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PROSPECTUS SUPPLEMENT No. 2 Registration Statement on Form S-3 (No.
(To Prospectus dated July 20, 1998, 333-58799)
as previously Filed Pursuant to Rule 424(b)(5)
supplemented by Prospectus Supplement
dated March 14, 2001)
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HOME PROPERTIES, INC.
DIVIDEND REINVESTMENT AND
DIRECT STOCK PURCHASE PLAN
This supplements the Prospectus of Home Properties, Inc., formerly Home
Properties of New York, Inc. ("Home Properties" or the "Company") dated July 20,
1998, as previously supplemented by Prospectus Supplement dated March 14, 2001.
The aggregate number of shares of Common Stock available under the Plan is
12,400,000 shares. As of the date of this Prospectus Supplement, an aggregate of
12,387,972 shares have been purchased through the Plan.
The Prospectus is further amended as follows:
a. Effective immediately, the name Home Properties of New York, Inc., shall be
revised to Home Properties, Inc. in all places in the Prospectus where the
name Home Properties of New York, Inc. is used. Home Properties of New
York, Inc. has changed its name to Home Properties, Inc.
b. Effective as of December 10, 2004, in all places in the Prospectus where
the percentage of 97% is used to refer to the percentage of the plan
purchase price that participants pay for their shares, the percentage shall
be changed to 100%. This change appears on pages 3, 4 and 5 of the
Prospectus.
c. On page 13 of the Prospectus, the documents incorporated by reference is
amended to read as follows:
Annual Report on Form 10-K for the year ended December 31, 2003.
Quarterly Reports on Form 10-Q for the quarters ending March 31, 2004 and
June 30, 2004. Current Reports on Form 8-K and Form 8-K/A, April 30, 2004,
May 4, 2004, August 6, 2004, and August 12, 2004.
Home Properties Proxy Statement dated March 30, 2004.
d. On the back cover of the prospectus, the information regarding the plan
agent is amended to reflect that the e-mail address for Mellon Investor
Services is now www.melloninvestor.com. The information reads as follows:
Plan Agent:
Mellon Bank, N.A.
Mellon Investor Services
P.O. Box 3338
South Hackensack, New Jersey 07606-1938
Phone: 888-245-0458
E-mail: www.melloninvestor.com
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATOR HAS APPROVE OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS, DATED JULY 20, 1998 AS AMENDED BY SUPPLEMENT DATED MARCH 14, 2001
AND THIS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
This Prospectus Supplement is dated November 4, 2004.
PROSPECTUS SUPPLEMENT
DATED MARCH 14, 2001
HOME PROPERTIES OF NEW YORK, INC.
DIVIDEND REINVESTMENT AND
DIRECT STOCK PURCHASE PLAN
This supplements the Prospectus of Home Properties of New York, Inc. ("Home
Properties" or the "Company") dated July 20, 1998. The Board of Directors has
increased the number of shares of Common Stock which are available for purchase
under the Home Properties of New York, Inc. Dividend Reinvestment and Direct
Stock Purchase Plan with optional cash payments by 1,800,000 shares to
10,250,000 shares and with dividend reinvestment by 750,000 shares to 2,150,000
shares. Home Properties will receive the proceeds of the sale of the newly
issued shares of Common Stock. The aggregate number of shares of Common Stock
available under the Plan is increased to 12,400,000 shares. As of the date of
this Prospectus Supplement, an aggregate of 8,262,077 shares have been purchased
through voluntary cash purchases and 1,283,417 shares have been purchased
through the dividend reinvestment feature of the Plan.
The Prospectus is further amended as follows:
a. Effective as of April 10, 2001, in all places in the Prospectus where the
percentage of 97% is used to refer to the percentage of the plan purchase
price that participants pay for their shares, the percentage shall be
changed to 98%. This change appears on pages 3, 4 and 5 of the Prospectus.
b. Effective as of April 10, 2001, in all places where the maximum investment
that can be made without Home Properties' prior approval is listed as
$5,000 that maximum investment amount is reduced to $1,000. The investment
range for optional cash purchases that can be made without Home Properties'
prior approval is from $50 to $1,000. Waiver purchases greater than $1,000
may receive a discount between 0% and 3% from the plan purchase price.
c. One page 5 of the Prospectus, the following language is substituted for the
italicized language to clarify that the 5% discount limitation applies to
all purchases under the Plan. The paragraph reads as follows:
Important: According to Internal Revenue Service guidelines, the actual
discount you receive on shares purchased may not exceed 5% of the one-day
New York Stock Exchange trading average on the purchase date, including any
fees or commissions paid on your behalf by Home Properties or the agent for
the plan. The agent for the plan will calculate the discounted purchase
price at 98% of the five-day average and test for the 5% rule. The actual
price will be the higher or the two amounts for that purchase date.
d. Effective as of April 10, 2001, on page 6 of the Prospectus, the plan
purchase price section is amended in its entirety to read as follows:
The plan purchase price is calculated in the same manner whether Home
Properties issues new shares or the shares are bought by the agent in open
trading. The plan purchase price is the average of the daily high and low
trading prices of Home Properties' common stock for the five business days
just before the purchase date. You are not charged a fee for either newly
issued shares or for open market purchases."
e. Effective as of April 10, 2001, on page 3 of the Prospectus in the section
listed "Plan Features," the initial investment for individuals who are not
a Home Properties' registered shareholder, community resident, limited
partner or employee is amended to be $1,000 instead of "at least $2,000."
f. On page 6 of the Prospectus, the last sentence of the section entitled "The
Source of Plan Shares" is deleted to reflect the possibility that Home
Properties may shortly elect to purchase stock in the open market for the
plan. That sentence formerly read as follows: We anticipate that Home
Properties will issue shares directly from our authorized, unissued shares.
g. On page 12 of the Prospectus, the section entitled "Governing Law" is
amended to reflect that Maryland is the governing law.
h. On page 12 of the Prospectus, the information regarding the Legal Opinion
is amended to reflect that Nixon, Hargrave, Devans & Doyle, LLP has changed
its name to Nixon Peabody LLP. The paragraph reads as follows:
Legal Opinion
Nixon Peabody LLP, Rochester, New York has passed upon the
validity of the common stock being offered under this plan prospectus.
i. One page 13 of the Prospectus, the information regarding the Independent
Public Accountants is amended to reflect that Coopers & Lybrand L.L.P. has
changed its name to PricewaterhouseCoopers, LLP, to update the references
and to reflect the firm's expertise in accounting and auditing. The
paragraph reads as follows:
The consolidated financial statements as of December 31, 1999 and 1998 and
for each of the three years in the period ended December 31, 1999
incorporated by reference in this prospectus have been so included in
reliance on the report of PricewaterhouseCoopers LLP, independent accounts,
given on the authority of said firm as experts in auditing and accounting.
j. On page 13 of the Prospectus, the documents incorporated by reference is
amended to read as follows:
Annual Report on Form 10-K for the year ended December 31, 1999.
Quarterly Reports on Form 10-Q for the quarters ending March 31, 2000, June
30, 2000 and September 30, 2000.
Current Reports on Form 8-K and Form 8-K/A, April 5, 2000, May 22, 2000,
June 9, 2000, June 12, 2000, June 30, 2000, August 31, 2000, October 26,
20000, December 1, 2000, December 5, 2000, December 22, 2000, January 10,
2001 and January 16, 2001.
Home Properties Proxy Statement dated March 30, 2000.
k. On the back cover of the Prospectus, the information regarding the Plan
Agent is amended to reflect that ChaseMellon Shareholder Services has
changed its name to Mellon Investor Services. The information reads as
follows:
Plan Agent: Mellon Bank, N.A.
Mellon Investor Services
P.O. Box 3338
South Hackensack, New Jersey 07606-1938
Phone: 888-245-0458
E-mail: www.mellon-investor.com
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATOR HAS APPROVE OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS, DATED JULY 20, 1998 AS AMENDED BY THIS SUPPLEMENT IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus Supplement is dated March 14, 2001.
HOME PROPERTIES OF NEW YORK, INC.
DIVIDEND REINVESTMENT AND
DIRECT STOCK PURCHASE PLAN
[LOGO] HOME PROPERTIES
6,050,000 Shares of Common Stock
Prospectus - July 20, 1998
PLAN HIGHLIGHTS
* Purchase Home Properties common stock at a discount
* Increase ownership through monthly optional cash purchases
* Automatically reinvest quarterly dividends and/or partnership distributions
* Transfer shares and move your money electronically
* Own stock without receiving certificates
Home Properties is a publicly traded company with a large amount of information
available. Our shares are traded on the New York Stock Exchange under the ticker
symbol HME. The closing price of the common stock on July 6, 1998 was $25.9375
per share. Investment in Home Properties common stock involves certain risks
including those described on pages 11-12.
Neither the Securities and Exchange Commission nor any state securities
regulator has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
Plan Service Fees
Enrollment Fee for New Investors No Charge
Purchase of Shares
Direct Issue from Home Properties No Charge
Open Market Purchase Fee $0.04 per share
Sale of Shares
Open Market Sale Fee $0.04 per share
Reinvestment of Dividends No Charge
Optional Cash Purchase No Charge
Gift or Transfer of Shares No Charge
Safekeeping of Stock Certificates No Charge
Certificate Issuance No Charge
Duplicate Statements
Current Year No Charge
Prior Year(s) No Charge
Returned Checks or Rejected Auto Withdrawals $20.00 per item
The agent charges the applicable fee to your plan account.
TABLE OF CONTENTS
Information About Home Properties 1
Purpose of the Plan 2
Home Properties' and the Agent's Responsibilites 2
Dividends Paid by Home Properties 2
Plan Features/Benefits to You 3
Details About the Plan 4
Miscellaneous Information 10
Income Tax Information 10
Risk Factors 11
Governing Law 12
Legal Opinion 12
Independent Public Accountants 13
Compliance Information 13
INFORMATION ABOUT HOME PROPERTIES
Home Properties is a real estate investment trust (REIT) that owns, manages,
acquires, and develops apartment communities in the Northeast, Midwest and
Mid-Atlantic United States. Our communities are predominantly suburban,
garden-style apartments with brick exteriors, which appeal to a broad range of
middle income and senior residents.
Headquartered in Rochester, New York, Home Properties and its predecessors have
operated multifamily properties since 1967. Our strategy is to acquire apartment
communities at prices significantly below new construction costs and then
improve and manage these communities for long term growth. We refer to this
strategy as "repositioning". We also generate fee income through the
development, rehabilitation and management of apartment communities supported by
various forms of government assistance. Home Properties' expertise in both
market rate and government-assisted housing strengthens our market position and
enhances our future opportunities.
Our mission is to provide investors with dependable, above average returns and
to be the first choice of renters in our chosen markets. We serve our residents
with integrity and respect while providing value and service that is intended to
exceed expectations. Home Properties provides employees with a secure
environment that fosters freedom for growth, creativity and the achievement of
excellence.
For information or copies of our Annual Report to Shareholders, Proxy Statement,
and 10-Q or 10-K Reports, as well as other documents incorporated by reference
in this prospectus, please visit our Internet address, www.homeproperties.com,
or contact:
Home Properties
Investor Relations Department
850 Clinton Square
Rochester, New York 14604
(716)546-4900
HME
Listed
NYSE
The New York Stock Exchange
You should rely only on the information incorporated by reference or provided
in this prospectus or in any prospectus supplement. Home Properties has
authorized no one to provide you with different information. Home Properties is
not making an offer to sell stock in any state or country where the offer is not
permitted. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of the document.
In this prospectus, "Home Properties" means Home Properties of New York, Inc.,
a Maryland corporation.
PURPOSE OF THE PLAN
The Home Properties Dividend Reinvestment and Direct Stock Purchase Plan was
established to promote long-term ownership in Home Properties and is designed to
give our shareholders, residents, employees, limited partners and others a
simple, convenient, and economical way to purchase Home Properties common stock.
The plan is also designed to enable Home Properties to efficiently raise capital
to fund our continued growth through the direct sale of newly issued shares.
In 1998, we revised the plan to provide new features, amend existing features,
and to clarify it. If you have previously participated in the plan, you may
participate in its amended version without any further action on your part.
Please read this booklet carefully before you invest. Once you begin
participating in the plan, store this booklet with your investment records
relating to the plan. If you require an additional plan prospectus, enrollment
form, or further assistance, simply contact us or the plan's agent.
HOME PROPERTIES' AND THE AGENT'S RESPONSIBILITIES
The agent is designated by Home Properties to administer the plan and act as
administrator for the participants. The agent purchases and holds shares of
stock for plan participants, keeps records, mails statements, and performs other
duties required by the plan.
Neither Home Properties nor the agent is liable for any act, or for any failure
to act, as long as we make good faith efforts to carry out the terms of the plan
as described in this prospectus and on the forms that accompany each investment
or activity. This release from liability does not apply to violation of federal
securities laws.
Neither Home Properties nor the agent promises a profit or protects against a
loss on the common stock purchased under the plan.
DIVIDENDS PAID BY HOME PROPERTIES
Home Properties normally pays dividends four (4) times a year, in February, May,
August and November. Record dates on which you must be a shareholder are
approximately eight business days prior to the dividend payment dates. Dividends
are declared by the Board of Directors.
PLAN FEATURES
Purchase Home Properties common stock by completing an Enrollment Form and send
a check, money order, or wire transfer; or arrange for the agent to
automatically withdraw from your bank account.
If you are not a Home Properties registered shareholder, community resident,
limited partner or employee, you must invest at least $2,000 initially. If you
own Home Properties shares in an account with a stock broker, request the broker
to enroll you, request a certificate for your shares or move those shares
electronically into the plan.
Make optional cash purchases once each month for a minimum of $50 up to a
maximum $5,000. You purchase shares at 97% of the plan purchase price. You may
make larger optional cash purchases with the prior approval of Home Properties.
Automatically reinvest all or some of your quarterly dividends or limited
partnership distributions into Home Properties common stock. The shares you
purchase with reinvested dividends/distributions are at 97% of the plan purchase
price.
Purchase both full and fractional shares, and receive dividends on full and
fractional shares.
Receive a statement detailing your account activity each time you invest.
Deposit your Home Properties stock certificates in the plan for safekeeping at
no cost.
Authorize the agent to sell your plan shares for a nominal fee without
requesting a specific sale date or price. If you prefer to decide the time and
price of the sale, you may withdraw your shares in certificate form or move your
shares electronically to your own brokerage account.
BENEFITS TO YOU
You purchase shares at a discount directly from Home Properties without a
broker, even if you are not a current shareholder. The Enrollment Form is
designed to guide you in setting up your plan account.
You begin with a relatively small amount invested, which may help you diversify
your financial assets. In addition, you can move shares from your brokerage
account into your plan account, or the reverse, at any time without fees.
You conveniently add to your investment over time.
Your investment continues to build until you decide to stop. Then, your
dividends are mailed to you or deposited directly in your bank account.
You enjoy the full reinvestment of your dividends.
You monitor your investment and make new transactions efficiently by using the
detachable form at the bottom of your plan statement.
You eliminate worry over lost or stolen certificates. Gifting or transferring
your stock is easier.
You have flexibility and control over your sale when using the plan's electronic
feature and your personal investment advisor.
Please see additional details on the following pages.
DETAILS ABOUT THE PLAN
WHO MAY PARTICIPATE
All U.S. citizens are eligible to join the plan, whether or not they
are currently Home Properties shareholders.
Foreign citizens are eligible to participate as long as their participation does
not violate any laws in their home countries.
HOW TO ENROLL
Join the plan at any time by completing an Enrollment Form and returning it to
the agent in the courtesy envelope.
If you are a Home Properties shareholder of record, a Home Properties community
resident, a Home Properties limited partner or a Home Properties employee,
complete and return the Enrollment Form to the agent to reinvest dividends or to
purchase shares with optional cash payments. If you own shares in a brokerage
account, request the broker to enroll you, request a certificate for your shares
or move shares electronically into the plan and complete and return the
Enrollment Form. Be sure to select one of the following investment options when
enrolling.
INVESTMENT OPTIONS
FULL DIVIDEND REINVESTMENT
If you select full dividend reinvestment, all dividends payable on your
registered shares or your plan shares acquired through optional cash purchases,
will purchase additional shares of common stock at 97% of the plan purchase
price. Your reinvested dividends will purchase whole and fractional shares,
computed to three decimal places, on the dividend payment date.
PARTIAL DIVIDEND REINVESTMENT
If you select partial dividend reinvestment, the portion of dividends payable on
your registered shares or your plan shares acquired through optional cash
purchases that you specify will purchase additional shares of common stock at
97% of the plan purchase price. Your reinvested dividends will purchase whole
and fractional shares, computed to three decimal places, on the dividend payment
date.
OPTIONAL CASH PURCHASE ONLY
If you select optional cash purchase only, you may purchase shares once a month
for 97% of the plan purchase price by investing a minimum of $50 up to a maximum
of $5,000. You will purchase whole and fractional shares, computed to three
decimal places. You will not receive interest on optional cash amounts held
pending a purchase. Your dividends will be paid directly to you or deposited
into your bank account.
IMPORTANT: According to Internal Revenue Service regulations regarding discounts
on optional cash purchases in the plan, the actual discount you receive on
shares purchased may not exceed 5% of the one-day New York Stock Exchange
trading average on the optional cash purchase date. The agent for the plan will
calculate the discounted purchase price at 97% of the five-day average and test
for the 5% rule. The actual price will be the higher of the two amounts for that
purchase date.
WAIVER PURCHASE
OPTIONAL CASH PURCHASE IN EXCESS OF $5,000
Home Properties considers monthly requests for optional cash purchases greater
than $5,000 on a case-by-case basis and approves requests based on various
corporate factors and market conditions. Waiver purchases may be denied by Home
Properties for any reason and require a signed Waiver Purchase Form from you
stating:
* you are not purchasing the shares to engage in arbitrage activities
* you will not sell Home Properties common stock or cause it to be sold
during the plan's five day pricing period
* you are not engaging in underwriting activities as defined under applicable
law
Waiver purchases greater than $5,000 may receive a discount between 0% and 3%
from the plan purchase price. Home Properties reserves the right to review and
adjust the waiver discount each month.
Waiver purchases greater than $25,000 are also subject to a discretionary
"Threshold Price" that may be set each month by Home Properties. The discounted
purchase price must meet or exceed the Threshold Price for the purchase date. If
the Threshold Price is not met, waiver payments are returned to you in full
without interest. The Threshold Price only applies to optional cash purchases
greater than $25,000.
If you select optional cash purchase and want to purchase more than $5,000 worth
of our stock:
1. Contact the Investor Relations Department of Home
Properties at 716-546-4900 with your request
Ask for that month's Threshold Price and Waiver
Purchase Form.
2. If approved, complete the Waiver Purchase Form that
we supply and return it to us before the pricing period
begins.
3. Send your optional cash payment to the agent before
the pricing period begins.
HOW TO MAKE AN OPTIONAL CASH PAYMENT OR AN AUTOMATIC OPTIONAL CASH PAYMENT FROM
YOUR BANK ACCOUNT
Make an optional cash payment by sending a check, money order, or wire transfer
to the agent or authorize the agent to automatically withdraw from your bank
account. Do not send cash to the agent. If you pay by check or money order,
please use the transaction stub located on the bottom of your plan statement,
make your check or money order payable to the agent and mail to the agent's
address. Always write our New York Stock Exchange symbol, HME, on your check,
money order or wire.
To authorize an automatic optional cash payment from your bank account, complete
section five of the Enrollment Form or contact the agent for additional
information or assistance. Funds will be withdrawn from your bank account on the
first business day of the month. If this date falls on a bank holiday or
weekend, funds will be withdrawn on the next business day. Please allow 4-6
weeks for withdrawals from your bank account to begin. You must notify the agent
in writing to change or terminate automatic withdrawals from your bank account.
THE SOURCE OF PLAN SHARES
Home Properties common stock purchased in the plan is either issued directly by
Home Properties from our authorized, unissued shares or purchased by the agent
on the New York Stock Exchange in open trading. Home Properties designates the
source of the shares but cannot change the source more than once every three
months and only if required by law or other valid reason. We anticipate that
Home Properties will issue shares directly from our authorized, unissued shares.
THE PLAN PURCHASE PRICE
The plan purchase price is calculated differently depending upon whether Home
Properties issues new shares or the shares are bought by the agent in open
trading.
NEWLY ISSUED SHARES - the price of shares purchased directly from Home
Properties is the average of the daily high and low trading prices of Home
Properties common stock reported on the New York Stock Exchange for the five
business days just before the purchase date. You are not charged a fee for newly
issued shares.
OPEN MARKET PURCHASES - the price of shares purchased in open market trading is
the weighted average price for all shares purchased by the agent for the plan on
the purchase date. You are charged a fee for open market purchases.
THE PURCHASE DATE AND THE PRICING PERIOD
* The purchase date for optional cash payments is the tenth day of each month
(or the next business day if the tenth is a weekend day or bank holiday).
* The purchase date for the reinvestment of dividends is the declared
quarterly dividend payment date.
* The period when we calculate the plan purchase price for each purchase date
is the five business days just before, and not including, the purchase
date.
PAYMENT DUE DATE FOR OPTIONAL CASH PURCHASES
Your optional cash purchase payment must be received by the agent before the
five day pricing period begins. You do not earn any interest on your payment,
and you bear the risk associated with price changes in Home Properties common
stock during the pricing period.
TRACKING YOUR INVESTMENT IN THE PLAN
If you participate in dividend reinvestment, the agent mails you a quarterly
statement showing all transaction details for your account including
year-to-date and other information. The agent sends supplemental statements or
notices when you make an initial or optional cash purchase or a deposit,
transfer, sale or withdrawal of shares. If you do not participate in dividend
reinvestment, you receive a statement or notice confirming any transaction you
make. An annual statement of your holdings is sent even if there was no activity
during the year in your account.
Please notify the agent in writing if the address on your account changes.
Remember to save your account statements, along with this prospectus and other
pertinent tax information related to Home Properties Dividend Reinvestment and
Direct Stock Purchase Plan, to establish the cost basis of your common stock
purchased in the plan.
OPTIONAL CASH PURCHASE DELAY NOTIFICATION
Home Properties notifies you of an optional cash purchase delay if the maximum
number of shares available for this plan under our registration statement with
the Securities and Exchange Commission (SEC) needs to be increased. If you are
notified, then you may elect to have the agent hold your money until additional
shares for the plan are available or you may have the agent return your money
without interest. If your money is held, the plan purchase price is recalculated
and you will receive the lower of the original or deferred purchase price, less
the discount.
SAFEKEEPING YOUR STOCK CERTIFICATES
Home Properties shares you purchase in the plan are maintained in your plan
account for safekeeping in book-entry form. You do not receive a certificate for
those shares unless you request one in writing. You do receive a monthly or
quarterly statement detailing the status of your holdings.
Any Home Properties shareholder may use the plan's safekeeping service for Home
Properties stock certificates. Safekeeping is beneficial since you do not bear
the risk and cost associated with the loss, theft, or destruction of stock
certificates. With safekeeping, you retain the option to receive cash dividends
or reinvest your dividends.
To deposit Home Properties shares in the plan's safekeeping service, send the
stock certificates to the agent by registered mail with written instructions to
deposit them in safekeeping. Do not endorse or assign your certificates.
OBTAINING STOCK CERTIFICATES
You can withdraw shares in certificate form from your plan account without
charge by writing to the agent. The agent issues certificates in the name
registered on the account, unless you instruct the agent to issue them in
another person's name or deliver a stock power to the agent with your
instructions. In order for certificates to be issued to another person, the
signature on the stock power must be guaranteed by a financial institution. This
ensures that the individual signing a stock certificate or stock power is in
fact the registered owner named on the stock certificate or stock power. Contact
your bank or broker for more information regarding this guarantee.
The agent issues certificates for whole shares only. The agent mails a check for
the value of the fractional shares to you or your designate within two to three
weeks, or you may arrange for the agent to deposit your money directly into your
bank account.
SELLING SHARES IN YOUR PLAN ACCOUNT
You can sell any number of shares held in your plan account by writing to the
agent. The agent sells shares weekly. The sales price for the shares the agent
sells for you is the price received in open trading by the agent. You receive
the proceeds of the sale less a small fee per share, and any required tax
withholdings.
CLOSING YOUR PLAN ACCOUNT
You may stop participating in the plan at any time by notifying the agent in
writing or by completing and returning the transaction stub of your most recent
plan account statement.
To stop automatic optional cash payments that are withdrawn from your bank
account, contact the agent at least one week before the last business day of the
month.
When you close your account, you may receive:
* certificates for full shares in your account and cash for
remaining fractional shares
* certificates for any portion of full shares and cash for
remaining full and fractional shares
* cash for all full and fractional shares
Please note that all sale proceeds are less a service fee.
CHANGES/TERMINATION OF THE PLAN
Home Properties reserves the right to amend or discontinue the plan at any time.
The agent will send you written notice of any significant changes to the plan.
If we discontinue the plan, the agent returns any unused optional cash payments
in your account, issues a certificate for whole shares in your account, and pays
you cash for any fractional shares in your account.
SUSPENSION/TERMINATION OF YOUR PARTICIPATION
Home Properties also reserves the right to deny, suspend or terminate your
participation in the plan if, in our sole discretion, you use the plan in a
manner inconsistent with its intended purpose, such as excessive activity
through multiple accounts. If we exercise this right, the agent notifies you in
writing and continues to safekeep your shares but does not accept optional cash
payments from you or reinvest your dividends. The agent can issue a certificate
to you or transfer your shares electronically only upon your written request.
MISCELLANEOUS INFORMATION
VOTING OF SHARES
For each shareholder meeting, you receive proxy materials and a proxy card
representing shares you own in certificate form and/or for whole and fractional
shares owned in your plan account. The proxy allows you to indicate how you want
your shares to be voted. Your shares are voted only as you indicate. However,
you must sign your proxy card or your shares will not be voted. You may wait to
vote or revote your shares in person at the shareholder meeting.
HANDLING OF STOCK SPLITS, STOCK DIVIDENDS AND OTHER DISTRIBUTIONS
If Home Properties declares a stock split or stock dividend, the agent credits
your plan account with the appropriate number of shares on the payment date.
In the event of a stock subscription or other offering of rights to
shareholders, you are entitled to these rights based on the number of shares in
your account on the record date for these transactions.
INCOME TAX INFORMATION
RELATING TO DIVIDENDS AND TRADING FEES
A portion of your dividends, whether or not they are reinvested, are considered
taxable income in the year you receive them, and a portion of your dividends are
considered return of capital. You receive an annual statement from the agent
indicating the amount of dividends reported as taxable dividend income to the
IRS on Form 1099.
The amount of the discount on any additional shares you purchase in the plan
through a purchase price discount is reported to the IRS as taxable income.
Consequently, your initial tax basis for those shares is the full purchase price
before the discount. This information is also reported on your annual Form 1099.
RELATING TO TRANSFER OF SHARES
You do not realize a gain or loss for U.S. federal income tax purposes when you
transfer shares into the plan or when you withdraw whole shares from the plan.
You realize a gain or loss when you sell shares held in the plan, including cash
received for fractional shares. You are required to report this gain or loss on
your federal income tax return.
WITHHOLDING TAXES
If you are a non-resident alien or a non-U.S. corporation, partnership, or other
entity, you are subject to a withholding tax on dividends earned on your plan
shares. The agent withholds the required amount determined according to U.S.
Treasury regulations. This withholding amount is reflected in your plan account.
RISK FACTORS
ACQUISITION OF APARTMENT COMMUNITIES
DEBT FINANCING
Home Properties is subject to the customary risks associated with debt
financing, including the potential inability to refinance existing mortgage
indebtedness when it becomes due. The Board of Directors has adopted a policy of
limiting our Company's indebtedness to approximately 50% of our market
capitalization, although Home Properties' organizational documents contain no
limitation on debt percentages. If the Board of Directors changes its position,
we could increase our debt level.
General Real Estate Conditions
Home Properties' investment in real estate involves certain risks including
general economic and local real estate conditions; other conditions that might
affect operating expenses at our apartment communities, such as severe weather;
the timely completion of renovation activities at our apartment communities,
within anticipated budgets; the illiquid nature of real estate assets; and
compliance with federal and state laws governing our properties.
OTHER RISK FACTORS
FAILURE TO QUALIFY AS A REIT
We cannot assure that Home Properties will remain qualified as a real estate
investment trust (REIT) under the Internal Revenue Code of 1986, as amended. If
Home Properties is disqualified as a REIT, Home Properties would not be allowed
a deduction for distributions to shareholders in computing our taxable income
and we would be subject to federal income tax (including any applicable
alternative minimum tax) on our taxable income at regular corporate rates. The
result may be a reduction in dividends to shareholders in the disqualified
taxable year, and potentially for four taxable years following the
disqualification.
To continue to be taxed as a REIT, no more than fifty percent (50%) in value of
the outstanding Home Properties common stock may be owned, directly or
indirectly, by five or fewer individuals at any time during the last six months
of our taxable year. Home Properties limits ownership by any single stockholder
to 8% of the outstanding common shares in an effort to prevent this restriction
from being violated.
PROPERTY MANAGEMENT'S CONFLICTS OF INTEREST
Our executive officers own the majority of their interest in Home Properties
through our UPREIT structure. This may create a conflict of interest between the
officers and stockholders with respect to business decisions affecting Home
Properties, and conflicts of interest as they relate to contracts and sales of
properties managed by Home Properties. Please contact the Investor Relations
department at our company headquarters for information on the UPREIT structure.
Governing Law
New York State law governs the terms and conditions of the plan, the Enrollment
Form, the account statements, and other documents relating to the plan.
Legal Opinion
Nixon, Hargrave, Devans & Doyle LLP, Rochester, New York has passed upon the
validity of the common stock being offered under this plan prospectus.
INDEPENDENT PUBLIC ACCOUNTANTS
The audited financial statements and schedule incorporated by reference in this
Prospectus to the extent and for the periods indicated in their report have been
audited by Coopers & Lybrand L.L.P., independent public accountants, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said report.
COMPLIANCE INFORMATION
We must comply with the Securities and Exchange Act of 1934. Accordingly, we
file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, proxy statements or
other information we file at the SEC's public reference rooms, including its
public reference room at 450 Fifth Street, NW, Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the SEC at 800-SEC-0330 for further information on its
public reference rooms. You may also access our SEC filings at the SEC's
Internet address (http://www.sec.gov), or Home Properties' Internet address
(http://www.homeproperties.com).
This prospectus is part of a registration statement that we filed with the SEC
to register the shares offered under the plan. It does not repeat important
information that you can find in our registration statement, reports and other
documents that we file with the SEC. The SEC allows us to "incorporate by
reference", which means that we can disclose important information to you by
referring you to other documents which are legally considered to be a part of
this prospectus, and any later information filed with the SEC which updates and
supersedes this information. The documents that we are incorporating by
reference are:
Annual Report on Form 10-K for the year ended 12/31/97.
Quarterly Report on Form 10-Q for the quarter ended 3/31/98.
Current Reports on Form 8-K, as amended, filed on 1/12/98, 2/20/98,
3/24/98, 3/26/98, 5/22/98 and 6/2/98.
Home Properties Proxy Statement dated March 27, 1998.
The description of the common stock set forth in Home Properties' Registration
Statement on Form 8-A, dated June 8, 1994 and the information incorporated by
reference set forth in the Registration Statement on Form S-11 (No. 33-78862),
as amended, or a prospectus subsequently filed under the heading "Description of
Capital Stock."
All documents filed by Home Properties under Sections 13(a), 13(c), 14, and
15(d) of the Exchange Act of 1934 after the date of this Prospectus and prior to
termination of this offering.
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HOME PROPERTIES
Dividend Reinvestment and
Direct Stock Purchase Plan
Plan Agent: American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
800-278-4353
NYSE Ticker Symbol: HME
Company Internet www.homeproperties.com
Address:
Dates to Remember:
Dividends Paid and Reinvested Quarterly in February,
May, August and November
Optional Cash Purchase Date The tenth day of each
calendar month
Optional Cash Payment Date Prior to the
five day pricing period
immediately preceding each
optional cash purchase date
Automatic Bank Account The first day of each
Withdrawal calendar month
Optional Cash Purchase Date The tenth day of each
calendar month
Optional Cash Payment Date Prior to the
five day pricing period
immediately preceding each
optional cash purchase date
Automatic Bank Account The first day of each
Withdrawal calendar month