SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or 240.14a-12
BNP Residential Properties, Inc.
(formerly Boddie-Noell Properties, Inc.)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11(Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
BNP RESIDENTIAL PROPERTIES, INC.
(formerly Boddie-Noell Properties, Inc.)
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3850 One First Union Center, Charlotte, NC 28202-6032, Telephone 704/944-0100
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held May 25, 2000
The annual meeting of shareholders of BNP Residential Properties, Inc. (the
"Company"), formerly Boddie-Noell Properties, Inc., will be held at the Hilton
Hotel in downtown Charlotte, North Carolina, on Thursday, May 25, 2000, at 2:00
p.m., for the following purposes:
1. To elect two directors;
2. To transact such other business that may properly come before the
meeting or any adjournments thereof.
April 7, 2000, is the record date for the determination of shareholders
entitled to notice of and to vote at the meeting.
We cannot conduct the proposed business at the annual meeting unless the
holders of a majority of the shares of the company outstanding on the record
date are present in person or by proxy. Therefore, PLEASE MARK, DATE, SIGN AND
RETURN THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS. THE
PROXY IS REVOCABLE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ATTEND THE MEETING.
By Order of the Board of Directors,
PHILIP S. PAYNE
Executive Vice President, Treasurer, and
Chief Financial Officer
April 24, 2000
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IMPORTANT
Shareholders can help the company avoid the necessity and expense of
sending follow-up letters to ensure a quorum by promptly returning the enclosed
proxy. Please mark, date, sign and return the enclosed proxy in order that the
necessary quorum may be represented at the meeting. The enclosed envelope
requires no postage if mailed in the United States.
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BNP RESIDENTIAL PROPERTIES, INC.
(formerly Boddie-Noell Properties, Inc.)
- -------------------------------------------------------------------------------
3850 One First Union Center, Charlotte, NC 28202-6032, Telephone 704/944-0100
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
to be held May 25, 2000
April 24, 2000
The Board of Directors of BNP Residential Properties, Inc. solicits the
enclosed proxy for use at the annual meeting of shareholders to be held on
Thursday, May 25, 2000. We expect to mail the proxy, proxy statement and notice
of meeting to shareholders on April 25, 2000.
We may also solicit proxies by personal interview or telephone. In
addition to directors or officers of the company, certain independent
solicitation agents may solicit proxies. We have retained Corporate
Communications, Inc. and First Union National Bank to assist in identifying and
contacting shareholders for the purpose of soliciting proxies. We expect the
cost of these services to be approximately $6,000, exclusive of certain other
fees we pay to First Union National Bank and Corporate Communications, Inc.
related to the meeting. BNP Residential Properties, Inc. will bear the costs of
this solicitation.
Holders of record of shares of BNP Residential Properties, Inc. common
stock as of the close of business on April 7, 2000, the record date, are
entitled to receive notice of and to vote at the meeting. A shareholder of
record on the record date is entitled to one vote for each share held. The
holders of a majority of the outstanding shares of common stock entitled to vote
at the meeting will constitute a quorum. At the close of business on April 7,
2000, there were 5,706,950 shares of common stock issued and outstanding.
You may revoke your proxy at any time before it is exercised, by filing
with the company a written notice of your revocation, by delivering a duly
executed proxy bearing a later date, or by voting in person at the meeting. If
you attend the meeting, you may withdraw your proxy at the meeting and vote your
shares in person. Executing your proxy will not, in any way, affect your right
to attend the meeting, revoke your proxy, and vote in person.
Every proxy returned in time to be voted at the meeting will be voted. If
a specification is made with respect to any proposal, the proxy will be voted
accordingly. If no specification is made, the proxy will be voted in favor of
the proposal.
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With respect to Proposal One, Election of Directors, the two nominees
receiving the highest number of votes will be elected. Abstentions on Proposal
One, Election of Directors, will not affect the election of the candidates
receiving the most votes.
No appraisal or dissenters' rights are available with respect to any
matters to be voted upon at the meeting.
PROPOSALS OF SHAREHOLDERS
We hereby give notice that any shareholder proposals for inclusion in
proxy solicitation material for the next annual meeting must be received at the
BNP Residential Properties, Inc. executive offices no later than December 26,
2000. Any such proposals must comply with requirements of Rule 14a-8 promulgated
under the Securities Exchange Act of 1934.
Under our bylaws, we must receive any shareholder proposal to be presented
in connection with our 2001 annual meeting by February 24, 2001.
GENERAL
The Board of Directors knows of no other matter to be acted upon at the
meeting. However, if any other matter is lawfully brought before the meeting,
the shares covered by such proxy will be voted thereon in accordance with the
best judgment of the persons acting under such proxy, unless a contrary intent
is specified by the shareholder.
Your vote is important. If you cannot attend the meeting, please take time
to complete the enclosed proxy card and return it in the envelope provided.
By Order of the Board of Directors,
PHILIP S. PAYNE
Executive Vice President, Treasurer, and
Chief Financial Officer
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PROPOSAL ONE:
ELECTION OF DIRECTORS
Our Board of Directors consists of seven directors. In March 1999, we
changed our bylaws to allow for directors' terms of office to expire on a
staggered basis. This year we need to elect two directors to serve for a period
of three years, until the 2003 annual meeting, or until their successors are
elected and qualified.
Terms of office for William H. Stanley and W. Michael Gilley expire at the
2000 annual meeting of shareholders. Messrs. Stanley and Gilley are nominees for
election to the Board of Directors to serve for a period of three years, until
the 2003 annual meeting, or until each director's successor is elected and
qualified.
The current directors hold office for the terms described below or until
their successors are elected and qualified. We have set forth below a listing
and brief biography of each of the current directors, including those persons
nominated for election to the Board of Directors:
<TABLE>
<CAPTION>
Name Age Position Director Since
- ---------------------------- ---------- ------------------------------------------------ -------------------
<S> <C> <C> <C>
Directors serving until the 2002 annual meeting:
B. Mayo Boddie 70 Director, Chairman of the Board April 1987
D. Scott Wilkerson 42 Director, President and December 1997
Chief Executive Officer
Paul G. Chrysson 44 Director December 1997
Directors serving until the 2001 annual meeting:
Philip S. Payne 48 Director, Executive Vice President, December 1997
Treasurer and Chief Financial Officer
Stephen R. Blank 54 Director May 1999
Directors serving until the 2000 annual meeting and current nominees:
William H. Stanley 74 Director April 1987
W. Michael Gilley 44 Director December 1997
</TABLE>
B. Mayo Boddie--Chairman of the Board of Directors. Mr. Boddie was one of
our founders and a co-founder of Boddie-Noell Enterprises, Inc. ("Enterprises")
in 1961. He serves as Chairman of the Board of Directors of both companies. Mr.
Boddie served as chief executive officer of the company from its inception until
April 1995. Mr. Boddie serves as a director of First Union National Bank of
North Carolina.
D. Scott Wilkerson--Director, President and Chief Executive Officer. Mr.
Wilkerson joined BT Venture Corporation, which was subsequently purchased by
Boddie-Noell Properties, in 1987 and served in various officer level positions,
including Vice President of Administration and Finance and Vice President for
Acquisitions and Development
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before becoming President in January 1994. He was named Chief Executive Officer
in April 1995 and a Director in December 1997. From 1980 to 1986, Mr. Wilkerson
was with Arthur Andersen LLP, in Charlotte, North Carolina, serving as tax
manager from 1985 to 1986. His specialization was in the representation of real
estate investors, developers and management companies. Mr. Wilkerson received a
BS degree in accounting from the University of North Carolina at Charlotte in
1980. He is a certified public accountant and licensed real estate broker. He
serves on the boards of directors of the National Multifamily Housing Council
and the Apartment Association of North Carolina, and he is President of the
Charlotte Apartment Association. He is active in various professional, civic and
charitable activities.
Philip S. Payne--Director, Executive Vice President, Treasurer and Chief
Financial Officer. Mr. Payne joined BT Venture Corporation, which was
subsequently purchased by Boddie-Noell Properties, in 1990 as Vice President of
Capital Market Activities and became Executive Vice President and Chief
Financial Officer in January 1993. He was named Treasurer in April 1995 and a
Director in December 1997. From 1987 to 1990 he was a principal in Payne Knowles
Investment Group, a financial planning firm. From 1983 to 1987 he was a
registered representative with Legg Mason Wood Walker. From 1978 to 1983, Mr.
Payne practiced law, and he currently maintains his license to practice law in
Virginia. He received a BS degree from the College of William and Mary in 1973
and a JD degree in 1978 from the same institution. Mr. Payne is a member of the
Editorial Board of Real Estate Portfolio, a publication of the National
Association of Real Estate Investments Trusts. He serves on the board of
directors of the National Multifamily Housing Council.
Stephen R. Blank--Director. Mr. Blank is a Senior Fellow, Finance, with the
Urban Land Institute. From 1993 to 1998, he was the Managing Director for Real
Estate Investment Banking with CIBC Oppenheimer Corp. He is an independent
trustee of Ramco-Gershenson Properties Trust and Atlantic Realty Trust, and a
director of WestCoast Hospitality Corporation.
Paul G. Chrysson--Director. Mr. Chrysson is President of C.B. Development
Company, Inc., a developer of single family and multi-family residential
properties. Mr. Chrysson is on the Board of Directors of Amos Cottage Children's
Hospital and Greenbriar Corporation. He is also on the Board of Advisors of
Wachovia Bank (Forsyth County). He is a former director of Triad Bank and United
Carolina Bank (North Carolina). He has also served on the boards of various
charitable organizations. He has been a licensed real estate broker since 1974
and a licensed contractor since 1978.
W. Michael Gilley--Director. Mr. Gilley is President of Bartram Investment
Properties, Inc., and is a developer of single family and multi-family
residential properties. From January 1995 to January 1997, he was Executive Vice
President of Greenbriar Corporation. He also served on their Board of Directors
from September 1994 to September 1996. He has been a licensed real estate broker
since 1984.
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William H. Stanley--Director. Mr. Stanley is retired from the positions of
Chairman of the Board of Directors and Chief Executive Officer of Peoples Bank
and Trust Company. Mr. Stanley serves as a director of Ellett Bros., Inc. and
Rocky Mount Mills.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors of the company recommends a vote FOR William H.
Stanley and W. Michael Gilley as directors to hold office for the three-year
terms, expiring at the 2003 annual meeting or shareholders, or until their
successors are elected and qualified.
COMMITTEES OF THE BOARD OF DIRECTORS; MEETINGS
The Board of Directors met 10 times during the year ended December 31,
1999, including six meetings held by telephone. The Board of Directors has two
committees - the Audit Committee and the Management Compensation Committee.
The Audit Committee consists of Messrs. Stanley (Chairman), Blank, and
Gilley. The committee recommends to the Board of Directors the engagement of the
independent public accountants of the company and reviews with the independent
public accountants the scope and results of the company's audits and the
company's internal accounting controls. During 1999, the Audit Committee held
two meetings.
The Management Compensation Committee consists of Messrs. Chrysson
(Chairman), Blank, Gilley, Stanley, and Douglas E. Anderson, who is a
non-compensated officer of the company. The committee is responsible for
ensuring that a proper system of short- and long-term compensation is in place
to provide performance-oriented incentives to management. During 1999, the
Management Compensation Committee held one meeting.
COMPENSATION OF DIRECTORS
During 1999, we paid directors' fees to each director who is not an
executive officer of the company. During the year ended December 31, 1999,
Messrs. Boddie, Blank, Chrysson, Gilley and Stanley were each paid annual
retainers of $10,000 plus fees totaling approximately $4,400 each for
participation in board meetings and approximately $300 each for participation in
committee meetings. Messrs. Wilkerson and Payne did not receive any compensation
for their service as directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Anderson, who is a member of the Management Compensation Committee,
serves without compensation as a vice president and secretary of the company. No
other member of the Management Compensation Committee was or is an officer or
employee of the company.
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process, including the systems of
internal controls. In fulfilling our oversight responsibilities, we reviewed the
audited financial statements in the Annual Report with management, including
discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.
The independent auditors are responsible for expressing an opinion on the
conformity of those audited financial statements with generally accepted
accounting principles. We reviewed with the independent auditors their judgments
as to the quality, not just the acceptability, of the company's accounting
principles and such other matters as are required to be discussed with the
committee under generally accepted auditing standards. In addition, we have
discussed with the independent auditors their independence from management and
the company, including the matters in the written disclosures required by the
Independence Standards Board of the American Institute of Certified Public
Accountants.
We discussed with the company's independent auditors the overall scope and
plans for the audit. We met with the independent auditors, with and without
management present, to discuss the results of their examinations, their
evaluations of the company's internal controls, and the overall quality of the
company's financial reporting. The committee held two meetings during fiscal
1999.
We relied on the reviews and discussions referred to above. Based on this
reliance, we recommended to the Board of Directors, and the Board has approved,
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended December 31, 1999, for filing with the Securities and
Exchange Commission. We recommended, and the Board approved, the selection of
Ernst & Young LLP as the company's independent auditors for the fiscal year
ending December 31, 2000.
In February 2000, the Board of Directors approved a new Audit Committee
Charter. A copy of this charter is included as Exhibit A to this proxy
statement. We have met with the company's independent auditors and management to
discuss the duties and responsibilities imposed by the charter and to coordinate
implementation of the charter.
April 24, 2000 Audit Committee
William H. Stanley
Stephen R. Blank
W. Michael Gilley
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The foregoing report should not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
EXECUTIVE COMPENSATION
The following tables provide information regarding the annual and
long-term compensation of our chief executive officer and the other most highly
paid executive officers whose total salary and bonus exceeded $100,000 in 1999.
We refer to them as the "named executive officers."
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------ All Other ------------------
Name and Principal Position Year Salary Bonus Compensation Options (#)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
D. Scott Wilkerson, President and 1999 $160,000 $ 0 $0 0
Chief Executive Officer 1998 160,000 50,000 0 50,000
1997 139,920 30,000 0 50,000
Philip S. Payne, Executive Vice 1999 $160,000 $ 0 $0 0
President, Treasurer and 1998 160,000 50,000 0 50,000
Chief Financial Officer 1997 139,920 30,000 0 50,000
Pamela B. Bruno, Vice President, 1999 $103,500 $ 0 $0 0
Controller and Chief Accounting 1998 103,500 20,000 0 20,000
Officer 1997 90,000 10,000 0 10,000
</TABLE>
1999 Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-Money
Options at Fiscal Year End Options at Fiscal Year End
Name Exercisable/Unexercisable Exercisable/Unexercisable (1)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
D. Scott Wilkerson 87,500 62,500 - -
Philip S. Payne 87,500 62,500 - -
Pamela B. Bruno 20,000 20,000 - -
<FN>
(1) Based on the closing price of $8.375 per share of common stock on December 31, 1999.
</FN>
</TABLE>
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EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
In July 1997, we entered into substantially identical employment
agreements with D. Scott Wilkerson (President and Chief Executive Officer) and
Philip S. Payne (Executive Vice President and Chief Financial Officer). The term
of the agreements is four years, subject to automatic annual renewal for
additional one-year periods extending the term to a maximum of ten years. The
agreements provide for initial annual base salaries of $139,920, annual
discretionary bonuses as determined by the Board of Directors, and participation
in an incentive compensation plan we intend to establish, along with specified
death and disability benefits. The agreements provide for severance payments
equal to base salary for the remaining term of the contract (excluding any
unexercised renewal periods) in the event of termination without cause. In the
event of a change in control of the company, the agreements provide for payments
of three times base salary, discretionary bonus and annual bonus. In addition,
the agreements provide for a lump sum cash payment of the benefit the executive
would otherwise have received had all stock options and other stock based
compensation been fully vested, been exercised and become due and payable.
Also in July 1997, we entered into an employment agreement with Pamela B.
Bruno (Vice President, Controller and Chief Accounting Officer). The two-year
agreement is substantially identical to the agreements signed by Messrs.
Wilkerson and Payne, except that this agreement provides for a base salary of
$90,000 and limits severance payments to no more than the greater of the then
remaining term of the agreement or one year's total compensation.
MANAGEMENT COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Management Compensation Committee is providing this report to assist
shareholders in understanding our objectives in establishing the compensation of
our executive officers. The Management Compensation Committee is responsible for
establishing and administering the company's executive compensation plan.
We believe that the executive officers' compensation should:
o Link rewards to business results and shareholder returns;
o Encourage creation of shareholder value and achievement of strategic
objectives;
o Maintain an appropriate balance between base salary and short- and
long-term incentive opportunity;
o Attract and retain, on a long-term basis, high-caliber personnel; and
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o Provide total compensation opportunity that is competitive with other
REITs, taking into account relative company size and performance, as well
as individual responsibilities and performances.
There are three key components to the executive compensation program: base pay,
short-term incentives and long-term incentives.
Base pay for the executive officers is designed to be competitive with
that paid by other REITs, considering the size of the company and individual
responsibilities and performance. We review base pay for the executive officers
annually.
We base short-term incentives, generally cash payments, on the attainment
of certain targeted performance results. These targets include measures such as
total shareholder return, operating earnings, funds from operations, cash flow,
and increasing the size and diversity of our portfolio. Individual awards depend
on our assessments of individual performance and the company's success in
meeting the specified targets.
Long-term incentives may include a variety of incentives, including stock
options, stock appreciation rights, phantom stock and direct grants of the
company's stock. The company has reserved 570,000 shares of common stock for
issuance under the Stock Option and Incentive Plan that was adopted in 1994. As
of December 31, 1999, options for 430,000 shares of common stock were
outstanding.
1999 Compensation of the CEO
D. Scott Wilkerson became president of the company on October 1, 1994, and
was named chief executive officer in April 1995. Mr. Wilkerson's employment
contract, effective July 1997, provides for an initial base salary of $139,920,
annual discretionary bonuses, and participation in an incentive compensation
plan we intend to establish. The Management Compensation Committee determined
Mr. Wilkerson's 1999 base salary of $160,000 in the same manner as described
above for other executive officers.
April 24, 2000 Management Compensation Committee
William H. Stanley
Stephen R. Blank
Paul G. Chrysson
W. Michael Gilley
Douglas E. Anderson
The foregoing report should not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides certain information regarding beneficial
ownership of common stock as of April 1, 2000, by each of the named executive
officers, and by all directors and officers as a group. We do not know of any
single person or group who is the beneficial owner of more than 5% of the
company's common stock.
<TABLE>
<CAPTION>
Shares Beneficially Owned
Directors and Officers Number Percent
- ----------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
B. Mayo Boddie 195,466 3.4%
D. Scott Wilkerson (1) 127,070 2.2%
Philip S. Payne (1) 127,070 2.2%
Stephen R. Blank 0 *
Paul G. Chrysson (2) 245,657 4.1%
W. Michael Gilley (3) 238,565 4.0%
William H. Stanley 4,000 *
Douglas E. Anderson (4) 55,671 *
Pamela B. Bruno (5) 22,575 *
All directors and executive officers as a group (9 persons) (6) 1,016,074 15.9%
* Less than 1 percent.
<FN>
(1) Number and percent of shares beneficially owned includes exercisable
options for 87,500 shares. Messrs. Wilkerson and Payne each own 41
shares (representing in the aggregate a 2.5% economic interest) of the
Class A (voting) stock of BNP Management, inc., a subsidiary of the
company.
(2) Number and percent of shares beneficially owned includes 245,657 units in
Boddie-Noell Properties Limited Partnership, the company's Operating
Partnership, owned by Mr. Chrysson, which are convertible, at the option
of the company, into shares of common stock.
(3) Number and percent of shares beneficially owned includes 233,565 units in
Boddie-Noell Properties Limited Partnership, the company's Operating
Partnership, owned by Mr. Gilley, which are convertible, at the option of
the company, into shares of common stock.
(4) Number and percent of shares beneficially owned includes exercisable
options for 15,000 shares.
(5) Number and percent of shares beneficially owned includes exercisable
options for 20,000 shares.
(6) Number and percent of shares beneficially owned includes exercisable
options for 210,000 shares held by directors and officers.
</FN>
</TABLE>
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
BNP RESIDENTIAL PROPERTIES, INC. AND B. MAYO BODDIE
B. Mayo Boddie, Chairman of our Board of Directors, is Chairman of the
Board of Directors and Chief Executive Officer of Enterprises. Mr. Boddie and
certain of his family members are the sole owners of Enterprises. We lease 44
restaurant properties to Enterprises. See "BNP Residential Properties, Inc. and
Boddie-Noell Enterprises" below.
Mr. Boddie is a shareholder and director of Boddie Investment Company. See
"BNP Residential Properties, Inc. and Boddie Investment Company" below.
Mr. Boddie was a shareholder and director of BT Venture Corporation. We
acquired BT Venture Corporation in 1994 for a total contract price of $24.9
million. As part of the acquisition, the former shareholders of BT Venture
Corporation have indemnified the company, subject to certain limitations,
against any claim against us that we assume as a result of our being the
successor-in-interest to BT Venture Corporation.
B. Mayo Boddie received $14,400 compensation for his services as Chairman
and Director of the company in 1999.
BNP RESIDENTIAL PROPERTIES, INC. AND BODDIE-NOELL ENTERPRISES, INC.
In 1987 we purchased 47 existing restaurant properties from BNE Realty
Partners, Limited Partnership, an affiliate of Enterprises, for an aggregate
purchase price of $43.2 million. Concurrent with our acquisition of the
properties, we leased them on a triple-net basis to Enterprises under a master
lease. The master lease, as amended in December 1995, has a primary term
expiring in December 2007, but grants Enterprises three five-year renewal
options. Under the amended lease, Enterprises pays annual rent equal to the
greater of specified minimum rent or 9.875% of food sales from the restaurants.
Enterprises operates the restaurants under franchise agreements with Hardee's
Food Systems, Inc.
Until June 1999, the minimum rent was $4.5 million per year. In June 1999,
Enterprises closed three restaurants under the "non-economic" provision of the
master lease. In conjunction with these closings, we sold the three restaurants
to Enterprises for $2.1 million, an amount equal to their net book value.
Subsequent to the closing, the minimum rent was reduced to $4.2 million per
year.
For the year ended December 31, 1999, the master lease with Enterprises
resulted in rental income of $4.3 million, or approximately 13% of our total
revenues. Enterprises is responsible for all taxes, utilities, insurance,
maintenance, and alteration expenses relating to the operation of the restaurant
properties.
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In connection with the acquisition of BT Venture Corporation in 1994, we
assumed a note payable to Enterprises in the amount of $6.1 million, with
interest at a variable rate equal to the 30-day LIBOR rate plus 1.5%, capped at
8.0%. Payments were interest only and paid quarterly. We made a cash payment of
$6.1 million to Enterprises to retire the note in May 1999. Interest on this
note was $132,000 in 1999.
BNP RESIDENTIAL PROPERTIES, INC. AND BODDIE INVESTMENT COMPANY
BNP Management, Inc., our unconsolidated subsidiary, provides fee
management of five limited partnerships and the apartment communities and
shopping center owned by those partnerships. Boddie Investment Company is the
general partner of these limited partnerships. BNP Management had revenues of
$472,000 from these limited partnerships in 1999.
In February 1997, we entered into a participating loan agreement with The
Villages of Chapel Hill Limited Partnership, a limited partnership whose general
partner is Boddie Investment Company. Under the terms of the agreement, we
advanced The Villages $2.5 million, of which $1.9 million was repaid in February
1999. We also provided a guarantee of $1.5 million on a note payable by The
Villages to a bank. During 1999, we earned $188,000 in interest and fees related
to this participating loan agreement and incurred $63,000 in interest expense to
fund the advances.
BNP RESIDENTIAL PROPERTIES, INC. AND THE CHRYSSON PARTIES
In September 1997, we signed an agreement with Paul and James Chrysson and
certain of their affiliates, all of whom together we refer to as the "Chrysson
Parties," to acquire a portfolio of seven apartment communities containing 1,356
units located in North Carolina. Under this acquisition agreement, we acquired
six apartment communities in 1997 and 1998. We refer to the acquisition of these
Chrysson properties as the Chrysson acquisition. The aggregate contract purchase
price of the six communities was approximately $85.9 million, including the
issuance of 1,350,000 partnership units of Boddie-Noell Properties Limited
Partnership and relief from $67.0 million in debt related to the communities. As
part of the acquisition agreement, the Chrysson Parties appointed two members to
our Board of Directors--Paul G. Chrysson and W. Michael Gilley.
Under the terms of the Chrysson acquisition agreement, we will issue up to
1.7 million partnership units of Boddie-Noell Properties Limited Partnership. We
have issued 1.3 million units to Chrysson parties, including 100,000 units
issued in 1999. We will issue the remaining units upon the acquisition of the
remaining apartment community that is currently under construction. In addition,
as long as any of the Chrysson Parties is a member of our board of directors or
the Chrysson Parties, in the aggregate, own five percent or more of the
outstanding shares and operating partnership units of the company, we will have
a right of first refusal to purchase any project developed in the future by a
development entity owned by the Chrysson Parties. As a further condition of the
acquisition agreement, the Chrysson Parties have agreed to refrain from
developing any
13
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apartment communities within a three-mile radius of any apartment community we
own now or in the future.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the company, upon the recommendation of the
Audit Committee, has appointed the accounting firm of Ernst & Young LLP to serve
as our independent auditors for the fiscal year ending December 31, 2000. Ernst
& Young has served as our independent auditors since October 1996 and is
considered by management to be well qualified. Ernst & Young has advised us that
neither it nor any member thereof has any financial interest, direct or
indirect, in the company or any of its subsidiaries in any capacity.
Representatives of Ernst & Young LLP will be present at the Meeting, will have
the opportunity to make a statement if they so desire, and will be available to
respond to appropriate questions.
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<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following stock price performance graph compares the company's
performance to the S&P 500 and the index of equity REITs prepared by the
National Association of Real Estate Investment Trusts ("NAREIT") for the last
five years. The stock price performance graph assumes an initial investment on
December 31, 1994, of $100 in the company and the two indexes, and further
assumes the reinvestment of all dividends.
Equity REITs are defined as those that derive more than 75% of their
income from equity investments in real estate assets. The NAREIT equity index
includes all tax qualified real estate investment trusts listed on the New York
Stock Exchange, American Stock Exchange and NASDAQ National Market System. Stock
price performance is not necessarily indicative of future results.
[object omitted]
Data points:
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Company 100.00 109.79 120.70 146.69 121.04 108.77
NAREIT 100.00 115.27 155.92 187.51 154.69 145.54
S&P 500 100.00 137.43 168.98 225.37 289.77 350.71
</TABLE>
The stock price performance graph shall not be deemed to be incorporated
by reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
15
<PAGE>
Exhibit A
BNP Residential Properties, Inc.
Board of Directors
Audit Committee Charter
ORGANIZATION
This charter governs the operations of the Audit Committee. The committee shall
review and reassess the charter at least annually and obtain the approval of the
Board of Directors. The committee shall be appointed by the Board of Directors
and shall comprise at least three directors, each of whom is independent of
management and the company. Members of the committee shall be considered
independent if they have no relationship that may interfere with the exercise of
their independence from management and the company. All committee members shall
be financially literate, and at least one member shall have accounting or
related financial management expertise.
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the company's
financial statements and the financial reporting process. In addition, the Audit
Committee shall provide such assistance with regard to the systems of internal
accounting and financial controls, the annual independent audit of the company's
financial statements, and the legal compliance and ethics programs as
established by management and the board. In so doing, it is the responsibility
of the committee to maintain free and open communication between the committee,
independent auditors and management of the company. In discharging its oversight
role, the committee is empowered to investigate any matter brought to its
attention with full access to all books, records, facilities and personnel of
the company and the power to retain outside counsel or other experts for this
purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Audit Committee is to oversee the company's
financial reporting process on behalf of the board and report the results of
their activities to the board. Management is responsible for preparing the
company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The committee, in carrying out its
responsibilities, believes its policies and procedures should remain flexible,
in order to best react to changing conditions and circumstances. The committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
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<PAGE>
The following shall be the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the committee may supplement them as
appropriate.
o The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the board and the audit committee, as representatives of the
company's shareholders. The committee shall have the ultimate authority and
responsibility to evaluate and, where appropriate, replace the independent
auditors. The committee shall discuss with the auditors their independence
from management and the company and the matters included in the written
disclosures required by the Independence Standards Board. Annually, the
committee shall review and recommend to the board the selection of the
company's independent auditors, subject to shareholders' approval.
o The committee shall discuss with the independent auditors the overall scope
and plans for their audits, including the adequacy of staffing and
compensation. Also, the committee shall discuss with management and the
independent auditors the adequacy and effectiveness of the accounting and
financial controls, including the company's system to monitor and manage
business risk, and legal and ethical compliance programs. Further, the
committee shall meet separately with the independent auditors, with and
without management present, to discuss the results of the examinations.
o The committee shall review the interim financial statements with management
and the independent auditors prior to the filing of the company's Quarterly
Report on Form 10-Q. Also, the committee shall discuss the results of the
quarterly review and any other matters required to be communicated to the
committee by the independent auditors under generally accepted auditing
standards. The chair of the committee may represent the entire committee
for the purposes of this review.
o The committee shall review with management and the independent auditors the
financial statements to be included in the Company's Annual Report on Form
10-K and the annual report to the shareholders. The committee shall review
with management and the independent auditors their judgment about the
quality, not just acceptability, of accounting principles, the
reasonableness of significant judgments, and the clarity of the disclosures
in the financial statements. Also, the committee shall discuss the results
of the annual audit and any other matters that the independent auditors are
required to communicate to the committee under generally accepted auditing
standards.
17
<PAGE>
P R O X Y BNP Residential Properties, Inc.
Proxy is Solicited on Behalf of the Board of Directors for the
Annual Meeting of Shareholders to be Held on May 25,2000
The undersigned hereby:
o acknowledges receipt of the Notice of Annual Meeting of Shareholders of BNP
Residential Properties, Inc. to be held on May 25, 2000, and the Proxy
Statement in connection therewith;
o appoints D. Scott Wilkerson and Philip S. Payne (the "Proxies"), or either
of them, each with the power to appoint a substitute; and
o authorizes the Proxies to represent and vote, as designated below, all the
shares of common stock of BNP Residential Properties, Inc. held of record
by the undersigned on April 7, 2000, at such Annual Meeting and at any
adjournment(s) thereof.
The Board of Directors recommends a vote FOR each of these proposals:
1. ELECTION OF DIRECTORS
( )FOR both nominees ( )WITHHOLD AUTHORITY to vote
(except as indicated to the contrary below) for both nominees
NOMINEES: William H. Stanley, W. Michael Gilley
Instructions: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.
2. OTHER BUSINESS: In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the meeting or any
adjournments.
( )FOR ( )WITHHOLD AUTHORITY
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WLL BE VOTED
"FOR" EACH OF THE PROPOSALS TO BE VOTED UPON AND IN THE DISCRETION OF THE
PROXIES ON ANY OTHER BUSINESS THAT PROPERLY COMES BEFORE THE MEETING.
Dated _________________, 2000
--------------------------------------
--------------------------------------
Please sign exactly as your name appears
hereon. When signing on behalf of a
corporation, partnership, estate, trust
or in any other representative capacity,
please sign your name and title. For
joint accounts, each joint owner must
sign.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE SO AS TO ENSURE A QUORUM AT THE MEETING. THIS IS IMPORTANT WHETHER YOU
OWN FEW OR MANY SHARES. DELAY IN RETURNING YOUR PROXY MAY SUBJECT THE COMPANY TO
ADDITIONAL EXPENSE.
