UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
Amendment No. 1
(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
OR
[ ] 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 333-47411
CNL HEALTH CARE PROPERTIES , INC.
(Exact name of registrant as specified in its charter)
Maryland 59-3491443
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
450 South Orange Avenue
Orlando, Florida 32801
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (407) 650-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of exchange on which registered:
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
None
(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 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 ]
Aggregate market value of the voting stock held by nonaffiliates of the
registrant: The registrant registered an offering of shares of common stock (the
"Shares") on Form S-11 under the Securities Act of 1933, as amended. Since no
established market for such Shares exists, there is no market value for such
Shares. Each Share was originally sold at $10 per Share. Based on the $10
offering price of the shares, $5,632,349 of our common stock was held by
non-affiliates as of February 7, 2000.
The number of shares of common stock outstanding as of February 7, 2000
was 583,235.
The Form 10K of CNL Health Care Properties, Inc. (the "Company") for
the year ended December 31, 1999, is being amended to include in the
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PERSUANT
SECTION 12 OF THE ACT the notice of annual meeting , letter to stockholders,
proxy card and proxy statement. At the time the Company filed its Form 10K, it
represented to the Securities and Exchange Commission (the "Commission") that
copies of such material would be furnished to the Commission at the time it was
sent to stockholders.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 11th day of
March, 2000.
CNL HEALTH CARE PROPERTIES, INC.
By: ROBERT A. BOURNE
President (Principal Financial
and Accounting Officer)
/s/ Robert A. Bourne
------------------------------
ROBERT A. BOURNE
<PAGE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.
<PAGE>
CNL HEALTH CARE PROPERTIES, INC.
450 South Orange Avenue
Orlando, Florida 32801
March 11, 2000
To our Stockholders:
You are cordially invited to attend the annual meeting of stockholders
of CNL Health Care Properties, Inc. (the "Company") on May 10, 2000 at 10:00
a.m. at CNL Center at 450 South Orange Avenue, Orlando, Florida. The directors
and officers of the Company look forward to greeting you personally. Enclosed
for your review are the proxy, proxy statement, notice of meeting for the annual
meeting of stockholders and 1999 annual report.
This year's proxy requests your vote for the election of five directors
and your approval of amendments to the Company's Amended and Restated Articles
of Incorporation (the "Articles"). These amendments, which would permit the
Company to make loans to a wider range of borrowers than is currently permitted
under the Articles, reflect the Board's desire to enhance the Company's business
opportunities.
Your vote counts. Please complete and return the enclosed proxy today,
whether or not you plan to attend the annual meeting. 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 HEALTH CARE PROPERTIES, INC.
450 South Orange Avenue
Orlando, Florida 32801
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 10, 2000
To our Stockholders:
Notice is hereby given that the 2000 annual meeting of stockholders of
CNL Health Care Properties, Inc. (the "Company") will be held at CNL Center, 450
South Orange Avenue, Orlando, Florida 32801 on Wednesday, May 10, 2000, at 10:00
a.m., local time, for the following purposes:
1. to elect five directors of the Company for terms expiring at the 2001
annual meeting of stockholders;
2. to approve amendments to the Company's Amended and Restated Articles of
Incorporation to permit the Company to make loans to a wider range of borrowers
than is currently permitted under the Company's Amended and Restated Articles of
Incorporation; and
3. to transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
Only stockholders of record at the close of business on February 23, 2000,
will be entitled to notice of, and to vote at, the annual meeting or any
adjournment or postponement thereof.
By Order of the Board of Directors,
/s/ Lynn E. Rose
------------------------
Lynn E. Rose
Secretary
March 11, 2000
Orlando, Florida
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE POSTAGE-PAID
ENVELOPE PROVIDED.
<PAGE>
CNL HEALTH CARE PROPERTIES, INC.
450 South Orange Avenue
Orlando, Florida 32801
PROXY STATEMENT
This proxy statement is furnished by the Board of Directors of CNL Health
Care Properties, Inc. (the "Company") in connection with the solicitation by the
Board of Directors of proxies to be voted at the annual meeting of stockholders
to be held on May 10, 2000, 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 23, 2000, 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 11, 2000.
As of February 23, 2000, 612,485 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
3% of the outstanding shares of common stock.
<PAGE>
TABLE OF CONTENTS
PROPOSAL I: ELECTION OF DIRECTORS........................................ 3-8
EXECUTIVE COMPENSATION................................................... 8
SECURITY OWNERSHIP....................................................... 8
CERTAIN TRANSACTIONS..................................................... 9-10
PROPOSAL II: APPROVAL OF AMENDMENTS
TO THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION TO PERMIT
THE COMPANY TO MAKE LOANS TO ADDITIONAL PARTIES..........................10-11
INDEPENDENT AUDITORS................................................... 11
OTHER MATTERS.......................................................... 11
PROPOSALS FOR NEXT ANNUAL MEETING...................................... 11
ANNUAL REPORT.......................................................... 12
<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 December 1997. Messrs. Dunbar, Moses and Smick
have served as directors since September 1998. 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.
Name and Age Background
Robert A. Bourne, 52 Director and President. Since joining
CNL Securities Corp. in 1979, Mr. Bourne
has participated as a general partner or
co-venturer in over 100 real estate
ventures involved in the financing,
acquisition, construction, and leasing
of restaurants, office buildings,
apartment complexes, hotels, and other
real estate. Mr. Bourne is the President
and Treasurer of CNL Financial Group,
Inc. (formerly CNL Group, Inc.). Mr.
Bourne is a director and President of
CNL Health Care Corp., the advisor to
the Company. He is also a director, Vice
Chairman of the Board and President of
CNL Hospitality Properties, Inc., a
public, unlisted real estate investment
trust, as well as CNL Hospitality Corp.,
its advisor. Mr. Bourne also serves as a
director of CNLBank. He has served as a
director since 1992, Vice Chairman of
the Board since February 1996, Secretary
and Treasurer from February 1996 through
1997, and President from July 1992
through February 1996, of Commercial Net
Lease Realty Inc., a public real estate
investment trust listed on the New York
Stock Exchange. Mr. Bourne has served as
a director since inception in 1994,
President from 1994 through February
1999, Treasurer from February 1999
through August 1999, and Vice Chairman
of the Board since February 1999 of CNL
American Properties Fund, Inc., a
public, unlisted real estate investment
trust. He also served in the following
positions for CNL Fund Advisors, Inc.,
the advisor to CNL American Properties
Fund, Inc. prior to its merger with such
company: director from 1994 through
August 1999, Treasurer from July 1998
through August 1999, President from 1994
through September 1997, and Vice
Chairman of the Board from September
1997 through August 1999. Mr. Bourne
holds the following positions for these
affiliates of CNL Financial Group, Inc.:
director, President and Treasurer of CNL
Investment Company; director, President,
Treasurer, and Registered Principal of
CNL Securities Corp., a subsidiary of
CNL Investment Company and the managing
dealer for the Company's public offering
of common stock; and director,
President, Treasurer, and Chief
Investment Officer of CNL Institutional
Advisors, Inc., a registered investment
advisor for pension plans. Mr. Bourne
began his career as a certified public
accountant employed by Coopers &
Lybrand, Certified Public Accountants,
from 1971 through 1978, where he
attained the position of tax manager in
1975. Mr. Bourne graduated from Florida
State University in 1970 where he
received a B.A. in Accounting, with
honors.
David W. Dunbar, 47 Independent Director. Mr. Dunbar serves
as chairman and chief executive officer
of Peoples Bank, which he organized and
founded in 1996. Mr. Dunbar is also a
member of the board of trustees of Bay
Care Health Systems, an alliance of ten
non-profit hospitals in the Tampa Bay
area, as well as a member of the board
of directors of Morton Plant Mease
Health Care, Inc., an 841-bed,
not-for-profit hospital and North Bay
Hospital, a 122-bed facility. He is a
former member of the board of directors
of Morton Plant Mease Hospital
Foundation. In addition, Mr. Dunbar
serves as a member of the Florida
Elections Commission, the body
responsible for investigating and
holding hearings regarding alleged
violations of Florida's campaign finance
laws. During 1994 and 1995, Mr. Dunbar
was a member of the board of directors
and an executive officer of Peoples
State Bank. Mr. Dunbar was the chief
executive officer of Republic Bank from
1981 through 1988 and from 1991 through
1993. From 1988 through 1991, Mr. Dunbar
developed commercial and medical office
buildings and, through a financial
consulting company he founded, provided
specialized lending services for real
estate development clients, specialized
construction litigation support for
national insurance companies and
strategic planning services for
institutional clients. In 1990, Mr.
Dunbar was the chief executive officer,
developer and owner of a 60,000 square
foot medical office building located on
the campus of Memorial Hospital in
Tampa, Florida. In addition, in 1990,
Mr. Dunbar served as the Governor's
appointee to the State of Florida
Taxation and Budget Reform Commission, a
25 member, blue ribbon commission
established to review, study and make
appropriate recommendations for changes
to state tax laws. Mr. Dunbar received a
degree in finance from Florida State
University. He is also a graduate of the
American Bankers Association National
Commercial Lending School at the
University of Oklahoma and the School of
Banking of the South at Louisiana State
University.
Edward A. Moses, 57 Independent Director. Dr. Moses has
served as dean of the Roy E. Crummer
Graduate School of Business at Rollins
College since 1994, and as a professor
and NationsBank professor of finance
since 1989. As dean, Dr. Moses is
presently establishing a comprehensive
program of executive education for
health care management at the Roy E.
Crummer Graduate School of Business.
From 1985 to 1989 he served as dean and
professor of finance at the University
of North Florida. He has also served in
academic and administrative positions at
the University of Tulsa, Georgia State
University and the University of Central
Florida. Dr. Moses has written six
textbooks in the fields of investments
and corporate finance as well as
numerous articles in leading business
journals. He has held offices in a
number of professional organizations,
including president of the Southern
Finance and Eastern Finance
Associations, served on the Board of the
Southern Business Administration
Association, and served as a consultant
for major banks as well as a number of
Fortune 500 companies. He currently
serves as a faculty member in the
Graduate School of Banking at Louisiana
State University, and is a member of the
board of directors of HTE, Inc. Dr.
Moses received a B.S. in Accounting from
the Wharton School at the University of
Pennsylvania in 1965 and a Masters of
Business Administration (1967) and Ph.D.
in finance from the University of
Georgia in 1971.
Timothy S. Smick, 48 Independent Director. Mr. Smick is
currently an independent investor. From
1996 through February 1998, he served as
chief operating officer, executive vice
president and a member of the board of
directors of Sunrise Assisted Living,
Inc., one of the nation's leading
providers of assisted living care for
seniors with 68 communities located in
13 states. In addition, Mr. Smick served
as president of Sunrise Management Inc.,
a wholly owned subsidiary of Sunrise
Assisted Living, Inc. During 1995, Mr.
Smick served as a senior housing
consultant to LaSalle Advisory, Ltd., a
pension fund advisory company. From 1985
through 1994, Mr. Smick was chairman and
chief executive officer of PersonaCare,
Inc., a company he co-founded that
provided sub-acute, skilled nursing and
assisted living care with 12 facilities
in six states. Mr. Smick's health care
industry experience also includes
serving as the regional operations
director for Manor Healthcare, Inc., a
division of ManorCare, Inc., and as
operations director for Allied Health
and Management, Inc. Prior to
co-founding PersonaCare, Inc., Mr. Smick
was a partner in Duncan & Smick, a
commercial real estate development firm.
Mr. Smick received a B.A. in English
from Wheaton College and pursued
graduate studies at Loyola College.
James M. Seneff, Jr., 53 Director, Chairman of the Board and
Chief Executive Officer. Since 1971, Mr.
Seneff has been active in the
acquisition, development, and management
of real estate projects and, directly or
through an affiliated entity, has served
as a general partner or co-venturer in
over 100 real estate ventures. These
ventures have involved the financing,
acquisition, construction, and leasing
of restaurants, office buildings,
apartment complexes, hotels, and other
real estate. Mr. Seneff is a principal
stockholder of CNL Holdings, Inc., the
parent company of CNL Financial Group,
Inc. (formerly CNL Group, Inc.), a
diversified real estate company, and has
served as a director, Chairman of the
Board and Chief Executive Officer of CNL
Financial Group, Inc. since its
formation in 1980. CNL Financial Group,
Inc. is the parent company, either
directly or indirectly, of CNL Real
Estate Services, Inc., CNL Health Care
Corp., the advisor to the company, CNL
Capital Markets, Inc., CNL Investment
Company and CNL Securities Corp., the
managing dealer for the Company's public
offering of common stock. Mr. Seneff
serves as a director, Chairman of the
Board and Chief Executive Officer of CNL
Health Care Corp., the advisor to the
Company. He also serves as director,
Chairman of the Board and Chief
Executive Officer of CNL Hospitality
Properties, Inc., a public, unlisted
real estate investment trust, as well
as, CNL Hospitality Corp., its advisor.
Since 1992, Mr. Seneff has served as
Chairman of the Board and Chief
Executive Officer of Commercial Net
Lease Realty, Inc., a public real estate
investment trust that is listed on the
New York Stock Exchange. In addition, he
has served as a director and Chairman of
the Board since inception in 1994, and
served as Chief Executive Officer from
1994 through August 1999, of CNL
American Properties Fund, Inc., a
public, unlisted real estate investment
trust. He also served as a director,
Chairman of the Board and Chief
Executive Officer of CNL Fund Advisors,
Inc., the advisor to CNL American
Properties Fund, Inc. until it merged
with such company in September 1999. Mr.
Seneff has also served as a director,
Chairman of the Board and Chief
Executive Officer of the following
affiliated companies since formation:
CNL Securities Corp. since 1979; CNL
Investment Company since 1990; and CNL
Institutional Advisors, a registered
investment advisor for pension plans,
since 1990. Mr. Seneff formerly served
as a director of First Union National
Bank of Florida, N.A., and currently
serves as the Chairman of the Board of
CNLBank. Mr. Seneff served on the
Florida State Commission on Ethics and
is a former member and past Chairman of
the State of Florida Investment Advisory
Council, which recommends to the Florida
Board of Administration investments for
various Florida employee retirement
funds. The Florida Board of
Administration is Florida's principal
investment advisory and money management
agency and oversees the investment of
more than $60 billion of retirement
funds. Mr. Seneff received his degree in
Business Administration from Florida
State University in 1968.
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 Amended and Restated Articles of
Incorporation (the "Articles"). Messrs. Dunbar, Moses and Smick are independent
directors.
Compensation of Directors
During the year ended December 31, 1999, each independent director earned
approximately $6,000 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 CNL Health
Care Corp., the Company's advisor (the "Advisor").
The Board of Directors met four times during the year ended December 31,
1999, and the average attendance by directors at Board meetings was
approximately 90 percent. Each member of the Board of Directors as it was
constituted during 1999 attended at least 75 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 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. During 1999, the Audit Committee was
composed of Messrs. Dunbar, Moses and Smick. The Audit Committee met twice
during the year ended December 31, 1999.
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.
Executive Officers
The executive officers of the Company are as follows:
Name Age Position
James M. Seneff, Jr. 53 Chief Executive Officer and Chairman
of the Board
Robert A. Bourne 52 President
Phillip M. Anderson, Jr. 40 Chief Operating Officer and Executive
Vice President
Thomas J. Hutchison III 58 Executive Vice President
Jeanne A. Wall 41 Executive Vice President
Lynn E. Rose 51 Secretary and Treasurer
Phillip M. Anderson, Jr. Chief Operating Officer and Executive Vice
President. Mr. Anderson joined CNL Health Care Corp. in January 1999 and is
responsible for the planning and implementation of CNL's interest in health care
industry investments, including acquisitions, development, project analysis and
due diligence. He currently serves as the Chief Operating Officer of both CNL
Health Care Corp., the Company's Advisor, and of CNL Health Care Development,
Inc. From 1987 through 1998, Mr. Anderson was employed by Classic Residence by
Hyatt. Classic Residence by Hyatt ("Classic") is affiliated with Hyatt Hotels
and Chicago's Pritzker family. Classic acquires, develops, owns and operates
seniors' housing, assisted living, skilled nursing and Alzheimer's facilities
throughout the United States. Mr. Anderson's responsibilities grew from
overseeing construction of Classic's first properties to acquiring and
developing new properties. After assuming responsibility for acquisitions, Mr.
Anderson doubled the number of senior living apartments/beds ("units") in the
portfolio by adding over 1,200 units. In addition, the development of an
additional 1,000 units of seniors' housing commenced under Mr. Anderson's
direction. Mr. Anderson also served on Classic's Executive Committee charged
with the responsibility of monitoring performance of existing properties and
development projects. Mr. Anderson has been a member of the American Senior
Housing Association since 1994 and currently serves on the executive board. He
graduated from the Georgia Institute of Technology in 1982, where he received a
B.S. in Civil Engineering, with honors.
Thomas J. Hutchison III. Executive Vice President. Mr. Hutchison
serves as President and Chief Operating Officer of CNL Real Estate Services,
Inc., which is the parent company of CNL Health Care Corp., the Advisor of the
Company. He is also the Chief Operating Officer of CNL Community Development
Corp. Mr. Hutchison joined CNL in January 2000 with more than 30 years of senior
management and consulting experience in the real estate development and services
industries. He currently serves on the board of directors of Restore Orlando, a
nonprofit community volunteer organization. Prior to joining CNL, Mr. Hutchison
was president and owner of numerous real estate services and development
companies. From 1995 to 2000, he was chairman and chief executive officer of
Atlantic Realty Services, Inc. and TJH Development Corporation. Since 1990, he
has fulfilled a number of long-term consulting assignments for large
corporations, including managing a number of large international joint ventures.
From 1990 to 1991, Mr. Hutchison was the court-appointed president and chief
executive officer of General Development Corporation, a real estate community
development company, where he assumed the day-to-day management of the $2.6
billion NYSE-listed company entering re-organization. From 1986 to 1990, he was
the chairman and chief executive officer of a number of real estate-related
companies engaged in the master planning and land acquisition of forty
residential, industrial and office development projects. From 1978 to 1986, Mr.
Hutchison was the president and chief executive officer of Murdock Development
Corporation and Murdock Investment Corporation, as well as Murdock's nine
service divisions. In this capacity, he managed an average of $350 million of
new development per year for over nine years. Additionally, he expanded the
commercial real estate activities to a national basis, and established both a
new extended care division and a hotel division that grew to 14 properties. Mr.
Hutchison was educated at Purdue University and the University of Maryland
Business School.
Jeanne A. Wall. Executive Vice President. Ms. Wall serves as Executive
Vice President of the Advisor. Ms. Wall is also Executive Vice President of CNL
Hospitality Properties, Inc., a public, unlisted real estate investment trust,
and Executive Vice President and director of CNL Hospitality Corp., its advisor.
She also serves as a director of CNLBank. Ms. Wall currently serves as Executive
Vice President of CNL Financial Group, Inc., a diversified real estate company.
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. and in 1985, became Vice President. In 1987, she became a
Senior Vice President and in July 1997, 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 product development, communications and
investor services for programs offered through participating brokers. Ms. Wall
also 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. from its inception in 1991 through 1997, as Vice President
of Commercial Net Lease Realty, Inc., a public real estate investment trust that
is listed on the New York Stock Exchange, from 1992 through 1997, as Executive
Vice President of CNL American Properties Fund, Inc., a public, unlisted real
estate investment trust, from 1994 through August 1999, and as Executive Vice
President of CNL Fund Advisors, Inc. from 1994 through August 1999, at which
time it merged with CNL American Properties Fund, Inc. Ms. Wall currently serves
as a trustee on the Board of the Investment Program Association, is a member of
the Corporate Advisory Council for the International Association for Financial
Planning, and is a member of the International Women's Forum. In addition, she
previously served on the Direct Participation Program committee for the National
Association of Securities Dealers, Inc. Ms. Wall holds a B.A. in Business
Administration from Linfield College and is a registered principal of CNL
Securities Corp.
Lynn E. Rose. Secretary and Treasurer. Ms. Rose serves as Secretary,
Treasurer and a director of the Advisor. Ms. Rose also serves as Secretary and
Treasurer of CNL Hospitality Properties, Inc., a public, unlisted real estate
investment trust, as Secretary, Treasurer and a director of CNL Hospitality
Corp., its advisor, and as Secretary of the subsidiaries of the Company. Ms.
Rose served as Secretary of CNL American Properties Fund, Inc., a public,
unlisted real estate investment trust, from 1994 through August 1999, and served
as Treasurer from 1994 through February 1999. She also served as Treasurer of
CNL Fund Advisors, Inc., from 1994 through July 1998, and served as Secretary
and a director from 1994 through August 1999, at which time it merged with CNL
American Properties Fund, Inc. Ms. Rose served as Secretary and Treasurer of
Commercial Net Lease Realty, Inc., a public real estate investment trust listed
on the New York Stock Exchange, from 1992 to February 1996, and as Secretary and
a director of CNL Realty Advisors, Inc., its advisor, from its inception in 1991
through 1997. She also served as Treasurer of CNL Realty Advisors, Inc. from
1991 through February 1996. Ms. Rose, a certified public accountant, has served
as Secretary of CNL Financial Group, Inc. (formerly CNL Group, Inc.) since 1987,
served as Controller from 1987 to 1993 and has served as Chief Financial Officer
since 1993. She also serves as Secretary of the subsidiaries of CNL Financial
Group, Inc. and holds various other offices in the subsidiaries. In addition,
she serves as Secretary for approximately 50 additional corporations affiliated
with CNL Financial Group, Inc. and its subsidiaries. Ms. Rose has served as
Chief Financial Officer and Secretary of CNL Securities Corp. since July 1994.
Ms. Rose oversees the tax and legal compliance for over 375 corporations,
partnerships and joint ventures, and the accounting and financial reporting for
over 200 entities. 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. Ms. Rose holds a B.A. in Sociology from the University of Central
Florida. She was licensed as a certified public accountant in 1979.
The backgrounds of Messrs. Seneff and Bourne are described at
"PROPOSAL I: 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 December 22, 1997 (date of inception) through December 31, 1997 or
during the years ended December 31, 1998 and 1999. In addition, no executive
officer of the Company received an annual salary or bonus from the Company
during the year ended December 31, 1999. The Company's executive officers also
are employees and executive officers of the Advisor or its affiliates and
receive compensation from CNL Financial Group, Inc. or its affiliates in part
for services in such capacities. See "Certain Transactions" for a description of
the fees payable and expenses reimbursed to the Advisor and its affiliates.
SECURITY OWNERSHIP
The following table sets forth, as of February 23, 2000, 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.
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Shares
James M. Seneff, Jr. 20,000 (1) 3.3%
Robert A. Bourne 0 --
David W. Dunbar 0 --
Timothy S. Smick 0 --
Edward A. Moses 0 --
Phillip M. Anderson, Jr. 1,075 (2)
All directors and executive 21,075 3.4%
officers as a group (9 persons)
(1) Includes 20,000 shares held by the Advisor of which Mr. Seneff is director.
Mr. Seneff and his wife share beneficial ownership of the Advisor through
their ownership of CNL Financial Group, Inc. The Advisor is a wholly owned
subsidiary of CNL Financial Group, Inc.
(2) Less than one percent.
CERTAIN TRANSACTIONS
All of the executive officers of the Company are executive officers of the
Advisor, a wholly owned subsidiary of CNL Financial Group, Inc., of which
Messrs. Seneff and Bourne are executive officers and directors and whose shares
are beneficially owned by Mr. Seneff and his wife. 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 Financial Group, Inc. Messrs. Seneff and
Bourne are directors of the Company, the Advisor and CNL Securities Corp., and
Ms. Rose is a director of the Advisor. Administration of the day-to-day
operations of the Company is provided by the Advisor, pursuant to the terms of
an advisory agreement. The Advisor 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. The Advisor also bears the expense of providing the
executive personnel and office space to the Company. The Advisor 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 of common stock, a
substantial portion of which will be paid as commissions to other
broker-dealers. For the year ended December 31, 1999, the Company incurred
$388,109 of such fees, the majority of which were 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, 1999, the Company incurred
$25,874 of such fees, the majority of which were reallowed to other
broker-dealers and from which all bona fide due diligence expenses will be paid.
The Advisor is entitled to receive acquisition fees for services in
identifying properties and structuring the terms of the leases of properties and
mortgage loans equal to 4.5% of gross proceeds of the Company's offering, loan
proceeds from permanent financing and amounts outstanding on the Company's line
of credit, if any, at the time of listing of the Company's stock on a national
securities exchange or over-the-counter market, but excluding that portion of
the permanent financing used to finance secured equipment leases. For the year
ended December 31, 1999, the Company incurred $232,865 of such fees.
The Advisor and its affiliates provide accounting and administrative
services to the Company (including accounting and administrative services in
connection with the offering of the Company's common stock) on a day-to-day
basis. For the year ended December 31, 1999, the Company incurred a total of
$373,480 for these services, $328,229 of such costs representing stock issuance
costs, $6,455 representing acquisition related costs and $38,796 representing
general operating and administrative expenses, including costs related to
preparing and distributing reports required by the Securities and Exchange
Commission.
The Company has and will continue to incur certain costs in connection with
the public offering of its common stock, including filing fees, legal,
accounting, marketing and printing costs and escrow fees, which will be deducted
from the gross proceeds of the offering. Certain preliminary costs incurred
prior to raising capital have been and will be advanced by an affiliate of the
Company. The Advisor has agreed to pay all organizational and offering expenses
(excluding commissions and marketing support and due diligence expense
reimbursement fees) which exceed three percent of the gross offering proceeds
received from the sale of shares of the Company. For the year ended December 31,
1999, the Company incurred $421,878 for such costs.
In addition, in connection with its current offering of common stock, the
Company has agreed to issue and sell soliciting dealer warrants ("Soliciting
Dealer Warrants") to CNL Securities Corp. The price for each warrant will be
$0.0008 and one warrant will be issued for every 25 shares sold by the managing
dealer, except when prohibited by federal or state securities laws. All or a
portion of the Soliciting Dealer Warrants may be reallowed to soliciting dealers
with prior written approval from, and in the sole discretion of the managing
dealer, except where prohibited by either federal or state securities laws. The
holder of a Soliciting Dealer Warrant will be entitled to purchase one share of
common stock from the Company at a price of $12.00 during the five year period
commencing with the date the offering begins. No Soliciting Dealer Warrants,
however, will be exercisable until one year from the date of issuance. As of
February 23, 2000, CNL Securities Corp. has been issued approximately 19,000
Soliciting Dealer Warrants.
All amounts paid by the Company to affiliates of the Company are believed
by the Company to be fair and comparable to amounts that would be paid for
similar services provided by unaffiliated third parties.
PROPOSAL II:
APPROVAL OF AMENDMENTS TO THE COMPANY'S
AMENDED AND RESTATED ARTICLES OF INCORPORATION
TO PERMIT THE COMPANY TO MAKE LOANS TO ADDITIONAL PARTIES
The Articles contain a number of provisions that limit the Company's
ability to enter into transactions with affiliated parties. Section 6.4(ii)
states that the Company will not make any loans to Affiliates. Affiliates are
defined to include: (i) any person or entity directly or indirectly through one
or more intermediaries controlling, controlled by, or under common control with
another person or entity; (ii) any person or entity, directly or indirectly
owning, controlling, or holding with power to vote ten percent (10%) or more of
the outstanding voting securities of another person or entity; (iii) any
officer, director, partner or trustee of such person or entity; (iv) any person
ten percent (10%) or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held with power to vote, by such other person;
and (v) if such other person or entity is an officer, director, partner or
trustee of a person or entity, the person or entity for which such person or
entity acts in any such capacity.
The Board of Directors believes that this provision is more restrictive
than is necessary to protect the interests of stockholders. For example, Section
6.4(ii) currently prohibits the Company from making a loan to a wholly owned
subsidiary, such as CNL Health Care Partners, LP, which is the operating entity
through which the Company expects to own properties and conduct its business.
Additionally, the current provisions prohibit the Company from making a loan to
a joint venture in which the Company owns an interest of as little as 10% and in
which the remaining interest is held by an unaffiliated third party. Because the
Board of Directors believes that Section 6.4(ii), as currently in effect,
precludes business transactions that are potentially advantageous to the Company
and that do not present undue risk of conflicts of interest with the Sponsor (as
such term is defined in the Articles), the Directors, the Advisor and Affiliates
of those persons, the Board has unanimously recommended that an amendment to
Section 6.4(ii) of Article VI of the Articles be submitted to stockholders for
approval.
The Company believes that the proposed change is consistent with the
requirements of the Statement of Policy Regarding Real Estate Investment Trusts
adopted by the North American Securities Administrators Association (NASAA).
These guidelines are applicable to REITs which make offerings that are not
exempt from registration under state securities laws.
The proposed amendment would allow the Company (i) to make loans to wholly
owned subsidiaries and (ii) to make mortgage loans to Affiliates in compliance
with Section 5.4 (iii) of the Company's Articles (which requires the Company to
obtain an independent appraisal of the value of the underlying property). The
Company would not be permitted to make loans to the Sponsor, the Directors, the
Advisor and the Affiliates of those persons in any other cases. The amendment as
set forth below and approved by the Board of Directors makes no other changes to
the existing text of Section 6.4 (ii).
The text of the proposed amendment is set forth below (the new text is
underlined, deleted text is struck through):
RESOLVED, that Section 6.4(ii) of Article VI of the Company's Amended
and Restated Articles of Incorporation, as amended, be
amended to read as follows:
Section 6.4 Other Transactions
(ii) The Company will shall not make any loans to Affiliates the Sponsor,
Advisor, Directors or any Affiliates thereof, except (A) as provided
under Section 5.4(iii), or (B) to wholly owned subsidiaries of the
Company. Any loans to the Company by the Advisor or its Affiliates must
be approved by a majority of the Directors (including a majority of
Independent Directors) not otherwise interested in such transaction as
fair, competitive, and commercially reasonable, and no less favorable
to the Company than comparable loans between unaffiliated parties.
In connection with the above-described amendment to Section 6.4(ii), the
Board of Directors unanimously recommends an amendment to section 5.4(xvii) of
the Articles, which prohibits the Company from making loans to the Advisor and
its Affiliates. Because certain mortgage loans to Affiliates and loans to wholly
owned subsidiaries would be permitted by the revised Section 6.4(ii), retaining
section 5.4(xvii) in its current form would be inconsistent with the amended
Section 6.4(ii). The Board of Directors has unanimously recommended that an
amendment to Section 5.4(xvii) of Article V of the Articles, which excepts
transactions made subject to Section 6.4(ii), be submitted to stockholders for
approval. The amendment as approved by the Board of Directors makes no other
changes to the existing text of Section 5.4.
The text of the proposed amendment to Section 5.4(xvii) of the
Articles is set forth below (the new text is underlined, deleted text is struck
through):
RESOLVED, that Section 5.4(xvii) of Article V of the Company's Amended
and Restated Articles of Incorporation, as amended, be amended to read as
follows:
Section 5.4 Investment Limitations. In addition to the other investment
restrictions imposed by the Directors from time to time, consistent with the
Company's objective of qualifying as a REIT, the following shall apply to the
Company's investments:
(xvii) The Company shall not make loans to the Advisor or its Affiliates,
except as provided under Section 6.4(ii).
Approval of the amendments requires the affirmative vote of a majority of
the outstanding shares of the Company's common stock entitled to be voted
thereon. The Company's officers and directors have advised the Company that they
intend to vote their shares of common stock for the amendments. The Board of
Directors unanimously recommends that stockholders vote for the amendments.
Proxies will be voted FOR the amendments unless stockholders designate
otherwise.
The amendments, if approved by the stockholders, will become effective on
the date the amendments are filed with the Maryland Department of Assessments
and Taxation. It is anticipated that the appropriate filing to effect the
amendments will be made as soon after the annual meeting as is practicable.
INDEPENDENT AUDITORS
Upon recommendation of and approval by the Board of Directors, including
the independent directors, PricewaterhouseCoopers LLP has been selected to act
as independent certified public accountants for the Company during the current
fiscal year.
A representative of PricewaterhouseCoopers LLP 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 2001 must be received at the Company's office at 450 South Orange
Avenue, Orlando, Florida 32801, no later than November 11, 2000.
Notwithstanding the aforementioned deadline, under the Company's Bylaws, a
stockholder must follow certain other procedures to nominate persons for
election as directors or to propose other business to be considered at an annual
meeting of stockholders. These procedures provide that stockholders desiring to
make nominations for directors and/or to bring a proper subject before a meeting
must do so by notice timely received by the Secretary of the Company. With
respect to proposals for the 2001 annual meeting, the Secretary of the Company
must receive notice of any such proposal no earlier than February 9, 2001, and
no later than March 11, 2001.
<PAGE>
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1999, accompanies this proxy statement.
By Order of the Board of Directors,
/s/ Lynn E. Rose
-------------------------
Lynn E. Rose
Secretary
March 11, 2000
Orlando, Florida
<PAGE>
P R O X Y CNL HEALTH CARE PROPERTIES, 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 Health Care Properties, Inc. (the
"Company") which the undersigned is entitled to vote, at the Annual Meeting of
Stockholders of the Company to be held on May 10, 2000, at 10:00 a.m., local
time, and any adjournment thereof, on all matters set forth in the Notice of
Annual Meeting and Proxy Statement, dated March 11, 2000, a copy of which has
been received by the undersigned, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING ITEMS:
<TABLE>
<CAPTION>
1. Election of Five Directors
<S> <C>
________________________________________________________
Nominees: |_| FOR ALL |_| WITHHELD FOR ALL |_| FOR ALL NOMINEES, EXCEPT VOTE
WITHHELD FOR:
Robert A. Bourne (Write that nominee's name above)
David W. Dunbar
Edward A. Moses
Timothy S. Smick
James M. Seneff, Jr.
</TABLE>
2. Proposal to amend Amended and Restated Articles of Incorporation
and to permit the Company to make loans to additional parties
(see proxy statement pages 10-11).
|_| 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, TEAR AT THE PERFORATION, AND RETURN
IN ENCLOSED ENVELOPE)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
IF YOU SIGN, DATE AND MAIL YOUR PROXY WITHOUT INDICATING HOW YOU WANT
TO VOTE, YOUR PROXY WILL BE COUNTED AS A VOTE "FOR" THE MATTERS STATED. IF YOU
FAIL TO RETURN YOUR PROXY, YOUR PROXY WILL NOT BE COUNTED. EACH STOCKHOLDER IS
URGED TO SUBMIT A SIGNED AND DATED PROXY.
Dated: , 2000
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.
<PAGE>
SEND IN YOUR PROXY
Please Vote
o Your Vote Counts...
The date of the CNL Health Care Properties, Inc. annual stockholder
meeting is rapidly approaching. We encourage you to cast your vote
promptly, so that we can avoid the time and expense of re-soliciting
your vote.
o Help Save Costs...
Re-soliciting stockholders adds unnecessary costs to CNL Health Care
Properties, Inc. Help us minimize operational expenses.
o Send in Your Proxy Today...
Please review the proxy card located in this stockholder package. Simply
cast your vote, sign and detach the proxy and return it in the
postage-paid envelope provided.
o Thank You!
If you have any questions, please call our Investor Services Department
at 1-800-522-3863. We appreciate your participation and support.
CNL Health Care Properties, Inc.
CNL Center at City Commons
450 South Orange Avenue
Orlando, FL 32801-3336
(407) 650-1000 (800) 522-3863
<PAGE>
FRONT OF CARD:
Your Vote is Important!
Please take a minute to sign, date and return your voting card.
CNL Health Care Properties, Inc.
CNL Center at City Commons
450 South Orange Avenue
Orlando, FL 32801-3336
(407) 650-1000 (800) 522-3863
BACK OF CARD:
The date of the CNL Health Care Properties, Inc. annual shareholder meeting is
quickly approaching...and we need your help!
You should have recently received your CNL Health Care Properties, Inc. annual
report, proxy statement and proxy card. Please take a few minutes to sign, date
and return the voting card. Please note: ALL parties must sign the voting card
in order for it to be valid.
If you have already cast your vote, thank you for your prompt attention to this
important matter. We appreciate your participation!
Management cannot vote your shares for you and it is important that your shares
are represented.
Please vote. Every Vote Counts! Thank You!
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the balance sheet of CNL Health Care Properties, Inc. at December 31, 1999, and
its statement of income for the twelve months then ended and is qualified in its
entirety by reference to the Form 10K of CNL Health Care Properties, Inc. for
the twelve months ended December 31, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 4,744,222
<SECURITIES> 0
<RECEIVABLES> 15
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,088,560
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 5,400
<OTHER-SE> 3,286,737
<TOTAL-LIABILITY-AND-EQUITY> 5,088,560
<SALES> 0
<TOTAL-REVENUES> 86,231
<CGS> 0
<TOTAL-COSTS> 114,621
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (28,390)
<INCOME-TAX> 0
<INCOME-CONTINUING> (28,390)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (28,390)
<EPS-BASIC> (.07)
<EPS-DILUTED> (.07)
<FN>
<F1>Due to the nature of its industry, CNL Health Care Properties, Inc. has an
unclassified balance sheet; therefore, no values are shown above for current
assets and liabilities
</FN>
</TABLE>
