SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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] No fee required
[ ] $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.:
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4) Date Filed:
AMERIHOST PROPERTIES, INC.
2400 EAST DEVON AVENUE
SUITE 280
DES PLAINES, ILLINOIS 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 6, 1998, 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 Reno J. Bernardo
Michael P. Holtz Salomon J. Dayan
Russell J. Cerqua Richard A. Chaifetz
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 June 22, 1998 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 6, 1998
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 August 6, 1998, 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 6, 1998.
Only shareholders of record of the Company at the close of business on June
22, 1998 are entitled to vote at the meeting or any adjournment thereof. As of
that date there were outstanding 6,182,775 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. Directors
shall be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
Directors. Abstentions and broker non-votes will have no effect.
ELECTION OF DIRECTORS
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 or unwilling 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.
Each person listed below is currently a director of the Company and is a
nominee for re-election as a director.
Director
Name, Age and Principal Occupation since
H. ANDREW TORCHIA, 55 1984
H. Andrew Torchia, a co-founder of the Company, was President and Chief
Executive Officer of the Company from 1985 until 1989, when he became
Chairman of the Board. 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 and is currently a
principal shareholder. Mr. Torchia also owns a 50% interest in Rosemont
Hotel 398 Limited Partnership which owns 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, 41 1985
From 1985 to 1988, Mr. Holtz served as the Company's Treasurer. From 1985
to 1989, Mr. Holtz served as the Company's 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.
RENO J. BERNARDO, 66 1989
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.
SALOMON J. DAYAN, 52 1996
Since 1980, Salomon J. Dayan, M.D., a physician certified in internal and
geriatric medicine, 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.
RICHARD A. CHAIFETZ, 43 1997
Richard A. Chaifetz, has been Chairman, President and Chief Executive
Officer of ComPsych Behavioral Health Corporation since its inception in
1987. ComPsych is a leading domestic and international provider of employee
assistance and managed behavioral health services to corporate America. Dr.
Chaifetz, a licensed psychologist, is also majority shareholder in several
other health care and service companies. In addition, Dr. Chaifetz is a
member of the board of directors of several private and not-for-profit
organizations.
The following person is a nominee for director.
RUSSELL J. CERQUA, 41
Russell J. Cerqua has been the Executive Vice President of Finance and Chief
Financial Officer of the Company since 1987, and Treasurer of the Company
since 1988. In 1989, in addition to his other responsibilities, Mr. Cerqua
was elected Secretary of the Company. Mr. Cerqua was a Director of the
Company from 1988 through 1997. 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 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.
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 six meetings during 1997, at which all Directors
were present.
COMPENSATION OF DIRECTORS
Each nonemployee director of the Company received an annual retainer fee of
$9,000 ($750 per month) in 1997. Each nonemployee director of the Company also
received $250 for each Board of Directors meeting attended in person, $150 for
each Board of Directors meeting attended by telephone and $150 for each
committee meeting attended. Each director is reimbursed for all out-of-pocket
expenses related to attendance at Board meetings.
Mr. Torchia, a Director of the Company, also indirectly received fees
through a consulting agreement between the Company and Urban which was
terminated as of January 31, 1997. Under the terms of the consulting agreement,
Urban had received a monthly consulting fee of $20,000 for the provision of
business development services to the Company. The Company also paid Urban
$74,050 in additional fees in 1997, for transactions brought to the Company
prior to the termination of the consulting agreement. See "Certain
Transactions".
COMMITTEES
The Board of Directors has three standing committees:
1. Audit Committee - This committee consists of two outside directors:
Messrs. Dayan (Chairman) and Chaifetz. The Audit Committee has the
responsibility among other things, to meet with the Company's
independent accountants to review the scope and results of their
audit, and to review with such independent accountants the Company's
system of internal accounting and financial controls. This committee
did not meet during 1997.
2. Compensation Committee - This committee consists of two outside
directors: Messrs. Bernardo (Chairman) and Chaifetz. The
Compensation Committee reviews the salaries, bonuses, stock
compensation, stock options and other direct and indirect compensation
for all Company officers. This committee did not meet during 1997.
3. Directors Affairs Committee - This committee, established on March 12,
1998, consists of two outside directors: Messrs. Chaifetz (Chairman)
and Dayan. The Directors Affairs Committee is responsible for
recommending possible candidates for election to the Board of
Directors, as well as evaluating the performance of all Board members.
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, 1997, 1996 and 1995, of those persons who were, at
December 31, 1997 (i) the Chairman of the Board of Directors, (ii) the chief
executive officer, and (iii) the other two most highly compensated executive
officers of the Company (the "Named Officers"). See "Compensation of
Directors".
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Restricted Securities
Name and Principal Stock Underlying All Other
Position Year Salary Bonus Awards(1) Options(#)(2) Compensation(3)
<S> <C> <C> <C> <C> <C> <C>
H. Andrew Torchia (4) 1997 $ - $ - $ - - $ 15,000
Chairman of the Board 1996 - - - - 15,000
1995 - - - 120,000 15,000
Michael P. Holtz 1997 334,615 - - 50,000 12,375
President and Chief 1996 375,000 - - - 10,000
Executive Officer 1995 322,115 - 196,927 360,000 10,000
Russell J. Cerqua 1997 165,577 10,000 - 15,625 12,369
Executive Vice President 1996 160,000 - - - 10,000
Finance, Secretary, Treasurer 1995 149,423 - 56,690 153,333 10,000
and Chief Financial Officer
Richard A. D'Onofrio (4) 1997 15,000 - - - 373,136
Executive Vice President 1996 144,000 36,000 - - 15,000
1995 137,500 27,500 - 120,000 15,000
(1) At December 31, 1997, the value of the 41,500 and 12,000 shares of common stock received by Messrs. Holtz and Cerqua,
respectively, in 1995 was $238,625 and $69,000 respectively.
(2) All options were fully vested as of December 31, 1997.
(3) Represents life insurance premiums paid by the Company on behalf of the Named Officers. Amounts for 1997 include the
Company's 401(k) matching contributions of $2,375 and $2,369 for Messrs. Holtz and Cerqua, respectively. The amount shown
for Mr. D'Onofrio in 1997 represents the amount paid pursuant to the terms of his termination agreement.
(4) Mr. Torchia, Chairman of the Board and a Director of the Company, received no annual compensation for services as an
officer of the Company in 1995, 1996 or 1997. For a discussion of the fees paid to Urban, a hotel development consulting
firm in which Mr. Torchia owns a 51% interest and Mr. D'Onofrio owns a 49% interest, pursuant to a consulting agreement
between the Company and Urban which was terminated in 1997, see "Certain Transactions."
</TABLE>
STOCK OPTIONS
The following table summarizes the number and terms of stock options granted to
each of the Named Officers during the year ended December 31, 1997.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term
% of Total
Options
Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted(1) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Michael P. Holtz 50,000 27.61% $1.53 Feb. 2007 391,745 669,138
Russell J. Cerqua 15,625 8.63% $1.53 Feb. 2007 122,420 209,106
</TABLE>
The following table provides information concerning the exercise of stock
options during 1997, and the year-end value of unexercised options for each of
the Named Officers of the Company.
<TABLE>
OPTION EXERCISES AND YEAR-END VALUE TABLE
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options Held at in-the-Money Options at
Acquired Value December 31, 1997 December 31, 1997 (1)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
H. Andrew Torchia 110,000 $ 222,844 185,063 - $ 359,461 $ -
Michael P. Holtz 110,000 222,844 470,000 - 877,188 -
Russell J. Cerqua 44,375 93,625 198,958 - 377,168 -
Richard A. D'Onofrio 110,000 198,469 183,688 - 357,570 -
_______________
(1) The closing sale price of the Company's Common Stock on such date on the Nasdaq National Market was $5.75.
</TABLE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The purpose of the Compensation Committee is to establish and administer the
policies governing all forms of executive compensation, as well as to administer
the Amerihost Properties, Inc. 1996 Omnibus Incentive Stock Plan.
The Committee's philosophy is that executive compensation should be designed
to motivate executives and reward them for individual initiative and
achievements as well as the short-term and long-term success of the Company. It
is anticipated that this philosophy will help to attract and maintain quality
individuals, thereby enhancing the Company's profitability and value for the
shareholders. The specific objectives within this philosophy are to:
Establish base salaries at levels which are competitive in the business
environment and which consider the responsibilities of the respective
position and the individual's experience.
Provide the executives with performance-based compensation which is
reflective of the performance of the Company.
Align the interests of the executives with those of the shareholders by
providing a meaningful level of equity-based compensation in the form of
long-term stock options.
The base salaries and annual increases for the Company's executives have
been based upon comparative industry data, tenure and an assessment of the
executive's historical performance and commitment to the Company. In addition,
the Committee considers other factors such as cost-of-living and other
geographic considerations, industry compensation trends, the level of expertise
and knowledge and the level and complexity of the individual's specific duties
and responsibilities. Base salaries consist of a blend of cash and stock
options.
In addition to the base salaries, the Company's executives receive incentive
compensation based upon the performance of the Company. Through 1997, these
incentives were based upon the Company's attainment of certain financial
benchmarks and consisted of either restricted stock awards or non-qualified
stock options.
The Chief Executive Officer of the Company served under an employment
agreement which began in 1995. His annual base compensation for 1997 was
reduced to $325,000. In lieu of the 40,000 shares of common stock Mr. Holtz
was to receive in April 1997 under the terms of his employment agreement, Mr.
Holtz received non-qualified options to purchase 50,000 shares of the Company's
common stock at an exercise price of $1.53. On January 1, 1998, pursuant to the
terms of the employment agreement, Mr. Holtz received options to purchase a
minimum of 364,100 shares of the Company's common stock at the market price on
date of issuance under the Company's 1996 Omnibus Incentive Stock Plan, of which
110,000 vested immediately, 121,000 will vest on January 1, 1999 and 133,100
will vest on January 1, 2000. Mr. Holtz did not receive a bonus for 1997. Mr.
Holtz's compensation is based upon the same factors as the other executive
officer. 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:
Reno J. Bernardo, Chairman
Richard J. Chaifetz
EMPLOYMENT AGREEMENTS
The Company's two executive officers, Michael P. Holtz, President and Chief
Executive Officer, and Russell J. Cerqua, Secretary, Treasurer, Executive Vice
President of Finance and Chief Financial Officer, provide services to the
Company under the terms of employment agreements dated January 1, 1995 and
amended February 4, 1997.
Mr. Holtz's annual base compensation for 1997 was reduced to $325,000 from
$425,000 pursuant to an amendment dated February 4, 1997. On April 22, 1997,
Mr. Holtz exercised his option to renew his agreement for an additional three-
year period ending December 31, 2000. On January 1, 1998, Mr. Holtz received
options to purchase a minimum of 364,100 shares of the Company's common stock at
the market price on date of issuance under the Company's 1996 Omnibus Incentive
Stock Plan, of which 110,000 vested immediately, 121,000 will vest on January 1,
1999 and 133,100 will vest on January 1, 2000. In December of each year, the
Compensation Committee will determine (i) a performance bonus to be paid for the
then-current year and (ii) Mr. Holtz's base salary for the following year, which
base salary will not be less than Mr. Holtz's then-existing base salary. In
lieu of the 40,000 shares of common stock Mr. Holtz was to receive in April 1997
under the terms of his employment agreement, Mr. Holtz received non-qualified
options to purchase 50,000 shares of the Company's common stock at an exercise
price of $1.53. Under the terms of the amended employment agreement, all stock
awards were eliminated.
Mr. Cerqua's annual base cash compensation for 1997 was reduced to $165,000 from
$175,000 pursuant to an amendment dated February 4, 1997. His agreement was
extended for a two-year period ending December 31, 1999. On January 1, 1998,
Mr. Cerqua received options to purchase 115,500 shares of the Company's common
stock at the market price on date of issuance under the Company's 1996 Omnibus
Incentive Stock Plan of which 55,000 vested immediately and 60,500 will vest on
January 1, 1999. In December of each year, the Compensation Committee will
determine (i) a performance bonus to be paid for the then-current year and (ii)
Mr. Cerqua's base salary for the following year, which base salary will not be
less than Mr. Cerqua's then-existing base salary. In lieu of the 12,500 shares
of common stock Mr. Cerqua was to receive in April 1997 under the terms of his
employment agreement, Mr. Cerqua received non-qualified options to purchase
15,625 shares of the Company's common stock at an exercise price of $1.53.
Under the terms of the amended employment agreement, all stock awards were
eliminated.
Each employment agreement entitles the executive officer to receive severance
payments, equal to two years' compensation with regard to Mr. Holtz and one
year's compensation with regard to Mr. 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. Mr. Holtz has agreed that a change of
control would not constitute "good reason" as a basis for him terminating his
employment after June 15, 1999. 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 Mr. 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.
In January 1997, Mr. D'Onofrio resigned from his positions as Executive Vice
President and a director of the Company. In connection therewith, Mr. D'Onofrio
continued to receive his salary until the end of 1997 and received a lump-sum
severance payment of $195,000.
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 December 31,
1997 all the aforesaid Section 16(a) filing requirements were complied with.
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, 1992 and ending December
31, 1997.
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 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
<S> <C> <C> <C> <C> <C> <C>
Amerihost Properties, Inc. 100.000 94.340 53.774 94.340 93.868 86.792
Nasdaq US 100.000 114.796 112.214 158.699 195.192 239.527
Nasdaq Non-Financial 100.000 115.458 111.021 154.727 188.024 220.645
Assumes $100 invested on December 31, 1992 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 H. Andrew Torchia, the Chairman of
the Board of Directors of the Company, and 49% by Richard A. D'Onofrio, a former
executive officer of the Company. Urban, a hotel development consulting firm,
and Mr. Torchia provided business development and consulting services to the
Company under a consulting agreement (the "Consulting Agreement") with Urban.
Under the terms of the Consulting Agreement, Urban received (i) a monthly
consulting fee of $20,000, (ii) a residual fee based on the management fees the
Company received 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 provided Urban with use of
the Company's telephone system. No additional amounts were paid to Urban for
the reimbursement of expenses. As part of this arrangement, Mr. Torchia did not
receive compensation for the services he provides to the Company, other than
warrants and other non-cash compensation for his services as Chairman. The
Consulting Agreement was terminated as of January 31, 1997. Urban received the
$20,000 consulting fee for January 1997 and additional fees of $74,050 during
1997 for projects which were in process at the time of the termination. In
addition, Urban received in 1997 a payment of $1,289,141 in connection with the
termination of the Consulting Agreement. In February 1997, Mr. D'Onofrio
resigned from his positions as Executive Vice President and as a Director of the
Company. In addition to the $15,000 in salary Mr. D'Onofrio received in 1997
for services prior to his resignation, Mr. D'Onofrio also received $373,136
pursuant to the terms of his termination agreement.
In December 1994, two of the Company's officers executed notes in the amount of
$956,292 to the Company for the purchase of a note and related receivables which
the Company had received in connection with the acquisition of seven management
contracts in 1992, and 165,784 shares of the Company's common stock which was
held as collateral on the note. The officer notes provided for the accrual of
interest at 8% per annum, with the principal balance and all accrued interest
due December 31, 1997 and were collateralized by a total of 273,369 shares of
the Company's Common Stock. In December 1997, these notes to the Company from
Messrs. Holtz and Cerqua in the aggregate amount of $1,181,831 were repaid in
accordance with the terms of the notes.
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, Mr. Torchia, through Urban, has invested an aggregate of approximately
$157,000 as limited partners and approximately $49,000 as a general partner in
four joint ventures since 1991. In addition, Dr. Dayan, a director of the
Company, has invested approximately $1.6 million in seven 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 joint
ventures. The mortgage, which has been in place since 1989, (i) has a current
outstanding balance of approximately $460,000, (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 as of June 22, 1998, by (i) each person
who is known by the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each of the Company's Directors, (iii) each of the Named
Officers and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned
As of June 22, 1998
Name Number Percent
<S> <C> <C>
Michael P. Holtz (7) 786,907 (1) 11.6%
H. Andrew Torchia (7) 667,801 (1)(2) 10.4
Richard A. D'Onofrio 641,658 (1)(2) 10.0
Wellington Management Company 600,000 (3) 9.7
Massachusetts Financial Services Company 517,000 (4) 8.4
Dimensional Fund Advisors, Inc. 372,100 (5) 6.0
Dr. Salomon J. Dayan 331,659 (1) 5.2
Russell J. Cerqua 312,413 (1) 4.9
Dr. Richard A. Chaifetz 83,800 (1)(6) 1.4
Reno J. Bernardo 53,612 (1) 0.9
ALL DIRECTORS AND EXECUTIVE
OFFICERS AS A GROUP (6 PERSONS) 2,236,192 30.2%
(1) Includes shares subject to options exercisable presently or within 60 days as follows: Mr. Holtz, 580,000 shares,
Messrs. Torchia and D'Onofrio, 218,750 shares each (including options for 68,750 shares owned by Urban 2000 Corp., see
(2) below), Mr. Cerqua, 253,958 shares, Dr. Dayan, 156,676 shares, Mr. Bernardo, 2,000 shares, and Dr. Chaifetz, 1,000
shares.
(2) Includes 375,832 shares owned by Urban 2000 Corp., options to purchase 68,750 shares owned by Urban which are exercisable
presently or within 60 days, and 7,676 shares owned by Niles 1290 Corp., a wholly-owned subsidiary of Urban 2000 Corp.
Mr. Torchia is the President and 51% stockholder of Urban 2000 Corp. 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.
Mr. D'Onofrio is a 49% stockholder of Urban 2000 Corp. Mr. D'Onofrio disclaims ownership of all but 187,919 shares and
options exercisable into 33,688 shares owned directly, or indirectly, by Urban.
(3) Based upon information provided in its Schedule 13G dated January 12, 1998, Wellington Management Company, 75 State
Street, Boston, MA 02109 ("WMC"), in its capacity as investment advisor, may be deemed beneficial owner of 600,000 shares
of the Company which are owned by numerous investment counseling clients. Of the shares shown above, WMC has shared
voting power for 520,000 shares and shared investment power for 600,000 shares.
(4) Based upon the information provided in its Schedule 13G dated February 12, 1998, Massachusetts Financial Services
Company, 500 Boylston Street, Boston, MA 02116 ("MFS"), in its capacity as investment manager, may be deemed beneficial
owner of 517,000 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 517,000
shares.
(5) Based upon information provided in its Schedule 13G dated February 9, 1998, Dimensional Fund Advisors, Inc., 1299 Ocean
Avenue, 11th Floor, Santa Monica, CA 90401 ("DFA"), in its capacity as investment advisor may be deemed beneficial owner
of 372,100 shares of the Company which are owned by numerous investment counseling clients. Of the shares shown above,
DFA has shared voting power for 127,600 shares and sole investment power for 372,100 shares.
(6) Includes 4,000 shares owned by The ComPsych Management Corporation Retirement Plan. Dr. Chaifetz is the owner, Chairman,
President and CEO of ComPsych Behavioral Health Corporation, the administrator of the plan. Dr. Chaifetz disclaims
beneficial ownership of the portion of the 4,000 shares which are not held for his benefit.
(7) The address of this stockholder is c/o Amerihost Properties, Inc., 2400 East Devon Avenue, Suite 280, Des Plaines,
Illinois 60018.
</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 1999 shareholders' meeting must be received by the
Company not later than March 6, 1999. Any such proposals, as well as any
questions related thereto, should be directed to the Secretary of the Company.
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 6, 1998
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 June 22, 1998, at the Annual Meeting of Shareholders to
be held on August 6, 1998 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 Reno J. Bernardo
Michael P. Holtz Salomon J. Dayan
Russell J. Cerqua Richard A. Chaifetz
INSTRUCTION: To withhold authority to vote for any individual
nominee write that nominee's name in the space provided below:
________________________________________________________________________________
2. 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, this proxy will be
voted for all nominees listed in proposal 1 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: _______________, 1998 ________________________________________
Signature (Title)
Print name and address:
________________________________________
_____________________________________ Signature if held jointly
_____________________________________
_____________________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED RETURN
ENVELOPE
