<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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-12
ROBERTS REALTY INVESTORS, INC.
-----------------------------------
(Name of Registrant as Specified in its Charter)
------------------------------------------------------
(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)(1) and 0-11.
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:
<PAGE> 2
ROBERTS REALTY INVESTORS, INC.
8010 ROSWELL ROAD, SUITE 120
ATLANTA, GEORGIA 30350
May 7, 1997
Dear Shareholders:
The Directors and Officers of Roberts Realty Investors, Inc. cordially invite
you to attend its third Annual Meeting of Shareholders. We hope you will
join us for the meeting at 10:00 a.m. on Tuesday, May 27, 1997, at the Crowne
Plaza Ravinia, 4355 Ashford-Dunwoody Road, Atlanta, Georgia 30346. The Notice
of Meeting and Proxy Statement attached to this letter contain information
regarding the election of Directors of the Company. A copy of the Company's
1996 annual report to shareholders is enclosed.
Although we would very much like each shareholder to attend the Annual Meeting,
we realize this is not possible. Whether or not you plan to be present, we
would appreciate your taking a few minutes to complete, sign, and return the
enclosed proxy card promptly. A postage-paid envelope is enclosed for your
convenience.
Your vote is important to us. We appreciate the time and consideration that I
am sure you will give it.
Sincerely,
/s/ Charles S. Roberts
- ----------------------
Charles S. Roberts,
Chairman and Chief Executive Officer
<PAGE> 3
ROBERTS REALTY INVESTORS, INC.
8010 ROSWELL ROAD, SUITE 120
ATLANTA, GEORGIA 30350
May 7, 1997
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 27, 1997
The Annual Meeting of Shareholders of Roberts Realty Investors, Inc. (the
"Company") will be held on Tuesday, May 27, 1997, at 10:00 a.m., at the Crowne
Plaza Ravinia, 4355 Ashford-Dunwoody Road, Atlanta, Georgia 30346, for the
following purposes:
(1) The election of two Directors of the Company to serve three-year
terms.
(2) To transact such other business as may properly come before the
meeting or any adjournment of it.
The Directors have set the close of business on April 15, 1997 as the
record date for determination of the shareholders of the Company who are
entitled to notice of and to vote at the meeting.
Shareholders who do not expect to attend the meeting in person are
requested to date, vote and sign the enclosed proxy card, indicating any voting
instructions, and to return it in the accompanying postage-paid envelope.
By order of the Board of Directors
/s/ Charles R. Elliott
----------------------
Charles R. Elliott
Secretary
<PAGE> 4
PROXY STATEMENT
FOR
THE ANNUAL MEETING OF SHAREHOLDERS
OF ROBERTS REALTY INVESTORS, INC.
TO BE HELD ON MAY 27, 1997
THIS DOCUMENT WILL GIVE YOU THE INFORMATION YOU NEED TO VOTE FOR THE TWO
DIRECTORS TO BE ELECTED AT THE ANNUAL MEETING. IF YOU HAVE ANY QUESTIONS
CONCERNING THE INFORMATION CONTAINED IN THIS PROXY STATEMENT, PLEASE CONTACT
CHARLES ELLIOTT, THE COMPANY'S CHIEF FINANCIAL OFFICER, AT (770) 394-6000.
- -------------------------------------------------------------------------------
WHAT IS THE CURRENT STATUS OF THE COMPANY'S PLANS TO LIST ITS SHARES ON AN
EXCHANGE?
The Company's intent is to list its Common Stock on an exchange to give
shareholders and unitholders a way to sell their shares and units. As
discussed below, the Company has completed several important steps towards
listing its shares on an exchange.
- - The Company was required under the securities laws to wait for a period of
nine months from the Company's last "intrastate" sale of securities before
it could list its shares for trading. The last sale of securities
occurred on July 2, 1996 and the nine month period ended April 3, 1997.
- - At the time of the initial consolidation in October 1994, the Company
intended to begin the nine month waiting period during the third quarter
of 1995 and the shares were expected to be listed on an exchange by
mid-year 1996. The listing date was delayed one year in order to complete
the acquisition of the Windsong, Bentley Place and Crestmark Communities
and to complete the offering of 699,175 shares to fund the acquisition and
development of the Howell Ferry Community. These acquisitions were
important because they substantially increased the Company's size and
financial strength. The Company's Board of Directors believes that the
benefits from the three acquisitions and the stock offering outweigh the
delay in the listing of the Common Stock.
- - In May 1996, the Company completed a major step towards listing its shares
when it registered its Common Stock with the Securities and Exchange
Commission (SEC) and became a public, reporting company.
- - During the nine month waiting period, which started July 3, 1996, the
Company's management evaluated the advantages and disadvantages of listing
its shares on the New York and American Stock Exchanges and the Nasdaq
National Market System. Management discussed the Company's listing with
representatives of each exchange and provided them with audited financial
statements and other information about the Company.
- - On February 25, 1997, the regional director of the American Stock Exchange
(AMEX) made a presentation to the Company's Board of Directors explaining
in detail the advantages of listing on the AMEX. After further
discussions with management, the AMEX informed the Company in a letter
dated March 27, 1997 that the AMEX is "prepared to give favorable
consideration to an application by the Company for the listing of its
Common Stock." After reviewing each of the three securities exchanges and
taking into account the Company's size and needs, management has
recommended to the Board of Directors that the Company list its shares on
the American Stock Exchange. The Board of Directors intends to make a
decision regarding the listing of the shares at its June meeting.
<PAGE> 5
WHO IS ASKING FOR MY VOTE?
The enclosed proxy is solicited by the Directors of the Company for use at
the Annual Meeting to be held on May 27, 1997. If the meeting is adjourned,
the proxy may also be used at any later meetings, for the purposes stated in
the Notice of Meeting.
HOW DO YOUR COMPANY'S DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE?
The Directors recommend that you vote FOR THE ELECTION OF BOTH NOMINEES.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on April 15, 1997 are
entitled to be present and to vote at the meeting or any adjourned meeting.
The Notice of Meeting, the Proxy, and this Proxy Statement are being mailed to
shareholders on or about May 7, 1997.
WHAT ARE THE RULES FOR VOTING?
As of the record date, the Company had 4,186,329 shares of Common Stock
outstanding and entitled to vote at the Annual Meeting. Each share of the
Company's Common Stock entitles the holder to one vote with respect to all
matters to come before the meeting, and all of such shares vote as a single
class. Shares represented by duly executed proxies will be voted in accordance
with shareholders' instructions. If you sign the proxy, but don't fill in a
vote, your shares will be voted in accordance with the Directors'
recommendation. The Company's management knows of no other matters to be
presented or considered at the meeting, but if any other business is brought
before the meeting, your shares will be voted at the Directors' discretion.
The proxies named will have the authority to vote for any person for election
as a director in lieu of either person nominated if the nominee is unable to
serve. It is not contemplated that any nominee will be unable to serve.
The presence in person or by proxy of shareholders owning more than
one-half of the shares outstanding and entitled to vote constitutes a quorum.
In determining whether a quorum exists at the Annual Meeting for purposes of
all matters to be voted on, all votes "for" and all votes to "withhold
authority" will be counted, and shares will be counted for quorum purposes if
they are represented at the meeting for any purpose other than solely to object
to holding the meeting or transacting business at the meeting. Assuming that a
quorum is present, abstentions and broker non-votes will have no effect on the
voting.
Assuming that a quorum is present, the vote required for election of
directors is a plurality of the votes cast by the shares entitled to vote in
the election. For any other matter coming before the meeting, the matter will
be deemed to be approved if the votes cast in favor of the action exceed the
votes cast opposing the action. Shareholders do not have cumulative voting
rights.
A proxy may be revoked, at any time before it is voted, at the option of
the person signing it by giving written notice to the Secretary of the Company
(Mr. Elliott), by delivering a later dated proxy, or by voting in person at the
Annual Meeting.
2
<PAGE> 6
HOW WILL THE COMPANY SOLICIT PROXIES, AND WHO WILL PAY FOR THE COST OF THE
SOLICITATION?
The Company will solicit proxies principally by mailing these materials to
the shareholders, but the Directors, officers and employees of the Company may,
on the Company's behalf, solicit proxies by telephone or in person. The
Company will pay all of the costs of the solicitation, principally the costs of
preparing, photocopying and mailing these materials.
HOW CAN A SHAREHOLDER PROPOSE BUSINESS TO BE BROUGHT BEFORE THE ANNUAL MEETING
OR NOMINATE A PERSON FOR ELECTION TO THE BOARD?
The Company's Bylaws provide procedures for shareholders to bring business
before the Annual Meeting and to nominate directors for election at such
meeting. Such procedures include the shareholder providing advance notice to
the Company of such business or nomination. A shareholder must also follow
certain procedures that are fully set forth in Rule 14a-8 of the General Rules
and Regulations adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934. Among other requirements of the Rule is a
requirement that a proposal for consideration at the next Annual Meeting must
be received at the Company's principal office not later than December 31, 1997.
Unless the procedures set forth in the Bylaws and the referenced Rule are
followed, no business may be brought before the Annual Meeting, and no person
shall be eligible for election as a Director of the Company.
ELECTION OF DIRECTORS
Proposal 1
WHO ARE THE TWO NOMINEES FOR ELECTION AS A DIRECTOR?
Information about the two nominees for election as Directors of your
Company, Mr. Charles S. Roberts and Mr. James M. Goodrich, is provided below.
Each of them is currently a Director of the Company and has been recommended by
the Directors for reelection to the Board.
WHY ARE ONLY TWO OF THE SIX DIRECTORS BEING ELECTED AT THE ANNUAL MEETING?
The Company's Articles of Incorporation require the Board of Directors to
be divided into three classes as nearly equal in number as possible. The terms
of office of Mr. Roberts and Mr. Goodrich expire at this year's Annual Meeting,
and they are standing for reelection for a full three year term through the
Annual Meeting in 2000. The terms of office of Mr. Ben A. Spalding and Mr.
George W. Wray, Jr. expire at the Annual Meeting in 1998, and the terms of
office of Mr. Dennis H. James and Mr. Wm. Jarell Jones expire at the Annual
Meeting in 1999. All of the Directors of the Company were originally elected
in 1994 other than Mr. Wray, who was elected in February 1995, and Mr. James,
who was elected in June 1995.
NOMINEES FOR DIRECTOR:
Charles S. Roberts, age 50, is Chairman of the Board, Chief Executive
Officer and President of the Company. Mr. Roberts owns, directly or
indirectly, all of the outstanding stock of, and is the president and sole
director of, Roberts Properties, Inc. and Roberts Properties Construction, Inc.
Mr. Roberts also owned substantially all of the outstanding interests in
Roberts Properties Management, L.L.C. until its acquisition by Roberts
Properties Residential, L.P. on April 1, 1997, as explained on pages 16-17.
In October 1970 Mr. Roberts established Roberts Properties, Inc. to
develop, construct and manage real estate. Beginning in 1985, Mr. Roberts and
his affiliates began to focus on developing upscale
3
<PAGE> 7
multifamily residential communities and have won numerous local, regional and
national awards for the development of these communities. Mr. Roberts is a
frequent national speaker on the topic of developing upscale multifamily
housing and has been recognized as a leader in this industry. In April 1995,
Roberts Properties Management, Inc. was recognized as the Property Management
Company of the Year by the National Association of Home Builders' National
Council of the Multifamily Industry. Through March 31, 1997, entities
affiliated with Mr. Roberts sponsored 54 different programs, raising
approximately $89,000,000 in equity and having an aggregate total
capitalization of approximately $230,000,000. These programs consisted of
multifamily residential communities with 2,918 units; approximately 277,307
square feet of other income producing real estate, principally shopping centers
and office buildings; and nine parcels of undeveloped land.
James M. Goodrich, age 56, a Director of the Company, is a consulting
engineer and private investor. In 1975 Dr. Goodrich founded Energy Management
Associates, which provides operations and financial planning software and
related consulting services to the electric and gas utility industries. Dr.
Goodrich was Executive Vice President of Energy Management Associates from 1975
until October 1993 and was a member of its board of directors until 1992, when
it was sold to Electronic Data Systems Corporation. Prior to his experience
with Energy Management Associates, Dr. Goodrich served in the United States
Navy for five years as an officer on the staff of Admiral Hyman Rickover; this
position involved technical support of the design and development of nuclear
power plants for the Navy. Dr. Goodrich holds a Ph.D. in Nuclear Engineering,
a master's degree in Engineering-Economic Systems, and a bachelor of arts
degree, all from Stanford University. He also holds a master's degree in
Engineering Science from George Washington University. Dr. Goodrich has
appeared as an expert witness before numerous state public utility commissions,
the Federal Energy Regulatory Commission, federal courts and arbitration
panels.
The Directors serve for their respective terms and until their successors
are elected and qualified. Each of the nominees has agreed to serve as a
Director if elected.
DIRECTORS CONTINUING IN OFFICE:
Ben A. Spalding, age 62, a Director of the Company, is the sole
shareholder of Spalding & Company, an NASD member broker-dealer that has served
since its founding by Mr. Spalding in 1980 as the exclusive broker-dealer for
limited partnerships sponsored by Mr. Roberts. Mr. Spalding served as
President of Spalding & Company from 1980 until 1994; he is presently a
registered associate of Spalding & Company. For the 20 year period through
1983, Mr. Spalding served in several positions with Johnson & Johnson in the
health care field, most recently as Healthcare Division Sales Manager for
several states in the Southeast. Mr. Spalding has a bachelor's degree in
Business Administration from Bellarmine College. He has served in numerous
positions with civic and charitable organizations, including serving as a
National Trustee of the Cystic Fibrosis Foundation and a member of the Board of
Trustees of the Metro-Atlanta Crime Commission. He received the Cystic
Fibrosis Dick Goldschmidt Award in 1986 for his efforts on behalf of the Cystic
Fibrosis Foundation.
George W. Wray, Jr., age 60, a Director of the Company, is a private
investor and Senior Partner of the Wray Partnership, a family investment group.
He was employed with International Silver Company from the early 1960s to July
1993, most recently as a Vice President engaged in sales management for the
eastern United States. Since the July 1993 acquisition of International Silver
Company by World Crisa Corporation, a division of Vitro S.A., Mr. Wray has been
an independent sales agent for the successor organization. Mr. Wray has also
served as a Vice President of Spalding & Company, an NASD registered
broker-dealer, since 1991 and has been a registered associate of Spalding &
Company since 1983. Mr. Wray holds a bachelor's degree in Industrial Relations
from the University of North Carolina at Chapel Hill. Mr. Wray also serves as
an elder of the Peachtree Presbyterian Church in Atlanta.
4
<PAGE> 8
Dennis H. James, age 50, a Director of the Company, is President and
Director of Shoptaw-James, Inc., one of the largest privately owned commercial
mortgage banking firms in the Southeast. Mr. James has over 25 years'
experience in the mortgage banking industry and has been involved in the
production of income property straight debt loans, participating mortgages,
debt/equity joint ventures and sales. As President of Shoptaw-James, Inc., he
is responsible for the overall production of the company and its investor
relationships, while sharing in its extended planning and management. He is a
director of Main America Capital, which specializes in financing small income
property mortgages; he is a trustee on the Alexander Tharpe Board, the
fund-raising organization of the Georgia Tech Athletic Association that funds
all scholarships for student athletes at Georgia Tech; and he serves on the
Allstate Life Insurance Company Correspondent Advisory Council. Mr. James has
a bachelor's degree in Industrial Management from Georgia Tech, and his
professional education includes attendance at numerous real estate institutes.
Wm. Jarell Jones, age 49, a Director of the Company, is an attorney and
has practiced law with the firm of Wm. Jarell Jones, P.C., in Statesboro,
Georgia since November 1993. Mr. Jones is also a Certified Public Accountant,
and in 1976 he formed the public accounting firm of Jones & Kolb in Atlanta,
Georgia and served as Senior Tax Partner and Co-Managing Partner until December
1988. In January 1989, Mr. Jones became a general partner of Simpson Seacoast,
which along with its affiliates managed and developed real estate and operated
a real estate brokerage and an NASD-member securities firm. In 1990 Mr. Jones
moved to Statesboro and practiced law with the firm of Edenfield, Stone & Cox
until November 1992 and then with the firm of Jones & Rutledge from November
1992 until November 1993. Mr. Jones is a director and former Chairman of the
Downtown Statesboro Development Authority.
5
<PAGE> 9
DO THE DIRECTORS AND EXECUTIVE OFFICERS HAVE A FINANCIAL INTEREST IN YOUR
COMPANY?
The following table sets forth the beneficial ownership of units of
partnership interest ("Units") in Roberts Properties Residential, L.P. (the
"Operating Partnership") and shares of the Company's Common Stock ("Shares"),
as of April 10, 1997 for (i) each person who holds more than a 5% interest in
the Operating Partnership or the Company, (ii) Directors of the Company, (iii)
the executive officers of the Company, and (iv) the Directors and executive
officers of the Company as a group. Unless otherwise indicated in the
footnotes, all of such interests are owned directly, and the indicated person
or entity has sole voting and investment power. (Addresses are provided only
for 5% owners.)
<TABLE>
<CAPTION>
Percent
Number of Units Percent Number of Shares Percent of All
Name of Beneficially of All Beneficially of Shares
Beneficial Owner Owned Units(1) Owned Shares(2) & Units(3)
- ----------------------- --------------- -------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Charles S. Roberts(4)
8010 Roswell Road
Suite 120
Atlanta, Georgia 30350 715,873 9.5% 443,285 10.6% 15.4%
George W. Wray, Jr.(5) 178,316 2.4% 153,252 3.7% 4.4%
James M. Goodrich(6) 162,049 2.1% 81,419 1.9% 3.2%
Ben A. Spalding(7) 14,655 * 2,957 * *
Dennis H. James - - 12,096 * *
Wm. Jarell Jones - - 2,917 * *
Charles R. Elliott - - 5,017 * *
All Directors and Executive
Officers as a Group:
(7 persons)(8) 1,070,893 14.2% 700,943 16.7% 23.5%
</TABLE>
- ----------------------------
*Less than 1%.
(1) Represents the number of Units held by the person as a percentage of the
total number of Units outstanding (7,549,759 Units) assuming none of the Units
is redeemed for Shares. Units are not presently redeemable, and the timing of
when the Units will become redeemable is uncertain. Redemption of Units is
subject to certain conditions. Among other restrictions, Units cannot be
redeemed if the redemption would cause the holder to violate the limitations on
ownership contained in the Company's Articles of Incorporation.
(2) Represents the number of Shares held by the person as a percentage of the
total number of Shares outstanding (4,186,329 Shares) assuming none of the
Units is redeemed for Shares.
(3) Assumes that all Units held by the person are redeemed for Shares. The
total number of Shares outstanding used in calculating this percentage
(7,549,759 Shares) assumes that all of the Units held by other persons (other
than the 4,186,329 Units held by the Company, which are not redeemable) are
redeemed for Shares.
(4) Includes: 686,373 Units and 440,841 Shares owned directly by Mr. Roberts;
2,444 Shares owned by Roberts Properties, Inc., all of the outstanding shares
of which are owned by Mr. Roberts; and 29,500 Units owned by a trust for his
minor daughter of which he is the sole trustee.
(5) Includes: 20,781 Units owned directly by Mr. Wray; 154,618 Units and
153,252 Shares owned by a partnership, over which Units and Shares Mr. Wray has
voting and
6
<PAGE> 10
investment power as the managing partner of such partnership; and 2,917 Units
owned jointly with his daughter, over which Units he shares voting and
investment power. Does not include 8,497 Units and 15,678 Shares owned by his
wife and 5,058 Shares owned by a trust of which his wife is a co-trustee, with
respect to which Units and Shares Mr. Wray disclaims beneficial ownership.
(6) Includes: 14,787 Shares owned directly by Mr. Goodrich; 57,571 Units and
66,632 Shares owned jointly by Mr. Goodrich and Mrs. Penelope Goodrich, his
wife; and 104,478 Units owned by Goodrich Enterprises, Inc., all of the
outstanding shares of which are owned by Mr. and Mrs. Goodrich and their sons.
Does not include 6,835 Units and 21,379 Shares owned by a trust for the benefit
of one son of Mr. and Mrs. Goodrich and of which Mrs. Goodrich is trustee and
6,835 Units and 23,379 Shares owned by a trust for the benefit of another son
of Mr. and Mrs. Goodrich and of which Mrs. Goodrich is trustee, with respect to
which Units and Shares Mr. Goodrich disclaims beneficial ownership.
(7) Excludes 2,917 Units owned by Mr. Spalding's wife, and 24,401 Units and
7,564 Shares owned by partnerships of which Mr. Spalding's wife is the managing
partner; Mr. Spalding disclaims beneficial ownership of all such Units and
Shares.
(8) Includes 60,488 Units and 66,632 Shares as to which directors share voting
and investment power with another family member; does not include an aggregate
of 49,485 Units and 73,058 Shares beneficially owned by three directors' wives,
as to which Units and Shares such directors disclaim beneficial ownership.
HOW OFTEN DO THE DIRECTORS MEET, AND WHAT COMMITTEES DO THEY HAVE?
The Directors meet each month to review the operations of the Company and
to discuss its business plans and strategies for the future. The Board met a
total of 13 times in 1996, and each Director attended more than 75% of the
meetings. In addition, the Company has the following committees:
Audit Committee. The Board has established an audit committee composed of
Mr. James Goodrich, Mr. Jarell Jones, and Mr. George Wray. The Audit Committee
makes recommendations concerning the engagement of the independent auditors,
reviews with the auditors the plans and results of the audit engagement,
approves professional services provided by the auditors, reviews the
independence of the auditors, and reviews the adequacy of the Company's
internal accounting controls. The Audit Committee met one time in 1996.
Executive Committee. The Board has established an Executive Committee
composed of Mr. Roberts, Mr. Goodrich, and Mr. Jones. The Executive Committee
will have such authority as is delegated to it by the Board of Directors. The
Executive Committee has not met since the Company's inception.
Compensation Committee. The Board has established a Compensation
Committee, composed of Mr. Goodrich, Mr. Jones, and Mr. Wray, to determine
compensation for the Company's executive officers and to administer any stock
option or incentive compensation plan established by the Company. The
Compensation Committee did not meet in 1996.
The Company has no nominating committee, and nominations are made by the
Board as a whole. Any shareholder interested in nominating a Director should
review the material described under the applicable heading above.
WHAT ARE THE DIRECTORS PAID FOR THEIR SERVICES?
The Company pays its Directors who are not officers of the Company fees
for their services as Directors. These Directors (presently Messrs. Spalding,
Goodrich, James, Jones and Wray) receive a fee of $750 for attendance (in
person or by telephone) at each meeting of the Board of Directors. Officers of
the Company who are Directors (presently Mr. Roberts) are not paid any Director
fees. In addition, the Company reimburses its Directors for reasonable travel
expenses and out-of-pocket expenses incurred in connection with their
activities on behalf of the Company.
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<PAGE> 11
WHO ARE THE COMPANY'S OFFICERS, AND WHAT DOES THE COMPANY PAY THEM?
The executive officers of the Company are Mr. Charles S. Roberts, the
Company's Chairman of the Board, Chief Executive Officer and President, and Mr.
Charles R. Elliott, the Company's Secretary and Treasurer since its inception
and its Chief Financial Officer since April 1995. Mr. Elliott, who is 43 years
old, served as a Director of the Company from October 1994 to February 1995.
He worked for Hunneman Real Estate Corporation in Boston, Massachusetts from
1979 to 1993, most recently as a Senior Vice-President of Accounting and
Finance. Mr. Elliott joined Roberts Properties in August 1993 as Chief
Financial Officer and served in that role until April 1995. He holds an
undergraduate degree in Accounting and a master's degree in Finance.
The following table sets forth certain information regarding compensation.
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal Position Year Salary ($) Bonus ($)
- --------------------------- ---- -------------------- ----------------
<S> <C> <C> <C>
Charles S. Roberts 1994 $18,750(1) $ 0
Chairman of the Board, Chief 1995 $75,000 $ 0
Executive Officer, and President 1996 $75,000 $ 0
Charles R. Elliott 1994 - -
Secretary, Treasurer and 1995 $45,000(2) $ 0
Chief Financial Officer 1996 $75,000 $28,750
</TABLE>
- --------------------
(1) The Company paid no salaries from its inception on July 22, 1994 through
September 30, 1994, and the amount shown was paid in the period October 1, 1994
through December 1, 1994.
(2) Mr. Elliott's employment as Chief Financial Officer commenced on April 1,
1995, and the amount shown is for the period April 1, 1995 through December 31,
1995. He received no other compensation from the Company in 1995.
The Company is not a party to any employment agreements.
WHO ARE THE COMPANY'S AUDITORS?
The Company has selected Deloitte & Touche LLP, independent auditors, as
the Company's principal accounting firm. A representative of Deloitte & Touche
LLP is expected to be present at the meeting and will be available to respond
to appropriate questions. The representative will also have an opportunity to
make a statement if he or she desires to do so. Approval of the Company's
accounting firm is not a matter required to be submitted to the shareholders.
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<PAGE> 12
WHAT MATERIAL RELATIONSHIPS AND TRANSACTIONS HAVE THE DIRECTORS AND EXECUTIVE
OFFICERS HAD WITH THE COMPANY AND ITS AFFILIATES?
GENERAL
The Company conducts its business through Roberts Properties Residential,
L.P., owns a 55.4% interest in it, and is its sole general partner. Mr.
Charles S. Roberts owns all or substantially all of the outstanding shares of
Roberts Properties, Inc. ("Roberts Properties") and Roberts Properties
Construction, Inc. ("Roberts Construction"), and he owned substantially all of
the outstanding equity interests in Roberts Properties Management, L.L.C.
("Roberts Management") prior to its acquisition by the Operating Partnership in
April 1997. (The three Roberts entities are sometimes hereinafter collectively
referred to as the "Roberts Companies.") Note 7 to the consolidated financial
statements of the Company included in the Company's 1996 annual report mailed
along with this proxy statement provides further detail regarding certain of
the transactions described in this section.
GUARANTEES BY MR. CHARLES S. ROBERTS
Since January 1, 1995, Mr. Roberts has personally guaranteed mortgage
loans secured by certain of the Company's multifamily residential communities
(the "Communities," which are sometimes referred to herein by name). The
aggregate outstanding principal face amount of new loan guarantees by Mr.
Roberts was approximately $14,156,000 during 1995 and $171,000 in 1996. In the
ordinary course of acquiring, developing, constructing and refinancing
Communities, the loans personally guaranteed pursuant to these guarantees and
other guarantees previously extended remain subject to further modification,
extension, exculpation and repayment, with the result that the liability of Mr.
Roberts under certain of these guarantees has been and may be modified,
extended, reduced or eliminated. The aggregate principal face amount of loans
secured by the Communities and guaranteed by Mr. Roberts that were refinanced
with nonrecourse loans (thereby eliminating the guarantees of such loans) was
approximately $8,509,000 during 1995 and $8,049,000 during 1996. There are
currently no mortgage loans secured by any of the Company's Communities that
are personally guaranteed by Mr. Roberts.
PAYMENTS TO THE ROBERTS COMPANIES FOR SERVICES
Overview. The Operating Partnership has paid substantial fees to the
Roberts Companies for various types of services and will continue to do so in
the future. These various arrangements are summarized below.
Construction Contracts. From January 1, 1995 through March 31, 1997, the
Operating Partnership has paid and will be obligated to pay Roberts
Construction the following amounts:
<TABLE>
<CAPTION>
Remaining Contractual
Total Contract Amount Amount Incurred Commitment
- --------------------- --------------- ----------
<S> <C> <C>
$35,685,000 $23,450,000 $12,235,000
</TABLE>
In addition, the Operating Partnership paid Roberts Construction for purchases
made on its behalf and for additional features added or built on the
Communities that were not part of the original construction contracts. These
amounts aggregated $538,000 during 1995 and $2,250,000 during 1996. In
addition, the Operating Partnership paid Roberts Construction for labor and
materials to perform repairs and maintenance for the Communities in the amounts
of $115,000 in 1995 and $2,174,000 in 1996. (Roberts Construction typically
estimates that it will earn a profit of 5% of the construction contract amount
on contracts with affiliates of Mr. Roberts.) Included in the remaining
contractual commitment amount are the following fixed price construction
contracts that have been or will be entered into between the
9
<PAGE> 13
Operating Partnership and Roberts Construction that relate to construction work
in process or to be completed:
<TABLE>
<CAPTION>
Fixed Estimated Profit to Percentage of
Construction Project Price Roberts Construction Contract Price
- -------------------- ---------- -------------------- --------------
<S> <C> <C> <C>
Howell Ferry Community $8,829,000 $250,000 2.8%
Second Phase of Plantation Trace Community $3,157,000 $158,000 5.0%
</TABLE>
Development Fees. The Operating Partnership paid Roberts Properties $0 in
1995 and $430,000 in 1996 for various development services, including design,
finish selection, interior design, and construction administration services and
the preparation of market studies and business plans. The Operating
Partnership will pay Roberts Properties: (a) $735,000 for development services
in connection with the development and construction of Howell Ferry ($200,000
of which was paid in the first quarter of 1997); and (b) $255,000 for
development services in connection with the development and construction of the
second phase of Plantation Trace.
Property Management Fees. Prior to its acquisition by the Operating
Partnership in April 1997 as described below, Roberts Management provided
management services to the Operating Partnership for a fee of 5% of gross
income. Total management fees paid to Roberts Management by the Operating
Partnership were $347,000 during 1995 and $760,000 during 1996. Shortly after
the merger of The Crestmark Club, L.P. into the Operating Partnership in June
1996, the Operating Partnership paid $28,000 to an affiliate of Mr. Roberts in
reimbursement of management-related costs previously incurred by The Crestmark
Club, L.P.
Consulting Fees. Under various consulting contracts, as amended, the
Roberts Companies have agreed to provide consulting services in the event of a
sale of nine specified Communities and one retail center. The fee for such
services will be 5% of the gross sales proceeds of the property sold (except 6%
in the case of Plantation Trace and the Shoppes of Plantation and 3% in the
case of Bentley Place and Windsong). A payment will also be triggered upon a
"change in control" of the Company or the Operating Partnership, which is
defined as (i) any transaction, whether by merger, consolidation, asset sale or
otherwise which results in the acquisition of beneficial ownership by any
person or group of 50% or more of the outstanding Shares or of the outstanding
Units in the Operating Partnership, (ii) sale of all or substantially all of
the assets of the Company or the Operating Partnership, or (iii) the
liquidation of the Company or the Operating Partnership. Notwithstanding the
foregoing, a "change in control" will not be deemed to have occurred in the
event of the sale of the Operating Partnership's assets to the Company or the
merger of the Operating Partnership into the Company if no change in control of
the Company occurs as a result. Upon the payment of a fee in the event of a
change in control, the contracts will be terminated.
To date, the Operating Partnership has not paid such a consulting fee to
Roberts Properties, although the Roberts Companies will continue to be entitled
to receive such a fee upon the sale of any of the nine Communities in the
future.
Acquisition and Other Consulting Fees. In 1995 the Operating Partnership
paid fees and reimbursed costs to Roberts Properties in the total amount of
$253,000 in connection with: (i) construction and leasing administration
services at The Shoppes of River Oaks ($50,000); (ii) the sale of The Shoppes
of Crestmark ($28,000); (iii) the acquisition of Autumn Ridge ($125,000); and
(iv) the merger of Roberts Properties - St. Simons, Ltd. into the Operating
Partnership ($50,000). In 1996 the Operating Partnership paid fees and
reimbursed costs to Roberts Properties in the total amount of $226,000 in
connection with: (i) the transfer of the Crestmark loan ($15,000); (ii)
additional construction and leasing administration services at The Shoppes of
River Oaks ($10,000); (iii) the acquisition of additional property adjacent to
Preston Oaks ($21,000); and (iv) miscellaneous other tasks ($80,000). In 1996
the Operating Partnership
10
<PAGE> 14
also reimbursed Roberts Properties for payroll and other expenses of Roberts
Properties in connection with two consent solicitations as follows: $50,000
paid upon the closing of the Roberts Properties Bentley Place, L.P. merger in
March 1996, and $50,000 paid upon the closing of the The Crestmark Club, L.P.
merger in June 1996.
ACQUISITIONS OF SHARES AND UNITS BY MR. CHARLES S. ROBERTS
The following table describes how Mr. Roberts has acquired Shares and
Units since January 1, 1995:
<TABLE>
<CAPTION>
Type of Transaction Number of Shares Number of Units
------------------- ---------------- ---------------
<S> <C> <C>
Shares in the March 1995 Roberts Properties Holcomb Bridge,
L.P. merger for his general partner interest (valued at $8.50
per Share)............................................................ 71,310 -
Shares in the March 1995 merger for his limited partner
interests (valued at $8.50 per Share)................................ 1,206 -
Units in the May 1995 Roberts Properties Plantation Trace, L.P.
merger in lieu of out-of-state residents, for $9.00 per Unit in cash.. - 48,296
Units in the May 1995 merger for his general partner interest
(valued at $9.00 per Unit)............................................ - 43,548
Units in the May 1995 merger for his limited partner interest acquired
in a private nonissuer transaction (valued at $9.00 per Unit)......... - 2,917
Shares received in exchange for Units in June 1995...................... 78,038 (78,038)
Shares acquired by Roberts Properties in the June 1995 offering
of Shares for $8.28 per Share in cash................................. 2,625 -
Units in the September 1995 Roberts Properties-St. Simons, Ltd.
(Windsong) merger in lieu of out-of-state residents, for $9.25
per Unit in cash...................................................... - 29,086
Units in the September 1995 merger for his general partner
interest in the general partner (valued at $9.25 per Unit)............ - 23,914
Shares received in exchange for Units in December 1995.................. 29,086 (29,086)
Shares in the March 1996 Roberts Properties Bentley Place, L.P.
merger in lieu of out-of-state residents, for $9.50 per Share in cash. 23,659 -
Shares in the March 1996 merger for his general partner interest........ 17,465 -
Shares in a private nonissuer transaction in June 1996.................. 125 -
Units in the June 1996 The Crestmark Club, L.P. merger in lieu of
out-of-state residents, for $9.25 per Unit in cash.................... - 15,667
Units in the June 1996 merger for his limited partner interest acquired
in a private nonissuer transaction (valued at $9.75 per Unit)......... - 2,405
Units in the June 1996 merger for his general partner interest.......... - 44,509
Units in three private nonissuer transactions in June 1996.............. - 7,215
Shares received in exchange for Units in June 1996...................... 25,287 (25,287)
Shares transferred to an employee of Roberts Management as a bonus...... (181) -
Units received in the April 1997 Roberts Management merger for
his member interest................................................... - 551,650
</TABLE>
11
<PAGE> 15
Mr. Roberts paid a nominal amount for his general partner interests in the
various limited partnerships that have been merged into the Operating
Partnership (the "Community Partnerships"). The values in the merger
transactions referenced above were determined by Mr. Roberts based upon his
evaluation of the equity in each limited partnership in light of its debt and
his opinion regarding the value of its assets. (For an explanation of the
values used in the Roberts Management merger, see "April 1997 Merger of Roberts
Properties Management, L.L.C. into the Operating Partnership" below.) In each
instance, the Company's Board of Directors approved the valuation proposed by
Mr. Roberts, who abstained from voting as a director on each merger. A number
of the acquisitions of Shares or Units by Mr. Roberts in connection with
mergers of various Community Partnerships into the Operating Partnership
involved his payment of cash into escrow pursuant to the terms of the
applicable merger agreement to provide the funds needed to allocate cash,
rather than Shares or Units, to limited partners in the Community Partnerships
who were not residents of Georgia when the merger occurred. The cash paid by
Mr. Roberts equaled the applicable value per Share or Unit used in the merger
(except for the Crestmark merger, when a $.50 per Unit discount was applied),
and Mr. Roberts was allocated the Shares or Units, as applicable, that would
have been distributed to the out-of-state residents had they resided in
Georgia. This feature of each merger agreement was necessitated by the
reliance by the Company and the Operating Partnership upon the "intrastate"
exemption from securities registration provided under Section 3(a)(11) of the
Securities Act of 1933 and Rule 147 promulgated by the Securities and Exchange
Commission regarding intrastate offerings. For an offering to be exempt as an
intrastate offering, securities may not be sold to persons who do not reside in
the state in which the offering is being conducted.
12
<PAGE> 16
ACQUISITIONS OF SHARES AND UNITS BY OTHER DIRECTORS, OFFICER AND SIGNIFICANT
SECURITY HOLDERS
The following table summarizes the acquisitions of beneficial ownership of
Shares and Units from the Company and the Operating Partnership by directors
other than Mr. Roberts and by Mr. Charles R. Elliott, the other officer of the
Company, since January 1, 1995. Each such person acquired his or her Shares
and/or Units in connection with (a) the January 1995 acquisition of The Shoppes
of Crestmark by the Operating Partnership, (b) the March 1995 Holcomb Bridge
merger, (c) the May 1995 Plantation Trace merger, (d) the Company's offering of
Shares for $9.00 per Share in cash that was completed in August 1995, (e) the
September 1995 Windsong merger, (f) the March 1996 Bentley Place merger, (g)
the Company's offering of Shares for $9.50 per Share in cash that was completed
in May 1996 (the "Cash Offering"), (h) the June 1996 Crestmark merger, and/or
(i) as noted in the footnotes. Except for acquisitions of limited partnership
interests in private nonissuer transactions as noted below, each director paid
the same price for his limited partnership interests as all other holders of
limited partner interests in the Community Partnerships, and accordingly each
person received Shares and/or Units in the mergers on the same basis as any
other holder in such Community Partnerships.
<TABLE>
<CAPTION>
(a) Acquisition of (b) March 1995 (c) May 1995 (e) Sept. 1995 (f) March 1996
The Shoppes Holcomb Plantation (d) 1995 Cash Windsong Bentley
Individual(1) of Crestmark(2) Bridge Merger Trace Merger Offering Merger Place Merger
- -------------------- ------------------ -------------- ------------ ------------- -------------- --------------
Units Shares Units Shares Units Shares
------------------ -------------- ------------ ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
George W. Wray, Jr.* 33,768 26,251 18,925(3) 44,750(4) 2,957(4)
James M. Goodrich* 104,478 11,457 8,750 12,800 8,950 17,744(5)
Wm. Jarell Jones* - - 2,917(4)(6) - - -
Charles R. Elliott - - 2,917(4)(6) - - -
Ben A. Spalding* - - - - 12,231(7) 2,957(4)
Dennis H. James*(9) - - - - - 2,957(4)
<CAPTION>
(h) June 1996
(g) Cash Crestmark
Individual(1) Offering Merger
- -------------------- ---------- -------------
Shares Units
---------- -------------
<S> <C> <C>
George W. Wray, Jr.* 60,300(3) 16,835
James M. Goodrich* - 26,432(8)
Wm. Jarell Jones* - -
Charles R. Elliott 2,100(3) -
Ben A. Spalding* - -
Dennis H. James*(9) - -
</TABLE>
*Denotes individuals who are directors.
(1) For a description of the beneficial ownership of each person listed, see
"Do the Directors and executive officers have a financial interest in your
Company?" above.
(2) On January 31, 1995, the Operating Partnership acquired The Shoppes of
Crestmark, a 7,078 square foot retail center with service and retail tenants on
Thornton Road in Douglas County, Georgia. The seller was Goodrich Enterprises,
Inc., all of the stock of which was owned by Mr. James M. Goodrich, a director
of the Company; the stock of Goodrich Enterprises, Inc. is currently owned by
Mr. Goodrich; Penelope Goodrich, his wife; and their sons. The sales price was
$888,063, paid in the form of 104,478 Units in the Operating Partnership
(valued at $8.50 per Unit by negotiation between the Company and Mr. Goodrich).
Goodrich Enterprises, Inc. acquired the land on May 28, 1993 and completed
construction of the retail center in February 1994 with a total cost of
approximately $777,000. The retail center was subsequently sold for $940,000
on December 8, 1995.
(3) As a registered associate of Spalding & Company, Mr. Wray purchased Shares
net of the $.72 per Share and $.665 per Share broker-dealer commissions as
permitted under the terms of the 1995 offering of Shares at $9.00 per Share and
the Cash Offering, respectively. Mr. Elliott, as an employee of Roberts
Properties, similarly purchased Shares in the Cash Offering net of the $.665
per Share brokerage commission. Mr. Wray also acquired 1,400 Shares and 1,650
Units in private nonissuer transactions in August and September 1996,
respectively.
(4) Each individual acquired his limited partnership interest(s) in the
applicable Community Partnerships in a private nonissuer transaction.
(5) Mr. Goodrich acquired two and one half limited partnership interests in
Roberts Properties Bentley Place, L.P.'s original offering and in December 1995
acquired, jointly with his spouse, an additional one half limited partnership
interest in a private nonissuer transaction.
(6) In December 1995 and April 1996, respectively, each of Mr. Jones and Mr.
Elliott exchanged his Units for an equal number of Shares.
(7) Mr. Spalding was a limited partner in the general partner of Roberts
Properties-St. Simons, Ltd. ("St. Simons, Ltd."). In accordance with the
agreement and plan of merger for the merger of St. Simons, Ltd. into the
Operating Partnership, Mr. Spalding (a) received 5,519 Units for his limited
partnership interest in the general partner (for which he paid only a nominal
amount) and (b) purchased 6,712 Units in lieu of the purchase of such Units by
out-of-state limited partners of St. Simons, Ltd., for which Units he paid cash
in the amount of $9.25 per Unit, the value used in the merger.
(8) Mr. and Mrs. Goodrich received 4,810 Units for the two limited partnership
interests they jointly held in The Crestmark Club, L.P., for which interests
they paid the same amount per interest as all other limited partners in The
Crestmark Club, L.P. In addition, Mr. and Mrs. Goodrich acquired an additional
21,622 Units by paying $200,004 in cash ($9.25 per Unit). Such cash was
allocated to out-of-state limited partners in the merger, and Mr. and Mrs.
Goodrich exchanged the 21,622 Units for an equal number of Shares on June 28,
1996.
(9) In July 1996 Mr. James exchanged 2,917 Units for an equal number of
Shares.
<PAGE> 17
LAND SALE
On July 21, 1995, the Operating Partnership paid Roberts Properties
$445,485 to purchase 12.33 acres of undeveloped property adjacent to the
Plantation Trace Community for the development of a second phase of Plantation
Trace. The purchase price was proposed by Mr. Roberts to the Company's Board
of Directors, which approved the transaction with Mr. Roberts abstaining from
voting as a director.
COMPENSATION TO SPALDING & COMPANY
Ben A. Spalding, one of the Company's directors, owns all of the
outstanding stock of Spalding & Company, an NASD member broker-dealer that has
participated as the distributor or solicitation agent in numerous offerings by
affiliates of Mr. Roberts, including the Company and the Operating Partnership.
The Operating Partnership has paid the following compensation to Spalding &
Company since January 1, 1995:
<TABLE>
<CAPTION>
Amount of Compensation Date of Closing of
Offering/Solicitation to Spalding & Company Offering/Solicitation
- ------------------------------ ------------------------- ---------------------
<S> <C> <C>
Solicitation for March 1995
Holcomb Bridge merger $ 44,000 3/24/95
Solicitation for May 1995
Plantation Trace merger $ 40,000 5/16/95
1995 cash offering of
Shares $ 491,760 8/25/95
Solicitation for September
1995 Windsong merger $ 20,000 9/27/95
----------
Subtotal for 1995 $ 595,760
----------
Solicitation for March 1996
Bentley Place merger $ 25,000 3/21/96
1995-1996 cash offering of
Shares $ 411,870 3/29/96 and 5/7/96
Solicitation for June 1996
Crestmark merger $ 50,000 6/26/96
----------
Subtotal for 1996 $ 486,870
----------
Total $1,082,630
==========
</TABLE>
COMPENSATION TO SHOPTAW-JAMES, INC.
Dennis H. James, a Director of the Company, is President and a Director of
Shoptaw-James, Inc., a commercial mortgage banking firm that has originated
loans for the Company and its Predecessors. Specifically, Shoptaw-James, Inc.
received the following fees in the months noted: $87,110 for the refinancing of
Preston Oaks (September 1995); $46,780 for the refinancing of Highland Park
(January 1996); $37,500 for the loan secured by Autumn Ridge (March 1996);
$30,750 for the loan secured by Bentley Place (August 1996); $69,375 for the
refinancing of River Oaks (October 1996); and $48,150 for the loan secured by
Ivey Brook (January 1997).
14
<PAGE> 18
MARCH 1995 MERGER OF ROBERTS PROPERTIES HOLCOMB BRIDGE, L.P. INTO THE OPERATING
PARTNERSHIP
On March 24, 1995, Roberts Properties Holcomb Bridge, L.P. ("Holcomb
Bridge, L.P.") was merged into the Operating Partnership in exchange for
609,873 Shares valued at $8.50 per Share ($5,183,921 in the aggregate).
Holcomb Bridge, L.P. had raised a total of $4,400,000 in equity, purchased land
for the development of Holcomb Bridge, and obtained development plans. The
value was determined by Mr. Roberts based upon his evaluation of the equity of
Holcomb Bridge, L.P. in light of his opinion regarding the value of its assets.
The Company's Board of Directors approved the valuation proposed by Mr.
Roberts, who abstained from voting as a director on the merger. The
transaction received the consent of 98% of the limited partners of Holcomb
Bridge, L.P. Mr. Roberts received 71,310 Shares for his general partner
interest in Holcomb Bridge, L.P., and certain other persons received Shares as
described in "Acquisitions of Shares and Units by Other Directors, Officer and
Significant Security Holders."
MAY 1995 MERGER OF ROBERTS PROPERTIES PLANTATION TRACE, L.P. INTO THE OPERATING
PARTNERSHIP
On May 16, 1995, Roberts Properties Plantation Trace, L.P. ("Plantation
Trace, L.P.") was merged into the Operating Partnership in exchange for 597,741
Units of the Operating Partnership valued at $9.00 per Unit ($5,379,669 in the
aggregate). The value used in the merger was determined by Mr. Roberts based
upon his evaluation of the equity of Plantation Trace, L.P. in light of its
debt and his opinion regarding the value of its assets. The Company's Board of
Directors approved the valuation proposed by Mr. Roberts, who abstained from
voting as a director on the merger. The transaction received the consent of
96% of the limited partners of Plantation Trace, L.P. Mr. Roberts received
43,548 Units for his general partner interest in Plantation Trace, L.P., and
certain other persons received Units as described in "Acquisitions of Shares
and Units by Other Directors, Officer and Significant Security Holders."
SEPTEMBER 1995 MERGER OF ROBERTS PROPERTIES-ST. SIMONS, LTD. INTO THE OPERATING
PARTNERSHIP
On September 27, 1995, Roberts Properties-St. Simons, Ltd. ("St. Simons,
Ltd.") was merged into the Operating Partnership in exchange for 476,931 Units
valued at $9.25 per Unit ($4,411,612 in the aggregate). The value used in the
merger was determined by Mr. Roberts based upon his evaluation of the equity of
St. Simons, Ltd. in light of its debt and his opinion regarding the value of
its assets. The Company's Board of Directors approved the valuation proposed
by Mr. Roberts, who abstained from voting as a director on the merger. The
transaction received the consent of 98% of the limited partners of St. Simons,
Ltd. Mr. Roberts received 23,914 Units for his general partner interest in the
general partner of St. Simons, Ltd., and certain other persons received Units
as described in "Acquisitions of Shares and Units by Other Directors, Officer
and Significant Security Holders."
MARCH 1996 MERGER OF ROBERTS PROPERTIES BENTLEY PLACE, L.P. INTO THE OPERATING
PARTNERSHIP
On March 21, 1996, Roberts Properties Bentley Place, L.P. ("Bentley Place,
L.P.") was merged into the Operating Partnership in exchange for 744,940 Shares
valued at $9.50 per Share or $7,076,930 in the aggregate. The value used in
the merger was determined by Mr. Roberts based upon his evaluation of the
equity of Bentley Place, L.P. in light of its obligations and his opinion
regarding the value of its assets. The Company's Board of Directors approved
the valuation proposed by Mr. Roberts, who abstained from voting as a director
on the merger. The transaction received the consent of 87% of the limited
partners of Bentley Place, L.P. Mr. Roberts received 17,465 Shares for his
general partner interest in Bentley Place, L.P., and certain other persons
received Shares as described in "Acquisitions of Shares and Units by Other
Directors, Officer and Significant Security Holders."
15
<PAGE> 19
JUNE 1996 MERGER OF THE CRESTMARK CLUB, L.P. INTO THE OPERATING PARTNERSHIP
On June 26, 1996, The Crestmark Club, L.P. ("Crestmark, L.P.") was merged
into the Operating Partnership in exchange for 746,715 Units valued at $9.75
per Unit or $7,280,471 in the aggregate. The Operating Partnership thereby
acquired the 248-unit Crestmark Community and 8.8 acres of adjacent undeveloped
property on which the Company intends to build an 86-unit second phase of
Crestmark. The 8.8 acre tract of undeveloped land adjacent to Crestmark was
encumbered by a second priority secured loan owed to Mr. Roberts in the amount
of $1,410,092. Crestmark, L.P. also owed $121,423 to Roberts Construction for
change orders from the original construction of Crestmark and $28,077 to
another affiliate of Mr. Roberts for reimbursement of certain costs. The
Operating Partnership assumed these obligations in the merger and repaid them
upon the closing of the merger.
Mr. Roberts received 44,509 Units for his general partner interest in
Crestmark, L.P., for which he paid only a nominal amount, and he received
another 15,667 Units for which he paid $144,920 in cash ($9.25 per Unit); such
cash was allocated to out-of-state limited partners in the merger. Mr. Roberts
also received 2,405 Units in the merger for a limited partnership interest he
acquired in a private nonissuer transaction. Certain other persons received
Units as described in "Acquisitions of Shares and Units by Other Directors,
Officer and Significant Security Holders."
APRIL 1997 MERGER OF ROBERTS PROPERTIES MANAGEMENT, L.L.C. INTO THE OPERATING
PARTNERSHIP
On April 1, 1997, the Company acquired Roberts Management, the property
management company that has managed the Company's multifamily apartment
communities since the Company's inception. The Company presently owns 11
multifamily apartment communities containing a total of 2,194 apartment homes,
317 of which are under construction or development. The Company's independent
Directors (Messrs. Goodrich, Wray, Jones and James) determined that it was in
the best long-term interests of the Company to manage its own communities.
Because Roberts Management had provided high quality property management
services to the Company, the independent Directors negotiated with Mr. Roberts
to purchase Roberts Management. The Company will now internally manage its
properties using Roberts Management's property management expertise and
systems, and the 45 property management personnel formerly employed by Roberts
Management. The Company will no longer have to pay 5% of gross property
revenues to Roberts Management for property management services.
The Operating Partnership issued a total of 590,000 Units valued at $10.00
per Unit or $5,900,000 to purchase Roberts Management. The purchase price was
negotiated between Mr. Roberts (for Roberts Management) and the Company's
independent Directors. The independent Directors took into account, among
other factors:
- the cash flow savings to the Company of approximately $140,000 per
year, which will increase over time as more Communities are added to
the Company's portfolio;
- a valuation of Roberts Management by an independent valuation firm;
- the high quality of management services historically provided by
Roberts Management;
- the value of continuity in those services; and
- advice from investment banking firms that the Company should become
internally managed before the Common Stock is listed on an exchange.
16
<PAGE> 20
The $10.00 per Unit value, which is the highest price paid to date for the
Company's securities, was determined by the independent Directors. The
independent Directors considered the following factors, among others:
- their belief that the Company's liquidation value was equal to
$10.34 per Unit;
- the Company's historical practice of issuing securities at a
discount to current liquidation value; and
- the Company's historical practice of issuing securities at
increasingly higher prices as the liquidation value has increased.
The acquisition was structured as a merger of Roberts Management into the
Operating Partnership, the limited partnership through which the Company owns
its properties and conducts its business. (The Company now owns a 55.4%
interest in the Operating Partnership and is its sole general partner.) Of the
590,000 Units issued in the merger, Mr. Roberts received 551,650 Units, and
twelve other employees of Roberts Management received 38,350 Units that are
subject to certain repurchase options held by Mr. Roberts which are exercisable
upon the holder's cessation of employment by the Operating Partnership (which
has subordinate repurchase options that are exercisable if Mr. Roberts fails to
exercise his option in any instance). The number of Units subject to such
options gradually declines to zero over a seven year period from the date each
holder acquired his or her member interest in Roberts Management. No cash or
consideration other than Units was paid in connection with the merger.
In April 1995, Roberts Properties Management, Inc. was selected as the
Property Management Company of the Year by the National Association of Home
Builders' National Council of the Multifamily Industry.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
persons who own beneficially more than 10% of the Company's outstanding Common
Stock to file with the Securities and Exchange Commission (the "SEC") initial
reports of ownership and reports of changes in their ownership of the Company's
Common Stock. Directors, executive officers and greater than 10% shareholders
are required by SEC regulations to furnish the Company with copies of the forms
they file. To the Company's knowledge, based solely on a review of the copies
of such reports furnished to the Company, during the fiscal year ended December
31, 1996, its directors, executive officers and greater than 10% shareholders
complied with all applicable Section 16(a) filing requirements.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
SOLICITED, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S 1996
ANNUAL REPORT ON FORM 10-KSB, INCLUDING THE FINANCIAL STATEMENTS AND THE
FINANCIAL STATEMENT SCHEDULES, REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. SUCH REQUEST SHOULD BE DIRECTED TO CHARLES R. ELLIOTT,
SECRETARY AND CHIEF FINANCIAL OFFICER, 8010 ROSWELL ROAD, SUITE 120, ATLANTA,
GEORGIA 30350. THE COMPANY WILL PROVIDE A COPY OF THE EXHIBITS TO SUCH REPORT
UPON REQUEST BUT WILL REQUIRE THE PAYMENT OF $250 FOR THE COMPANY'S EXPENSES IN
COPYING THE APPROXIMATELY 1,400 PAGES OF EXHIBITS.
17
<PAGE> 21
APPENDIX A
ROBERTS REALTY INVESTORS, INC.
8010 ROSWELL ROAD, SUITE 120, ATLANTA, GEORGIA 30350
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS, MAY 27, 1997
The undersigned hereby appoints Charles R. Elliott and Pamela J. Hallmark,
and each of them, proxies, with full power of substitution, for and in the name
or names of the undersigned, to vote all shares of Common Stock of Roberts
Realty Investors, Inc. held of record by the undersigned at the Annual Meeting
of Shareholders to be held on Tuesday, May 27, 1997, at 10:00 a.m., E.D.T., at
the Crowne Plaza Ravinia, 4355 Ashford-Dunwoody Road, Atlanta, Georgia 30346,
and at any adjournment thereof, upon the matter described in the accompanying
Notice of Annual Meeting and Proxy Statement, receipt of which is hereby
acknowledged, and upon any other business that may properly come before, and
matters incident to the conduct of, the meeting or any adjournment thereof. Said
persons are directed to vote on the matter described in the Notice of Annual
Meeting and Proxy Statement as follows, and otherwise in their discretion upon
such other business as may properly come before, and matters incident to the
conduct of, the meeting and any adjournment thereof:
<TABLE>
<S> <C> <C>
1. Proposal to elect the nominees listed to the right: NOMINEES: Charles S. Roberts, James M. Goodrich
[ ] FOR: nominees listed at right (except as indicated [ ] WITHHOLD authority to vote for both nominees
to the contrary below)
</TABLE>
INSTRUCTIONS: To withhold authority to vote for an individual nominee, write the
applicable name in the space provided below:
- --------------------------------------------------------------------------------
(Continued and to be signed on the reverse side)
(Continued from front)
Please sign and date this proxy as your name appears below and return
immediately in the enclosed envelope, whether or not you plan to attend the
Annual Meeting.
THIS PROXY WILL BE VOTED AS
DIRECTED OR, IF NO DIRECTION IS
INDICATED, WILL BE VOTED "FOR"
THE STATED PROPOSAL.
--------------------------------
Signature of Shareholder
--------------------------------
Signature if held jointly
Dated:
, 1997
------------------------
IMPORTANT: If shares are jointly owned, both owners should sign. If signing as
attorney, executor, administrator, trustee, guardian or other person signing in
a representative capacity, please give your 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.
