDS
ANNUAL COMPENSATION Shares Underlying
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS
<S> <C> <C> <C> <C>
Norman P. Leenhouts
Chairman and Co-Chief Executive Officer 1997 $159,720 $143,109 15,000 sh. (4)
1998 196,237 156,989 15,000 sh. (5)
1999 230,000 185,969(1) 50,000 sh. (6)
Nelson B. Leenhouts
President and Co-Chief Executive Officer 1997 $159,720 $143,109 15,000 sh. (4)
1998 196,237 156,989 15,000 sh. (5)
1999 230,000 185,969(1) 50,000 sh. (6)
Richard J. Crossed
Executive Vice President 1997 $159,720 $143,109 15,000 sh. (4)
1998 196,237 156,989 15,000 sh. (5)
1999 230,000 185,969(1) 50,000 sh. (6)
Amy L. Tait
Executive Vice President 1997 $110,725 $ 99,210 10,000 sh. (4)
1998 131,931 105,545 10,000 sh. (5)
1999 153,000 125,526(2) 35,000 sh. (6)
David P. Gardner
Vice President, Treasurer and Chief 1997 $ 91,000 $ 40,768 5,000 sh. (4)
Financial Officer 1998 110,417 44,168 5,000 sh. (5)
1999 127,500 59,168(3) 15,000 sh. (6)
Ann M. McCormick, Esq.
Vice President, General Counsel and 1997 $ 90,000 $ 42,336 5,000 sh. (4)
Secretary 1998 110,417 44,168 5,000 sh. (5)
1999 127,500 59,168(3) 15,000 sh. (6)
</TABLE>
(1) Includes $19,969, which represents 50% of the amount of the 1998 bonus
that was subject to mandatory deferral under the Company's Incentive
Compensation Plan.
(2) Includes $13,426, which represents 50% of the amount of the 1998 bonus
that was subject to mandatory deferral under the Company's Incentive
Compensation Plan.
(3) Includes $5,618, which represents 50% of the amount of the 1998 bonus
that was subject to mandatory deferral under the Company's Incentive
Compensation Plan.
(4) These options were granted under the Company's 1994 Stock Benefit Plan
and are exercisable for ten years at $26.50 per share and vest over
five years.
(5) These options were granted under the Company's 1994 Stock Benefit Plan
and are exercisable for ten years at $25.125 per share and vest over
five years.
(6) These options were granted under the Company's 1994 Stock Benefit Plan
and are exercisable for ten years at $27.125 per share and vest over
five years.
<PAGE>
OPTION GRANTS IN FISCAL YEAR 1999
The following table sets forth certain information relating to the
options granted under the 1994 Stock Benefit Plan with respect to fiscal year
ended December 31, 1999. The columns labeled "Potential Realizable Value" are
based on hypothetical 5% and 10% growth assumptions in accordance with the
rules of the Securities and Exchange Commission. The Company cannot predict
the actual growth rate of the Common Stock.
OPTION GRANTS IN LAST FISCAL YEAR*
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
Percent of Total
Number of Shares Options Potential Realizable
Underlying Granted to Value at Assumed Annual
Options GRANTED Employees in Exercise or Rates of Stock Price
Fiscal Base Price Expiration Appreciation FOR OPTION
NAME YEAR ($/SH) DATE TERM
5% 10%
<S> <C> <C> <C> <C> <C> <C>
Norman P. Leenhouts 50,000 8.53% $27.125 8/3/2009 $852,938 $2,161,513
Nelson B. Leenhouts 50,000 8.53% $27.125 8/3/2009 $852,938 $2,161,513
Richard J. Crossed 50,000 8.53% $27.125 8/3/2009 $852,938 $2,161,513
Amy L. Tait 35,000 5.97% $27.125 8/3/2009 $597,057 $1,513,059
David P. Gardner 15,000 2.56% $27.125 8/3/2009 $255,882 $ 648,454
Ann M. McCormick 15,000 2.56% $27.125 8/3/2009 $255,882 $ 648,454
</TABLE>
____________
* Stock appreciation rights were not granted in 1999
<PAGE>
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth the value of options held at the end of
1999 by the Company's Named Executives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES{(1)}
<TABLE>
<CAPTION>
Number of Number of Shares Value of Unexercised in-
Shares Underlying Unexercised the-
Acquired on Value OPTIONS AT FISCAL YEAR-END Money Options at
NAME EXERCISE REALIZED FISCALYEAR-END (2)
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Norman P. Leenhouts 48,000 $261,000 13,402 sh. 73,936 sh. $ 43,101 $ 72,181
Nelson B. Leenhouts 0 0 61,402 sh. 73,936 sh. $448,101 $ 72,181
Richard J. Crossed 0 0 13,402 sh. 73,936 sh. $ 43,101 $ 72,181
Amy L. Tait 0 0 82,123 sh. 51,083 sh. $645,978 $ 49,513
David P. Gardner 0 0 14,364 sh. 22,870 sh. $ 98,115 $ 22,786
Ann M. McCormick 0 0 16,023 sh. 22,850 sh. $112,160 $ 22,647
</TABLE>
(1) Stock appreciation rights were not granted in 1999.
(2) Based on the closing price of the Common Stock on the NYSE on December 31,
1999 of $27.4375 less the per Share exercise price of the options.
EMPLOYMENT AGREEMENTS
Norman and Nelson Leenhouts entered into employment agreements with the
Company prior to its initial public offering providing for an initial term of
five years commencing August 4, 1994 with automatic one year extensions (the
"Employment Agreements"). The agreements provided for the employment of
Norman Leenhouts as Chairman of the Board and Co-Chief Executive Officer of the
Company and Nelson Leenhouts as President and Co-Chief Executive Officer of the
Company and President and Chief Executive Officer of HP Management. The
Employment Agreements provided for initial base salaries of $120,000, which
were to automatically increase by 10% each year starting January 1, 1995. In
addition, the Employment Agreements also provided certain benefits if
employment is terminated by the Company or not renewed without cause, or
terminated by the executive for good reason at any time. The Employment
Agreements also entitled the Leenhoutses to receive incentive compensation
pursuant to a specific formula. Pursuant to their respective Employment
Agreements with the Company, Norman and Nelson Leenhouts are each subject to a
covenant not to compete with the Company during the term of his employment and,
if either is terminated by the Company for cause or resigns without good
reason, for two years thereafter. The covenants prohibit Norman and Nelson
Leenhouts from participating in the management, operation or control of any
multifamily residential business which is competitive with the business of the
Company, except that they, individually and through Home Leasing and its
affiliates, may continue to own and develop the properties managed by HP
Management. The Leenhoutses have also agreed that any commercial property
which may be developed by them will be managed by HP Management subject to the
approval of the outside members of the Board of Directors. The initial term of
the Employment Agreements expired on August 4, 1999 and automatically renewed
to August 4, 2000. They may be terminated by either party on written notice
given sixty days prior to the expiration of the then current term.
Richard Crossed also entered into an Employment Agreement with the
Company, effective January 1, 1996. The terms of that agreement were
substantially the same as the Employment Agreements entered into by Norman and
Nelson Leenhouts as described above. The initial term is for five years and
identical termination provisions are provided. In his Employment Agreement,
Mr. Crossed has agreed not to compete with the Company during the term of his
employment and, if he is terminated by the Company for cause or resigns without
good reason, for three years thereafter.
The Employment Agreements have been amended. In 1998 the base salaries
for Norman and Nelson Leenhouts and Richard Crossed were increased to $225,000
and to $230,000 for 1999. This compares to the $193,261 that would have
otherwise been payable under their Employment Agreements for 1999. The reasons
for the increases are described in the Management and Directors Committee's
Report on Executive Compensation which appears below. Previously, the
Employment Agreements had been amended to provide that the executives will
receive incentive compensation pursuant to the Company's Incentive Compensation
Plan as it may be revised by the Management and Directors Committee from time
to time, rather than as originally provided in their Employment Agreements.
For all applicable years, the formula contained in their Employment Agreements
would have resulted in higher bonuses. In addition, for 1999, even with the
increase in base salaries described above, total compensation would have been
greater if the Employment Agreements had not been modified. Finally, the
Employment Agreements have been amended to provide for severance benefits under
the Company's Executive Retention Plan as described below in the event of a
change of control and a subsequent termination of employment rather than as
described in the Employment Agreements. The benefits that would be payable
under the Executive Retention Plan are approximately the same as those that
would have been paid under the Employment Agreements, except that under the
Executive Retention Plan the executives would also receive a "gross up" in the
amount of any excise tax that is payable.
INCENTIVE COMPENSATION PLAN
Under the Company's incentive compensation plan (the "Incentive Plan")
eligible officers and key employees may earn a cash bonus based on increases in
the Company's Funds from Operations ("FFO") per share/unit (computed based on
the basic shares/units outstanding). The Incentive Plan provides for bonus
units to be awarded for each percent of per share/unit FFO growth in excess of
a 5% floor. For example, if per share/unit FFO growth is 13.2%, 8.2 bonus
units are awarded.
A factor is applied to each eligible participant's salary, ranging from
1% to 12%, which is multiplied by the resulting bonus units, to determine the
split of the bonus pool. The factor applied to the salaries of Norman and
Nelson Leenhouts, Richard Crossed and Amy Tait was 10%, but has been increased
12%, effective with the bonuses payable for services rendered in 2000. The
factor applied to the salaries of David Gardner and Ann McCormick is 6%.
Incentive Plan participants in the 1% and 2% bonus categories are limited
to bonuses equal to ten times (10 bonus units) bonus category amounts. There
is no limit for participants in the 3% bonus category or above, except there is
a deferral component when bonus units are in excess of a ceiling. The ceiling
established is as follows:
Bonus
YEAR UNIT CEILING
1999 7
2000 6
2001 and beyond 5
The deferred amount plus interest at 6% will be paid out at the rate of
50% in each of the following two years, provided the Company achieves the 5%
floor in per share/unit growth each year.
Of the bonuses otherwise payable to each of Nelson and Norman Leenhouts
and Richard Crossed for services rendered in 1999, $37,260 was deferred as
provided above, $24,786 was deferred with respect to Amy L. Tait and $12,393
was deferred with respect to each of David P. Gardner and Ann M. McCormick.
DIRECTOR, OFFICER AND EMPLOYEE STOCK PURCHASE AND LOAN PROGRAM
The Company has made various loans to its officers and directors pursuant
to its Director, Officer and Employee Stock Purchase and Loan Program, which
the Board approved in 1996 (the "Stock Purchase Program"). The loans were used
by the recipients to purchase the Company's Common Stock. The Stock Purchase
Program approved by the stockholders at the 1998 Annual Meeting of the
Stockholders provided that the Company can loan approximately 50% of the
purchase price to the Independent Directors and arrange for loans from a
commercial bank for the balance. The Company can loan other participating
employee directors and officers 100% of the purchase price. Six of the
Independent Directors and thirty of the Company's officers, including the
employee directors, have participated in some or all of the various phases of
the Stock Purchase Plan. To date, 615,864 shares of the Company's Common Stock
have been purchased by those officers and directors under the Stock Purchase
Plan and a total of $9,769,837 has been loaned by the Company to participants.
Interest rates on the existing loans range from 6.7% to 7.13%. All dividends
from the shares issued under the Stock Purchase Plan are applied toward
interest and principal payments on the Company or commercial bank loans. The
loans are fully recourse to the participants and there is no provision for debt
forgiveness. There was no loan made or stock issued under the Stock Purchase
Plan in 1999.
DEFERRED BONUS PLAN
Under the Company's Deferred Bonus Plan, eligible employees can elect to
defer up to 50% of their bonus under the Incentive Compensation Plan for three,
five or ten years. The Company contributes 10% of the amount deferred, which
amount vests after three years. A "phantom" stock account is established for
both amounts. Each deferral and Company contribution is reflected by crediting
those accounts with the number of shares of the Company's Common Stock that
could be purchased with the amounts deferred and contributed at the Common
Stock's fair market value. The equivalent of dividends on those shares is also
credited to the accounts at the time dividends are paid on the Company's Common
Stock. The Deferred Bonus Plan was amended in 1999 to provide that the shares
that could be purchased with the hypothetical dividends will be credited to
accounts at the same price that shares are purchased for participants under the
dividend reinvestment feature of the Company's Dividend Reinvestment and Direct
Stock Purchase Plan. Under the Deferred Bonus Plan, Nelson and Norman
Leenhouts each deferred $92,984.25 of their 1999 bonus and David Gardner and
Ann McCormick each deferred $11,833.60.
EXECUTIVE RETENTION PLAN
The Company's Executive Retention Plan provides for severance benefits
and other compensation to be received by certain employees, including the
executive officers, in the event of a change of control of the Company and a
subsequent termination of their employment without cause or voluntarily with
good cause. Under this Plan, the executive officers, in the event of a
termination covered by the Plan, would receive a lump sum payment equal to two
times their current base salary, two times their last paid bonus under the
Incentive Compensation Plan plus a "gross-up" amount necessary to pay any
excise tax due on the payment. In addition, all accrued or deferred bonuses
under the Incentive Compensation Plan would be paid and all stock options
granted under the 1994 Stock Benefit Plan and the 2000 Stock Benefit Plan would
vest.
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative return on the Company's
Common Stock during the five year period ended December 31, 1999 to the
cumulative return of the NAREIT All Equity REIT Index and the Standard and
Poor's 500 Index for the same period. The total return assumes that dividends
were reinvested quarterly and is based on a $100 investment on December 31,
1994. Stockholders should note that past performance does not predict future
results.
[GRAPH INSERTED HERE]
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
<S> <C> <C> <C> <C> <C> <C>
Company Common Stock $100.00 $95.80 $136.95 $178.26 $181.66 $209.46
NAREIT All Equity REIT Index 100.00 115.27 155.92 187.51 154.69 147.54
S&P 500 Index 100.00 137.43 168.98 225.37 289.77 350.71
</TABLE>
MANAGEMENT AND DIRECTORS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
As part of its responsibilities, the Management and Directors Committee
performs the traditional functions of a compensation committee. As such, the
Management and Directors Committee of the Board of Directors is responsible for
recommending to the Board compensation policies applicable to the Company's
executive officers as well as broad-based compensation plans for the other
officers and employees generally. The Committee also makes specific annual
compensation recommendations to the Board relating to the Company's executive
officers. The Management and Directors Committee consists only of Independent
Directors. The Committee believes that the success of the Company is, in large
part, attributable to the performance and dedication of its employees and, in
particular, to the leadership efforts of its executive officers. In
establishing the Company's compensation program, the Management and Directors
Committee's goal therefore is to: (1) attract and retain highly capable
employees; (2) motivate those employees to reach the Company's operating and
financial goals; and (3) encourage ownership of the Company's stock and link
compensation to the performance of the Company in order to more closely align
the interests of executives and other employees with those of its stockholders.
To achieve these ends, the Company's executive compensation package consists of
three components: base salary, annual incentive compensation under the
Incentive Plan, and awards under the Company's Stock Benefit Plan. The
Committee annually considers the appropriate combination of these three
components in the executive officers' compensation packages and, among other
things, weighs the competitiveness of the Company's overall compensation
arrangements in relation to comparable companies.
It is the Committee's policy that executive compensation should be
deductible to the Company for federal income tax purposes. The Committee will
annually consider compensation decisions in light of the limit on deductibility
under Section 162(m) of the Internal Revenue Code and related regulations.
SALARY. The Management and Directors Committee believes that, in order
to attract and retain highly qualified executives, it is necessary to provide
market competitive compensation. To determine whether the compensation of its
senior executives was market competitive, the Company retained William M.
Mercer, Inc. in 1998 to perform a comparative analysis. Mercer compared the
compensation of the Company's executives to a peer group of national REITs in
the residential property sector. The comparison demonstrated to the Management
and Directors Committee that the cash compensation levels of the Company's
senior executives were below the competitive range, especially in light of
those executives' current responsibilities and relative value to Home
Properties.
In 1998, the base salaries of the executive officers were therefore
increased by an average of 27% to make them more market competitive. With
respect to Norman and Nelson Leenhouts and Richard Crossed, this required an
amendment to their existing Employment Agreements, which provided for a set
base salary with 10% annual increases. The Committee determined that this
variance from the terms of the Employment Agreements was appropriate in light
of the results of the Mercer analysis, the faster than anticipated growth pace
of the Company resulting in increased responsibilities and the agreement of the
executives to receive their incentive pay under the Company's Incentive Plan
rather than as provided under the Employment Agreements. The Committee
subsequently reviewed proposed salaries for 1999 in light of the prior increase
and approved an increase in 1999 base salary of less than 2.5% for each of the
executive officers.
In considering 2000 salary adjustments for the executives, the Committee
reviewed additional data, including published compensation surveys and
compensation information contained in the proxy statements for industry peer
group companies. Based on this review and an assessment of overall corporate
performance as well as individual responsibilities and performances, the
Committee recommended to the Board of Directors and the Board approved a 20%
salary increase for each of the executive officers.
The Committee expects to make an annual review of base salaries of the
executive officers and key officers of the Company.
INCENTIVE COMPENSATION. The Incentive Plan provides for cash bonuses
based on increases in the Company's Funds From Operations on a per share/unit
basis. The Employment Agreements for the Leenhoutses have been amended to
provide that they will receive their incentive compensation pursuant to the
Incentive Plan rather than as originally provided in their Employment
Agreements. For 1999, the formula contained in their Employment Agreements
would have resulted in higher bonuses. In order to bring their total
compensation to a more competitive level, the Management and Directors
Committee increased the maximum factor applied to the salaries of the two Co-
Chief Executive Officers as well as Mr. Crossed and Mrs. Tait for purposes of
determining their shares of the bonus pool from 10% to 12%, effective with the
bonuses payable for services rendered in 2000. Under the Employment
Agreements, all of the bonus was nondiscretionary, while under the Incentive
Plan, one-half of the bonus is nondiscretionary and one-half is payable at the
discretion of the Committee.
The Committee expects to regularly review the Incentive Plan to assure
its appropriateness.
In order to further align the interests of the Company's employees with
the interests of the stockholders, in 1998 the Committee recommended and the
Board adopted a Deferred Bonus Plan for key employees. Under that Plan,
eligible employees can elect to receive up to 50% of their incentive
compensation in the form of "phantom" stock. The Deferred Compensation Plan
also serves as a means to assist key employees with their individual tax and
financial planning and to therefore permit the Company to remain competitive in
attracting, retaining, motivating and rewarding key employees. This plan is
described in more detail earlier in this Executive Compensation Section of this
Proxy Statement.
STOCK COMPENSATION. All stock option awards made to date have been
issued under the Company's 1994 Stock Benefit Plan, which was put in place at
the time of the Company's initial public offering. It is expected that no
additional grants will be made under the 1994 Stock Benefit Plan. The
Management and Directors Committee recently recommended and the Board of
Directors approved the 2000 Stock Benefit Plan. No stock option awards have
been granted under the 2000 Stock Benefit Plan, although it is expected that
awards may be granted in 2000 to the executive officers and other key
employees.
The purpose of option grants is to offer employees an incentive to
maximize their efforts to promote the Company's economic performance and
thereby advance the interests of the Company's stockholders. To encourage the
employees to seek long term appreciation in the value of the Company's Common
Stock, options are not immediately exercisable but vest over a specified
period of time, typically five years.
The Committee has recommended to the Board of Directors and the Board has
approved periodic awards under the 1994 Stock Benefit Plan.
In 1999, the Management and Directors Committee again reviewed the number
of options granted to the Co-Chief Executive Officers and other executive
officers in light of the other elements of their compensation and their overall
equity interest in the Company's business, including their ownership of units
of limited partnership interest in the Operating Partnership. The Committee
determined to encourage officers to acquire additional Common Stock by making
additional option awards under the 1994 Stock Option Plan.
The Management and Directors Committee therefore recommended and the
Board of Directors approved the issuance of 585,900 additional options to
purchase Common Stock to certain officers and employees of the Company at an
option price, which was the closing price on the New York Stock Exchange for a
share of the Company's Common Stock on the date of the grant. Each of the
Named Executives received additional options which vest 20% per year and expire
in ten years. Each of the Co-Chief Executive Officers and Mr. Crossed received
50,000 additional options; Amy Tait received 35,000 additional options; and
each of David Gardner and Ann McCormick received 15,000 additional options.
The Committee expects to recommend periodic awards under the 2000 Stock
Benefit Plan.
CO-CHIEF EXECUTIVE OFFICER COMPENSATION. The compensation to Nelson B.
and Norman Leenhouts is determined substantially in conformity with the
policies described above for all other executive officers of the Company.
Respectfully submitted,
The Management and Directors Committee
Burton S. August, Sr.
William Balderston, III
Alan L. Gosule
Clifford W. Smith, Jr.
<PAGE>
MANAGEMENT AND DIRECTORS COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
During the fiscal year 1999, the Management and Directors Committee was
comprised of Burton S. August, Sr., William Balderston, III, Alan L. Gosule and
Clifford W. Smith, Jr. None of them have ever been an officer of the Company
or any of its subsidiaries. Mr. Gosule is a partner in the law firm of
Clifford Chance Rogers & Wells, LLP, formerly Rogers and Wells, LLP. In
1999, the Company paid fees to Rogers & Wells in connection with certain
services rendered by the firm to the State of Michigan Retirement Systems in
connection with their investment in the Company as well as fees for certain
limited services rendered by Rogers & Wells to the Company.
2000 STOCK BENEFIT PLAN
GENERAL
The Management and Directors Committee recently recommended and the Board
of Directors approved the 2000 Stock Benefit Plan. The purpose of the 2000
Stock Benefit Plan is to provide persons responsible for the future success of
the Company, including directors, officers, regional managers and on-site
property managers, with increased motivation and incentives to exert their best
efforts on behalf of the Company by enlarging their personal stake in its
success. The 2000 Stock Benefit Plan fulfills the same basic purposes as the
1994 Stock Benefit Plan.
The number of employees participating in the 1994 Stock Benefit Plan is
approximately 450. As of March 17, 2000 options to purchase 1,539,947 shares
have been granted to employees and options to purchase 132,054 shares have been
granted to the Independent Directors. Of the options granted under the 1994
Stock Benefit Plan, 1,158,859 issued to employees and 95,381 issued to the
Independent Directors were outstanding as of March 17, 2000.
It is expected that all future awards of stock options will be granted
under the 2000 Stock Benefit Plan and that a similar number of employees will
participate in the new Plan. The 2000 Stock Benefit Plan limits the number
of shares issuable pursuant to the Plan to 2.2 million, of which 200,000 are to
be available for issuance to the Independent Directors. The following summary
of the 2000 Stock Benefit Plan is qualified in its entirety by reference to
the full text of the 2000 Stock Benefit Plan, copies of which may be obtained
from the Secretary of the Company.
The Board of Directors may amend, suspend or discontinue the 2000 Stock
Benefit Plan at any time except that certain amendments, under applicable laws
or rules of governmental entities or regulations of the New York Stock Exchange
or similar bodies, must be approved by the holders of a majority of the issued
and outstanding shares of capital stock of the Company entitled to vote. The
2000 Stock Benefit Plan may not be amended to adversely affect awards
outstanding prior to the amendment.
EMPLOYEE AWARDS
The 2000 Stock Benefit Plan provides for the grant of "incentive stock
options" within the meaning of Section 422 of the Code, non-statutory stock
options, stock appreciation rights and restricted stock awards to employees of
the Company. No incentive stock options will be awarded unless the Plan is
approved by a majority vote of the stockholders. The 2000 Stock Benefit Plan
is administered by the Management and Directors Committee of the Board of
Directors, none of the members of which will participate in employee awards
under the 2000 Stock Benefit Plan. The Management and Directors Committee
determines the persons to be granted options, the number of shares subject to
each option, whether or not such option is a non-statutory or incentive stock
option, the exercise price and exercise schedule, the manner in which payment
may be made and whether such persons will have the right to receive cash or
shares in lieu of exercising their options. The exercise price may not be less
than 100% of the fair market value of the Company's Common Stock on the date of
grant. The Management and Directors Committee may grant an option holder the
right to elect to receive cash or shares in an amount equal to the excess of
the fair market value of the shares subject to an incentive or non-statutory
option over the exercise price for such shares, which right can be exercised
instead of (but not in addition to) its related incentive or non-statutory
option (a stock appreciation right). The number of shares of Common Stock
covered by all options granted in any calendar year to any one participant may
not exceed 200,000 shares. There are no other limits on the number of options
that may be granted to any one individual under the 2000 Stock Benefit Plan,
provided that the grant of the options may not cause the Company to fail to
qualify as a REIT for federal income tax purposes and the aggregate fair market
value of Common Stock with respect to which incentive stock options are
exercisable for the first time by a participant during any calendar year may
not exceed $100,000. An optionee may elect to pay for the shares to be
received upon exercise of his or her options in cash, shares (including shares
issuable upon exercise of an option) or any combination thereof. Options may
not be exercisable for more than a ten-year period. Options held by officers
of the Company generally terminate three months after the optionee's
termination of employment from the Company for any reason other than death or
disability, and are not transferable by the optionee other than by will or the
laws of descent and distribution. All options vest immediately upon a change
of control.
Awards of restricted stock will consist of shares of Common Stock which
may be subject to forfeiture and restrictions on transfer as determined by the
Management and Directors Committee. In general, a participant who has been
granted restricted stock will have the benefits of ownership in respect of such
shares, including the right to vote such shares and to receive dividends and
other distributions thereon from the date of grant, subject to the restrictions
imposed in the grant or as set forth in the Stock Benefit Plan.
DIRECTOR'S OPTIONS
Under the 2000 Stock Benefit Plan, the Independent Directors of the
Company will be granted non-statutory options to purchase 7,000 shares
immediately following the stockholders' meetings in 2000, 2001 and 2002. The
exercise price for each option grant will be 100% of the fair market value of
the Company's Common Stock on the date of grant. Each director's option will
have a five-year term.
FEDERAL TAX CONSEQUENCES
Non-Statutory Options. No income is recognized by a participant at the
time of grant of a non-statutory option, nor is the Company entitled to a tax
deduction at that time. The rules for recognizing income upon exercise of a
non-statutory option depend on whether or not the participant is an "insider",
I.E., the participant's sale or purchase of Common Stock may give rise to suit
under Section 16(b) of the Securities Exchange Act of 1934, as amended
("Section 16(b)"). In the case of a non-insider, ordinary income will be
recognized by the participant on the date he or she exercises a non-statutory
option in an amount equal to the excess of the fair market value of the shares
on the date of exercise over the exercise price. The holding period for
capital gain and loss purposes will begin on the date of exercise. In the case
of an insider, ordinary income will be recognized by the participant on the
first day on which a sale of the Common Stock at a profit would not expose the
participant to Section 16(b) liability (the "date of taxation") in an amount
equal to the excess of the fair market value of the shares on the date of
taxation over the exercise price. The holding period for capital gain and loss
purposes will begin on the date of taxation. An insider may elect to be taxed
according to the rules applicable to non-insiders by filing an election with
the Internal Revenue Service under Section 83(b) of the Internal Revenue Code
within 30 days from the date of exercise. The Company will be entitled to a
deduction at the time the participant is required to recognize income from the
exercise of the non-statutory option. The deduction will be equal to the
amount which is taxable to the participant as ordinary income as a result of
the exercise.
If the exercise price of a non-statutory option is paid by surrendering
Common Stock of the Company, the participant will recognize no gain or loss on
the shares that he or she surrenders to pay the exercise price (the
"surrendered shares"). The number of shares that the participant receives upon
exercise of the option in excess of the surrendered shares are considered
"additional shares." The participant will recognize ordinary income upon the
exercise equal to the fair market value of the additional shares on the date of
exercise, less any cash paid towards the exercise price. The basis of the
additional shares will be equal to their fair market value on the date of
exercise, and their holding period will begin on that date. The shares that
the participant receives upon exercise equal to the surrendered shares will
have a basis and holding period equal to that of the surrendered shares.
The basis of shares acquired pursuant to the exercise of a non-statutory
option will be the amount included in ordinary income due to receipt of those
shares. When the participant disposes of shares acquired pursuant to a non-
statutory option, any amount realized in excess of the basis of the shares will
be treated as long-term or short-term capital gain, depending on the holding
period of the shares. If the amount realized is less than the basis of the
shares, the loss will be treated as a long-term or short-term capital loss,
depending on the holding period of the shares.
INCENTIVE STOCK OPTIONS. A participant receiving an incentive stock
option will not be subject to income tax upon either the grant of the incentive
stock option or its subsequent exercise. The spread between the exercise price
and the fair market value on the date of exercise will, however, be included in
the participant's alternative minimum taxable income for purposes of
determining the participant's liability, if any, for the alternative minimum
tax. If the participant holds the shares acquired upon exercise for more than
one year after exercise (and two years after grant), then the difference
between the amount realized on a subsequent sale or other taxable disposition
of the shares and the exercise price will constitute long-term capital gain or
loss at the time of sale. The Company will not be entitled to a federal income
tax deduction with respect to the grant or exercise of an incentive stock
option. If the options cease to be incentive stock options for any reason,
they will be treated as non-statutory options. For example, if the participant
sells the shares before the expiration of the requisite holding periods, he or
she will be deemed to have made a "disqualifying disposition" of the shares and
will realize ordinary income in the year of the disposition. In the event of a
disqualifying disposition, the Company will be entitled to a federal income tax
deduction in the year of disposition of the shares in the amount of the
ordinary income realized by the participant.
If the exercise price of an incentive stock option is paid by
surrendering Common Stock of the Company, the Internal Revenue Service treats
such exchange as if there were two transactions. The first transaction is
treated as a non-taxable exchange of the previously-acquired Common Stock for
an equal number of shares of Common Stock, both having the same market value.
The basis of the new shares will be the same basis as the shares surrendered
and the holding period will include the holding period of the shares
surrendered. The second transaction concerns the additional shares that a
participant will receive pursuant to the exercise. This exchange also results
in no gain or loss being recognized at the time of the exchange. However, the
basis of these additional shares will equal zero (I.E., the participant is
treated as having paid nothing for these shares). The holding period for the
additional shares begins on the date of the exchange.
STOCK APPRECIATION RIGHTS. Upon the exercise of a stock appreciation
right, a participant will recognize ordinary income equal to the cash received
plus the fair market value on the date of exercise, of any shares that may be
issued to the holder.
RESTRICTED STOCK AWARDS. A participant receiving a restricted stock
award will not be subject to tax upon receipt of the award, provided that the
restriction creates a substantial risk of forfeiture. If a participant is not
an "insider" for purposes of Section 16(b) of the Exchange Act, an award will
be taxable when the restricted stock is no longer subject to a substantial risk
of forfeiture. An award conditioned upon the passage of time or the attainment
of a performance goal whose attainment is substantially uncertain is subject to
a substantial risk of forfeiture. Hence, income will be recognized only when
both of these conditions have been met. Vesting will not be delayed if the
only restrictions are non-substantial as defined in IRS regulations, e.g., a
no-compete restriction. If a participant is an "insider" on the date shares
become vested as described above, recognition of income for tax purposes will
be deferred until the date when the sale of the shares would not subject the
insider to a lawsuit under Section 16(b).
The amount includable in income is the fair market value of the shares on
the date all restrictions having a substantial risk of forfeiture lapse
(including restrictions arising as a result of Section 16(b)). Any later
appreciation or depreciation in the shares is treated as capital gain or loss.
For the purpose of determining whether the gain or loss is short-term or long-
term, the capital gain holding period with respect to the shares begins
immediately after the date the value of the shares is includable in income.
A participant may elect under Section 83(b) of the Internal Revenue Code
to report income on a restricted stock award in the year the award is made. If
the Section 83(b) election is made, income equal to the fair market value of
the shares on the date of grant will be recognized in the year of grant and no
income will be recognized at the time the shares become vested. The basis of
shares to which a Section 83(b) election applies equals the amount of income
that is recognized and the holding period for capital gain purposes runs
immediately following the date the income is recognized. The Section 83(b)
election must be filed with the Internal Revenue Service Center where a
participant normally files his or her tax returns and must be filed no later
than 30 days after the date a restricted stock award is made.
The principal advantage of making a Section 83(b) election is to lock in
ordinary tax liability at the time of grant and have all subsequent gains in
the value of shares subject to tax at lower capital gain rates. The principal
disadvantage of making a Section 83(b) election is that the shares remain
subject to all restrictions and forfeiture conditions to the same extent as if
the election had never been made.
WITHHOLDING TAXES. Whenever the Company proposes or is required to issue
or transfer shares of Common Stock under the Plan to an employee, or whenever
restricted stock vests, the Company has the right to require the recipient to
remit to the Company an amount sufficient to satisfy any federal, state and/or
local income and employment withholding tax requirements prior to the delivery
of any certificate or certificates for such shares or to take any other
appropriate action to satisfy such withholding requirements. Notwithstanding
the foregoing, subject to such rules as the Committee may promulgate and
compliance with any requirements under Rule 16b-3 of the Exchange Act, the
recipient may satisfy such obligation in whole or in part by electing to have
the Company withhold shares of Common Stock from the shares to which the
recipient is otherwise entitled.
NEW PLAN BENEFITS
The following table sets forth information relating to grants to be made
under the 2000 Stock Benefit Plan pursuant to the specific provisions of that
Plan. Additional awards may be made from time to time under the 2000 Stock
Benefit Plan to directors, executive officers and other employees at the
discretion of the Management and Directors Committee.
<TABLE>
<CAPTION>
Number of Shares SUBJECT TO
NAME AND POSITION DOLLAR VALUE ($) OPTIONS
<S> <C> <C>
Norman P. Leenhouts $0 (1)
Chairman and Co-Chief Executive Officer
Nelson B. Leenhouts, $0 (1)
President and Co-Chief Executive Officer
Richard J. Crossed, $0 (1)
Executive Vice President
Amy L. Tait, $0 (1)
Executive Vice President
Executive Officers as a Group $0 (1)
Independent Directors as a Group (2) 168,000
Non-Executive Officer Employees as a Group $0 (1)
</TABLE>
(1) The number of shares issuable pursuant to the 2000 Stock Benefit Plan
to employees, including the executive officers and the employee
directors is 2.0 million. The Plan is to be administered by the
Management and Directors Committee, which will determine the persons to
be granted options under the Plan and the number of options to be
issued. The exercise price may not be less than 100% of the fair
market value of the Company's Common Stock on the date of the grant.
As of March 17, 2000, no stock option awards have been made under the
2000 Stock Benefit Plan.
(2) The 2000 Stock Benefit Plan provides that each of the Independent
Directors will be granted options to purchase 7,000 shares of the
Company's Common Stock immediately following the annual meeting of
stockholders in 2000, 2001 and 2002. There are currently eight
Independent Directors. The options are to have an exercise price equal
to the fair market value of the Company's Common Stock on the date of
the grant.
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 17, 2000 regarding
the beneficial ownership of shares of Common Stock by (i) directors, nominees
and Named Executives of Home Properties, and (ii) directors, Nominees and
executive officers of Home Properties as a group, and (iii) each person known
by the Company to be the beneficial owner of more than a 5% interest in the
Company. The table also includes information relating to the number and
percentage of shares of Common Stock and partnership units of the Operating
Partnership ("Units") beneficially owned by the persons included in (i) and
(ii) above (such Units are exchangeable into shares, or cash at the election of
the Independent Directors of the Company). In preparing this table, the
Company has relied on information supplied by its officers, directors, Nominees
and certain stockholders, and upon information contained in filings with the
SEC.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percentage of Number of Shares/ Percentage of
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OUTSTANDING SHARES(1) UNITS OWNED SHARES/UNITS(2)
- -------------------- ------------------- ------------------ ----------------- --------------
<S> <C> <C> <C> <C>
Norman P. Leenhouts 191,094(3) * 460,254(3)(5) 2.26%
Nelson B. Leenhouts 174,285(4) * 443,197(4)(5) 2.17 %
Richard J. Crossed 187,963(6) * 450,601 (6) 2.21 %
Amy L. Tait 177,936(7) * 191,749 (7) *
Burton S. August, Sr. 45,149(8) * 49,395 (8) *
William Balderston, III 28,768(9) * 28,768 (9) *
Alan L. Gosul 11,247(10) * 11,247 (10) *
Leonard F. Helbig, III 34,099(11) * 34,099 (11) *
Roger W. Kober 29,368(12) * 29,368 (12) *
Albert H. Small 74(13) * 1,038,982 (13) 4.92%
Clifford W. Smith, Jr. 36,119(14) * 36,119 (14) *
Paul L. Smith 22,077(15) * 22,077 (15) *
David P. Gardner 44,040(16) * 47,546 (16) *
Ann M. McCormick 43,731(17) * 46,033 (17) *
All executive officers and
directors as a group
(14 persons) 1,025,950(18) 5.05%(19) 2,889,435(18)(20) 13.02% (20)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Name and Address Number of Shares Outstanding Shares
OF BENEFICIAL OWNER BENEFICIALLY OWNED AS OF DECEMBER 31, 1999
<S> <C> <C>
State Treasurer, State of Michigan 2,935,091 (21) 13.75%
Bureau of Investments
Department of Treasury
Treasury Building, Box 15128
Lansing, MI 48901
Capital Growth Management Limited Partnership 2,030,600(22) 10.52%
One International Place
Boston, MA 02110
GE Capital Equity Investments, Inc. 1,679,543(23) 8.1%
120 Long Ridge Road
Stamford, CT 06927
Ohio PERS 1,430,000 (24) 7.41%
277 East Town Street
Columbus, OH 43215
FMR Corp. 1,294,314 (25) 6.7%
82 Devonshire St.
Boston, MA 02109
Perkins Wolf McDonnell & Company 1,073,100(26) 5.8%
53 W. Jackson Blvd. Suite 722
Chicago, IL 60604
</TABLE>
__________
* Less than 1%
(1) Assumes that all options issued to the person have been exercised. The
total number of shares outstanding used in calculating the percentage
assumes that none of the options held by any other person have been
exercised.
(2) Assumes that all options issued to the person have been exercised and all
Units issued to the person have been exchanged for shares of Common Stock.
The total number of shares outstanding used in calculating the percentage
assumes that none of the options held by any other person have been
exercised and that none of the Units held by any other person have been
exchanged for shares.
(3) Includes 13,402 shares which may be acquired upon the exercise of currently
exercisable options, 1,752 shares owned by Mr. Leenhouts' spouse as to
which he disclaims beneficial ownership and 5,778 shares of common stock
issuable pursuant to the Company's Deferred Bonus Plan. The 5,778 shares
issuable under the Deferred Bonus Plan are fully vested, except for 156
shares which will vest in February, 2002 and 357 shares which will vest in
February, 2003 or upon the death or retirement of Mr. Leenhouts prior to
those dates.
(4) Includes 61,402 shares which may be acquired upon the exercise of currently
exercisable options and 5,778 shares of common stock issuable pursuant to
the Company's Deferred Bonus Plan. The 5,778 shares issuable under the
Deferred Bonus Plan are fully vested, except for 156 shares which will vest
in February, 2002 and 357 shares which will vest in February, 2003 or upon
the death or retirement of Mr. Leenhouts prior to those dates.
(5) Includes Units owned by Home Leasing and Leenhouts Ventures. Norman
Leenhouts and Nelson Leenhouts are each directors, officers and 50%
stockholders of Home Leasing and each owns 50% of Leenhouts Ventures.
Includes 50,000 Units owned by the respective spouses of each of Norman and
Nelson Leenhouts as to which they disclaim beneficial ownership.
(6) Includes 13,402 shares which may be acquired upon the exercise of currently
exercisable options and 2,595 shares of common stock issuable pursuant to
the Company's Deferred Bonus Plan. The 2,595 shares issuable under the
Deferred Bonus Plan are fully vested, except for 218 shares which will vest
in February, 2002 or upon the death or retirement of Mr. Crossed prior to
that date. Also includes Mr. Crossed's proportionate share of Units owned
by Conifer and its affiliates.
(7) Includes 82,123 shares which may be acquired upon the exercise of currently
exercisable options. Also includes 8,543 shares, 15,087 shares which may
be acquired upon the exercise of currently exercisable options and 70 Units
owned by Mrs. Tait's spouse as to which she disclaims beneficial ownership.
Mrs. Tait shares voting and dispositive power with respect to 2,548 Units
with her spouse.
(8) Includes 16,955 shares which may be acquired upon the exercise of currently
exercisable options, 37 shares of common stock issuable pursuant to the
Directors Deferred Compensation Plan and 9,100 shares held in a trust of
which Mr. August is the lifetime beneficiary.
(9) Includes 16,955 shares which may be acquired upon the exercise of currently
exercisable options.
(10) Includes 10,500 shares which may be acquired upon the exercise of currently
exercisable options and 74 shares issuable pursuant to the Directors
Deferred Compensation Plan.
(11) Includes 10,586 shares which may be acquired upon the exercise of currently
exercisable options and 74 shares issuable pursuant to the Directors
Deferred Compensation Plan.
(12) Includes 16,955 shares which may be acquired upon the exercise of currently
exercisable options and 74 shares issuable pursuant to the Directors
Deferred Compensation Plan.
(13) Includes 74 shares of common stock issuable pursuant to the Directors
Deferred Compensation Plan.
(14) Includes 10,955 shares which may be acquired upon the exercise of currently
exercisable options and 74 shares issuable pursuant to the Directors
Deferred Compensation Plan. Also includes 1,400 shares owned by Mr.
Smith's spouse as custodian for their minor children and 700 shares held in
a trust for the benefit of one of Mr. Smith's minor children.
(15) Includes 10,955 shares which may be acquired upon the exercise of currently
exercisable options.
(16) Includes 14,364 shares which may be acquired upon the exercise of currently
exercisable options and 917 shares of common stock issuable pursuant to the
Company's Deferred Bonus Plan. The 917 shares issuable under the Deferred
Bonus Plan are fully vested, except for 35 shares which will vest in
February, 2002 and 45 shares which will vest in February, 2003 or upon the
death or retirement of Mr. Gardner prior to those dates.
(17) Includes 16,023 shares which may be acquired upon the exercise of
currently exercisable options and 917 shares of common stock issuable
pursuant to the Company's Deferred Bonus Plan. The 917 shares issuable
under the Deferred Bonus Plan are fully vested, except for 35 shares which
will vest in February, 2002 and 45 shares which will vest in February, 2003
or upon the death or retirement of Mrs. McCormick prior to those dates.
Mrs. McCormick shares voting and dispositive power with respect to 565
Units with her spouse.
(18) Includes 309,664 shares which may be acquired upon the exercise of
immediately exercisable options and 16,393 shares of common stock issuable
pursuant to the Company's Deferred Bonus Plan and the Directors Deferred
Compensation Plan.
(19) Assumes that all exercisable options issued to all listed persons have been
exercised.
(20) Assumes that all exercisable options issued to all listed persons have been
exercised and all Units issued to all listed persons have been exchanged
for shares of Common Stock.
(21) Based on a report on Form 13D, filed March 2, 2000, reflecting that the
State Treasurer, State of Michigan and the individual members of the
Michigan Department of Treasury's Bureau of Investments, which manages the
investments for four state-sponsored retirement systems: Public School
Employees' Retirement System, State Employees' Retirement System, Michigan
State Police Retirement System and Judges' Retirement System is the owner
of 1,666,667 shares of Series A Senior Convertible Preferred Stock, which
is convertible, at the option of the State of Michigan, into 1,666,667
shares of Common Stock, subject to adjustment, over which the State
Treasurer has sole voting and dispositive power. These persons are also
the beneficial owners of 1,268,424 shares of the Common Stock of the
Company.
(22) Based on a report on Schedule 13G, filed February 10, 2000, reflecting
that Capital Growth Management Limited Partnership has shared dispositive
and sole voting power with respect to shares held in client accounts, as to
which Capital Growth disclaims beneficial ownerhsip.
(23) Based on a report on Form 13G, filed February 14, 2000 reflecting that GE
Capital Equity Investments, Inc. and General Electric Capital Corporation
have shared voting and dispositive power with respect to 1,679,543 shares
of Series B Convertible Cumulative Preferred Stock, which is convertible,
at the stockholder's option, into an equal number of shares of Common
Stock.
(24) Based on a report on Schedule 13G, filed January 26, 2000, relfecting that
the Ohio PERS has sole voting and dispositive power with respect to the
shares.
(25) Based on a report on Schedule 13G, filed February 14, 2000, filed
jointly on behalf of FMR Corp., Fidelity Management and Research Company,
Edward C. Johnson 3d and Abigail P. Johnson reflecting that FMR Corp. has
sole dispositive power with respect to all of such shares and sole voting
power with respect to 597,000 of such shares.
(26) Based on a report in Schedule 13G, filed February 10, 2000, reflecting
that Perkins Wolf McDonnell & Company has shared dispositive and voting
power with respecdt to the shares held in client accounts.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's executive officers and directors, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange. Officers,
directors and greater than 10% stockholders are required to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than 10% beneficial owners were satisfied with the
following exceptions: (1) Director Roger Kober filed his statement of
beneficial ownership on Form 4 reporting a May, 1999 exercise of stock options
subsequent to the due date for such filing; (2) The State of Michigan
Retirement Systems, the holder of in excess of 10% of a registered class of the
Company's equity securities, filed its required Form 4 subsequent to the due
date for such filing.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Directors and executive officers of the Company received loans from the
Company for some portion of the purchase price of shares of Common Stock
purchased by them in connection with the Stock Purchase Program described
above. No new loans were made under the Stock Purchase Program in 1999. As of
March 17, 2000, the indebtedness to the Company of each of the Named Executives
for prior loans under the Program is: each of Messrs. Leenhouts and Crossed -
$1,366,854.98, Mrs. Tait - $942,640.32, Mr. Gardner - $393,286.55 and Mrs.
McCormick - $389,762.76. These loans bear interest at rates ranging from 6.7%
to 7.13%, are secured by the shares of Common Stock purchased by the Named
Executives under the Stock Purchase Program and are fully recourse.
Home Leasing, in consideration of a portion of the Units and cash
received by it in connection with the formation of the Company, assigned to HP
Management certain management contracts between it and certain entities of
which it is a general partner. As a general partner of those entities, Home
Leasing Corporation (and, indirectly, Norman and Nelson Leenhouts) has an
ongoing interest in such management contracts. In addition, Conifer assigned
to the Company and its affiliates certain management contracts between Conifer
and entities in which it is the general partner. As a general partner, Conifer
(and indirectly, Richard Crossed) has an ongoing interest in such management
contracts.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee,
has appointed the accounting firm of PricewaterhouseCoopers LLP to serve as
independent auditors of the Company for the fiscal year ending December 31,
2000. PricewaterhouseCoopers LLP (and its predecessor, Coopers & Lybrand,
L.L.P.) has served as the Company's independent auditors since its commencement
of operations and is considered by the management of the Company to be well
qualified. A representative of PricewaterhouseCoopers LLP will be present at
the Annual Meeting, will be given the opportunity to make a statement if he or
she so desires and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE 2000 FISCAL YEAR.
PROPOSAL 3
APPROVAL OF THE COMPANY'S
2000 STOCK BENEFIT PLAN
In connection with its initial public offering, the Company adopted its
1994 Stock Benefit Plan. As of March 17, 2000, the Company has issued and
outstanding 1,158,859 stock options to employees and 95,381 stock options to
Independent Directors under that Plan. In order to continue to effectively
attract and retain employees and directors and to further align the interest of
the Company's employees and directors with the interests of its stockholders,
the Board of Directors believes that the Company needs to continue to grant
options to purchase shares of its Common Stock. As a result, in February 2000,
the Board of Directors adopted the 2000 Stock Benefit Plan. Pursuant to the
2000 Stock Benefit Plan, the Company may grant additional options to purchase
up to 2.0 million shares of Common Stock to employees and up to 200,000 shares
to its Independent Directors. The 2000 Stock Benefit Plan is described in more
detail earlier in this Proxy Statement.
The Company may grant non-qualified stock options and restricted stock
awards under the 2000 Stock Benefit Plan without obtaining the approval of the
Plan by the Company's stockholders because it is a broadly based plan under
current New York Stock Exchange rules. In order for the Company to grant
incentive stock options under the 2000 Stock Benefit Plan, however, the Company
must obtain stockholder approval. Such approval requires the affirmative vote
of a majority of the votes cast so long as the total of votes cast on the
proposal is more than 50% of the total number of shares entitled to vote.
Incentive stock options provide certain tax benefits to the recipients of such
awards. To obtain these benefits, the recipient must hold the shares issued
upon the exercise of the incentive stock option for a period of at least one
year. The Board of Directors believes that the grant of incentive stock
options will therefore encourage participants to hold such shares of Common
Stock in furtherance of the objectives of the 2000 Stock Benefit Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE 2000
STOCK BENEFIT PLAN.
<PAGE>
OTHER MATTERS
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
paid by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
STOCKHOLDER PROPOSALS
A stockholder proposal submitted pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, for inclusion in the Company's
proxy statement and form of proxy for the 2001 annual meeting of stockholders
must be received by the Company by November 30, 2000. Such a proposal must
comply with the requirements as to form and substance established by the
Securities and Exchange Commission for such a proposal to be included in the
proxy statement and form of proxy, and the proponent or a representative of the
proponent must attend the Annual Meeting to present the proposal.
INCORPORATION BY REFERENCE
The Company's financial statements for the years ended December 31, 1999
and 1998, the supplemental financial information and management's discussion
and analysis of financial condition and results of operations contained in the
Company's Annual Report on Form 10-K (File No. 1-13136) filed with the
Securities and Exchange Commission are incorporated herein by reference.
Copies may be obtained from Rebecca Fountain, Home Properties of New York, Inc.
850 Clinton Square, Rochester, New York 14604 or from the Securities and
Exchange Commission over the Internet at its Web site (http:\\www.sec.gov).
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement which will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY
CARD TODAY.
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
REVOCABLE PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS MAY 2, 2000
The undersigned hereby appoints Norman P. Leenhouts and Nelson B.
Leenhouts or each of them, as Proxies with full power of substitution to
represent the undersigned and to vote all Common Stock of Home Properties of
New York, Inc. which the undersigned would be entitled to vote at the 2000
Annual Meeting of Stockholders of the Company to be held on May 2, 2000 and any
adjournment thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Please note any address correction here and check the box on the reverse side
of this card
---------------------------------------------------------------------------
---------------------------------------------------------------------------
<PAGE>
FOR WITHHOLD
all nominees AUTHORITY
listed (except to vote for
as marked all nominees
to the contrary) listed
PROPOSAL ONE-
To elect the following
persons as directors to
serve until the next
annual meeting of stockholders
and until their
successors have been
elected and have quailfied.
NOMINEES: Norman P. Leenhouts
Nelson B. Leenhouts
Richard J. Crossed
Amy L. Tait
Burton S. August, Sr.
William Balderston, III
Alan L. Gosule
Leonard F. Helbig, III
Roger W. Kober
Albert H. Small
Clifford W. Smith, Jr.
Paul L. Smith
(Instruction: To withhold authority to vote
for any individual nominee, write that nominee's name on the space provided
below.)
____________________________________________________
FOR AGAINST ABSTAIN
PROPOSAL TWO - To ratify the
appointment of PricewaterhouseCoopers
LLP as independent auditors for 2000.
PROPOSAL THREE - To approve the
Company's 2000 Stock Benefit Plan.
Mark here if address change
is noted on reverse -----
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
THEREON. IF NO DIRECTION IS MADE, IT WILL BE VOTED "FOR" PROPOSALS 1 AND 2.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF,
INCLUDING THE ELECTION OF A PERSON DESIGNATED BY THE BOARD OF DIRECTORS AS A
DIRECTOR IN THE PLACE OF A NOMINEE WHO IS UNABLE TO SERVE.
Please mark, sign, date and return this proxy card using the enclosed envelope.
Signature: ___________________________________
Signature if held jointly _______________________________
Dated ___________, 2000
NOTE: (Please sign as name appears above. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.)
