Edgar Filing: BNP RESIDENTIAL PROPERTIES INC

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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Filed by Party other than the Registrant [ ]

Check the appropriate box:
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by Rule 14-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12

BNP Residential Properties, Inc.

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BNP RESIDENTIAL PROPERTIES, INC.
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301 South College Street, Suite 3850, Charlotte, NC 28202-6024,
Telephone 704/944-0100

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held May 19, 2005

The annual meeting of shareholders of BNP Residential Properties, Inc.
(the "company"), will be held at the Hilton Charlotte & Towers Hotel, 222 East
Third Street, Charlotte, North Carolina, on Thursday, May 19, 2005, at 10:00
a.m., for the following purposes:

1. To elect three directors, one of whom will be the Series B director elected
by the holders of our Series B Cumulative Convertible Preferred Stock;
2. To amend our Stock Option and Incentive Plan;
3. To transact such other business that may properly come before the meeting
or any adjournments thereof.

April 4, 2005, 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 votes entitled to be cast are present in person or
by proxy. Therefore, PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY. 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

Chairman and
Chief Financial Officer

April 14, 2005

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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.
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301 South College Street, Suite 3850, Charlotte, NC 28202-6024,
Telephone 704/944-0100

PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
to be held May 19, 2005

April 14, 2005

BNP Residential Properties, Inc. solicits the enclosed proxy for use at
the annual meeting of shareholders to be held on Thursday, May 19, 2005. We
expect to mail the proxy, proxy statement and notice of meeting to shareholders
on April 18, 2005.

Holders of record of shares of BNP Residential Properties, Inc. common
stock and Series B Cumulative Convertible Preferred Stock ("Series B Preferred
Stock") as of the close of business on April 4, 2005, the record date, are
entitled to receive notice of the meeting. The holders of common stock will be
entitled to vote on the election of the directors (except for the Series B
director), on the amendment to the Stock Option and Incentive Plan, and on all
other matters that come before the meeting. The holders of Series B Preferred
Stock will be entitled to vote on the election of the Series B director only. 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 Series B
Preferred Stock entitled to vote at the meeting will constitute a quorum for
purposes of the election of the Series B director. For purposes of all other
matters to be voted upon, the presence in person or by proxy of shareholders
entitled to cast a majority of all the votes entitled to be cast at the meeting
will constitute a quorum. At the close of business on April 4, 2005, there were
9,159,167 shares of common stock issued and outstanding, and 909,090 shares of
Series B Preferred 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 the proxy is executed but no instruction is given, the votes
will be cast "FOR" the nominees for directors, "FOR" the amendment to the Stock
Option and Incentive Plan, and in the discretion of the proxy holder on any
other matter that may properly come before the meeting or any adjournment or
postponement thereof, unless otherwise indicated.

With respect to Proposal One, Election of Directors, if a quorum is
present, the two nominees receiving the highest number of votes from the holders
of common shares will be elected, and the nominee receiving the highest number
of votes from the outstanding shares of Series B Preferred stock will be
elected. Abstentions on Proposal One, Election of Directors, will not be counted
as votes cast and will have no effect on the result of the vote.

With respect to Proposal Two, Amendment to Stock Option and Incentive
Plan, the affirmative vote of a majority of the votes cast at which a quorum is
present is required for approval. For purposes of the vote on the plan
amendment, abstentions and broker non-votes will not be counted as votes cast
and will have no effect on the result of the vote.

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 your 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 you.

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

Chairman and
Chief Financial Officer

PROPOSAL ONE:
ELECTION OF DIRECTORS

Our Board of Directors consists of six directors. Our bylaws provide
that directors' terms of office expire on a staggered basis. Terms of office for
D. Scott Wilkerson and Paul G. Chrysson expire at the 2005 annual meeting of
shareholders. Messrs. Wilkerson and Chrysson are nominees for election to the
Board of Directors to serve for a period of three years, until the 2008 annual
meeting, or until each director's successor is elected and qualified.

Under our Articles of Incorporation, the holders of a majority of the
Series B Preferred Stock are entitled to nominate and elect one director (the
"Series B director") to serve until the next annual meeting, or until his
successor is elected and qualified. Peter J. Weidhorn has been nominated for
election as the Series B director.

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:

Name Age Position Director Since
-------------------------- ------- --------------------------------------------------- ---------------------

Directors serving until the 2005 annual meeting:
D. Scott Wilkerson 47 Director, President, Chief Executive Officer December 1997
Paul G. Chrysson 50 Director December 1997
Peter J. Weidhorn 57 Series B Director (1) December 2001

Directors serving until the 2006 annual meeting:
W. Michael Gilley 49 Director December 1997

Directors serving until the 2007 annual meeting:
Philip S. Payne 53 Chairman, Chief Financial Officer December 1997
Stephen R. Blank 59 Director May 1999

(1) The terms of the Articles Supplementary establishing the rights and
preferences of the Series B Convertible Preferred Stock provide that the
holders of a majority of the shares of the Series B Convertible Preferred
Stock can elect one director, to whom we refer as the "Series B Director."

Philip S. Payne - Chairman of the Board of Directors, Chief Financial Officer.
Mr. Payne joined BT Venture Corporation, which was subsequently purchased by the
company, in 1990 as Vice President of Capital Markets 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. In January 2004,
Mr. Payne was named Chairman of the Board of Directors and continues in his role
as Chief Financial Officer. 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. He is a member of the board
of directors of the National Multi Housing Council and is a member of the Urban
Land Institute (Multi Family Council - Gold). In addition, he is a member of the
board of directors of Ashford Hospitality Trust, a REIT focused on the
hospitality industry, and serves as chairman of its audit committee.

D. Scott Wilkerson - Director, President, Chief Executive Officer. Mr. Wilkerson
joined BT Venture Corporation, which was subsequently purchased by the company,
in 1987 and served in various officer-level positions, including Vice President
of Administration and Finance and Vice President for Acquisitions and
Development 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 Multi Housing Council and the National Apartment Association. He
is President of the Apartment Association of North Carolina and is a past
president of the Charlotte Apartment Association. He is active in various
professional, civic and charitable activities.

Stephen R. Blank - Director. Mr. Blank is a Senior Fellow, Finance, with the
Urban Land Institute, and has served in such capacity since 1998. 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 serves on the boards of directors of
WestCoast Hospitality Corporation and MFA Mortgage Investments, Inc. In
addition, he serves as a member of the board of advisors of Paloma, LLC, the
principal investor in a private multifamily real estate investment trust. Mr.
Blank serves as the chair of the audit committees for both Ramco-Gershenson
Properties Trust and MFA Mortgage Investments, Inc. He has over 20 years
experience as a senior real estate investment banking officer, advising and
evaluating a wide array of real estate companies, including publicly reporting
companies.

Paul G. Chrysson - Director. Mr. Chrysson is President of C.B. Development
Company, Inc., a developer of single-family and multi-family residential
properties, and has served in that capacity since 1986. Mr. Chrysson is a member
of the Board of Advisors of Wachovia Bank (Forsyth County). He is a former
director of Triad Bank and United Carolina Bank (North Carolina) and has served
on the boards of various charitable organizations. He has been a licensed real
estate broker since 1974 and has been actively involved in construction since
1978.

W. Michael Gilley - Director. Mr. Gilley has been a private real estate investor
and developer of single-family and multi-family residential properties since
1990. 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. Greenbriar owned and operated assisted living
and retirement centers. He has been a licensed real estate broker since 1984.

Peter J. Weidhorn - Series B Director. Mr. Weidhorn is a consultant and private
real estate investor in the multi-family housing market and has served in such
capacity from 2003 to present. From 2000 to 2003, Mr. Weidhorn served as
Director of Acquisitions for Westminster Management. From 1998 to 2000, he was
Chairman of the Board, President and Director of WNY Group, Inc., a real estate
investment trust that owned and operated 8,000 apartment units throughout New
Jersey, Pennsylvania, Delaware and Maryland prior to its sale to the Kushner
Companies. From 1981 to 1998, he was President of WNY Management Corp. Mr.
Weidhorn serves on the boards of directors of Monmouth Real Estate Investment
Corporation and The Community Development Trust, and is a past president of the
New Jersey Apartment Association. Mr. Weidhorn currently serves as the chair of
the audit committee of Monmouth Real Estate Investment Corporation and as a
member of the audit committee of The Community Development Trust. He has over 30
years of experience in the management, acquisition, and financing of commercial
real estate. Mr. Weidhorn is a certified public accountant (inactive). He is
active in various professional, civic and charitable activities.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors of the company recommends that the common
shareholders vote FOR D. Scott Wilkerson and Paul G. Chrysson as directors to
hold office for the three-year terms, expiring at the 2008 annual meeting of
shareholders, or until their successors are elected and qualified.

The Board of Directors of the company recommends that the holders of
Series B Preferred stock vote FOR Peter J. Weidhorn as the Series B director for
a one-year term until the next annual meeting, or until his successor is elected
and qualified.

BOARD OF DIRECTORS AND COMMITTEE MEMBERSHIP

The Board of Directors met nine times during the year ended December
31, 2004, including four meetings held by telephone. The independent members of
the Board met in executive session during each in-person meeting of the Board.

The rules of the American Stock Exchange require that at least a
majority of the members of the Board must be independent as defined in such
rules. With the exception of Philip S. Payne, our Chairman and Chief Financial
Officer, and D. Scott Wilkerson, our President and Chief Executive Officer, our
Board has affirmatively determined that the remaining members of our Board are
independent as required by the rules of the American Stock Exchange and that a
majority of the Board is therefore comprised of independent directors.

BOARD COMMITTEES AND MEETINGS

The Board of Directors has three standing committees - the Audit
Committee, the Management Compensation Committee and the Nominating Committee.
Each of these committees has a written charter approved by the Board. A copy of
each charter may be found on our website at www.bnp-residential.com (select
Corporate Information, then Corporate Governance, then Board Committees). In
addition, a copy of the charter for the Audit Committee, as amended December
2004, is included in Exhibit A to this proxy statement.

Audit Committee

The Audit Committee currently consists of Messrs. Blank (Chairman),
Gilley and Weidhorn. 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 2004, the Audit Committee
held six meetings.

Management Compensation Committee

The Management Compensation Committee currently consists of Messrs.
Chrysson (Chairman), Blank and Weidhorn. All three members are considered
"independent" under the rules of the American Stock Exchange. 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 2004, the Management Compensation Committee held six
meetings.

Nominating Committee

The Nominating Committee currently consists of Messrs. Weidhorn
(Chairman), Blank and Chrysson. All three members are considered "independent"
under the rules of the American Stock Exchange. The committee reviews and makes
recommendations to the Board of Directors as to changes in size, composition,
organization and operational structure of the Board and its committees; makes
recommendations to the Board with respect to director nominees and nominees for
appointment as members of the respective committees of the Board; and on an
annual basis reports to the Board with an assessment of the Board's performance.
The Nominating Committee held one meeting during 2004.

In identifying potential candidates for nomination as a director, the
Nominating Committee may use a variety of resources--including recommendations
from management, current Board members, significant shareholders and others. The
Nominating Committee also has the sole authority to retain and terminate any
outside search firm it may deem appropriate. The Nominating Committee has not
yet adopted specific minimum qualifications, qualities or skills for being named
as a director of the company.

The Nominating Committee does not currently have a policy for the
consideration of director candidates recommended by shareholders. The Board
believes it is appropriate for the company not to have

such a policy in order to retain the maximum flexibility in reacting to such
recommendations, depending on factors such as the Board's current composition
and the nature of any recommendations.

COMMUNICATIONS WITH DIRECTORS

Shareholders who wish to contact any of our directors, either
individually or as a group, may do so by writing to them c/o Corporate
Secretary, BNP Residential Properties, Inc., 301 S. College Street, Suite 3850,
Charlotte, North Carolina 28202. Shareholder letters are screened by company
personnel to filter out improper or irrelevant topics, such as solicitations.
Correspondence involving an ordinary business matter will be forwarded to the
company's management for handling to allow timely response to such matters. All
other correspondence will be forwarded to the director to whom it was addressed.
If no particular director is named, the communication will be forwarded to the
appropriate committee chair depending on the subject matter. Any communication
to the Board may be sent to management to enable the company to research and
assist in responding to the concern as appropriate.

ATTENDANCE AT ANNUAL MEETING

We do not have a formal policy requiring directors' attendance at our
annual meeting of shareholders. Historically, all of our directors have attended
our annual meetings of shareholders, and all of our directors attended our
annual meeting of shareholders held in May 2004.

COMPENSATION OF DIRECTORS

During 2004, we paid directors' fees to each director who is not an
executive officer of the company. During the year ended December 31, 2004,
Messrs. Blank, Chrysson, Gilley, and Weidhorn were each paid annual retainers of
$12,000 plus fees totaling $5,650 each for participation in board meetings
(including committee meetings held on the same day as Board meetings). In
addition, Messrs. Blank, Gilley and Weidhorn each received $200 for
participation in Audit Committee meetings held separately from Board meetings.
Messrs. Wilkerson and Payne did not receive any compensation for their service
as directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of our Compensation Committee are Messrs. Chrysson, Blank
and Weidhorn.

During 2004, we earned management fees from and acquired an apartment
property from affiliates of Messrs. Chrysson and Gilley. This relationship is
described under "Certain Relationships and Related Transactions - BNP
Residential Properties, Inc. and the Chrysson Parties," which is included herein
by incorporation by reference to that section in this proxy statement.

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 2004.
We refer to them as the "named executive officers."

Summary Compensation Table
Annual Compensation
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Name and Principal Position Year Salary Bonus Other (1)
-----------------------------------------------------------------------------------------------------------

D. Scott Wilkerson, President, 2004 $228,750 $11,250 $73,249
Chief Executive Officer 2003 225,000 - -
2002 200,000 25,000 -

Philip S. Payne, Chairman of the Board of 2004 $228,750 $11,250 $79,956
Directors, Chief Financial Officer 2003 225,000 - -
2002 200,000 25,000 -

Eric S. Rohm, Vice President, Secretary, 2004 $145,000 $15,000 -
General Counsel 2003 140,000 - -

Pamela B. Bruno, Vice President, Treasurer, 2004 $145,000 $15,000 $17,395
Chief Accounting Officer, Assistant Secretary 2003 136,250 18,750 -
2002 125,000 - -

(1) Amounts for 2004 include the value realized in exercise of stock options,
included in the table below. No amounts have been included for 2003 and
2002 because perquisites received by the named executive officers were less
than 10% of the total of their annual salary and bonus amounts.

The following table provides information regarding exercises of stock
options by named executive officers during 2004 as well as the value of
unexercised stock options held by named executive officers as of December 31,
2004. No options were granted during the year ended December 31, 2004.

Aggregated Option Exercises in 2004 and Year-end Option Values
Number of Securities
Number of Underlying Unexercised Value of Unexercised
Shares Value Options at In-the-Money Options at
Acquired in Realized in Fiscal Year End Fiscal Year End
Name Exercise Exercise Exercisable/Unexercisable Exercisable/Unexercisable
-----------------------------------------------------------------------------------------------------------

D. Scott Wilkerson 43,844 $59,189 100,000 - $341,250 -

Philip S. Payne 50,000 67,500 100,000 - 341,250 -

Pamela B. Bruno 6,000 8,100 30,000 - 98,000 -

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 (Director, President and Chief Executive
Officer) and Philip S. Payne (Chairman, Treasurer 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, along with specified death and disability
benefits. The agreements provide for severance payments equal to the
then-current 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 then in effect and three times average discretionary
bonus and annual bonus over the prior three fiscal years. 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.

In July 1997, we entered into an employment agreement with Pamela B.
Bruno (Vice President, Treasurer and Chief Accounting Officer). The two-year
agreement (with automatic annual renewal periods) is substantially identical to
the agreements signed by Messrs. Wilkerson and Payne, except that this agreement

provides for an initial annual 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.

In December 2002, we entered into an employment agreement with Eric S.
Rohm (Vice President, General Counsel). The two-year agreement (with automatic
annual renewal periods) is substantially identical to the agreement signed by
Ms. Bruno, except that this agreement provides for an initial annual base salary
of $140,000.

SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

COMMON STOCK

The following table provides certain information regarding beneficial
ownership of common stock as of April 4, 2005, by each person or group known to
be the beneficial owner of more than 5% of the company's common stock.

Common Shares
Beneficially Owned
Name and address of beneficial owner Number Percent
--------------------------------------------------------------- ------------------- -------------------

Kensington Investment Group, Inc. 457,900 5.0%
4 Orinda Way, Suite 200C, Orinda, CA 94563
Mercury Real Estate Advisors LLC 547,400 5.9%
100 Field Point Road, Greenwich, CT 06830
Preferred Investment I, LLC 909,090 (1) 9.0%
60 Thomas Drive, Manalapan, NJ 07726

(1) Includes 909,090 shares of common stock issuable upon conversion of
outstanding shares of Series B Cumulative Convertible Preferred Stock owned
by Preferred Investment I, LLC.

The following table provides certain information regarding beneficial
ownership of common stock as of April 4, 2005, by each of the directors and
named executive officers, and by all directors and executive officers as a
group.

Common Shares
Beneficially Owned
Directors and Officers Number Percent
----------------------------------------------------------------------- ------------------- -------------------

Philip S. Payne (1)) 189,570 2.0%
D. Scott Wilkerson (2) 93,343 1.0%
Stephen R. Blank 1,000 *
Paul G. Chrysson (3) 267,612 2.8%
W. Michael Gilley (4) 265,991 2.8%
Peter J. Weidhorn (5) 917,290 9.0%
Eric S. Rohm -0- *
Pamela B. Bruno (6) 40,334 *
All directors and executive officers
as a group (8 persons) (7) 1,775,140 16.4%

* Less than 1 percent.
(1) Includes exercisable options for 100,000 shares of common stock.
(2) Includes exercisable options for 50,000 shares of common stock.
(3) Includes 250,612 shares issuable (at the company's option) in satisfaction
of the right to redeem the same number of units owned by Mr. Chrysson in
the operating partnership.

(4) Includes 265,991 shares issuable (at the company's option) in satisfaction
of the right to redeem the same number of units owned by Mr. Gilley in the
operating partnership.
(5) Includes 909,090 shares of common stock issuable upon conversion of
outstanding shares of Series B Cumulative Convertible Preferred Stock owned
by Preferred Investment I, LLC (of which Mr. Weidhorn is the managing
director).
(6) Includes exercisable options for 30,000 shares of common stock.
(7) Includes exercisable options for 180,000 shares, 909,090 shares issuable
upon conversion of Series B Cumulative Convertible Preferred Stock, and
516,603 shares issuable (at the company's option) in satisfaction of the
right to redeem the same number of units in the operating partnership.

PREFERRED STOCK

The following table provides certain information regarding beneficial
ownership of Series B Cumulative Convertible Preferred stock as of April 4,
2005. These shares have limited voting rights.

Series B Preferred Shares
Beneficially Owned
Name and address of beneficial owner Number Percent
-------------------------------------------------------------- ------------------- -------------------

Preferred Investment I, LLC 909,090 100.0%
60 Thomas Drive, Manalapan, NJ 07726

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

BNP RESIDENTIAL PROPERTIES, INC. AND BODDIE-NOELL ENTERPRISES, INC.

We lease 40 restaurant properties to Boddie-Noell Enterprises, Inc.
("Enterprises") under a master lease on a triple-net basis. The lease agreement
has a primary term expiring in December 2007, but grants Enterprises three
five-year renewal options. Enterprises pays annual rent equal to the greater of
the specified minimum rent or 9.875% of food sales from the restaurants. Under
certain conditions as defined in the agreement, both Enterprises and the company
have the right to substitute another restaurant property for a property covered
by the lease. Assuming renewal of the lease, after December 31, 2007,
Enterprises has the right to terminate the lease on up to five restaurant
properties per year by offering to purchase them under specified terms. We
received the minimum rent, $3.8 million, in 2004. We expect to receive the
annual minimum rent of $3.8 million in years 2005 through 2007.

B. Mayo Boddie served on our Board of Directors from the company's
inception in 1987 until May 2004. Mr. Boddie is Chairman of the Board of
Directors and Chief Executive Officer of Enterprises. Mr. Boddie and certain of
his family members, including Nicholas B. Boddie, are the sole owners of
Enterprises.

Douglas E. Anderson served as Vice President and Secretary of our
company from our inception in 1987 until May 2004. He has been with Enterprises
since 1977 and is currently a director, executive vice president and secretary
of Enterprises. Mr. Anderson is also president of BNE Land and Development
Company, the real estate development division of Enterprises.

BNP RESIDENTIAL PROPERTIES, INC. AND BODDIE INVESTMENT COMPANY

We provided fee management for three limited partnerships, of which
Boddie Investment Company ("BIC") was the general partner, and the apartment
communities owned by those partnerships, until January 2005. We recorded fee
revenues totaling $409,000 from these limited partnerships in 2004.

In January 2005, we acquired BIC in exchange for 508,578 shares of our
common stock, valued at $8.2 million, which we issued to Messrs. Boddie and
Boddie. As part of this acquisition, BIC surrendered, and we cancelled, 72,399
shares of our common stock valued at $1.2 million. As a result of this
acquisition, we have assumed the role of general partner and acquired the
economic interests in the three limited

partnerships to which we previously provided fee management services. We will
continue to manage the properties following this acquisition.

In addition, we are the lender in a participating loan agreement with
The Villages of Chapel Hill Limited Partnership, one of the limited partnerships
identified above. The outstanding balance receivable under that agreement
includes $100,000 for advances under the agreement and $567,000 for the
outstanding "fixed portion" of our participation in the increase in value of the
property as measured July 2001. Interest on the outstanding advance accrues at
the greater of 12.5% or the 30-day LIBOR rate plus 6.125%. Interest on the
outstanding fixed portion accrues at the greater of a prime rate or 8%. We
received interest and participation income of $71,000 in 2004.

Messrs. Boddie and Boddie were the sole shareholders and directors of
Boddie Investment Company. Mr. Anderson was vice president and secretary of
Boddie Investment Company. See "BNP Residential Properties, Inc. and
Boddie-Noell Enterprises, Inc." above.

BNP RESIDENTIAL PROPERTIES, INC. AND THE CHRYSSON PARTIES

In July 2004, we acquired Savannah Shores Apartments from members of a
group that we refer to as the Chrysson Parties. The initial purchase price was
$12.5 million, including assumption of $12.2 million in debt obligations and
$0.2 million net operating liabilities in excess of operating assets acquired,
and issuance of 7,695 operating partnership units with an imputed value of $0.1
million. The acquisition agreement provides for potential earn-out of additional
purchase price of up to $1.7 million within a three-year period upon attainment
of certain performance standards; this would be funded through the issuance of
operating partnership units with an imputed value of $13.00 per unit to the
contributors. Prior to this acquisition, we managed this community on a contract
basis, and received $33,000 in management fee revenues for the first six months
of 2004. In previous years during 1997 through 2002, we issued 1.5 million
operating partnership common units to acquire eight apartment communities from
this group.

Messrs. Chrysson and Gilley, who serve on our Board of Directors, are
members of the Chrysson Parties.

NOTES RECEIVABLE FROM MANAGEMENT

In 1996 through 1999, Messrs. Wilkerson and Payne each borrowed $70,000
on an interest-free basis from the company. The loans are secured by shares of
the company's common stock and are payable in full six months after termination
of employment.

INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors of the company, upon the recommendation of the
Audit Committee, has reappointed Ernst & Young LLP to serve as our independent
auditors for the fiscal year ending December 31, 2005.

Ernst & Young LLP has served as our principal accountant and
independent auditor since October 1996. The Board of Directors, upon the
recommendation of the Audit Committee, engaged Ernst & Young LLP to serve as our
independent auditors for the fiscal years ending December 31, 2004 and 2003.

The Audit Committee also approves in advance all engagements of Ernst &
Young LLP for audit-related, tax and other services.

The following table reflects fees billed by Ernst & Young LLP for
services rendered to the company and its subsidiaries in 2004 and 2003:

Nature of Services 2004 2003
----------------------------------------------------------------------- ------------------- -------------------

Audit fees - $224,000 $117,000
For audit of our annual financial statements, audit of internal
control over financial reporting (in 2004), and review of
financial statements included in our Forms 10-Q

Audit-related fees - 174,000 22,000
For services related to business acquisitions, accounting
consultations, SEC registration statements, and audit of the
company's 401(k) plan

Tax fees - 115,000 108,000
For tax compliance, tax advice, and tax planning

All other fees - (none in 2004 or 2003) - -

Representatives of Ernst & Young LLP are expected to be available at
the annual meeting, will have the opportunity to make a statement if they so
desire, and are expected to be available to respond to appropriate questions.

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.

OTHER MATTERS

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely on a review of the copies of the forms in its possession,
and on written representations from certain reporting persons, the company
believes that during 2004 all of its executive officers and directors filed the
reports required under Section 16(a) on a timely basis.

DELIVERY OF PROXY MATERIALS

Only one annual report for 2004 and proxy statement for the 2005 annual
meeting is being delivered to multiple shareholders of record who share the same
address and last name unless the company received contrary instructions from the
affected shareholder. This practice is known as "householding." The company has
been notified that certain brokers and banks that hold stock for their customers
will also household annual reports and proxy statements. Each shareholder who
resides at a householded address will be mailed a separate proxy card. The
company will promptly deliver a separate paper copy of the annual report and
proxy statement to a shareholder at a shared address to which to single copy of
these documents was delivered upon receiving oral or written request from the
shareholder. Oral notice should be made to our Investor Relations officer at
704/944-0100; written notice should be sent to BNP Residential Properties, Inc.,
Attn: Investor Relations, 301 S. College Street, Suite 3850, Charlotte, North
Carolina 28202. Any shareholders of record sharing an address who now receive
multiple copies of the company's annual report and proxy statement and who wish
to receive only one copy of these materials per household in the future should
likewise contact the company by telephone or mail as instructed above.

PROPOSALS OF SHAREHOLDERS FOR 2006 ANNUAL MEETING

Any proposals by holders of common shares 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 15, 2005,
which is 120 days prior to the date of our 2005 proxy statement. However, if we
hold our 2006 annual meeting before April 19 or after June 18, shareholders must
submit proposals for inclusion in our 2006 proxy statement within a reasonable
time before we begin to print our proxy materials.

If a common shareholder wishes to present a proposal at the 2006 annual
meeting, whether or not the proposal is intended to be included in the 2006
proxy material, our bylaws require that the shareholder give advance written
notice to the secretary of the company by February 18, 2006, which is 90 days
prior to the anniversary of our 2005 annual meeting.

If a shareholder is permitted to present a proposal at the 2006 annual
meeting but the proposal was not included in the 2006 proxy material, we believe
that our proxy holder would have the discretionary authority expected to be
granted by the proxy card (and as permitted under SEC rules) to vote on the
proposal if the proposal was received after March 4, 2006, which is 45 calendar
days prior to the anniversary of the mailing of this proxy statement.

PROXY SOLICITATION

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 Wachovia Bank, N.A. to assist in identifying and
contacting shareholders for soliciting proxies. We expect the cost of these
services to be approximately $7,500, exclusive of certain other fees we pay to
Wachovia Bank and Corporate Communications, Inc. related to the meeting. BNP
Residential Properties, Inc. will bear the costs of this solicitation.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the company's financial reporting process
on behalf of the Board of Directors. The activities of the Audit Committee are
governed by a written charter. The Board of Directors amended its charter for
the Audit Committee in December 2004, a copy of which is included as Exhibit A
to this proxy statement.

Management has the primary responsibility for BNP's financial
statements and the reporting process, including the systems of internal
controls. In fulfilling our oversight responsibilities, we reviewed with
management each of the unaudited quarterly financial statements and the audited
financial statements included in our Annual Report. As part of each review, we
discussed with management 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, the reasonableness of significant judgments, the clarity of
disclosures in the financial statements, and such other matters as are required
to be discussed with the committee under generally accepted auditing standards.
In addition, we have received the written disclosures and the letter from the
independent auditors required by the Independence Standards Board Standard No.
1, "Independence Discussions with Audit Committees," and we discussed with the
independent auditors their independence.

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 six meetings during fiscal
2004.

Based on the reviews and discussions referred to above, 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, 2004, for filing with the Securities and Exchange Commission.

The Audit Committee consists entirely of non-employee directors who are
independent, as defined in Section 121(A) of the American Stock Exchange's
listing standards.

Audit Committee

Stephen R. Blank
W. Michael Gilley
Peter J. Weidhorn

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

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 470,000 shares of common stock for
issuance under the Stock Option and Incentive Plan that was adopted in 1994. As
of December 31, 2004, options for 327,500 shares of common stock were
outstanding.

2004 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. The Management Compensation Committee determined Mr. Wilkerson's 2004 base
salary of $228,750 in the same manner as described above for other executive
officers.

Management Compensation Committee

Paul G. Chrysson
Stephen R. Blank
Peter J. Weidhorn

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, 1999, of $100 in BNP Residential Properties, Inc. 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:

12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
-------------------------------------------------------------------------------

BNP $100.00 $102.46 $159.00 $174.65 $219.43 $328.28
NAREIT 100.00 126.37 143.97 149.47 204.98 269.70
S&P 500 100.00 90.90 80.09 62.39 80.29 89.02

PROPOSAL TWO:
AMENDMENT TO THE STOCK OPTION AND INCENTIVE PLAN

On April 1, 2005, our Board of Directors adopted, subject to
shareholder approval, an amendment to the Amended and Restated 1994 Stock Option
and Incentive Plan. We refer to this plan as the "Stock Option and Incentive
Plan" or as the "Plan." Depending upon the context, we use these terms to
describe both the plan as it exists today and as it will exist if the
shareholders approve the proposed amendment. The amendment, if approved by you,
would:

o increase the number of shares of our common stock issuable under the
Plan from 570,000 shares to 1,260,000 shares;

o allow us to issue incentive stock options through May 19, 2015;

o replace the 152,000-share limit on Restricted Stock Awards with a
630,000-share limit on Restricted Stock Awards, Phantom Stock Awards
and Other Stock-Based Awards ("Full Value Awards"), combined;

o establish minimum vesting periods for those Full Value Awards that
cause the total of all Full Value Awards to exceed 10% of the shares
authorized under the Plan;

o establish limits on the amount of options and Stock Appreciation Rights
that may be granted to any one person in any calendar year;

o allow us to grant a greater variety of awards payable in (or valued on
the basis of) our stock, including interests in the future profits of
the operating partnership;

o require that all stock options have an exercise price of no less than
fair market value on the date of grant;

o eliminate the ability to issue (without shareholder approval) "reload"
stock options whereby a participant who uses existing company shares to
satisfy the exercise price of stock options automatically is granted
additional stock options to purchase the same number of shares as
surrendered to the company;

o eliminate liberal share "recycling" provisions under the Plan, i.e.,
shares reacquired by the company as consideration for the exercise
price of stock options or to satisfy tax withholding obligations would
no longer be available for issuance under the Plan;

o eliminate the ability to reduce the exercise or purchase price of any
outstanding award or to extend the original term of an option without
shareholder approval; and

o set the termination date of our Plan as May 19, 2015.

We summarize below the most important features of the Plan.

PURPOSE OF THE PLAN

The purpose of the Plan is to attract and retain the best available
officers, employees and directors and to encourage them to perform at the
highest possible level. We believe that our ability to provide incentives under
the Plan will enhance the value of our company and benefit you, the
stockholders. We also believe the Plan motivates officers, employees and
directors to contribute to our future growth and profitability and rewards them
in a manner that aligns their interests with your interests as stockholders. All
officers,

employees, consultants and directors of BNP Residential Properties are eligible
to participate in the Plan, subject to the discretion of the Management
Compensation Committee (the "Committee"), which administers the Plan. As of
April 4, 2005, approximately 240 of the company's employees, officers, directors
and consultants were eligible to participate in the Plan.

TYPE OF PLAN AWARDS

Upon shareholder approval of the amendment, we will be able to issue up
to seven different types of awards under the Plan, each of which are described
in more detail below:

o Stock options that qualify as incentive stock options under Section 422
of the Internal Revenue Code, which we refer to as Incentive Stock
Options;

o Stock options that do not qualify as Incentive Stock Options, which we
refer to as Non-qualified Stock Options;

o Restricted Stock Awards;

o Phantom Stock Awards;

o Stock Appreciation Rights, which we refer to as SARs;

o Profits Interest Units; and

o Other Stock-Based Awards.

Without shareholder approval of the proposed amendment to the Plan, we
would only be able to issue Non-qualified Stock Options, Restricted Stock
Awards, Phantom Stock Awards and Stock Appreciation Rights and the amount of
these awards would have to be much more limited.

SIZE OF THE PLAN

Our Plan currently permits us to issue 570,000 shares, of which not
more than 152,000 may be Restricted Stock. As of June 16, 2004, our Plan no
longer permitted the issuance of Incentive Stock Options. Having already issued
157,344 shares under the Plan and with 270,000 shares also issuable upon
exercise of outstanding awards, without shareholder approval of the proposed
amendment to the Plan, we would be limited to issuing approximately 143,000
shares pursuant to future awards under the Plan. Upon shareholder approval of
the proposed amendment, the Plan would permit the issuance of a total of
1,260,000 shares (including shares already issued or issuable under previously
granted awards), of which up to 630,000 shares could be Full Value Awards. The
Plan amendment would also permit us to issue Incentive Stock Options again
through May 19, 2015.

LIMITATIONS ON AWARDS

Under the amended Plan, the maximum number of shares of common stock
with respect to which one or more options or SARs may be granted during any one
calendar year under the Plan to any one person is 200,000, provided, however,
that in connection with his or her initial employment with the company, a
participant may be granted options or SARs with respect to up to an additional
100,000 Shares, which shall not count against the foregoing annual limit.

STOCK OPTIONS

Incentive Stock Options vs. Non-Qualified Stock Options

We can grant two types of stock options under the Plan: Incentive Stock
Options and Non-qualified Stock Options. Incentive Stock Options meet tax
requirements entitling the holder to favorable tax treatment. Upon the
shareholders' approval of the amendment, the Plan will allow us to issue
Incentive Stock Options until May 19, 2015. Stock options not meeting the IRS
criteria are Non-qualified Stock Options.

An employee who receives Incentive Stock Options generally recognizes
no income on either the grant or exercise of the option; however, the
alternative minimum tax may apply in certain circumstances. If the Plan
participant sells his acquired stock at least two years after the grant date and
at least one year after the exercise date, he would realize capital gain. The
capital gain would equal the difference between the amount he pays for the stock
(the option price or the exercise price) and the sale proceeds. If the
participant's gain is taxed as a capital gain, we would not be allowed a
deduction. If the participant disposes of his stock before the end of those
holding periods, however, we would be allowed a deduction equal to the income
the participant recognizes. If the disposition were a taxable sale or exchange,
the participant would recognize ordinary income equal to the difference between
the option price and the fair market value of the stock on the exercise date.

Plan participants receiving Non-qualified Stock Options having no
ascertainable fair market value on the grant date will recognize no income for
Federal income tax purposes until they exercise or otherwise dispose of the
option. If the participant exercises a Non-qualified Stock Option, the
participant will realize compensation income equal to the fair market value of
the stock at the time it is transferred to him less the exercise price.

If we satisfy our tax withholding obligations arising from the exercise
of the Non-qualified stock options, we would receive a business expense
deduction for the amount that the participant must include in gross income as
compensation relating to the exercise of the option.

Exercise Price

If we grant an Incentive Stock Option or a Non-qualified Stock Option,
the exercise price must be at least equal to the fair market value of a share of
common stock on the grant date. If we grant an Incentive Stock Option to someone
who, because of certain ownership attribution rules in the Internal Revenue
Code, is deemed to own at least 10% of our voting stock, the exercise price must
be at least equal to 110% of the fair market value of a share of common stock on
the grant date.

Option Term

The Committee can fix the term of each stock option it grants. But
Incentive Stock Options must expire no more than 10 years after the grant date.
If we grant an Incentive Stock Option to someone who, because of certain
ownership attribution rules in the Internal Revenue Code, is deemed to own at
least 10% of our voting stock, the option must expire no more than five years
after the grant date.

Vesting

The Committee determines the vesting schedule for each stock option it
grants. Generally, the stock options issued under the Plan to date have vested
in equal annual amounts over three or four years.

Method of Exercise

An option holder may exercise his options by delivering an exercise
notice that states how many options the holder is exercising. The holder must
pay the option price in full at the time he exercises the options in one of the
following manners:

o in cash or by certified check;

o by a broker-dealer to whom the holder has submitted an exercise notice;

o by delivering shares of the company's common stock already owned
and possessed by the holder; or

o by any other method the Committee allows.

Transferability

No option holder may transfer an option to another person except by
will or by the laws of intestacy. Only the grantee of an option may exercise
that option during the grantee's lifetime.

Termination

If an optionee's employment terminates because he dies, retires, or
becomes totally disabled, the vested portion of the optionee's options will be
exercisable for a period ranging from three to six months after the employment
termination, depending on the nature of the termination. If we terminate an
optionee's employment for cause, all of the optionee's unexercised options will
immediately terminate.

STOCK APPRECIATION RIGHTS

SARs are awards enabling participants to receive cash, stock or a
combination of the two in an amount equal to the increase in the fair market
value of the shares from the grant date to the exercise date. The Committee may
grant and determine the terms of SARs, which may be related or unrelated to
options. However, the exercise price of each SAR must be at fair market value
and generally the term cannot exceed ten years from the date of grant. The
Committee may also determine the method of payment for exercised SARs -- cash,
common stock valued at its fair market value on the exercise date, or a
combination of the two.

PROFITS INTEREST UNITS

Upon shareholder approval of the amendment, any participant selected by
the Committee may be granted an award of Profits Interest Units in such amount
and subject to such terms and conditions as may be determined by the Committee.
A Profits Interest Unit is an interest in the future profits and gains of the
operating partnership. It is distinguished from other interests in the operating
partnership in that its liquidation value at the time of issuance is zero. In
recognition of this initial liquidation value, there is generally no tax to the
participant upon the issuance of a Profits Interest Unit. A Profits Interest
Unit may only be issued to a participant for the performance of services to or
for the benefit of the operating partnership.

After satisfying a holding period set by the Committee, a participant
would be able to redeem Profits Interest Units for cash or, at the company's
option, shares of the company's common stock. The amount to be received upon
redemption would be based on the relative liquidation value of a Profits
Interest Unit compared with a common operating partnership unit. For example, if
at the time of redemption of a Profits Interest Unit, the holder of the unit
would receive on liquidation of the operating partnership 1/10th of the amount
that would be received by a holder of a common operating partnership unit, then
the redemption price for a Profits Interest Unit would then generally be 1/10th
the value of a share of common stock. We expect the Committee to prohibit
transfer or redemption of a Profits Interest Unit for a period of at least two
years from issuance in order that the receipt of the Profits Interest Units
would qualify for tax-free treatment.

At the time of grant, the Committee shall specify the date or dates on
which the Profits Interest Units shall vest and become nonforfeitable, and may
specify such conditions to vesting as it deems appropriate. Profits Interest
Units shall be subject to such restrictions on transferability and other
restrictions as the Committee may impose. These restrictions may lapse
separately or in combination at such times, pursuant to

such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the award or thereafter. The Committee
shall specify the purchase price, if any, to be paid by the grantee to the
operating partnership for the Profits Interest Units.

RESTRICTED STOCK AWARDS

A Restricted Stock Award is an award entitling the recipient to acquire
shares of common stock that are subject to restrictions imposed by the
Committee. The Committee will determine the price, if any, at which an employee
may acquire the Restricted Stock. The Committee will also determine the service
requirements and performance goals to which awards of Restricted Stock will be
subject and will determine whether the Restricted Stock Award allows the company
to pay, waive, defer, or reinvest dividends on the Restricted Stock.

A participant receiving a grant of Restricted Stock must decide whether
to accept the grant within 60 days of the grant. If he accepts the grant, within
that 60-day period, he must sign a written instrument describing the terms and
conditions of the grant and must pay any purchase price for the Restricted
Stock.

The holder of Restricted Stock may not sell, assign, transfer, pledge
or otherwise encumber or dispose of the Restricted Stock. If a holder's
employment terminates, for whatever reason, we will have the right to repurchase
at the original purchase price, if any, any unvested shares of Restricted Stock.

PHANTOM STOCK AWARDS

Under the Plan, the Committee may also grant Phantom Stock Awards and
establish the terms of those awards. A Phantom Stock Award is an award of a
right to receive a payment equal to the fair market value on the exercise date
of a stated number of shares of common stock. The Committee may determine
whether the company will pay for exercised Phantom Stock Awards in cash, common
stock valued at its fair market value on the exercise date, or a combination of
the two.

OTHER STOCK-BASED AWARDS

Upon shareholder approval of the amendment, the Committee will be
authorized, subject to limitations under applicable law, to grant to
participants such other awards that are payable in, valued in whole or in part
by reference to, or otherwise based on or related to shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including without
limitation shares awarded purely as a "bonus" and not subject to any
restrictions or conditions, convertible or exchangeable debt securities, other
rights convertible or exchangeable into shares, and awards valued by reference
to book value of shares or the value of securities of or the performance of
specified parents or subsidiaries. The Board shall determine the terms and
conditions of such awards.

VESTING PROVISIONS FOR FULL VALUE AWARDS

Full Value Awards are defined in the amended Plan as Restricted Stock
Awards, Phantom Stock Awards and Other Stock-Based Awards. Not more than 50% of
the aggregate number of shares issuable under the Plan may be granted as Full
Value Awards. To the extent that Full Value Awards exceed 10% of the Shares
authorized under the Plan, the Full Value Awards in excess of 10% shall either
(i) be subject to a minimum vesting period of three years, or one year if the
vesting is based on performance criteria other than continued employment, or
(ii) be granted solely in exchange for foregone compensation.

CHANGE IN CONTROL FEATURES

Awards under the Plan become immediately vested if there is a change of
control of the company. If the Committee expressly stated that an award would
not vest upon a change of control, however, then that express provision would
stay in force. A change of control includes:

o the company adopting a plan of merger or consolidation where the
company's stockholders as a group would receive less than 50% of the
voting capital stock of the surviving or resulting corporation;

o a change in the make-up of the company's Board of Directors where those
directors who, as of May 19, 2005 (the "Incumbent Directors") ceased to
constitute at least a majority of the Board. But, if someone becomes a
director after May 19, 2005, and his nomination for election was
approved by a vote of at least a majority of the Incumbent Directors,
then he is considered an Incumbent Director for purposes of this test;
or

o the acquisition of more than 40% of the company's voting capital stock
by any person within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Act"), without our Board's
approval.

PLAN AMENDMENT

The Board of Directors may amend or discontinue the Plan or amend or
cancel any outstanding award, or provide substitute awards. However, shareholder
approval must be obtained for any Plan amendment that is material or any award
amendment that reduces the exercise or purchase price of any outstanding award
or extends the original term of an option. The Committee may amend or terminate
any outstanding award without the approval of the participant so long as such
amendment or termination does not diminish the value of the award determined as
if the award had been exercised, vested, cashed in or otherwise settled on the
date of such amendment or termination.

ADDITIONAL EQUITY COMPENSATION PLAN INFORMATION

As of April 4, 2005, we have reserved 413,000 shares of the company's
common stock for issuance under our employee Stock Option and Incentive Plan and
issued 157,344 shares. Options have been granted to employees at prices equal to
the fair market value of the stock on the dates the options were granted.
Options awarded to date have generally been exercisable in three or four annual
installments beginning one year after the date of grant, and expire ten years
after the date of grant. The Committee can elect to issue options with shorter
expiration dates. Based on the closing price of the company's stock on April 4,
2005, the market value of the common stock underlying the options granted to
date is approximately $7,640,000.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides summary information about securities
issuable under our current Stock Option and Incentive Plan as of December 31,
2004.

Number of securities
Number of securities to Weighted average remaining available for
be issued upon exercise exercise price of future issuance
of outstanding options, outstanding options, under equity
Plan category warrants and rights warrants and rights compensation plans (1)
---------------------------- -------------------------- -------------------------- --------------------------

Equity compensation plans
approved by security
holders 327,500 $12.04 142,656

Equity compensation plans
not approved by security
holders - - -
-------------------------- -------------------------- --------------------------
Total 327,500 $12.04 142,656
========================== ========================== ==========================

(1) Includes securities reflected in the first column.

A summary of options granted to date under the Stock Option and
Incentive Plan to current directors, executive officers, nominees, or their
associates follows:

Number of
Options Granted
------------------------

Named executive officers -
D. Scott Wilkerson, President and Chief Executive Officer 150,000
Philip S. Payne, Chairman and Chief Financial Officer 150,000
Eric S. Rohm, Vice President and General Counsel -
Pamela B. Bruno, Vice President, Treasurer and 40,000
Chief Accounting Officer

All current executive officers as a group 340,000

All current directors who are not executive officers as a group -

Nominees for election as a director
D. Scott Wilkerson, President and Chief Executive Officer 150,000
Paul G. Chrysson -
Peter J. Weidhorn -

Associates of directors, executive officers or nominees -

Other persons who received 5% of such options
Douglas E. Anderson 60,000
W. Craig Worthy 30,000

All employees (except executive officers) as a group 47,500

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors of the company recommends a vote FOR the
amendment to the Plan. The Board of Directors will vote proxies that they
solicit in favor of the amendment unless you specify a contrary choice in your
proxy. The affirmative vote of a majority of the votes cast on the proposal will
be required to approve the amendment.

Exhibit A
BNP RESIDENTIAL PROPERTIES, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER

ORGANIZATION

The Board of Directors (the "Board") shall have an Audit Committee
comprised of at least three outside Directors who are independent of the
management of the Corporation, are free of any relationship that, in the opinion
of the Board, would interfere with their exercise of independent judgment as a
Committee member, and are financially literate. In determining the composition
of the Audit Committee, the term "independent" shall have the meaning set forth
in the American Stock Exchange Company Guide. Additionally, at least one member
should possess accounting or related financial management expertise as required
by applicable regulations of the Securities and Exchange Commission. No member
of the Committee shall be permitted to accept any consulting, advisory or other
compensatory fee from the Corporation or any of its Affiliates, other than in
such member's capacity as a director. Members of the Committee shall be
appointed annually by the Board at its annual meeting or as necessary to fill
vacancies in the interim. The Board shall designate one of the Committee members
as chairman. The Committee shall hold meetings (in person or by telephone
conference) as appropriate, but not less than three times per year.

STATEMENT OF POLICY

The primary function of the Audit Committee shall be to oversee the
financial information provided to shareholders, the corporate accounting and
financial reporting practices, the systems of internal financial controls which
management and the Board have established, and the audit process. In performing
its duties, the committee will maintain effective working relationships with the
Board, management and the external auditors. To effectively perform their role,
each committee member will obtain an understanding of the detailed
responsibilities of committee membership as well as the company's business,
operations and risks.

ROLES AND RESPONSIBILITIES

External Audit

A. Consider, retain and oversee the firm to be employed as the
Corporation's independent auditor.

B. Oversee the independent auditor's compensation and the terms
of its engagement and review the non-audit services performed
by the independent auditor to ensure the performing of those
services does not impair the independence of the auditors.

C. Consider, in consultation with the independent auditor, the
scope and plan of forthcoming audits and the independent
auditor's responsibility under generally accepted auditing
standards.

D. Review and consider, based on the reports of the independent
auditor and the internal auditors (if any):

(a) the adequacy of the Corporation's internal accounting
controls including electronic data processing procedures and
controls and related security programs.
(b) any related management letter recommendations, and
management's responses to such recommendations made by
the independent auditor; and
(c) the policies and financial reporting process for retirement
and other benefit plans.

Financial Reporting

A. Review, based on the reports of the independent auditor and management:

(a) the corporation's interim and annual financial statements and
determine whether they are complete and consistent with the
information known to committee members;
(b) the results of each external audit of the Corporation's financial
statements, including any certification, report, opinion or review
rendered by the independent auditor in connection with those financial
statements;
(c) disputes between management and the independent auditor that arose
in connection with such audit;
(d) any changes required in the independent auditor's plan;
(e) other matters related to the conduct of the audit which are
communicated to the Audit Committee under generally accepted
auditing standards, including those concerning:

(i) selection of and changes in accounting policies and
practices and questions of choice of appropriate
policies and practices;
(ii) management's formulation of any particularly sensitive
accounting estimates and the auditor's conclusion as
to their reasonableness;
(iii) audit adjustments;
(iv) consultation by management with other accountants
about accounting, tax and SEC related matters; and
(v) difficulties the auditor encountered in dealing with
management in performing the audit.

B. Review significant filings with the SEC containing the Corporation's
financial statements, including interim financial statements.

C. Review policies and reports of reviews with respect to officers' expense
accounts.

Internal Audit

A. Review jointly with management the performance of an internal auditors,
and engage, replace or dismiss the internal auditor as necessary.

B. Review and approve the internal audit plan and confirm coordination of
activities between the internal auditors and external auditors.

C. Review reports of the internal auditors summarizing audit results,
significant findings, and management's planned corrective actions.

Other Responsibilities

A. Periodically review the status of any pending litigation, which could
have significant impact on the Corporation's financial condition or
seriously affect its reputation.

B. Have authority to inquire into any financial matters in addition to
those set forth in the charter with the right and power (at the expense
of the Corporation) to employ such persons and organizations to assist
it in carrying out its duties as it shall reasonably deem to be
necessary.

C. Perform such other functions as may be assigned to it by law or the
Corporation's Charter or Bylaws, or by the Board.

D. Report Committee agenda and actions to the Board with such
recommendations, as the Audit Committee may deem appropriate.

E. Review the Audit Committee Charter annually to reassess its adequacy.

F. Prepare for inclusion in the Corporation's proxy statement an annual
report of the Audit Committee regarding the prior year's audited
financial statements, including whether the Committee has recommended
that such audited financial statements be included in the Corporation's
Annual Report.

G. Establish procedures for the receipt, retention and treatment of
complaints received by the Corporation regarding accounting, internal
accounting controls or auditing matters and for the confidential
submission by employees of concerns regarding questionable accounting
or auditing matters.

H. Review its own performance at least annually and report to the Board on
such evaluation and recommend to the Board any proposed changes to the
Committee and its operations.

Revised December, 2004

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 19, 2005

The undersigned hereby:
o acknowledges receipt of the Notice of Annual Meeting of Shareholders of
BNP Residential Properties, Inc. to be held on May 19, 2005, 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 4, 2005, at such Annual Meeting and at any
adjournment(s) thereof.

The votes entitled to be cast by the undersigned will be cast as instructed
below. If this Proxy is executed but no instruction is given, the votes entitled
to be cast by the undersigned will be cast "FOR" the nominees for directors and
in the discretion of the Proxy holder on any other matter that may properly come
before the meeting or any adjournment or postponement thereof, unless otherwise
indicated.

1. ELECTION OF DIRECTORS
( )FOR all nominees ( )WITHHOLD AUTHORITY to vote
(except as indicated to the contrary below) for all nominees
NOMINEES: D. Scott Wilkerson, Paul G. Chrysson
Instructions: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.

2. AMENDMENT OF STOCK OPTION AND INCENTIVE PLAN
( )FOR ( )AGAINST

3. 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.
( )AUTHORITY GRANTED ( )WITHHOLD AUTHORITY

Dated _________________, 2005

_________________________________________

_________________________________________
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 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.

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 19, 2005

The undersigned hereby:
o acknowledges receipt of the Notice of Annual Meeting of Shareholders of
BNP Residential Properties, Inc. to be held on May 19, 2005, 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 Series B Preferred Stock of BNP Residential Properties, Inc. held
of record by the undersigned on April 4, 2005, at such Annual Meeting and
at any adjournment(s) thereof.

The Board of Directors recommends a vote FOR the following proposal:

1. ELECTION OF SERIES B DIRECTOR
( )FOR Peter J. Weidhorn ( )WITHHOLD AUTHORITY to vote

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" THE PROPOSAL TO BE VOTED UPON.

Dated _________________, 2005

Preferred Investment I, LLC
60 Thomas Drive
Manalapan, NJ 07726

_______________________________________

_______________________________________
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.