SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commisison Only (as permitted by
Rule 14a-6(e)(2))
[XX] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
SUPERTEL HOSPITALITY, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[XX] No fee required.
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
PROXY STATEMENT
SUPERTEL HOSPITALITY, INC.
309 North 5th Street
Norfolk, Nebraska 68701
(402) 371-2520
SUPERTEL HOSPITALITY, INC.
<PAGE>
SUPERTEL HOSPITALITY, INC.
309 North 5th Street
Norfolk, Nebraska 68701
(402) 371-2520
NOTICE OF MEETING
To Supertel Hospitality, Inc. Stockholders:
The annual meeting of stockholders of Supertel Hospitality, Inc. will be
held on May 2, 1997 at 2:00 p.m. local time, at The Red Lion Inn, 1616 Dodge
Street, Omaha, Nebraska 68102.
We hope you will be able to attend the Annual Stockholders' Meeting. If you
do not expect to be present and wish your stock to be voted, please sign, date
and mail the enclosed proxy form. If you later decide to attend the meeting, you
may withdraw your proxy at that time and vote your shares in person.
Matters to be considered by the stockholders:
Item 1. Election of Directors.
Item 2. Approval of the 1997 Stock Plan.
Item 3. Approval of the appointment of the independent
accountants for fiscal year 1997.
Stockholders of record as of the close of business on March 14, 1997 are
eligible to vote at the Annual Stockholders' Meeting.
By order of the Board of Directors
Paul J. Schulte, President and
Chief Executive Officer
March 25, 1997
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<PAGE>
PROXY STATEMENT
Annual Meeting of Stockholders to be held May 2, 1997
To our Stockholders:
The Board of Directors of Supertel Hospitality, Inc. ("Supertel") solicits
your proxy in the form enclosed for use at the Annual Meeting of Stockholders to
be held on Friday, May 2, 1997.
Stockholders of record at the close of business on March 14, 1997 are
entitled to vote at the meeting. Supertel at March 14, 1997 had issued and
outstanding 4,840,000 shares of common stock. All holders of common stock are
entitled to one vote for each share of stock held by them.
The presence of a majority of the outstanding shares of common stock,
represented in person or by proxy at the meeting, will constitute a quorum.
Common shares represented by proxies that are marked "abstain" will be counted
as shares present for purposes of determining the presence of a quorum. Proxies
relating to "street name" shares that are voted by brokers on some matters will
be treated as shares present for purposes of determining the presence of a
quorum, but will not be treated as shares entitled to vote at the annual meeting
on those matters as to which authority to vote is withheld by the broker
("broker non-votes").
The five nominees receiving the highest vote totals will be elected as
directors of Supertel. Accordingly, abstentions and broker non-votes will not
affect the outcome of the election of directors. All other matters to be voted
on will be decided by the affirmative vote of a majority of the common shares
present or represented at the meeting and entitled to vote. On any such matter,
an abstention will have same effect as a negative vote. A broker non-vote will
not be counted as an affirmative vote or a negative vote because shares held by
brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority.
A stockholder giving a proxy may revoke it before the meeting by mailing a
signed instrument revoking the proxy to: Secretary, Supertel Hospitality, Inc.,
309 North 5th Street, Norfolk, Nebraska, 68701. To be effective, the revocation
must be received by the Secretary prior to May 2, 1997. A stockholder may attend
the meeting in person, and at that time withdraw his or her proxy and vote in
person. This proxy statement is being mailed to stockholders on or about March
25, 1997.
The cost of solicitation of proxies, including the cost of reimbursing the
banks and brokers for forwarding proxies and proxy statements to their
principals, will be borne by Supertel.
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CERTAIN STOCKHOLDERS
The following table sets forth information relating to the beneficial
ownership of Supertel's common stock by each person known to Supertel to be the
beneficial owner of more than 5% of the outstanding shares of common stock, by
each director, by each executive officer, and by all directors and executive
officers as a group.
Name and Address of Beneficial Percent
Beneficial Owner Ownership as of of Class
March 14, 1997
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Paul Schulte 715,651(1) 14.8%(1)
309 North 5th Street
Norfolk, NE 68701
Steve Borgmann 767,639(1) 15.9%(1)
309 North 5th Street
Norfolk, NE 68701
Loren Steele 6,000(1) (2)
Joseph Caggiano 6,500(1) (2)
Richard Herink 25,500(1) (2)
Troy Beatty 200(1) (2)
KPM Investment Management, Inc.
10250 Regency Circle
Omaha, Nebraska 68114 421,600(3) 8.7%(3)
Wellington Management
Company, LLP 467,000(4) 9.7%(4)
All Executive Officers and
Directors as a Group 1,523,990 31.5%
(6 persons)
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(1) Beneficial ownership includes shares owned by spouses and minor
children and shares which the persons indicated have the right to
acquire through the exercise of stock options as follows: Mr. Steele
and Mr. Caggiano, 4,500 shares each; Mr. Schulte and Mr. Borgmann,
10,000 shares each; Mr. Schulte's spouse, 4,000 shares; and Mr.
Herink, 3,000 shares. Beneficial ownership also includes shares
indirectly owned through corporations as follows: Mr. Schulte,
37,504 shares; and Mr. Borgmann, 82,932 shares.
(2) Less than 1% of the outstanding common stock.
(3) Based on a Schedule 13G dated February 3, 1997 filed with the
Securities and Exchange Commission.
(4) Based on a Schedule 13G dated January 24, 1997 filed with the
Securities and Exchange Commission.
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<PAGE>
ELECTION OF DIRECTORS
Supertel's Board of Directors is composed of five members elected on an
annual basis.
The following table sets forth Supertel's nominees for the Board of
Directors. Each nominee is a member of the present Board of Directors. Mr.
Schulte and Mr. Borgmann have served as directors of Supertel since its
formation. Mr. Steele and Mr. Caggiano have served as directors since February
1994. Mr. Herink became a director in February 1997. Supertel became subject to
the reporting requirements of the Securities Exchange Act of 1934 upon
completion of its initial public offering on May 3, 1994. For information
concerning the ownership of Supertel common stock by the nominees, see "Certain
Stockholders".
PAUL J. SCHULTE
Mr. Schulte, age 63, is President and Chief Executive Officer of
Supertel. Mr. Schulte has been involved in acquiring, developing, owning,
managing and operating economy motels for Supertel or its predecessors
since 1978.
STEVE H. BORGMANN
Mr. Borgmann, age 51, is Executive Vice President and Chief Operating
Officer of Supertel. Mr. Borgmann has been involved in acquiring,
developing, owning, managing and operating economy motels for Supertel or
its predecessors since 1978.
LOREN STEELE
Mr. Steele, age 56, is a director of Super 8 Motels, Inc., a wholly-
owned subsidiary of Hospitality Franchise Systems, Inc. (a publicly- owned
franchisor of hotels and motels). Mr. Steele is also Chairman of the
International Franchise Association. From 1988 through April 1993, Mr.
Steele was Vice Chairman and Chief Executive Officer of Super 8 Enterprises
Motel System, Inc. (franchisor of Super 8 Motels).
JOSEPH CAGGIANO
Mr. Caggiano, age 71, has served as Vice Chairman Emeritus of Bozell,
Jacobs, Kenyon & Eckhardt, Inc. from 1991 to the present. From 1974 to
1991, Mr. Caggiano served as Chief Financial Officer and Vice Chairman of
the Board of Bozell & Jacobs (advertising and public relations). Mr.
Caggiano is also a director of First Omaha Funds.
RICHARD HERINK
Mr. Herink, age 43, became Executive Vice President of Supertel in
August 1995. From April 1993 to August 1995, he was Executive Vice
President of FirsTier Bank, N.A., Norfolk. Prior to April 1993, he was a
Division President with Farm Credit Services of the Midlands.
The proxies will be voted for the election of these nominees; however, in
the event any nominee should become unavailable, which the Board of Directors
has no reason to believe will be the case, the proxy holders will have
discretionary authority in that instance to vote the proxies for a substitute.
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DIRECTOR MEETINGS AND COMPENSATION
The Board of Directors meets on a regularly scheduled basis. The Board of
Directors met six times during 1996. The Board of Directors has assigned certain
responsibilities to committees. Supertel does not have a standing Nominating
Committee.
The Audit Committee, which met four times in 1996, is responsible for
recommending the appointment of Supertel's independent public accountants,
reviewing the scope of the audits recommended by the independent public
accountants, and consulting with the independent public accountants on a
periodic basis on matters relating to financing controls and procedures. Members
of the Audit Committee are Joseph Caggiano (Chairman) and Loren Steele.
The Compensation Committee, which met five times in 1996, determines the
amounts and types of remuneration to be paid to management employees and
administers compensation plans for management employees. Members of the
Compensation Committee are Loren Steele (Chairman) and Joseph Caggiano.
Directors who are not employees of Supertel receives fees of $12,000 per
annum plus $750 per board and committee meeting attended (other than meetings by
written consent or telephone communications). In addition, each non-employee
director receives an option to acquire 1,500 shares of common stock, exercisable
at the market price of the shares on the grant date, each year following such
director's election at the annual stockholders' meeting.
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table shows compensation paid by
Supertel for services rendered during calendar years 1996, 1995 and 1994 for the
executive officers of Supertel whose salary and bonus for 1996 exceeded
$100,000.
<TABLE>
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Annual Compensation Long-Term
Compensation
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Name and Principal Position Year Salary Bonus Number of Options
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<S> <C> <C> <C> <C>
Paul Schulte 1996 $250,000 -0- 5,000
President and 1995 $250,000 $10,000 5,000
Chief Executive Officer 1994 $250,000 $10,000 -0-
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Steve Borgmann 1996 $250,000 -0- 5,000
Executive Vice President and 1995 $250,000 $10,000 5,000
Chief Operating Officer 1994 $250,000 $10,000 -0-
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Richard Herink 1996 $132,000 -0- 3,000
Executive Vice President(1) 1995 $ 41,015 $ 4,400 -0-
1994 --- --- ---
===============================================================================================================================
(1) Mr. Herink became an executive officer of Supertel in August 1995.
</TABLE>
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<PAGE>
OPTION GRANTS IN 1996
The following table sets forth information on grants of stock options
during 1996 pursuant to the Supertel 1994 Stock Option Plan to the executive
officers named in the Summary Compensation Table. No stock appreciation rights
were granted during 1996. <TABLE>
===================================================================================================================================
Percent of Potential Realizable Value at
Total Options Per Share Assumed Annual Rates of Stock
Number of Granted to Exercise Price Appreciation for Option
Options Employees in Price Term(2)
Name Granted(1) Fiscal 1996 Expiration
Date
===================================
5% 10%
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<S> <C> <C> <C> <C> <C> <C> <C>
Paul Schulte 5,000 14.4% $10.75 2-5-06 $33,863 $85,463
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Steve Borgmann 5,000 14.4% $10.75 2-5-06 $33,863 $85,463
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Richard Herink 3,000 8.6% $10.75 2-5-06 $20,318 $51,278
===================================================================================================================================
(1) The options were granted on February 5, 1996 at the then fair market
value of Supertel's common stock and became exercisable on February 5, 1997.
(2) Potential realizable value is based on the assumption that the common
stock price appreciates at the annual rate shown (compounded annually) from the
date of grant until the end of the ten-year option term. Supertel's common stock
price at the end of the ten-year term based on a 5% appreciation would be $17.52
and Supertel's common stock price at the end of the 10- year term based on a 10%
appreciation would be $27.84. The numbers are calculated based on the
requirements promulgated by the Securities and Exchange Commission. The actual
value, if any, an executive may realize will depend on the excess of the stock
price over the exercise price on the date the option is exercised (if the
executive were to sell the shares on the date of exercise), so there is no
assurance that the value realized will be at or near the potential realizable
value as calculated in this table. </TABLE>
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<PAGE>
OPTION EXERCISES IN FISCAL 1996 AND YEAR-END VALUES
The following table sets forth information on aggregate option exercises in
1996 and information with respect to the value of unexercised options to
purchase Supertel's Common Stock for the executive officers named in the Summary
Compensation Table. <TABLE>
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Value of Unexercised In-The-
Number of Number of Unexercised Options Money Options Held at
Shares Held at December 31, 1996 December 31, 1996(1)
Acquired on Value
Name Exercise Realized
------------------------------------
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Exercisable Unexercisable Exercisable Unexercisable
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<S> <C> <C> <C> <C> <C> <C>
Paul Schulte -0- -0- 5,000 5,000 -0- -0-
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Steve Borgmann -0- -0- 5,000 5,000 -0- -0-
- ----------------------------------------------------------------------------------------------------------------------------------
Richard Herink -0- -0- -0- 3,000 -0- -0-
==================================================================================================================================
(1) Value is common stock closing price on December 31, 1996, less the
option exercise price, multiplied by the number of shares.
</TABLE>
CERTAIN AGREEMENTS AND TRANSACTIONS
Supertel is a party to employment agreements with Messrs. Schulte, Borgmann
and Herink. Each employment agreement is for a term extending through December
31, 1997, is annually renewable thereafter, and requires the executive to
refrain from competing with Supertel for one year following termination of
employment. Each employment agreement provides for payment of base salary,
participation in bonus and option plans to the extent determined by the
Compensation Committee, and payment of normal business expenses. If Supertel
terminates an executive without cause (as defined in each employment agreement),
Supertel is required to pay the executive's base salary for the remaining term
of the employment agreement, but in no event for a period of less than twelve
months.
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<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Supertel's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the "Committee"). The
Committee is composed of non-employee directors. The Committee's executive
compensation policies are designed to provide competitive levels of compensation
which integrate pay with Supertel's annual and long-term performance goals,
reward above-average corporate performance, and assist Supertel in attracting,
motivating and retaining qualified executives.
The program consists of three components: base salary, annual incentives
and long-term incentives. The Committee recommended or established the executive
compensation within each of these components during 1996. In determining
competitive levels of compensation, the Committee obtains and utilizes
information such as executive compensation surveys and comparative analyses of
compensation data in proxy statements of others. The Committee intends to
structure all executive compensation so that such payments will be deductible
under Section 162(m) of the Internal Revenue Code.
BASE SALARY. The Committee targets base salary for executives at a level
comparable to base salaries paid by competitive businesses in the same
geographic area. The base salary paid during 1996 to Supertel's chief executive
officer and chief operating officer was established prior to the completion of
Supertel's initial public offering in May 1994 and has not been increased
following such date. The Committee intends to annually review base salaries for
executive officers.
ANNUAL INCENTIVES. The Committee believes that an executive's contribution
to net income should form the basis for annual incentives, since such results
maximize earnings in the best interests of the corporation. For 1996, the
Committee did not authorize any cash bonuses.
LONG-TERM INCENTIVES. Supertel's long-term incentives for executive
officers are provided through stock options under Supertel's 1994 Stock Option
Plan. The Committee intends to grant stock options at the prevailing market
price of Supertel's common stock, and therefore any option grants will have
value only if Supertel's stock price increases. The size of option grants are
expected to be based upon competitive practice and position level, the expected
contribution of each member of the executive officer group to Supertel's
strategic and operational goals, and the Committee's desire to provide certain
executive officers with an opportunity to build a meaningful stake in Supertel.
Past stock option grants are not considered when determining the number of stock
options to grant in a given year.
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<PAGE>
The Committee granted options to acquire an aggregate of 34,600 shares to
42 employees during 1996. The grants to executive officers are set forth under
"Option Grants in 1996" above. The grants reflect the Committee's policy of
issuing stock options for 20% to 25% of the shares authorized under the 1994
Stock Option Plan on an annual basis, and issuing options to Supertel's
executive officers at a level substantially above the grants for other
employees.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The Committee intends to review
the compensation of the Chief Executive Officer on an annual basis. During 1996,
the Committee did not make any change in the base salary of the Chief Executive
Officer from that existing prior to Supertel's initial public offering in May
1994.
Supertel Hospitality, Inc.
Compensation Committee
Loren Steele, Chairman
Joseph Caggiano
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<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following performance graph compares the performance of Supertel's
common stock to the Total Return Index for the NASDAQ Stock Market-United States
Companies (Broad Market Index) and the S & P Hotel/Motel Index. The performance
graph shows cumulative stockholder returns. The performance graph assumes the
value of the investment in Supertel's common stock and each Index was $100 on
May 1, 1994 (immediately prior to the completion of Supertel's initial public
offering on May 3, 1994) and that any dividends were reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Supertel Nasdaq S&P Hotel/
Hospitality, Inc. Composite Index Motel Index
DATE PRICE INDEX PRICE INDEX PRICE INDEX
May 1, 1994 $10.00 100.00 $ 740.68 100.00 $298.77 100.00
December 31, 1994 12.75 127.50 751.96 101.52 302.00 101.08
December 31, 1995 10.00 100.00 1,052.14 142.05 353.46 118.31
December 31, 1996 9.00 90.00 1,291.03 174.30 407.07 136.25
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<PAGE>
APPROVAL OF THE SUPERTEL 1997 STOCK PLAN
GENERAL
Supertel's Board of Directors has adopted the Supertel 1997 Stock Plan (the
"Plan"), subject to stockholder approval. The Board of Directors recognizes the
value of stock incentives in assisting Supertel in the hiring and retaining of
management personnel and in enhancing of the long-term mutuality of interest
between Supertel stockholders and its directors, officers and employees. Since
only 25,500 shares of common stock remain available for grant under Supertel's
current stock plan, the Board of Directors has approved the Plan which
authorizes the issuance of up to 250,000 shares of Supertel common stock.
Under the Plan, the Compensation Committee (the "Committee") of the Board
may grant stock options, stock appreciation rights, restricted stock and stock
bonuses to officers and other employees of Supertel and its subsidiaries. The
number of grantees may vary from year to year. The number of employees eligible
to participate in the Plan is estimated to be approximately 125. The Committee
administers the Plan and its determinations are binding upon all persons
participating in the Plan.
The maximum number of shares of Supertel's common stock that may be issued
under the Plan is 250,000. Any shares of common stock subject to an award which
for any reason are cancelled, terminated or otherwise settled without the
issuance of any common stock are again available for awards under the Plan. The
maximum number of shares of common stock which may be issued under the Plan to
any one employee shall not exceed 20% of the aggregate number of shares of
common stock that may be issued under the Plan. The shares may be unissued
shares or treasury shares. If there is a stock split, stock dividend,
recapitalization or other relevant change affecting Supertel's common stock,
appropriate adjustments may be made by the Committee in the number of shares
issuable in the future and in the number of shares and price under all
outstanding grants made before the event.
GRANTS UNDER THE PLAN
Stock Options for Employees. The Committee may grant employees nonqualified
options and options qualifying as incentive stock options. The option price of
either a nonqualified stock option or an incentive stock option will be the fair
market value of the common stock on the date of grant. Options qualifying as
incentive stock options must meet certain requirements of the Internal Revenue
Code, including the requirement that the aggregate fair market value of the
common stock (determined at the time of the grant of the option) with respect to
which such options are exercisable for the first time by an employee during any
calendar
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<PAGE>
year shall not exceed $100,000. To exercise an option, an employee may pay the
option price in cash, or if permitted by the Committee, by withholding shares
otherwise issuable on exercise of the option or by delivering other shares of
common stock if such shares have been owned by the optionee for at least six
months. The term of each option will be fixed by the Committee but may not
exceed ten years from the date of grant. The Committee will determine the time
or times when each option is exercisable. Options may be made exercisable in
installments, and the exercisability of options may be accelerated by the
Committee. All outstanding options become immediately exercisable in the event
of a change-in-control of Supertel.
Stock Appreciation Rights. The Committee may grant a stock appreciation
right (an "SAR") in conjunction with an option granted under the Plan or
separately from any option. Each SAR granted in tandem with an option may be
exercised only to the extent that the corresponding option is exercised, and
such SAR terminates upon termination or exercise of the corresponding option.
Upon the exercise of an SAR granted in tandem with an option, the corresponding
option will terminate. SAR's granted separately from options may be granted on
such terms and conditions as the Committee establishes. If an employee exercises
an SAR, the employee will generally receive a payment equal to the excess of the
fair market value at the time of exercise of the shares with respect to which
the SAR is being exercised over the price of such shares as fixed by the
Committee at the time the SAR was granted. Payment may be made in cash, in
shares of Supertel common stock, or any combination of cash and shares as the
Committee determines.
Restricted Stock. The Committee may grant awards of restricted stock to
employees under the Plan. The restrictions on such shares shall be established
by the Committee, which may include restrictions relating to continued
employment and Supertel financial performance. The Committee may issue such
restricted stock awards without any cash payment by the employee, or with such
cash payment as the Committee may determine. The Committee has the right to
accelerate the vesting of restricted shares and to waive any restrictions. All
restrictions lapse in the event of a change-in-control of Supertel.
Stock Bonuses. The Committee may grant a bonus in shares of Supertel common
stock to employees under the Plan. Such stock bonuses may be in lieu of cash
compensation otherwise payable to such employee, or may be in addition to such
cash compensation.
Director Participation. Each non-employee director will receive under the
Plan an annual grant of a nonstatutory stock option to acquire 1,500 shares of
common stock exercisable at the fair market value of the common stock on the
date of grant. The annual stock option grant will first be made immediately
following the 1998 annual stockholders' meeting. Each non-employee director
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<PAGE>
currently receives such an option grant pursuant to the terms of Supertel's 1994
Stock Option Plan.
Tax Withholding. The Committee may permit an employee to satisfy applicable
federal, state and local income tax withholding requirements through the
delivery to Supertel of previously-acquired shares of common stock or by having
shares otherwise issuable under the Plan withheld by Supertel.
Other Information. The Board may terminate the Plan at any time but such
termination shall not affect any stock options, SAR's, restricted stock or stock
bonuses then outstanding under the Plan. Unless terminated by action of the
Board, the Plan will continue in effect until December 31, 2006, but awards
granted prior to such date will continue in effect until they expire in
accordance with their terms. The Board may also amend the Plan as it deems
advisable. Amendments which materially modify the requirements for participation
in the Plan or increase the number of shares of common stock subject to issuance
under the Plan must be submitted to stockholders for approval.
FEDERAL INCOME TAX CONSEQUENCES
With respect to incentive stock options, if the holder of an option does
not dispose of the shares acquired upon exercise of the option within one year
from the transfer of such shares to such employee, or within two years from the
date the option to acquire such shares is granted, for federal income tax
purposes (i) the optionee will not recognize any income at the time of the
exercise of the option; (ii) the excess of the fair market value of the shares
as of the date of exercise over the option price will constitute an "item of
adjustment" for purposes of the alternative minimum tax; and (iii) the
difference between the option price and the amount realized upon the sale of the
shares by the optionee will be treated as a long-term capital gain or loss.
Supertel will not be allowed a deduction for federal income tax purposes in
connection with the granting of an incentive stock option or the issuance of
shares thereunder.
With respect to the grant of options which are not incentive stock options,
the person receiving an option will recognize no income on receipt thereof. Upon
the exercise of the option, the optionee will recognize ordinary income in the
amount of the difference between the option price and the fair market value of
the shares on the date the option is exercised. Supertel will receive an
equivalent deduction at that time.
With respect to restricted stock awards and bonuses of common stock, an
amount equal to the fair market value of the Supertel shares distributed to the
employee (in excess of any purchase price paid by the employee) will be
includable in the employee's gross income at the time of receipt unless the
award is not transferable and subject to a substantial risk of forfeiture as
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defined in Section 83 of the Internal Revenue Code (a "Forfeiture Restriction").
If an employee receives an award subject to a Forfeiture Restriction, the
employee may elect to include in gross income the fair market value of the
award. In the absence of such an election, the employee will include in gross
income the fair market value of the award subject to a Forfeiture Restriction on
the earlier of the date such restrictions lapse or the date the award becomes
transferable. Supertel is entitled to a deduction at the time and in the amount
income is included in the gross income of an employee.
With respect to stock appreciation rights, the amount of any cash (or the
fair market value of any common stock) received upon the exercise of a stock
appreciation right will be subject to ordinary income tax in the year of receipt
and Supertel will be entitled to a deduction for such amount.
VOTE REQUIRED
The favorable vote of the holders of a majority of the outstanding shares
of Supertel's common stock present in person or represented by proxy at the
meeting is required for approval of the Plan.
The Board of Directors recommends a vote FOR the approval of
the Supertel 1997 Stock Plan.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of KPMG Peat Marwick has been appointed by the Board of Directors
to conduct the 1997 audit of Supertel's financial statements. The same firm
conducted the 1996 audit. The Board of Directors requests stockholder approval
of their appointment. A representative of KPMG Peat Marwick will be present at
the Annual Stockholders' Meeting and will have the opportunity to make a
statement and to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be included in Supertel's proxy statement
for the 1998 annual meeting must be received by Supertel no later than December
1, 1997 in order for such proposals to be considered for inclusion in Supertel's
proxy statement relating to such meeting.
Supertel's bylaws set forth certain procedures which stockholders must
follow in order to nominate a director or present any other business at an
annual stockholders' meeting. Generally, a stockholder must give timely notice
to the Secretary of Supertel.
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<PAGE>
To be timely, such notice must be received by Supertel at 309 North 5th
Street, Norfolk, Nebraska, 68701, not less than thirty nor more than sixty days
prior to the meeting. The bylaws specify the information which must accompany
any such stockholder notice. Details on these provisions of the bylaws may be
obtained by any stockholder from the Secretary of Supertel.
OTHER MATTERS
The Board of Directors does not know of any other matter that may be
presented for action an the annual meeting of stockholders. If any other matter
or proposal should be presented and should properly come before the meeting for
action, the persons named in the accompanying proxy will vote upon such matter
and upon such proposal in accordance with their best judgment.
By Order of the Board of Directors
Steve H. Borgmann, Secretary
Supertel Hospitality, Inc.
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Supertel Hospitality, Inc.
Proxy for Annual Meeting of Stockholders May 2, 1997
The undersigned hereby constitutes and appoints Paul Schulte and Steve
Borgmann, or either of them, with full power of substitution in each of them,
for and on behalf of the undersigned to vote as proxies, as directed and
permitted herein at the Annual Meeting of Stockholders of Supertel to be held at
The Red Lion Inn, 1616 Dodge Street, Omaha, Nebraska, 68102, on May 2, 1997 at
2:00 p.m. and at any adjournment thereof, upon matters set forth in the Proxy
Statement, and, in their judgment and discretion, upon such other business as
may properly come before the meeting.
ITEM 1.
Election of Directors - FOR the following nominees for Director: Paul
Schulte, Steve Borgmann, Richard Herink, Loren Steele and Joseph
Caggiano.
VOTE FOR WITHHOLD WITHHOLD VOTE FOR
ALL NOMINEES VOTE FOR ALL ONLY THE FOLLOWING
NOMINEES NOMINEE(S):
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ITEM 2.
Approval of the 1997 Stock Plan:
FOR AGAINST ABSTAIN
|-| |-| |-|
ITEM 3.
Approval of appointment of independent accountants KPMG Peat Marwick for fiscal
1997:
FOR AGAINST ABSTAIN
|-| |-| |-|
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. This proxy, when
properly executed, will be voted in the manner directed herein by the
undersigned stockholder. If properly executed and no direction is made, this
proxy will be voted FOR proposals 1, 2 and 3.
Dated this ___ day of _______________, 1997.
Signature______________________________________
Signature______________________________________
(When signing as attorney, executor, administrator, trustee, guardian
or conservator, designate full title. All joint tenants must sign.)
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Appendix
Pursuant to Instructions to Item 10 of Rule 14a-101
SUPERTEL 1997 STOCK PLAN
SECTION 1
NAME AND PURPOSE
1.1 Name. The name of the plan shall be the Supertel 1997 Stock Plan (the
"Plan").
1.2. Purpose of Plan. The purpose of the Plan is to foster and promote the
long-term financial success of the Company and increase stockholder value by (a)
motivating superior performance by means of stock incentives, (b) encouraging
and providing for the acquisition of an ownership interest in the Company by
Employees and (c) enabling the Company to attract and retain the services of a
management team responsible for the long-term financial success of the Company.
SECTION 2
DEFINITIONS
2.1 Definitions. Whenever used herein, the following terms shall have the
respective meanings set forth below:
(a) "Act" means the Securities Exchange Act of 1934, as amended.
(b) "Award" means any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, or any combination thereof, including
Awards combining two or more types of Awards in a single
grant.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee of the Board,
which shall consist of two or more members, each of whom shall
be a "non-employee director" within the meaning of Rule 16b-3
as promulgated under the Act.
(f) "Company" means Supertel Hospitality, Inc., a Delaware
corporation (and any successor thereto) and its Subsidiaries.
(g) "Director Award" means a grant of stock options granted to
each Eligible Director pursuant to Section 7.1 without any
action by the Board or the Committee.
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(h) "Eligible Director" means a person who is serving as a member
of the Board and who is not an Employee.
(i) "Employee" means any employee of the Company or any of its
Subsidiaries.
(j) "Fair Market Value" means, on any date, the average of the
high and low sales prices of the Stock as reported on the
National Association of Securities Dealers Automated
Quotation system (or on such other recognized market or
quotation system on which the trading prices of the Stock are
traded or quoted at the relevant time) on such date. In the
event that there are no Stock transactions reported on such
system (or such other system) on such date, Fair Market Value
shall mean the average of the high and low sale prices on the
immediately preceding date on which Stock transactions were so
reported.
(k) "Option" means the right to purchase Stock at a stated price
for a specified period of time. For purposes of the Plan, an
Option may be either (i) an Incentive Stock Option within the
meaning of Section 422 of the Code or (ii) a Nonstatutory
Stock Option.
(l) "Participant" means any Employee designated by the Committee
to participate in the Plan.
(m) "Plan" means the Supertel 1997 Stock Plan, as in effect from
time to time.
(n) "Restricted Stock" shall mean a share of Stock granted to a
Participant subject to such restrictions as the Committee may
determine.
(o) "Stock" means the Common Stock of the Company, par value $.01
per share.
(p) "Stock Appreciation Right" means the right, subject to such
terms and conditions as the Committee may determine, to
receive an amount in cash or Stock, as determined by the
Committee, equal to the excess of (i) the Fair Market Value,
as of the date such Stock Appreciation Right is exercised, of
the number shares of Stock covered by the Stock Appreciation
Right being exercised over (ii) the aggregate exercise price
of such Stock Appreciation Right.
(q) "Stock Bonus" means the grant of Stock as compensation from
the Company, which may be in lieu of cash compensation
otherwise receivable by the Participant or in addition to such
cash compensation.
(r) "Subsidiary" means any corporation or partnership in which
the Company owns, directly or indirectly, 50% or
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more of the total combined voting power of all classes of
stock of such corporation or of the capital interest or
profits interest of such partnership.
2.2 Gender and Number. Except when otherwise indicated by the context,
words in the masculine gender used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
SECTION 3
ELIGIBILITY AND PARTICIPATION
Except as otherwise provided in Section 7.1, the only persons eligible to
participate in the Plan shall be those Employees selected by the Committee as
Participants.
SECTION 4
POWERS OF THE COMMITTEE
4.1 Power to Grant. The Committee shall determine the Participants to whom
Awards shall be granted, the type or types of Awards to be granted, and the
terms and conditions of any and all such Awards. The Committee may establish
different terms and conditions for different types of Awards, for different
Participants receiving the same type of Awards, and for the same Participant for
each Award such Participant may receive, whether or not granted at different
times.
4.2 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to prescribe, amend, and rescind rules and regulations relating to
the Plan, to provide for conditions deemed necessary or advisable to protect the
interests of the Company, and to make all other determinations necessary or
advisable for the administration and interpretation of the Plan in order to
carry out its provisions and purposes. Determinations, interpretations, or other
actions made or taken by the Committee pursuant to the provisions of the Plan
shall be final, binding, and conclusive for all purposes and upon all persons.
SECTION 5
STOCK SUBJECT TO PLAN
5.1 Number. Subject to the provisions of Section 5.3, the number of shares
of Stock subject to Awards (including Director Awards) under the Plan may not
exceed 250,000 shares of Stock. The
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shares to be delivered under the Plan may consist, in whole or in part, of
treasury Stock or authorized but unissued Stock, not reserved for any other
purpose. The maximum number of shares of Stock with respect to which Awards may
be granted to any one Employee under the Plan is 20% of the aggregate number of
shares of Stock available for Awards under Section 5.1.
5.2 Cancelled, Terminated or Forfeited Awards. Any shares of Stock subject
to an Award which for any reason are cancelled, terminated or otherwise settled
without the issuance of any Stock shall again be available for Awards under the
Plan.
5.3 Adjustment in Capitalization. In the event of any Stock dividend or
Stock split, recapitalization (including, without limitation, the payment of an
extraordinary dividend), merger, consolidation, combination, spin-off,
distribution of assets to stockholders, exchange of shares, or other similar
corporate change, (i) the aggregate number of shares of Stock available for
Awards under Section 5.1 and (ii) the number of shares and exercise price with
respect to Options and the number, prices and dollar value of other Awards, may
be appropriately adjusted by the Committee, whose determination shall be
conclusive. If, pursuant to the preceding sentence, an adjustment is made to the
number of shares of Stock authorized for issuance under the Plan, a
corresponding adjustment shall be made with respect to Director Awards granted
pursuant to Section 7.1.
SECTION 6
STOCK OPTIONS
6.1 Grant of Options. Options may be granted to Participants at such time
or times as shall be determined by the Committee. Options granted under the Plan
may be of two types: (i) Incentive Stock Options and (ii) Nonstatutory Stock
Options. The Committee shall have complete discretion in determining the number
of Options, if any, to be granted to a Participant. Each Option shall be
evidenced by an Option agreement that shall specify the type of Option granted,
the exercise price, the duration of the Option, the number of shares of Stock to
which the Option pertains, the exercisability (if any) of the Option in the
event of death, retirement, disability or termination of employment, and such
other terms and conditions not inconsistent with the Plan as the Committee shall
determine.
6.2 Option Price. Nonstatutory Stock Options and Incentive Stock Options
granted pursuant to the Plan shall have an exercise price which is not less than
the Fair Market Value on the date the Option is granted.
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6.3 Exercise of Options. Options awarded to a Participant under the Plan
shall be exercisable at such times and shall be subject to such restrictions and
conditions as the Committee may impose, subject to the Committee's right to
accelerate the exercisability of such Option in its discretion. Notwithstanding
the foregoing, no Option shall be exercisable for more than ten years after the
date on which it is granted.
6.4 Payment. The Committee shall establish procedures governing the
exercise of Options, which shall require that written notice of exercise be
given and that the Option price be paid in full in cash or cash equivalents,
including by personal check, at the time of exercise or pursuant to any
arrangement that the Committee shall approve. The Committee may, in its
discretion, permit a Participant to make payment (i) in Stock already owned by
the Participant valued at its Fair Market Value on the date of exercise (if such
Stock has been owned by the Participant for at least six months) or (ii) by
electing to have the Company retain Stock which would otherwise be issued on
exercise of the Option, valued at its Fair Market Value on the date of exercise.
As soon as practicable after receipt of a written exercise notice and full
payment of the exercise price, the Company shall deliver to the Participant a
certificate or certificates representing the acquired shares of Stock.
6.5 Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary, no term of this Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code, or, without the consent of any Participant affected thereby, to
cause any Incentive Stock Option previously granted to fail to qualify for the
Federal income tax treatment afforded under Section 421 of the Code.
SECTION 7
DIRECTOR AWARDS
7.1 Amount of Award. Each Eligible Director shall receive an annual grant
of a Nonstatutory Stock Option to acquire 1,500 shares of Stock exercisable at
the Fair Market Value of the Company's common stock on the date of grant; such
grant shall be made on the date of and immediately following the annual meeting
of stockholders (beginning with the 1998 Annual Stockholders' Meeting). The
Nonstatutory Stock Options awarded to a director hereunder shall be
appropriately adjusted in the event of any stock changes as described in Section
5.3.
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SECTION 8
STOCK APPRECIATION RIGHTS
8.1 SAR's In Tandem with Options. Stock Appreciation Rights may be granted
to Participants in tandem with any Option granted under the Plan, either at or
after the time of the grant of such Option, subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine. Each Stock Appreciation Right shall only be exercisable to the
extent that the corresponding Option is exercisable, and shall terminate upon
termination or exercise of the corresponding Option. Upon the exercise of any
Stock Appreciation Right, the corresponding Option shall terminate.
8.2 Other Stock Appreciation Rights. Stock Appreciation Rights may also be
granted to Participants separately from any Option, subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine.
SECTION 9
RESTRICTED STOCK
9.1 Grant of Restricted Stock. The Committee may grant Restricted Stock to
Participants at such times and in such amounts, and subject to such other terms
and conditions not inconsistent with the Plan as it shall determine. Each grant
of Restricted Stock shall be subject to such restrictions, which may relate to
continued employment with the Company, performance of the Company, or other
restrictions, as the Committee may determine. Each grant of Restricted Stock
shall be evidenced by a written agreement setting forth the terms of such Award.
9.2 Removal of Restrictions. The Committee may accelerate or waive such
restrictions in whole or in part at any time in its discretion.
SECTION 10
STOCK BONUSES
10.1 Grant of Stock Bonuses. The Committee may grant a Stock Bonus to a
Participant at such times and in such amounts, and subject to such other terms
and conditions not inconsistent with the Plan, as it shall determine.
10.2 Effect on Compensation. The Committee may from time to time determine
to grant a Stock Bonus in lieu of salary or cash bonuses otherwise payable to a
Participant.
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SECTION 11
AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
11.1 General. The Board may from time to time amend, modify or terminate
any or all of the provisions of the Plan, subject to the provisions of this
Section 11.1. The Board may not change the Plan in a manner which would prevent
outstanding Incentive Stock Options granted under the Plan from being Incentive
Stock Options without the consent of the optionees concerned. Furthermore, the
Board may not make any amendment which would (i) materially modify the
requirements for participation in the Plan or (ii) increase the number of shares
of Stock subject to Awards under the Plan pursuant to Section 5.1, in each case
without the consent and approval of the holders of a majority of the outstanding
shares of Stock entitled to vote thereon. No amendment or modification shall
affect the rights of any Employee with respect to a previously granted Award,
nor shall any amendment or modification affect the rights of any Eligible
Director pursuant to a previously granted Director Award.
11.2 Termination of Plan. No further Options shall be granted under the
Plan subsequent to December 31, 2006, or such earlier date as may be determined
by the Board.
SECTION 12
MISCELLANEOUS PROVISIONS
12.1 Beneficiary Designation. Each Participant under the Plan may from time
to time name any beneficiary or beneficiaries (who may be named contingent or
successively) to whom any benefit under the Plan is to be paid or by whom any
right under the Plan is to be exercised in case of his death. Each designation
will revoke all prior designations by the same Participant shall be in a form
prescribed by the Committee, and will be effective only when filed in writing
with the Committee. In the absence of any such designation, Awards outstanding
at death may be exercised by the Participant's surviving spouse, if any, or
otherwise by his estate, subject to the terms and conditions of the Award.
12.2 No Guarantee of Employment or Participation. Nothing in the Plan shall
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate any Participant's employment at any time, nor confer upon any
Participant any right to continue in the employ of the Company or any
Subsidiary. No Employee shall have a right to be selected as a Participant, or,
having been so selected, to receive any future Awards.
12.3 Tax Withholding. The Company shall have the power to withhold, or
require a Participant or Eligible Director to remit to
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the Company, an amount sufficient to satisfy federal, state, and local
withholding tax requirements on any Award under the Plan, and the Company may
defer issuance of Stock until such requirements are satisfied. The Committee
may, in its discretion, permit a Participant to elect, subject to such
conditions as the Committee shall impose, (i) to have shares of Stock otherwise
issuable under the Plan withheld by the Company or (ii) to deliver to the
Company previously acquired shares of Stock, in each case having a Fair Market
Value sufficient to satisfy all or part of the Participant's estimated total
federal, state and local tax obligation associated with the transaction.
12.4 Change of Control. On the date of a Change of Control, all outstanding
options and stock appreciation rights shall become immediately exercisable and
all restrictions with respect to Restricted Stock shall lapse. "Change of
Control" shall mean:
(i) The acquisition (other than from the Company) by any person,
entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Act (excluding any acquisition or holding by (i)
the Company or its subsidiaries or (ii) any employee benefit plan
of the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Act) of 50% or more of either the then outstanding shares of
common stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the
election of directors; or
(ii) Individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose
election, or nomination for the election by the Company's
stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be, for
purposes of this Plan, considered as though such person were a
member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which
persons who were the stockholders of the Company immediately
prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the combined voting
power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's then
outstanding voting securities, or a liquidation or
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dissolution of the Company or of the sale of all or substantially
all of the assets of the Company.
12.5 Company Intent. The Company intends that the Plan comply in all
respects with Rule 16b-3 under the Act, and any ambiguities or inconsistencies
in the construction of the Plan shall be interpreted to give effect to such
intention.
12.6 Requirements of Law. The granting of Awards and the issuance of shares
of Stock shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or securities exchanges as may be
required.
12.7 Effective Date. The Plan shall be effective upon its adoption by the
Board subject to approval by the affirmative vote of the holders of a majority
of the shares of Stock present in person or by proxy at a stockholders' meeting.
12.8 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Delaware.
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