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").
<TABLE>
SUMMARY COMPENSATION 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 $15,000
Chairman of the Board 1994 0 0 0 30,000 15,000
1993 0 0 0 0 15,000
Michael P. Holtz 1995 322,115 0 196,927 360,000 10,000
President and Chief 1994 244,913 75,000 75,000 60,000 10,000
Executive Officer 1993 117,741 177,759 0 0 10,000
Russell J. Cerqua 1995 149,423 0 56,690 153,333 10,000
Senior Vice President 1994 132,692 15,000 15,000 30,000 10,000
Finance, Secretary, 1993 75,000 43,900 0 0 10,000
Treasurer and Chief
Financial Officer
Richard A. D'Onofrio(3) 1995 137,500 27,500 0 120,000 15,000
Executive Vice President 1994 162,528 0 0 30,000 15,000
1993 99,010 15,000 0 0 15,000
(1) Options for the purchase of 100,000, 320,000, 133,333, and 100,000
shares of Common Stock granted to Messrs. Torchia, Holtz, Cerqua and
D'Onofrio were vested as of May 31, 1996. Options for the purchase of
50,000, 100,000, 50,000, and 50,000 shares of Common Stock granted to
Messrs. Torchia, Holtz, Cerqua and D'Onofrio, respectively, will vest as
of January 1, 1997.
(2) Represents life insurance premiums paid by the Company on behalf of the
Named Officers.
(3) Mr. Torchia received no annual compensation from the Company in 1993,
1994 or 1995. For a discussion of the fees paid to Urban, a hotel
development consulting firm in which Mr. Torchia owns a 51% interest and
Mr. D'Onofrio owns a 49% interest, pursuant to a consulting agreement
between the Company and Urban, see "Certain Transactions."
</TABLE>
OPTIONS
The options described in the following tables have been granted other
than pursuant to the Company's stock plans. There were no options exercised
by the Named Officers in 1995.
<TABLE>
OPTION GRANTS IN 1995
<CAPTION>
Individual Grants
Potential Realizable
% of Total Value at Assumed
Options Annual Rates of
Granted to Stock Price
Employees Exercise or Appreciation for
Options in Fiscal Base Price Expiration Option Term
Name Granted Year ($/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>
<TABLE>
YEAR END OPTION VALUES
<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 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 and any such
amendments may not adversely affect the status of transactions under the Plan
as protected 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. The Plan was adopted by the Board of Directors of
the Company on July 8, 1996.
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 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 Beneficial Ownership on
Form 4 were filed late by Urban 2000 Corp. ("Urban"), H. Andrew Torchia and
Richard A. D'Onofrio, 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 Changes in
Beneficial Ownership on Form 4 was filed late by Reno J. Bernardo, which
related to 4,400 shares of Common Stock received by Mr. Bernardo in
connection with a transfer of a limited 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
</TABLE>
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.
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.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
AS OF JULY 10, 1996
NUMBER PERCENT(1)
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. 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 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.
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 or the employee's guardian or legal
representative. 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. No amendment shall result in
transactions under the Plan losing their status as protected under Rule 16b-
3.
16. APPROVAL. The Plan was adopted by the Board of Directors of the
Company on July 8, 1996.
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 during the one year period following death by his or her estate or
the person to whom the option passes by will or the laws of descent and
distribution.
Notwithstanding the foregoing, a director may transfer any option granted
hereunder solely to members of the director'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 Board of Directors of the Company.
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.
10. APPROVAL. This Plan was adopted by the Board of Directors of the
Company on July 8, 1996.
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
___________ retention of BDO ___________ of 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
