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
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CNL American Realty Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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, of
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
CNL AMERICAN REALTY FUND, INC.
400 East South Street
Orlando, Florida 32801
March 9, 1998
To our stockholders:
You are cordially invited to attend the annual meeting of stockholders
of CNL American Realty Fund, Inc., (the "Company") on May 4, 1998 at 1:00 p.m.
at the CNL Management Center at 450 E. South Street, Suite 101, Orlando,
Florida. The directors and officers of the Company look forward to greeting you
personally. Enclosed for your review are the proxy, proxy statements, notice of
meeting for the annual meeting of stockholders and annual report.
This year's proxy requests your vote on a proposal to change the name
of the Company, and to vote for election of directors. The proposal for the name
change reflects the Board's desire to provide better name recognition of the
Company in the context of its business. Therefore, the Board of Directors
unanimously recommends that you vote to approve the proposals presented in this
year's proxy statement. Your vote counts. Please complete and return the
attached ballot today. Thank you for your attention to this matter.
Sincerely,
/s/ James M. Seneff, Jr. /s/ Robert A. Bourne
- --------------------------- ------------------------
James M. Seneff, Jr. Robert A. Bourne
Chairman of the Board and President
Chief Executive Officer
<PAGE>
CNL AMERICAN REALTY FUND, INC.
400 East South Street
Orlando, Florida 32801
Notice of Annual Meeting of Stockholders
To Be Held May 4, 1998
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of CNL
AMERICAN REALTY FUND, INC. (the "Company") will be held at 1:00 p.m. local time,
on May 4, 1998, at the CNL Management Center at 450 E. South Street, Suite 101,
Orlando, Florida, for the following purposes:
1. To elect five directors.
2. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation changing the name of the Company to
CNL Hospitality Properties, Inc.
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Stockholders of record at the close of business on February 20, 1998,
will be entitled to notice of and to vote at the annual meeting or at any
adjournment thereof.
Stockholders are cordially invited to attend the meeting in person.
WHETHER OR NOT YOU NOW PLAN TO ATTEND THE MEETING, YOU ARE ASKED TO
COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY CARD FOR WHICH A
POSTAGE PAID RETURN ENVELOPE IS PROVIDED. IT IS IMPORTANT THAT YOUR SHARES BE
VOTED. IF YOU DECIDE TO ATTEND THE MEETING YOU MAY REVOKE YOUR PROXY AND VOTE
YOUR SHARES IN PERSON.
By Order of the Board of Directors,
Lynn E. Rose
Secretary
March 9, 1998
Orlando, Florida
<PAGE>
CNL AMERICAN REALTY FUND, INC.
400 East South Street
Orlando, Florida 32801
----------------------------------------------------------
PROXY STATEMENT
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This Proxy Statement is furnished by the Board of Directors of CNL American
Realty Fund, Inc. (the "Company") in connection with the solicitation by
management of proxies to be voted at the annual meeting of stockholders to be
held on May 4, 1998, and at any adjournment thereof, for the purposes set forth
in the accompanying notice of such meeting. All stockholders of record at the
close of business on February 20, 1998, will be entitled to vote.
Any proxy, if received in time, properly signed and not revoked, will be
voted at such meeting in accordance with the directions of the stockholder. If
no directions are specified, the proxy will be voted FOR each Proposal set forth
in this Proxy Statement. Any stockholder giving a proxy has the power to revoke
it at any time before it is exercised. A proxy may be revoked (1) by delivery of
a written statement to the Secretary of the Company stating that the proxy is
revoked, (2) by presentation at the annual meeting of a subsequent proxy
executed by the person executing the prior proxy, or (3) by attendance at the
annual meeting and voting in person.
Votes cast in person or by proxy at the annual meeting will be tabulated
and a determination will be made as to whether or not a quorum is present. The
Company will treat abstentions as shares that are present and entitled to vote
for purposes of determining the presence or absence of a quorum, but as unvoted
for purposes of determining the approval of any matter submitted to the
stockholders. If a broker submits a proxy indicating that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with respect
to such matter.
Solicitation of proxies will be primarily by mail. However, directors and
officers of the Company also may solicit proxies by telephone or telegram or in
person. All of the expenses of preparing, assembling, printing and mailing the
materials used in the solicitation of proxies will be paid by the Company.
Arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to forward soliciting materials, at the expense of the Company,
to the beneficial owners of shares held of record by such persons. It is
anticipated that this Proxy Statement and the enclosed proxy first will be
mailed to stockholders on or about March 9, 1998.
As of February 20, 1998, ___________ shares of common stock of the Company
were outstanding. Each share of common stock entitles the holder thereof to one
vote on each of the matters to be voted upon at the annual meeting. As of the
record date, officers and directors of the Company had the power to vote
approximately ____% of the outstanding shares of common stock.
<PAGE>
<TABLE>
TABLE OF CONTENTS
<S> <C>
PROPOSAL I: Election of Directors.............................................................. 3
Executive Compensation............................................................. 8
Performance Comparison............................................................. 9
PROPOSAL II: Amendment to the Company's Amended and Restated Articles
of Incorporation to Change the Name of the Company................................. 10
SECURITY OWNERSHIP............................................................................................ 11
CERTAIN TRANSACTIONS.......................................................................................... 12
INDEPENDENT AUDITORS.......................................................................................... 13
OTHER MATTERS................................................................................................. 13
PROPOSALS FOR NEXT ANNUAL MEETING............................................................................. 13
ANNUAL REPORT................................................................................................. 13
</TABLE>
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<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
Nominees
The persons named below have been nominated by the Board of Directors for
election as directors to serve until the next annual meeting of stockholders or
until their successors shall have been elected and qualified. Messrs. Bourne and
Seneff have been directors since June 1996. Messrs. Hostetter, Huseman and Kruse
have been directors since July 1997. The table sets forth each nominee's name,
age, principal occupation or employment during at least the last five years, and
directorships in other public corporations.
The Company's officers and directors have advised the Company that they
intend to vote their shares of common stock for the election of each of the
nominees. Proxies will be voted FOR the election of the following nominees
unless authority is withheld.
<TABLE>
<CAPTION>
Name and Age Background
<S> <C>
Robert A. Bourne, 50 Mr. Bourne has served as President and a director of the Company
since June 1996, and as President and a director of CNL Real Estate
Advisors, Inc. ("Real Estate Advisors") since its inception in January
1997. Real Estate Advisors is responsible for the day-to-day
operation of the Company and performs certain other administrative
services for the Company. See "Certain Transactions." Mr. Bourne
also serves as President and Treasurer of CNL Group, Inc. In
addition, Mr. Bourne is President, a director and a registered principal
of CNL Securities Corp., President and a director of CNL Investment
Company, Vice Chairman of the Board of Directors of Commercial
Net Lease Realty, Inc., President of CNL Realty Corp. and Chief
Investment Officer, Vice Chairman of the Board of Directors,
Treasurer and a director of CNL Institutional Advisors, Inc., a
registered investment advisor. Mr. Bourne previously served as
Secretary and Treasurer of Commercial Net Lease Realty, Inc.
through December 31, 1997. Mr. Bourne also served as President of
CNL Institutional Advisors, Inc. from the date of its inception
through June 30, 1997. Mr. Bourne also served as director, Treasurer
and Vice Chairman of CNL Realty Advisors, Inc. until December 31,
1997, at which time CNL Realty Advisors, Inc. merged with
Commercial Net Lease Realty, Inc. In addition, Mr. Bourne serves
as President and a director of CNL American Properties Fund, Inc.,
and as Treasurer and a director of CNL Fund Advisors, Inc. Mr.
Bourne also previously served as President of CNL Fund Advisors,
Inc. All such entities are affiliates of CNL Group, Inc., a privately
held, diversified real estate company of which Real Estate Advisors
is a wholly owned subsidiary. Since joining CNL Securities Corp.
in 1979, Mr. Bourne has been active in the acquisition, development,
and management of real estate projects throughout the United States.
Mr. Bourne formerly was a certified public accountant with Coopers
& Lybrand L.L.P. and a partner in the firm of Bourne & Rose, P.A.
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<PAGE>
G. Richard Hostetter, Esq., 58 Mr. Hostetter serves as a director of the Company and also serves as
a director of CNL American Properties Fund, Inc. Mr. Hostetter was
associated with the law firm of Miller and Martin from 1966 through
1989, the last ten years of such association as a senior partner. As
a lawyer, he served for more than 20 years as counsel for various
corporate real estate groups, fast-food companies and public
companies, including The Krystal Company, resulting in his extensive
participation in transactions involving the sale, lease, and
sale/leaseback of approximately 250 restaurant units. He is licensed
to practice law in Tennessee and Georgia. From 1989 to date, Mr.
Hostetter has served as President and General Counsel of Mills,
Ragland & Hostetter, Inc., the corporate general partner of MRH,
L.P., a holding company involved in corporate acquisitions, in which
he also is a general and limited partner.
Richard C. Huseman, 59 Dr. Huseman serves as a director of the Company and also serves as
a director of CNL American Properties Fund, Inc. Dr. Huseman is
presently a professor in the College of Business Administration, and
from 1990 through 1995, served as the Dean of the College of
Business Administration of the University of Central Florida. He has
served as a consultant in the area of managerial strategies to a
number of Fortune 500 corporations, including IBM, AT&T, and 3M,
as well as to several branches of the U.S. government, including the
U.S. Department of Health and Human Services, the U.S. Department
of Justice, and the Internal Revenue Service.
J. Joseph Kruse, 65 Mr. Kruse serves as a director of the Company and also serves as a
director of CNL American Properties Fund, Inc. From 1993 to the
present, Mr. Kruse has been President and Chief Executive Officer
of Kruse & Co., Inc., a merchant banking company engaged in real
estate. Formerly, Mr. Kruse was a Senior Vice President with
Textron, Inc. for twenty years, and then served as Senior Vice
President at G. William Miller & Co., a firm founded by the former
Chairman of the Federal Reserve Board and the Treasury Secretary.
Mr. Kruse was responsible for evaluations of commercial real estate
and retail shopping mall projects and continues to serve of counsel
to the firm.
-4-
<PAGE>
James M. Seneff, Jr., 51 Mr. Seneff has been Chief Executive Officer, a director and
Chairman of the Board of the Company since June 1996, as well as
Chief Executive Officer, Chairman of the Board and a director of
Real Estate Advisors since its inception in January 1997. Mr. Seneff
has served as Chief Executive Officer, Chairman of the Board of
Directors, director, and a principal stockholder of CNL Group, Inc.
since its formation in 1980. In addition, Mr. Seneff is Chief
Executive Officer, a director and a registered principal of CNL
Securities Corp., Chief Executive Officer and Chairman of the Board
of CNL Investment Company, Chief Executive Officer and Chairman
of the Board of Commercial Net Lease Realty, Inc. Chief Executive
Officer and Chairman of the Board of CNL Realty Corp. and Chief
Executive Officer and a director of CNL Institutional Advisors, Inc.,
a registered investment advisor. Mr. Seneff also served as Chief
Executive Officer and Chairman of the Board of CNL Realty
Advisors, Inc. until December 31, 1997 at which time CNL Realty
Advisors, Inc. merged with Commercial Net Lease Realty, Inc. In
addition, Mr. Seneff serves as Chief Executive Officer, Chairman of
the Board and a director of CNL American Properties Fund, Inc. and
CNL Fund Advisors, Inc. Mr. Seneff previously served on the
Florida State Commission on Ethics. Mr. Seneff also served on the
Florida Investment Advisory Council, which oversees the $60 billion
Florida State retirement plan, from 1986 to 1994, and was Chairman
of the Council from 1991 to 1992. Since 1971, Mr. Seneff has been
active in the acquisition, development and management of real estate
projects throughout the United States.
</TABLE>
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<PAGE>
In the event that any nominee(s) should be unable to accept the office of
director, which is not anticipated, it is intended that the persons named in the
proxy will vote FOR the election of such other person in the place of such
nominee(s) for the office of director as the Board of Directors may recommend.
The affirmative vote of a majority of the shares of common stock present in
person or represented by proxy and entitled to vote is required for the election
of directors.
A majority of the Company's directors are required to be independent, as
that term is defined in the Company's Articles of Incorporation. Messrs.
Hostetter, Kruse and Huseman are independent directors.
Compensation of Directors
During the year ended December 31, 1997, each independent director earned
$3,000 for serving on the Board of Directors. Each independent director also
received $750 per Board meeting attended ($375 for each telephonic meeting in
which the director participated), including committee meetings. The Company has
not, and in the future will not, pay any compensation to the directors of the
Company who also serve as officers and directors of the Company's advisor, CNL
Real Estate Advisors, Inc.
The Board of Directors met two times during the year ended December 31,
1997, and the average attendance by directors at Board meetings was
approximately 90 percent. Each current member attended at least 50 percent of
the total meetings of the Board and of any committee on which he served.
Committees of the Board of Directors
The Company has a standing Audit Committee, the members of which are
selected by the Board of Directors each year. The current members of the Audit
Committee, who have served since July 1997, are Messrs. Hostetter, Kruse and
Huseman. The Audit Committee makes recommendations to the Board of Directors as
to the independent accountants of the Company and reviews with such accounting
firm the scope of the audit and the results of the audit upon its completion.
The Audit Committee did not meet during the year ended December 31, 1997.
At such time, if any, as the Company's shares of common stock are listed on
a national securities exchange or over-the-counter market, the Company will form
a compensation committee, the members of which will be selected by the full
Board of Directors each year. Currently, the Company does not have a
compensation committee.
The Company does not have a nominating committee.
-6-
<PAGE>
Executive Officers
The executive officers of the Company are as follows:
Name Position
James M. Seneff, Jr. Chief Executive Officer and Chairman of the Board
Robert A. Bourne President
Charles A. Muller Executive Vice President
John T. Walker Executive Vice President
Jeanne A. Wall Executive Vice President
Lynn E. Rose Secretary and Treasurer
Mr. Muller, age 39, has served as Executive Vice President of the Company
since July 1997 and as Executive Vice President of Real Estate Advisors since
its inception in January 1997. Mr. Muller joined CNL in October 1996 and is
responsible for the planning and implementation of CNL's interest in hotel
industry investments, including acquisitions, development, project analysis and
due diligence. Mr. Muller joined CNL following more than 15 years of broadbased
hotel industry experience. From 1993 to 1996, Mr. Muller served as a Director of
Operations for Tishman Hotel Corporation where he was responsible for the
company's market review and valuation analysis efforts. At Tishman, Mr. Muller
played a significant role in the development of a new 600-room golf resort in
Puerto Rico, and was active in several project management, asset management and
development assignments. From 1989 to 1993, Mr. Muller served as a Development
Manager for Wyndham Hotels & Resorts where he was responsible for new business
development and company growth through acquisitions, development and management
contracts. At Wyndham, Mr. Muller was also responsible for market review and
feasibility analysis efforts in markets across the United States and the
Carribean for Wyndham Garden Hotels. Prior to joining Wyndham, Mr. Muller worked
for Pannell Kerr Forster as a hotel industry consultant and spent four years
with AIRCOA (currently Richfield Hospitality) where he was responsible for
capital expenditure planning, property renovations and construction management.
From 1981 through 1985, Mr. Muller held several management positions in hotel
operations.
Mr. Walker, age 39, has served as Executive Vice President of the Company
since June 1996 and as Executive Vice President of Real Estate Advisors since
its inception in January 1997. In addition, Mr. Walker serves as Chief Operating
Officer and Executive Vice President of CNL American Properties Fund, Inc. and
CNL Fund Advisors, Inc. From May 1992 to May 1994, Mr. Walker, a certified
public accountant, was Executive Vice President for Finance and Administration
and Chief Financial Officer of Z Music, Inc., a cable television network
(subsequently acquired by Gaylord Entertainment), where he was responsible for
overall financial and administrative management and planning. From January 1990
through April 1992, Mr. Walker was Chief Financial Officer of the First Baptist
Church in Orlando, Florida. From April 1984 through December 1989, he was a
partner in the accounting firm of Chastang, Ferrell & Walker, P.A., where he was
the partner in charge of audit and consulting services, and from 1981 to 1984,
Mr. Walker was a Senior Consultant/Audit Senior at Price Waterhouse.
-7-
<PAGE>
Ms. Wall, age 39, has served as Executive Vice President of the Company
since June 1996 and as Executive Vice President of Real Estate Advisors since
its inception in January 1997. Ms. Wall has served as Chief Operating Officer of
CNL Investment Company and of CNL Securities Corp. since November 1994 and has
served as Executive Vice President of CNL Investment Company since January 1991.
In 1984, Ms. Wall joined CNL Securities Corp. as its Partnership Administrator.
In 1985, Ms. Wall became Vice President of CNL Securities Corp., in 1987, she
became Senior Vice President and in July 1997, she became Executive Vice
President of CNL Securities Corp. In this capacity, Ms. Wall serves as national
marketing and sales director and oversees the national marketing plan for the
CNL investment programs. In addition, Ms. Wall oversees partnership
administration and investor services for programs offered through participating
brokers. Ms. Wall also has served as Senior Vice President of CNL Institutional
Advisors, Inc., a registered investment advisor, from 1990 to 1993, as Vice
President of CNL Realty Advisors, Inc. since its inception in 1991 until
December 31, 1997, at which time CNL Realty Advisors, Inc. merged with
Commercial Net Lease Realty, Inc., and served as Vice President of Commercial
Net Lease Realty, Inc. from 1992 through December 31, 1997. In addition, Ms.
Wall serves as Executive Vice President of CNL American Properties Fund, Inc.
and CNL Fund Advisors, Inc. Ms. Wall currently serves as a trustee on the Board
of the Investment Program Association and on the Direct Participation Program
committee for the National Association of Securities Dealers.
Ms. Rose, age 49, has served as Secretary and Treasurer of the Company
since June 1996 and as a director, Treasurer and Secretary of Real Estate
Advisors since its inception in January 1997. Ms. Rose, a certified public
accountant, has served as Secretary of CNL Group, Inc. since 1987, as Chief
Financial Officer of CNL Group, Inc. since December 1993, and served as
Controller of CNL Group, Inc. from 1987 until December 1993. In addition, Ms.
Rose has served as Chief Financial Officer and Secretary of CNL Securities Corp.
since July 1994. She has served as Chief Operating Officer, Vice President and
Secretary of CNL Corporate Services, Inc. since November 1994. Ms. Rose also has
served as Chief Financial Officer and Secretary of CNL Institutional Advisors,
Inc. since its inception in 1990, as Treasurer of CNL Realty Advisors, Inc. from
1991 to February 1996, and as Secretary and a director of CNL Realty Advisors,
Inc. since its inception in 1991 until December 31, 1997, at which time CNL
Realty Advisors, Inc. merged with Commercial Net Lease Realty, Inc. In addition,
Ms. Rose served as Secretary and Treasurer of Commercial Net Lease Realty, Inc.
from 1992 to February 1996. Ms. Rose also serves as Secretary and Treasurer of
CNL American Properties Fund, Inc. and as Secretary and a director of CNL Fund
Advisors, Inc. Ms. Rose also currently serves as Secretary for approximately 50
additional corporations. Ms. Rose oversees the management information services,
administration, legal compliance, accounting, tenant compliance, and reporting
for over 300 corporations, partnerships and joint ventures. Prior to joining
CNL, Ms. Rose was a partner with Robert A. Bourne in the accounting firm of
Bourne & Rose, P.A., Certified Public Accountants. She was licensed as a
certified public accountant in 1979.
The backgrounds of Messrs. Seneff and Bourne are described at "ELECTION OF
DIRECTORS."
EXECUTIVE COMPENSATION
Annual Compensation
No annual or long-term compensation was paid by the Company to the Chief
Executive Officer for services rendered in all capacities to the Company during
the period June 12, 1996 (date of inception) through December 31, 1996 or during
the year ended December 31, 1997. In addition, no executive officer of the
Company received an annual salary or bonus from the Company during the fiscal
year ended December 31, 1997. The Company's executive officers also are
employees and executive officers of Real Estate Advisors and receive
compensation from CNL Group, Inc. in part for services in such capacities. See
"Certain Transactions" for a description of the fees payable and expenses
reimbursed to Real Estate Advisors.
-8-
<PAGE>
PERFORMANCE COMPARISON
Set forth below is a comparison of the cumulative total stockholder return
on the Company's common stock, based on the offering price of the common stock
and assuming the reinvestment of distributions ("ARF"), with the S&P 500 Index
("S&P 500") and with the income rate of return from The National Council of Real
Estate Investment Fiduciaries ("NCREIF") from the month the Company commenced
operations through December 31, 1997. The comparison assumes the investment of
$100 on October 1, 1997.
Quarterly Total Return Indexes
Date S&P 500 NCREIF ARF(1)
---- ------- ------ ---
12/31/97 102.87 102.28 100.50
The S&P 500 index contains both a capital and income component to its total
return. For companies included in the S&P 500 index, their total return is
measured by dividing the sum of (a) the cumulative amount of dividends for the
measurement period, assuming dividend reinvestment, and (b) the difference
between the registrant's share price at the end and the beginning of the
measurement period; by the share price at the beginning of the measurement
period. There is currently no public trading market for the Company's shares,
therefore, the share price is fixed at $10 per share and its return is composed
of only the cumulative amount of distributions for the measurement period,
assuming reinvestment of distributions. The NCREIF income index measures net
operating income as a percentage of average daily investment. In order to
display a more comparative return, the component of the NCREIF total return
attributable to increases in share price has not been included in the cumulative
return.
(1) The Company broke escrow and commenced operations on October 15, 1997.
-9-
<PAGE>
PROPOSAL II
APPROVAL OF AN AMENDMENT TO THE COMPANY'S AMENDED
AND RESTATED ARTICLES OF INCORPORATION TO
CHANGE THE NAME OF THE COMPANY
The Board of Directors of the Company has unanimously approved and directed
that there be submitted to stockholders for their approval an amendment to
Article I of the Company's Amended and Restated Articles of Incorporation, as
amended (the "Restated Articles of Incorporation") which would change the name
of the Company to "CNL Hospitality Properties, Inc." (the "Name Change
Amendment").
The text of the proposed amendments are set forth below:
RESOLVED, that Section 1.1 of Article I of the Company's Restated Articles
of Incorporation be amended to read as follows:
SECTION 1.1 Name. The name of the corporation (the "Company") is: CNL
Hospitality Properties, Inc. So far as may be practicable, the business
of the Company shall be conducted and transacted under that name, which
name (and the word "Company" wherever used in these Articles of
Amendment and Restatement of CNL Hospitality Properties, Inc. (these
"Articles of Incorporation"), except where the context otherwise
requires) shall refer to the Directors collectively but not
individually or personally and shall not refer to the Stockholders or
to any officers, employees or agents of the Company or of such
Directors.
The Name Change Amendment will not change any other aspect of Article I.
The Board has taken this action in order to provide better name recognition
of the Company in the context of its business.
Approval of the Name Change Amendment requires the affirmative vote of a
majority of the outstanding shares of the Company's common stock entitled to
vote thereon. The Company's officers and directors have advised the Company that
they intend to vote their shares of common stock for the Name Change Amendment.
The Name Change Amendment, if approved by stockholders, will become
effective on the date the Company's Maryland Articles of Incorporation are filed
with the Maryland Department of Assessments and Taxation. It is anticipated that
the appropriate filing to effect the Name Change Amendment will be made soon
after the annual meeting as practicable.
The Board of Directors unanimously recommends that stockholders vote FOR
the Name Change Amendment. Proxies will be voted for the Name Change Amendment
unless stockholders designate otherwise.
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<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of February 20, 1998, the number and
percentage of outstanding shares beneficially owned by all persons known by the
Company to own beneficially more than five percent of the Company's Common
Stock, by each director and nominee, and by all officers and directors as a
group, based upon information furnished to the Company by such stockholders,
officers and directors.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Shares
<S> <C>
Robert A. Bourne 20,000 (1) (3)
400 East South Street
Orlando, Florida 32801
Charles A. Muller 500 (2) (3)
400 East South Street
Orlando, FL 32801
Lynn E. Rose 20,000 (1) (3)
400 East South Street
Orlando, Florida 32801
James M. Seneff, Jr. 20,000 (1) (3)
400 East South Street
Orlando, Florida 32801
All directors and executive 20,500 (1) (2) (3)
officers as a group (4 persons)
</TABLE>
(1) Represents shares held by Real Estate Advisors, of which Messrs. Bourne and
Seneff and Ms. Rose are directors.
(2) Represents shares held by Mr. Muller as an individual.
(3) Less than one percent.
Compliance With Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the "SEC") commencing April 30, 1998. Accordingly, no such
forms have yet been filed.
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<PAGE>
CERTAIN TRANSACTIONS
All of the executive officers of the Company are executive officers of Real
Estate Advisors, a wholly owned subsidiary of CNL Group, Inc., of which Messrs.
Seneff and Bourne are affiliates. In addition, Messrs. Seneff and Bourne, Ms.
Rose and Ms. Wall are executive officers of CNL Securities Corp., the managing
dealer of the Company's offering of shares of common stock, and a wholly owned
subsidiary of CNL Group, Inc. Messrs. Seneff and Bourne are directors of the
Company, Real Estate Advisors and CNL Securities Corp., and Ms. Rose is a
director of Real Estate Advisors. Administration of the day-to-day operations of
the Company is provided by Real Estate Advisors, pursuant to the terms of an
advisory agreement (the "Advisory Agreement"). Real Estate Advisors also serves
as the Company's consultant in connection with policy decisions to be made by
the Company's Board of Directors, manages the Company's properties and renders
such other services as the Board of Directors deems appropriate. Real Estate
Advisors also bears the expense of providing the executive personnel and office
space to the Company. Real Estate Advisors is at all times subject to the
supervision of the Board of Directors of the Company and has only such functions
and authority as the Company may delegate to it as the Company's agent.
CNL Securities Corp. is entitled to receive selling commissions amounting
to 7.5% of the total amount raised from the sale of shares of common stock for
services in connection with the offering of shares, a substantial portion of
which has been or will be paid as commissions to other broker-dealers. For the
year ended December 31, 1997, the Company had incurred $849,405 of such fees, of
which approximately $792,832 was paid by CNL Securities Corp. as commissions to
other broker-dealers.
In addition, CNL Securities Corp. is entitled to receive a marketing
support and due diligence expense reimbursement fee equal to 0.5% of the total
amount raised from the sale of shares, a portion of which may be reallowed to
other broker-dealers. For the year ended December 31, 1997, the Company had
incurred $56,627 of such fees, the majority of which were reallowed to other
broker-dealers and from which all bona fide due diligence expenses were paid.
Real Estate Advisors is entitled to receive acquisition fees for services
in identifying the properties and structuring the terms of the acquisition and
leases of the properties and structuring the terms of the mortgage loans equal
to 4.5% of gross proceeds, loan proceeds from permanent financing and amounts
outstanding on the line of credit, if any, at the time of listing, but excluding
that portion of the permanent financing used to finance Secured Equipment
Leases. For the year ended December 31, 1997, the Company had incurred $509,643
of such fees.
Real Estate Advisors and its affiliates provide accounting and
administrative services to the Company (including accounting and administrative
services in connection with the offering of shares) on a day-to-day basis. For
the year ended December 31, 1997, the Company incurred a total of $192,224 for
these services, $185,335 of such costs representing stock issuance costs and
$6,889 representing general operating and administrative expenses, including
costs related to preparing and distributing reports required by the Securities
and Exchange Commission.
All amounts paid by the Company to affiliates of CNL Group, Inc. are
believed by the Company to be fair and comparable to amounts that would be paid
for similar services provided by unaffiliated third parties.
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<PAGE>
INDEPENDENT AUDITORS
Upon recommendation of and approval by the Board of Directors, including
the independent directors, Coopers & Lybrand L.L.P. has been selected to act as
independent certified public accountants for the Company during the current
fiscal year.
A representative of Coopers & Lybrand L.L.P. will be present at the annual
meeting and will be provided with the opportunity to make a statement if
desired. Such representative will also be available to respond to appropriate
questions.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
annual meeting other than those stated above. If any other business should come
before the annual meeting, the person(s) named in the enclosed proxy will vote
thereon as he or they determine to be in the best interests of the Company.
PROPOSALS FOR NEXT ANNUAL MEETING
Any stockholder proposal to be considered for inclusion in the Company's
proxy statement and form of proxy for the annual meeting of stockholders to be
held in 1999 must be received at the Company's office at 400 East South Street,
Orlando, Florida 32801, no later than November 9, 1998.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1997, accompanies this Proxy Statement.
By Order of the Board of Directors,
Lynn E. Rose
Secretary
March 9, 1998
Orlando, Florida
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<PAGE>
P R O X Y CNL AMERICAN REALTY FUND, INC.
The undersigned hereby appoints James M. Seneff, Jr. and Robert A. Bourne,
and each of them, as proxies, with full power of substitution in each, to vote
all shares of common stock of CNL American Realty Fund, Inc. (the "Company")
which the undersigned is entitled to vote, at the Annual Meeting of Stockholders
of the Company to be held on May 4, 1998, at 1:00 p.m., local time, and any
adjournment thereof, on all matters set forth in the Notice of Annual Meeting
and Proxy Statement, dated March 9, 1998, a copy of which has been received by
the undersigned, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING ITEMS:
1. Election of Five Directors
Nominees: |_|FOR ALL |_| WITHHELD FOR ALL
------------------------------------------
Robert A. Bourne FOR ALL NOMINEES, EXCEPT VOTE WITHHELD FOR:
G. Richard Hostetter (Write that nominee's name above)
Richard C. Huseman
J. Joseph Kruse
James M. Seneff, Jr.
2. Proposal to Change the Name of the Company (See Proxy Statement page 10)
|_| FOR |_| AGAINST |_| ABSTAIN
3. Other Matters:
Grant authority upon such other matters as may come before the Meeting as
they determine to be in the best interest of the Company.
|_| FOR |_| AGAINST |_| ABSTAIN
(PLEASE SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE,
AND RETURN IN ENCLOSED ENVELOPE)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE
VOTED "FOR" THE MATTERS STATED. EACH STOCKHOLDER IS URGED TO SUBMIT AN EXECUTED
PROXY.
Dated: ______________________ , 1998
_____________________________________
_____________________________________
Signature(s) of Stockholder(s)
IMPORTANT: Please mark this Proxy, date
it, sign it exactly as your name(s)
appear(s) and return it in the enclosed
postage paid envelope. Joint owners
should each sign personally. Trustees
and others signing in a representative
or fiduciary capacity should indicate
their full titles in such capacity.
