U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K/A
AMENDMENT NO. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1999.
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________ to _________.
Commission file number 001-13183
Roberts Realty Investors, Inc.
-------------------------------
(Name of small business issuer in its charter)
Georgia 58-2122873
- -------------------------------------------- --------------------------------
(State or Other Jurisdiction of Incorporation
or Organization) (I.R.S. Employer Identification No.)
8010 Roswell Road, Suite 120
Atlanta, GA 30350
- ----------------------------------------------------- --------
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number: (770) 394-6000
Securities registered under Section 12(b) of the Act: None
Title of each class: Name of each exchange on which
------------------- --------------------------------------
N/A registered:
----------
N/A
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
----------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |X|
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates of the registrant. The aggregate market value
shall be computed by reference to the price at which the common equity was sold,
or the average bid and asked prices of such common equity, as of a specified
date within 60 days prior to the date of this filing. (See definition of
affiliate in Rule 405.)
$25,594,981
Note: If a determination as to whether a particular person or entity is
an affiliate cannot be made without involving unreasonable effort and expense,
the aggregate market value of the common stock held by non-affiliates may be
calculated on the basis of assumptions reasonable under the circumstances,
provided that the assumptions are set forth in this Form.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. 4,885,421 shares of
common stock (as of March 31, 2000)
Documents Incorporated by Reference. None.
<PAGE>
The registrant hereby amends its annual report on Form 10-K for the
year ended December 31, 1999 by deleting the text under Part III, Items 10-13
and replacing it with the following:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Directors and Executive Officers
Charles S. Roberts, age 53, a director since July 1994, is our Chairman
of the Board, Chief Executive Officer and President. Mr. Roberts' term as a
director expires at the 2000 annual meeting of shareholders. 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.
In October 1970, Mr. Roberts established Roberts Properties, Inc. to
develop, construct and manage real estate. Beginning in 1985, Mr. Roberts and
Roberts Properties began to focus on developing upscale 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. On a regional level, Roberts Properties was
awarded the prestigious Southeast Builders Conference Aurora Award for the best
rental apartment community eight out of nine years during the period 1988
through 1996. On a national level, Roberts Properties was awarded the
prestigious Pillars of the Industry Award from the National Association of Home
Builders for the best low-rise apartments in 1991 and 1992. In 1993, Roberts
Properties was awarded the coveted Golden Aurora Award for best overall
development in the Southeast.
James M. Goodrich, age 59, a director since October 1994, is a
consulting engineer and private investor. Dr. Goodrich's term expires at the
2000 annual meeting of shareholders. Dr. Goodrich is a director of the North
American Electric Reliability Council, whose mission is to promote the
reliability of the electricity supply for North America. 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.
Wm. Jarell Jones, age 51, a director since October 1994, is an attorney
and has practiced law with the firm of Wm. Jarell Jones, P.C., in Statesboro,
Georgia since November 1993. Mr. Jones' term expires at the 2002 annual meeting
of shareholders. 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 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 the Chief Executive Officer of JQUAD,
Inc., a family owned holding company of timber, farming, and development
interests. Mr. Jones was a former director for six years and the former Chairman
for two years of the Downtown Statesboro Development Authority.
Ben A. Spalding, age 65, a director since October 1994, is Executive
Vice President of DHL International, Inc., an executive search firm. Mr.
Spalding was the sole shareholder of Spalding & Company, a former NASD member
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broker-dealer that served from 1980 to 1996 as the exclusive broker-dealer for
limited partnerships sponsored by Mr. Roberts. Mr. Spalding's term expires at
the 2001 annual meeting of shareholders. Mr. Spalding served as President of
Spalding & Company from 1980 until 1994. 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 63, a director since February 1995, is a
private investor and Senior Partner of the Wray Partnership, a family investment
group. Mr. Wray's term expires at the 2001 annual meeting of shareholders. 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. From the July 1993 acquisition of International Silver
Company by World Crisa Corporation (a division of Vitro S.A.) through September
1997, Mr. Wray was an independent sales agent for the successor organization.
Mr. Wray also served as a Vice President of Spalding & Company, an NASD
registered broker-dealer, from 1991 to 1997 and was a registered associate of
Spalding & Company from 1983 to 1997. Mr. Wray holds a bachelor's degree in
Industrial Relations from the University of North Carolina at Chapel Hill and
serves as an elder of the Peachtree Presbyterian Church in Atlanta.
Dennis H. James, age 53, a director since June 1995, is Executive Vice
President of L. J. Melody & Company (formerly Shoptaw-James, Inc.), a commercial
mortgage banking firm. Mr. James' term expires at the 2002 annual meeting of
shareholders. 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
Executive Vice President of L. J. Melody & Company, he is responsible for the
Southeast Region's overall production and investor relations. He has served on
both the Allstate Life Insurance Company Correspondent Advisory Council and
State Farm Life Insurance 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.
Weldon R. Humphries, age 62, a director since February 1998, is a
private investor. Mr. Humphries' term expires at the 2001 annual meeting of
shareholders. Mr. Humphries recently retired from a distinguished twenty-year
career with Manor Care, Inc. (NYSE: MNR), where he was employed from January
1978 to November 1997 as Senior Vice President responsible for asset management,
acquisitions and development, and with Choice Hotels International, Inc. (NYSE:
CHH), where he served as Senior Vice-President responsible for asset management,
acquisitions and development from November 1997 to January 1998. Mr. Humphries
began his career as a senior mortgage analyst with Connecticut General Life
Insurance Company and later worked for Arvida Corporation, where he was
responsible for all real estate financing, development and marketing. Mr.
Humphries has a BBA in Marketing from the University of Houston and an MBA in
Finance from the University of Hartford. He also served as an officer in the
United States Marine Corps.
Charles R. Elliott, age 46, Roberts Realty's Secretary and Treasurer
since its inception, is our Chief Financial Officer and has served in that
capacity since April 1995. Mr. Elliott also served as a director of Roberts
Realty 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.
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<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Roberts
Realty's directors and executive officers and persons who own beneficially more
than 10% of our outstanding common stock to file with the SEC initial reports of
ownership and reports of changes in their ownership of our common stock.
Directors, executive officers and greater than 10% shareholders are required by
SEC regulations to furnish us with copies of the forms they file. To our
knowledge, based solely on a review of the copies of such reports furnished to
us, during the fiscal year ended December 31, 1999, our directors, executive
officers and greater than 10% shareholders complied with all applicable Section
16(a) filing requirements.
ITEM 11. EXECUTIVE COMPENSATION.
Compensation of Executive Officers
Roberts Realty's executive officers are Mr. Charles S. Roberts, our
Chairman of the Board, Chief Executive Officer and President, and Mr. Charles R.
Elliott, our Secretary and Treasurer since inception and our Chief Financial
Officer since April 1995. Mr. Roberts and Mr. Elliott are our "named executive
officers."
Summary Compensation Table
Annual Compensation
---------------------------------------
Name and Principal Position Year Salary ($) Bonus ($)
--------------------------- ---- ---------- ---------
Charles S. Roberts 1999 150,000 0
Chairman of the Board, Chief 1998 155,769 0
Executive Officer, and President 1997 129,857 0
Charles R. Elliott 1999 101,577 30,000
Secretary, Treasurer and 1998 93,642 30,000
Chief Financial Officer 1997 75,000 38,500
We are not a party to any employment agreements. Certain fees and other
payments are payable to affiliates of Mr. Roberts under various agreements and
arrangements. See "Part III, Item 13, Certain Relationships and Related
Transactions - Payments to the Roberts Companies."
Compensation of Directors
We pay our directors who are not officers of Roberts Realty fees for
their services as directors. Mr. Roberts, who is the only director who is an
officer, is not paid any director fees. Non-officer directors receive an annual
fee of $12,000 for attendance, in person or by telephone, at meetings of the
Board of Directors. In addition, we reimburse our directors for reasonable
travel expenses and out-of-pocket expenses incurred in connection with their
activities on our behalf.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors is composed of Mr.
Humphries, Mr. James and Mr. Jones. None of them was during 1999, or at any
previous time, an officer or employee of Roberts Realty or Roberts Properties
Residential, L.P.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table describes the beneficial ownership of shares of our
common stock as of March 31, 1999 for
o each person or entity known by us to be the beneficial owner of more
than 5% of the outstanding shares of common stock,
o each director and each of our named executive officers, and
o our directors and executive officers as a group.
Except as noted in the footnotes, the person owns all shares and partnership
units directly and has sole voting and investment power. Each of the persons
known by us to beneficially own more than 5% of the common stock has an address
in care of our principal office. The Number of Shares Owned column in the table
includes the shares owned by the persons named but does not include shares they
may acquire by exchanging units of partnership interest in Roberts Properties
Residential, L.P., our operating partnership, for shares of common stock as
explained in the following paragraph. The Number of Units Beneficially Owned
column in the table reflects all shares that each person has the right to
acquire by exchanging units for shares. Under SEC rules, the shares that can be
acquired in exchange for units are deemed to be outstanding and to be
beneficially owned by the person or group holding those units when computing the
percentage ownership of that person or group, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other person or
group.
Except as described in this paragraph, unitholders generally have the
right to require the operating partnership to redeem their units. Our articles
of incorporation limit ownership by any one holder to 6% of our outstanding
shares, other than by Mr. Roberts, who is limited to 25%. Accordingly, a
unitholder cannot redeem units if upon their redemption he would hold more
shares than permitted under the applicable percentage limit. Given the total
number of shares and units they own, each of Mr. Roberts, Dr. Goodrich and Mr.
Wray may be unable to redeem all the units they own unless and until other
unitholders redeem a sufficient number of units to cause the number of
outstanding shares of common stock to be increased to a level sufficient to
permit their redemption. A unitholder who submits units for redemption will
receive, at our election, either (a) an equal number of shares or (b) cash in
the amount of the average of the daily market prices of the common stock for the
10 consecutive trading days before the date of submission multiplied by the
number of units submitted. Our policy is to issue shares in exchange for units
submitted for redemption.
<TABLE>
<CAPTION>
Number of
Number of Units
Name of Shares Beneficially Percent of
Beneficial Owner Owned Owned Total Class(1)
- ---------------- --------- ------------ ----- ----------
<S> <C> <C> <C> <C>
Charles S. Roberts(2) 692,035 738,012 1,430,047 25.4%
George W. Wray, Jr.(3) 258,768 134,537 393,305 7.8
James M. Goodrich(4) 258,651 54,910 313,561 6.3
Ben A. Spalding(5) 25,252 27,318 52,570 1.1
Dennis H. James 44,796 2,405 47,201 1.0
Wm. Jarell Jones 3,917 0 3,917 *
Weldon R. Humphries(6) 38,000 0 38,000 *
Charles R. Elliott 10,000 0 10,000 *
All directors and executive officers
as a group: (8 persons)(7) 1,331,419 957,182 2,288,601 39.2%
- ------------------------------
*Less than 1%.
</TABLE>
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(1) The total number of shares outstanding used in calculating this percentage
is 4,885,421, the number of shares outstanding as of March 31, 2000.
(2) Includes 2,744 shares owned by Mr. Roberts' minor daughter. A trust for
his minor daughter of which he is the sole trustee owns 29,500 units.
(3) Includes 224,953 shares owned by a partnership, over which shares Mr. Wray
has voting and investment power as the managing partner of such partnership;
27,257 shares owned by his wife and 5,058 shares owned by a trust of which she
is a co-trustee. Mr. Wray disclaims beneficial ownership of the 27,257 shares
owned by Mrs. Wray and 5,058 shares owned by a trust of which she is a
co-trustee. The partnership previously referenced owns 109,868 units, and Mr.
Wray owns 2,917 units jointly with his daughter, over which units he shares
voting and investment power.
(4) Includes: 110,507 shares owned jointly by Dr. Goodrich and his wife; 108,478
shares owned by Goodrich Enterprises, Inc., all of the outstanding shares of
which are owned by Dr. and Mrs. Goodrich and their sons; and 24,879 shares owned
by a trust for the benefit of a son of Dr. and Mrs. Goodrich and of which Mrs.
Goodrich is trustee. Dr. Goodrich's beneficial ownership of units includes
48,075 units owned jointly by Dr. and Mrs. Goodrich and 6,835 units owned by a
trust for the benefit of a son of Dr. and Mrs. Goodrich of which Mrs. Goodrich
is trustee. Dr. Goodrich disclaims beneficial ownership of the units and shares
owned by the trust.
(5) Includes 7,564 shares owned by partnerships of which Mr. Spalding's wife is
the managing partner. Mr. Spalding's beneficial ownership of units includes
2,917 units owned by Mrs. Spalding and 24,401 units owned by partnerships of
which Mrs. Spalding is the managing partner. Mr. Spalding disclaims beneficial
ownership of all units and shares owned by his wife or partnerships of which she
is the managing partner.
(6) Owned by a trust of which Mr. Humphries is a co-trustee along with his
spouse.
(7) Includes 256,985 shares and 50,992 units as to which directors share voting
and investment power with another family member; also includes an aggregate of
64,758 shares and 34,153 units beneficially owned by three directors' wives, as
to which shares such directors disclaim beneficial ownership.
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
General
Roberts Realty conducts its business through Roberts Properties
Residential, L.P., which we refer to as the operating partnership; owns a 66.0%
interest in it; and is its sole general partner. Mr. Charles S. Roberts owns all
or substantially all of the outstanding shares of both Roberts Properties, Inc.
and Roberts Properties Construction, Inc., which we refer to together as the
Roberts Companies. These companies perform certain services for us as explained
below. Notes 1 and 9 to our Consolidated Financial Statements provide further
detail regarding some of the transactions described in this section.
Payments to the Roberts Companies
Overview. We have 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.
Development Fees. From time to time we pay Roberts Properties fees for
various development services that include market studies, business plans,
design, finish selection, interior design and construction administration. The
operating partnership will pay Roberts Properties a fee of $1,595,000, or $5,000
per unit, for designing, developing, and overseeing construction of our 319-unit
Ballantyne community now under construction in Charlotte, North Carolina.
Through December 31, 1999, Roberts Realty had incurred $1,063,000 of the
$1,595,000 development fees. The operating partnership will pay Roberts
Properties a fee of $2,015,000, or $5,000 per unit, for designing, developing,
and overseeing construction our 403-unit Addison Place project in Atlanta,
Georgia. Through December 31, 1999, Roberts Realty had incurred $1,540,000 of
the $2,015,000 development fees. The operating partnership will pay Roberts
Properties a fee of $1,245,000, or $5,000 per unit, for designing, developing,
and
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overseeing construction of our 249-unit Old Norcross project in Gwinnett County,
Georgia.
Construction Contracts. Roberts Realty enters into contracts in the
normal course of business with Roberts Properties Construction, Inc. ("Roberts
Construction"), an affiliate of Roberts Realty owned by Mr. Roberts.
Ballantyne. We have entered into a cost plus 10% contract with
Roberts Construction for construction of our Ballantyne community. Roberts
Construction started construction of the Ballantyne community in the fourth
quarter of 1999, and we have paid Roberts Construction $125,000 through March
31, 2000 for its initial work on the project. Roberts Construction intends to
hire a third-party general contractor to complete construction of the community,
and Roberts Construction will continue to oversee the project. We are working on
finalizing the estimate of the total cost of the project.
Old Norcross. We have entered into a cost plus 10% contract
with Roberts Construction for construction of our Old Norcross community.
Through March 31, 2000, we paid Roberts Construction $65,000 for its initial
work on the Old Norcross project. We are working on finalizing the estimate of
the total cost of the project.
Other Communities. The following table summarizes certain
information regarding payments to Roberts Construction for other construction
projects through March 31, 2000. Under all of these contracts, we pay Roberts
Construction its cost, plus a fee of 10% of its cost.
<TABLE>
<CAPTION>
Actual/ Amount
Estimated Incurred Estimated
Total Total From Remaining
Contract Amount 1/1/1999 to Contractual
Amount Incurred 3/31/2000 Commitment
---------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Addison Place - Phase I $ 9,647,000 $ 9,375,000 $8,370,000 $ 272,000
Addison Place - Phase II 20,605,000 2,724,000 2,724,000 17,881,000
Plantation Trace - Phase II 4,908,000 4,908,000 395,000 0
----------- ----------- ---------- ----------
$35,160,000 $17,004,000 $6,978,000 $18,153,000
=========== =========== ========== ==========
</TABLE>
We paid Roberts Construction $420,000 in 1999 for labor and materials
to perform repairs and maintenance for our communities.
Partnership Profits Interest. Between 1994 and 1996, the operating
partnership acquired nine limited partnerships of which Mr. Roberts was the sole
general partner. Each partnership owned an apartment community that had been
developed or was in the development process. As a part of each acquisition, the
operating partnership assumed an existing financial obligation to an affiliate
of Mr. Roberts. That financial obligation has been formalized as a profits
interest in the operating partnership. As the holder of the profits interest,
Roberts Properties may receive distributions in certain circumstances. Upon a
sale of any of the acquired properties, Roberts Properties will receive a
distribution of a specified percentage of the gross sales proceeds, or, in the
case of the Crestmark Phase II land, a maximum amount of $86,775. Upon a change
in control of Roberts Realty or the operating partnership, Roberts Properties
will receive a distribution of the applicable percentages of the fair market
value of each of the properties, or in the case of the Crestmark Phase II land,
up to the maximum amount. The amount to be distributed to Roberts Properties
with respect to each affected property will be limited to the amount by which
the gross proceeds from the sale of that property, or, in connection with a
change in control, its fair market value, exceeds the sum of:
o the debt assumed, or taken subject to, by the operating partnership
in connection with its acquisition of the property;
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o the equity issued by the operating partnership in acquiring the
property; and
o all subsequent capital improvements to the property made by the
operating partnership.
The percentages which apply to the sales proceeds, or fair market
value, of the affected properties are shown in the following table:
River Oaks 5%
Rosewood Plantation 5%
Preston Oaks Phase I 5%
Highland Park 5%
Ivey Brook 5%
Crestmark Phase I 5%
Plantation Trace Phase I 6%
In the case of the Crestmark Phase II land, the maximum amount would be
$86,775.
If Roberts Realty exercises its option to acquire all of the
outstanding units for shares, it must simultaneously purchase the profits
interest for cash in the amount the holder of that interest would receive if a
change in control occurred at that time.
Except for units and the partnership profits interest related to the
original nine limited partnerships acquired between 1994 and 1996, no
partnership interests have been, or are presently expected to be, issued or
assumed by the operating partnership.
During 1999, we made a profits interest distribution of $242,000 to
Roberts Properties.
Other Fees. During 1999, we paid affiliates of Mr. Roberts
miscellaneous fees and cost reimbursements totaling $242,000.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this Amendment No. 1 to annual report on Form 10-K to be
signed on its behalf by the undersigned, thereunto duly authorized.
ROBERTS REALTY INVESTORS, INC.
By: /s/ Charles R. Elliott
--------------------------------------------------------------
Charles R. Elliott, Chief Financial Officer
(The Registrant's Principal Financial and Chief
Accounting Officer, who is duly authorized to sign this report)
Date: May 1, 2000
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