<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/x/ Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AMERICAN HEALTH PROPERTIES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Geoffrey D. Lewis, General Counsel
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rules 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
AMERICAN HEALTH PROPERTIES, INC.
6400 SOUTH FIDDLER'S GREEN CIRCLE
ENGLEWOOD, COLORADO 80111
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 19, 1995
The 1995 Annual Meeting of Shareholders of American Health Properties,
Inc., a Delaware corporation ("AHP" or the "Company"), will be held at the
Ritz-Carlton Hotel, 4375 Admiralty Way, Marina del Rey, California at 2:00 p.m.
local time, on May 19, 1995, for the following purposes:
(1) To elect three Class II directors to a term of three years.
(2) To approve an amendment to the Certificate of Incorporation of the
Company to increase the number of shares of Common Stock.
(3) To approve the appointment of the accounting firm of Arthur
Andersen LLP as the Company's auditors and independent public accountants
for the fiscal year ending December 31, 1995.
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 24, 1995 are
entitled to notice of, and to vote at, the meeting and any adjournments thereof.
A list of the shareholders entitled to vote at the meeting may be examined
at the Company's principal executive offices, which are located at 6400 South
Fiddler's Green Circle, Suite 1800, Englewood, Colorado, during the ten-day
period preceding the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY. THE PROXY IS
REVOCABLE AT ANY TIME. IF YOU ARE PRESENT AT THE MEETING, YOU MAY WITHDRAW YOUR
PROXY AND VOTE IN PERSON IF YOU SO DESIRE.
By Order of the Board of Directors,
Geoffrey D. Lewis
Corporate Secretary
March , 1995
<PAGE> 3
AMERICAN HEALTH PROPERTIES, INC.
6400 SOUTH FIDDLER'S GREEN CIRCLE
ENGLEWOOD, COLORADO 80111
------------------------
PROXY STATEMENT
------------------------
This proxy statement and the enclosed proxy card are being mailed on or
about April 1, 1995 to shareholders of the Company, in connection with the
solicitation by the Board of Directors of the Company of proxies for use at the
annual meeting of shareholders to be held on May 19, 1995, and any adjournments
thereof.
Any person giving a proxy pursuant to this proxy statement may revoke it at
any time before it is exercised at the meeting by filing with the Secretary of
the Company an instrument revoking it or by a duly executed proxy bearing a
later date. In addition, if the person executing the proxy is present at the
meeting, he or she may vote his or her shares in person. Proxies in the form
enclosed, if duly signed and received in time for voting, and not so revoked,
will be voted at the meeting in accordance with the directions specified
therein.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on March 24, 1995, the record date for
shareholders entitled to notice of and to vote at the meeting, there were
outstanding 20,865,539 shares of AHP Common Stock. No shares of AHP Preferred
Stock have been issued or are outstanding. Each share of AHP Common Stock is
entitled to one vote on all matters of business before the meeting. The holders
of a majority of the outstanding shares of Common Stock present in person or by
proxy and entitled to vote will constitute a quorum at the meeting.
ITEM 1. ELECTION OF DIRECTORS
There are currently eight members of the Board of Directors.
The members of the Board of Directors are divided into three classes. Class
I consists of two directors who are serving a 3-year term expiring at the 1997
annual meeting of shareholders. Class II consists of three directors who will be
elected to a 3-year term expiring at the 1998 annual meeting of shareholders.
Class III consists of three directors who are serving a 3-year term expiring at
the 1996 annual meeting of shareholders. In each case, a director serves for the
designated term and until his respective successor is elected and qualified.
The Board of Directors has nominated Royce Diener, Charles M. Haar and
Joseph P. Sullivan for election as Class II directors. Messrs. Diener, Haar and
Sullivan are presently directors of AHP and have served continuously as such
since the date indicated in their biographies below. In the event any nominee is
<PAGE> 4
unable to or declines to serve as a director at the time of the annual meeting
(which is not anticipated), proxies will be voted for the election of such
person or persons, if any, as may be designated by the present Board of
Directors.
NOMINEES FOR ELECTION TO CLASS II
The following sets forth the names of and certain information with respect
to each nominee:
CLASS II DIRECTORS
ROYCE DIENER -- Former President and Chief Executive Officer of American
Medical International, Inc. ("AMI"), an international owner and operator of
for-profit hospitals, from 1975 until 1979, continuing as Chairman and Chief
Executive Officer until 1985. From 1985 until January 1988, Mr. Diener served as
Chairman of AMI. He again served as Chairman and Chief Executive Officer from
September 1988 until February 1989, after which he continued as a Director until
his retirement from the Board in November 1989. He is a member of the Board of
Directors of Acuson, Inc. and Advanced Technology Venture Fund. Mr. Diener has
been a director of the Company since its organization in 1986 and is 76 years
old.
CHARLES M. HAAR -- Louis D. Brandeis Professor of Law at Harvard University
since 1975. Mr. Haar is a director of Banner Aerospace, Inc. He has been a
director of the Company since its organization in 1986 and is 74 years old.
JOSEPH P. SULLIVAN -- President and Chief Executive Officer of the Company
since February 11, 1993. Prior to that, Mr. Sullivan spent 20 years with
Goldman, Sachs & Co. where he had overall investment banking responsibility for
numerous companies in the health care field. He has been a director of the
Company since February 1993 and is 52 years old.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES FOR DIRECTOR.
The following sets forth information about each of the members presently
serving on the Board of Directors other than Messrs. Diener, Haar and Sullivan:
CLASS I DIRECTORS
NORMAN BARKER, JR. -- Retired Chairman of the Board of Directors of First
Interstate Bank of California. He served in that position from 1973 to 1986. He
is Chairman of the Board of Pacific American Income Shares, Inc., Chairman of
the Board of Fidelity Federal Bank, a director of TCW Convertible Securities
Fund, Inc. and SPI Pharmaceuticals, Inc. Mr. Barker has been a director of the
Company since its formation in 1986 and is 72 years old.
JAMES L. FISHEL -- Retired Vice President and Chief Credit Officer of
General Electric Capital Corporation, the financial arm of General Electric
Corporation, having served in that capacity from 1984 to 1994. Mr. Fishel is a
director of Noble Drilling Corporation. Mr. Fishel has been a director of the
Company since May 1994 and is 63 years old.
CLASS III DIRECTORS
SHELDON S. KING -- Executive Vice President of Salick Health Care, Inc.
since February 8, 1994. Former President of Cedars-Sinai Medical Center, Los
Angeles, California from 1989 to January 15, 1994. Previously,
2
<PAGE> 5
he served as President of Stanford University Hospital from 1986 to 1989. Mr.
King is a director of American Medical Holdings, Inc. He was elected a director
of the Company in February 1988 and is 63 years old.
WALTER J. MCNERNEY -- Chairman of the Board since February 1988 and Chief
Executive Officer of the Company from February 1988 to May 15, 1992 and from
January 15, 1993 to February 11, 1993. He is also Herman Smith Professor of
Health Policy, J.L. Kellogg Graduate School of Management, Northwestern
University since 1982 and was managing partner of Walter J. McNerney and
Associates, a management consulting firm in the health field, during 1982-1992.
He is a director of The Stanley Works, Nellcor Incorporated, Value Health, Inc.,
Medicus Systems, Inc., Hanger Orthopedic, Inc., Osteotech, Inc. and Ventritex,
Inc. Mr. McNerney was elected a director of the Company in January 1987 and is
69 years old.
LOUIS T. ROSSO -- Chairman of the Board and Chief Executive Officer of
Beckman Instruments, Inc., a leading supplier of laboratory systems for life
sciences and diagnostics, since 1989. He is a member of the Board of Directors
of Allergan, Inc. Mr. Rosso has been a director of the Company since May 1994
and is 61 years old.
BOARD COMMITTEES AND MEETINGS
The Board of Directors held nine regular meetings during 1994. No director
attended fewer than 75% of the meetings of the Board and its committees on which
he served.
The Company's Board of Directors has standing Audit, Finance, Investment
and Compensation and Board Affairs Committees.
The Audit Committee, composed exclusively of directors who are not
employees of AHP, meets with AHP's independent auditors from time to time during
the course of their audit and throughout the year to review audit procedures and
receive recommendations and reports from the auditors. The Audit Committee
monitors the Company's compliance with federal tax laws and regulations
necessary to maintain the Company's status as a real estate investment trust. In
addition, this committee monitors all corporate activities to assure conformity
with good practice and government regulations. The Audit Committee consists of
Messrs. Haar (chairman), Barker and Diener. The Audit Committee met four times
during 1994.
The Finance Committee is charged with the responsibility of evaluating the
overall financial needs, financial strategy, acquisitions and investments of
AHP. The Finance Committee met four times during 1994. This committee is
composed of Messrs. King (chairman), Barker, Diener, Haar, McNerney and
Sullivan.
The members of the Investment Committee are Messrs. Diener (chairman),
Fishel, King, McNerney and Sullivan. This Committee is responsible for reviewing
proposed investments and divestitures to be made by the Company. The Investment
Committee met four times during 1994.
The members of the Compensation and Board Affairs Committee are Messrs.
Barker (chairman), King, McNerney and Rosso. This committee is responsible for
reviewing and recommending to the full Board compensation of officers and
directors, management's nominees for officers of the Company and the entering
into of employment agreements to assure continuity of a well-qualified
management team. The Compensation and Board Affairs Committee is also
responsible for corporate governance, Board governance and Board policies,
nominations to the Board of Directors and Board Committee structure and
membership. This committee met eight times during 1994.
3
<PAGE> 6
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 1, 1995, the shares of AHP
Common Stock beneficially owned (including shares subject to option within 60
days of such date) by each director and nominee for director of AHP and the
executive officers of AHP. Each individual listed beneficially owns less than 1%
of the outstanding shares of AHP Common Stock, and the beneficial ownership of
all directors and officers as a group represents collectively 3.5% of the
outstanding shares of AHP Common Stock as of March 1, 1995:
<TABLE>
<CAPTION>
SHARES OF SHARES SUBJECT
NAME OF COMMON STOCK TO OPTION
BENEFICIAL OWNER BENEFICIALLY OWNED WITHIN 60 DAYS
------------------------------------------------------ ------------------ --------------
<S> <C> <C>
Norman Barker, Jr. ................................... 1,000 40,000
Royce Diener.......................................... 7,500 60,000
James L. Fishel....................................... -0- 20,000
Charles M. Haar....................................... 6,000 60,000
Sheldon S. King....................................... 1,000 60,000
Geoffrey D. Lewis..................................... 13,082 33,269
Michael J. McGee...................................... 12,723 32,244
Walter J. McNerney.................................... 5,000 100,000
Louis T. Rosso........................................ -0- 20,000
C. Gregory Schonert................................... 12,294 53,571
Victor C. Streufert................................... 19,918 64,186
Joseph P. Sullivan.................................... 33,909 91,000
All Directors and Executive Officers as a Group
(12 persons)........................................ 112,426 634,270
</TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
CASH COMPENSATION. Outside directors of the Company receive a retainer fee
for their Board work in the amount of $24,000 per year. Outside directors
receive an additional $1,000 payment for each meeting attended of any Committee
on which they serve (except for the Chairman of the Committee who receives
$1,500 for each Committee meeting attended). The Chairman of the Board currently
receives a retainer fee for his Board work in the amount of $48,000 per year and
an additional $1,000 payment for each meeting attended of any committee on which
he serves.
4
<PAGE> 7
The following table sets forth compensation paid or earned during the years
ended December 31, 1994, 1993 and 1992, to or by each of the five most highly
compensated executive officers of the Company during the last fiscal year:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
NUMBER OF
ANNUAL COMPENSATION RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING ALL OTHER
NAME AND POSITION SALARY BONUS AWARDS(1) OPTIONS(2) COMPENSATION(3)
-------------------------------- -------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Sullivan 1994 $474,800 $190,800 $ -0- 50,000 $35,900
President and Chief 1993(4) 398,800 450,000(5) 500,000 63,096 36,800
Executive Officer
Victor C. Streufert 1994 194,200 70,100 -0- 6,294 31,800
Executive Vice President 1993 177,900 147,200 -0- 13,500 33,400
Chief Financial Officer 1992 168,900 -0- 257,700 5,139 33,900
Geoffrey D. Lewis 1994 183,600 54,200 -0- 5,102 32,000
Senior Vice President, 1993 169,300 121,800 -0- 11,000 33,100
General Counsel and 1992 159,800 -0- 246,800 4,218 33,400
Secretary
C. Gregory Schonert 1994 160,400 40,600 -0- 4,458 32,900
Senior Vice President -- 1993 147,000 106,400 -0- 9,500 32,000
Development 1992 139,700 -0- 213,100 3,642 33,900
Michael J. McGee 1994 137,200 37,700(6) -0- 3,303 30,600
Vice President, Controller 1993 125,000 78,000 -0- 7,500 30,500
and Assistant Secretary 1992 116,500 -0- 180,000 2,667 30,500
</TABLE>
---------------
(1) Restricted stock awards are valued based on the fair market price of the
Company's Common Stock on the date of grant. Such prices for 1992, 1993 and
1994 were $29.25, $23.625 and $27,125, respectively. Restricted stock
awards for 1993 vest ratably over five years. Restricted stock awards for
1992 vest ratably over six years. Dividends are paid on the restricted
shares at the same rate as all other shares of Common Stock of the Company.
The table below shows the aggregate shares of restricted stock that were
held and remain restricted at December 31, 1994, the value of such shares
on December 31, 1994 and the number of shares granted in 1992, 1993 and
1994.
<TABLE>
<CAPTION>
VALUE OF
RESTRICTED AGGREGATE GRANTS
STOCK HELD RESTRICTED ---------------------------
AT DECEMBER 31, 1994 STOCK 1992 1993 1994
-------------------- ---------- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Joseph P. Sullivan 15,601 $308,100 -0- 21,164 -0-(5)
Victor C. Streufert 4,404 87,000 8,810 -0- -0-
Geoffrey D. Lewis 4,218 83,300 8,436 -0- -0-
C. Gregory Schonert 3,642 71,900 7,284 -0- -0-
Michael J. McGee 3,076 60,800 6,154 -0- -0-
</TABLE>
(2) Stock options vest ratably over two years and are coupled with dividend
equivalent rights.
5
<PAGE> 8
(3) Includes amounts paid for 1994 under the Company's Money Purchase Retirement
Plan, Executive Medical Reimbursement Plan and life insurance policies as
follows:
<TABLE>
<CAPTION>
RETIREMENT MEDICAL LIFE INSURANCE
---------- ------- --------------
<S> <C> <C> <C>
Joseph P. Sullivan $ 30,000 $ -0- $5,900
Victor C. Streufert 30,000 900 900
Geoffrey D. Lewis 30,000 1,200 800
C. Gregory Schonert 30,000 1,700 1,200
Michael J. McGee 30,000 -0- 600
</TABLE>
(4) Mr. Sullivan commenced employment with the Company on February 11, 1993.
(5) Pursuant to an election made by Mr. Sullivan, in lieu of $157,500 of the
amount shown for his 1993 bonus, he received 5,807 shares of restricted
stock and 5,807 options to purchase Common Stock (together with dividend
equivalent rights) at the fair market value thereof on the date the bonus
was awarded.
(6) Pursuant to an election made by Mr. McGee, in lieu of $28,297.50 of the
amount shown for his 1994 bonus, he received 1,372 shares of restricted
stock and 1,372 options to purchase Common Stock (together with dividend
equivalent rights) at the fair market value thereof on the date the bonus
was awarded.
EMPLOYMENT AGREEMENTS. Joseph P. Sullivan, who commenced employment as
President and Chief Executive Officer of the Company on February 11, 1993, is
entitled to receive minimum compensation under a three-year employment agreement
with the Company as follows: (a) base salary of $477,000 per annum, (b) a
minimum bonus of 30% of base salary for 1995 and (c) a minimum stock option
grant for 1995 equal to a number of shares calculated by dividing 200% of his
base salary by the share price on the date of grant. Messrs. Streufert, Lewis,
Schonert and McGee are entitled to receive minimum compensation under two-year
employment agreements with the Company at the rate of $203,000, $192,000,
$167,700 and $143,400 per annum, respectively. If the employment of Mr. Sullivan
is terminated by reason of a "change of control" (as defined in the employment
agreements), he will be entitled to receive a payment equal to three times his
average salary plus bonus for the two most recent years. If the employment of
any of Messrs. Streufert, Lewis, Schonert or McGee is terminated by reason of a
"change of control" (as defined in the employment agreements), he will be
entitled to receive a payment equal to two times his average salary plus bonus
for the two most recent years.
INCENTIVE BONUS PLAN. The Company's incentive bonus plan for fiscal 1994
covered a total of 15 employees, including executive officers. The incentive
program is designed to reward the Company's employees based upon the Company's
attaining or surpassing goals for annual cash flow per share and other operating
and strategic goals. Actual incentive bonus awards granted are determined by a
"base" award schedule specified by the Compensation and Board Affairs Committee
of the Board of Directors and are contingent upon achievement of specified
goals. Awards are determined at year end and depend upon (a) the Company's
actual cash flow per share versus the goals set at the start of the year, (b)
growth in the current year's cash flow per share, and (c) a judgmental look back
by the Committee of operational and strategic performance.
1988 STOCK OPTION PLAN, 1990 STOCK INCENTIVE PLAN AND 1994 STOCK INCENTIVE
PLAN. The Company's 1988 Stock Option Plan, as approved by the shareholders of
the Company on June 15, 1988 (the "1988
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<PAGE> 9
Plan"), provides for the granting of stock options, shares of restricted stock
and stock appreciation rights to key employees and directors. The maximum number
of shares of Common Stock that may be issued pursuant to the 1988 Plan is
450,000. The Company's 1990 Stock Incentive Plan, as approved by the
shareholders of the Company on June 28, 1990 (the "1990 Plan"), provides for the
granting of stock options, shares of restricted stock and stock appreciation
rights to key employees and directors. The maximum number of shares of Common
Stock that may be issued pursuant to the 1990 Plan is 750,000. The Company's
1994 Stock Incentive Plan, as approved by the shareholders of the Company on May
11, 1994 (the "1994 Plan"), provides for the granting of stock options, shares
of restricted stock and stock appreciation rights, deferred shares, performance
shares and performance units to key employees. The maximum number of shares of
Common Stock that may be issued pursuant to the 1994 Plan is 1,000,000. The 1988
Plan, the 1990 Plan and the 1994 Plan are collectively referred to hereinafter
as the "Plans."
Options granted under the Plans may be either incentive stock options
within the meaning of Section 422A of the Internal Revenue Code (the "Code") or
nonstatutory options. Stock appreciation rights may either be related to
specific stock options or may be granted independent of any stock options.
The Plans presently are administered by the Board of Directors and the
Compensation and Board Affairs Committee. The Board selects the employees to
whom awards will be granted and determines the type and amount of each award,
subject to the terms of the Plans. Pursuant to the 1988 Plan, an option for
20,000 shares was granted to each incumbent nonemployee director on the date the
1988 Plan was adopted by the Board. Pursuant to the 1990 Plan, an option for
20,000 shares was granted to each incumbent non-employee director on the date
the 1990 Plan was adopted by the Board and an option for 20,000 shares will be
granted pursuant to the terms of the 1990 Plan to any new non-employee director
upon his election to the Board. In addition, the 1990 Plan provides that each
incumbent non-employee director will be entitled to an option for 10,000 shares
on each January 31 thereafter.
The exercise price of incentive stock options granted under the Plans must
not be less than the fair market value of the Common Stock on the date of grant
and the maximum term of each option may not be longer than 10 years. In the case
of incentive stock options, the aggregate fair market value of optioned shares
(determined at the time of the grant) becoming exercisable by any optionee in
any calendar year may not exceed $100,000.
Stock options may be granted in tandem with dividend equivalent rights
("DERs"). When DERs are coupled with options, a calculation is made on each
dividend declaration date to determine the number of shares that could be
acquired if dividends were paid on shares under option and accumulated DERs and
such number of shares are accumulated for the benefit of option holders. Upon
exercise of the related option, each option holder is entitled to receive
additional shares equivalent to the accumulated number of related DER shares.
Stock appreciation rights which are related to stock options entitle the
holder upon exercise to receive a payment equal to the difference between the
option exercise price and the fair market value of the optioned shares at the
date of exercise. In the case of stock appreciation rights granted independent
of any stock options, such payment would be equal to the growth in fair market
value of the shares covered thereby between the date of grant and the date of
exercise. No stock appreciation rights have been granted pursuant to the Plans.
7
<PAGE> 10
An award of restricted shares involves the immediate transfer by the
Company to a participant of ownership of a specific number of shares of Common
Stock in consideration of the performance of services. The participant is
entitled immediately to voting, dividend and other ownership rights in the
shares. The transfer may be made without additional consideration or for
consideration in an amount that is less than the market value of the shares on
the date of grant, as the Compensation and Board Affairs Committee may
determine. The Compensation and Board Affairs Committee may condition the award
on the achievement of specified performance objectives ("Management
Objectives").
Restricted shares must be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period to be determined by
the Compensation and Board Affairs Committee. An example would be a provision
that the restricted shares would be forfeited if the participant ceased to serve
the Company as an officer or other salaried employee during a specified period
of years.
The 1994 Plan allows for the grant of deferred shares. An award of deferred
shares constitutes an agreement by the Company to deliver shares of Common Stock
to the participant in the future in consideration of the performance of
services, subject to the fulfillment of such conditions during the Deferral
Period (as defined in the 1994 Plan) as the Compensation and Board Affairs
Committee may specify. During the Deferral Period, the participant has no right
to transfer any rights covered by the award and no right to vote the shares
covered by the award. On or after the date of any grant of deferred shares, the
Compensation and Board Affairs Committee may authorize the payment of dividend
equivalents thereon on a current, deferred or contingent basis in either cash or
additional shares of Common Stock. Grants of deferred shares may be made without
additional consideration or for consideration in an amount that is less than the
market value of the shares on the date of grant. Deferred shares must be subject
to a Deferral Period, as determined by the Compensation and Board Affairs
Committee on the date of grant, except that the Compensation and Board Affairs
Committee may provide for a shorter Deferral Period in the event of a change in
control of the Company or other similar transaction or event. No deferred shares
have been granted pursuant to the 1994 Plan.
The 1994 Plan allows for the grant of performance shares. A performance
share is the equivalent of one share of Common Stock, and a performance unit is
the equivalent of $1.00. A participant may be granted any number of performance
shares or performance units. The participant will be given one or more
Management Objectives to meet within a specified period (the "Performance
Period"). The specified Performance Period may be subject to earlier termination
in the event of a change in control of the Company or other similar transaction
or event. A minimum level of acceptable achievement will also be established by
the Compensation and Board Affairs Committee. If by the end of the Performance
Period the participant has achieved the specified Management Objectives, the
participant will be deemed to have fully earned the performance shares or
performance units. If the participant has not achieved the Management Objectives
but has attained or exceeded the predetermined minimum level of acceptable
achievement, the participant will be deemed to have partly earned the
performance shares or performance units in accordance with a predetermined
formula. To the extent earned, the performance shares or performance units will
be paid to the participant at the time and in the manner determined by the
Compensation and Board Affairs Committee in cash, shares of Common Stock or any
combination thereof. No performance shares or performance units have been
granted pursuant to the 1994 Plan
8
<PAGE> 11
Stock options, stock appreciation rights, restricted shares, deferred
shares, performance shares and performance units are nontransferable other than
by will or the laws of descent and distribution and may be exercised during the
grantee's lifetime only by him or her. The number of shares covered by the Plans
and outstanding awards are subject to an adjustment in the case of changes in
the Company's capital structure, business combinations, reorganizations and
similar events.
NONQUALIFIED STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS. The Company's
Nonqualified Stock Option Plan for Nonemployee Directors was approved by the
shareholders of the Company on May 11, 1994 (the "Directors Option Plan"). The
Directors Option Plan provides for the granting of options to purchase shares of
Common Stock ("Nonqualified Options"). In addition, the Directors Option Plan
gives nonemployee directors an opportunity to defer receipt, and therefore the
recognition for federal income taxes purposes, of all or a portion of their
annual retainer and meeting fees payable by the Company for their services as a
director. The maximum number of shares of Common Stock that may be issued
pursuant to the Directors Option Plan is 400,000 shares. The Directors Option
Plan provides that an option for 20,000 shares will be granted to any new
nonemployee director upon his election to the Board (subject to a maximum
aggregate grant under all of the Plans of 20,000 shares). In addition, the
Directors Option Plan provides that each incumbent nonemployee director will be
entitled to an option for 10,000 shares on each January 31 thereafter (subject
to a maximum aggregate grant under all of the Plans of 10,000 shares).
The exercise price of the nonqualified options granted under the Directors
Option Plan is equal to the average of the closing price of the Common Stock on
the NYSE for the five trading days commencing on February 15 (or the first
trading day thereafter if such date is not a trading day) of the year in which
the grant is made.
Under the terms of the Directors Option Plan, a nonemployee director may
elect to have his or her director's fees credited to an account in Units (an
accounting unit equal in value to one share of Common Stock). Deferred fees
payable in Units will be credited to a nonemployee director's account at the end
of each fiscal quarter on the basis of the average of the closing prices of the
Common Stock on the NYSE on the last trading day of each calendar month during
the quarter. After the end of the third fiscal year after each fiscal year in
which any deferred fees have been credited to a nonemployee director's account,
unless such nonemployee director shall have elected to have his or her entire
deferred amount distributed upon termination of services as a director, the
Company shall deliver to such nonemployee director that number of full shares of
Common Stock which is equal to the number of Units credited to such nonemployee
director's account with respect to such fiscal year, including the dividend
equivalents allocable to such Units. Upon the termination of service of the
nonemployee director as a director of the Company for any reason, the Company
shall pay the nonemployee director or his or her beneficiary, as the case may
be, the balance of his or her account in full shares of Common Stock in one lump
sum.
9
<PAGE> 12
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SECURITIES TOTAL STOCK AVERAGE
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED TO PRICE EXPIRATION PRESENT VALUE ON
NAME GRANTED(1) EMPLOYEES ($/SH) DATE DATE OF GRANT(2)
------------------------------ ---------- ------------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Joseph P. Sullivan 50,000 72.30% $25.98 07/12/04 $105,000
Victor C. Streufert 6,294 9.10 27.125 01/31/04 12,500
Geoffrey D. Lewis 5,102 7.38 27.125 01/31/04 10,200
C. Gregory Schonert 4,458 6.45 27.125 01/31/04 8,900
Michael J. McGee 3,303 4.77 27.125 01/31/04 6,600
</TABLE>
---------------
(1) In 1994, stock options were granted in tandem with DERs on July 12, 1994 for
Mr. Sullivan and on January 31, 1994 for the other officers. At December
31, 1994, the accumulated number of DER shares related to the 1994 stock
options for each of the named executive officers was as follows: Mr.
Sullivan: 2,540; Mr. Streufert: 608; Mr. Lewis: 493; Mr. Schonert: 430; and
Mr. McGee: 319. The dollar value of all such DER shares at December 31,
1994 based on the closing price of the Company's Common Stock was $86,700.
(2) Estimated present values are based on the Black-Scholes Model, a
mathematical formula used to value options traded on stock exchanges. The
Black-Scholes Model considers a number of factors, including the stock's
volatility and dividend rate, the term of the option, and interest rates.
The ultimate value of the options will depend on the future market price of
the Company's Common Stock, which cannot be forecast with reasonable
accuracy. The expected volatility of the Company's Common Stock used in
valuing the options is .25, and is based on the sixty-month historical
volatility of the Company's Common Stock. The future dividend yield assumed
in valuing the options is 9%. The options are valued assuming they will be
exercised just prior to their expiration in 10 years. The risk-free rates
of return used in valuing the options are 5.83% for the January 1994
options and 7.61% for the July 1994 options. These risk-free rates of
return were determined based upon the quoted yields for 10-Year U.S.
Treasury Strips (principal only securities) at the approximate dates the
options were granted. Estimated present values do not include DERs.
AGGREGATED OPTION EXERCISES IN 1994 AND OPTION VALUES AT DECEMBER 31, 1994.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1994 DECEMBER 31, 1994(2)
ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Sullivan....... -0- -0- 31,548 87,355 $ 400 $ 400
Victor C. Streufert...... -0- -0- 50,239 17,094 -0- -0-
Geoffrey D. Lewis........ -0- -0- 21,343 14,477 -0- -0-
C. Gregory Schonert...... -0- -0- 43,242 12,558 4,400 -0-
Michael J. McGee......... -0- -0- 24,236 9,659 -0- -0-
</TABLE>
10
<PAGE> 13
---------------
(1) Value at exercise is the difference between the closing price on the date of
exercise less the exercise price per share of Common Stock, multiplied by
the number of shares acquired upon exercise.
(2) Calculated based on the closing price of the Company's Common Stock at
December 31, 1994 multiplied by the number of applicable shares
in-the-money, less the total exercise price for such shares and considering
accumulated tandem DER shares.
MONEY PURCHASE RETIREMENT PLAN. The Company has a Money Purchase
Retirement Plan (the "Money Purchase Plan") pursuant to which it provides
retirement benefits for all of its employees. The Company is required to make an
annual contribution pursuant to the Money Purchase Plan on behalf of
participating employees, subject to a maximum contribution for each participant
not to exceed the lesser of $30,000 or 25% of the participant's annual
compensation. A participant's interest in contributions made to the Money
Purchase Plan for his account become 100% vested after one year of service with
the Company. Benefits are payable to participants upon their retirement,
termination or death. The Company is required to fund annual contributions
pursuant to the direction of participants into various investment funds managed
by a brokerage firm.
DIRECTORS RETIREMENT PLAN. The Retirement Plan for Outside Directors
("Director Retirement Plan") provides that non-employee directors are eligible
for a retirement benefit if they retire from the Board with at least five years
of service. An eligible retiring director will receive an annual benefit for a
number of years equal to his years of service on the board up to a maximum of 10
years. The annual benefit is equal to the annual base director fee in effect as
of the date of a director's retirement. All benefit payments terminate upon the
death of a director. The Director Retirement Plan is unfunded.
DIRECTORS DEFERRED COMPENSATION PLAN. The Company has a Directors Deferred
Compensation Plan that allows a member of the Board of Directors to defer the
payment of compensation payable by reason of that person's capacity as a
director. Pursuant to the Plan a director may elect to defer payment of between
50% to 100% of such compensation in any calendar year. Any compensation which is
deferred shall be paid in accordance with the election by the director, together
with accrued interest at a rate equal to the prime rate used by Wells Fargo
Bank, N.A. No director deferred any compensation pursuant to this plan in 1994.
MEDICAL EXPENSE AND FINANCIAL PLANNING REIMBURSEMENT PLAN FOR EXECUTIVE
OFFICERS. The Company has a medical expense and financial planning
reimbursement plan for executive officers. Participants in this plan are
entitled to reimbursement for (i) certain medical, dental and vision expenses
incurred by them and their dependents to the extent such expenses are not
covered by other health care plans and insurance policies maintained by them or
by the Company and (ii) certain financial, tax and estate planning expenses
incurred by them. The maximum annual reimbursement for such expenses is $10,000
for each participant.
COMPENSATION AND BOARD AFFAIRS COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation and Board Affairs Committee of the Board of Directors, which is
composed of the non-employee Directors listed below this report. None of these
non-employee Directors has any interlocking or other relationship with the
Company
11
<PAGE> 14
that would call into question his independence as a member of the Compensation
and Board Affairs Committee.
The Compensation and Board Affairs Committee retained the services of
Frederic W. Cook & Co., Inc., a nationally-recognized executive compensation
consulting firm, to assist the Committee in the development and ongoing
implementation of the Company's compensation program. Based largely on the
information provided by Frederic W. Cook and Co., Inc., which included a survey
of other real estate investment trusts in the health care industry, the
Committee believes that the Company's compensation program is within the
intermediate range for comparable companies.
COMPENSATION PHILOSOPHY
The Compensation and Board Affairs Committee believes that the primary
focus of the Company's compensation program should be related to creating value
for shareholders. The Committee also believes that the compensation program
should be designed to retain key executives as employees and to encourage them
to accumulate ownership of the Company's stock. In structuring the compensation
program, the Committee has designed the program to balance short and long-term
incentive compensation to achieve desired results and above all to pay for
performance.
COMPENSATION MIX
The Company's executive compensation is based on three components designed
in each case to accomplish the Company's compensation philosophy.
BASE SALARY. Salaries for executives are reviewed by the Compensation and
Board Affairs Committee on an annual basis and may be increased based upon an
assessment of the individual's contribution to the asset and financial growth of
the Company; competitive pay levels; the executive's demonstrated ability to
work as a member of the management team; and increases in the cost of living.
ANNUAL CASH INCENTIVE AWARDS. Annual cash bonus incentive awards are based
on the performance of the Company. The Committee believes that annual financial,
operational and strategic goals should be set for the organization and that
executive officers should receive incentive compensation when these goals are
met or exceeded. Conversely, the Company believes that there should be risk when
the goals are not met.
Awards granted are determined by a performance schedule specified by the
Committee and are contingent upon achievement of specified goals. Awards are
determined at year end and depend upon (a) the Company's cash flow per share
versus the goals set at the start of the year, (b) growth in the fiscal year's
cash flow per share, and (c) a judgmental review by the Committee of the
Company's overall operational and strategic performance.
For 1994, actual cash bonus incentive awards paid to executive officers
were below the level achieved at year end as specified by the performance
schedule adopted by the Committee at the beginning of 1994. The Committee chose
to reduce these awards pursuant to its discretion because of the continuing poor
financial performance of the Company's psychiatric hospital assets. At the same
time, the Committee recognizes and supports management's actions to reduce the
Company's psychiatric portfolio by sales, restructurings or creation of a class
of targeted stock to separate the economics of the psychiatric hospitals from
the Company's
12
<PAGE> 15
strong core portfolio of acute care and rehabilitation hospitals. It is the
Committee's intention to grant to executive officers in 1995 additional stock
incentive awards to offset the reduced level of cash bonuses paid for 1994.
LONG-TERM INCENTIVES. The Compensation and Board Affairs Committee
administers the Company's 1990 Stock Incentive Plan (the "Plan"). Pursuant to
the Plan, annual restricted stock grants and stock options have been awarded in
order to retain and motivate executives to improve long-term stock price
performance. In 1994, the Committee granted only stock options as long-term
incentives.
Stock options are granted at a price equal to the current fair market value
of the Company's stock at the time of grant and will be of value to the
executive only if the total return to shareholders increases over time. Stock
option awards vest over a two-year period. The Committee recognizes that,
because the Company must distribute at least 95% of its income in the form of
dividends in order to qualify as a real estate investment trust, over the
long-run the share price of the Company's stock may be sensitive to market
interest rates which are beyond management's control. Furthermore, much of the
value created for shareholders over time may be in the form of dividends. These
factors make traditional stock options, which reward only for price
appreciation, ill-suited for executive incentive compensation purposes for
Company officers. For this reason, the Committee determined in 1992 to couple
stock option awards with dividend equivalent rights. By adding dividend
equivalent rights to stock options, the options become a reward for total
shareholder return instead of only for stock price growth. Depending upon
individual performance and contribution, award levels for annual stock option
grants are intended to approximate the fiftieth percentile of long-term
incentive compensation for comparable companies.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation in excess of
$1,000,000 paid to a company's Chief Executive Officer and five other most
highly compensated executive offers. Qualifying performance-based compensation
is not subject to the deduction limit if certain requirements are met. For 1994,
the Committee does not contemplate that there will be nondeductible compensation
for the positions in question. The Committee plans to review this matter for
1995 and take such actions as are necessary to maximize the deductibility of
compensation payments.
CHIEF EXECUTIVE COMPENSATION
The Company has entered into an employment agreement with Joseph P.
Sullivan, President and Chief Executive Officer of the Company, which has a
three-year evergreen term. The agreement provides for a base salary of $477,000.
In addition, under the terms of the agreement, Mr. Sullivan is guaranteed a
minimum annual cash bonus in 1994 and 1995 of 40% and 30%, respectively, of his
base salary. Mr. Sullivan was also guaranteed a minimum stock option grant in
1994 and 1995 equal to a number of shares calculated by dividing 200% of his
base salary by the share price on the date of grant.
The Committee and the full Board believe that the amount and terms of Mr.
Sullivan's compensation are consistent with general compensation levels within
the industry and are appropriate in view of the Company's accomplishments in
1994. These accomplishments include: increasing the Company's funds from
operations;
13
<PAGE> 16
increasing the Company's bank credit line to $100,000,000; funding $62,000,000
of new investments; and preparing for the distribution of a new class of
preferred stock designed to separate the economic effect of the Company's
psychiatric hospital assets from its core portfolio of properties. As stated
above under "Annual Cash Incentive Awards", because of the poor performance of
the Company's psychiatric hospital assets, the Committee reduced the amount of
the cash incentive bonus to which Mr. Sullivan would have been entitled in 1994
according to the performance schedule adopted by the Committee at the beginning
of 1994.
The Committee remains committed to establishing and maintaining a
compensation program that appropriately aligns the Company's executive
compensation with corporate performance and the interests of the shareholders
and which offers competitive opportunities in the executive marketplace. As
such, the Committee periodically reviews the compensation program in order to
make such changes as it considers necessary to achieve such objectives.
NORMAN BARKER, JR. SHELDON S. KING WALTER J. McNERNEY LOUIS T. ROSSO
14
<PAGE> 17
STOCK PRICE PERFORMANCE GRAPH
The graph below compares cumulative total return of the Company, the S&P
500 Index and the Equity REIT Index of the National Association of Real Estate
Investment Trusts ("NAREIT") from December 31, 1989 to December 31, 1994
assuming an initial investment of $100. Total return assumes quarterly
reinvestment of dividends before consideration of income taxes.
[STOCK PERFORMANCE CHART]
ITEM 2. AMENDMENT TO CERTIFICATE OF INCORPORATION
AHP is currently authorized to issue up to 25,000,000 shares of Common
Stock and up to 1,000,000 shares of Preferred Stock. The Company's Board of
Directors recommends that the shareholders consider and approve a proposal to
amend the Company's Certificate of Incorporation to increase the total number of
shares of Common Stock the Company is authorized to issue to 100,000,000 shares.
The purpose of the amendment is to increase the number of shares of Common
Stock available to be issued by the Company in connection with future financings
of equity or convertible debt or potential acquisitions for stock. While the
Company does not have any immediate plans for any such transactions, management
of the Company believes it is prudent to increase the authorized Common Stock at
this time so as to be in a position to raise capital as acquisition
opportunities arise or favorable market circumstances present themselves.
AHP currently has 23,206,000 shares of Common Stock issued and outstanding
or reserved for issuance in connection with the Company's stock incentive plans
and outstanding convertible debt securities. Thus, the Board of Directors
believes the Company's authorized capitalization, after giving effect to the
proposed
15
<PAGE> 18
amendment, would allow the Company adequate flexibility to issue additional
shares of Common Stock as may be necessary to meet the Company's goals for
future acquisitions and expansion of its business.
Article IV, Section 1 of AHP's Certificate of Incorporation as proposed to
be amended would provide as follows:
SECTION 1. The total number of shares of capital stock which the
Corporation shall have authority to issue is One Hundred and One
Million (101,000,000), of which One Hundred Million (100,000,000)
shall be shares of Common Stock having a par value of $0.01 per share
and One Million (1,000,000) shall be shares of Preferred Stock having
a par value of $0.01 per share.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE
PROPOSED AMENDMENT TO AHP'S CERTIFICATE OF INCORPORATION. THE VOTE OF THE
HOLDERS OF A MAJORITY OF THE OUTSTANDING CAPITAL STOCK OF THE COMPANY IS
REQUIRED FOR APPROVAL.
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The table below sets forth information as of March 24, 1995, with respect
to persons known by the Company to be beneficial owners of more than five
percent of the Company's Common Stock. The Company's Common Stock is its only
outstanding class of voting security.
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
--------------------------------------------------------------- ----------- --------
<S> <C> <C>
Franklin Resources, Inc........................................ 1,957,700(1) 9.4%
777 Mariners Island Blvd.
San Mateo, California 94403
</TABLE>
---------------
(1) Based on a Form 13-G filed with the Company by Franklin Resources, Inc. on
or about February 14, 1995.
ITEM 3. SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed an Audit Committee, whose members and
functions are described above under "Election of Directors -- Board Committees
and Meetings." Upon recommendation of the Audit Committee, the Board of
Directors has appointed the firm of Arthur Andersen LLP, independent public
accountants, as auditors for the current fiscal year subject to the approval of
the shareholders of the Company. Arthur Andersen LLP have served as auditors of
AHP since 1987. Representatives of the firm are expected to be present at the
annual meeting and will have the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions.
The shareholders are requested to approve, ratify and confirm the
appointment of the accounting firm of Arthur Andersen LLP as the auditors and as
independent public accountants for AHP for the year ended December 31, 1995.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS AUDITORS FOR 1995.
16
<PAGE> 19
OTHER MATTERS
The Board of Directors knows of no business to be presented at the meeting
other than the matters stated in the notice of the annual meeting and described
in this proxy statement. If other matters should properly come before the
meeting, the proxies will be voted in accordance with the best judgment of the
persons acting under the proxies, and discretionary authority to do so is
included in the proxy.
SOLICITATION OF PROXIES
The total cost of soliciting proxies will be borne by the Company. The
Company has engaged the firm of Corporate Investor Communications, Inc. as proxy
solicitors. The fee to such firm for solicitation services is estimated to be
$5,500, plus reimbursement of out-of-pocket expenses. In addition, proxies may
be solicited by officers and regular employees of the Company, without extra
remuneration, by personal interviews, telephone and telegraph. It is anticipated
that banks, brokerage houses and other custodians, nominees and fiduciaries will
forward soliciting material to beneficial owners of shares entitled to vote at
the meeting, and such persons will be reimbursed for the out-of-pocket expenses
incurred by them in this connection.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the Company's next
annual meeting of shareholders must be received by the Company at its principal
executive offices on or before January 25, 1996, to be included in the Company's
proxy statement and form of proxy relating to that meeting.
By Order of the Board of Directors,
Geoffrey D. Lewis
Corporate Secretary
March , 1995
17
<PAGE> 20
PROXY AMERICAN HEALTH PROPERTIES, INC. PROXY
6400 SOUTH FIDDLER'S GREEN CIRCLE, ENGLEWOOD, COLORADO 80111
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates and appoints Joseph P. Sullivan, Victor C.
Streufert, and each of them, as attorneys, agents and proxies of the
undersigned, with full powers of substitution to each, and hereby authorizes
them to represent and to vote, as designated below, all shares of Common Stock
of AMERICAN HEALTH PROPERTIES, INC. (the "Company") held of record by the
undersigned as of the close of business on March 24, 1995 at the Annual Meeting
of Shareholders to be held on May 19, 1995 or any adjournment thereof.
1. ELECTION OF DIRECTORS
To elect as Class II Directors for a three-year term expiring at the 1998
Annual Meeting the following nominees: Royce Diener, Charles M. Haar and
Joseph P. Sullivan.
/ / FOR all nominees listed above
(except as indicated to the contrary below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
--------------------------------------------------------------------------------
2. To approve an amendment to the Certificate of Incorporation to increase the
number of shares of Common Stock.
/ /FOR / / AGAINST / / ABSTAIN
3. To approve the appointment of Arthur Andersen LLP as auditors and independent
public accountants for the Company's 1995 fiscal year.
/ /FOR / / AGAINST / / ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE CONTINUE ON REVERSE SIDE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS. THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE
PROPOSALS.
The undersigned hereby ratifies and confirms all that said attorneys and
proxies, or any of them, or their substitutes, shall lawfully do or cause to be
done by virtue hereof, and hereby revokes any and all proxies heretofore given
by the undersigned to vote at said meeting. The undersigned acknowledges receipt
of the notice of said annual meeting and proxy statement accompanying said
notice.
Dated _______________________, 1995
__________________________________
(Signature)
__________________________________
(Signature)
PLEASE SIGN EXACTLY AS NAMES ARE
SHOWN. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN
SIGNING AS AN ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL
CORPORATION NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED
PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 21
PROXY AMERICAN HEALTH PROPERTIES, INC. PROXY
6400 SOUTH FIDDLER'S GREEN CIRCLE, ENGLEWOOD, COLORADO 80111
The undersigned hereby nominates and appoints Joseph P. Sullivan, Victor C.
Streufert, and each of them, as attorneys, agents and proxies of the
undersigned, with full powers of substitution to each, and hereby authorizes
them to represent and to vote, as designated below, all shares of Common Stock
of AMERICAN HEALTH PROPERTIES, INC. (the "Company") held of record by the
undersigned as of the close of business on March 24, 1995 at the Annual Meeting
of Shareholders to be held on May 19, 1995 or any adjournment thereof.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
<PAGE> 22
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
[X] PLEASE MARK
YOUR VOTES
_______________ ______________ AS THIS
COMMON D.R.S.
1. ELECTION OF DIRECTORS: To elect as Class II Directors for a three-year term
expiring at the 1998 Annual Meeting the following nominees: Royce Diener,
Charles M. Haar and Joseph P. Sullivan.
FOR ALL WITHHOLD
NOMINEES LISTED AUTHORITY
ABOVE (EXCEPT TO VOTE FOR ALL
INDICATED TO THE NOMINEES
CONTRARY BELOW) LISTED ABOVE
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
______________________________________________________________________________
2. To approve an amendment to the Certificate of Incorporation to increase the
number of shares of Common Stock.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To approve the appointment of Arthur Andersen LLP as auditors and
independent public accountants for the Company's 1995 fiscal year.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS. THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE
PROPOSALS.
The undersigned hereby reflects and confirms all that said attorneys and
proxies, or any of them, or their substitutes, shall lawfully do or cause to be
done by virtue hereof, and hereby revokes any and all proxies heretofore given
by the undersigned to vote at said meeting. The undersigned acknowledges
receipt of the notice of said annual meeting and proxy statement accompanying
said notice.
________________________________________________________________________________
(Signature)
________________________________________________________________________________
(Signature)
Dated ____________________, 1995
Please sign exactly as names are shown. When shares are held by joint tenants,
both should sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a corporation, please sign in
full corporation name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
