[Sonesta letterhead]
[Sonesta logo] SONESTA INTERNATIONAL HOTELS CORPORATION
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02116
April 17, 1996
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders to
be held on May 22, 1996 at 9:00 in the morning, notice of which is enclosed.
The Meeting will be held at the Company's Corporate Offices, 200 Clarendon
Street, Boston, Massachusetts. I hope that as many stockholders as possible
will attend.
Please date and sign the enclosed Proxy and return it in the accompanying
envelope. This will not prevent you from voting in person at the Meeting if
you so desire, in which case you may revoke your Proxy at that time. By
returning your signed Proxy now, you can be sure that your vote will be
counted even if you are not able to attend the Meeting. If you have received
Proxies as both a Common Stock and Preferred Stock owner, please sign, date
and return both Proxies.
The Annual Report of the Company for 1995 is being forwarded to
stockholders together with this Notice and Proxy Statement; however, any
stockholder who wishes to receive another copy of this report or the
Company's Form 10-K may obtain one, without charge, by writing to the
Secretary of the Company at the above address.
Roger P. Sonnabend
Chairman of the Board
<PAGE>
<PAGE>
[Sonesta letterhead]
[Sonesta logo] SONESTA INTERNATIONAL HOTELS CORPORATION
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02116
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
To the Stockholders of
Sonesta International Hotels Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Sonesta
International Hotels Corporation (the "Company"), will be held at the
Company's Corporate Offices, 200 Clarendon Street, Boston, Massachusetts on
May 22, 1996 at 9:00 a.m. for the following purposes.
Matter No.
1. To elect a Board of Directors.
2. To ratify the appointment of Ernst & Young as independent auditors for
the year 1996.
3. To consider and transact such other business as may properly come
before the Meeting or any adjournment or adjournments thereof.
Holders of Preferred and Common Stock are entitled to vote on Matter No. 1
as set forth in the accompanying Proxy Statement; only the holders of Common
Stock may vote on the other matters.
Stockholders of record at the close of business on April 15, 1996 are
entitled to notice of and to vote at the Meeting.
By Order of the Board of Directors,
Peter J. Sonnabend
Secretary
Dated: April 17, 1996
<PAGE>
<PAGE>
PROXY STATEMENT
Solicitation of Proxies
The accompanying Proxy is solicited by the Board of Directors of the
Company. All shares represented by the accompanying Proxy will be voted in
accordance with the specified choice of the stockholders. In the absence of
directions, the Proxy will be voted for the election of the nominees for
Directors named in this Proxy Statement, and for the ratification of the
appointment of Ernst & Young as independent auditors for the year 1996. The
Proxy may be revoked at any time before it is exercised by notifying the
Company in writing at the address listed on the Notice of Annual Meeting of
Stockholders, Attention--Office of the Secretary; or by voting in person at
the Meeting.
All costs of solicitation of Proxies will be borne by the Company. In
addition to solicitation by mail, the Company's Directors, officers and
regular employees, without additional remuneration, may solicit Proxies by
telephone, telegraph and personal interviews. Brokers, custodians and
fiduciaries will be requested to forward Proxy soliciting material to the
owners of stock held in their names, and the Company will reimburse them for
their out-of-pocket and clerical disbursements in connection therewith. This
Proxy Statement and accompanying Proxy are first being mailed to stockholders
on or about April 20, 1996.
Outstanding Voting Securities and Voting Rights
The outstanding voting securities of the Company as of April 1, 1996
consisted of 2,067,281 shares of Common Stock and 10,697 shares of Preferred
Stock. Only stockholders of record at the close of business on April 15, 1996
will be entitled to vote. Stockholders are entitled to one vote per share. In
connection with the election of Directors, holders of Preferred Stock as a
class elect two Directors and holders of Common Stock as a class elect the
remaining Directors. All stockholders have cumulative voting rights with
respect to the election of Directors, which means that within each class a
stockholder's total vote (number of shares held multiplied by the number of
Directors to be elected by that class) may be cast entirely for one nominee
or distributed among two or more nominees. The Board of Directors is
soliciting discretionary authority to cumulate votes. The vote of the holders
of a majority of the Common Stock voting at the Meeting will be sufficient to
take action on matters other than the election of Directors. Holders of
Preferred Stock are not entitled to vote on any matter other than the
election of Directors.
Under SEC rules, boxes and a designated blank space are provided on the
proxy card for shareholders to mark if they wish either to abstain on one or
more of the proposals or to withhold authority to vote for one or more
nominees for Director. In accordance with New York State law, such
abstentions are not counted in determining the votes cast in connection with
the selection of auditors or the election of one or more of the nominees for
Director.
1
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1. ELECTION OF DIRECTORS
The persons named in the accompanying Proxy, unless otherwise instructed,
intend to vote shares of Common Stock in favor of the election as Directors
for the ensuing year of the Common Stock Nominees named below and to vote
shares of Preferred Stock in favor of the election as Directors for the
ensuing year of the Preferred Stock Nominees named below, and will be
entitled to vote cumulatively in respect of any such nominees. In case any of
those named should become unavailable to serve, it is intended that votes may
be cast for a substitute. The Board of Directors of the Company has no reason
to believe the persons named will be unable or decline to serve if elected.
<TABLE>
<CAPTION>
Owned Beneficially as of
Common Stock Nominees April 1, 1996(1)
--------------------------
Shares and Shares and
Percent of Percent of
Preferred Common
Name, Age and Principal Occupation Stock(2) Stock(3)
------------------------------------------------------------------------ ---------- ------------
<S> <C> <C>
George S. Abrams Age 63; Director since May, 1995;
Attorney
and Director and Trustee of several organizations.................. None 57,285(4)
(2.8%)
Mr. Abrams has been an attorney with the law firm Winer and Abrams,
Boston, Massachusetts for more than 20 years. He formerly served as
General Counsel and Staff Director of the United States Judiciary
Subcommittee on Refugees. Mr. Abrams is a Director of Viacom, Inc.,
where he is a Chairman of the Audit Committee, and of National
Amusements, Inc. Mr. Abrams also serves as a trustee and on the
Visiting Committees of a number of cultural, arts-related and
educational institutions, including the Museum of Fine Arts, in Boston,
and the Harvard University Art Museums.
Vernon R. Alden Age: 72; Director since May, 1978;
Director and Trustee of several organizations ..................... None 2,819
(.1%)
Mr. Alden was Chairman of the Board and Executive Committee of The
Boston Company, Inc., a financial services company, from 1969 to
1978.He was President of Ohio University from 1962 to 1969. Mr. Alden
is a Director of Augat Inc., Colgate-Palmolive Company, Digital
Equipment Corporation and Intermet Corporation. He is also Independent
General Partner of three ML-Lee Acquisition Funds and trustee of
several cultural and educational organizations. Mr. Alden is Chairman
of the Japan Society of Boston and the Honorary Consul General for the
Royal Kingdom of Thailand, in Boston.
2
<PAGE>
Owned Beneficially as of
Common Stock Nominees April 1, 1996(1)
--------------------------
Shares and Shares and
Percent of Percent of
Preferred Common
Name, Age and Principal Occupation Stock(2) Stock(3)
------------------------------------------------------------------------ ---------- ------------
Joseph L. Bower Age: 57; Director since May, 1984;
Donald Kirk David Professor of Business Administration, Harvard
Business School ................................................ None 200
(Less
than
.1%)
Mr. Bower has been a member of the faculty of the Harvard Business
School since l963 and has served as Senior Associate Dean and is
currently Chairman of the Doctoral Programs and Director of Research.
Mr. Bower is a Director of ANIKA Research, Inc., Brown Group, Inc., The
ML-Lee Acquisition Funds, New America High Income Fund, and is a
trustee of the New England Conservatory of Music and DeCordova and Dana
Museum and Park. He has published extensively on strategy,
organization, and the relation of business and government.
Lawrence M. Levinson Age: 77; Director since January, 1973;
Partner, Burns & Levinson, Attorneys at Law (Boston, Massachusetts).. None 1,500
(Less
than
.1%)
Mr. Levinson graduated from Harvard College in 1939 and, after
serving in the United States Army, from Harvard Law School in 1947. He
serves as a Director of Arrow Automotive Industries, Inc. and
Independent Bank Corp., and an Honorary Director of Rockland Trust
Company. He also serves as a director, trustee, officer and/or counsel
for various other corporation and charitable organizations.
Peter J. Sonnabend (8)(9) Age: 42; Director since May, 1995;
Vice Chairman and Secretary, Sonesta International Hotels
Corporation.................................................... 2,000(5) 104,112
(18.7%) (5%)
After graduating from Wesleyan University and Boston University
School of Law, Mr. Sonnabend practiced law with the Boston law firm of
Winer and Abrams from 1980 to 1987. In March 1987, he joined the
Company as Vice President and Assistant Secretary and, in May 1987,
became Vice President and Secretary. He also represents the Company as
General Counsel. Mr. Sonnabend serves as a Director of Hub Data, Inc.
and is also involved in professional, cultural and community
organizations.
3
<PAGE>
Owned Beneficially as of
Common Stock Nominees April 1, 1996(1)
--------------------------
Shares and Shares and
Percent of Percent of
Preferred Common
Name, Age and Principal Occupation Stock(2) Stock(3)
------------------------------------------------------------------------ ---------- ------------
Roger P. Sonnabend (6)(8) Age: 70; Director since May, 1959;
Chairman of the Board and Chief Executive Officer, Sonesta
International Hotels Corporation ............................... 2,000(5) 559,084
(18.7%) (27.0%)
Mr. Sonnabend, a graduate of the Massachusetts Institute of
Technology and Harvard Business School, became a Vice President of the
Company in 1956 after ten years of hotel managerial experience.
Subsequently, he was Executive Vice President and from 1963 to 1970 was
President of the Company. Since June, 1970, Mr. Sonnabend has been
Chairman of the Board and from January, 1978 until November, 1983 he
also held the office of President. He is involved with many
professional, business, community and educational institutions.
Stephanie Sonnabend (8) (10) Age: 43; Director since January, 1996;
President, Sonesta International Hotels Corporation................ 2,000(5) 100,008
(18.7%) (4.8%)
Ms. Sonnabend graduated from Harvard-Radcliffe College in 1975 and
The Sloan School of Management, MIT in 1979. She joined the company in
1979 and held various managerial positions including Vice President of
Sales, Vice President of Marketing, and Executive Vice President. In
January 1996, she became President of the Company. Ms. Sonnabend serves
on the Board of Trustees of Radcliffe College and the Board of
Directors of the Cambridge Chamber of Commerce.
Jean C. Tempel (6) (8) Age: 53; Director since September, 1995;
General Partner, TL Ventures..................................... None None
During 1991, Ms. Tempel was a consultant for Safeguard Scientifics,
Inc., a Philadelphia-based NYSE technology company. She became
President and COO in January, 1992. In November, 1993, she returned to
Boston and became a General Partner, TL Ventures, the Safeguard
affiliated venture capital firm. She also serves as a Director of
Cambridge Technology Partners, Inc., Centocor, Inc., and the Scudder
mutual funds and is a Director of several private companies and not for
profit organizations.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Owned Beneficially as of
Preferred Stock Nominees April 1, 1996 (1)
----------------------
Shares and Shares and
Percent of Percent of
Preferred Common
Name, Age and Principal Occupation Stock(2) Stock (3)
- - - - - --------------------------------------------------------------------------------- -------- ----------
<S> <C> <C>
Paul Sonnabend (6)(8) Age: 68; Director since June, 1961;
Chairman of the Executive Committee and Chief Financial Officer, Sonesta
International Hotels Corporation....................................... 2,000(5) 502,014
(18.7%) (24.3%)
Mr. Sonnabend graduated in 1950 from Cornell University School of Hotel
Administration after serving in the U.S. Naval Reserve. He was President of the
Company from 1970 to 1977. In May, 1980, Mr. Sonnabend became Vice Chairman of
the Board, a position he held until November, 1983 when he reassumed the
Presidency of the Company. Mr. Sonnabend is active in many community projects.
Stephen Sonnabend (6)(8) Age: 64; Director since April, 1964;
Senior Vice President, Sonesta International Hotels Corporation............. 2,000(5) 210,310
(18.7%) (10.2%)
Mr. Sonnabend has served as General Manager of the Royal Sonesta Hotel in
Cambridge and the Sonesta Beach Resort in Key Biscayne. In 1970 he became
Senior Vice President of the Company and serves as President of the Sonesta
Beach Hotel in Key Biscayne, Florida.
</TABLE>
- - - - - ----------------------
(1) Shares are considered beneficially owned for the purposes of this Proxy
Statement if held by the person indicated as beneficial owner, or if such
person, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise has the power to vote, to
direct the voting of and/or to dispose of or to direct the disposition
of, such security, or if the person has the right to acquire beneficial
ownership within sixty (60) days.
(2) As of April 1, 1996 the nominees listed in the table above owned an
aggregate of 2,000 shares of the Company's Preferred Stock, representing
18.7% of that class of equity securities.
(3) As of April 1, 1996 the nominees listed in the table above beneficially
owned an aggregate of 1,313,624 shares of the Company's Common Stock,
representing 63% of that class of equity securities.
(4) Of these shares, 56,000 are held as a Trustee of several trusts for the
benefit of Paul Sonnabend's children and grandchildren; 42,000 of these
shares are deemed to be beneficially owned by Paul Sonnabend and 24,500
of these shares are deemed to be beneficially owned by Peter J.
Sonnabend.
(5) Constitutes the 2,000 shares of Preferred Stock owned by the Sonnabend
Foundation, a charitable trust established by the Sonnabends. See Note 2
on page 14.
5
<PAGE>
(6) Roger, Paul and Stephen Sonnabend are brothers.
(7) By virtue of his stock ownership interest and position with the Company,
he may be deemed to control (or be in common control with other
stockholders of) the Company within the meaning of the Rules and
Regulations of the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
(8) See Note 2 on page 13.
(9) Peter J. Sonnabend is the son of Paul Sonnabend, who is deemed to be the
beneficial owner of 71,700 shares of the common stock owned by Peter J.
Sonnabend.
(10) Stephanie Sonnabend is the daughter of Roger P. Sonnabend, who is deemed
to be the beneficial owner of 96,008 shares of the Common Stock owned by
Stephanie Sonnabend.
Committees of the Board of Directors
The Company's Board of Directors has an Audit Committee consisting of
Messrs. Alden, Bower and Levinson. Mr. Alden serves as Chairman of this
Committee, which meets periodically with the Company's management and
independent public accountants to assure that they are carrying out their
responsibilities.
The Company's Board of Directors has an Executive Committee consisting of
Messrs. Levinson, Bower, Paul Sonnabend, and Roger P. Sonnabend. Mr. Paul
Sonnabend serves as Chairman of this Committee. The Committee has the
authority, except as proscribed by law, to exercise the powers of the
Directors in the management of the business affairs and property of the
Company during the intervals between the meetings of the Board.
The Company's Board of Directors has a Nominating Committee consisting of
Messrs. Bower, Alden, and Paul Sonnabend. Mr. Bower serves as Chairman of
this Committee. The functions of this Committee include consideration of the
composition of the Board and recommendation of individuals for election as
Directors of the Company. The Nominating Committee will consider nominees
recommended by security holders provided such nominations are made pursuant
to the Company's By-laws and applicable law.
The Company's Board of Directors has a Compensation Committee consisting
of Messrs. Alden, Bower, Levinson, and Ms. Tempel. Mr. Bower serves as
Chairman of this Committee, which meets periodically to review and consider
the appropriateness of the compensation of the Company's management.
Directors' Attendance and Fees
Directors who are not salaried employees of the Company receive annual
compensation of $12,000, plus an attendance fee of $600 per meeting.
During 1995 there were six meetings of the Board of Directors, one meeting
of the Compensation Committee, one meeting of the Audit Committee, and one
meeting of the Nominating Committee. The Executive Committee did not meet
during 1995. Each of the nominees attended at least 75% of the total number
of meetings of the Board of Directors and of the committees on which such
Directors served during 1995.
6
<PAGE>
Executive Compensation
Set forth below is the compensation paid and/or accrued by the Company and
its subsidiaries for services in all capacities for the last three completed
fiscal years to or for the benefit of the CEO and each of its four other most
highly compensated executive officers whose aggregate cash compensation
exceeded $100,000.
Summary Compensation Table
Annual Compensation
----------------------------------------
Name & Principal Other Annual
Position Year Salary Bonus* Compensation
------------------------------------ --- ------- ----- -------------
Roger P. Sonnabend 1995 $418,374 72,136 NONE
Chief Executive Officer 1994 402,283 79,169
1993 386,811 83,897
Paul Sonnabend 1995 396,158 68,305 NONE
President 1994 380,922 74,965
1993 366,272 87,429
Stephen Sonnabend 1995 280,395 48,346 NONE
Senior Vice President 1994 269,611 53,059
1993 230,396 62,157
Hans U. Wandfluh 1995 192,400 48,100 NONE
Vice President; President & General 1994 185,000 46,250
Manager, Royal Sonesta Hotel, 1993 170,200 42,500
New Orleans
Jacqueline Sonnabend 1995 156,000 26,894 NONE
Vice President--Human Resources 1994 150,000 29,520
1993 137,700 32,869
Peter J. Sonnabend 1995 156,000 26,894 NONE
Vice President and Secretary 1994 150,000 29,520
1993 137,700 32,869
Stephanie Sonnabend 1995 156,000 26,894 NONE
1993 137,700 32,869
Long Term Compensation
--------------------------------------
Securities
Name & Principal Underlying LTIP** All Other
Position Options/SAR's Payouts Compensation
------------------------------- ------------- ------- --------------
Roger P. Sonnabend NONE NONE NONE
Chief Executive Officer
Paul Sonnabend NONE NONE NONE
President
Stephen Sonnabend NONE NONE NONE
Senior Vice President
Hans U. Wandfluh NONE NONE NONE
Vice President; President
& General Manager,
Royal Sonesta Hotel,
New Orleans
Jacqueline Sonnabend NONE NONE NONE
Vice President--Human Resources
Peter J. Sonnabend NONE NONE NONE
Vice President and Secretary
Stephanie Sonnabend NONE NONE NONE
- - - - - ----------------------
* These bonuses were paid under the Company's incentive compensation plan.
(See p.8)
** Long Term Incentive Plan
7
<PAGE>
Agreements with Executives
The Company entered into Restated Employment Agreements with Roger P.
Sonnabend, Paul Sonnabend, and Stephen Sonnabend, effective as of January 1,
1992, and amended and updated in November 1995 (Paul) and March 1996 (Roger,
Stephen), which replaced Restated Employment Agreements dated January 1,
1984, at annual base salaries of at least $418,374, $396,158, and $280,395,
respectively. The current terms end December 31, 1996, but are automatically
renewed for successive one year terms unless terminated by either party. Upon
the death of any of such executives, the Company has undertaken to continue
payments to their respective "Beneficiary" (as defined in the Agreement) in
an amount equal to fifty percent (50%) of the applicable base salary as of
the date of death, for a period of four years following death. Under separate
agreements, dated December 31, 1991, and amended and updated in November 1995
(Paul) and March 1996 (Roger, Stephen), the Company has agreed that in the
event of the permanent and total disability of Roger P. Sonnabend, Paul
Sonnabend or Stephen Sonnabend while in the employ of the Company, the
Company will continue payments to such executive in an amount equal to fifty
percent (50%) of the applicable base salary at the date of disability, for a
period of four years following the disability; and if death occurs during
disability, for the balance of the four-year period, to the executive's
spouse, estate or other designated beneficiary.
Incentive Compensation Plan
The Company has an incentive compensation plan under which pre-tax profit
thresholds are established at the beginning of each year for certain of its
hotels. Once the profit threshold is reached at a hotel, key employees of
that hotel are entitled to receive a bonus equal to 3% of their annual
salary, and 10% of any profits in excess of the threshold are shared
proportionally by the same group. Additionally, key employees of each hotel
may receive a bonus of up to two percentage points based on an evaluation of
that hotel's performance in the areas of personal service and hotel physical
appearance. Executive Office key employees, including officers of the
Company, are entitled to receive incentive payments of that percentage of
their salary which equals the average (as a percentage of salaries) of all
incentive payments made to certain hotel key employees as a group.
Pension Plan
The Company has an I.R.S. qualified defined benefit pension plan which
covers all non-union salaried employees at its Executive Offices and its
hotels in Boston (Cambridge) and New Orleans. All officers and Directors who
are full-time employees of the Company are covered under this plan. Benefits
under the plan are based on the average compensation for the highest sixty
consecutive months of service during employment, reduced proportionately for
each year of service less than twenty-seven (full service period). The plan
provides for integration with 50% of the primary Social Security benefit,
reduced proportionately for each year of service less than twenty-seven. It
provides for a normal retirement age of 65 and an early retirement age of 55
with five years of service. Benefits become vested at normal retirement age
or upon the completion of five years of service. Thus, the Company is unable
to ascertain the benefits which may accrue to its Directors and/or officers
since the benefits are based on variable factors.
The following table sets forth a range of estimated annual retirement
benefits under the plan upon retirement at age 65.
8
<PAGE>
PENSION PLAN TABLE
Average
Annual Compensation for Years of Service
Highest Sixty -----------------------------------------------------
Consecutive Months 15 20 25 30* 35*
- - - - - -------------------------- -------- -------- -------- -------- ---------
$125,000 30,576 40,767 50,959 55,036 55,036
150,000 37,520 50,027 62,533 67,536 67,536
175,000 44,464 59,286 74,107 80,036 80,036
200,000 51,409 68,545 85,681 92,536 92,536
225,000 58,353 77,805 97,256 105,036 105,036
250,000 65,298 87,064 108,830 117,536 117,536
300,000 79,187 105,582 120,000 120,000 120,000
350,000 93,076 120,000 120,000 120,000 120,000
400,000 106,965 120,000 120,000 120,000 120,000
450,000 120,000 120,000 120,000 120,000 120,000
500,000 120,000 120,000 120,000 120,000 120,000
*The maximum benefit under the Company's Pension Plan is based on 27 years of
service.
The above benefits are calculated on a straight-life annuity basis and
after deducting a portion of Social Security benefits, as described above.
For 1995 the maximum benefit allowable under the Employee Retirement
Income Security Act of 1974 is $120,000.
Each of Roger, Paul and Stephen Sonnabend has the maximum number of years
of credited service under the pension plan (27 years). Of the other
individuals named in the Summary Compensation Table on page 7, Hans Wandfluh
has 23 years of credited service, and Jacqueline, Peter and Stephanie
Sonnabend have 12, 9 and 17 years of accredited service, respectively.
Compensation Committee Report on Executive Compensation
In considering executive compensation, the Compensation Committee, which is
comprised entirely of non-management directors, reviews Management's
recommendations regarding executive compensation in light of numerous
factors, including changes in the cost of living, job responsibilities, job
performance, the compensation awarded to executives holding similar positions
in other companies of comparable size and complexity to the Company, and the
financial capacity of the Company. Generally, in 1995, executive salaries,
including that of the chief executive officer, increased 4% over 1994 levels.
The Compensation Committee's consideration of the chief executive
officer's compensation is consistent with that of other Company executives.
For 1995, the Compensation Committee considered, in particular, as noted
above,
9
<PAGE>
increases in the cost of living and the strong performance of the Company's
owned hotel in Boston (Cambridge) and its leased hotel in New Orleans. The
Compensation Committee believes that the compensation established in January
1995 for the CEO for that year was appropriate in light of the following:
that in 1994 the Company's Boston (Cambridge) and New Orleans hotels achieved
record results; that all Company-operated hotels and resorts performed better
in 1994 than in 1993; that the Company successfully opened a new 250-room
resort in Sharm el Sheikh, Egypt; that the Company was preparing to open a
new 243-room hotel in New Orleans; and that the Company had entered into
partnership agreements, in December 1994, to create new hotels in Costa Rica
and in New York City.
In addition to base salary, the chief executive officer and other
executive officers of the Company can earn annual bonuses under the Company's
incentive compensation plan (as further described elsewhere in this Proxy)
based on hotel operating results and an evaluation of each of the Company's
hotels' performance in areas of personal service and physical appearance by
an independent "shopping" service. These bonuses were also taken into
consideration by the Compensation Committee in reviewing the chief executive
and other executive officers' total annual compensation packages.
In reviewing the compensation paid to the chief executive officer and
other executive officers the Compensation Committee also considered that the
Company has entered into Restated Employment Agreements with the chief
executive officer, the president and the senior vice president which set
annual base salaries for those executive officers. (The Restated Employment
Agreements are further described in this Proxy in the section captioned
"Executive Compensation".)
The Compensation Committee also took note of the fact that the Company has
not awarded stock options to any of the executive officers since 1987. Stock
options have not been deemed a necessary part of the Company's compensation
arrangements for several years and, in fact, the Company's incentive stock
option plan and all options outstanding thereunder expired in 1992.
Submitted by the Compensation Committee.
Vernon R. Alden, Joseph L. Bower, Chairman, Lawrence M. Levinson, and Jean
C. Tempel.
Performance Graph
The following graph compares the annual percentage change in the cumulative
total shareholder return on the Company's Common Stock against the cumulative
total return of the NASDAQ Stock Market (US Companies) and the NASDAQ Hotels
and Motels for the five-year period commencing December 31, 1990 and ending
December 31, 1995.
10
<PAGE>
Comparison of Five Year-Cumulative Total Returns
Performance Graph for
Sonesta International Hotels Corporation
Prepared by the Center for Research in Security Prices
Produced on 03/28/96 including data to 12/29/95
*********************************[LINE CHART]**********************************
Legend
<TABLE>
<CAPTION>
CRSP Total Returns
Symbol Index for: 12/31/90 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95
- - - - - -------------------- ---------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
[straight line with Sonesta International
square dot] Hotels Corporation 100.0 143.7 125.2 205.8 236.3 169.1
[3-dots/1-dash line Nasdaq Stock Market
with star dot] (US Companies) 100.0 160.5 186.9 214.5 209.7 296.5
[dashed line with NASDAQ Stocks
triangle dot] (SIC 7010-7019 US +
Foreign Hotels and
Motels) 100.0 96.8 103.7 98.6 80.1 86.4
</TABLE>
Notes:
A. The lines represent annual index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the annual interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/90.
E. Methodology for calculating the company index was changed at request
to accommodate a one-day suspension
*******************************************************************************
11
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Company's Board of Directors consisted of
Vernon R. Alden, Joseph L. Bower, and Lawrence M. Levinson throughout 1995.
Jean C. Tempel joined the Committee in September, 1995.
Certain Relationships/Transactions
Mr. George S. Abrams, a Director of the Company, performed legal services
for the Company during 1995 and 1996.
The law firm of Burns & Levinson, of which Mr. Lawrence M. Levinson, a
Director of the Company, is a partner, performed legal services for the
Company during 1995 and 1996.
The Company has purchased artwork for its hotels and executive offices
from Obelisk Gallery, Inc., a corporation owned by Mrs. Roger Sonnabend.
Purchases from January 1, 1995 through March 1, 1996 have totaled $187,718
including $166,724 on behalf of managed hotels. The Company believes that the
prices paid for such artwork are at least as favorable to the Company as
would have been obtained from unrelated parties.
PRINCIPAL STOCKHOLDERS
The following tables set forth certain information as of April 1, 1996
with respect to persons known to the Company to be the beneficial owners of
more than 5% of the Company's Common Stock and more than 5% of the Company's
Preferred Stock.
COMMON STOCK
Number of Shares
Name and Address Beneficially Percent
of Beneficial Owner Owned (1) of Class
- - - - - --------------------------------------- ---------------- ---------
Alan M. Sonnabend (2)................. 114,883 (3) 5.6%
c/o Sonesta Beach Resort
350 Ocean Drive
Key Biscayne, FL 33149
Paul Sonnabend (2) ................... 502,014 24.2%
200 Clarendon Street
Boston, MA 02116
Peter J. Sonnabend (2)................ 104,112 (4) 5.0%
200 Clarendon Street
Boston, MA 02116
Roger P. Sonnabend (2)................ 562,084 27.1%
200 Clarendon Street
Boston, MA 02116
12
<PAGE>
Number of Shares
Name and Address Beneficially Percent
of Beneficial Owner Owned (1) of Class
- - - - - --------------------------------------- ---------------- ---------
Stephen Sonnabend (2)................. 217,810 10.5%
200 Clarendon Street
Boston, MA 02116
All executive officers
and Directors as a group
(16 persons including
those noted above) ................... 1,324,324 64.1%
Marvin C. Schwartz (3)................ 144,500 7.0%
c/o Neuberger & Berman
605 Third Avenue
New York, New York 10158-3698
- - - - - --------------
(1) See note 1 on Page 5.
(2) 1,224,908 shares of the Company's Common Stock are subject to the
Sonnabend Voting Trust Agreement dated August 1, 1984, as amended in
December, 1984. The voting trust terminates on December 31, 2000, or at
such time as there are fewer than two trustees. The present trustees are
Messrs. Roger, Paul and Stephen Sonnabend; any two trustees have the
power to vote the shares in their discretion unless otherwise directed by
the holders of a majority of the beneficial owners of the shares. The
trustees and fourteen other members of the Sonnabend family are the
record owners of these shares.
(3) Of these shares, 109,883 are deemed to be benefically owned by Roger P.
Sonnabend.
(4) Of these shares, 71,700 are deemed to be beneficially owned by Paul
Sonnabend.
(5) Marvin C. Schwartz has the sole power to dispose of 18,500 shares and has
shared dispositive power with regard to 115,500 shares. Mr. Schwartz has
sole voting power with regard to 18,500 shares and does not have shared
voting power over any shares.
PREFERRED STOCK
Number of Shares
Name and Address Beneficially Percent
of Beneficial Owner Owned (1) of Class
- - - - - ----------------------------------------- ---------------- ---------
Paul Sonnabend, Stephanie Sonnabend
and Peter J. Sonnabend, as holders of
the voting rights in the Sonnabend
Foundation (2) ........................ 2,000 18.7%
All executive officers and Directors
as a group (16 persons including
above).................................. 2,000 18.7%
- - - - - ----------------------
(1) See note 1 on Page 5.
(2) On April 1, 1996 members of the Sonnabend family, including Roger P.
Sonnabend, Paul Sonnabend, Stephanie Sonnabend, Stephen Sonnabend and
Peter J. Sonnabend, owned beneficially 2,000 shares of Preferred Stock,
all of which was owned beneficially by the Sonnabend Foundation, a
charitable trust established by the Sonnabends.
13
<PAGE>
Jacqueline Sonnabend and Hans U. Wandfluh, who are referenced in the
Summary Compensation Table on Page 7, are the beneficial owners of the
following amounts of Common Stock: Jacqueline Sonnabend: 91,408 shares; Hans
U. Wandfluh: 4,000 shares. Neither of such persons is the beneficial owner of
Preferred Stock.
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The persons named in the accompanying Proxy intend, unless otherwise
instructed, to vote shares of Common Stock for Ernst & Young as independent
auditors for the Company for the year 1996. The appointment of this firm has
been made by the Board of Directors of the Company upon recommendation of its
Audit Committee, subject to stockholder ratification. Until 1979, Arthur
Young & Company, which merged with Ernst & Whinney during 1989 to form Ernst
& Young, had acted as independent auditors for the Company for many years and
was reappointed in 1985.
Ernst & Young is an internationally recognized firm of independent auditors.
This firm has considerable experience in the hotel industry and has offices
in all locations in which the Company operates. In the opinion of the Board
of Directors of the Company, Ernst & Young is fully qualified to act as
independent auditors for the Company.
The Audit Committee has previously reviewed and approved the scope of the
annual audit by the Company's independent public accountants. The Committee
also reviews all services and fees at the end of each annual audit.
A representative of Ernst & Young is expected to be present at the Meeting
and will have an opportunity to make a statement and is to be available to
respond to stockholders' questions.
STOCKHOLDER PROPOSALS
Proposals of stockholders intending to be presented at the next Annual
Meeting of Stockholders must comply with Rule 14a-8 of the Securities and
Exchange Commission issued under the Securities Exchange Act of 1934 and must
be received at the principal executive offices of the Company, 200 Clarendon
Street, Boston, Massachusetts 02116 not later than February 1, 1997.
14
<PAGE>
MISCELLANEOUS
The Board of Directors does not know of any matters, other than those
discussed in this Proxy Statement, which may come before the Meeting.
However, if any other matters are properly presented at the Meeting, it is
the intention of the persons named in the accompanying Proxy to vote, or
otherwise act, in accordance with their judgment on such matters.
By Order of the Board of Directors
Peter J. Sonnabend
Secretary
Dated: April 17, 1996
The Board of Directors hopes that all stockholders will attend the
Meeting. In the meantime, you are requested to execute the accompanying Proxy
and return it in the enclosed envelope. Stockholders who attend the Meeting
may vote their stock personally even though they have sent in their Proxies.
15
<PAGE>
COMMON PROXY
SONESTA INTERNATIONAL HOTELS CORPORATION
PROXY For Annual Meeting of Stockholders--May 22, 1996
Sonesta International Hotels Corporation
200 Clarendon Street, Boston, Massachusetts
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of SONESTA INTERNATIONAL HOTELS CORPORATION, a
New York corporation, hereby constitutes and appoints BOY A.J. VAN RIEL and
PETER J. SONNABEND and each of them, the true and lawful attorneys and proxies
of the undersigned with power of substitution in each of them and their
respective substitute(s), for and in the name of the undersigned to vote the
COMMON STOCK which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Sonesta International Hotels Corporation, to be held on May 22,
1996 at 9:00 A.M. and at any adjournment(s) thereof, to the same extent and with
all powers which the undersigned would possess if personally present. A majority
of such attorneys and proxies or their substitute(s), or if only one be present
and acting at such meeting, then that one, shall have and may exercise all of
the powers of all of said attorneys and proxies. The undersigned hereby
acknowledges receipt of the Notice of Annual Meeting of Stockholders and the
Proxy Statement furnished therewith, each dated April 17, 1996.
(Continued and to be SIGNED on other side)
[triangle] FOLD AND DETACH HERE [triangle]
<PAGE>
The undersigned hereby instructs said proxies to vote
1. ELECTION OF DIRECTORS: G. Abrams, V. Alden, J. Bower, L. Levinson,
P.J. Sonnabend, R. Sonnabend, S. Sonnabend, J. Tempel
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote
listed above AUTHORITY for any individual nominee, write that
(except as marked to vote for nominee's name on the line provided below.)
to the contrary) all nominees
listed above
____________________________________________
[ ] [ ]
2. Ratification of Ernst & Young as independent 3. On such other business as
accountants of the Company for the year 1996. may properly come before
the meeting or any
adjournment(s) thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ] UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE
VOTED FOR PROPOSALS NO. 1 AND NO. 2.
Date ______________________________________, 1996
_________________________________________________
_________________________________________________
Signature(s)
| Please sign exactly as your name or names appear
| hereon. Joint owners should sign personally.
| Corporate proxies should be signed by authorized
|______ officer, and have seal affixed and attested.
PLEASE DATE, SIGN AND MAIL THIS PROXY PROMPTLY.
[triangle] FOLD AND DETACH HERE [triangle]
<PAGE>
PREFERRED PROXY
SONESTA INTERNATIONAL HOTELS CORPORATION
PROXY For Annual Meeting of Stockholders--May 22, 1996
Sonesta International Hotels Corporation
200 Clarendon Street, Boston, Massachusetts
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of SONESTA INTERNATIONAL HOTELS CORPORATION, a
New York corporation, hereby constitutes and appoints BOY A.J. VAN RIEL and
PETER J. SONNABEND and each of them, the true and lawful attorneys and proxies
of the undersigned with power of substitution in each of them and their
respective substitute(s), for and in the name of the undersigned to vote the 5%
CUMULATIVE PREFERRED STOCK which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of Sonesta International Hotels Corporation, to
be held on May 22, 1996 at 9:00 A.M. and at any adjournment(s) thereof, to the
same extent and with all powers which the undersigned would possess if
personally present. A majority of such attorneys and proxies or their
substitute(s), or if only one be present and acting at such meeting, then that
one, shall have and may exercise all of the powers of all of said attorneys and
proxies. The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and the Proxy Statement furnished therewith, each dated
April 17, 1996.
(Continued and to be SIGNED on other side)
[triangle] FOLD AND DETACH HERE [triangle]
<PAGE>
The undersigned hereby instructs said proxies to vote
1. ELECTION OF DIRECTORS: P. Sonnabend, S. Sonnabend
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote
listed above AUTHORITY for any individual nominee, write that
(except as marked to vote for nominee's name on the line provided below.)
to the contrary) all nominees
listed above
____________________________________________
[ ] [ ]
2. On such other business as may properly come
before the meeting or any adjournment(s) thereof.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE
VOTED FOR PROPOSAL NO. 1.
Date ______________________________________, 1996
_________________________________________________
_________________________________________________
Signature(s)
| Please sign exactly as your name or names appear
| hereon. Joint owners should sign personally.
| Corporate proxies should be signed by authorized
|______ officer, and have seal affixed and attested.
PLEASE DATE, SIGN AND MAIL THIS PROXY PROMPTLY.
[triangle] FOLD AND DETACH HERE [triangle]
