U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
/x/ Annual report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee required)
For the fiscal year ended December 31, 1995
/ / Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No fee required)
For the transition period from ___________ to ____________
Commission file number 0-2528
------------
POCONO HOTELS CORPORATION
----------------------------------------------
(Name of Small Business Issuer in Its Charter)
Delaware 51-0099583
------------------------------ -----------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1209 Orange St., Wilmington, Delaware 19801
- ------------------------------------------ --------------
(Address of Principal Executive Offices) (Zip Code)
(302) 658-7581
-------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
None
------------------- ---------------------
------------------- ---------------------
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, no par value
-------------------------------------------------------------------
(Title of Class)
Preferred Stock, par value $100 per share, 7% cumulative
-------------------------------------------------------------------
(Title of Class)
<PAGE>
Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes _X_ No ___
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. /X/
State issuer's revenues for its most recent fiscal
year. $9,396,395
There is no active trading market for the Registrant's Common Stock. To the
Registrant's knowledge, the last available published bid price, on March 8,
1996, was $103.50 per share. Although the Registrant believes that the bid price
of its Common Stock does not represent a price produced by an active trading
market, the aggregate market value (calculated as if such bid price were derived
in an active market) of the 9,205 shares of the Common Stock held by
non-affiliates of the Registrant as of March 26, 1996 was $952,718.
As of March 26, 1996, the Registrant had 9,812 outstanding shares of its Common
Stock.
Documents Incorporated by Reference:
Certain portions of the Registrant's Annual Report to Stockholders for the
fiscal year ended December 31, 1995 are incorporated by reference in Part II of
this Report on Form 10-KSB and certain portions of the Registrant's Proxy
Statement for its 1996 Annual Meeting of Stockholders are incorporated by
reference in Part III.
-2-
<PAGE>
PART I
Item 1. Description of Business.
(a) General Development of Business.
Pocono Hotels Corporation (the "Registrant"), incorporated in
1925 under the laws of Delaware, is a holding company whose principal subsidiary
is Skytop Lodges, Inc. ("Skytop"). The business of Skytop consists of the
operation of a vacation resort in Skytop, Pennsylvania, the development and sale
of clustered homes and related activities.
(b) Financial Information About Industry Segments.
The Registrant operates in two industry segments:
resort hotels and real estate development.
The resort hotel segment operates lodging, food and beverage,
golf and other recreational facilities, catering principally to family and
convention business. The real estate development segment constructs and markets
cluster homes and develops single family homes. See Note 5 to the Registrant's
Consolidated Financial Statements as of December 31, 1995 for certain financial
information separated by segment industry.
(c) Narrative Description of Business.
Seasonal Factors. The resort business of Skytop is seasonal.
Traditionally, Skytop's operations from May through October are responsible for
nearly all of its profits and those of the Registrant in any fiscal year.
Operations during November through April are usually at a loss. These seasonal
fluctuations do not materially affect the Registrant's or Skytop's capital
expenditures, inventories or the credit terms on which business is done with
customers.
Marketing. Hotel occupancy at the resort operated by Skytop is
derived primarily from the family vacation trade but is augmented by group and
corporate business during non-peak periods. Most of Skytop's guests come from
the Northeast United States and arrive at the resort by private automobile.
Skytop markets its hotel services through various media, primarily newspapers
and magazines serving Skytop's major markets, and direct mail advertising to
former guests. Skytop is not dependent on a single customer or a few customers,
the loss of any one or more of whom would have a materially adverse effect on
Skytop's business.
-3-
<PAGE>
The marketing of the Company's clustered homes is done by
solicitation to all guests of Skytop Lodge, direct mail to former patrons, news
releases to newspapers and magazines, and word of mouth.
Competition. The resort business is highly competitive. The
resort operated by Skytop competes with approximately nine similar resorts in
the Pocono Mountain region of Pennsylvania and, because of substantial
improvements and increases in travel in recent years, competes with resorts
located throughout the United States. Among the resorts in the Pocono Mountain
region, the principal methods of competition are the facilities offered, quality
of services rendered and price. The Registrant believes that its facilities,
quality of service rendered and prices are competitive with those of similar
resorts in the Pocono Mountain region. The Registrant's lack of a conference
center has, however, adversely affected its ability to compete for group
business with other resorts that offer such facilities.
The real estate development business is highly competitive.
However, the unique location, quality construction, availability of amenities
and short supply of available property on the "Skytop Estate" enhance the demand
for the Registrant's clustered homes.
Compliance with Environmental Regulations. The Registrant does
not presently anticipate that its compliance with federal, state or local
regulations that relate to the protection of the environment will have any
material effect on its operations, capital expenditure, earnings or competitive
position.
Clustered Homes. During 1989, Skytop Development Corporation
("Skytop Development"), a wholly-owned subsidiary of Skytop Lodges, Inc., began
the development of 40 clustered homes on the Company's property. The Company has
entered into various contracts providing for such development. The Company
obtained financing for this project from Penn Security Bank and Trust Company.
However, since 1994 the project has been financed exclusively through internally
generated funds and sale of units. During 1993, the Company reduced its plan for
development from 40 to 37 units. During 1994, the plan for development was
further reduced from 37 to 34 units, and in 1995 the plan was further reduced to
32. As of December 31, 1995, 30 of the revised planned 32 homes were
constructed, 28 of which had been sold. The Company anticipates that proceeds
from the sale of the clustered homes will be used to improve the facilities at
Skytop Lodge.
Employees. As of December 31, 1995, the Registrant and
its subsidiaries together employed approximately 220 persons,
-4-
<PAGE>
none of whom are represented by a union and approximately 190 of
whom are full-time.
Item 2. Description of Property.
The principal property of Skytop consists of a resort facility
owned by it located on approximately 5,500 acres of land in Monroe and Pike
Counties of Pennsylvania. The property contains part of a mountain, woodlands,
five lakes, several streams and various small swamps. The only public access to
the land is from a township road in Barrett Township. Approximately 500 acres of
land have been placed under Pennsylvania Act 319 which results in lower property
taxes for the Company and places restrictions on their development. In addition
to the buildings described below, the commercial areas of the property include
an 18-hole golf course and various other recreational facilities.
The buildings on the Company's property consist of a lodge and
nine cottages accommodating 166 rooms, dining facilities, an indoor swimming
pool, a large lobby, a library, a lounge and a gift shop. Other buildings on the
property consist of an ice skating rink, a full service garage and other various
maintenance facilities. In addition, there are four dormitories that house over
100 employees. The property maintains its own water and sewage systems.
The Company does not have any present plans for the
improvement or development of any of its unimproved or undeveloped properties,
except that the Company is currently contemplating the sale of seven parcels of
undeveloped land aggregating approximately 15 acres.
The Company's management believes that the Company's
properties are adequately covered by insurance.
See "Description of Business - Narrative Description of
Business -- Clustered Homes."
Item 3. Legal Proceedings.
The Company and its subsidiaries are occasionally the subject
of legal proceedings arising in the normal course of business. While any
proceeding or litigation has an element of uncertainty, the Company believes
that it is not reasonably likely that any such matters individually or in the
aggregate would have a material adverse effect on the financial condition or
operations of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
-5-
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters.
The information required by this Item 5 is contained in the
material captioned "STOCK PRICE AND DIVIDEND INFORMATION" in the Registrant's
Annual Report to Stockholders for the fiscal year ended December 31, 1995 (the
"1995 Annual Report") to be furnished to the Securities and Exchange Commission
pursuant to Rule 14a-3 under the Securities and Exchange Act of 1934, as
amended. Such material is incorporated herein by reference.
Item 6. Management's Discussion and Analysis or Plan of
Operation.
The information required by this Item 6 is contained in the
material captioned "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" in the 1995 Annual Report, which is incorporated
herein by reference.
Item 7. Financial Statements.
The information required by this Item 7 is contained in the
material on pages 7 through 18 of the Company's 1995 Annual Report, which is
incorporated herein by reference.
Item 8. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a) of the Exchange
Act.
The information required by this Item 9 is contained in the
material captioned "ELECTION OF DIRECTORS" in the Registrant's Proxy Statement
for its 1996 Annual Meeting of Stockholders (the "1996 Proxy Statement") and is
to be filed with the Securities and Exchange Commission within 120 days of the
end of the fiscal year covered by this report. Such material is incorporated
herein by reference.
-6-
<PAGE>
Item 10. Executive Compensation.
The information required by this Item 10 is contained in the
material captioned "EXECUTIVE COMPENSATION" in the 1996 Proxy Statement, which
is incorporated herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The information required by this Item 11 is contained in the
material captioned "SECURITY OWNERSHIP" in the 1996 Proxy Statement, which is
incorporated herein by reference.
Item 12. Certain Relationships and Related Transactions.
None.
Item 13. Exhibits and Reports on Form 8-K.
(a) The following exhibits are filed as part of this report:
Exhibit
No. Description
- ------ -----------
3 Registrant's Articles of Incorporation and
By-laws, as amended.
10A Form of Indemnity Agreement for directors
and officers.
10B Agreement, dated November 27, 1989, between
Skytop Development Corporation and Zaveta
Construction, Inc.
10C Agreement, dated November 27, 1989, between
Skytop Development Corporation and Russell
Lindsay Excavating.
11 Statement re: computation of per share
earnings.
13 1995 Annual Report to Stockholders (furnished for the
information of the Commission only and not to be deemed filed
as part of this Report on Form 10-KSB except to the extent
specifically incorporated by reference herein).
21 Subsidiaries of Registrant.
-7-
<PAGE>
24 Powers of Attorney of John B. Campbell, Gardner F.
Cunningham, F. David Clarke, John J. Cotter, Evelyn M.
Doherty, John B. Hogan, John V.N. Klein, Donald H.
Miller, Richard L. Price, Jr., Dan Raymond and Charles
E. Stokes, III.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the
quarter ended December 31, 1995.
-8-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
POCONO HOTELS CORPORATION
Date: March 29, 1996 By: /s/ Stewart F. Campbell
------------------------
Stewart F. Campbell
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Stewart F. Campbell Chairman of the March 29, 1996
- -------------------------- Board, Chief
Stewart F. Campbell Executive Officer
and Director
/s/ Charles F. Hewson Controller (Principal March 29, 1996
- -------------------------- Financial and
Charles F. Hewson Accounting Officer)
* Director March 29, 1996
- --------------------------
John B. Campbell
* Director March 29, 1996
- --------------------------
Gardner R. Cunningham
* Director March 29, 1996
- --------------------------
F. David Clarke
* Director March 29, 1996
- --------------------------
John J. Cotter
* Director March 29, 1996
- --------------------------
Evelyn M. Doherty
* Director March 29, 1996
- --------------------------
John B. Hogan
</TABLE>
-9-
<PAGE>
<TABLE>
<S> <C> <C>
* Director March 29, 1996
- --------------------------
John V.N. Klein
* Director March 29, 1996
- --------------------------
Donald H. Miller
* Director March 29, 1996
- --------------------------
Richard L. Price, Jr.
* Director March 29, 1996
- ---------------------------
Dan Raymond
* Director March 29, 1996
- --------------------------
Charles E. Stokes, III
*By: /s/ Stewart F. Campbell
-----------------------
Stewart F. Campbell
Attorney-in-fact pursuant to
powers of attorney filed as
part of this Form 10-KSB
</TABLE>
-10-
<PAGE>
Appendix I
Index to Exhibits to Form 10-KSB
<TABLE>
<CAPTION>
Exhibit
No. Description Page
- ------- ----------- ----
<S> <C> <C>
3 Registrant's Articles of Incorporation and By-
laws, as amended.
10A Form of Indemnity Agreement for directors and
officers.
10B Agreement, dated November 27, 1989, between
Skytop Development Corporation and Zaveta
Construction, Inc.
10C Agreement, dated November 27, 1989, between
Skytop Development Corporation and Russell
Lindsay Excavating.
11 Statement re: computation of per share earnings.
13 1995 Annual Report to Stockholders (furnished for the
information of the Commission only and not to be deemed filed
as part of this Report on Form 10-KSB except to the extent
specifically incorporated by reference herein).
21 Subsidiaries of Registrant.
24 Powers of Attorney of John B. Campbell, Gardner F.
Cunningham, F. David Clarke, John J. Cotter, Evelyn M.
Doherty, John B. Hogan, John V.N. Klein, Donald H. Miller,
Richard L. Price, Jr., Dan Raymond and Charles E. Stokes,
III.
27 Financial Data Schedule
</TABLE>
<PAGE>
CERTIFICATE OF INCORPORATION
OF
POCONO HOTELS CORPORATION
--------------
FIRST: The name of this corporation is
POCONO HOTELS CORPORATION.
SECOND: Its principal office in the State of Delaware
is located at No. 7 West Tenth Street, in the City of Wilmington,
County of New Castle. The name and address of its resident agent
is the Corporation Trust Company of America, No. 7 West Tenth
Street, Wilmington, Delaware.
THIRD: The nature of the business, or objects or
purposes proposed to be transacted, promoted or carried on are:
To subscribe for, or cause to be subscribed for, buy, own,
hold, purchase, receive, or acquire, and to sell, negotiate, guarantee, assign,
deal in, exchange, transfer, mortgage, pledge or otherwise dispose of, shares of
the capital stock, scrip, bonds, coupons, mortgages, debentures, debenture
stock, securities, notes, acceptances, drafts and evidences of indebtedness
issued or created by other corporations, joint stock companies or associations,
whether public, private or municipal, or any corporate body, and while the owner
thereof, to possess and to exercise in respect thereof all the rights, powers
and privileges of ownership, including the right to vote thereon; to guarantee
the payment of dividends on any shares of the capital
<PAGE>
stock of any of the corporations, joint stock companies or associations in which
this Corporation has or may at any time have an interest, and to become surety
in respect of, endorse or otherwise guarantee the payment of the principal of or
interest on any scrip, bonds, coupons, mortgages, debentures, debenture stock,
securities, notes, drafts, bills of exchange or evidences of indebtedness,
issued or created by any such corporation, joint stock companies or
associations; to become surety for or guarantee the carrying out and performance
of any and all contracts, leases and obligations of every kind of any
corporations, joint stock companies or associations, and in particular of any
corporation, joint stock company or association any of whose shares, scrip,
bonds, coupons, mortgages, debentures, debenture stock, securities, notes,
drafts, bills of exchange or evidence of indebtedness, are at any time held by
or for this Corporation, and to do any acts or things designed to protect,
preserve, improve, or enhance the value of any such shares, scrip, bonds,
coupons, mortgages, debentures, debenture stock, securities, notes, drafts,
bills of exchange or evidences of indebtedness.
To manufacture, purchase or otherwise acquire, own, mortgage,
pledge, sell, assign and transfer, or otherwise dispose of, to invest, trade,
deal in and deal with, goods, wares and merchandise and real and personal
property of every class and description.
-2-
<PAGE>
To acquire, and pay for in cash, stock or bonds of this
corporation or otherwise, the good will, rights, assets and property, and to
undertake or assume the whole or any part of the obligations or liabilities of
any person, firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage, or otherwise dispose of letters patent of the United
States or any foreign country, patent rights, licenses and privileges,
inventions, improvements and processes, copyrights, trade-marks and trade names,
relating to or useful in connection with any business of this corporation.
To issue bonds, debentures or obligations of this corporation
from time to time, for any of the objects or purposes of the corporation, and to
secure the same by mortgage, pledge, deed of trust, or otherwise.
To purchase, hold, sell and transfer the shares of its own
capital stock; provided it shall not use its funds or property for the purchase
of its own shares of capital stock when such use would cause any impairment of
its capital; and provided further that shares of its own capital stock belonging
to it shall not be voted upon directly or indirectly.
To have one or more offices, to carry on all or any of its
operations and business and without restrictions or limit as to amount to
purchase or otherwise acquire, hold, own, mortgage, sell, convey, or otherwise
dispose of real and personal property of every class and description in any of
the States, Districts,
-3-
<PAGE>
Territories or Colonies of the United States, and in any and all foreign
countries, subject to the laws of such State, District, Territory, Colony or
Country.
In general, to carry on any other business in connection with
the foregoing, whether manufacturing or otherwise, and to have and exercise all
the powers conferred by the laws of Delaware upon corporations formed under the
act hereinafter referred to, and to do any or all of the things hereinbefore set
forth to the same extent as natural persons might or could do.
The foregoing clauses shall be construed both as objects and
powers; and it is hereby expressly provided that the foregoing enumeration of
specific powers shall not be held to limit or restrict in any manner the powers
of this corporation.
FOURTH: The total authorized capital stock of this corporation
is Eight Thousand Five Hundred (8500) shares of preferred stock of the par value
of One Hundred Dollars ($100.) per share, amounting in the aggregate to Eight
Hundred Fifty Thousand Dollars ($850,000.) and Twelve Thousand Five Hundred
(12,500) shares of common stock without nominal or par value.
The distinguishing preferences, rights, privileges and
restrictions of the preferred and common stock are as follows:
The balance of the preferred stock shall be entitled to
receive, when and as declared by the board of directors of the corporation out
of the net profits or surplus of the corporation, preferential dividends at the
rate of seven per centum (7%) per
-4-
<PAGE>
annum and no more, payable on such days as may be determined by the board of
directors, before any dividend shall be declared or paid upon or set apart for
the common stock. Such dividends upon the preferred stock shall be cumulative
from the date of issue thereof (except that no dividends shall accumulate prior
to March 1, 1926) shall be fully paid or set apart but without interest, before
any dividend shall be paid upon or set apart for the common stock. Whenever the
full dividend upon the preferred stock for all past dividend periods shall have
been paid, and the full dividend thereon for the then current dividend period
shall have been paid or declared and a sum sufficient for the payment thereof
set apart, dividends upon the common stock may be declared by the board of
directors out of the remainder of the net profits or surplus, and the holders of
the preferred stock shall not be entitled to participate in any such dividends.
The corporation may, at the option of the board of directors,
redeem the whole or any part of the outstanding preferred stock on any dividend
payment date after two (2) years from the date of filing of this certificate of
incorporation by paying One Hundred Ten Dollars ($110.) for each share thereof,
together with a sum of money equivalent to dividends at the rate of seven per
centum (7%) per annum on the par value thereof from the date or dates on which
the dividends on said shares of preferred stock so to be redeemed became
cumulative to the date fixed for such redemption, less the amount of dividends
theretofore paid thereon. Notice of such election to redeem
-5-
<PAGE>
shall, not less than thirty (30) days prior to the dividend date upon which the
stock is to be redeemed, be mailed to each holder of stock so to be redeemed at
his address as it appears on the books of the corporation. In case less than all
of the outstanding preferred stock is to be redeemed, the amount to be redeemed
and the method of effecting such redemption, whether by lot or pro rata or
otherwise, may be determined by the board of directors. If on or before the
redemption date named in such notice, the funds necessary for such redemption
shall have been set aside by the corporation so as to be available for payment
on demand to the holders of the preferred stock so called for redemption, then,
notwithstanding that any certificate of the preferred stock so called for
redemption shall not have been surrendered for cancellation, the dividends
thereon shall cease to accrue from and after the date of redemption so
designated, and all rights with respect to such preferred stock so called for
redemption, including any right to vote or otherwise participate in the
determination of any proposed corporate action shall forthwith after such
redemption date cease and determine, except only the right of the holder to
receive the redemption price therefor but without interest. Stock redeemed
pursuant to the provisions hereof shall not be reissued and no preferred stock
shall be issued in lieu or in exchange therefor.
In the event of any liquidation, dissolution or winding up of
the affairs of the corporation, whether voluntary or involuntary, the holders of
the preferred stock shall be
-6-
<PAGE>
entitled, before any assets of the corporation shall be distributed among or
paid over to the holders of the common stock, to be paid One Hundred Dollars
($100.) per share, together with a sum of money equivalent to dividends at the
rate of seven per centum (7%) per annum on the par value thereof, from the date
or dates upon which dividends on such preferred stock become cumulative to the
date of payment thereof, less the amount of dividends theretofore paid thereon.
After the making of such payments to the holders of the preferred stock, the
remaining assets of the corporation shall be distributed among the holders of
the common stock alone, share and share alike. If, upon such liquidation,
dissolution or winding up, the assets of the corporation distributable as
aforesaid among the holders of the preferred stock shall be insufficient to
permit of the payment to them of said amounts, the entire assets shall be
distributed ratably among the holders of the preferred stock.
Except as herein otherwise provided, the holders of the
preferred stock shall have no voting power, nor shall they be entitled to notice
of meetings of stockholders, all rights to vote and all voting power being
vested exclusively in the holders of the common stock.
In the event, however, that any dividend due on the preferred
stock shall not be paid when payable hereunder and shall remain so unpaid for
any period of two years after March 1, 1926, then a special meeting of the
stockholders of this corporation shall be called at the request of any preferred
-7-
<PAGE>
stockholder or stockholders, and at such meeting, if said dividends still remain
unpaid, the holders of a majority of the preferred stock, present or represented
at said meeting, shall be entitled to elect a majority of a new board of
directors of this corporation, and the holders of a majority of the common
stock, present or represented at such meeting shall elect a minority of said
board.
The election of the new board of directors in the manner
hereinabove specified shall terminate the term of office of each member of the
existing board of directors elected by the common stockholders. Thereafter and
until all arrearages of dividends shall have been paid upon the preferred stock,
such power to elect a majority of the board of directors shall vest and remain
in the holders of the preferred stock. One month after the payment of all
defaulted dividends upon the preferred stock, or the accumulation of net
earnings equal to said defaulted dividends, the voting power then vested in the
preferred stock shall cease and exclusive voting power shall be restored to the
holders of the common stock and a new board of directors may be elected by such
exclusive vote of the common stock, at a meeting duly called and held as above
provided concerning any meeting following a default in the payment of dividends
on the preferred stock, save only that notice thereof shall be given alone to
the holders of the common stock, and, such meeting being held and such new board
being elected, the
-8-
<PAGE>
term of office of each director elected by the vote of the preferred stock shall
at once expire.
Said common stock without nominal or par value may be issued
by the corporation from time to time for such consideration as may be fixed from
time to time by the board of directors.
FIFTH: The number of shares with which this corporation will
commence business is Ten (10) shares of common stock which shares are without
nominal or par value.
SIXTH: The names and places of residence of the subscribers to
the capital stock and the number of shares subscribed for by each are as
follows:
<TABLE>
<CAPTION>
NAME RESIDENCE NO. OF SHARES
<S> <C> <C>
Common
T. L. Croteau Wilmington, Delaware 8
A. L. Miller Wilmington, Delaware 1
E. C. LeHane Wilmington, Delaware 1
</TABLE>
SEVENTH: This corporation is to have perpetual existence.
EIGHTH: The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent whatever.
NINTH: In furtherance, and not in limitation of the powers
conferred by statute, the board of directors is expressly authorized:
To make and alter the by-laws of this corporation, to fix the
amount to be reserved as working capital over and above
-9-
<PAGE>
its capital stock paid in, to authorize and cause to be executed mortgages and
liens upon the real and personal property of this corporation:
From time to time to determine whether and to what extent, and
at what times and places, and under what conditions and regulations, the
accounts and books of this corporation, (other than the stock ledger), or any of
them, shall be open to inspection of stockholders; and no stockholder shall have
any right of inspecting any account, book or document of this corporation except
as conferred by statute, unless authorized by a resolution of the stockholders
or directors:
If the by-laws so provide, to designate two or more of its
number to constitute an executive committee, which committee shall for the time
being, as provided in said resolution or in the by-laws of this corporation,
have and exercise any or all of the powers of the board of directors in the
management of the business and affairs of this corporation, and have power to
authorize the seal of this corporation to be affixed to all papers which may
require it.
Pursuant to the affirmative vote of the holders of at least a
majority of the stock issued and outstanding, having voting power, given at a
stockholders' meeting duly called for that purpose, or when authorized by the
written consent of the holders of a majority of the voting stock issued and
outstanding, the board of directors shall have power and authority at any
meeting to sell, lease or exchange all of the property and assets
-10-
<PAGE>
of this corporation, including its good will and its corporate franchises, upon
such terms and conditions as its board of directors deem expedient and for the
best interests of the corporation.
This corporation may in its by-laws confer powers upon its
directors in addition to the foregoing, and in addition to the powers and
authorities expressly conferred upon them by the statute.
Both stockholders and directors shall have power, if the
by-laws so provide, to hold their meetings, and to have one or more offices
within or without the State of Delaware, and to keep the books of this
corporation (subject to the provisions of the statutes), outside of the State of
Delaware at such places as may be from time to time designated by the board of
directors.
TENTH: This corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
WE, THE UNDERSIGNED, being each of the original subscribers to
the capital stock hereinbefore named for the purpose of forming a corporation to
do business both within and without the State of Delaware, and in pursuance of
the General Corporation Law of the State of Delaware, being Chapter 65 of the
Revised Code of Delaware, and the acts amendatory thereof and supplemental
thereto, do make and file this certificate, hereby
-11-
<PAGE>
declaring and certifying that the facts herein stated are true,
and do respectively agree to take the number of shares of stock
hereinbefore set forth, and accordingly have hereunto set our
hands and seals this 16th day of June A. D. 1925.
In presence of
/s/ Herbert E. Latter
/s/ T. L. Croteau
/s/ A. L. Miller
/s/ E. C. LeHane
-12-
<PAGE>
STATE OF DELAWARE )
) ss.
COUNTY OF NEW CASTLE )
BE IT REMEMBERED that on this 16th day of June A. D.
1925, personally came before me Herbert E. Latter, a Notary
Public for the State of Delaware, T. L. Croteau, A. L. Miller and
E. C. LeHane, parties to the foregoing certificate of
incorporation, known to me personally to be such, and severally
acknowledged the said certificate to be the act and deed of the
signers respectively and that the facts therein stated are truly
set forth.
GIVEN under my hand and seal of office the day and year
aforesaid.
/s/ Herbert E. Latter
---------------------
Notary Public
-13-
<PAGE>
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, Elisha C. Dukes, Secretary of the State of Delaware, do
hereby certify that the above and foregoing is a true and correct copy of
Certificate of Incorporation of the "POCONO HOTELS CORPORATION," as received and
filed in this office the sixteenth day of June, A.D. 1925, at 2 o'clock P.M.
In Testimony Whereof, I have hereunto set my hand and official
seal at Dover this twenty-fifth day of April in the year of Our Lord one
thousand nine hundred and sixty-seven .
/s/ Elisha C. Dukes
-------------------
/s/ G. F. Downs
---------------
-14-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
POCONO HOTELS CORPORATION
POCONO HOTELS CORPORATION, a corporation organized and
existing under and by virtue of the provisions of an Act of the General Assembly
of the State of Delaware, entitled "An Act Providing a General Corporation Law,"
approved March 10, 1899, and the acts amendatory thereof and supplemental
thereto, the certificate of incorporation of which was filed in the office of
the Secretary of State of Delaware on June 16, 1925 and recorded in the office
of the Recorder of Deeds for New Castle County, State of Delaware, on June 17,
1925, DOES HEREBY CERTIFY:
That, it appearing by the Certificate of the Judges appointed
for the purpose of conducting, at the special meeting of the stockholders of the
above corporation held on the 27th day of March, A. D. 1929, in the City of
Wilmington, State of Delaware, at 2:00 o'clock in the afternoon, for the
consideration of the amendment hereinafter set forth, the vote of stockholders
for and against the adoption of said amendment, that the persons or bodies
corporate holding a majority of the Preferred stock of said corporation issued
and outstanding and a majority of the voting Common stock of said corporation
issued and outstanding have voted in favor thereof, the following amendment to
the Certificate of Incorporation of the above corporation was duly adopted in
accordance with the provisions of Section 26 of the
<PAGE>
General Corporation Law of the State of Delaware as amended: That the capital
will not be reduced under or by reason of said amendment.
That the first paragraph of Article Fourth of the Certificate
of Incorporation of POCONO HOTELS CORPORATION be and the same hereby is amended
to read as follows:
"The total authorized capital stock of this
corporation is twelve thousand (12,000) shares of preferred
stock of the par value of One hundred ($100.) dollars per
share, amounting in the aggregate to One million two hundred
thousand ($1,200,000.) dollars, and sixteen thousand (16,000)
shares of common stock without nominal or par value."
IN WITNESS WHEREOF the said POCONO HOTELS CORPORATION
has caused its corporate seal to be hereunto affixed and this certificate to be
signed by Sam H. Packer, its Vice President, and Barclay White, its Assistant
Secretary, this 27th day of March, A. D. 1929.
By /s/ Sam H. Packer
-------------------
Vice President
By /s/ Barclay White
------------------
Assistant Secretary
-2-
<PAGE>
STATE OF DELAWARE )
) ss.
COUNTY OF NEW CASTLE )
BE IT REMEMBERED that on this 27th day of March, A. D. 1929,
personally came before me, Herbert E. Latter, a Notary Public in and for the
County and State aforesaid, Sam E. Packer, Vice President of POCONO HOTELS
CORPORATION, a corporation of the State of Delaware, the corporation described
in and which executed the foregoing certificate, known to me personally to be
such, and he, the said Sam H. Packer, as such Vice President, duly executed said
certificate before me and acknowledged the said certificate to be his act and
deed and the act and deed of said corporation; that the signatures of the said
Vice President and of the Assistant Secretary of said corporation to said
foregoing certificate are in the handwriting of the said Vice President and
Assistant Secretary of said Company respectively, and that the seal affixed to
said Certificate is the common or corporate seal of said Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/ Herbert E. Latter
----------------------
Notary Public
-3-
<PAGE>
STATE OF DELAWARE
OFFICE OF SECRETARY OF STATE
I, Elisha C. Dukes, Secretary of the State of Delaware, do
hereby certify that the above and foregoing is a true and correct copy of
Certificate of Amendment of the "POCONO HOTELS CORPORATION," as received and
filed in this office the twenty- eighth day of March, A.D. 1929, at 1 o'clock
P.M.
In Testimony Whereof, I have hereunto set my hand and official
seal at Dover this twenty-fifth day of April in the year of Our Lord one
thousand nine hundred and sixty-seven.
/s/ Elisha C. Dukes
-------------------
/s/ G. F. Downs
-------------------
-4-
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
Pocono Hotels Corporation, a corporation organized and
existing under any by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Pocono
Hotels Corporation, resolutions were duly adopted setting forth a proposed
amendment of the Certificate of Incorporation of said corporation for
consideration thereof. The resolutions setting forth the proposed amendment are
as follows:
RESOLVED, that the form and contents of ... (a) the Notice of
Annual Meeting of Stockholders, (b) Proxy Statement, (c) Management
Proxy, and (d) Proposed Amendments filed with the minutes of this
meeting and together marked Exhibit 1, be and they are hereby approved;
(Please see Exhibits A and B for text of "Proposed Amendments" as well as the
text of the proxy statement authorizing repeal of the provisions of the
Certificate of Incorporation authorizing action by written consent of the
shareholders.)
SECOND: That thereafter, pursuant to resolution of its Board
of Directors, a special meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not
be reduced under or by reason of said amendment.
IN WITNESS WHEREOF, said Pocono Hotels Corporation, has caused
its corporate seal to be hereunto affixed and this
<PAGE>
certificate to be signed by Donald M. Biles, its President, and
Eugene B. Yacuboski, its Secretary, this 4th day of June, 1985.
POCONO HOTELS CORPORATION
By:/s/ Donald M. Biles
------------------------
President
(CORPORATE SEAL)
By:/s/ Eugene B. Yacuboski
-----------------------
Secretary
ATTEST:
<PAGE>
Exhibit A
APPENDIX A
ELEVENTH: (A) Notwithstanding anything to the contrary in this
Certificate of Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be specified by law),
except as provided in paragraph (b) of this Article ELEVENTH, the affirmative
vote of the holders of at least eighty-five percent (85%) of each class of
outstanding capital stock of the Corporation shall be required in order for any
of the following actions or transactions to be effected by the Corporation, or
approved by the Corporation as stockholder of any subsidiary of the Corporation:
(1) Any merger or consolidation of the Corporation of any of
its subsidiaries with or into a Related Person (as hereinafter defined)
or any affiliate or associate (as each of said terms is defined in the
Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder) of a Related Person;
(2) Any sale, lease, exchange or other disposition to or with
a Related Person or any affiliate or associate of a Related Person (in
one transaction or a series of related transactions) of all or any
substantial part (as determined with respect to any transaction by the
Continuing Directors, as hereinafter defined) of the Corporation's or
any of its subsidiaries' assets having an aggregate Fair Market Value
(as hereinafter defined) of $1,000,000 or more;
(3) Any issuance or transfer by the Corporation to a Related
Person or any affiliate or associate of a Related Person (in one
transaction or a series of transactions) of any voting securities (or
any securities or other instruments convertible into voting securities)
of the Corporation or any of its subsidiaries (other than securities
issued or delivered by the Corporation pursuant to (a) any present or
future stock option plan or other stock plan created for the benefit of
the officers and employees of the Corporation or any of its
subsidiaries; (b) any dividend reinvestment plan; or (c) any
underwritten public offering) in exchange for cash, other assets or
securities, or any combination thereof, having an aggregate Fair Market
Value of $1,000,000 or more;
(4) The adoption of any plan or proposal for the liquidation
or dissolution of the Corporation or any of its subsidiaries proposed
by or on behalf of a Related Person or any affiliate or associate of a
Related Person; or
<PAGE>
(5) Any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation or any of its
subsidiaries, or any merger or consolidation of the Corporation with
any of its subsidiaries or any other transaction (whether or not with
or into or otherwise involving a Related Person or any affiliate or
associate of a Related Person) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any subsidiary which is directly or indirectly owned by
any Related Person or any affiliate or associate of a Related Person.
As used in this Article ELEVENTH, "Major Transaction" shall mean any
transaction which is referred to in any one or more of clauses (1) through (5)
above.
(B) The vote of the securityholders specified in paragraph (A) of this
Article ELEVENTH shall not be applicable to any particular Major Transaction if:
(1) The Major Transaction is approved in advance by a majority
of the "Continuing Directors" (said term to mean all directors of the
Corporation then in office who (a) were duly elected prior to the time
the person, corporation or entity involved in such Major Transaction
(either directly or with or through any affiliates or associates)
became a Related Person or (b) are not Related Persons or affiliates or
associates of Related Persons and were recommended by a majority of the
remaining Continuing Directors to succeed a Continuing Director who
resigned, retired, died or failed to stand for reelection); or
(2) The Major Transaction involves solely the Corporation and
one or more subsidiaries of the Corporation, or involves solely two or
more subsidiaries of the Corporation (provided that none of the stock
of any such subsidiary involved is directly or indirectly beneficially
owned by a Related Person (other than such ownership arising solely
because of ownership interests in the Corporation)), and in the case of
a merger involving the Corporation, the Corporation is a surviving
corporation or a subsidiary of the Corporation is a surviving
corporation and following such merger the certificate or articles of
incorporation of such subsidiary contain provisions substantially the
same as those in this Article ELEVENTH; or
(3) All of the following conditions have been met:
(a) The aggregate amount of cash and the Fair Market Value (as
of the date of the consummation of such Major Transaction) of
consideration other than cash to be received
<PAGE>
per share by holders of outstanding shares of each class or series of
preferred stock of the Corporation ("Preferred Stock") pursuant to such
Major Transaction shall be at least equal to the highest amount
determined under sub-paragraphs (i), (ii), (iii) and (iv) below:
(i) The highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Related Person or an affiliate or associate
thereof for any shares of such class or series of Preferred
Stock acquired by it (A) within the two-year period
immediately prior to the Announcement Date or (B) in the
transaction in which the Related Person became a Related
Person, whichever is higher (if no such shares have been
acquired within said two-year period, this provision shall be
inapplicable);
(ii) The preferential amount per share to which the
holders of shares of such class or series of Preferred Stock
would be entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of the
Corporation, regardless of whether the Major Transaction to be
consummated constitutes such an event;
(iii) The Fair Market Value per share of such class
or series of Preferred Stock on the Announcement Date or on
the date on which the Related Person became a Related Person
(the later of such dates is referred to in this Article
ELEVENTH as the "Determination Date"), whichever is higher;
and
(iv) The price per share equal to the Fair Market
Value per share of such class or series of Preferred Stock
determined pursuant to subparagraph (B)(3)(a)(iii) above,
multiplied by the ratio of (x) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Related Person or an
affiliate or associate thereof for any shares of such class or
series of Preferred Stock acquired by it within the two-year
period immediately prior to the Announcement Date to (y) the
Fair Market Value per share of such class or series of
Preferred Stock on the first day of such two-year period on
which the Related Person or an affiliate or associate thereof
acquired any shares of such class or series of Preferred Stock
(if no such shares have been acquired within said two-year
period, this provision shall be inapplicable).
<PAGE>
(b) The aggregate amount of cash and the Fair Market Value (as
of the date of the consummation of such Major Transaction) of
consideration other than cash to be received per share by holders of
each class of common stock of the Corporation ("Common Stock") pursuant
to such Major Transaction shall be at least equal to the highest amount
determined under sub-paragraphs (i), (ii), (iii) and (iv) below:
(i) The highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Related Person or an affiliate or associate
thereof for any shares of such class of Common Stock acquired
by it (A) within the two-year period immediately prior to the
first public announcement of the proposal of the Major
Transaction (the "Announcement Date") or (B) in the
transaction in which the Related Person became a Related
Person, whichever is higher (if no such shares have been
acquired within said two-year period, this provision shall be
inapplicable);
(ii) The Fair Market Value per share of such class of
Common Stock on the Announcement Date or on the Determination
Date, whichever is higher;
(iii) The price per share equal to the Fair Market
Value per share of such class of Common Stock determined
pursuant to subparagraph (B)(3)(b)(ii) above, multiplied by
the ratio of (x) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Related Person or an affiliate or associate
thereof for any shares of such class of Common Stock acquired
by it within the two-year period immediately prior to the
Announcement Date to (y) the Fair Market Value per share of
such class of Common Stock on the first day in such two-year
period on which the Related Person or an affiliate or
associate thereof acquired any shares of such class of Common
Stock (if no such shares have been acquired within said
two-year period, this provision shall be inapplicable); and
(iv) The book value per share of such class of Common
Stock at the end of the month preceding the Determination
Date, book value to be adjusted pursuant to guidelines
approved by a majority of the Continuing Directors to reflect
the appraised market value of fixed assets and real estate and
improvements owned by the Corporation and its subsidiaries.
<PAGE>
The provisions of this subparagraph (B)(3) shall be required
to be met with respect to every class or series of outstanding Common
Stock and Preferred Stock, whether or not the Related Person or
affiliate or associate thereof has previously acquired any shares of a
particular class or series of Common Stock or Preferred Stock.
(c) The consideration to be received by holders of a
particular class or series of outstanding capital stock shall be in
cash or in the same form as the Related Person or an affiliate or
associate thereof has previously paid for shares of such class or
series of capital stock. If the Related Person or an affiliate or
associate thereof has paid for shares of any class or series of capital
stock with varying forms of consideration, the form of consideration
for such class or series of capital stock shall be cash.
(d) After such Related Person has become a Related Person and
prior to the consummation of such Major Transaction, there shall have
been no change in dividend policies with respect to any class or series
of capital stock, except as necessary to reflect any reclassification
(including any reverse stock split), recapitalization, reorganization
or any similar transaction, unless such change was approved by a
majority of the Continuing Directors.
(C) For purposes of this Article ELEVENTH:
(1) The term "Related Person" shall mean any individual,
corporation, partnership or other person or entity which, together with
its affiliates and associates and any other person or entity with which
it or its affiliates or associates has any agreement, arrangement or
understanding, directly or indirectly, for the purposes of acquiring,
holding, voting or disposing of any class or series of capital stock of
the Corporation, directly or indirectly beneficially owns or controls
ten percent (10%) or more in the aggregate of the outstanding shares of
any class or series of capital stock of the Corporation. A majority of
the Continuing Directors then in office shall have the power to
determine for purposes of these Articles of Incorporation, on the basis
of information then known to them, who shall constitute a Related
Person and its affiliates and associates. Any such determination by the
Continuing Directors shall be conclusive and binding for all purposes.
(2) The term "Fair Market Value" shall mean: (a) in the case
of stock, the highest closing sale price during the 30-day period
immediately preceding the date in question of a share of such stock on
the Composite Tape for New York
<PAGE>
Stock Exchange-Listed Stocks; or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange; or, if such stock is
not listed on such Exchange, on the principal United States Securities
Exchange registered under the Securities Exchange Act of 1934 on which
such stock is listed; or, if such stock is not listed on any such
Exchange, the highest closing bid quotation with respect to a share of
such stock during the 30-day period preceding the date in question (i)
on the National Association of Securities Dealers, Inc. Automated
Quotation System or any system then in use, or (ii) reported (or
published in the "pink sheets" by a securities dealer who regularly
makes a market in the stock); or if no such quotations are available,
the fair market value on the date in question of a share of such stock
as determined in good faith by a majority of the Continuing Directors;
and (b) in the case of property other than cash or stock, the fair
market value of such property on the date in question as determined in
good faith by a majority of the Continuing Directors.
(D) Notwithstanding anything to the contrary in this Certificate of
Incorporation and in addition to any requirements of applicable law, the
provisions set forth in this Article ELEVENTH may not be repealed or amended in
any respect unless such action is approved by the affirmative vote of the
holders of at least eighty-five percent (85%) of the common stock of the
Corporation entitled to vote, voting as a single class.
APPENDIX B
TWELFTH: (A) No action required or permitted to be taken at any annual
or special meeting of stockholders of the Corporation may be taken by the
written consent of stockholders without a meeting.
(B) Notwithstanding anything to the contrary in this Certificate of
Incorporation and in addition to any requirements of applicable law, the
provisions set forth in this Article TWELFTH may not be repealed or amended in
any respect unless such action is approved by the affirmative vote of the
holders of at least eighty-five percent (85%) of the Common stock of the
Corporation entitled to vote, voting as a single class.
<PAGE>
Exhibit B [from text of proxy statement]
The approval of the addition of Article TWELFTH to the
Certificate shall also approve the repeal of the provisions of the Certificate
authorizing action by written consent of the holders or a majority of the
outstanding voting stock to sell, lease or exchange all of the Company's assets.
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
****
Pocono Hotels Corporation, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Pocono
Hotels Corporation, resolutions were duly adopted setting forth a proposed
amendment of the Certificate of Incorporation of the Corporation, declaring the
amendment to be advisable and in the best interest of the Corporation and
directing that the proposed amendment be submitted to the stockholders of the
Corporation for their approval at the next Annual Meeting of Stockholders. The
resolution setting forth the proposed amendment is as follows:
FURTHER RESOLVED, that the Corporation's Certificate of
Incorporation be amended by adding Article THIRTEEN in the
form attached hereto as Exhibit "A-1."
SECOND: That thereafter, the Annual Meeting of Stockholders of
the Corporation was duly called and held, upon notice given in accordance with
Section 222 of the General Corporation Law of the State of Delaware, at which
meeting the
<PAGE>
necessary number of shares as required by statute were voted in favor of the
amendment.
THIRD: That the amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of the Corporation shall not
be reduced under or by reason of the amendment.
IN WITNESS WHEREOF, Pocono Hotels Corporation has caused its
corporate seal to be affixed hereto and this certificate to be signed by Donald
M. Biles, its President, and Eugene B. Yacuboski, its Secretary, this 15th day
of June, 1987.
BY:/s/ Donald M. Biles
--------------------------
President
(Corporate Seal)
ATTEST:/s/ Eugne B. Yacuboski
----------------------
Secretary
<PAGE>
A-1
Article THIRTEEN
A director of the Corporation shall have no personal liability to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except to the extent that Section 102(b)(7) (or any successor
provision) of the Delaware General Corporation Law, as amended from time to
time, expressly provides that the liability of a director may not be eliminated
or limited.
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
****
Pocono Hotels Corporation (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the
Corporation, a resolution was duly adopted setting forth a proposed amendment of
the Certificate of Incorporation of said Corporation, declaring said amendment
to be advisable and determining to submit such to the annual meeting of the
stockholders of said Corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this
Corporation be amended by adding an Article thereto numbered "Fourteenth," which
Article shall be and read as follows:
"The Company elects to be governed by Section 203 (or any
successor provision) of the Delaware General Corporation Law,
entitled 'Business Combinations with Interested Stockholders,'
as amended from time to time."
SECOND: That thereafter, pursuant to resolution of its Board
of Directors, at the annual meeting of the stockholders of said Corporation
which was duly called and held, upon notice in accordance with Section 222 of
the General Corporation Law of the
<PAGE>
State of Delaware, the necessary number of shares as required by statute were
voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said Corporation shall not
be reduced under or by reason of said amendment.
IN WITNESS WHEREOF, said Pocono Hotels Corporation has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
Donald M. Biles, its President, and Eugene B. Yacuboski, its Secretary, this
26th day of May, 1988.
By: /s/ Donald M. Biles
-------------------
President
(Corporate Seal)
By: /s/ Eugene B. Yacuboski
-----------------------
Secretary
<PAGE>
AMENDED AND RESTATED BY-LAWS
of
POCONO HOTELS CORPORATION
(a Delaware corporation)
ARTICLE I
Meetings of Stockholders
SECTION 1. Annual Meetings. The annual meeting of the
stockholders for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held at such place
within or without the State of Delaware, on such date and at such hour of the
day as the Board of Directors shall determine annually, provided that in the
absence of such a determination the annual meeting of stockholders shall be held
at the principal office of the Corporation in the State of Delaware on the third
Tuesday in May of each year at 12:00 Noon Eastern Daylight Saving Time.
SECTION 2. Special Meetings. Special meetings of the
stockholders for the purpose or purposes shall be held at such time and place
within or without the State of Delaware as the Board of Directors shall
determine whenever called by order of the Chairman of the Board, the President,
the Board of Directors, the Executive Committee or by stockholders holding
together a majority of all shares of the Corporation entitled to vote at the
meeting.
<PAGE>
SECTION 3. Notice of Meetings. Written notice of every meeting
of stockholders, stating the time, place and purposes thereof, shall be give
personally or by mail at least 10, but not more than 60, days (except as
otherwise provided by law or in these By-laws) before the date of such meeting
to each stockholder entitled to vote at such meeting. If such notice is mailed,
it shall be directed to such stockholder at his address as it appears on the
stock transfer books of the Corporation.
SECTION 4. Quorum. At any meeting of the stockholders the
holders of a majority of the shares of the Corporation entitled to vote at such
meeting, present in person or represented by proxy, shall constitute a quorum
for all purposes, except where otherwise provided by law or in the Certificate
of Incorporation.
SECTION 5. Adjournments. If at any meeting of stockholders a
quorum shall fail to attend in person or by proxy, the holders of a majority of
the shares present in person or by proxy and entitled to vote at such meeting
may adjourn the meeting from time to time until a quorum shall attend, and
thereupon any business may be transacted which might have been transacted at the
meeting as originally called. Notice need not be given of the adjourned meeting
if the time and place thereof are announced at the meeting at which the
adjournment is taken, provided, however, that if the adjournment is for more
than thirty days or if after the adjournment a new record date is
-2-
<PAGE>
fixed, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
SECTION 6. Organization. The Chairman of the Board, and in his
absence the President, and in his absence any Vice President and in the absence
of all of them a chairman appointed by the stockholders present in person or by
proxy and entitled to vote, shall call meetings of the stockholders to order and
shall act as chairman thereof. The Secretary or an Assistant Secretary of the
Corporation shall act as secretary at all meetings of the stockholders when
present, and, in the absence of either, the presiding officer may appoint any
person to act as secretary.
SECTION 7. Voting. At each meeting of the stockholders each
stockholder entitled to vote any shares on any matter to be voted upon at such
meeting shall be entitled to one vote on such matter for each such share, and
may exercise such voting right either in person or by proxy appointed by an
instrument in writing subscribed by such stockholder or his duly authorized
attorney. No such proxy shall be voted or acted upon after one year from its
date, unless the proxy provides for a longer period, except that any proxy which
may be voted or acted upon at any regular or special meeting of stockholders may
be voted or acted upon at any valid adjournment of such meeting. Voting need not
be by ballot except that all elections of directors shall be by written ballot.
All elections of directors shall be decided and all questions decided and acts
authorized by a plurality vote except as otherwise required by law.
-3-
<PAGE>
SECTION 8. Inspectors. At any meeting of stockholders
inspectors of election may be appointed by the presiding officer of the meeting
for the purpose of opening and closing the polls, receiving and taking charge of
the proxies, and receiving and counting the ballots or the vote of stockholders
otherwise given. The inspectors shall be appointed by the presiding officer of
the meeting, shall be sworn to faithfully perform their duties, and shall in
writing certify to the returns. No candidate for election as director shall be
appointed or act as inspector.
SECTION 9. Stockholder List. At least ten (10) days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of such
stockholder, shall be prepared and held open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for said ten (10) days either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the meeting, or,
if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the meeting during the whole time thereof,
and may be inspected by any stockholder who is present.
SECTION 10. Informal Action. (a) Any action required
to be taken or which may be taken at any annual or special
meeting of the stockholders of the Corporation, may be taken
-4-
<PAGE>
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
(b) Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing. In the event that the
action which is consented to is such as would have required the filing of a
certificate under any other section of the Delaware General Corporation Law, if
such action had been voted on by stockholders at a meeting thereof, the
certificate filed under such other section shall state, in lieu of any statement
required by such section concerning any vote of stockholders, that written
consent and that written notice have been given in accordance with this
provision.
ARTICLE II
Directors
SECTION 1. Number. The property and business of this
corporation shall be managed by its Board of Directors, twelve in number.
Directors need not be stockholders and shall hold office until their successors
are respectively elected and qualify. The Board of Directors shall be
classified, and divided in respect to
-5-
<PAGE>
the time for which they shall severally hold office, into three classes of four
members each: the term of office of those of the first class to expire at the
annual meeting next ensuing; of the second class one year thereafter; of the
third class two years thereafter, and at each annual election held after such
classification and election, Directors shall be chosen for a full term of three
years or for an unexpired term as the case may be, to succeed those whose terms
expire or are otherwise terminated.
SECTION 2. Removal. Any director may be removed, with
or without cause, by a vote of the stockholders. Any director
may be removed with cause by a vote of the Board of Directors.
SECTION 3. Vacancies. Unless otherwise provided in the
Certificate of Incorporation or in these By-laws vacancies among the directors,
whether caused by resignation, death, disqualification, removal, an increase in
the authorized number of directors or otherwise, may be filled by a majority of
the directors then in office, although less than a quorum or by a sole remaining
director. Any directors chosen to fill vacancies shall hold office until the
next election of the class for which such directors shall have been chosen, and
until their successors shall be elected and qualified.
SECTION 4. Place of Meeting. The directors may hold their
meetings and may have one or more offices and keep the books of the Corporation
(except as otherwise may at any time be provided by law) at such place or places
within or without the State of Delaware as the Board may from time to time
determine.
-6-
<PAGE>
SECTION 5. Annual Meeting of the Board. The newly elected
Board may meet for the purpose of organization, the election of officers and the
transaction of other business, at such time and place within or without the
State of Delaware as shall be fixed as provided in Section 7 of this Article for
special meetings of the Board of Directors.
SECTION 6. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such time and place within or without the State of
Delaware as the Board of Directors shall from time to time by resolution
determine and no notice of such regular meetings shall be required.
SECTION 7. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the direction of the Chairman of the
Board, the President, or of two of the directors then in office. The Secretary
or some other officer or director of the Corporation shall give notice to each
director of the time and place of each special meeting by mailing the same at
least two days before the meeting or by telegraphing or telephoning the same not
later than the day before the meeting, at the residence address of each director
or at his usual place of business. Special meetings of the Board shall be held
at such place within or without the State of Delaware as shall be mentioned in
the call for the meeting.
SECTION 8. Quorum. Except as otherwise provided by
law or in the Certificate of Incorporation, a majority of the
directors in office shall constitute a quorum for the transaction
-7-
<PAGE>
of business, provided, however, that the number of directors that constitute a
quorum shall in no case be less than one-third of the total number of directors.
A majority of those present at the time and place of any regular or special
meeting, if less than a quorum be present, may adjourn from time to time without
notice, until a quorum be had. The vote of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors, except as may be otherwise provided by law or in the Certificate of
Incorporation.
SECTION 9. Compensation. The Board of Directors shall have the
authority to fix by resolution the compensation of directors.
SECTION 10. Organization. At all meetings of the Board of
Directors, the Chairman of the Board, or in his absence the President, or in his
absence any Vice President who is a member of the Board, or in the absence of
all of them, a Chairman chosen by the Directors shall preside. The Secretary or
an Assistant Secretary of the Corporation shall act as secretary at all meetings
of the Board of Directors when present, and, in the absence of either, the
presiding officer may appoint any person to act as secretary.
SECTION 11. Telephone Meetings. Members of the Board
of Directors may participate in any meeting of such Board by
means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can
hear each other, and participation in any meeting pursuant to
-8-
<PAGE>
this provision shall constitute presence in person at such meeting.
SECTION 12. Informal Action. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board or committee
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.
SECTION 13. Directors Emeritus. The Board shall have the power
from time to time to designate any former director as a "Director Emeritus", by
vote of the majority of the Board then in office, any such director to serve at
the pleasure of the Board. Any such Director Emeritus shall have the right to
receive notice and attend directors' meetings but shall not have the right to
vote at any meeting of the Board or to receive any director's fees.
ARTICLE III
Committees
SECTION 1. Executive Committee. The Board of Directors, by a
resolution passed by a vote of a majority of the whole Board, may appoint an
Executive Committee of three or more directors, which to the extent permitted by
law and in said resolution shall, during the intervals between the meetings of
the Board of Directors, in all cases where special directions
-9-
<PAGE>
shall not have been given by the Board, have and may exercise all the powers and
authority of the Board of Directors, including those powers enumerated in these
By-laws which are not specifically reserved to the Board of Directors and the
power and authority to declare a dividend or to authorize the issuance of stock,
in the management of the property, business and affairs of the Corporation and
may authorize the seal of the corporation to be affixed to all papers which may
require it; provided, however, that the Executive Committee shall not have the
power or authority to amend the Certificate of Incorporation, to adopt an
agreement of merger or consolidation, to recommend to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, to recommend to the stockholders a dissolution of the Corporation or a
revocation of dissolution, or to amend the By-laws of the Corporation. The Board
of Directors shall appoint the Chairman of the Executive Committee. The members
of the Executive Committee shall receive such compensation and fees as from time
may be fixed by the Board of Directors.
SECTION 2. Alternates and Vacancies. The Board of Directors
may designate one or more directors as alternate members of the Executive
Committee, who may replace any absent or disqualified member at any meeting of
the Executive Committee. In the absence or disqualification of a member of the
Executive Committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they
-10-
<PAGE>
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. All other vacancies in the Executive Committee shall be filled by the
Board of Directors in the same manner as original appointments to such
Committee.
SECTION 3. Committee to Report to Board. The Executive
Committee shall keep regular minutes of its proceedings and all action by the
Executive Committee shall be reported to the Board of Directors at its meeting
next succeeding such action.
SECTION 4. Procedure. The Executive Committee shall fix its
own rules of procedure, and shall meet where and as provided by such rules or by
resolution of the Board of Directors. The presence of a majority of the then
appointed number of each committee shall constitute a quorum and in every case
an affirmative vote by a majority of the members of the committee present shall
be the act of the committee.
SECTION 5. Other Committees. From time to time the Board of
Directors by a resolution adopted by a majority of the whole Board may appoint
any other committee or committees for any purpose or purposes, to the extent
lawful, which shall have such powers as shall be determined and specified by the
Board of Directors in the resolution of appointment.
SECTION 6. Termination of Committee Membership. In the event
any person shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to
-11-
<PAGE>
be a member of any committee appointed by the Board of Directors,
or any subcommittee thereof.
ARTICLE IV
Officers
SECTION 1. Executive Officers. The executive officers of the
Corporation shall be a Chairman of the Board, a President, one or more Vice
Presidents, a Treasurer and a Secretary, all of whom shall be elected annually
by the Board of Directors. Unless otherwise provided in the resolution of
election, each officer shall hold his office until his successor is elected and
qualified. Any two of such offices, except those of President and Secretary, may
be held by the same person. The Chairman of the Board and the President shall
each be a member of the Board of Directors.
SECTION 2. Subordinate Officers. The Board of Directors may
appoint one or more Assistant Secretaries, one or more Assistant Treasurers and
such other subordinate officers and agents as it may deem necessary or
advisable, for such term as the Board of Directors shall fix in such
appointment, who shall have such authority and perform such duties as may from
time to time be prescribed by the Board.
SECTION 3. Compensation. The Board of Directors shall have the
power to fix the compensation of all officers, agents and employees of the
Corporation, which power, as to other than
-12-
<PAGE>
elected officers, may be delegated as the Board of Directors shall determine.
SECTION 4. Removal. All officers, agents and employees of the
Corporation shall be subject to removal, with or without cause, at any time by
affirmative vote of a majority of the Directors then in office whenever, in the
judgment of such majority, the best interests of the Corporation will be served
thereby. The power to remove officers, agents and employees, other than
officers, agents and employees elected or appointed by the Board of Directors,
may be delegated as the Board of Directors shall determine.
SECTION 5. The Chairman of the Board. The Chairman of the
Board shall be the chief executive officer of the Corporation, shall preside or
designate another member of the Board of Directors to preside at all meetings of
the stockholders and directors at which he is present, and shall perform such
other duties as may from time to time be assigned to him by the Board of
Directors.
SECTION 6. The President. The President shall be the chief
operating officer of the Corporation and shall have the general powers and
duties of supervision and management of the Corporation and in the absence of
the Chairman of the Board, shall be the chief executive officer of the
Corporation. In the absence or incapacity of the Chairman of the Board, the
President shall also preside at all meetings of the stockholders and directors
at which he is present. The President shall also
-13-
<PAGE>
perform such other duties as may from time to time be assigned to him by the
Board of Directors.
SECTION 7. Vice Presidents. Vice Presidents shall perform such
duties and shall have such authority as from time to time may be assigned to
them by the Board of Directors or the Chief Executive Officer.
SECTION 8. The Treasurer. The Treasurer shall have the general
care and custody of all the funds and securities of the Corporation which may
come into his hands and shall deposit the same to the credit of the Corporation
in such bank or banks or depositaries as from time to time may be designated by
the Board of Directors or by an officer or officers authorized by the Board of
Directors to make such designation, and the Treasurer shall pay out and dispose
of the same under the direction of the Board of Directors. He shall have general
charge of all the securities of the Corporation and shall in general perform all
duties incident to the position of Treasurer.
SECTION 9. The Secretary. The Secretary shall keep the minutes
of all proceedings of the Board of Directors and the minutes of all meetings of
the stockholders and also, unless otherwise directed by such committee, the
minutes of each standing committee, in books provided for that purpose, of which
he shall be the custodian; he shall attend to the giving and serving of all
notices for the Corporation; he shall have charge of the seal of the
Corporation, of the stock certificate books and such other books and papers as
the Board of Directors may
-14-
<PAGE>
direct; and he shall in general perform all the duties incident to the office of
Secretary and such other duties as may be assigned to him by the Board of
Directors.
SECTION 10. Vacancies. All vacancies among the officers for
any cause shall be filled only by the Board of Directors.
SECTION 11. Bonding. The Board of Directors shall have power
to require any officer or employee of the Corporation to give bond for the
faithful discharge of his duties in such form and with such surety or sureties
as the Board of Directors may deem advisable.
ARTICLE V
Stock
SECTION 1. Form and Execution of Certificates. The
certificates of shares of stock of the Corporation shall be in such form as
shall be approved by the Board of Directors. The certificates shall be signed by
or in the name of the Corporation by the Chairman of the Board, the President or
a Vice President, and by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary. Any or all of the signatures on the
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent, or registrar
before such
-15-
<PAGE>
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent, or registrar at the date of its
issue.
SECTION 2. Regulations. The Board of Directors may make such
rules and regulations consistent with any governing statute as it may deem
expedient concerning the issue, transfer and registration of certificates of
stock and concerning certificates of stock issued, transferred or registered in
lieu or replacement of any lost, stolen, destroyed or mutilated certificates of
stock.
SECTION 3. Transfer Agent and Registrar. The Board of
Directors may appoint a transfer agent or transfer agents and a registrar or
registrars of transfers for any or all classes of the capital stock of the
Corporation, and may require stock certificates of any or all classes to bear
the signature of either or both. The Board of Directors may appoint the same
person as both transfer agent and registrar.
SECTION 4. Fixing of Record Date. For the purpose of
determining the stockholders entitled to notice of and to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, for any such
-16-
<PAGE>
determination of stockholders, and all persons who are stockholders of record on
the date so fixed, and no others, shall be entitled to notice of, and to vote
at, such meeting or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or to receive payment of any dividend or
other distribution or allotment of any rights, or to exercise any rights in
respect of any change, conversion or exchange of stock or to take any other
lawful action, as the case may be. Such record date shall not be more than 60
days nor less than 10 days before the date of any such meeting, nor more than 60
days prior to any other action.
ARTICLE VI
Seal
SECTION 1. Seal. The seal of the Corporation shall be circular
in form and contain the name of the Corporation, the year of its organization,
and the name of the state of incorporation, which seal shall be in charge of the
Secretary to be used as directed by the Board.
-17-
<PAGE>
ARTICLE VII
Fiscal Year
SECTION 1. Fiscal Year. The fiscal year of the Corporation
shall begin the first day of January in each year, or otherwise as the Board of
Directors may determine.
ARTICLE VIII
Waiver of Notice
SECTION 1. Waiver of Notice. Whenever notice is required to be
given by law, the Certificate of Incorporation or these By-laws, a written
waiver thereof, signed by the person entitled to notice, whether before or after
the time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting or by proxy, if a stockholder, at any meeting, shall
constitute a waiver of notice of such meeting, except when such person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
-18-
<PAGE>
ARTICLE IX
Checks, Notes, Drafts, Contracts, Etc.
SECTION 1. Checks, Notes, Drafts, Etc. All checks, notes,
drafts or other orders for the payment of money of the Corporation shall be
signed, endorsed or accepted in the name of the Corporation by such officer,
officers, person or persons as from time to time may be designated by the Board
of Directors or by an officer or officers authorized by the Board of Directors
to make such designation.
SECTION 2. Execution of Contracts, Deeds, Etc. The Board of
Directors may authorize any officer or officers, agent or agents, in the name
and on behalf of the Corporation to enter into or execute and deliver any and
all deeds, bonds, mortgages, contracts and other obligations or instruments, and
such authority may be general or confined to specific instances.
ARTICLE X
Amendments
SECTION 1. Directors May Amend By-Laws. The Board of Directors
shall have power to make, amend, and repeal the By-laws of the Corporation, at
any regular or special meeting of the Board.
SECTION 2. By-Laws Subject to Amendment by Stockholders.
By-laws made by the Board of Directors may be
-19-
<PAGE>
repealed or changed, and new By-laws made, by the stockholders at any annual or
special meeting of the stockholders, and the stockholders may prescribe that any
By-laws made by them shall not be altered, amended or repealed by the Board of
Directors.
ARTICLE XI
Indemnification
SECTION 1. Indemnification. (a) The Corporation shall
indemnify, subject to the requirements of subsection (c) of this Section, any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; except that, as to any
threatened, pending or completed action or suit by or in the right of the
-20-
<PAGE>
Corporation, such indemnification shall be limited to expenses (including
attorneys' fees) actually and reasonably incurred in connection with the defense
or settlement of the case and, in respect of any claim, issue or matter as to
which such person shall have been adjudged in any such action or suit to be
liable to the Corporation shall not be made without court approval.
(b) To the extent that a director, officer, employee or agent
of the Corporation, or a person serving in any other enterprise at the request
of the Corporation, has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsection (a) of this Section, or
in defense of any claim, issue or matter therein, the Corporation shall
indemnify him against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(c) Any indemnification under subsection (a) of this Section
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that the director, officer, employee
or agent has met the applicable standard of conduct set forth in subsection (a)
of this Section. The determination shall be made in all cases, (1) by the Board
of Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or even if obtainable a quorum of disinterested
-21-
<PAGE>
directors so directs, by independent legal counsel in a written opinion. Such
person(s) shall make the determination within ninety days of the time the
Corporation receives notice that a claim has been made or suit has been
instituted against a director, officer, employee or agent; provided, however,
that if the director, officer, employee or agent is found liable to the
Corporation in any action or suit by or in the right of the Corporation, the
determination shall be made, but no payment in the nature of indemnification
shall be awarded without court approval.
(d) The Corporation shall pay in advance of the final
disposition of a civil or criminal action, suit or proceeding expenses incurred
by a director, officer, employee or agent in defending such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent that he shall repay such amount in the event that it
is ultimately determined pursuant to paragraph (c) that he is not entitled to be
indemnified by the Corporation.
(e) The indemnification and advancement of expenses provided
by or granted pursuant to the other subsections of this Section shall not
prevent the Corporation from providing any other indemnification or advancement
of expenses permitted by law nor shall it be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
-22-
<PAGE>
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent, and shall
inure to the benefit of the heirs, executors and administrators of such a
person. The Corporation is expressly authorized to enter into agreements
obligating the Corporation to indemnify any of its present and former directors
and officers and present and former directors and officers of the Corporation's
subsidiaries against any expenses incurred in connection with any claim,
proceeding, hearing or legal action by reason of the fact that he is or was a
director or officer, and against any judgments, fines, and amounts paid in
settlement in connection with any such claims, proceedings, hearings or legal
actions (other than in the right of the Corporation), without regard to whether
a determination has been made by anyone that the person indemnified has met any
standard of conduct, and without any obligation on the part of the person
indemnified to reimburse the Corporation.
(f) For the purposes of this Section, references to "the
Corporation" include all constituent corporations absorbed in a consolidation or
merger as well as the resulting or surviving corporation so that any person who
is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such
-23-
<PAGE>
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise shall stand
in the same position under the provisions of this section with respect to the
resulting or surviving corporation as he would if he had served the resulting or
surviving corporation in the same capacity.
-24-
EX.10A
INDEMNITY AGREEMENT
This agreement ("Agreement") is made this day of
, 1987 by and between POCONO HOTELS CORPORATION, a
Delaware corporation (the "Company") and ("Indemnitee").
W I T N E S S E T H:
WHEREAS, the Company has determined that it is in the best
interests of the Company and the stockholders to retain and attract the services
of qualified individuals such as Indemnitee to serve as a director or officer of
the Company and, thus, that it is in the best interests of the Company and the
stockholders to enter into a contract to indemnify each director and officer of
the Company so as to provide them with appropriate protection from the payment
of expenses and from certain liabilities arising from their status as a director
or officer.
Section 1. Indemnification. Subject to the provisions of
Section 2, the Company shall indemnify Indemnitee against all expenses,
judgments, fines, excise taxes, and amounts paid in settlement actually and
reasonably incurred in any threatened, pending or completed action, proceeding,
hearing or suit, whether civil, criminal, administrative or investigative
("Action") brought or threatened to be brought against Indemnitee by reason of
the fact that he is or was a director, officer, employee or agent of the Company
or of a subsidiary of the Company, or is or was serving at the request of the
Company or a subsidiary as a director, officer, employee or agent of any other
corporation, partnership, joint venture, trust or other enterprise, except that
in any such Action by or in the right of the Company (a "Derivative Suit"),
indemnification shall be limited to expenses actually and reasonably incurred in
connection with such Action. For purposes of this Agreement, expenses shall
include, without limitation, attorneys' fees and expenses and Indemnitee's
travel expenses attributable to his participation in and attendance at any
deposition, hearing or trial.
Section 2. Standard of Care Determination.
(a) Indemnitee shall be entitled to the indemnification
provided under Section 1 if a determination has been made in the specific case
in the manner set forth in paragraph (b) below that Indemnitee acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Company.
(b) The determination required in paragraph (a) shall be made
within ninety days after the date the Company receives written notice from
Indemnitee that an Action has been threatened or instituted against him setting
forth information about the Action, and shall be made:
<PAGE>
(i) by the Board of Directors, by a vote of a
majority of directors who are not parties or threatened to be made parties to
such Action (even though such directors be less than a quorum) unless Indemnitee
requests in the written notice that the determination be made by independent
legal counsel pursuant to subparagraph (ii) below; or
(ii) by independent legal counsel (who shall be
reasonably satisfactory to the Company and Indemnitee) in a written opinion (a)
if the claim is made against Indemnitee as a director and all of the directors
are parties or are threatened to be made parties to the Action; or (b) if
Indemnitee so requests.
Section 3. Cooperation. The Company shall give Indemnitee a
reasonable opportunity to appear before and present evidence to the person or
group making the determination contemplated by Section 2(b) to provide a basis
for the determination that Indemnitee acted in accordance with the standards
required by Section 2(a). In addition, Indemnitee shall promptly forward to the
Company a copy of every demand, notice, summons or process received by him or
his representative (but the failure to do so shall not affect Indemnitee's right
to payment hereunder). Indemnitee shall cooperate with the Company and, when
requested, shall appear at all hearings, trials and depositions and give
evidence.
Section 4. Advancement of Expenses. The Company shall pay, in
advance of the final disposition of any Action, or, if earlier, until the
determination contemplated by Section 2(b) is made, all of the expenses actually
and reasonably incurred by Indemnitee in defending such Action. Indemnitee
hereby undertakes to repay such amounts if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified by the Company pursuant to
this Agreement. No determination pursuant to Section 2 shall be a prerequisite
to any advancement of expenses, and any obligation of the Indemnitee to repay an
advancement under this Section shall terminate when an approving determination
shall have been made pursuant to Section 2.
Section 5. Counsel to Indemnitee. In each Action in which the
Company is required hereunder to indemnify or make advancement of expenses to
Indemnitee, the Company shall have the right to select counsel for Indemnitee
(who may also act as counsel to other persons against whom an action may be
threatened or commenced), experienced in such matters who shall be reasonably
satisfactory to Indemnitee. If counsel so selected shall determine that
Indemnitee should have separate counsel, the Company shall similarly select such
new counsel. In any event, however, Indemnitee may in addition select counsel of
his choice in an Action, but if the Company has provided counsel as provided
<PAGE>
in this section, the cost of any separate counsel shall be borne
exclusively by Indemnitee.
Section 6. Success on the Merits. To the extent that
Indemnitee is successful on the merits or otherwise in defense of any Action or
in defense of any claim, issue or matter therein, Indemnitee shall be presumed
to have acted in good faith and in the best interests of the Company, and shall
be indemnified against expenses actually and reasonably incurred by him in
connection therewith.
Section 7. Costs of Acting as a Witness. The Company shall pay
the expenses incurred by Indemnitee, including attorney's fees and travel and
other expenses that are attributable to Indemnitee's acting as a witness in any
action by reason of the fact that he is or was a director or officer of the
Company or a subsidiary of the Company. If so requested by Indemnitee, the
Company shall select counsel for Indemnitee (who shall be experienced in such
matters and reasonably satisfactory to Indemnitee) to represent Indemnitee in
connection with any such proceeding. The fees and disbursements of any attorney
so selected shall be paid directly by the Company.
Section 8. Payment. Any amounts to which Indemnitee becomes
entitled under Sections 1, 4, 6 and 7 of this Agreement shall be paid by the
Company within thirty days after the date a demand is made upon the Company by
Indemnitee, which demand shall be accompanied by bills and a reasonable
itemization of expenses. The fees and disbursements of counsel selected by the
Company as provided in Section 4 shall be deemed to have been reasonably
incurred by Indemnitee and entitled to be paid or reimbursed under this
Agreement, and the Company shall not be entitled to object to the reasonableness
of any such fees or disbursements. It shall not be necessary for Indemnitee
actually to have paid such expenses to be entitled to reimbursement hereunder
and any expenses not actually paid by the Indemnitee may, at the option of the
Company, be paid directly to the person to whom such amounts are owed.
Section 9. Binding Effect. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties, the Company and its
successors, and the heirs, administrators, executors and estate of the
Indemnitee. This Agreement shall continue in effect notwithstanding the fact
that Indemnitee is not a director or officer of the Company at the time an
Action is threatened or commenced or when a claim is made hereunder.
Section 10. Termination. This contract shall be terminable by
the Company by giving written notice to Indemnitee at least 12 months prior to
the termination date specified therein at the address set forth below (or such
other address as Indemnitee shall provide to the Company by written notice to it
<PAGE>
at its principal corporate offices). Notwithstanding any such termination, the
rights of Indemnitee hereunder with respect to advancement of expenses and
indemnification in connection with any Action involving circumstances, acts or
omissions taking place prior to the date of termination shall remain in full
force and effect. This Agreement supersedes any other written agreement between
the Company and Indemnitee as to the indemnification of Indemnitee as an officer
or director of the Company.
Section 11. Severability. If any portion of this Agreement is
found to be unenforceable as contrary to law or public policy, such portion
shall be severable and the remaining portions of this Agreement shall remain in
full force and effect.
Section 12. Non-Exclusivity. The rights of Indemnitee
under this Agreement shall be in addition to any rights to which
he may be entitled under the laws of the state of incorporation
of the Company.
Section 13. Governing Law. This Agreement shall be
governed by, and interpreted and applied in accordance with, the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto set their hands and
seal this day of , 1987.
POCONO HOTELS CORPORATION
- --------------------------- ----------------------------------
Indemnitee Chairman of the Board of Directors
The address of the Indemnitee is:
- ---------------------------
- ---------------------------
AIA Document A101
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND CONTRACTOR
where the basis of payment is a
STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES;
CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO
ITS COMPLETION OR MODIFICATION.
The 1987 Edition of AIA Document A201, General Conditions of the Contract
for Construction, is adopted in this document by reference. Do not use with
other general conditions unless this document is modified.
This document has been approved and endorsed by The Associated General
Contractors of America.
AGREEMENT
made as of the Twenty Seventh day of November in the year of Nineteen Hundred
and Eighty Nine
BETWEEN the Owner: Skytop Development Corporation
(Name and address) P.O. Box 14
Skytop, PA 18357
and the Contractor: Zaveta Construction, Inc.
(Name and address) 4030 Sky Run Suite H
Doylestown, PA 18901
The Project is: Skytop Meadow Clustered Homes
(Name and location) Route 390
Skytop, PA 18357
The Architect is: George J. Donovan A.I.A. & Associates
(Name and address) Suite 113/ 350 S. Main St.
Doylestown, PA 18901
The Owner and Contractor agree as set forth below.
<PAGE>
ARTICLE 1
THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications, Addenda
issued prior to execution of this Agreement, other documents listed in this
Agreement and Modifications issued after execution of this Agreement; these form
the Contract, and are as fully a part of the Contract as if attached to this
Agreement or repeated herein. The contract represents the entire and integrated
agreement between the parties hereto and supersedes prior negotiations,
representations or agreements, either written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article 9.
ARTICLE 2
THE WORK OF THIS CONTRACT
The Contractor shall execute the entire Work described in the Contract
Documents, except to the extent specifically indicated in the Contract Documents
to be the responsibility of others, or as follows:
Site Improvements to be constructed by others; supervision and coordination to
be part of this Contract at no additional cost.
This Contract is for 14 units of Phase I only, with the provision that, if the
five remaining units of Phase I are constructed as a continuation of Phase I the
unit price of $155,176.00 shall be the cost for these units. The Contract will
be amended to include the work associated with Phase II.
The General Construction Work described is for a fixed cost as outlined, with no
contingencies.
ARTICLE 3
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
3.1 The date of commencement is the date from which the Contract Time of
Paragraph 3.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)
The date of commencement will be immediately upon signing of this agreement.
Unless the date of commencement is established by a notice to proceed issued by
the Owner, the Contractor shall notify the Owner in writing not less than five
days before commencing the Work to permit the timely filing of mortgages,
mechanic's liens and other security interests.
-2-
<PAGE>
3.2 The Contractor shall achieve Substantial Completion of the entire Work
not later than
(Insert the calendar date or number of calendar days after the date of
commencement. Also insert any requirements for earlier Substantial Completion of
certain portions of the Work, if not stated elsewhere in the Contract
Documents.)
Phase I to be completed within twelve months with an additional two and one half
(2-1/2) month allowance for weather.
, subject to adjustments of this Contract Time as provided in the Contract
Documents.
(Insert provisions, if any, for liquidated damages relating to failure to
complete one time.)
ARTICLE 4
CONTRACT SUM
4.1 The Owner shall pay the Contractor in current funds for the Contractor's
performance of the Contract the Contract Sum of Two Million One Hundred Seventy
Two Thousand Four Hundred Sixty Four Dollars ($2,172,464.00 (14 units of Phase
I)), subject to additions and deductions as provided in the Contract Documents.
4.2 The Contract Sum is based upon the following separate prices, if any, which
are described in the Contract Documents and are hereby accepted by the Owner:
(State the numbers or other identification of accepted alternates. If decisions
or other alternates are to made by the Owner subsequent to the execution of this
Agreement, attach a schedule of such other alternates showing the amount of each
and the date noted which that amount is valid.)
If the Owner proceeds with construction of the balance of Phase I, the Contract
sum will be increased by $775,880.00 ($155,176.00 per unit for five units).
If the Owner proceeds with construction of Phase II, the construction sum for
Phase II will be established and mutually agreeable by both parties.
4.3 Unit prices, if any, as follows:
1. Additional masonry work to accommodate Walk Out Basement as determined
in field to be Four Thousand Dollars ($4,000.00) per unit.
ARTICLE 5
PROGRESS PAYMENTS
5.1 Based upon Applications for Payment submitted to the Architect by the
Contractor and Certificates for Payment issued by the Architect, the Owner shall
make progress payments on account of the Contract Sum to the Contractor as
provided below and elsewhere in the Contract Documents.
5.2 The period covered by each Application for Payment shall be one calendar
month ending on the last day of the month, or as follows:
The Thirty Day Period may be adjusted to reflect the actual starting date.
5.3 Provided an Application for Payment is received by the Architect not later
than the twenty fifth day of a month, the Owner shall make payment to the
Contractor not later than the tenth day of the next month. If an Application for
Payment is received by the Architect after the application date fixed above,
payment shall be made by the Owner not later than thirty days after the
Architect receives the Application for Payment.
-3-
<PAGE>
5.4 Each Application for Payment shall be based upon the Schedule of Values
submitted by the Contractor in accordance with the Contract Documents. The
Schedule of Values shall allocate the entire Contract Sum amongst the various
portions of the Work and be prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This Schedule, unless
objected to by the Architect, shall be used as a basis for reviewing the
Contractor's Applications for Payment.
5.5 Applications for Payment shall indicate the percentage of completion of each
portion of the Work as of the end of the period covered by the Application for
Payment.
5.6 Subject to the provisions of the Contract Documents, the amount of each
progress payment shall be computed as follows:
5.6.1 Take that portion of the Contract Sum properly allocable to completed Work
as determined by multiplying the percentage completion of each portion of the
Work by the share of the total Contract Sum allocated to that portion of the
Work in the Schedule of Values, less retainage of ten percent (10%). Pending
final determination of cost to the Owner of changes in the Work, amounts not in
dispute may be included as provided in Subparagraph 7.3.7 of the General
Conditions even though the Contract Sum has not yet been adjusted by Change
Order;
5.6.2 Add that portion of the Contract Sum properly allocable to materials and
equipment delivered and suitably stored at the site for subsequent incorporation
in the completed construction (or, if approved in advance by the Owner, suitably
stored off the site at a location agreed upon in writing), less retainage of ten
percent (10%);
5.6.3 Subtract the aggregate of previous payments made by the Owner; and
5.6.4 Subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for Payment as provided in Paragraph 9.5 of the General
Conditions.
5.7 The progress payment amount determined in accordance with Paragraph 5.6
shall be further modified under the following circumstances:
5.7.1 Add, upon Substantial Completion of the Work, a sum sufficient to increase
the total payments to one hundred percent (100%) of the Contract Sum, less such
amounts as the Architect shall determine for incomplete Work and unsettled
claims; and
5.7.2 Add, if final completion of the Work is thereafter materially delayed
through no fault of the Contractor, any additional amounts payable in accordance
with Subparagraph 9.10.3 of the General Conditions.
5.8 Reduction or limitation of retainage, if any, shall be as follows:
(If it is intended, prior to Substantial Completion of the entire Work, to
reduce or limit the retainage resulting from the percentages inserted in
Subparagraphs 5.6.1 and 5.6.2 above, and this is not explained elsewhere in the
Contract Documents, insert here provisions for such reduction or limitation.)
When project is fifty percent (50%) complete, retainage shall be reduced to five
percent (5%) until completion.
-4-
<PAGE>
ARTICLE 6
FINAL PAYMENT
Final payment, constituting the entire unpaid balance of the Contract Sum, shall
be made by the Owner to the Contractor when (1) the Contract has been fully
performed by the Contractor except for the Contractor's responsibility to
correct nonconforming Work as provided in Subparagraph 12.2.2 of the General
Conditions and to satisfy other requirements, if any, which necessarily survive
final payment; and (2) a final Certificate for Payment has been issued by the
Architect; such final payment shall be made by the Owner not more than 30 days
after the issuance of the Architect's final Certificate for Payment, or as
follows:
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Contract Document, the reference refers to that provision
as amended or supplemented by other provisions of the Contract Documents.
7.2 Payments due and unpaid under the Contract shall bear interest from the date
payment is due at the rate stated below, or in the absence thereof, at the legal
rate prevailing from time to time at the place where the Project is located.
(Insert rate of interest agreed upon, if any)
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations of the Owner's and
Contractor's principal places of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
7.3 Other provisions:
If the Owner delays the commencement of Phase II beyond the Completion Date of
Phase I, the contract sum for Phase II shall be established to reflect increases
in material and labor costs.
-5-
<PAGE>
ARTICLE 8
TERMINATION OR SUSPENSION
8.1 The Contract may be terminated by the Owner or the Contractor as provided in
Article 14 of the General Conditions.
8.2 The Work may be suspended by the Owner as provided in Article 14 of the
General Conditions.
ARTICLE 9
ENUMERATION OF CONTRACT DOCUMENTS
9.1 The Contract Documents, except for Modifications issued after execution of
this Agreement, are enumerated as follows:
9.1.1 The Agreement is this executed Standard Form of Agreement Between Owner
and Contractor, AIA Document A101, 1987 Edition.
9.1.2 The General Conditions are the General Conditions of the Contract for
Construction, AIA Document A201, 1987 Edition.
9.1.3 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated May 1989
, and are as follows:
Document Title Pages
Division I General Requirements 3
9.1.4 The Specifications are those contained in the Project Manual dated as in
Subparagraph 9.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement.)
Section Title Pages
Division 2 Sitework 3
Division 3 Concrete 2
Division 4 Masonry 6
Division 5 Metals 2
Division 6 Carpentry 9
Division 7 Moisture Protection 9
Division 8 Doors, Windows & Glass 1
Division 9 Finishes 4
Division 10 Specialties 1
Division 11 Equipment 1
Division 12 Special Construction 1
Division 15 Mechanical 1
Division 16 Electrical 1
-6-
<PAGE>
9.1.5 The Drawings are as follows, and are dated 15 May 1989 unless a different
date.
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)
<TABLE>
<CAPTION>
Number Title
<S> <C>
A-1 FOUNDATION/BASEMENT PLAN
A-2 FIRST FLOOR PLAN: Unit A-1LH, B,A-1RH
A-3 FIRST FLOOR PLAN: Unit A-2LH, B-3 Bedroom One
& A-1RH
A-4 SECOND FLOOR PLAN: Unit A-1LH, B,A-2RH
A-5 SECOND FLOOR PLAN: Unit A-2LH, B-3 Bedroom
& A-1RH
A-6 ELEVATIONS
A-7 SIDE ELEVATIONS
A-8 BUILDING SECTIONS & DETAILS: Unit A
A-9 BUILDING SECTIONS & DETAILS: Unit B
A-10 WALL SECTIONS
A-11 DETAILS
A-12, 12A, 12B FRAMING PLANS
A-13 ROOF FRAMING PLAN
A-14 SCHEDULES
A-15 FOUNDATION/BASEMENT PLAN: 2 Units
A-16 FIRST FLOOR PLAN: 2 Unit Building
A-17 SECOND FLOOR PLAN: 2 Unit Building
A-18 FRONT & REAR ELEVATIONS: 2 Unit Building
A-19 SIDE ELEVATIONS: 2 Unit Building
A-20 FRAMING PLANS: 2 Unit Building
A-21 WALK-OUT BASEMENT OPTION: Unit #S15
E-1 ELECTRICAL PLANS
E-2 ELECTRICAL PLANS: 2 Unit Building
</TABLE>
9.1.6 The Addenda, if any, are as follows:
Number Date
1 1 June 1989
Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 9.
9.1.7 Other documents, if any, forming part of the Contract Documents are as
follows:
(List here any additional documents which are intended to form part of the
Contract Documents. The General Conditions provide that bidding requirements
such as advertisement or invitation to bid, Instructions to Bidders, sample
forms and the Contractor's bid are not part of the Contract Documents unless
enumerated in this Agreement. They should be listed here only if intended to be
part of the Contract Documents.)
Proposal submitted by Zaveta Construction Co., Inc. dated July 14, 1989.
-7-
<PAGE>
This Agreement is entered into as of the day and year first written above and is
executed in at least three original copies of which one is to be delivered to
the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.
<TABLE>
<S> <C>
OWNER CONTRACTOR
/s/ Gardner Cummingham, Chairman /s/ Richard D. Zaveta, Jr., President
- --------------------------------- -------------------------------------
(Signature) (Signature)
Gardner Cunningham, Chairman Richard D. Zaveta, Jr., President
Skytop Development Corporation Zaveta Construction Co., Inc.
- --------------------------------- --------------------------------------
(Printed name and title) (Printed name and title)
</TABLE>
-8-
<PAGE>
AIA Document A101
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND CONTRACTOR
where the basis of payment is a
STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES;
CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO
ITS COMPLETION OR MODIFICATION.
The 1987 Edition of AIA Document A201, General Conditions of the Contract
for Construction, is adopted in this document by reference. Do not use with
other general conditions unless this document is modified.
This document has been approved and endorsed by The Associated General
Contractors of America.
AGREEMENT
made as of the Twenty Seventh day of November in the year of Nineteen Hundred
and Eighty Nine
BETWEEN the Owner: Skytop Development Corporation
(Name and address) P.O. Box 14
Skytop, PA 18357
and the Contractor: Russell Lindsay Excavating
(Name and address) RD 6, Box 6484
Moscow, PA 18444
The Project is: Skytop Meadow Clustered Homes
(Name and location) Route 390
Skytop, PA 18357
The Engineer is: Gilmore and Associates
(Name and address) 331 Butler Avenue
New Britain, PA 18901
The Owner and Contractor agree as set forth below.
<PAGE>
ARTICLE 1
THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications, Addenda
issued prior to execution of this Agreement, other documents listed in this
Agreement and Modifications issued after execution of this Agreement; these form
the Contract, and are as fully a part of the Contract as if attached to this
Agreement or repeated herein. The contract represents the entire and integrated
agreement between the parties hereto and supersedes prior negotiations,
representations or agreements, either written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article 9.
ARTICLE 2
THE WORK OF THIS CONTRACT
The Contractor shall execute the entire Work described in the Contract
Documents, except to the extent specifically indicated in the Contract Documents
to be the responsibility of others, or as follows:
Site improvements to be constructed by this Contractor; supervision and
coordination to be performed by Zaveta Construction.
The Work consists of all site improvements as indicated on Drawings prepared by
Gilmore and Associates, including the following: on site sewer system, off site
sewer system, on site water system, off site water system, storm sewer system,
cut and fill grades road base and paving, excavation and back fill for units,
utilities, retaining walls and pump station.
The work of this Contract includes all foundation excavation and backfill for
forty units. Payment for this work to be based on the number of units
constructed in each phase at a cost of $2330.00/unit.
ARTICLE 3
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
3.1 The date of commencement is the date from which the Contract Time of
Paragraph 3.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)
The Date of Commencement will be immediately upon signing this Agreement.
Unless the date of commencement is established by a notice to proceed issued by
the Owner, the Contractor shall notify the Owner in writing not less than five
days before commencing the Work to permit the timely filing of mortgages,
mechanic's liens and other security interests.
3.2 The Contractor shall achieve Substantial Completion of the entire Work
not later than
(Insert the calendar date or number of calendar days after the date of
commencement. Also insert any requirements for earlier Substantial Completion of
certain portions of the Work, if not stated elsewhere in the Contract
Documents.)
-2-
<PAGE>
Phase I to be completed within twelve months with an additional two and one-half
(2-1/2) month allowance for weather, subject to adjustments of this Contract
Document.
(Insert provisions, if any, for liquidated damages relating to failure to
complete one time.)
ARTICLE 4
CONTRACT SUM
4.1 The Owner shall pay the Contractor in current funds for the Contractor's
performance of the Contract the Contract Sum of Six Hundred Sixty Two Thousand
Dollars ($662,000.00), subject to additions and deductions as provided in the
Contract Documents.
4.2 The Contract Sum is based upon the following separate prices, if any, which
are described in the Contract Documents and are hereby accepted by the Owner:
(see attached Exhibit A)
(State the numbers or other identification of accepted alternates. If decisions
or other alternates are to made by the Owner subsequent to the execution of
this Agreement, attach a schedule of such other alternates showing the amount
of each and the date noted which that amount is vested.)
On Site Sewer $55,220.00
Off Site Sewer 38,593.00
On Site Water 73,347.00
Off Site Water 46,342.00
Storm Sewer 58,913.00
Cut Fill Grade 84,843.00
Road Base $51,542.00
Paving Allowance 70,000.00
Unit Excavating &
Back Fill 93,200.00 (2330/unit)
Utilities Allowance 25,000.00
Retaining Walls #15 & 16 10,000.00
Pump Station 45,000.00
Hydro Seeding 10,000.00
Total: $662,000.00
4.3 Unit prices, if any, as follows:
Quantity Cost of Removal
100 cu. yds. or less $45.00/cu. yd.
100 cu. to 1000 cu. yds. $35.00/cu. yd.
over 1000 cu. yd. $26.00/cu. yd.
ARTICLE 5
PROGRESS PAYMENTS
5.1 Based upon Applications for Payment submitted to the Architect by the
Contractor and Certificates for Payment issued by the Architect, the Owner shall
make progress payments on account of the Contract Sum to the Contractor as
provided below and elsewhere in the Contract Documents.
5.2 The period covered by each Application for Payment shall be one calendar
month ending on the last day of the month, or as follows:
(See attached Exhibit A)
5.3 Provided an Application for Payment is received by the Architect not later
than the twenty fifth day of a month, the Owner shall make payment to the
Contractor not later than the tenth day of the next month. If an Application for
Payment is received by the Architect after the application date fixed above,
payment shall be made by the Owner not later than thirty days after the
Architect receives the Application for Payment.
-3-
<PAGE>
5.4 Each Application for Payment shall be based upon the Schedule of Values
submitted by the Contractor in accordance with the Contract Documents. The
Schedule of Values shall allocate the entire Contract Sum amongst the various
portions of the Work and be prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This Schedule, unless
objected to by the Architect, shall be used as a basis for reviewing the
Contractor's Applications for Payment.
5.5 Applications for Payment shall indicate the percentage of completion of each
portion of the Work as of the end of the period covered by the Application for
Payment.
5.6 Subject to the provisions of the Contract Documents, the amount of each
progress payment shall be computed as follows:
5.6.1 Take that portion of the Contract Sum properly allocable to completed Work
as determined by multiplying the percentage completion of each portion of the
Work by the share of the total Contract Sum allocated to that portion of the
Work in the Schedule of Values, less retainage of ten percent (10%). Pending
final determination of cost to the Owner of changes in the Work, amounts not in
dispute may be included as provided in Subparagraph 7.3.7 of the General
Conditions even through the Contract Sum has not yet been adjusted by Change
Order;
5.6.2 Add that portion of the Contract Sum properly allocable to materials and
equipment delivered and suitably stored at the site for subsequent incorporation
in the completed construction (or, if approved in advance by the Owner, suitably
stored off the site at a location agreed upon in writing), less retainage of ten
percent (10%);
5.6.3 Subtract the aggregate of previous payments made by the Owner; and
5.6.4 Subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for Payment as provided in Paragraph 9.5 of the General
Conditions.
5.7 The progress payment amount determined in accordance with Paragraph 5.6
shall be further modified under the following circumstances:
5.7.1 Add, upon Substantial Completion of the Work, a sum sufficient to increase
the total payments to one hundred percent (100%) of the Contract Sum, less such
amounts as the Architect shall determine for incomplete Work and unsettled
claims; and
5.7.2 Add, if final completion of the Work is thereafter materially delayed
through no fault of the Contractor, any additional amounts payable in accordance
with Subparagraph 9.10.3 of the General Conditions.
5.8 Reduction or limitation of retainage, if any, shall be as follows:
(If it is intended, prior to Substantial Completion of the entire Work, to
reduce or limit the retainage resulting from the percentages inserted in
Subparagraphs 5.6.1 and 5.6.2 above, and this is not explained elsewhere in the
Contract Documents, insert here provisions for such reduction or limitation.)
When project is fifty percent (50%) complete, retainage shall be reduced to five
percent (5%) until completion (see attached Exhibit A)
-4-
<PAGE>
ARTICLE 6
FINAL PAYMENT
Final payment, constituting the entire unpaid balance of the Contract Sum, shall
be made by the Owner to the Contractor when (1) the Contract has been fully
performed by the Contractor except for the Contractor's responsibility to
correct nonconforming Work as provided in Subparagraph 12.2.2 of the General
Conditions and to satisfy other requirements, if any, which necessarily survive
final payment; and (2) a final Certificate for Payment has been issued by the
Architect; such final payment shall be made by the Owner not more than 30 days
after the issuance of the Architect's final Certificate for Payment, or as
follows:
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Contract Document, the reference refers to that provision
as amended or supplemented by other provisions of the Contract Documents.
7.2 Payments due and unpaid under the Contract shall bear interest from the date
payment is due at the rate stated below, or in the absence thereof, at the legal
rate prevailing from time to time at the place where the Project is located.
(Insert rate of interest agreed upon, if any)
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations of the Owner's and
Contractor's principal places of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
7.3 Other provisions:
If the Owner delays the commencement of Phase II beyond the Completion Date of
Phase I, the contract sum for Phase II shall be renegotiated to reflect
increases in material and labor costs.
-5-
<PAGE>
ARTICLE 8
TERMINATION OR SUSPENSION
8.1 The Contract may be terminated by the Owner or the Contractor as provided in
Article 14 of the General Conditions.
8.2 The Work may be suspended by the Owner as provided in Article 14 of the
General Conditions.
ARTICLE 9
ENUMERATION OF CONTRACT DOCUMENTS
9.1 The Contract Documents, except for Modifications issued after execution of
this Agreement, are enumerated as follows:
9.1.1 The Agreement is this executed Standard Form of Agreement Between Owner
and Contractor, AIA Document A101, 1987 Edition.
9.1.2 The General Conditions are the General Conditions of the Contract for
Construction, AIA Document A201, 1987 Edition.
9.1.3 The Supplementary and other Conditions of the Contract are those contained
in the Project Manual dated May 1989, and are as follows:
Document Title Pages
Division I General Requirements 3
9.1.4 The Specifications are those contained in the Project Manual dated as in
Subparagraph 9.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement.)
Section Title Pages
Division Sitework 3
-6-
<PAGE>
9.1.5 The Drawings are as follows, and are dated unless a different
date.
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)
<TABLE>
<CAPTION>
Number Title Date
<S> <C> <C>
1 RECORD PLAN
2 EXISTING FEATURES PLAN
3 GRADING AND DRAINAGE PLAN
4 SEDIMENTATION AND EROSION CONTROL PLAN
5 PLAN AND PROFILE (STA 0 + 00 to STA 15 + 48.17)
6 UTILITY PLAN
7 STORM SEWER PROFILES
8 SANITARY SEWER PROFILES
9 SANITARY SEWER PLAN AND PROFILE - OFFSITE
(STA 0 + 00 to STA 15 + 50)
10 SANITARY SEWER PLAN AND PROFILE
11 WATER PLAN AND PROFILE - OFFSITE
12 STANDARD CONSTRUCTION DETAILS
13 STANDARD CONSTRUCTION DETAILS
14 UTILITY CONSTRUCTION DETAILS (WATER)
15 UTILITY CONSTRUCTION DETAILS (SANITARY SEWER)
1 DRAINAGE AREA BOUNDARY PLAN
</TABLE>
9.1.6 The Addenda, if any, are as follows:
<TABLE>
<CAPTION>
Number Date Pages
<S> <C> <C>
1 1 June 1989 3
2 22 September 1989 4
</TABLE>
Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 9.
-7-
<PAGE>
9.1.7 Other documents, if any, forming part of the Contract Documents are as
follows:
(List here any additional documents which are intended to form part of the
Contract Documents. The General Conditions provide that bidding requirements
such as advertisement or instructions to bid, instructions to Bidders, sample
forms and the Contractor's bid are not part of the Contract Documents unless
enumerated in this Agreement. They should be listed here only if intended to be
part of the Contract Documents.)
Proposal submitted by Russell Lindsay Excavating.
This Agreement is entered into as of the day and year first written above and is
executed in at least three original copies of which one is to be delivered to
the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.
OWNER CONTRACTOR
/s/ Gardner Cunningham /s/ Russell Lindsay
- ------------------------------- --------------------------
(Signature) (Signature)
Gardner Cunningham, Chairman
Skytop Development Corporation Russel Lindsay, Excavating
- ------------------------------- --------------------------
(Printed name and title) (Printed name and title)
-8-
<PAGE>
EXHIBIT "A"
ARTICLE 4
CONTRACT SUM
<TABLE>
<S> <C> <C> <C>
4.2A * ON SITE SEWER - TOTAL PRICE: $55,220.00
includes: Installation of 6" sewer line for laterals
1,395' (ft) of 6" pipe
490' (ft) of 4" pipe
Installation of 12 - 8x8x6" tee's.
Installation of 31 - 6x6x4" tee's.
Installation of 1,970' (ft) of 8" sewer line.
Installation of 12 manholes.
Installation of 4" force sewer main from pump station to
manhole #13.
Total footage to end of development - 1,100'
* OFF SITE SEWER - TOTAL PRICE: $38,593.00
includes: Installation of sewer line and manholes starting at #13 to
#23.
This includes 11 manholes and 1,025' (ft) of 8" pipe.
Total footage from outside development to manhole #13 -
1,695' (ft)
* ON SITE WATER - TOTAL PRICE: $73,347.00
includes: Installation of 1,120' (ft) of 6" dip.
Installation of 1,600' (ft) of 4" dip.
Installation of 2,800' (ft) of 3/4 K copper.
does not include water meters for houses.
* OFF SITE WATER - TOTAL PRICE: $46,342.00
includes: Installation of 2,750' (ft) of 6" dip outside development.
Final Grade - No Seed.
Installation of 2 fire hydrants.
* STORM SEWER - TOTAL PRICE: $58,913.00
includes: Installation of 1,455' (ft) of 18" concrete pipe
Installation of 135' (ft) of 24" concrete pipe
Installation of 15' (ft) of 30" concrete pipe
Installation of 15 catch basins with bike safe grates @
$700.00 each.
Installation of 1 endwall.
Installation of 2 energy dissipators.
Installation of 21-20' (ft) 12" CMP with shield.
* CUT FILL GRADE - TOTAL PRICE: $84,843.00
includes: The Cutting of Roads.
Silt Screens and Hay Bales for Soil Erosion Control.
The Moving of Fill and The Compacting of Required Areas on
Site.
Does not include The Hauling Away of Excess Material.
-9-
<PAGE>
* ROAD BASE - TOTAL PRICE: $51,542.00
*** Using shale provided by Skytop Lodge's Pit, the sum of $30,000.00
was deducted from the previous total of $81,542.00, making a new
total of $51,542.00.
includes: Labor and Machine Work for the Installation of Roads and
Driveways.
* PAVING - ALLOWANCE OF $70,000.00
* UNIT EXCAVATION & BACKFILL - TOTAL PRICE: $93,200.00
includes: Excavation for Units.
Installation of 4" stone under concrete slab (2B).
Drain Title - includes 50' (ft) of drain pipe away from
each unit.
Backfill.
Final Grade around each U nit
prices: 12 - triple units @ 6,900 each
2 - double units @ 5,200 each
* UTILITIES - ALLOWANCE OF $25,000.00
** The sum of $25,000.00 is an allowance for the excavation and
backfilling for power lines, "only". The price is based on $5.00
per foot.
* RETAINING WALLS - ALLOWANCE $10,000.00
* PUMP STATION - ALLOWANCE $55,000.00
** Due to Engineer Spec's. **
* SEEDING - NO MONEY IS REFLECTED IN THE CONTRACT PRICE
** Temporary Seeding, if needed for soil erosion, is the financial
responsibility of Skytop Meadows. **
</TABLE>
4.2B DEFINITION
The definitions in this section are incorporated and made a part
of this Contract and shall be applicable to the interpretation of this Contract,
more specifically Article 4, et. seq.
<TABLE>
<S> <C>
Allowance - "Allowance" whenever used in this Contract shall mean that
- ---------
figure arrived at, upon execution of this Agreement, which
represents an incomplete calculation and is subject to
change by the parties when performance is begun.
Contracted Work - "Contracted Work" shall be defined as the
total sum under the Contract and not the
performance of the project.
Rock Clause - "Rock Clause" as used in this Contract is defined as:
- -----------
If Excavation Encounters Rock, the price structure is as
follows:
100 Cubic Yrds. of Rock or less - $45.00 per cubic yard.
100 Cu. Yrd. to 1,000 cubic yrds. - $35.00 per cubic yard.
Over 1,000 cu. yards - $26.00 per cubic yard.
Seeding - "Seeding" as defined in this Contract shall mean any or
- ------- all temporary and/or permanent seeding that may be
required to prevent soil erosion or seeding that may be
required by any local, state or federal laws.
</TABLE>
-10-
<PAGE>
5.2A The Owner has paid to Contractor the sum of $5,000.00 prior to the
execution of this Contract.
5.2B The Contractor will submit his first bill on the 30th day of the month that
the Contractor begins his work in the Project and will submit a bill on the same
calendar date each month thereafter.
5.2C The Owner shall pay the bill submitted by the Contractor no later than the
15th day following submission of the bill as referred to in 5.2B above.
5.2D Material delivered shall be billed by the Contractor as of the date of the
delivery and shall become payable under the schedule in 5.2B and 5.2C above.
5.2E The sum of $5,000.00 referred to in Article 5.2A shall be deducted by owner
from the contract price in 4.1 by deducting $5,000.00 from the first bill
submitted by the Contractor.
5.8A Ten (10%) percent will be retained by Owner under 5.2 et seq. until
contracted work is fifty (50%) percent completed.
5.8B Thereafter, the sum referred to in 5.8A will be reduced to five (5%)
percent until Contractors work is completed.
5.8C As work is inspected and approved by Owner's engineers the retainage will
be released by Owner to Contractor, within a time not to exceed three months
from the date of same.
-11-
<PAGE>
EXHIBIT 11
<PAGE>
POCONO HOTELS CORPORATION
AND SUBSIDIARIES
Consolidated Computation of Net Income (Loss) Per Common Share
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994
---- ----
<S> <C> <C>
Net income (loss) $ 41,472 $ 101,317
--------- ---------
Less
Earnings applicable to cumulative 7%
$100 par value preferred stock, 9,423
shares outstanding in 1995 and 1994 (65, 961) (65, 961)
--------- ---------
Net income (loss) for year
applicable to common stock $ (24,489) $ 35,356
========= =========
Common stock
Number of shares issued 13,994 13,994
--------- ---------
Less average number of shares held in
treasury (4,182) (4,182)
--------- ---------
Average number of shares outstanding 9,812 9,812
Net income (loss) per common share $ (2.49) $ 3.60
========= =========
</TABLE>
POCONO HOTELS CORPORATION
Wilmington, Delaware 19801
April 5, 1996
Dear Pocono Hotels Stockholder:
Enclosed is the Annual Report from our Company for the year ending
December 31, 1995, as well as a Notice of Meeting, Proxy Statement, Proxy Card
and return envelope.
Fiscal 1995 was an encouraging year for Skytop Lodges, Inc., the
Company's subsidiary. Continued marketing promotions and sales efforts helped
increase occupancy from 45.7% to 49.5%, which resulted in a 12% revenue
improvement over 1994. Profit for Skytop Lodges, Inc. increased as a result of
improved sales and cost containment programs, which allowed us to maintain an
aggressive capital spending program. No cluster homes were sold during 1995,
however, which resulted in an overall negative impact on sales and profitability
for Skytop Lodges, Inc.
With the increased available cash in 1995, we completed several
significant capital improvements, including roof dormer upgrades and repairs,
upgraded banquet/meeting room facilities, a complete redesign and reconstruction
of the front desk/reservations areas and sales office, development of a new
driving range and an expanded in-house laundry. These capital improvements have
improved guest service and employee working conditions. Our goal is to provide
our guests with the best service possible.
The cluster homes project continued in 1995 with the construction of
two additional units, bringing the total to 30 units built and 28 sold. The cost
of these two additional units was funded internally. In 1996, we expect to sell
the remaining two units and complete the construction and sale of the last two
units of this project for a total of 32 units. In addition, with the
implementation of our new sales and marketing computer systems, we should see
continued successful marketing initiatives. Along with other capital
improvements, a major room renovation project has begun as well as construction
of a new guest cottage.
Most importantly, we want to recognize the outstanding contributions
that our managers and employees have made to Skytop. The success of Skytop in
1995 is a result of their hard work, creativity, dedication, teamwork and
effort, of which we are most appreciative. Their devotion to the many wonderful
traditions of Skytop has continued to ensure that it is a great place to visit
and work.
We thank you for your continued support.
Sincerely,
/s/ Stewart F. Campbell /s/ Edward F. Mayotte
Stewart F. Campbell Edward F. Mayotte
Chairman of the Board Vice President
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Positions with Pocono Hotels
Corporation and Present Occupation
----------------------------------
<S> <C>
JOHN B. CAMPBELL......................... Director and Vice President of the Company;
Director of Mannington Mills, Inc.,
a manufacturer of vinyl flooring,
and Wellco Carpet Corporation, a
manufacturer of contract carpets.
*STEWART F. CAMPBELL..................... Director; Chairman of the Board and Chief
Executive Officer; Financial Vice President and
Secretary of the Alfred P. Sloan Foundation.
F. DAVID CLARKE.......................... Director; Director of Clarke-Hook Corporation, a
company engaged in industrial property
construction, ownership and management.
JOHN J. COTTER........................... Director; Partner, Cotter, Cotter & Sohon,
attorneys, Bridgeport, CT.
GARDNER R. CUNNINGHAM.................... Director; Retired.
EVELYN M. DOHERTY........................ Director; Sales Associate for Rumson Realty,
Rumson, NJ.
JOHN B. HOGAN............................ Director and Secretary of the Company; Partner,
Hogan & Sarzynski, Attorneys, Binghamton, NY.
JOHN V.N. KLEIN.......................... Director; Partner, Meyer, Suozzi, English &
Klein, Attorneys, Mineola, NY.
DONALD H. MILLER......................... Director and Treasurer of the Company; Chairman
of the Board and President, Donald H. Miller,
Inc., a marine insurance company.
RICHARD L. PRICE, JR..................... Director and Vice President of the Company;
President and Director, Ray Price Chevrolet
Inc.; Cresco, PA.; President and Director Raymond Price,
Inc., Cresco, PA.; President and Director Ray Price Mt.
Pocono Ford Sales, Inc.
DAN RAYMOND.............................. Director and Vice President of the Company;
Retired.
CHARLES E. STOKES, III................... Director; President of The Home Rubber Company,
Trenton, NJ, a manufacturer of
industrial rubber goods; Director,
Trenton Savings Bank, a financial
institution.
</TABLE>
- --------------------------
* Executive Officer of Pocono Hotels Corporation
The Annual Report of Pocono Hotels Corporation on Form 10-KSB for the
fiscal year ended December 31, 1995 (including financial statements and
schedules but without exhibits) is available without charge on written request.
Copies of exhibits to the Form 10-KSB also will be furnished upon request and
the payment of a reasonable fee. Please address your request to Pocono Hotels
Corporation, 1209 Orange Street, Wilmington, Delaware 19801, Attention:
Secretary.
-2-
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth certain selected consolidated financial
data and is qualified in its entirety by the more detailed Consolidated
Financial Statements included herein:
<TABLE>
<CAPTION>
Year Ended December 31,
Selected Income Statement Data -------------------------------------------
(In Thousands Except Per Common Share Data) 1995 1994 1993 1992 1991
------------------------------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues.............................................. $9,396 $9,660 $9,277 $9,364 $9,609
Income (loss) before extraordinary item............... 102 218 (246) (46) (11)
Net income (loss)..................................... 41 101 (124) 225 (11)
Earnings per Common Shares............................ (2.49) 3.60 (19.39) 16.25 (7.82)
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
Selected Balance Sheet Data --------------------------------------------
(In Thousands) 1995 1994 1993 1992 1991
---------------------------
<S> <C> <C> <C> <C> <C>
Total assets.......................................... $5,471 $5,422 $5,356 $6,211 $5,621
Long-term debt........................................ --- --- --- --- 15
Stockholders' equity.................................. 4,362 4,443 4,408 4,570 4,382
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY
The following table sets forth for the periods indicated percentages,
which certain items contained in the financial data bear to revenues of the
Company:
Relationship to
Total Revenues
Year Ended
December 31,
-----------------
1995 1994
---- ----
Revenues
Rooms 44.6% 40.2%
Food and Beverage 39.7 33.9
Golf and Other Sports 8.4 8.1
Sundry Departments 3.0 2.9
Sale of Clustered Homes 0.4 13.4
Other Income 4.0 1.4
---- -----
Total Revenues 100.0 100.0
Food and Beverage Expense 30.3 26.1
Cost of Clustered Homes 0.4 10.0
Other Operating Expense 44.6 38.7
----- -----
Gross Margin 24.7 25.2
Administrative and General Expenses 17.2 17.1
Interest Expense --- .2
Depreciation 6.4 5.7
Provision for Income Taxes 0.7 1.2
---- ----
Net Income (loss) 0.4% 1.0%
==== ====
-3-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES:
Working Capital Ratios: This ratio is considered to indicate a
Company's ability to meet its short-term obligations.
1995 1994
---- ----
Working Capital (in thousands) $88.4 $636.0
Working Capital Ratio 1.09x1 1.77x1
Reference is made to the Consolidated Statement of Changes in Financial
Condition contained herein.
Cash flow from operations, together with available credit facilities,
are the Company's primary source of liquidity. Net cash provided by operating
activities was approximately $110,000 in 1995 and $1,055,000 in 1994, the
decrease primarily due to the lack of cluster homes sales in 1995.
Capital expenditures totaled approximately $627,000 and $310,000 in
1995 and 1994, respectively. Capital expenditures during 1995 consisted of roof
dormer upgrades and repairs, upgraded banquet/meeting room facilities, a
complete redesign and reconstruction of the front desk/reservation areas and
sales office, development of a new driving range and an expanded in-house
laundry. Capital improvements planned for 1996 include spending of approximately
$1,000,000 on the commencement of a major rooms renovation project, an
additional guest cottage and continuing upgrades to our facilities and grounds.
During 1992, the Company, through its subsidiary, negotiated a
construction loan line of credit for $2,500,000, which expired on December 31,
1994 and was not renewed, related to its clustered homes development project.
During 1994, the Company drew on approximately $279,000 to construct three
clustered home units, all of which was repaid from the sale of four units.
During 1995, the Company constructed two additional cluster homes, funded
internally. At December 31, 1995 the Company had two units available for sale.
The Company has additional available unsecured lines of credit totaling
$1,500,000, expiring between June 1996 and August 1996, which provide for
interest at the lender's prime rate. The lines of credit are utilized to support
hotel operations during the hotel's off season and are expected to be renewed or
renegotiated prior to their expiration on comparable terms.
The Company presently expects to be able to meet its debt obligations,
finance operations and capital expenditures, as well as provide for the
completion of its clustered homes development project through internally
generated cash flow and utilization of bank credit and loan facilities.
RESULTS OF OPERATIONS
The Company's net income for 1995 was $41,472 or $(2.49) per common
share, compared to 1994's net income of $101,317 or $3.60 per share. The
decrease is due to the reduced activity in the sale of clustered homes in 1995
compared to 1994.
Revenues: Revenues for the Company in 1995 decreased to $9,396,395 from
$9,659,794 in 1994, primarily due to the lack of cluster home sales in 1995
($28,234 in 1995 versus $1,298,391 in 1994) partially offset by an increase in
total lodge revenue ($9,356,146 in 1995 versus $8,360,432 in 1994). The
occupancy of the resort increased to 49.5% in 1995 from 45.7% in 1994. Guest
counts increased to 57,527 in 1995 from 53,138 in 1994. The improvement in the
general economy and a concentrated sales effort contributed to the improvement
in group business.
-4-
<PAGE>
Operating Costs and Expenses: Food and beverage costs and expenses
increased by $328,607 in 1995, to $2,846,285, compared to $2,517,678 in 1994.
This increase resulted primarily from an increase in sales related to increased
occupancy, which caused a proportional increase in cost of sales and other
variable costs. Other operating expenses increased to $4,185,281 in 1995 from
$3,736,165 in 1994, primarily due to the increase in sales volume. Improvements
to employee uniforms, guest room supplies, promotional activity, guest
entertainment and employee compensation all contributed to the increase in
operating costs. Cost of clustered homes also decreased, dropping to $32,666 in
1995 from $970,008 in 1994. This decrease resulted from no sales in 1995
compared to four units in 1994.
Administrative, General and Other Overhead Expenses: Administrative and
general expenses decreased to $1,620,180 in 1995 from $1,647,405 in 1994,
primarily due to lower workers' compensation costs. Interest expense decreased
by approximately $17,000 due to decreased borrowing needs.
Provisions for Income Taxes: The provision for income taxes was $60,641
at December 31, 1995, as compared to income tax of $116,329 at December 31,
1994.
-5-
<PAGE>
Independent Auditors' Report
The Stockholders
Pocono Hotels Corporation:
We have audited the accompanying consolidated balance sheets of Pocono Hotels
Corporation and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Pocono Hotels
Corporation and subsidiaries as of December 31, 1995 and 1994 and the results of
their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
New York, New York
February 19, 1996
-6-
<PAGE>
POCONO HOTELS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents (note 1)............................. $222,661 $862,297
Accounts receivable ........................................... 432,288 351,180
Inventories (note 1)........................................... 153,011 148,232
Prepaid expenses............................................... 255,246 103,009
-------- ---------
Total current assets....................................... 1,063,206 1,464,718
--------- ---------
Investments:
Other, at cost................................................. 42,851 42,851
--------- ---------
Property, plant and equipment, at cost:
Land and land improvements..................................... 1,771,054 1,654,038
Buildings...................................................... 6,976,600 6,698,868
Furniture, equipment and other assets.......................... 6,142,177 5,909,723
---------- ----------
Total...................................................... 14,889,831 14,262,629
Less accumulated depreciation and
amortization................................................... 11,354,675 10,749,953
---------- ----------
3,535,156 3,512,676
Construction in progress.......................................... -- 36,581
---------- ----------
3,535,156 3,549,257
---------- ----------
Clustered homes held for sale (note 1)............................ 830,064 365,307
---------- ----------
$5,471,277 $5,422,133
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable............................................... $ 330,952 $ 294,358
Accrued expenses............................................... 224,300 234,567
Accrued taxes (note 3)......................................... 146,798 96,261
Advance deposits............................................... 272,765 203,498
---------- ----------
Total current liabilities.................................. 974,815 828,684
---------- ----------
Deferred income tax liability (note 3)............................ 134,313 150,143
---------- ----------
Commitments (notes 2 and 4).......................................
Stockholders' equity (note 2):
Capital stock:
Preferred stock -- 7% cumulative --
$100 par value; authorized 12,000
shares, issued and outstanding
9,423 shares............................................... 942,300 942,300
Common stock -- no par value; authorized
16,000 shares, issued 13,994 shares........................ 259,080 259,080
---------- ----------
Total capital stock........................................... 1,201,380 1,201,380
Retained earnings.............................................. 3,217,466 3,298,623
---------- ----------
4,418,846 4,500,003
Less treasury stock, at cost:
Common stock -- 4,182 shares................................... 56,697 56,697
---------- ---------
Total stockholders' equity................................. 4,362,149 4,443,306
========== =========
$5,471,277 5,422,133
</TABLE>
See accompanying notes to consolidated financial statements.
-7-
<PAGE>
POCONO HOTELS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------- -------
<S> <C> <C>
Revenues:
Rooms............................................................ $4,189,845 3,884,634
Food and beverage................................................ 3,730,503 3,278,652
Sales of cluster homes........................................... 28,234 1,298,391
Golf and other sports............................................ 793,207 782,253
Sundry departments............................................... 280,682 278,058
Other income..................................................... 373,924 137,806
---------- ----------
9,396,395 9,659,794
---------- ----------
Operating costs and expenses:
Food and beverage............................................. 2,846,285 2,517,678
Hotel operating............................................... 4,185,281 3,736,165
Cost of cluster homes......................................... 32,666 970,008
Administrative and general.................................... 1,620,180 1,647,405
Interest expense (note 4)..................................... 5,148 22,315
Depreciation and amortization................................. 604,722 548,577
--------- ----------
9,294,282 9,442,148
---------- ----------
Income before provision for
income taxes................................................ 102,113 217,646
Provision for income taxes (note 3).............................. 60,641 116,329
--------- ----------
Net income.................................................... 41,472 101,317
Dividends on preferred stock (note 1)............................ 65,961 65,961
--------- ----------
Net (loss) income applicable to
common stockholders.......................................... $(24,489) 35,356
========= ==========
Net (loss) income per common share (note 1)...................... $ (2.49) 3.60
========= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
-8-
<PAGE>
POCONO HOTELS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
Total
Preferred Common Treasury Retained stockholders'
stock stock stock earnings equity
-------- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993................. $942,300 259,080 (56,697) 3,263,337 4,408,020
Net income for the year..................... --- --- --- 101,317 101,317
Dividends on preferred stock at $7
per share (note 2)........................ --- --- --- (66,031) (66,031)
------- ------- -------- --------- ---------
Balance at December 31, 1994................. 942,300 259,080 (56,697) 3,298,623 4,443,306
Net income for the year...................... --- --- --- 41,472 41,472
Dividends on preferred stock at $13
per share (note 2)......................... --- --- --- (122,629) (122,629)
Balance at December 31, 1995................. $942,300 259,080 (56,697) 3,217,466 4,362,149
======== ======== ======== ========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
-9-
<PAGE>
POCONO HOTELS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income..................................................................... $ 41,472 101,317
-------- ---------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization.............................................. 604,722 548,577
Changes in operating assets and liabilities:
Increase in accounts receivable........................................... (81,108) (2,989)
Increase in inventories................................................... (4,779) (1,957)
(Increase) decrease in prepaid expenses................................... (152,237) 31,209
(Increase) decrease in clustered homes
held for sale......................................................... (464,757) 290,747
Decrease in construction in progress...................................... 36,581 37,964
Increase (decrease) in accounts payable................................... 36,594 (48,449)
Decrease in deferred income tax liability................................. (15,830) (15,677)
Decrease (increase) in accrued expenses................................... (10,267) 115,173
Increase in accrued taxes................................................. 50,537 30,754
Increase (decrease) in advance deposits................................... 69,267 (32,056)
-------- ---------
Total adjustments..................................................... 68,723 953,296
-------- ---------
Net cash provided by operating activities............................. 110,195 1,054,613
-------- ---------
Cash flows from investing activities:
Purchase of property, plant and equipment...................................... (627,202) (309,712)
--------- ---------
Cash flows from financing activities:
Proceeds of construction loan.................................................. -- 278,883
Payments on construction loan.................................................. -- (278,883)
Dividends...................................................................... (122,629) (66,031)
--------- --------
Net cash used in financing activities...................................... (122,629) (66,031)
--------- ---------
Net (decrease) increase in cash and
cash equivalents.......................................................... (639,636) 678,870
Cash and cash equivalents at beginning of year...................................... 862,297 183,427
-------- ---------
Cash and cash equivalents at end of year............................................ $222,661 862,297
======== =========
Supplemental disclosures of cash flow information:
Income taxes paid.............................................................. 116,460 25,949
========= =========
Interest paid (net of amounts capitalized)..................................... $ -- 22,315
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
-10-
<PAGE>
POCONO HOTELS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1995 and 1994
(1) Significant Accounting Policies
Consolidation
The consolidated financial statements include the accounts of Pocono Hotels
Corporation (the Company) and its wholly owned subsidiaries, Skytop Lodges,
Inc. and its subsidiary, Skytop Development Corporation (the Subsidiary)
and Hotel Securities Corporation. In consolidation, all intercompany
balances and all intercompany profit and losses on transactions were
eliminated.
Inventories
Food, beverage and other hotel supplies are stated at the lower of cost or
market, with cost determined principally on a first-in, first-out basis.
Inventories consist of:
December 31,
-------------------------
1995 1994
-------- -------
Food $ 47,928 62,811
Beverage 17,253 22,364
Other hotel supplies 87,830 63,057
------- -------
$153,011 148,232
======= =======
Clustered Homes Held for Sale
Land and improvements in process relating to the Subsidiary cluster
home project are carried at cost, which is not in excess of net
realizable value. Interest on the construction loan and other costs
directly related to inventory are capitalized to completion of
construction. For the years ended December 31, 1995 and 1994
approximately $0 and $5,100 of interest was capitalized in inventory,
respectively. At December 31, 1995, the Company had two units available
for sale.
Depreciation and Amortization
Depreciation and amortization of property, plant and equipment is
provided as follows:
<TABLE>
<CAPTION>
Method of
depreciation
Estimated and
useful life amortization
----------- ------------
<S> <C> <C>
Buildings 10-56 years Straight-line and
Furniture, equipment 3-15 years various accelerated
and other assets methods
Dams 20-75 years Straight-line
Water and Sewerage 10-50 years Straight-line and
System various accelerated
methods
</TABLE>
-11-
<PAGE>
POCONO HOTELS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Repair and maintenance expenditures are charged to expense when
incurred. Expenditures for betterments and major renewals are added to
the applicable property or equipment account. Upon sale or retirement
of property, the cost and accumulated depreciation are removed from the
accounts and any gain or loss is recognized in the statement of
operations.
Revenue Recognition
Sales of cluster homes and related costs and expenses are recognized
when construction is completed and the sale is closed. Cost of units
sold is determined on the basis of direct cost accumulations applicable
to such units increased by their proportionate share of estimated total
project development costs.
Cash and Cash Equivalents
For the purpose of the statements of cash flows, the Company considers
all highly liquid debt instruments with maturities of three months or
less to be cash equivalents.
December 31,
-----------------------------
1995 1994
-------- --------
On hand and in banks $102,396 854,081
Money market funds 120,265 8,216
------- -------
$222,661 862,297
======= =======
Income Taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
-12-
<PAGE>
POCONO HOTELS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Financial Instruments
The Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 107, Disclosures about Fair Value of Financial
Instruments, defines fair value of a financial instrument as the amount
at which the instrument could be exchanged in a current transaction
between willing parties. The Company's cash and interest-bearing
deposits, accounts receivable, accounts payable, accrued expenses,
accrued taxes, advance deposits and long-term debt are carried at
cost, which approximates fair value.
Use of Estimates
Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
Earnings Per Share
Income (loss) per common share, based on the weighted average number of
shares outstanding of 9,812 in 1995 and 1994 after recognition of
preferred stock dividend requirements of $65,961 in 1995 and 1994,
respectively, is as follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Net income $ 4.23 10.32
Dividends on preferred stock (6.72) (6.72)
----- -----
Net (loss) income applicable
to common stockholders $ (2.49) 3.60
===== =====
</TABLE>
Reclassifications
Certain items in 1994 have been reclassified to conform with the 1995
presentation.
-13-
<PAGE>
POCONO HOTELS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(2) Capital Stock
During 1981, the Board of Directors authorized the Company's Executive
Committee, at its discretion, to purchase, on the open market, shares
of the Company's 7% cumulative preferred stock and common stock,
provided that such purchases do not impair the capital of the Company.
It was further resolved that any shares of 7% cumulative preferred
stock purchased would be retired and any shares of common stock
acquired would be held in treasury.
The 7% cumulative preferred stock of the Company may be redeemed in
whole or in part at the option of the Board of Directors by paying the
cumulative preferred stock dividends in arrears to such shares. No
shares of 7% cumulative preferred stock were redeemed during 1995 and
1994.
At December 31, 1995 and 1994, the Company's arrearage in cumulative
preferred stock dividends per share amounted to $223.50 and $229.50,
respectively. The total for all such shares outstanding at those dates
amounted to $2,106,040.50 and $2,162,578.50, respectively.
During 1995, the Company declared and paid preferred dividends of
$13 per share, representing the 1994 dividend of $7 per share and
$6 per share representing the remaining dividends for 1992 and
1991. During 1994, the Company declared and paid preferred dividends
of $7 per share, representing the 1993 dividend.
(3) Income Taxes
Income tax provision (recovery) is comprised of the following:
1995 1994
-------- -------
Current:
Federal income tax $ 34,564 69,884
State income tax 41,907 30,137
------- -------
76,471 100,021
------- -------
Deferred:
Federal income tax (5,418) 16,308
State income tax (10,412) --
------- -------
(15,830) 16,308
$ 60,641 116,329
======== =======
-14-
<PAGE>
POCONO HOTELS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Total tax expense varies from the amount which would be provided by
applying the Federal normal income tax rate (34%) to income before
provision for (recovery of) income taxes. The reasons for the
difference are as follows:
1995 1994
-------- ------
Tax (recovery of) computed at
statutory rates (34%) $ 28,362 73,800
State income tax 23,620 19,890
Permanent difference 8,659 22,639
-------- -------
Total $ 60,641 116,329
======== =======
Deferred tax assets of approximately $45,000 and $51,800 at
December 31, 1995 and 1994, respectively, are principally comprised
of temporary differences arising from the recognition of certain costs.
In addition, the Company has a deferred tax liability of approximately
$180,000 and $202,000 at December 31, 1995 and 1994, respectively,
which is principally comprised of temporary differences which
arose from the recognition of a gain resulting from the involuntary
conversion of fully depreciated assets destroyed in a fire.
(4) Commitments
The Company's Subsidiary has unsecured lines of credit totaling
$1,500,000 which require annual interest at the lender's prime rate and
expire between June 1996 and August 1996. The Company had no borrowings
at December 31, 1995 or 1994 under these lines of credit.
Letters of Credit
The Company, through its Subsidiary, has issued an irrevocable letter
of credit for $8,331 in favor of Barrett Township, which obligates the
Subsidiary to complete certain grading, road paving and installation of
utilities at the site. The letters of credit expire in November 7, 1996
or when the improvements are completed and inspected by the Township.
-15-
<PAGE>
POCONO HOTELS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(5) Business Segment Information
The Company operates in two business segments: Resort Hotel
and Real Estate Development.
The Resort Hotel segment operates lodging, food and beverage, golf and
other recreational facilities, catering principally to family and
convention business.
The Real Estate Development segment constructs and markets cluster
homes and develops single family homes.
-16-
<PAGE>
POCONO HOTELS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
Resort Real Estate
Hotel Development Total
----------- ----------- ----------
<S> <C> <C> <C>
For the year ended December 31, 1995:
Revenues......................................... $ 9,356,841 39,554 9,396,395
========= ====== =========
Operating profit................................. 203,643 (96,382) 107,261
========= ======
Interest expense................................. (5,148)
---------
Income before income taxes................ 102,113
=========
Identifiable assets.............................. $ 4,700,052 771,225 5,471,277
========= ======= =========
Capital expenditures............................ $ 627,000 -- 627,000
========= ======= =========
Depreciation and amortization.................... $ 600,716 4,006 604,722
========= ======= =========
For the year ended December 31, 1994:
Revenues......................................... $ 8,360,704 1,299,090 9,659,794
========= ========= =========
Operating profit................................. 79,770 160,191 239,961
Interest expense................................. (22,315)
---------
Income before income taxes................ 217,646
=========
Identifiable assets.............................. $ 4,620,770 853,171 5,473,941
========= ========= =========
Capital expenditures............................. $ 309,712 -- 309,712
========= ======== =========
Depreciation and amortization.................... $ 536,683 11,894 548,577
========= ========= =========
</TABLE>
(6) Savings and Investment Plan
Effective March 1, 1984, as amended January 1, 1988, the Board of
Directors of a subsidiary approved a defined contribution savings and
investment plan for all employees who have completed one year of
service. The plan permits qualified employees to contribute annually
from 2% to 10% of their salary not to exceed the maximum contributions
allowable under the Federal income tax code. The plan also requires
that the Board of Directors make an annual determination of the
subsidiary's contribution. Approved subsidiary contributions for
qualified employees equaled 50% of employees' contributions up to 6% of
their salary for 1995 and 100% of employees' contributions up to 6% of
their salary for 1994. The total expense related to this plan for 1995
and 1994 amounted to $62,953 and $58,051, respectively.
-17-
<PAGE>
<PAGE>
ADDITIONAL INFORMATION
NATURE AND SCOPE OF BUSINESS
Pocono Hotels Corporation ("Pocono") is a holding company. Skytop Lodges,
Inc. ("Skytop"), a wholly-owned subsidiary of Pocono, owns and operates a
resort in Skytop, Pennsylvania. Skytop Development Corporation, a wholly-
owned subsidiary of Skytop, is engaged in the business of development and sale
of clustered homes.
The resort business is highly competitive. Skytop competes with similar
resorts located in the Pocono Mountain region of Pennsylvania and, because of
substantial improvements and increases in travel in recent years, throughout the
United States.
Skytop's resort business is seasonal. Traditionally, Skytop's operations
from May through October are responsible for nearly all its profits and those of
Pocono in any fiscal year. Operations during November through April are usually
at a loss. These seasonal fluctuations do not materially affect Pocono's or
Skytop's capital expenditures, inventories or the credit terms on which business
is done with customers.
Occupancy at the resort hotel operated by Skytop is derived primarily from
the family vacation trade, but is augmented by group business during non-peak
periods. Skytop markets its hotel services through various media, primarily
newspapers and magazines serving its major markets and direct mail advertising
to former guests.
STOCK PRICE AND DIVIDEND INFORMATION
Although there are a limited number of sales, there is no established
public trading market for the Common Stock of the Company. There were no
published asked prices during 1995 or 1994. During 1995 and 1994, the high and
low per share bid prices for the Company's Common Stock were as follows:
Fiscal Quarter High Bid Price Low Bid Price
-------------- -------------- -------------
First 1994 $60 $60
Second 1994 $60 $50
Third 1994 $60 $50
Fourth 1994 $60 $50
First 1995 $61 $50
Second 1995 $61 $61
Third 1995 $90 1/2 $61
Fourth 1995 $103 1/2 $88
According to the National Quotation Bureau, the above quotations
represent prices between dealers and do not include retail mark-up, mark-down or
commissions. They do not represent actual transactions.
Dividends of $7.00, $3.00 and $3.00 per share were paid on the
Preferred Stock on December 11, 1995, representing dividend arrearages on the
Preferred Stock for the years 1994, 1992 and 1991, respectively. A dividend of
$7.00 per share was paid on the Preferred Stock on December 12, 1994.
No dividends have been paid on the Common Stock since the formation of
Pocono in 1925. An existing dividend arrearage on the Preferred Stock must be
eliminated before dividends are payable on the Common Stock. See Note 2 to the
Consolidated Financial Statements.
-21-
<PAGE>
As of March 8, 1996, there were approximately 9,812 record holders of
the Common Stock and 436 record holders of the Preferred Stock.
-22-
<PAGE>
Exhibit 21
Subsidiaries of Registrant
Name State of Incorporation
1. Hotels Securities Corporation Delaware
2. Skytop Lodges, Inc. Pennsylvania
3. Pocono Design & Maintenance Co. Pennsylvania
4. Skytop Development Corporation Pennsylvania
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ Gardner R. Cunningham
----------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ John V.N. Klein
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ Dan Raymond
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ Charles E. Stokes, III
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ John J. Cotter
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ John B. Hogan
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ Richard L. Price, Jr.
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ John B. Campbell
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ F. David Clarke
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ Evelyn M. Doherty
---------------------------------
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby consent and appoint Stewart F. Campbell and Charles F. Hewson, or either
of them, his or her attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Pocono Hotels Corporation (the "Company") to comply with the
Securities Exchange Act of 1934, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
filing under said Act of an annual report of the Company on Form 10-KSB for the
year ended December 31, 1995, including the power and authority to sign in the
name and on behalf of the undersigned, in any and all capacities in which the
signature of the undersigned would be appropriate, such annual report and any
and all amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as the
undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 20th day of March, 1996.
/s/ Donald H. Miller
---------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED STATEMENT OF INCOME FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1995 AND THE CONSOLIDATED BALANCE SHEET AS OF
DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 222,661
<SECURITIES> 0
<RECEIVABLES> 467,150
<ALLOWANCES> 0
<INVENTORY> 153,011
<CURRENT-ASSETS> 1,063,206
<PP&E> 14,889,831
<DEPRECIATION> (11,354,675)
<TOTAL-ASSETS> 5,471,277
<CURRENT-LIABILITIES> 974,815
<BONDS> 0
0
942,300
<COMMON> 259,080
<OTHER-SE> 3,217,466
<TOTAL-LIABILITY-AND-EQUITY> 5,471,277
<SALES> 0
<TOTAL-REVENUES> 9,396,395
<CGS> 2,878,951
<TOTAL-COSTS> 9,294,282
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,472
<EPS-PRIMARY> (2.49)
<EPS-DILUTED> (2.49)
</TABLE>
