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:
[ X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sections 240.14a-11(c) or Section 240.14a-
12
AMERIHOST PROPERTIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
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:
AMERIHOST PROPERTIES, INC.
2400 EAST DEVON AVENUE - SUITE 280
DES PLAINES, IL 60018
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders of Amerihost
Properties, Inc. (the "Company") will be held on August 29, 1996, at 10:30 A.M.,
local time, at the offices of McDermott, Will & Emery, 227 West Monroe Street,
Chicago, Illinois 60606 to act upon the following matters:
1. To elect the Directors of the Company who will serve until the next annual
meeting of shareholders or until their successors are duly qualified. The
following persons have been nominated for directorships:
H. Andrew Torchia Russell J. Cerqua
Michael P. Holtz Reno J. Bernardo
Richard A. D'Onofrio Salomon J. Dayan
2. To amend the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 15,000,000 shares, $0.005 par value
per share to 25,000,000 shares, $0.005 par value per share.
3. To consider and vote upon approval of the Amerihost Properties, Inc. 1996
Omnibus Incentive Stock Plan.
4. To consider and vote upon approval of the Amerihost Properties, Inc. 1996
Stock Option Plan for Nonemployee Directors.
5. To ratify the appointment and retention of BDO Seidman, LLP as the
Company's independent certified public accountants.
6. The transaction of such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Said meeting may be adjourned from time to time without other notice than by
announcement at said meeting, or at any adjournment thereof, and any and all
business for which said meeting is hereby noticed may be transacted at any such
adjournment.
Only holders of record at the close of business on July 17, 1996 of the
Company's common stock, $.005 par value will be entitled to notice of and to
vote at the meeting and at any adjournment or adjournments thereof.
Enclosed is a form of Proxy solicited by the management of the Company.
Stockholders who do not plan to attend the meeting in person are requested to
date, sign and return the enclosed Proxy. Your Proxy may be revoked at any time
before it is exercised and will not be used if you attend the meeting and prefer
to vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ MICHAEL P. HOLTZ
Michael P. Holtz, President
Des Plaines, Illinois
July 25, 1996
AMERIHOST PROPERTIES, INC.
2400 East Devon Avenue
Suite 280
Des Plaines, Illinois 60018
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
The enclosed proxy is solicited on behalf of the Board of Directors of Amerihost
Properties, Inc. (the "Company"), for use at the Annual Meeting of Shareholders
of the Company to be held at 10:30 A.M. on Thursday, August 29, 1996, at the
offices of McDermott, Will & Emery, 227 West Monroe Street, Chicago, Illinois
60606. In addition to solicitation of proxies by mail, proxies may be solicited
by the Company's directors, officers and regular employees by personal
interview, telephone or telegram, and the Company will request brokers and other
fiduciaries to forward proxy soliciting material to the beneficial owners of
shares which are held of record by them. The expense of all such solicitation,
including printing and mailing, will be paid by the Company. Any proxy may be
revoked at any time prior to its exercise, by written notice to the Secretary of
the Company or by attending the meeting and electing to vote in person. Any
such revocation shall not affect any vote previously taken. This Proxy
Statement and accompanying proxy were initially mailed to shareholders on or
about July 25, 1996.
Only shareholders of record of the Company at the close of business on July 17,
1996 are entitled to vote at the meeting or any adjournment thereof. As of that
date there were outstanding 6,023,521 shares of Common Stock, each of which is
entitled to one vote on all matters voted upon at the annual meeting. Holders
of Common Stock are not entitled to cumulate their votes in the election of
directors. A majority of the outstanding shares of the Company, represented in
person or by proxy, shall constitute a quorum at the meeting, and the
affirmative vote of the majority of the shares represented at the meeting is
required to elect directors, to approve the Amerihost Properties, Inc. 1996
Omnibus Incentive Stock Option Plan, to approve the Amerihost Properties, Inc.
Stock Option Plan for Nonemployee Directors and to ratify the appointment of the
Company's independent auditors. The affirmative vote of the holders of a
majority of the outstanding shares is required to approve the proposed amendment
to the Company's Certificate of Incorporation.
ELECTION OF DIRECTORS
(PROPOSAL 1)
A board of six directors will be elected to serve until the next annual meeting,
or until their successors are elected and shall have qualified. The proxies
duly signed and returned pursuant to this solicitation will be voted by the
persons named therein in accordance with the directions of the shareholders. If
no directions are specified in a proxy, the proxy will be voted for the election
as directors of the nominees named below. Should any nominee be unable to
accept the office of director (which is not presently anticipated), the persons
named in the proxies will vote for the election of such other persons as they
shall determine.
The following persons are the executive officers and directors of the Company.
Each person listed below is a nominee for re-election as a director.
Director
Name, Age, and Principal Occupation since
H. ANDREW TORCHIA, 53 1984
H. Andrew Torchia, a co-founder of the Company, has been a director of the
Company since its inception in 1984. Mr. Torchia was President and Chief
Executive Officer of the Company from 1985 until 1989, when he became
Chairman of the Board. As Chairman, Mr. Torchia's primary areas of
responsibility include business development, corporate finance and strategic
and financial planning. Mr. Torchia is also the President and 51%
shareholder of Urban 2000 Corp., a hotel development and consulting firm,
which was initially the sole shareholder of the Company. Mr. Torchia also
owns a 50% interest in American International Hotel Corporation which leases
the Best Western at O'Hare. Mr. Torchia has 30 years of experience in hotel
development, operations and franchising. Prior to founding the Company, Mr.
Torchia served as head of regional development for Best Western
International and as a head of independent franchise sales organizations for
Quality Inns International and Days Inns.
MICHAEL P. HOLTZ, 39 1985
Michael P. Holtz has been a director of the Company since August 1985. From
1985 to 1989, Mr. Holtz served as the Company's Treasurer and Secretary. In
1986, Mr. Holtz was promoted to Chief Operating Officer of the Company with
direct responsibility for the Company's day to day operations. In 1989, Mr.
Holtz was elected President and Chief Executive Officer of the Company. Mr.
Holtz is responsible for development and implementation of all Company
operations including development, finance and management. Mr. Holtz has
over 20 years experience in the operation and management of hotel
properties.
RICHARD A. D'ONOFRIO, 52 1984
Richard A. D'Onofrio, a co-founder of the Company, has been a director of
the Company since its inception in 1984. From 1985 to 1989, Mr. D'Onofrio
served as Vice President of the Company responsible for investor relations,
external financing and development activities. In 1989, Mr. D'Onofrio was
promoted to Executive Vice President. His principal areas of responsibility
include corporate finance and corporate marketing and the management of the
Company's relationship with members of the financial community. Prior to
founding the Company, Mr. D'Onofrio had been involved in various capacities
within the hotel and related industries, including the development of
franchised restaurants. In addition, Mr. D'Onofrio owned and operated
the Quality Inn in Youngstown, Ohio, through 1987. During 1994,
Mr. D'Onofrio acquired 49% of Urban 2000 Corp.
RUSSELL J. CERQUA, 39 1987
Russell J. Cerqua has been the Senior Vice President of Finance and Chief
Financial Officer of the Company since 1987, and Treasurer and a director of
the Company since 1988. In 1989, in addition to his other responsibilities,
Mr. Cerqua was elected Secretary of the Company. His primary
responsibilities include internal and external financial reporting,
corporate and property financing, development of financial management
systems, hotel accounting for managed properties and financial analysis.
Prior to joining the Company, Mr. Cerqua was an audit manager with Laventhol
& Horwath, the Company's former independent certified public accountants,
and was responsible for the Company's annual audits. Mr. Cerqua was
involved in public accounting for over 9 years, with experience in auditing,
financial reporting and taxation. Mr. Cerqua is a Certified Public
Accountant and a member of the American Institute of Certified Public
Accountants and the Illinois CPA Society.
RENO J. BERNARDO, 64 1987
Reno J. Bernardo served as the Senior Vice President of Construction of the
Company from 1987 through March 1994, when he retired. His primary
responsibilities included managing construction of new properties and
directing renovation projects. In 1989, Mr. Bernardo became a director of
the Company and continues to serve in this capacity. From 1985 to 1986, Mr.
Bernardo was Vice President of Construction with Devcon Corporation, a hotel
construction company. From 1982 to 1985, Mr. Bernardo was Project
Superintendent with J.R. Trueman and Associates, a hotel construction
company, and a subsidiary of Red Roof Inns, where his responsibilities
included supervision of the development and construction of several Red Roof
Inns.
ROBERT L. BARNEY, 59 1995
Robert L. Barney is currently the sole shareholder, President and Chief
Executive Officer of Rolling Meadows Golf Club & Estates in Marysville,
Ohio. Mr. Barney was a director of Wendy's International, Inc. ("Wendy's"),
a restaurant company, when it was founded in 1969. In July 1971, Mr. Barney
was appointed President and Chief Operating Officer of Wendy's and in
February 1980 became the Chief Executive Officer in which capacity he served
until February 1989. Mr. Barney also served as Chairman of the Board of
Wendy's from September 1982 until retiring in May 1990, and continued to
consult Wendy's until May 1992. Prior to his affiliation with Wendy's, Mr.
Barney held positions with Kentucky Fried Chicken and Arthur Treacher's Fish
& Chips while owning several franchises for these two restaurant chains.
Since December 1991, Mr. Barney has served as a director of Quantum
Restaurant Group, Inc., owner of four restaurant chain concepts including
Mortons Steak House. Mr. Barney has been a director of the Company since
July 1995. Mr. Barney has chosen not to seek re-election as a director of
the Company at the Company's next annual meeting of shareholders, thus his
term as a director will expire.
The following person is a nominee for director.
Name, Age, and Principal Occupation
SALOMON J. DAYAN, 50
Salomon J. Dayan, M.D. is a physician certified in internal and geriatric
medicine. Since 1980, Dr. Dayan has been the Chief Executive Officer of
Salomon J. Dayan, Ltd., a multi-specialty medical group which he founded and
which is dedicated to the care of the elderly in hospital and nursing home
settings. Since 1986, Dr. Dayan has been the Medical Director and Chief
Executive Officer at Healthfirst, a corporation which operates multiple
medical ambulatory facilities in the Chicago, Illinois area, and since 1994
he has also been an associate professor at Rush Medical Center in Chicago.
Dr. Dayan is currently the Chairman of the Board of Directors of Greater
Chicago Financial Corporation, a bank holding company owning interests in
two banks. Dr. Dayan also has numerous investments in residential and
commercial real estate.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES
REPRESENTED IN PERSON OR BY PROXY AT THE ANNUAL SHAREHOLDERS MEETING IS
NECESSARY FOR THE ELECTION OF THE NOMINEES. SHARES REPRESENTED BY THE
PROXIES RECEIVED WILL BE VOTED FOR THE ELECTION OF THE NOMINEES UNLESS
SHAREHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES.
ATTENDANCE
The Board of Directors held four meetings during 1995. All directors attended
at least 75% of the meetings.
COMPENSATION OF DIRECTORS
Each director of the Company receives an annual retainer fee of $9,000 ($750 per
month). Each director of the Company also receives $250 for each Board of
directors meeting attended in person, $150 for each Board of Directors meeting
conducted by telephone and $150 for each committee meeting. In addition, each
director is reimbursed for all out-of-pocket expenses related to attendance at
Board meetings.
COMMITTEES
The Board of Directors has two standing committees:
1. Audit Committee - This committee consists of the two outside
directors: Messrs. Bernardo (Chairman) and Barney. The Audit
Committee has the responsibility to meet with the Company's
independent accountants to review the scope and results of their
audit, as well as reviews with the independent accountants the
Company's system of internal accounting and financial controls. This
committee held two meetings during 1995, at which all members were
present.
2. Compensation Committee - This committee consists of the two outside
directors: Messrs. Barney (Chairman) and Bernardo. The Compensation
Committee reviews the salaries, bonuses, stock compensation, stock
options and other direct and indirect compensation for all Company
officers. This committee held one meeting during 1995, at which
all members were present.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's Compensation Committee was initially appointed on July 14, 1993,
and is composed entirely of outside directors. The Committee is responsible for
the establishment and administration of the policies which govern all forms of
executive compensation.
The Company has maintained the philosophy that a compensation plan should be
designed to motivate and compensate executives for both the short-term and long-
term success of the Company. Effective January 1, 1995, the Company and all
three executives of the Company entered into employment agreements which are
consistent with this philosophy. Base salaries were set based upon comparative
industry data and an evaluation of the executive's responsibilities and
experience. Incentive compensation is directly linked to the financial
performance of the Company. The Company also uses stock purchase warrants as
part of its long-term incentive program. The Committee believes that bonuses
tied objectively to financial performance and stock warrants tied directly to
the appreciation of the Company's stock closely align the executives' interests
with the interests of the Company's shareholders.
Compensation for each of the executives in 1995 consisted of a blend of cash,
Common Stock, and stock options. Total compensation in the form of cash paid in
1995 approximates the total cash compensation to be paid in 1996 pursuant to the
employment agreements if the performance objectives are met. Additional
subjective compensation in the form of common stock was also earned in 1995. In
1995, the employment agreements of Messrs. Holtz and Cerqua were modified to
issue stock options in the amount of 100,000 and 33,333, respectively, in lieu
of the shares of Common Stock they were to receive in 1996. The number of
warrants to vest in 1996 pursuant to the employment agreements approximates the
number of options issued to the executives in 1995.
The Chief Executive Officer of the Company served under an arrangement which
established a base salary of $325,000 in 1995. In addition to his base salary,
a portion of Mr. Holtz's compensation is directly linked to the financial
performance of the Company. The determination of the Chief Executive Officer's
compensation is based on the same factors and in the same manner as other
executive officers. Due to the Company's favorable financial performance in
1995, Mr. Holtz received bonuses pursuant to his employment agreement in the
form of restricted Common Stock, and long-term incentive in the form of stock
options. Mr. Holtz also serves as the President and Chief Executive Officer of
all the Company's wholly-owned subsidiaries. Mr. Holtz receives no additional
compensation for his services to these subsidiaries.
Compensation Committee:
Robert L. Barney, Chairman
Reno J. Bernardo
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the annual and
long-term compensation for services as officers to the Company for the fiscal
years ended December 31, 1995, 1994 and 1993, of those persons who were, at
December 31, 1995 (i) the Chairman of the Board, (ii) the chief executive
officer, and (iii) the other two most highly compensated executive officers of
the Company (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
Restricted Securities
NAME AND PRINCIPAL ANNUAL COMPENSATION Stock Underlying All Other
POSITION Year Salary Bonus Awards Options(#)(1) Compensation(2)
<S> <C> <C> <C> <C> <C> <C>
H. Andrew Torchia(3) 1995 $ 0 $ 0 $ 0 120,000 $15,000
Chairman of the Board 1994 0 0 0 30,000 15,000
1993 0 0 0 0 15,000
Michael P. Holtz 1995 322,115 0 196,927 360,000 10,000
President and Chief 1994 244,913 75,000 75,000 60,000 10,000
Executive Officer 1993 117,741 177,759 0 0 10,000
Russell J. Cerqua 1995 149,423 0 56,690 153,333 10,000
Senior Vice President 1994 132,692 15,000 15,000 30,000 10,000
Finance, Secretary, 1993 75,000 43,900 0 0 10,000
Treasurer and Chief
Financial Officer
Richard A. D'Onofrio(3) 1995 137,500 27,500 0 120,000 15,000
Executive Vice President 1994 162,528 0 0 30,000 15,000
1993 99,010 15,000 0 0 15,000
(1) Options for the purchase of 100,000, 320,000, 133,333, and 100,000 shares
of Common Stock granted to Messrs. Torchia, Holtz, Cerqua and D'Onofrio
were vested as of May 31, 1996. Options for the purchase of 50,000,
100,000, 50,000, and 50,000 shares of Common Stock granted to Messrs.
Torchia, Holtz, Cerqua and D'Onofrio, respectively, will vest as of
January 1, 1997.
(2) Represents life insurance premiums paid by the Company on behalf of the
Named Officers.
(3) Mr. Torchia received no annual compensation from the Company in 1993, 1994
or 1995. For a discussion of the fees paid to Urban, a hotel development
consulting firm in which Mr. Torchia owns a 51% interest and Mr. D'Onofrio
owns a 49% interest, pursuant to a consulting agreement between the
Company and Urban, see "Certain Transactions."
OPTIONS
The options described in the following tables have been granted other than
pursuant to the Company's stock plans. There were no options exercised by the
Named Officers in 1995.
OPTION GRANTS IN 1995
</TABLE>
<TABLE>
<CAPTION>
Individual Grants
Potential Realizable
% of Total Value at Assumed
Options Annual Rates of
Granted to Stock Price
Employees Exercise or Appreciation for
Options in Fiscal Base Price Expiration Option Term
Name Granted Year ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
H. Andrew Torchia 120,000(1) 12.92% $3.56 Jan. 2007 $ 310,198 $815,308
Michael P. Holtz 260,000(1) 27.99% $3.56 Jan. 2007 666,657 1,748,790
100,000(2) 10.77% $6.50 Dec. 2005 388,420 1,003,511
360,000 38.76% 1,055,077 2,752,301
Russell J. Cerqua 120,000(1) 12.92% $3.56 Jan. 2007 310,198 815,308
33,333(2) 3.59% $6.50 Dec. 2005 129,472 334,500
153,333 16.51% 439,670 1,149,808
Richard A. D'Onofrio 120,000(1) 12.92% $3.56 Jan. 2007 310,198 815,308
(1) Options granted January 1, 1995.
(2) Options granted December 1, 1995.
</TABLE>
YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Options Value of Unexercised in-the-Money
Held at December 31, 1995 Options at December 31, 1995 (1)
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
H. Andrew Torchia 132,833 94,875 $219,125 $243,094
Michael P. Holtz 332,000 198,000 501,313 500,438
Richard A. D'Onofrio 190,688 103,000 379,789 245,125
Russell J. Cerqua 132,833 94,875 219,125 243,094
(1) The closing sale price of the Company's Common Stock on the
Nasdaq National Market on December 31, 1995 was $6.25.
</TABLE>
EMPLOYMENT AGREEMENTS
Effective January 1, 1995, the Company entered into employment agreements
with Messrs. Holtz, D'Onofrio and Cerqua. The employment agreements are each
for a three-year term, with Mr. Holtz's agreement providing for automatic
renewal for an additional three years at his option. Pursuant to his employment
agreement, Mr. Holtz is to receive cash compensation equal to $375,000 and
$425,000 in 1996 and 1997, respectively, and, if certain performance criteria
are satisfied, compensation in the form of 30,000 and 40,000 shares of Common
Stock in 1996 and 1997, respectively. In addition, in 1995, Mr. Holtz received
warrants exercisable into an aggregate of 260,000 shares of Common Stock. In
the event that Mr. Holtz chooses to renew his employment agreement for a second
three-year term, each element of his compensation (cash, shares of Common Stock
and warrants) shall be increased annually by the greater of a factor of 10% or
the then current rate of inflation. Pursuant to his employment agreement, Mr.
D'Onofrio is to receive base cash compensation equal to $144,000 and $151,700 in
1996 and 1997, respectively, and, if certain performance criteria are satisfied,
incentive cash compensation equal to $36,000 and $43,300 in 1996 and 1997,
respectively. In addition, in 1995, Mr. D'Onofrio received warrants exercisable
into an aggregate of 120,000 shares of Common Stock. Pursuant to his employment
agreement, Mr. Cerqua is to receive cash compensation equal to $160,000 and
$175,000 in 1996 and 1997, respectively, and, if certain performance criteria
are satisfied, compensation in the form of 10,000 and 12,500 shares of Common
Stock in 1996 and 1997, respectively. In addition, in 1995, Mr. Cerqua received
warrants exercisable into an aggregate of 120,000 shares of Common Stock. In
1995, the Company modified the employment agreements of Messrs. Holtz and Cerqua
in order to allow them to receive in 1995 incentive compensation in the form of
options to purchase shares of Common Stock rather than shares of Common Stock to
be received by them in 1996.
Each employment agreement entitles the executive officers to receive
severance payments, equal to two years' compensation with regard to Mr. Holtz
and one year's compensation with regard to Messrs. D'Onofrio and Cerqua, if his
employment is terminated by the Company without cause or if he elects to
terminate such employment for a "good reason," including a change of control of
the Company. For purposes of the employment agreements, a change of control
means (i) any change in the Company's Board of Directors such that a majority of
the Board of Directors is composed of members who were not members of the Board
of Directors on the date the employment agreements were made or (ii) removal of
the executive from membership on the Board of Directors by a vote of a majority
of the shareholders of the Company or failure of the Board of Directors to
nominate the executive for re-election to Board membership. Each executive
officer is also entitled to severance payments, equal to one year's compensation
with regard to Mr. Holtz and six month's compensation with regard to
Messrs. D'Onofrio and Cerqua, if he voluntarily terminates his employment with
the Company for a reason other than a "good reason" and provides appropriate
notice of such resignation.
PROPOSED AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
(PROPOSAL 2)
INCREASE IN NUMBER OF SHARES OF COMMON STOCK AUTHORIZED
The Board of Directors has approved and is recommending that the shareholders
approve an amendment to the Company's Certificate of Incorporation (the
"Amendment"), in order to increase the number of authorized shares of Common
Stock from 15,000,000 shares, $0.005 par value per share to 25,000,000 shares,
$0.005 par value per share.
Although there are sufficient shares to permit all presently contemplated
issuances, the Board believes that the proposed amendment is in the best
interests of the Company and its shareholders and will provide the Company with
flexibility of action in the future by assuring there will be sufficient
authorized but unissued shares of Common Stock for financing requirements, stock
dividends, stock splits or possible acquisitions and other corporate purposes
without the necessity of further shareholder action at any special or annual
meeting. Shares to be issued by the Company in the future may be issued for
such consideration, cash or otherwise, at such times and in such amounts as the
Board of Directors, in its discretion, may determine, without further action by
the shareholders unless required by applicable law.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES ENTITLED TO VOTE IS
NECESSARY FOR THE ADOPTION OF THIS PROPOSAL. SHARES REPRESENTED BY THE PROXIES
RECEIVED WILL BE VOTED FOR THE PROPOSED AMENDMENT UNLESS SHAREHOLDERS OTHERWISE
SPECIFY IN THEIR PROXIES.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE INCREASE IN AUTHORIZED
SHARES.
PROPOSAL TO APPROVE OF THE AMERIHOST PROPERTIES, INC. 1996 OMNIBUS
INCENTIVE STOCK PLAN
(PROPOSAL 3)
On July 8, 1996, the Board of Directors adopted the Amerihost
Properties, Inc. 1996 Omnibus Incentive Stock Plan (the "Plan"), subject to
shareholder approval. The purpose of the Plan is to provide incentive to
officers and other key employees of the Company and its subsidiaries to improve
operation and increase profits by providing such key employees an opportunity to
own shares of Common Stock of the Company or monetary payments based on the
value of shares pursuant to other Plan benefits.
Officers and key employees of the Company or its subsidiaries will be
eligible to participate. The Company currently has four officers. The market
value of the Common Stock was $8.25 as of July 10, 1996.
The following description of the Plan is a summary of the material terms of
the plan and is qualified in its entirety by reference to the complete text of
the Plan, a copy of which appears as Appendix A to this proxy statement.
SUMMARY OF THE PLAN
RESERVED SHARES. For each Company fiscal year, commencing with the year
ending December 31, 1996, there will be reserved for issuance under the Plan
three percent (3%) of the adjusted average common stock used by the Company to
calculate fully diluted earnings per share for the preceding fiscal year
(183,743 shares as of December 31, 1995). The maximum number of shares of
common stock which may be granted to any participant for any fiscal year shall
not exceed 300,000 shares.
ADMINISTRATION. The Stock Option Committee of the Board of Directors (the
"Committee") consisting of at least two (2) nonemployee directors will
administer the Plan. The Committee will determine individuals to receive
grants, determine the number of shares to be awarded, the period, terms and
conditions of the grant. The Committee may interpret the Plan and establish
rules to administer the Plan.
ELIGIBILITY. Benefits may be granted to officers and other key employees of
the Company or its subsidiaries.
BENEFITS UNDER THE PLAN. Benefits under the Plan may be granted in any one
or a combination of Incentive Stock Options, Non-Qualified Stock Options, and
Stock Appreciation Rights ("SARS").
STOCK OPTIONS AND SARS. The option exercise price of both Incentive Stock
Options and Non-Qualified Stock Options must be at least 100% of the fair market
value of the Company's common stock on the date of grant. The value of SARs
will be based on the fair market value on the date of grant of the related
option or on the date of grant of the SAR, whichever is applicable. Stock
options and SARs shall be exercisable not earlier than six months and not later
than ten years after the date of grant. Benefits are generally not transferable
and may be exercised only by the employee. Benefits may be exercised after
death by the executor or administrator or by the person to whom the benefit has
passed under will or by law.
TERMS OF BENEFITS TO BE ESTABLISHED BY THE COMMITTEE. The Plan provides
that the Committee may (in its discretion) grant benefits which include the
following provisions:
(a) Payment of Option Price: may be made by delivering shares of Common
Stock already owned by the optionee if the Company agrees in advance to such
payment.
(b) Withholding: on non-qualified stock option or SAR exercise may be
satisfied out of shares otherwise deliverable if the Company agrees in
advance to such procedure.
(c) Exercise after termination of employment: depending upon the reason
for termination, benefits may terminate, or may be exercisable for varying
periods after termination, or may continue as originally granted.
(d) Installments: benefits may provide that they are exercisable only in
installments over a period of years.
ADJUSTMENT. The number of shares of Common Stock subject to a benefit
shall be adjusted if there is an increase in the number of issued shares without
the payment of new consideration to the Company. (for example, due to a stock
dividend). Each benefit may also provide for the continuation or adjustment of
benefits if the Company is merged, reorganized or similarly affected.
AMENDMENT. The Board of Directors may amend the Plan not more than once
every six months, and any such amendments may not adversely affect the Plan's
status as a protected plan for purposes of Section 16(b) of the Securities
Exchange Act of 1934 (the "Exchange Act").
FEDERAL INCOME TAX CONSEQUENCES. Under current U.S. federal tax law, a
participant who is granted an option or SAR will not realize any taxable income
at the time of grant. The participant will have taxable income at the time of
exercise of a non-qualified stock option equal to the difference between the
option price and the fair market value of the shares on the date of exercise and
the Company will be entitled to a corresponding deduction. The participant will
have no taxable income at the time of the exercise of an Incentive Stock Option
and any gain realized on the subsequent disposition of the stock will qualify
for long-term capital gain treatment if the shares are held for at least two
years from the date of grant of the option and one year from the date of its
exercise. The Company will not be entitled to any deduction if shares obtained
upon the exercise of an Incentive Stock Option are disposed of after meeting the
holding periods. The participant will have taxable income at the time of the
exercise of an SAR equal to the amount of cash or value of shares received upon
exercise.
SHAREHOLDER APPROVAL. This Plan was adopted by the Board of Directors of
the Company on July 8, 1996. The Plan shall be null and void if shareholder
approval is not obtained at the 1996 Annual Meeting of Shareholders.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES
REPRESENTED IN PERSON OR BY PROXY AT THE ANNUAL SHAREHOLDERS MEETING IS
NECESSARY FOR THE ADOPTION OF THIS PROPOSAL. SHARES REPRESENTED BY THE
PROXIES RECEIVED WILL BE VOTED FOR THE ADOPTION OF THIS PROPOSAL UNLESS
SHAREHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE PLAN.
PROPOSAL TO APPROVE THE AMERIHOST PROPERTIES, INC.
1996 STOCK OPTION PLAN
FOR NONEMPLOYEE DIRECTORS
(PROPOSAL 4)
On July 8, 1996, the Board of Directors adopted the Amerihost
Properties, Inc. 1996 Stock Option Plan for Nonemployee Directors (the
"Directors Plan"), subject to shareholder approval. The purpose of the
Directors Plan is to attract and retain outstanding individuals to serve as
nonemployee members of the Board of Directors of the Company by providing such
persons opportunities to acquire shares of the Common Stock of the Company on
advantageous terms. Participation in the Directors Plan is limited to
nonemployee directors of the Company. There are currently two nonemployee
directors of the Company. The market value of the Common Stock was $8.25 as of
July 10, 1996.
The following description of the Directors Plan is a summary of its
material terms and is qualified in its entirety by references to the complete
text of the Directors Plan, a copy of which appears as Appendix B to this proxy
statement.
SUMMARY OF THE DIRECTORS PLAN
RESERVED SHARES. 50,000 shares of Common Stock which may be newly-issued or
treasury shares. The number of shares reserved and subject to option shall be
adjusted if the Company changes the number of issued shares without
consideration (such as by stock dividend or stock split).
GRANT OF OPTIONS. Each person who remains or becomes a nonemployee
director of the Company on the date of the 1996 Annual Meeting of Shareholders,
will be granted an option to purchase 1,000 shares of Common Stock on the first
business day after the date of the 1996 Annual Meeting. Each person
who becomes a nonemployee director after the date of the 1996 Annual Meeting
shall be granted an option to purchase 1,000 shares of Common Stock on the first
business day after the date of the first annual meeting of shareholders at which
such person was elected as a nonemployee director. Thereafter, each
nonemployee director shall be granted additional options to purchase 1,000
shares of Common Stock on the first business day after the date of each
succeeding annual meeting of shareholders at which the nonemployee director
remains a member of the Board.
OPTION PRICE. The option price for each option granted to nonemployee
directors shall be 100% of the fair market value of the shares subject to option
on the date of option grant. The option price may be paid by check or by the
delivery of shares of Common Stock then owned by the participant.
ESTIMATE OF BENEFITS. There are two nonemployee directors in the proposed
Directors Plan. If this Directors Plan is approved, then on August 30, 1996,
the day after the Annual Shareholders Meeting, the two Nonemployee Directors, as
a group, will be granted 2,000 option shares at an option price equal to the
fair market value of the shares on that date.
TERM: TERMINATION OF SERVICE. The option term shall be ten years. All
options granted to nonemployee directors shall become fully exercisable one
year after the date of option grant, or upon a Change in Control of the Company.
The period of exercise following death shall be one year. In the event of any
other termination of service on the Board, each option shall be exercisable for
the balance of its ten year term.
FEDERAL INCOME TAX CONSEQUENCES. Under current U.S. federal tax law, a
nonemployee director who is granted an option will not realize any taxable
income at the time of grant. The director will have taxable income at the time
of exercise equal to the difference between the option price and the fair market
value of the shares on the date of exercise and the Company will be entitled to
a corresponding deduction.
SHAREHOLDERS APPROVAL. This Directors Plan was adopted by the Board of
Directors of the Company on July 8, 1996. The Directors Plan shall be null
and void if shareholder approval is not obtained at the 1996 Annual Meeting of
Shareholders.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES
REPRESENTED IN PERSON OR BY PROXY AT THE ANNUAL SHAREHOLDERS MEETING IS
NECESSARY FOR THE ADOPTION OF THIS PROPOSAL. SHARES REPRESENTED BY THE
PROXIES RECEIVED WILL BE VOTED FOR THE ADOPTION OF THIS PROPOSAL UNLESS
SHAREHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE DIRECTORS
PLAN.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of the
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission and the Nasdaq Stock Market initial reports of
ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Such persons are required by Securities
and Exchange Commission regulation to furnish the Company with copies of
all Section 16(a) forms they file.
To the Company's knowledge, based solely on its review of the copies of such
reports furnished to the Company and written representations to the Company that
no other reports were required, during the fiscal year ended 1995 all the
aforesaid Section 16(a) filing requirements were complied with, except as
follows.
For the year 1995, three Statements of Changes in Benicial Ownership on
Form 4 were filed late by Urban H. Andrew Torchia and Richard A. D'Onofrio
2000 Corp. ("Urban"), all of which related to the distribution of 4,651
shares of Common Stock from Niles 1290 Partnership to Urban Niles 1290 Corp.,
a wholly-owned subsidiary of Urban. Urban is owned 51% by H. Andrew
Torchia and 49% by Richard A. D'Onofrio. In addition, one Statement of
Change in Beneficial Ownership on Form 4 was filed late by Reno J.
Bernardo, which related to 4,400 shares of Common Stock received by
Reno Bernardo in connection with a transfer of a liited partnership
interest to the Company.
STOCK PRICE PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the Nasdaq U.S. index and the Nasdaq Non-
Financial index for the period commencing December 31, 1990 and ending
December 31, 1995.
The Stock Price Performance Graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this report into
any filing under the Securities Act of 1933 or under the Securities Exchange Act
of 1934, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
acts.
[Graph]
<TABLE>
<CAPTION>
Date 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Amerihost Properties, Inc. 100.000 143.590 271.795 256.410 146.154 256.410
Nasdaq US 100.000 160.549 186.856 214.413 209.671 296.560
Nasdaq Non-Financial 100.000 161.035 176.163 203.388 194.904 268.185
Assumes $100 invested on December 31, 1990 in the Common Stock of Amerihost
Properties, Inc. and the Nasdaq Stock Market and the Nasdaq Non-Financial
Stocks.
</TABLE>
CERTAIN TRANSACTIONS
Urban 2000 Corp. ("Urban") is owned 51% by Mr. Torchia, the Chairman of the
Board of Directors of the Company, and 49% by Mr. D'Onofrio, the Executive Vice
President and a director of the Company. Urban, a hotel development consulting
firm, and Mr. Torchia provide business development and consulting services to
the Company under a consulting agreement (the "Consulting Agreement") with Urban
which commenced in January 1994. Urban, pursuant to the Consulting Agreement,
has agreed to not engage in business activities that directly compete with the
business activities of the Company; provided, however, that Urban may pursue
business opportunities which the Company decides not to pursue. Under the terms
of the Consulting Agreement, Urban receives (i) a monthly consulting fee of
$20,000, (ii) a residual fee based on the management fees the Company receives
from management arrangements or relationships which resulted from contacts
initiated for the Company by Urban and (iii) transaction fees, based on an
established fee schedule and consistent with industry practice, for transactions
introduced by Urban. The Company also provides Urban with use of the Company's
telephone system. No additional amounts are paid to Urban for reimbursement of
expenses. As part of this arrangement, Mr. Torchia no longer receives
compensation for the services he provides to the Company, other than warrants
and other non-cash compensation for his services as Chairman. Mr. D'Onofrio
continues to receive compensation from the Company. During 1993, 1994 and
1995, Urban received an annual consulting fee of $240,000 plus aggregate
additional fees $352,082, $289,915 and $236,138, respectively, from the
Company and received $28,200 and $82,400, in 1994 and 1995, respectively,
in other transactional fees directly from partnerships in which the
Company is a general partner.
The Consulting Agreement may be terminated by Urban, upon, among other
things, a breach by the Company of the agreement's terms, Mr. Torchia's death or
permanent disability, changes in the composition of the Board of Directors
whereby the current employee directors no longer constitute a majority of the
Board, Mr. Torchia's failure to serve as a director for any reason, including
his resignation or failure to be elected by the shareholders, or a change of
control of the Company due to a merger or sale of substantially all of the
Company's assets. In addition, either Urban or the Company may terminate the
Consulting Agreement at any time after December 31, 1999. If the Consulting
Agreement is terminated for any of these reasons, the Company shall pay to Urban
a severance fee equal to $600,000. Additionally, upon the termination of the
Consulting Agreement for any reason, including any of the reasons described
above, the Company shall purchase from Urban all of Urban's rights to the
residual fee described above for a purchase price equal to 6 times the aggregate
residual fee paid to Urban over the preceding twelve-month period. As part of
the fees described above, Urban received an aggregate residual fee of $68,571 in
1995.
The Company currently has a note receivable outstanding from each of Mr.
Holtz, a director and the President and Chief Executive Officer of the Company,
and Mr. Cerqua, a director and the Chief Financial Officer, Senior Vice
President of Finance, Secretary and Treasurer of the Company. These notes (the
"Officer Notes") arose initially when, in 1992, the Company entered into
agreements with Grand American Hotel Management, Inc. ("Grand"), its
shareholders and certain other entities owned by the shareholders of Grand to
acquire seven management contracts for, among other consideration, a loan of
$800,000 to the shareholders of Grand (the "Original Note"). The note was
collateralized by 165,784 shares of the Company's Common Stock and bore interest
at a rate of 10.5% per annum. During 1993, the Company and Grand agreed to
revise the terms of the Original Note to, among other things, reduce its
interest rate. The Company did not receive any payments for principal or
interest in 1994.
Due to this default by Grand, in November 1994, the Company notified Grand of
its intention to take the 165,784 shares of Common Stock in lieu of the Original
Note and related receivables. In December 1994, and prior to the Company's
taking possession of such shares, Messrs. Holtz and Cerqua executed notes in the
amounts of $756,292 and $200,000, respectively, to the Company for the purchase
of the Original Note and related receivables and the 165,784 shares of the
Common Stock held as collateral on the Original Note. Following the purchase,
each of Messrs. Holtz and Cerqua pledged as collateral for the Officer Notes,
the shares of Common Stock received upon purchase of the Original Note together
with additional shares of the Company's Common Stock which each individually
owned. As originally drafted, the Officer Notes provided for annual payments of
interest at 8% per annum commencing on December 31, 1995, with the principal
balance due December 31, 1997 and were collateralized by an aggregate of 273,369
shares of the Company's Common Stock. The Company and Messrs. Holtz and Cerqua
have amended the terms of the Officer Notes to provide that the annual payments
of interest shall be payable commencing April 1, 1997. Messrs. Holtz and Cerqua
each have the option to pay interest and principal with shares of the Company's
Common Stock, with the shares tendered being valued at the fair market value at
time of payment. The Officer Notes receivable have been classified as a
reduction of shareholders' equity on the Company's Consolidated Financial
Statements.
In the past, certain of the Company's directors and executive officers have,
directly or indirectly, invested in Joint Ventures with the Company. For
example, each of Messrs. Torchia and D'Onofrio, through Urban, have invested an
aggregate of approximately $144,000 as limited partners and approximately
$49,000 as a general partner in 3 Joint Ventures since 1991. In addition, Dr.
Dayan, who has been nominated by the Board of Directors to stand for election as
a director of the Company at the next annual meeting of the Company's
shareholders, has invested approximately $1.6 million in 7 Joint Ventures since
1988. Dr. Dayan and each of the Company's directors and executive officers who
have made such investments have done so on the same terms as all other investors
in such Joint Ventures. In addition to his investments in certain Joint
Ventures, Dr. Dayan also holds an interest in a mortgage on one of the minority-
owned hotels. The mortgage, which has been in place since 1989, (i) has a
current outstanding balance of approximately $470,000, (ii) bears interest at an
annual rate of prime plus 4% (with a minimum annual interest rate of 12%), and
(iii) is payable in monthly installments through 1999.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock at July 10, 1996, by (i) each person who
is known by the Company to own beneficially more than 5% of the outstanding
shares of the Company's Common Stock, (ii) each of the Company's directors and
its director-nominee, (iii) each of the Named Officers and (iv) all directors
(including the director-nominee) and executive officers as a group. Except as
otherwise indicated, the Company believes that the beneficial owners of the
Common Stock listed below, based on information provided by such owners, have
sole investment and voting power with respect to such shares, subject to
community property laws where applicable. Except as set forth below, the
address of each of the shareholders named below is the Company's principal
headquarters.
SHARES BENEFICIALLY OWNED
AS OF JULY 10, 1996
<TABLE> NUMBER PERCENT(1)
<CAPTION>
NAME
<S> <C> <C>
Michael P. Holtz (2) . . . . . . . . . . . . . . . 714,091 11.1%
H. Andrew Torchia (2)(3) . . . . . . . . . . . . . 658,658 10.5
Richard A. D'Onofrio (2)(3). . . . . . . . . . . . 658,658 10.5
Wellington Management Company (4) . . . . . . . . . 568,300 9.4
Massachusetts Financial Services Company (5) . . . 516,500 8.6
Russell J. Cerqua (2) . . . . . . . . . . . . . . . 245,805 4.0
Salomon J. Dayan (6) . . . . . . . . . . . . . . . 187,983 3.1
Reno J. Bernardo (2) . . . . . . . . . . . . . . . 86,766 1.4
Robert L. Barney . . . . . . . . . . . . . . . . . - -
All directors and executive officers as a group
(7 persons)(3) . . . . . . . . . . . . . . . . . . 2,099,703 29.4
(1) Percentage of beneficial ownership is based on 6,023,521 shares of
Common Stock outstanding at July 10, 1996, plus, in the case of each
of Messrs. Holtz, Torchia, D'Onofrio, Cerqua and Bernardo and
Dr. Dayan, the amount of shares subject to options beneficially held
by such individual which are exercisable presently or within 60 days.
(2) Includes shares subject to options granted to the individuals directly
which are exercisable presently or within 60 days as follows: Mr.
Holtz, 417,000 shares; Mr. Torchia 197,000 shares; Mr. D'Onofrio,
197,000 shares; Mr. Cerqua, 172,833 shares; Mr. Bernardo, 39,500
shares; and Dr. Dayan, 30,000 shares.
(3) Includes 375,832 shares owned by Urban, options exercisable into
68,750 shares owned by Urban which are exercisable presently or within
60 days and 7,676 shares owned by Urban Niles 1290 Corp., a wholly-
owned subsidiary of Urban. Mr. Torchia is the President and 51%
shareholder of Urban and Mr. D'Onofrio is a 49% shareholder in Urban.
Mr. Torchia disclaims beneficial ownership of all but an aggregate of
195,589 shares and options exercisable into 35,063 shares owned,
directly or indirectly by Urban and Mr. D'Onofrio disclaims beneficial
ownership of all but an aggregate of 187,919 shares and options
exercisable into 33,687 shares owned, directly or indirectly, by
Urban.
(4) Based upon information provided in its Schedule 13G dated January 26,
1996, Wellington Management Company ("WMC"), in its capacity as
investment advisor, may be deemed beneficial owner of 568,300 shares
of the Company which are owned by numerous investment counselling
clients. Of the shares shown above, WMC has shared voting power for
314,000 shares and shared investment power for 568,300 shares. WMC's
address is 75 State Street, Boston, MA 02109.
(5) Based upon information provided in its Schedule 13G dated February 12,
1996, Massachusetts Financial Services Company ("MFS"), in its
capacity as investment manager, may be deemed beneficial owner of
516,500 shares of the Company which are also beneficially owned by MFS
Series Trust II - MFS Emerging Growth Stock Fund, shares of which are
owned by numerous investors. MFS has sole voting and investment power
for the 516,500 shares. MFS's address is 500 Boylston Street, Boston,
MA 02116.
(6) Dr. Dayan has been nominated by the Board of Directors to stand for
election as a director of the Company at the Company's next annual
meeting of shareholders.
</TABLE>
SHAREHOLDER PROPOSALS
From time to time, shareholders present proposals which may be proper subjects
for inclusion in the proxy statement and for consideration at the annual
meeting. To be considered, proposals must be submitted on a timely basis.
Proposals for the 1997 shareholders' meeting must be received by the Company not
later than March 27, 1997. Any such proposals, as well as any questions related
thereto, should be directed to the Secretary of the Company.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent certified public accountants for the past five fiscal
years were and for the current fiscal year are BDO Seidman, LLP. A
representative of BDO Seidman, LLP is anticipated to attend the annual meeting.
The Board recommends a vote for ratification.
OTHER MATTERS
The Management knows of no other business likely to be brought before the
meeting. If other matters do come before the meeting, the persons named in the
form of proxy or their substitute will vote said proxy according to their best
judgement.
By the order of the Board of Directors
RUSSELL J. CERQUA
Secretary
Des Plaines, Illinois
July 25, 1996
APPENDIX A
AMERIHOST PROPERTIES, INC.
1996 OMNIBUS INCENTIVE STOCK PLAN
1. PURPOSE. The purpose of the Amerihost Properties, Inc. 1996 Omnibus
Incentive Stock Plan (the "Plan") is to provide incentive to officers and other
key employees of Amerihost Properties, Inc. (the "Company") and its subsidiaries
to improve operations and increase profits by providing such key employees an
opportunity own shares of the Common Stock of the Company or monetary payments
based on the value of such shares pursuant to the benefits described herein.
2. RESERVED SHARES. For each fiscal year of the Company, commencing with
the year ending December 31, 1996, there shall be reserved for issuance under
this Plan a number of shares equal to three percent (3%) of the adjusted average
Common Stock outstanding used by the Company to calculate fully diluted earnings
per share for the preceding fiscal year. The maximum number of shares of Common
Stock which may be available for the award of benefits to any participant for
any fiscal year of the Company shall not exceed three hundred thousand (300,000)
shares. Any shares of Common Stock reserved for issuance hereunder and any
shares of Common Stock subject to an award which lapses, is forfeited, expires
or terminates, shall be available for awards under this Plan. The shares issued
under this Plan may be either authorized but unissued or treasury shares of the
Company.
Benefits may be granted hereunder to persons who are participants under this
Plan and may be granted in substitution, exchange or cancellation of options or
other benefits then or theretofore held under this Plan. Benefits granted under
this Plan may be mutually rescinded and new benefits granted in lieu thereof
from time to time as may be initially determined by the Committee and agreed to
by the holders thereof.
3. ADMINISTRATION. The Board of Directors shall appoint a Stock Option
Committee (which may be the Compensation Committee of the Board of Directors)
consisting of not less than two (2) nonemployee members of the Board of
Directors not then eligible to participate in the Plan to administer the Plan.
Subject to the provisions of the Plan, the Committee shall determine the
individuals to whom and the time or times at which benefits shall be granted,
the number of shares to be subject to each benefit, and the period of any such
benefit and shall determine other terms and conditions of the respective
benefits which may or may not be identical. The Committee shall also interpret
the Plan, prescribe, amend and rescind rules and regulations relating to the
Plan and make all other determinations necessary or advisable for the
administration of the Plan. The determinations of the Committee shall be made
in accordance with its judgment as to the best interests of the Company and its
shareholders and in accordance with the purpose of the Plan. A majority of the
members of the Committee shall constitute a quorum and all determinations of the
Committee shall be made by a majority of its members. Any determinations of the
Committee under the Plan may be made without notice or meeting of the Committee
by a writing signed by a majority of the Committee members.
The Committee may authorize the modification or mutual rescission of any
outstanding benefit when, and subject to such conditions, as deemed to be in the
best interest of the Company and in accordance with the purpose of the Plan.
4. ELIGIBILITY. Benefits may be granted to officers and other key
employees of the Company or any or all of its present or future subsidiaries,
such key employees being those employees to whom, in judgment of the Committee,
the granting of benefits will further the purpose of the Plan. A director of
the Company or of a subsidiary who is not also an employee of the Company or of
a subsidiary shall not be eligible to participate in the Plan. A key employee
who has been granted a benefit hereunder or under any other option plan of the
Company may be granted an additional benefit hereunder.
5. TYPES OF BENEFITS. Benefits under the Plan may be granted in any one or
a combination of (a) Incentive Stock Options; (b) Non-qualified Stock Options;
and (c) Stock Appreciation Rights, all as described below.
6. STOCK OPTIONS. Both Incentive Stock Options and Non-qualified Stock
Options will consist of stock options to purchase Common Stock at purchase
prices not less than 100% of the fair market value of the Common Stock on the
date the option is granted. Said purchase price may be paid by check or, in the
discretion of the Committee, by the delivery of shares of Common Stock of the
Company then owned by the participant. All options shall be exercisable not
earlier than six months and not later than ten years after the date they are
granted. The aggregate fair market value (determined as of the time the option
is granted) of the Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by a participant during any calendar year
(under all option plans of the Company and its subsidiary corporations) shall
not exceed $100,000.
7. STOCK APPRECIATION RIGHTS. The Committee may, in its discretion, grant a
Stock Appreciation Right to the holder of any stock option granted hereunder.
In addition, Stock Appreciation Rights may be granted independently of and
without relation to options. Each Stock Appreciation Right shall be subject to
such terms and conditions consistent with the Plan as the Committee shall impose
from time to time, including the following:
(a) A Stock Appreciation Right relating to an option may be made part of
such option at the time of its grant or at any time thereafter up to six
months prior to its expiration.
(b) Each Stock Appreciation Right will entitle the holder to elect to
receive the appreciation in the fair market value of the shares subject
thereto up to the date the right is exercised. In the case of a right issued
in relation to an option, such appreciation shall be measured from not less
than the option price and in the case of a right issued independently of any
option, such appreciation shall be measured from not less than the fair
market value of the Common Stock on the date the right is granted. Payment
of such appreciation shall be made in cash or in Common Stock, or a
combination thereof, as set forth in the award, but no Stock Appreciation
Right shall entitle the holder to receive, upon exercise thereof, more than
the number of shares of Common Stock (or cash of equal value) with respect to
which the right is granted.
(c) Each Stock Appreciation Right will be exercisable at the times and to
the extent set forth therein, but no Stock Appreciation Right may be
exercisable earlier than six months or later than ten years after its grant.
Exercise of a Stock Appreciation Right shall reduce the number of shares
issuable under the Plan (and the related option, if any) by the number of
shares with respect to which the right is exercised.
8. TERMINATION OF EMPLOYMENT. In the event that the employment of a
participant is terminated for cause, the participant's right to exercise
benefits shall immediately terminate. In the event that the employment of a
participant is terminated by reason of death, the participant's executor or
administrator shall have the right to exercise the benefit as provided in
paragraph 10 hereof. In the event that the employment of a participant is
terminated by reason of total and permanent disability or retirement pursuant to
any pension or retirement plan of the Company, the participant shall have the
right to exercise any benefit within the terms of its grant. In the event that
employment of a participant who is also an officer of the Company is terminated
either voluntarily or involuntarily within one year following a Change in
Control of the Company, all restrictions on the exercise of a benefit, whether
contained in this Plan or in the benefit grant, shall lapse and the participant
shall be entitled to exercise the benefit at any time within three (3) months
after such voluntary or involuntary termination, but not thereafter and then
only within the original period for the benefit. In the event a participant is
terminated as a result of a Sale of Part of the Company, the Committee, in its
sole discretion, may accelerate the lapse of all restrictions on any benefit
held by the participant and the participant shall be entitled to exercise the
benefit at any time within three (3) months after the termination with all
benefits not then exercised to be forfeited. In the event that employment of a
participant is terminated for any reason other than cause, death, total and
permanent disability, retirement, Sale of Part of the Company or, in the case of
an officer of the Company, within one (1) year following the Change in Control
of the Company, any benefit may be exercised by the participant (to the extent
that the or she is otherwise entitled to exercise that benefit) at any time
within three (3) months after such termination, but not thereafter and then only
within the original period for the benefit. Nothing in the Plan or in any
benefit shall confer on any employee any right to continue in the employ of the
Company or any of its subsidiaries or to interfere with the right of the Company
or of any subsidiary to terminate his or her employment at any time. Leaves of
absence for military service, illness and transfers of employment between the
Company and any subsidiary shall not constitute termination of employment for
these purposes.
9. ADJUSTMENT PROVISIONS.
(a) If the Company shall at any time change the number of issued shares of
Common Stock without new consideration to it (such as by stock dividends,
stock splits or similar transaction), the total number of shares reserved for
issuance under this Plan and the number of shares covered by each outstanding
benefit shall be adjusted so that the aggregate consideration payable to the
Company and the value of each such benefit shall not be changed. The Board
of Directors may also provide for the continuation of benefits or for other
equitable adjustments after changes in the Common Stock resulting from
reorganization, sale, merger, consolidation or similar occurrence.
(b) Notwithstanding any other provision of this Plan, and without
affecting the number of shares otherwise reserved or available hereunder, the
Board may authorize the issuance or assumption of benefits in connection with
any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem appropriate.
(c) In the case of any merger, consolidation or combination of the Company
with or into another corporation, other than a merger, consolidation or
combination in which the Company is continuing corporation and which does not
result in the outstanding Common Stock being converted into or exchanged for
different securities, cash or other property, or any combination thereof (an
"Acquisition"):
(i) any participant to whom an option has been granted under the Plan
shall have the right (subject to the provisions of the Plan and any
limitation applicable to such option) thereafter and during the term of
such option, to receive upon exercise thereof the Acquisition Consideration
(as defined below) receivable upon such Acquisition by a holder of the
number of shares of Common Stock which may have been obtained upon exercise
of such option or portion thereof, as the case may be, immediately prior to
such Acquisition;
(ii) any participant to whom a Stock Appreciation Right has been
granted under the Plan shall have the right (subject to the provisions of
the Plan and any limitation applicable to such right) thereafter and during
the term of such right to receive upon exercise thereof the difference
between the aggregate fair market value on the applicable date (as set
forth in such right) of the Acquisition Consideration receivable upon such
Acquisition by a holder of the number of shares of Common Stock subject to
such Stock Appreciation Right, immediately prior to such Acquisition and
the aggregate option price of the related option, or the aggregate fair
market value on the date of grant of the right, whichever is applicable.
The term "Acquisition Consideration" shall mean the kind and amount of shares
of the surviving or new corporation, cash, securities, evidence of
indebtedness, or the property or any combination thereof receivable in
respect of one share of Common Stock of the Company upon consummation of an
Acquisition.
10. REGISTRATION AND LEGAL COMPLIANCE. The grant of any option under
the Plan may also be subject to other provisions as counsel to the Company
deems appropriate including, without limitation, provisions to comply with
federal and state securities laws and stock exchange requirements. The
Company shall not be required to issue or deliver any certificate for Common
Stock purchased upon the exercise of any option granted under this Plan
prior to the admission of such shares to listing on any stock exchange on
which Common Stock of the Company may at that time be listed. If the Company
shall be advised by its counsel that the shares deliverable upon exercise
of an option are required to be registered under the Securities Act of 1933,
as amended (the "Act") or any state securities law or that delivery of such
shares must be accompanied or preceded by a prospectus meeting the
requirements of such Act, the Company will use its best eforts to effect
such registration or provide such prospectus not later than a reasonable
time following each exercise of such option, but delivery of shares by the
Company may be deferred until such registration is effective or such
prospectus is available.
11. NONTRANSFERABILITY. Each benefit granted under the Plan to an employee
shall not be transferable by the employee otherwise than by will or the laws of
descent and distribution, and shall be exercisable, during the employee's
lifetime, only by the employee. In the event of the death of a participant
during employment, each benefit theretofore granted to the employee shall be
exercisable up to one (1) year after the employee's death (but not beyond the
stated duration of the benefit) and then only:
(a) By the executor or administrator of the estate of the deceased
participant or the persons to whom the deceased participant's rights under
the benefit shall pass by will or the laws of descent and distribution; and
(b) To the extent that the deceased participant was entitled to do so at
the date of death.
Notwithstanding the foregoing, at the discretion of the Committee, a grant of a
benefit may permit the transfer of the benefit by the participant solely to
members of the participant's immediate family or trusts or family partnerships
for the benefit of such persons, subject to such terms and conditions as may be
established by the Committee.
12. OTHER PROVISIONS. The award of any benefit under the Plan may also be
subject to such other provisions (whether or not applicable to the benefit
awarded to any other participant) as the Committee determines appropriate,
including without limitation, provisions for the installment purchase of Common
Stock under stock options, provisions for the installment exercise of Stock
Appreciation Rights, provisions to assist the participant in financing the
acquisition of Common Stock, restrictions on resale or other disposition,
provisions to comply with Federal and state securities laws, or understandings
or conditions as to the participant's employment in addition to those
specifically provided for under the Plan.
13. WITHHOLDING. All payments or distributions made pursuant to the Plan
shall be net of any amounts required to be withheld pursuant to applicable
federal, state and local tax withholding requirements. If the Company proposes
or is required to distribute Common Stock pursuant to the Plan, it may require
the recipient to remit to it an amount sufficient to satisfy such tax
withholding requirements prior to the delivery of any certificates for such
Common Stock. The Committee may, in its discretion and subject to such rules as
it may adopt, permit an optionee or right holder to pay all or a portion of the
federal, state and local withholding taxes arising in connection with the
exercise of a Non-qualified Stock Option or Stock Appreciation Right, by
electing to (i) have the Company withhold shares of Common Stock, (ii) tender
back shares of Common Stock received in connection with such benefit or (iii)
deliver other previously owned shares of Common Stock, in each case having a
fair market value equal to the amount to be withheld.
14. DEFINITIONS.
(a) The term "subsidiary" shall include any corporation defined as a
subsidiary of the Company in Section 424 of the Internal Revenue Code of
1986, as amended.
(b) "Fair market value" of Common Stock of the Company on any particular
date shall be determined in such manner as the Committee may deem equitable
or as required by applicable provisions or regulations under the Internal
Revenue Code.
(c) "Change in Control" of the Company shall occur if (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934 (the "Exchange Act")) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) directly or indirectly of
securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities or (ii) during any period
of two consecutive years individuals who at the beginning of the two-year
period were members of the Board of Directors cease for any reason to
constitute at least a majority of the Board.
(d) "Sale of Part of the Company" shall mean the sale of any part of the
Company at a price equal to or greater than $10 million.
15. DURATION, AMENDMENT AND TERMINATION. No benefit shall be granted more
than ten years after the date of adoption of this Plan; provided, however, that
the terms and conditions applicable to any benefit granted within such period
may thereafter be amended or modified by mutual agreement between the Company
and the participant or such other persons as may then have an interest therein.
The Board of Directors may amend the Plan from time to time or terminate the
Plan at any time. However, no action authorized by this paragraph shall reduce
the amount of any existing benefit or change the terms and conditions thereof
without the participant's consent. The Plan may not be amended more frequently
than once every six months and no amendment shall result in any Committee member
losing his or her status as a "disinterested" administrator under Securities and
Exchange Commission Rule 16b-3 ("Rule 16b-3") with respect to any employee
benefit plan of the Company or result in the Plan losing its status as a
protected plan under Rule 16b-3.
16. SHAREHOLDER APPROVAL. The Plan was adopted by the Board of Directors of
the Company on July 8, 1996. The Plan and any benefits granted thereunder
shall be null and void if shareholder approval is not obtained within twelve
(12) months of the adoption of the Plan by the Board of Directors unless counsel
for the Company shall have rendered an opinion that shareholder approval is not
required to bring the Plan within the protection of Rule 16b-3.
APPENDIX B
AMERIHOST PROPERTIES, INC.
1996 STOCK OPTION PLAN
FOR NONEMPLOYEE DIRECTORS
1. PURPOSE. The purpose of the Amerihost Properties, Inc. 1996 Stock Option
Plan of Nonemployee Directors (the "Plan") is to encourage directors who are not
officers or full-time employees of Amerihost Properties, Inc. (the "Company") or
any of its subsidiaries ("Nonemployee Directors") to become shareholders in the
Company thereby giving them a stake in the growth and profitability and to
encourage them to continue serving as directors.
2. SHARES RESERVED. There is hereby reserved for issuance under the Plan an
aggregate of 50,000 shares of Common Stock which may be newly-issued or treasury
shares. If there is a lapse, expiration, termination or cancellation of any
option granted under this Plan, all unissued shares subject to the option may
again be used for new options granted under this Plan.
3. GRANT OF OPTIONS. Each person who becomes a Nonemployee Director of the
Company on the date of the 1996 annual meeting of shareholders shall be granted
an option to purchase 1,000 shares of Common Stock on the first business day
after the date of the annual meeting. Each person who becomes a Nonemployee
Director after the date of the 1996 annual meeting shall be granted an option to
purchase 1,000 shares of Common Stock on the first business day after the date
of the next succeeding annual meeting of shareholders.
Each Nonemployee Director who is granted an initial option to purchase 1,000
shares of Common Stock hereunder shall be granted an option to purchase 1,000
shares of Common Stock on the first business day after the date of each
succeeding annual meeting of shareholders on which the Nonemployee Director is a
member of the Board.
4. OPTION PRICE. The option price for each option granted to Nonemployee
Directors shall be equal to the average of the highest and lowest prices of the
shares subject to option as reported on the Nasdaq National Market on the date
of option grant. The option price may be paid by check or by the delivery of
shares of Common Stock then owned by the participant.
5. TERM; TERMINATION OF SERVICE. The option term shall be ten years. All
options granted to Nonemployee Directors shall become fully exercisable one year
after the date of option grant. All options shall also become fully exercisable
upon a Change in Control of the Company (as defined in Section 13(c) of the
Amerihost Properties, Inc. 1996 Omnibus Incentive Stock Plan). The period of
exercise following a death of a director shall be one year. In the event of any
other termination of service on the Board, each option shall be exercisable for
the balance of its ten year term.
6. NONTRANSFERABILITY. Any option granted under this Plan shall not be
transferable other than by will or the laws of descent and distribution, and
shall be exercisable during the Nonemployee Director's lifetime, only by the
director or the director's guardian or legal representative. If a director dies
during the option period, any option granted to the director may be exercised by
his or her estate or the person to whom the option passes by will or the laws of
descent and distribution.
7. ADJUSTMENT PROVISIONS.
(a) If the Company shall at any time change the number of issued shares of
Common Stock without new consideration to is (such as by stock dividends,
stock splits or similar transactions), the total number of shares reserved
for issuance under this Plan and the number of shares covered by each
outstanding option shall be adjusted so that the aggregate consideration
payable to the Company and the value of each option shall not be changed.
(b) In the case of any merger, consolidation or combination of the Company
with or into another corporation, other than a merger, consolidation or
combination in which the Company is the continuing corporation and which does
not result in the outstanding Common Stock being converted into or exchanged
for different securities, cash or other property, or any combination thereof
(an "Acquisition"), any Nonemployee Director to whom an option has been
granted under the Plan shall have the right during the remaining term of such
option, to receive upon exercise thereof the Acquisition Consideration (as
defined below) receivable upon such Acquisition by a holder of the number of
shares of Common Stock which might have been obtained upon exercise of such
option or portion thereof, as the case may be, immediately prior to such
Acquisition. The term "Acquisition Consideration" shall mean the kind and
amount of shares of the surviving or new corporation, cash, securities,
evidence of indebtedness, other property or any combination thereof
receivable in respect of one share of Common Stock of the Company upon
consummation of an Acquisition.
8. REGISTRATION AND LEGAL COMPLIANCE. The grant of any option under the
Plan may also be subject to other provisions as counsel to the Company deems
appropriate including, without limitation, provisions to comply with federal and
state securities laws and stock exchange requirements. The Company shall not be
required to issue or deliver any certificate for Common Stock purchased upon the
exercise of any option granted under this Plan prior to the admission of such
shares to listing on any stock exchange on which Common Stock of the Company may
at that time be listed. If the Company shall be advised by its counsel that the
shares deliverable upon exercise of an option are required to be registered
under the Securities Act of 1933, as amended (the "Act") or any state securities
law or that delivery of such shares must be accompanied or preceded by a
prospectus meeting the requirements of such Act, the Company will use its best
efforts to effect such registration or provide such prospectus not later than a
reasonable time following each exercise of such option, but delivery of shares
by the Company may be deferred until such registration is effective or such
prospectus is available.
9. AMENDMENT, SUSPENSION AND TERMINATION OF PLAN. The Board of Directors
may suspend or terminate the Plan at any time and may amend it form time to time
in such respects as the Board of Directors may deem advisable in order that any
grants thereunder shall conform to or otherwise reflect any change in applicable
laws or regulations or to permit the Company or the Nonemployee Directors to
enjoy the benefits of any change in applicable laws or regulations; provided,
however, that this Plan may not be amended more than once every six months and
that no amendment shall, without shareholder approval, increase the number of
shares of Common Stock which may be issued under the Plan, materially modify the
requirements as to eligibility for participation in the Plan or materially
increase the benefits accruing to Nonemployee Directors under the Plan. No such
amendment, suspension or termination shall impair the rights of Nonemployee
Directors under any outstanding options, or make any change that would
disqualify the Plan or any other plan of the Company intended to be so qualified
from the exemption provided by Rule 16b-3.
10. SHAREHOLDER APPROVAL. This Plan was adopted by the Board of Directors
of the Company on July 8, 1996. The Plan shall be null and void if
shareholder approval is not at the 1996 annual meeting of the shareholders.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
Amerihost Properties, Inc.
2400 East Devon Avenue
Suite 280
Des Plaines, Illinois 60018
The undersigned hereby appoints Michael P. Holtz and Russell J. Cerqua as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them, each acting alone, to represent and to vote, as designated below, all the
Common Stock of Amerihost Properties, Inc. held of record by the undersigned at
the close of business on July 17, 1996, at the Annual Meeting of Shareholders to
be held on August 29, 1996 and any adjournment thereof, with all the powers the
undersigned would possess if present.
1. ELECTION OF DIRECTORS
for all nominees WITHHOLD AUTHORITY
_________ listed below _________ to vote for all
nominees listed
below
_________ to abstain from voting on this proposal
H. Andrew Torchia Russell J. Cerqua
Michael P. Holtz Reno J. Bernardo
Richard A. D'Onofrio Salomon J. Dayan
INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name in the space provided below:
________________________________________________________________________________
2. AMENDMENT TO CERTIFICATE OF INCORPORATION
To amend the Company's Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 15,000,000 shares, $0.005 par value per
share to 25,000,000 shares, $0.005 par value per share.
____________ FOR ____________AGAINST
______________ ABSTAIN
3. APPROVAL OF THE AMERIHOST PROPERTIES, INC. 1996 OMNIBUS INCENTIVE STOCK
PLAN
To approve the Amerihost Properties, Inc. 1996 Omnibus Incentive Stock Plan.
____________ FOR ____________ AGAINST
_______________ ABSTAIN
_____________________________________________________________________________
4. APPROVAL OF THE AMERIHOST PROPERTIES, INC. 1996 STOCK OPTION PLAN FOR
NONEMPLOYEE DIRECTORS.
To approve the Amerihost Properties, Inc. 1996 Stock Option Plan for
Nonemployee Directors.
____________ FOR ____________AGAINST
_______________ ABSTAIN
_______________________________________________________________________________
5. RATIFICATION OF AUDITORS
FOR ratification of AGAINST ratification of
_______ retention of BDO ________ retention of BDO Seidman,
Seidman, LLP as the LLP as the Company's
Company's certified certified public accountants
public accountants
_________________ ABSTAIN
_____________________________________________________________________________
6. OTHER MATTERS
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made with respect to any
proposal, this proxy will be voted for all nominees listed in proposal 1, for
the increase in the number of authorized shares, for the approval of the
Amerihost Properties, Inc. 1996 Omnibus Incentive Stock Plan, for approval of
the Amerihost Properties, Inc. 1996 Stock Option Plan for Nonemployee Directors,
for the retention of BDO Seidman, LLP and in the discretion of the Proxies for
such other business as may properly come before the meeting.
Please sign exactly as name appears on your stock certificates. For joint
accounts, all tenants should sign. If signing for an estate, trust,
corporation, partnership or other entity, title or capacity should be stated.
Dated: _______________, 1996 ________________________________________
Signature (Title)
Print name and address:
________________________________________
_____________________________________ Signature if held jointly
_____________________________________
_____________________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED RETURN
ENVELOPE
