<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ExecuStay Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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> 2
EXECUSTAY CORPORATION
7595 Rickenbacker Drive, Gaithersburg, Maryland 20879 -- (301-948-7300)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 14, 1998
TO THE STOCKHOLDERS OF EXECUSTAY CORPORATION:
Notice is hereby given that the Annual Meeting of the Stockholders of ExecuStay
Corporation will be held at the Gaithersburg Hilton, 620 Perry Parkway,
Gaithersburg, Maryland, on Thursday, May 14, 1998 at 10:30 a.m., local time,
for the following purposes:
1. To elect directors to serve until the next Annual Meeting of
Stockholders.
2. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 20, 1998 are entitled
to notice of and to vote at this Annual Meeting and at any adjournment or
postponement thereof. For ten days prior to the meeting, a complete list of
stockholders entitled to vote at the meeting will be available for examination
by any stockholder, for any purpose relating to the meeting, during ordinary
business hours at the Company's principal offices located at 7595 Rickenbacker
Drive, Gaithersburg, Maryland.
By Order of the Board of Directors
/s/ ROBERT W. ZAUGG
Robert W. Zaugg
Executive Vice President,
Chief Operating Officer
and Secretary
Gaithersburg, Maryland
April 14, 1998
IMPORTANT: PLEASE FILL-IN, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY IN
THE POST-PAID ENVELOPE TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE
MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON IF YOU WISH TO DO SO EVEN THOUGH YOU HAVE SENT IN YOUR PROXY.
<PAGE> 3
PROXY STATEMENT
--------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
OF
EXECUSTAY CORPORATION
The accompanying proxy is solicited by the Board of Directors of
ExecuStay Corporation (the "Company") for use at its Annual Meeting of
Stockholders to be held on May 14, 1998, at the Gaithersburg Hilton, 620 Perry
Parkway, Gaithersburg, Maryland 20879, at 10:30 a.m., local time, or any
adjournment or postponement of the meeting, for the purposes described below
and in the accompanying Notice of Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The principal executive offices of the Company are at 7595
Rickenbacker Drive, Gaithersburg, Maryland 20879. The Company's telephone
number at the location is (301) 948-7300. The date of this Proxy Statement is
April 14, 1998, the approximate date on which these proxy solicitation
materials and the Annual Report to Stockholders for the fiscal year ended
December 31, 1997, including financial statements, were first sent or given to
stockholders entitled to vote at the meeting.
In addition, to solicitation by mail, Management may use the services
of its directors, officers and others to solicit proxies, personally or by
telephone, telegram, facsimile or electronic mail. No additional compensation
will be paid to directors, officers or other regular employees for such
services. Arrangements may also be made with brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation material to the
beneficial owners of the stock held of record by such persons, and the Company
may reimburse them for reasonable out-of-pocket and clerical expenses they
incur.
RECORD DATE, VOTING AND REVOCABILITY OF PROXIES
The Company had outstanding on March 20, 1998 (the "Record Date"),
7,028,955 shares of Common Stock, $.01 par value, all of which are entitled to
vote on all matters to be acted upon at the meeting. The Company's Bylaws
provide that a majority of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum for transaction of business. Each
stockholder is entitled to one vote for each share held on the Record Date. If
no instructions are given on the executed Proxy, the Proxy will be voted for
all nominees and in favor of all proposals described. Stockholders who sign
and return the Proxy may revoke it at any time before it is voted by giving
written notice to the Secretary of the Company.
For the election of directors, a plurality of the votes present and
entitled to vote is required for approval if a quorum is present. An automated
system administered by the Company's transfer agent tabulates the votes.
Abstentions and broker non-votes are each included in the determination of the
number of shares represented at the meeting for purposes of determining the
presence of a quorum. Each is tabulated separately. Abstentions and broker
non-votes will not be counted for purposes of determining the number of votes
cast for a proposal.
1
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock as of March 20, 1998 by each
person who is known by the Company to own beneficially more than 5% of the
Common Stock, each director, nominee and executive officer of the Company named
in the Summary Compensation Table and all directors and executive officers of
the Company as a group. Unless otherwise noted, the stockholders listed in the
table have sole voting and investment powers with respect to the shares of
Common Stock owned by them.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER (1) BENEFICIALLY OWNED (2) SHARES
---------------------------------------- ---------------------- ---------------------
<S> <C> <C>
Gary R. Abrahams (3)................................... 1,190,250 16.93%
Marc B. Kaplan (3)..................................... 1,189,250 16.92
Robert W. Zaugg (3).................................... 1,187,500 16.89
Benny E. Anderson (3).................................. 190,500 2.71
Joseph C. Porpiglia (3)................................ 7,250 *
All executive officers and directors
as a group (seven persons)(3).......................... 3,765,250 53.42
</TABLE>
- ----------------------------
* Indicates ownership of less than 1% of the Company's Common Stock.
(1) The business address of the executive officers of the Company is 7595
Rickenbacker Drive, Gaithersburg, Maryland 20879.
(2) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and generally include voting power
and/or investment power with respect to securities. Shares of Common
Stock subject to options or warrants currently exercisable or
exercisable within 60 days of the date hereof ("Currently Exercisable
Options") are deemed outstanding for computing the percentage
beneficially owned by the person holding such options but are not
deemed outstanding for computing the percentage beneficially owned by
any other person. Except as indicated by footnote, the Company
believes that the persons named in this table, based on information
provided by such persons, have sole voting and investment power with
respect to the shares of Common Stock indicated.
(3) Includes 1,750 shares beneficially owned by Mr. Kaplan and includes the
following shares that may be acquired within 60 days through the
exercise of stock options: Mr. Abrahams, 2,750; Mr. Anderson, 3,000;
Mr. Porpiglia, 7,250; and all executive officers and directors as a
group, 18,000.
2
<PAGE> 5
CERTAIN TRANSACTIONS
HEADQUARTERS AND WAREHOUSE LEASE
In August 1993, the Company entered into a 20-year lease with 7595
Rickenbacker LLC, which is owned in equal shares by Messrs, Abrahams, Zaugg and
Kaplan, who are directors, executive officers and principal stockholders of the
Company. Under the terms of the lease, the Company leases approximately 38,000
square feet at 7595 Rickenbacker Drive, Gaithersburg, Maryland 20879, which is
used as the Company's headquarters and primary warehouse facility, at a current
rental rate of approximately $21,400 per month. The rental rate is subject to
annual increases based upon the consumer price index for the Washington
metropolitan area. The Company must bear all maintenance and repair costs and
pay utilities, property taxes and insurance for the premises. The Company
believes that the terms of the lease, including the rental rate, are at least
as favorable to the Company as those which could have been negotiated with an
unaffiliated third party.
COMPANY LOAN GUARANTEE
The Company has guaranteed a loan from a commercial bank to 7595
Rickenbacker LLC, which is owned by Messrs, Abrahams, Zaugg and Kaplan, the
proceeds of which were used to purchase the building that is leased by the
Company and used as its headquarters. The outstanding balance on this loan
was $929,500 at December 31, 1997.
3
<PAGE> 6
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
The following persons have been nominated to serve as
directors of the Company until the next Annual Meeting of Stockholders:
<TABLE>
<CAPTION>
NAME OF DIRECTOR AGE DIRECTOR SINCE TERM EXPIRES
- ---------------- --- -------------- ------------
<S> <C> <C> <C>
Gary R. Abrahams 45 June 1997 * 1998
Marc B. Kaplan 49 June 1997 * 1998
Robert W. Zaugg 53 June 1997 * 1998
David S. Santee (1)(2) 38 June 1997 1998
Stuart C. Siegel (1)(2) 54 June 1997 1998
</TABLE>
- -------------------
*During the period of 1986-1988, Mr. Abrahams, Mr. Kaplan and Mr. Zaugg
co-founded the operating subsidiaries of the Company. They have been directors
of the subsidiaries since inception.
(1) Compensation Committee member
(2) Audit Committee member
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE NOMINEES
AS DIRECTORS.
GARY R. ABRAHAMS. Mr. Abrahams is the Company's Chief Executive
Officer, President, a Director and a co-founder of the Company. He was an
executive officer of Horizon Financial Corporation in Washington, D.C. from
1983 to 1987, was employed by Standard Federal Savings & Loan in Gaithersburg,
Maryland from 1979 to 1983, and by Ernst & Ernst from 1975 to 1978.
MARC B. KAPLAN. Mr. Kaplan is the Company's Chief Financial Officer,
Treasurer, a Director and a co-founder of the Company. He was president of
Horizon Financial Corporation from 1983 to 1987, was employed by Standard
Federal Savings & Loan from 1976 to 1983, and by Arthur Young & Company from
1972 to 1976.
ROBERT W. ZAUGG. Mr. Zaugg is the Company's Chief Operating Officer,
Secretary, a Director and a co-founder of the Company. He was an executive
officer of Horizon Financial Corporation from 1983 to 1987, was employed by
Standard Federal Savings & Loan from 1975 to 1983, by Equitable Federal Savings
from 1972 to 1974, and by Peat, Marwick, Mitchell & Company from 1968 to 1972.
DAVID S. SANTEE. Mr. Santee has been a Director of the Company since
June 1997. Since 1994, he has served as Division Vice President of Equity
Residential Properties Trust ("Equity Properties"), a publicly traded REIT,
where he is responsible for the operations of over 115 properties. Before
joining Equity Properties in 1994, Mr. Santee was Vice President of Summit
Properties, another publicly traded REIT. From 1893 to 1992, Mr. Santee worked
for R&B Realty Group in various capacities.
STUART C. SIEGEL. Mr. Siegel has been a Director of the Company since
June 1997. For the last fifteen years, he has served as Chairman of the Board
of Directors and Chief Executive Officer of S & K Famous Brands, Inc., a
menswear retailer.
4
<PAGE> 7
PERFORMANCE GRAPH
The following graph compares the Cumulative Total Return of the
Company's Common Stock, assuming reinvestment of dividends, if any, with the
CRSP Total Return Index for the Nasdaq Stock Market and an index of peer
companies (Globe Business Resources, Inc. and Extended Stay America) selected
by the Company. Since the Company's initial public offering occurred on August
27, 1997 the comparison of Cumulative Total Return is presented for the period
August 27, 1997 through December 31, 1997.
The graph is constructed on the assumption that $100 was invested on
August 27, 1997 in each of the Company's common stock, the CRSP Total Return
Index for the Nasdaq Stock Market and the Peer Group common stock.
[CHART]
<TABLE>
<CAPTION>
August 27, 1997 December 31, 1997
--------------- -----------------
<S> <C> <C>
ExecuStay Corporation 100.00 97.50
CRSP Total Return Index 100.00 98.87
Peer Group 100.00 97.69
</TABLE>
5
<PAGE> 8
DIRECTOR'S COMPENSATION
Directors who are employees of the Company do not receive any
compensation for their service as directors. The Company reimburses each
director who is not an employee of the Company, for out-of-pocket expenses
incurred to attend meetings. The two non-employee directors have each been
granted an option to purchase 10,000 shares of Common Stock at $10.00 per share
(the initial public offering price) under the ExecuStay Corporation 1997
Incentive and Stock Option Plan ("the Plan"). Any non-employee director first
elected to the Board of Directors after August 27, 1997 (the initial public
offering date) will be granted an option to purchase 10,000 shares. In
addition, each non-employee director will be granted an additional option to
purchase 10,000 shares at the fourth anniversary of the initial grant if he or
she is then still serving as a director. The exercise price will be the market
price of the Company's Common Stock on the date of grant. Options to
non-employee directors vest in 25% increments, starting on the date of grant
and thereafter on each anniversary of such grant.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held two meetings (one in the post initial
public offering period) during the fiscal year ended December 31, 1997. All
members of the Board of Directors attended the meetings held while such members
were Directors of the Company. Standing committees of the Board include the
Audit Committee and the Compensation Committee. The Company does not have a
Nomination Committee.
The Audit Committee's principal responsibilities consist of (a)
recommending the selection of independent accountants (b) reviewing the scope
of the audit conducted by such auditors, as well as the results of the audit
itself and (c) reviewing the Company's internal accounting and audit procedures
and financial reporting activities. The Audit Committee was formed in June
1997. No meetings were held during fiscal 1997.
The Compensation Committee oversees and administers the compensation
of the Company's executive officers and administers the Company's 1997
Incentive and Stock Option Plan. No meetings were held during fiscal 1997.
6
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information for the Company's fiscal
years ended December 31, 1997 and 1996 concerning the compensation of the
Company's Chief Executive Officer and each of the four most highly compensated
executive officers who were serving as executive officers at the end of the
latest fiscal year.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION ALL OTHER
NAME AND SALARY COMPENSATION SHARES COMPENSATION
PRINCIPAL POSITION YEAR $ BONUS UNDERLYING OPTIONS (1) $ (2)
------------------ ---- --------- ----- ---------------------- -------------
<S> <C> <C> <C> <C> <C>
Gary R. Abrahams 1997 100,000 - - 1,026
Chief Executive 1996 99,615 - - 780
Officer and President
Benny Anderson 1997 100,000 - 12,000 570
Executive Vice- 1996 99,157 - - 660
President
Marc B. Kaplan 1997 100,000 - - 1,026
Executive Vice- 1996 99,615 - - 780
President, Chief
Financial Officer, and
Treasurer
Robert W. Zaugg 1997 100,000 - - 1,026
Executive Vice- 1996 99,615 - - 780
President, Chief
Operating Officer and
Secretary
Joseph C. Porpiglia 1997 82,240 27,430 29,000 817
Senior Vice-President 1996 80,000 13,663 - 0
</TABLE>
(1) Represents options granted pursuant to the Company's Stock Option
Plan.
(2) Unless otherwise indicated, amounts disclosed in this column represent
Company contributions under the Company's 401 (K) Savings Plan to each
of the named executive officers.
7
<PAGE> 10
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table summarizes option grants under the Plan made by
the Company to each of its executive officers in 1997.
<TABLE>
<CAPTION>
Potential Realizable Value
Percentage At Assumed Annual Rates of
Number of of Total Stock Price Appreciation for
Securities Options Option Term (3)
Underlying Granted to Exercise or ---------------
Options Employees Base Price Expiration
Name Granted (#)(1) in 1997(2) ($/Sh) Date 5%($) 10%($)
---- --------------- ----------- ------ ---- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Mr. Abrahams 0 - % $ - - $ - $ -
Mr. Kaplan 0 - - - - -
Mr. Zaugg 0 - - - - -
Mr. Anderson 12,000 (4) 6.4 10.00 8/27/07 75,467 191,249
Mr. Porpiglia 29,000 (4) 15.5 10.00 8/27/07 182,379 462,185
</TABLE>
- ------------------------
(1) Each option represents the right to purchase one share of Common
Stock. The options vest in annual cumulative 25% installments over a
period of three years beginning on the date of grant and continuing on
each of the first three anniversaries from the grant date. Each
option grant allows the individual to acquire shares of the Company's
Common Stock at a fixed price per share over a ten year period of
time.
(2) In 1997, the Company granted employees options to purchase an
aggregate of 186,850 shares of Common Stock.
(3) The compounding assumes a ten year exercise period for all option
grants. The 5% and 10% assumed annual rates of compounded stock price
appreciation are mandated by rules of the Securities and Exchange
Commission and do not represent the Company's estimate or projection
of the Company's future Common Stock prices. These amounts represent
certain assumed rates of appreciation only. Actual gains, if any, on
stock option exercises are dependent on the future performance of the
Common Stock and overall stock market conditions. The amounts
reflected in the table may not necessarily be achieved.
(4) Stock options granted to employees on August 27, 1997.
8
<PAGE> 11
YEAR-END OPTION TABLE
The following table sets forth certain information concerning options
to purchase Common Stock exercised by the executive officers named in the
Summary Compensation Table above during fiscal year 1997 and the number and
value of unexercised stock options held by such officers as of December 31,
1997.
AGGREGATED VALUE OF OPTIONS HELD AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options Held at In-the-Money Options Held
December 31, 1997 at December 31, 1997 (1)
----------------------------------- -----------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gary R. Abrahams 0 0 $ 0 $ 0
Marc B. Kaplan 0 0 0 0
Robert W. Zaugg 0 0 0 0
Benny E. Anderson 3,000 9,000 0 0
Joseph C. Porpiglia 7,250 21,750 0 0
</TABLE>
- --------------------
(1) "Value" has been determined based on the difference between the last
sale price of the Company's Common Stock as reported by the Nasdaq
Market System on December 31, 1997 ($9.75) and the per share option
exercise price, multiplied by the number of shares subject to the
in-the-money options.
9
<PAGE> 12
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors advises the Chief
Executive Officer and the Board of Directors on matters of the Company's
compensation philosophy and recommends salaries, incentives and other forms of
compensation for directors, officers and other employees of the Company. The
Compensation Committee also is responsible for the administration of the
Company's 1997 Incentive and Stock Option Plan (the "Plan"). The Compensation
Committee has reviewed and is in accord with the compensation paid to executive
officers in fiscal year 1997.
General Compensation Policy. The Company is committed to attracting,
hiring and retaining an experienced management team that can successfully
develop the Company's services and penetrate target markets. The fundamental
policy of the Compensation Committee is to provide the Company executive
officers with competitive compensation opportunities based upon their
contribution to the development and financial success of the Company and
long-term stockholder interest as well as the officers' personal performance.
It is the Compensation Committee objective to have a portion of each executive
officer compensation contingent upon the Company performance as well as upon
such executive officer's own level of performance. Beginning in 1998, the
compensation package for each executive officer will be comprised of three
elements: (i) base salary which reflects individual performance and is designed
primarily to be competitive with salary levels in the industry (ii) bonus
contingent upon specific corporate and individual milestones and (iii) long-term
stock-based incentive awards which strengthen the mutuality of interests between
the executive officers and the Company's stockholders. Through the end of
1997, the compensation package of each executive officer was primarily
comprised of base salary.
Base Salary. The base salary is established as a result of the
Committee's analysis of each executive officer's individual performance during
the prior year, the overall performance of the Company during the prior year
and historical compensation levels within the executive officer group. The
Committee believes executive salaries must be sufficient to attract and retain
key individuals. Salaries are based on experience level and are intended to be
competitive with median salaries paid to comparable executives in similar
positions at other companies.
Long-Term Incentive Compensation. Long-term incentives are provided
through grants of stock options. The grants are designed to align the interest
of each executive officer with those of the stockholders and provide each
individual with an incentive to manage the Company from the perspective of an
owner with an equity stake in the Company. Stock options are generally granted
to executive officers at the time they are elected. In determining the number
of shares subject to stock option grants, the Committee takes into
consideration the job responsibilities, experience and contributions of the
individual as well as the recommendations of the Chief Executive Officer. The
stock options generally vest in 25% increments beginning on the date of grant
and continuing on each of the first three anniversaries of the grant date.
Each option grant allows the individual to acquire shares of the Company's
Common Stock at a fixed price per share over a ten year period of time.
CEO Compensation. The Compensation Committee's determination of the
Chief Executive Officer's salary, bonus and stock option grants follow the
policies set forth above for all executive's compensation. The Committee seeks
to establish a level of base salary competitive with that paid by companies
within the industry which are of comparable size, and a bonus contingent upon
the Company's performance and stock price appreciation.
10
<PAGE> 13
Compliance with Internal Revenue Code Section 162(m). As a result of
Section 162 (m) of the Internal Revenue Code of 1986, as amended, the Company
will not be allowed a federal income tax deduction for compensation paid to
certain executive officers, to the extent that compensation exceeds $1 million
per officer in any one year. This limitation will apply to all compensation
paid to the covered executive officers which is not considered to be
performance based. Compensation which does qualify as performance based
compensation will not have to be taken into account for purposes of this
limitation. The Committee believes that option granted the Plan will meet the
requirements for qualifying as performance based.
The Compensation Committee does not expect that the compensation to be
paid to the Company's executive officers for the 1998 calendar year will exceed
the $1 million limit per officer. Accordingly, the Committee believes that this
section will not affect the tax deductions available to the Company.
DAVID S. SANTEE, and
STUART C. SIEGEL
The Members of the Compensation Committee
of the Board of Directors
11
<PAGE> 14
OTHER MATTERS
The Company's management knows of no matters other than the foregoing
which will be presented for action at the meeting. If any other matters
properly come before the meeting, or any adjournments, the person or persons
voting the management proxies will vote them in accordance with their best
judgment.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has not selected a firm to serve as independent
auditors for the fiscal year ended December 31, 1998. The Board of Directors
is evaluating independent auditors and will make its selection as soon as is
practicable after the Annual Meeting. Grant Thornton LLP has served as
independent auditors of the Company for the fiscal year ended December 31,
1997. The Board of Directors has invited representatives of Grant Thornton LLP
to attend the Annual Meeting, to have the opportunity to make a statement if he
or she desires, and to respond to appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE - Section
16(a) of the Securities Exchange Act of 1934 requires the Company's directors
and officers and persons who beneficially own more than 10% of the Company's
Common Stock to file reports of holdings and transactions in the Company's
equity securities with the Securities and Exchange Commission. Based solely on
a review of the copies of such reports furnished to the Company and written
representation from the executive officers and directors, the Company believes
that all Section 16 (a) filing requirements applicable to its executive
officers and directors and greater than 10% beneficial owners were complied
with respect to 1997.
ANNUAL REPORT (FORM 10-K) - The Company undertakes, on written request
and without charge, to provide each person from whom the accompanying Proxy is
solicited with a copy of the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, as filed with the Securities and Exchange Commission,
including the financial statements and schedules. Copies of exhibits not
included in the Form 10-K are also available, on written request, at the
Company's cost therefore. Requests should be addressed to ExecuStay
Corporation, 7595 Rickenbacker Drive, Gaithersburg, Maryland 20879, Attention:
Secretary.
FUTURE SHAREHOLDER PROPOSALS - Shareholders who wish to submit
proposals for inclusion in the proxy statement and for consideration at the
annual meeting must do so on a timely basis. In order to be included in the
proxy statement for the 1999 annual meeting, proposals must relate to proper
subjects and must be received by the Corporate Secretary, ExecuStay
Corporation, 7595 Rickenbacker Drive, Gaithersburg, MD 20879, before
December 1, 1998.
By order of the Board of Directors
/s/ ROBERT W. ZAUGG
Robert W. Zaugg
Executive Vice President,
Chief Operating Officer
and Secretary
April 14, 1998
12
<PAGE> 15
EXECUSTAY CORPORATION
PROXY FOR THE 1998 ANNUAL STOCKHOLDERS MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Marc B. Kaplan and Robert W. Zaugg, and each of
them, with power to appoint a substitute, to vote all shares the undersigned is
entitled to vote at the Annual Meeting of Stockholders of ExecuStay Corporation
to be held on May 14, 1998, and at all adjournments thereof, as specified below
on the matters referred to and, in their discretion, upon any other matters
which may be brought before the meeting:
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS: [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
TO WITHHOLD AUTHORITY FOR A SPECIFIC NOMINEE, PLACE A LINE THROUGH HIS NAME BELOW:
GARY R. ABRAHAMS, MARC B. KAPLAN, DAVID S. SANTEE, STUART C. SIEGEL, ROBERT W. ZAUGG
2. TO VOTE WITH DISCRETIONARY AUTHORITY ON ANY OTHER MATTER THAT MAY PROPERLY COME
BEFORE THE MEETING
</TABLE>
(Continued on reverse side)
<PAGE> 16
(Continued from other side)
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made, this
Proxy will be voted for all of the directors named in proposal 1.
When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated: __________________ 1998
_______________________________
Signature
_______________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
