-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QHv/90YpqvPuwax07/189LJBBQfEuZtxJqP/+CS/0ep2c1JSVBmDlMUGx2gi/AbP HhqPR8AMMB3NuOI8Jks2Fw== 0000950123-00-005385.txt : 20000524 0000950123-00-005385.hdr.sgml : 20000524 ACCESSION NUMBER: 0000950123-00-005385 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000614 FILED AS OF DATE: 20000523 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRESIDENTIAL REALTY CORP/DE/ CENTRAL INDEX KEY: 0000731245 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 131954619 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-08594 FILM NUMBER: 642117 BUSINESS ADDRESS: STREET 1: 180 S BROADWAY CITY: WHITE PLAINS STATE: NY ZIP: 10605 BUSINESS PHONE: 9149481300 MAIL ADDRESS: STREET 1: 180 SOUTH BROADWAY CITY: WHITE PLAINS STATE: NY ZIP: 10605 DEF 14A 1 PRESIDENTIAL REALTY CORPORATION 1 SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] 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-2.
PRESIDENTIAL REALTY CORPORATION - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than 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 0-12. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------ (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------ (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------ (5) Total fee paid: ------------------------------------------------------------------------ [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------ (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------ (3) Filing Party: ------------------------------------------------------------------------ (4) Date Filed: ------------------------------------------------------------------------ 2 PRESIDENTIAL REALTY CORPORATION 180 SOUTH BROADWAY, WHITE PLAINS, N.Y. 10605 ------------------------ NOTICE OF ANNUAL MEETING OF STOCKHOLDERS JUNE 14, 2000 ------------------------ NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of PRESIDENTIAL REALTY CORPORATION has been called for and will be held at 2:00 P.M., New York Time, on Wednesday, June 14, 2000 at the Westchester Marriott, 670 White Plains Road, Tarrytown, New York, for the following purposes: 1. To elect, by vote of the Class A shares, 4 directors of the Company to serve for the ensuing year; 2. To elect, by vote of the Class B shares, 2 directors of the Company to serve for the ensuing year; and 3. To transact such other business as may properly come before the meeting. Only stockholders of record at the close of business on April 26, 2000 are entitled to notice of and to vote at the meeting. Stockholders are cordially invited to attend the meeting in person. If you are not able to do so and wish your stock voted, you are requested to complete, sign and date the accompanying proxy or proxies and promptly return the same in the enclosed stamped envelope. The proxy for Class A stock is blue and the proxy for Class B stock is white. If you hold both classes of stock please make sure that you send in both proxies. BY ORDER OF THE BOARD OF DIRECTORS ROBERT E. SHAPIRO Chairman of the Board of Directors Dated: April 27, 2000 3 PRESIDENTIAL REALTY CORPORATION 180 SOUTH BROADWAY, WHITE PLAINS, NEW YORK 10605 ------------------------ PROXY STATEMENT ------------------------ This Proxy Statement is furnished in connection with the solicitation by the management of PRESIDENTIAL REALTY CORPORATION of proxies to be used at the Annual Meeting of Stockholders of the Company to be held June 14, 2000, and at any adjournment thereof. If proxies in the accompanying form are properly executed and returned, the shares represented thereby will be voted as instructed in the proxy. A stockholder executing and returning a proxy has the power to revoke it at any time before it is voted by giving written notice to the Secretary of the Company, by submission of another proxy bearing a later date or by attending the meeting and requesting to vote in person. Only stockholders of record as of the close of business on April 26, 2000 will be entitled to vote. The distribution of this Proxy Statement and the enclosed form of Proxy to stockholders will commence on or about April 27, 2000. The Company's annual report to stockholders for 1999, including financial statements, is being mailed to stockholders with this Proxy Statement. As of March 31, 2000, there were outstanding and entitled to vote at the Annual Meeting 478,833 shares of the Company's Class A Common Stock (held by approximately 164 holders of record) and 3,214,392 shares of the Company's Class B Common Stock (held by approximately 711 holders of record). The Company is authorized to issue 700,000 Class A shares and 10,000,000 Class B shares. The holders of the Class A Common Stock have the right at all times to elect two-thirds of the membership of the Board of Directors of the Company, and the holders of the Class B Common Stock have the right at all times to elect one-third of the membership of the Board of Directors of the Company. All directors, once elected, have equal authority and responsibility. On all other matters, the holders of the Class A Common Stock and the holders of the Class B Common Stock have one vote per share for all purposes. However, no action may be taken which would alter or change the special rights or powers given to either class of Common Stock so as to affect such class adversely, or which would increase or decrease the amount of the authorized stock of such class, or increase or decrease the par value thereof, except upon the affirmative vote of the holders of the requisite majority of the outstanding shares of the class of stock so affected. Accordingly, the Class A shares will vote as a class for the election of four Directors of the Company to serve for the ensuing year (Proposal No. 1 on the accompanying Notice of Annual Meeting), and for this purpose each Class A share will be entitled to one vote. The Class B shares will vote as a class for the election of two directors of the Company for the ensuing year (Proposal No. 2 on the accompanying Notice of Annual Meeting), and for this purpose each Class B share will be entitled to one vote. 4 ELECTION OF DIRECTORS ELECTION OF DIRECTORS BY CLASS A STOCKHOLDERS It is intended that proxies in the accompanying form as received from the holders of Class A Common Stock will be voted in favor of the four persons listed below, each of whom is at present a director, as directors for the ensuing year. If for any reason any of these nominees becomes unable to accept nomination or election, it is intended that such proxies will be voted for the election, in his place, of any substituted nominee as management may recommend, and of the other nominees listed. The management, however, has no reason to believe that any nominee will be unable or unwilling to serve as director. The directors so elected will serve until the next Annual Meeting of Stockholders and until their respective successors are duly elected and have qualified.
FIRST CLASS A CLASS B BECAME DIRECTOR COMMON COMMON OCCUPATION OR OF PRESIDENTIAL BENEFICIALLY BENEFICIALLY PERCENTAGE OF ALL PRINCIPAL OR ITS OWNED AND OWNED AND OUTSTANDING STOCK EMPLOYMENT PREDECESSOR PERCENTAGE PERCENTAGE (CLASS A AND B) NAME AND AGE OF DIRECTOR FOR PAST 5 YEARS COMPANY OF CLASS(1) OF CLASS(1) COMBINED ------------------------ ---------------- --------------- ------------ ------------ ----------------- Robert Feder (69)................. Partner, Cuddy & 1981 916* 24,135* * Feder & Worby, Attorneys Jeffrey F. Joseph (58)**.......... President of 1993 198,735(2) 55,000(3) (6.8) Presidential (41.5) (1.7) Robert E. Shapiro (82)**.......... Chairman of the 1961 None 41,744 (1.1) Board of (1.3) Directors of Presidential Joseph Viertel (84)**............. Director and 1961 None None Chairman of the Executive Committee of Presidential.
- --------------- * Less than 1% of the class of stock ** Member of the Executive Committee of the Board of Directors (1) These figures, based on information as of March 31, 2000, include 124 shares of Class A Common Stock and 27,781 shares of Class B Common Stock of Presidential held in trust or in the names of wives, the beneficial ownership of which is disclaimed by the respective Directors. Each of the owners of the shares set forth in the table has the sole voting and investment power over such shares except that such owner has no voting or investment power over shares the beneficial ownership of which is disclaimed. (2) These shares are owned by Pdl Partnership, a general partnership in which Mr. Joseph has a 20% partnership interest. See Principal Holders of Securities below. (3) Includes presently exercisable options to purchase 24,000 shares of Class B Common Stock. Robert E. Shapiro and Joseph Viertel are brothers. ELECTION OF DIRECTORS BY CLASS B STOCKHOLDERS It is intended that proxies in the accompanying form as received from the holders of Class B Common Stock will be voted in favor of the two persons listed below, each of whom is at present a director, as directors for the ensuing year. If for any reason any of these nominees becomes unable to accept nomination or election, it is intended that such proxies will be voted for the election, in his place, of any substituted nominee as management may recommend, and of the other nominees listed. The management, however, has no reason to believe that any nominee will be unable or unwilling to serve as a director. The directors so elected will serve 2 5 until the next Annual Meeting of Stockholders and until their respective successors are duly elected and have qualified.
FIRST CLASS A CLASS B BECAME DIRECTOR COMMON COMMON OCCUPATION OR OF PRESIDENTIAL BENEFICIALLY BENEFICIALLY PERCENTAGE OF ALL PRINCIPAL OR ITS OWNED AND OWNED AND OUTSTANDING STOCK EMPLOYMENT PREDECESSOR PERCENTAGE PERCENTAGE (CLASS A AND B NAME AND AGE OF DIRECTOR FOR PAST 5 YEARS COMPANY OF CLASS(1) OF CLASS(1) COMBINED) ------------------------ ---------------- --------------- ------------ ------------ ----------------- Richard Brandt (72)............... Chairman of the 1972 none 9,000* * Board of Directors of Trans-Lux Corporation(2) Mortimer M. Caplin (83)........... Partner, Caplin 1984 none 73,866 (2.0) & Drysdale, (2.3) Attorneys(3)
- --------------- * Less than 1% of the class of stock (1) These figures are based on information as of March 31, 2000. Each of the owners of the shares set forth in the table has the sole voting and investment power over such shares. (2) Trans-Lux Corporation is a manufacturer of stock tickers and electronic displays and its entertainment division operates motion picture theaters. (3) Mr. Caplin is a director of Fairchild Corporation and Danaher Corporation. PRINCIPAL HOLDERS OF SECURITIES As of March 31, 2000 the following persons owned beneficially the following amounts and percentages of the Class A and Class B Common Stock of Presidential:
CLASS A PERCENTAGE OF ALL COMMON CLASS B PERCENTAGE OF OUTSTANDING STOCK STOCK PERCENTAGE COMMON STOCK CLASS B (CLASS A AND B BENEFICIALLY OF CLASS A BENEFICIALLY COMMON COMMON STOCK NAME OWNED COMMON STOCK OWNED STOCK COMBINED) ---- ------------- ------------ ------------ ------------- ----------------- Pdl Partnership....... 198,735(1) (41.5) none none (5.3) 180 South Broadway White Plains, NY 10605 The Trust Company of New Jersey.......... none none 337,100(2) (10.3) (9.0) 35 Journal Square Jersey City, NJ 07306 Westport Asset Management, Inc..... none none 272,242(3) (8.3) (7.3) 253 Riverside Avenue Westport, CT 06880 Wilshire Oil Company of Texas............ none none 191,100(4) (5.8) (5.1) 921 Bergen Avenue 11th Floor Jersey City, NJ 07306 All officers and directors as a group (10 persons)........ 224,252(5) (46.8) 299,790(5) (9.2) (14.0)
- --------------- (1) Such amount does not include 24,601 shares owned by certain partners of Pdl Partnership, including 4,762 shares owned by a partner as trustee, the beneficial ownership of which 4,762 shares is disclaimed. 3 6 The partners of Pdl Partnership are Jeffrey Joseph, an officer and director of Presidential and a nominee for director, and Steven Baruch and Thomas Viertel, officers of Presidential. (2) The Company has been informed by The Trust Company of New Jersey that it has sole voting and dispositive power with respect to 325,600 of such shares and shared voting and dispositive power with respect to 11,500 of such shares. This information is based upon Amendment number 10 dated February 1, 2000 to a Schedule 13G filed by The Trust Company of New Jersey. (3) The Company has been informed by Westport Asset Management, Inc. that it has shared voting power with respect to 100,647 of such shares, sole voting power with respect to none of such shares, shared dispositive power with respect to 184,232 of such shares and sole dispositive power with respect to none of such shares. Westport Asset Management disclaims beneficial ownership of all of such shares, which are held either in discretionary managed accounts or by employees of Westport Asset Management. This information is based upon Amendment number 3 dated February 16, 2000 to a Schedule 13G filed by Westport Asset Management, Inc. (4) The Company has been informed by Wilshire Oil Company of Texas that it has sole voting and dispositive power with respect to 191,100 shares of Class B Common Stock. This information is based upon a Schedule 13D dated March 10, 1999 filed by Wilshire Oil Company of Texas. (5) Such amount includes (i) 198,735 shares of Class A Common Stock owned by Pdl Partnership (see Note 1 above), (ii) 4,886 shares of Class A Common Stock and 27,781 shares of Class B Common Stock held in trust or in the names of wives, the beneficial ownership of which is disclaimed by the respective persons and (iii) options to purchase 60,000 shares of Class B Common Stock. Except as noted in the table, each of the owners of the shares set forth in the table has the sole voting and dispositive power over such shares except that such owner has no voting or dispositive power over shares the beneficial ownership of which is disclaimed. The Company's management knows of no other persons owning beneficially more than 5% of either the outstanding Class A Common Stock or the outstanding Class B Common Stock of the Company. A Schedule 13D dated December 26, 1989 was filed by Jack Harry Stewart of 9300 S.W. 90th Street, Miami, Florida reflecting the ownership of 70,700 shares of Class A common stock (14.7%). However, the Company has not received a more recent filing from Mr. Stewart and believes that Mr. Stewart no longer owns more than 5% of the Class A common stock. Neither Pdl Partnership nor its partners have any contract, arrangement, understanding or relationship (legal or otherwise) with respect to any securities of the Company, except as described below. 212,648 Class A Shares owned by Pdl Partnership or its partners are pledged to Robert E. Shapiro and Joseph Viertel, directors of the Company, as security for loans previously made in connection with the purchase of 134,334 Class A Shares by Pdl Partnership's predecessor in interest. The partners of Pdl Partnership have entered into an Agreement pursuant to which they have agreed among themselves that the Class A Shares owned by Pdl Partnership may (1) be voted by Pdl Partnership only by action of any two of them or (2) be sold by Pdl Partnership only with the approval of any two of them. EXECUTIVE OFFICERS The following table sets forth information with respect to the executive officers of Presidential. Each officer has been elected for a period of one year and thereafter until his successor is elected, subject to the terms of the Employment Agreements described below.
NAME AGE POSITION WITH REGISTRANT ---- --- ------------------------ Jeffrey F. Joseph..................... 58 President and a Director Thomas Viertel........................ 58 Executive Vice President and Chief Financial Officer Steven Baruch......................... 61 Executive Vice President Elizabeth Delgado..................... 55 Treasurer Roslyn Lacativa....................... 62 Secretary
Mr. Joseph has been President of the Company since February, 1992 and a Director since April, 1993. 4 7 Thomas Viertel has been an Executive Vice President of the Company since January, 1993 and its Chief Financial Officer since April of that year. Mr. Viertel is also the Chairman of the Board of Scorpio Entertainment, Inc., a privately owned company which produces theatrical enterprises. (See Certain Transactions below.) Mr. Baruch has been an Executive Vice President of the Company since January, 1993. Mr. Baruch is also the President of Scorpio Entertainment, Inc. (See Certain Transactions below.) Mr. Baruch also serves as a member of the Board of Directors of Trans-Lux Corporation, of which Richard Brandt, a director of Presidential Realty Corporation and a member of its Compensation Committee, is Chairman of the Board of Directors. Ms. Delgado has been Treasurer of the Company since 1986. Ms. Lacativa has been the Secretary of the Company since November, 1993. Thomas Viertel is the son of Joseph Viertel, a Director of Presidential and the nephew of Robert E. Shapiro, a Director of Presidential. Steven Baruch is the cousin of Robert E. Shapiro and Joseph Viertel. Prior to August 1, 1979, Jeffrey Joseph, Thomas Viertel and Steven Baruch were executive officers of Presidential. REMUNERATION OF EXECUTIVE OFFICERS AND DIRECTORS The following table and discussion summarizes the compensation for the year ended December 31, 1999 of the Chief Executive Officer of the Company and of any other executive officer of the Company who served as such at December 31, 1999 and whose total annual compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE ANNUAL COMPENSATION LONG TERM COMPENSATION ------------------------------ -------------------------- (A) (B) (E) (G) (C) (D) OTHER ANNUAL STOCK SALARY BONUS COMPENSATION(A) OPTIONS NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) --------------------------- ---- -------- ---------- --------------- ------- Jeffrey F. Joseph................... 1999 $262,584 $ 157,735(1) 0 24,000 President and Chief Executive Officer 1998 258,449 57,880 0 0 and Director 1997 253,879 49,287 0 0 Thomas Viertel...................... 1999 $176,450 $ 58,722 0 18,000 Executive Vice President and 1998 173,671 43,410 0 0 Chief Financial Officer 1997 170,600 36,966 0 0 Steven Baruch....................... 1999 $176,450 $ 58,722 0 18,000 Executive Vice President 1998 173,671 43,410 0 0 1997 170,600 36,966 0 0 Elizabeth Delgado................... 1999 $ 97,745 $ 12,932 0 0 Treasurer 1998 94,878 0 0 0 1997 91,670 11,780 0 0
- --------------- (A) Does not include perquisites or other personal benefits which in the aggregate do not exceed the lesser of (a) 10% of annual salary and bonus or (b) $50,000. The Company pays the premiums on life insurance policies on the lives of, and owned by, Jeffrey F. Joseph, Thomas Viertel and Steven Baruch. The annual premiums for each of years 1999, 1998 and 1997 were $12,750 for Mr. Joseph, $9,250 for Mr. Viertel and $10,500 for Mr. Baruch. These amounts are not included under Column (e) of the Summary Compensation Table because the aggregate perquisites and other personal benefits do not exceed the lesser of (a) 10% of annual salary and bonus or (b) $50,000. (1) Includes 7,000 shares of Class B Common Stock valued at $49,438 at the time of grant. 5 8 OPTION/SAR GRANTS IN LAST FISCAL YEAR
(A) (B) (C) (D) (E) NUMBER OF PERCENT OF TOTAL SECURITIES OPTIONS/SARS UNDERLYING GRANTED TO EXERCISE OR OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION NAME GRANTED(#) FISCAL YEAR ($/SH) DATE ---- ------------ ---------------- ----------- ----------------- Jeffrey F. Joseph................ 24,000 40% $6.375 November 10, 2005 President and Chief Executive Officer and Director Thomas Viertel................... 18,000 30 6.375 November 10, 2005 Executive Vice President and Chief Financial Officer Steven Baruch.................... 18,000 30 6.375 November 10, 2005 Executive Vice President
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
(C) (D) SECURITIES UNDERLYING VALUE OF NUMBER OF UNEXERCISED UNEXERCISED IN-THE-MONEY OPTIONS AT OPTIONS AT 12/31/99 12/31/99(B) (A) ---------------- ----------------- SHARES (B) (#) ($) ACQUIRED ON VALUE EXERCISABLE(E) EXERCISABLE(E) NAME EXERCISE(#) REALIZED($)(A) UNEXERCISABLE(U) UNEXERCISABLE(U) ---- ----------- --------------- ---------------- ----------------- Jeffrey F. Joseph............... 24,000 $6,000 E - 24,000 E - $12,000 President and Chief Executive Officer and Director Thomas Viertel.................. 18,000 4,500 E - 18,000 E - 9,000 Executive Vice President and Chief Financial Officer Steven Baruch................... 18,000 4,500 E - 18,000 E - 9,000 Executive Vice President
- --------------- (A) Based on the $6.125 per share exercise price of all options and the $6.375 per share closing price on the American Stock Exchange on the date of exercise of the options. (B) Based on the $6.375 per share exercise price of all options and the $6.875 per share closing price on the American Stock Exchange on December 31, 1999. In connection with the exercise of stock options in 1999, the Company loaned $367,500 in the aggregate to Jeffrey Joseph ($147,000), Thomas Viertel ($110,250) and Steven Baruch ($110,250) to pay for the purchase price of the stock. The recourse notes, secured by the stock, bear interest at 8% per annum, payable quarterly, and the principal is due at maturity on November 30, 2004. The Employment Agreements for Messrs. Joseph, Viertel and Baruch provide that to the extent that any of the existing stock options held by those executives are either exercised or lapse, the Company will grant to the executive new options in the amount of the stock options that have either been exercised or have lapsed, which new options will have an exercise price equal to the closing price of the Class B common stock on the date that the new option is actually granted, will have a term of six years from the date such new option is granted and will be otherwise subject to the terms of the 1999 Stock Option Plan or any successor plan. 6 9 DEFINED BENEFIT PENSION PLAN The Company has a Defined Benefit Pension Plan which covers substantially all of its employees, including the officers listed in the Summary Compensation Table. Directors who are not employees of the Company are not eligible to participate in the Plan. In 1999 the Defined Benefit Pension Plan was amended to increase the maximum benefits payable thereunder to the maximum benefits permitted by law under a tax-qualified Defined Benefit Pension Plan. The Plan is a non-contributory, tax qualified defined benefit plan which provides a monthly retirement benefit payable for a participant's lifetime in an amount equal to the sum of (i) 7.15% of an employee's average monthly compensation and (ii) .62% of such employee's average monthly compensation in excess of the average Social Security wage base, multiplied in each case by the employee's years of service commencing after December 31, 1993 (up to a maximum of 10 years). Average monthly compensation for these purposes is the employee's monthly compensation averaged over the five consecutive Plan years which produce the highest monthly average within the employee's last ten years of service. However, the amount of compensation taken into account under a tax qualified plan was limited to $160,000 per annum in 1999 and is limited to $170,000 per annum in 2000, which limit may be increased in future years for cost of living increases. Maximum benefits under the Plan are attainable after ten years of service commencing after December 31, 1993, and are payable at age 65. Mr. Joseph (58 years old), Mr. Viertel (58 years old) and Mr. Baruch (61 years old) all have six years of service credited under the Plan. EMPLOYMENT AGREEMENTS The Company has an employment agreement with Jeffrey F. Joseph, President of the Company, that extends through December 31, 2002 and provides for annual compensation of $268,360 for calendar year 2000. The employee may also become entitled to a bonus for each calendar year based on a formula relating to the Company's earnings, which bonus is limited to a maximum amount of 33 1/3% of his annual basic compensation for that year. The agreement also provides for retirement benefits commencing at age 65 in the annual amount of $29,000, subject to increases based on fifty percent of any increase in the cost of living subsequent to the first year of retirement. The Company also has employment agreements with Steven Baruch, Executive Vice President of the Company, and Thomas Viertel, Executive Vice President and Chief Financial Officer of the Company, that each extend to December 31, 2002 and provide for annual compensation of $180,331 for calendar year 2000. Mr. Baruch and Mr. Viertel may also become entitled to a bonus for each calendar year based on a formula relating to the Company's earnings, which bonus is limited to a maximum amount of 33 1/3% of the annual basic compensation for the year. Each of the agreements also provides for retirement benefits commencing at age 65 in the annual amount of $29,000, subject to increases based on fifty percent of any increase in the cost of living subsequent to the first year of retirement. The Company's employment agreements with Mr. Baruch and Mr. Viertel permit them to spend a reasonable amount of their time during normal business hours on matters related to Scorpio Entertainment, Inc., a company which is engaged in theatrical productions, so long as the time and effort for Scorpio Entertainment, Inc. does not conflict or interfere with the performance of their duties for the Company and they diligently perform their duties for the Company to the satisfaction of the Board of Directors. (See Certain Transactions below.) The Company also has an employment agreement with Elizabeth Delgado, the Company's Treasurer, that extends through December 31, 2001 and provides for annual compensation of $101,634 for calendar year 2000. The employment agreement provides for a retirement period that commences at age 65 with annual cash benefits during retirement equal to the sum of (a) 23.6% plus (b) 2.6% for each year of employment subsequent to December 31, 1994, up to a maximum of 60% of the average of the three highest annual salary rates paid during employment, provided that such annual benefits shall not exceed $50,046 per annum, and provided further that any payments to be made under the retirement provisions of the employment agreement shall be reduced dollar for dollar by any amounts payable to the employee as a participant under the Company's Defined Benefit Pension Plan. Annual cash retirement benefits payable by the Company to Ms. Delgado under such employment agreement cannot be less than $37,828, but could be higher depending upon future rates of compensation and the terms of any subsequent employment agreement. 7 10 During the retirement periods under the above agreements, the employees will also be entitled to the continuation of certain life, group health and disability insurance benefits. None of the employment contracts described above provide death benefits for the recipients or for funding by Presidential of the anticipated retirement benefits. COMPENSATION OF DIRECTORS The Company pays each Director (other than Jeffrey F. Joseph, who is the President of the Company, Robert E. Shapiro, who is the Chairman of the Board of Directors of the Company, and Joseph Viertel, who is the Chairman of the Executive Committee of the Board of Directors of the Company) $11,000 per annum plus $1,500 for each meeting of the Board of Directors or Committee thereof attended, plus reimbursement of expenses. A portion of the above described directors fees is paid by the issuance of 1,000 shares of the Company's Class B Common Stock to each Director. The Company ordinarily does not pay any other compensation to Directors for their services as Directors. Presidential also has employment agreements with two directors (who were executive officers of the Company prior to their retirement) providing for stipulated annual payments for life (plus continuation of life, group health and disability insurance benefits). The annual cash retirement benefits paid under these contracts in 1999 were as follows:
ANNUAL CASH RETIREMENT BENEFIT (SUBJECT TO INCREASE NAME AND AGE POSITION WITH PRESIDENTIAL FOR INFLATION) - -------------------------------------- ---------------------------------- ---------------------------- Robert E. Shapiro (82)................ Director and Chairman of the Board $165,075 of Directors. Retired as President in 1992. Joseph Viertel (84)................... Director and Chairman of the 149,510 Executive Committee. Retired as President in 1987.
CERTAIN TRANSACTIONS Presidential currently has loans outstanding to certain affiliates of Ivy Properties, Ltd. (collectively "Ivy") as more fully described in the table set forth below. Ivy is owned by Thomas Viertel, Steven Baruch and Jeffrey Joseph (the "Ivy Principals"). Mr. Joseph is currently the President and a Director of Presidential and is a nominee for Director. Mr. Viertel is currently an Executive Vice President and the Chief Financial Officer of Presidential and is the son of Joseph Viertel, a Director of Presidential, and a nephew of Robert E. Shapiro, also a Director of Presidential. Steven Baruch is currently an Executive Vice President of Presidential and is a cousin of Robert E. Shapiro and Joseph Viertel. Pdl Partnership, a partnership which is wholly owned by the Ivy Principals, currently owns 198,735 shares of the Company's Class A Common Stock. As a result of the ownership of these shares by Pdl Partnership, together with the ownership of an aggregate of 24,601 additional shares of Class A Common Stock individually by the Ivy Principals, Pdl Partnership and the Ivy Principals have beneficial ownership of an aggregate of approximately 47% of the outstanding shares of Class A Common Stock of the Company, which class of stock is entitled to elect two-thirds of the Board of Directors of the Company. By reason of such beneficial ownership, the Ivy Principals are in a position substantially to control elections of the Board of Directors of the Company. The Board of Directors has adopted a resolution pursuant to which Presidential will not make any loan to Ivy nor enter into any other material transaction with Ivy unless such transaction is unanimously approved by the Directors of Presidential who are not otherwise affiliated with Presidential or Ivy (with no more than one abstention). 8 11 The following table sets forth information with respect to all outstanding loans to Ivy at December 31, 1998 and December 31, 1999:
ORIGINAL LOAN BASIC DATE ADVANCED DESCRIPTION INTEREST RATE 12/31/99 12/31/98 - ---- ---------- ------------------------------ -------------- ---------- ---------- 1981 $5,285,000 UTB Associates, a partnership 11.8 to 25.33% $ 468,243 $ 532,457 in which Presidential owns a 66 2/3% interest, sold an apt. property in New Haven, CT to Ivy for long-term, non-recourse purchase money notes. 1984 4,305,500 Sale by Presidential to Ivy of 6.00% 908,343 930,057 50% interest in a partnership which owns an apartment complex in Alexandria, VA (Overlook loan).(1) 1991 526,454 UTB End Loans: Purchase money Various 158,183 183,900 notes on co-op apts. These notes were transferred to Presidential as part of the Ivy settlement. 1991 155,084 Consolidated Loans: Replaced Chase Prime 39,259 52,568 previously defaulted loans.(2) ---------- ---------- Total Loans 1,574,028 1,698,982 Less: Discounts 132,073 149,685 Deferred gain on Overlook loan 908,343 930,057 ---------- ---------- Net Carrying Value $ 533,612 $ 619,240 ========== ==========
- --------------- (1) The Overlook loan, which is a nonrecourse loan resulting from the sale by the Company to Ivy in 1984 of an apartment property, is secured by a second mortgage note (the "Collateral Security") with a face value of $908,343. All interest and principal collected by Ivy on the Collateral Security is paid to Presidential in reduction of current interest, previously deferred interest or principal. (2) As part of the Settlement Agreement effectuated in November, 1991 between the Company and Ivy, certain of Presidential's outstanding nonrecourse loans to Ivy were modified and consolidated into two nonrecourse loans (collectively, the "Consolidated Loans") that were collateralized by substantially all of Ivy's then remaining business assets with respect to which Presidential either did not previously have any security interest or had a junior security interest (collectively, the "Consolidated Collateral"). The terms of the Settlement Agreement permit Ivy to use the proceeds of each sale of Consolidated Collateral to (1) pay existing indebtedness of Ivy to its bank and trade creditors and certain operating expenses and (2) create and fund specified reserves to provide for payment of future obligations and potential liabilities. At December 31, 1999, the Consolidated Loans had an outstanding principal balance of $4,809,309 and a net carrying value of $39,259. Presidential does not expect to recover any material amount on the Consolidated Loans in excess of their net carrying value. As part of the Settlement Agreement with Ivy, Presidential obtained an option to acquire Scorpio Entertainment, Inc., a company owned by the Ivy Principals to carry on theatrical productions ("Scorpio"). The option called for a $100,000 purchase price, to be paid by crediting it against amounts due to Presidential from the Ivy Principals under the Consolidated Loans. In 1996 Presidential and the Ivy Principals agreed to a modification of the Settlement Agreement to provide that the Ivy Principals will make payments on the Consolidated Loans in an amount equal to 25% of the operating cash flow (after provision for certain reserves) of Scorpio. This agreement, and Presidential's decision not to exercise its option to acquire the capital stock of Scorpio, was made pursuant to the unanimous determination of the members of the Board of Directors who are not affiliated with the Ivy Principals that such actions were in the best interests of Presidential. As a result 9 12 of this modification, during 1999 Presidential received $13,309 of principal payments and $64,405 of interest from the Ivy Principals on the Consolidated Loans. As described under Renumeration of Executive Officers and Directors above, the Company made an aggregate of $367,500 of loans in 1999 to Jeffrey Joseph, Thomas Viertel and Steven Baruch in connection with their exercise of stock options. COMMITTEES OF THE BOARD OF DIRECTORS The Board of Directors of Presidential has an Executive Committee, an Audit Committee, a Compensation and Pension Committee and an Unaffiliated Director Committee. The Board of Directors does not have a nominating committee. The members of the Executive Committee are Jeffrey F. Joseph, Robert E. Shapiro and Joseph Viertel. The function of the Executive Committee is to make general and specific recommendations to the Board of Directors with respect to matters to be considered by the Board. The Executive Committee meets monthly and from time to time as required by the business of Presidential. The members of the Audit Committee are Richard Brandt, Mortimer Caplin and Robert Feder. The function of the Audit Committee is to review the policies and procedures adopted by the Company and its independent public accountants with respect to the financial reporting by the Company. The Audit Committee held one meeting during the Company's last fiscal year. The members of the Compensation and Pension Committee are Richard Brandt, Mortimer Caplin and Robert Feder. The function of the Compensation and Pension Committee is to recommend guidelines and specific compensation levels to the Board of Directors of the Company for the executive officers of the Company. The Compensation and Pension Committee held three meetings during the Company's last fiscal year. The members of the Unaffiliated Director Committee are Richard Brandt, Mortimer Caplin and Robert Feder. The function of the Unaffiliated Director Committee is to review and vote upon any material transaction with Ivy Properties, Ltd. or any of its affiliates. The Company will not enter into any material transaction with Ivy or any affiliate of Ivy unless the members of the Unaffiliated Director Committee unanimously approve the transaction, with no more than one abstention. The Unaffiliated Director Committee did not hold any meetings during the Company's last fiscal year. The Board of Directors of the Company held four meetings during the Company's last fiscal year. All of the directors attended all of the meetings in 1999 of the Board of Directors and the committees of which they were members. INDEPENDENT PUBLIC ACCOUNTANTS Deloitte & Touche, LLP, who, with their predecessor companies, have been the independent public accountants for Presidential and its predecessor companies since 1960, will have representatives present at the Annual Meeting of Stockholders who will have an opportunity to make a statement if they desire to do so and to respond to appropriate questions. Deloitte & Touche, LLP has advised the Company that neither it nor, to the best of its knowledge, any of its members has any direct or material indirect financial interest in the Company nor has it had any connection during the past five years with the Company in the capacity of promoter, underwriter, voting trustee, director, officer or employee other than as independent auditors for the Company. OTHER MATTERS At the date of this Proxy Statement, the only proposals which the management intends to present at the meeting are those set forth in the Notice of the Annual Meeting of Stockholders. Management knows of no other matter which may come before the meeting, but if any other matters properly come before the meeting, 10 13 it is intended that proxies in the accompanying forms will be voted thereon in accordance with the judgment of the person or persons voting the proxies. PROPOSALS FOR 2001 ANNUAL MEETING OF STOCKHOLDERS Shareholder proposals for the 2001 Annual Meeting of Stockholders must be received by the Secretary at the corporate offices of Presidential, 180 South Broadway, White Plains, New York 10605, no later than December 29, 2000 for inclusion in the Proxy Statement for the 2001 Annual Meeting of Stockholders. COST OF SOLICITATION The cost of soliciting proxies in the accompanying forms has been or will be borne by the Company. In addition to solicitation by mail, solicitations may be made by telephone calls by existing employees of the Company. IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. IF YOU ARE UNABLE TO BE PRESENT IN PERSON, YOU ARE REQUESTED TO SIGN THE ENCLOSED PROXY OR PROXIES AND RETURN SAME IN THE ENCLOSED STAMPED AND ADDRESSED ENVELOPE AS PROMPTLY AS POSSIBLE. A STOCKHOLDER EXECUTING AND RETURNING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME BEFORE IT IS VOTED BY GIVING WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY, BY SUBMISSION OF ANOTHER PROXY BEARING A LATER DATE, OR BY ATTENDING THE MEETING AND REQUESTING TO VOTE IN PERSON. April 27, 2000 11 14 PROXY PRESIDENTIAL REALTY CORPORATION (Class A Shares) [PRESIDENTIAL 180 SOUTH BROADWAY, WHITE PLAINS, NEW YORK 10605 REALTY MANAGEMENT PROXY LOGO] THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints JEFFREY F. JOSEPH and THOMAS VIERTEL, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to appear and vote all of the shares of Class A stock standing in the name of the undersigned on April 26, 2000, at the Annual Meeting of Stockholders of Presidential Realty Corporation to be held at the Westchester Marriott, 670 White Plains Road, Tarrytown, New York, on June 14, 2000 at 2:00 P.M., New York time, and at any and all adjournments thereof, and the undersigned hereby instructs said attorneys to vote as designated below: 1. ELECTION OF DIRECTORS FOR all nominees listed below: WITHHOLD AUTHORITY (except as marked to the to vote for all nominees contrary below) [ ] listed below [ ] ROBERT FEDER, JEFFREY F. JOSEPH, ROBERT E. SHAPIRO, JOSEPH VIERTEL INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below. ------------------------------------------------------------------- 2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournments thereof. The undersigned hereby acknowledges receipt of the Proxy Statement dated April 27, 2000. (CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE) 15 THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER, IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. Dated: , 2000 -------------- MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ] Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. ------------------------------------------------- Signature ------------------------------------------------- Signature if held jointly. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. 16 PROXY PRESIDENTIAL REALTY CORPORATION (Class B Shares) [PRESIDENTIAL 180 SOUTH BROADWAY, WHITE PLAINS, NEW YORK 10605 REALTY MANAGEMENT PROXY LOGO] THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints JEFFREY F. JOSEPH and THOMAS VIERTEL, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to appear and vote all of the shares of Class B stock standing in the name of the undersigned on April 26, 2000, at the Annual Meeting of Stockholders of Presidential Realty Corporation to be held at the Westchester Marriott, 670 White Plains Road, Tarrytown, New York, on June 14, 2000 at 2:00 P.M., New York time, and at any and all adjournments thereof, and the undersigned hereby instructs said attorneys to vote as designated below: 1. ELECTION OF DIRECTORS FOR all nominees listed below: WITHHOLD AUTHORITY (except as marked to the to vote for all nominees contrary below) [ ] listed below [ ] RICHARD BRANDT, MORTIMER M. CAPLIN INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below. ------------------------------------------------------------------- 2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournments thereof. The undersigned hereby acknowledges receipt of the Proxy Statement dated April 27, 2000. (CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE) 17 THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER, IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. Dated: , 2000 -------------- MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ] Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. ------------------------------------------------- Signature ------------------------------------------------- Signature if held jointly. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. -----END PRIVACY-ENHANCED MESSAGE-----