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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
HUMPHREY HOSPITALITY TRUST, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] 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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Notes:
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HUMPHREY HOSPITALITY TRUST, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 25, 2000
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The annual meeting of the shareholders (the "Annual Meeting") of Humphrey
Hospitality Trust, Inc. (the "Company") will be held at The Sheraton Inner
Harbor, 300 South Charles Street, Baltimore, Maryland, on Thursday, May 25,
2000, at 11:00 a.m., local time, for the following purposes:
1. To elect directors to serve on the Board of Directors until the annual
meeting of shareholders in 2001 or until their successors have been
duly elected and qualified; and
2. To transact such other business as may properly come before the Annual
Meeting and any adjournments thereof.
Only shareholders of the Company of record as of the close of business on
April 14, 2000 will be entitled to notice of and to vote at the Annual Meeting
and any adjournments thereof.
There is enclosed, as a part of this Notice, a Proxy Statement which
contains further information regarding the Annual Meeting and the nominees for
election to the Board of Directors.
In order that your shares may be represented at the Annual Meeting, you are
urged to promptly complete, sign, date and return the accompanying Proxy in the
enclosed envelope, whether or not you plan to attend the Annual Meeting. If you
attend the Annual Meeting in person you may, if you wish, vote personally on all
matters brought before the Annual Meeting even if you have previously returned
your Proxy.
By Order of the Board of Directors
/s/ Steve H. Borgmann
STEVE H. BORGMANN
Executive Vice President and Secretary
Silver Spring, Maryland
April 19, 2000
<PAGE>
HUMPHREY HOSPITALITY TRUST, INC.
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is provided in connection with the solicitation of
proxies by the Board of Directors of Humphrey Hospitality Trust, Inc. (the
"Company") for use at the annual meeting of shareholders to be held on Thursday,
May 25, 2000 (the "Annual Meeting") and any adjournments thereof. The mailing
address of the principal executive offices of the Company is 12301 Old Columbia
Pike, Silver Spring, Maryland, 20904. This Proxy Statement and the Proxy Form,
Notice of Meeting and the Company's annual report, all enclosed herewith, are
first being mailed to the shareholders of the Company on or about April 18,
2000.
The Proxy
The solicitation of proxies is being made by the Company primarily through
the use of the mails. The cost of preparing and mailing this Proxy Statement and
accompanying material, and the cost of any supplementary solicitations, which
may be made by mail, telephone, telegraph or personally by officers and
employees of the Company, will be borne by the Company. The shareholder giving
the proxy has the power to revoke it by delivering written notice of such
revocation to the Secretary of the Company before or at the Annual Meeting or by
attending the meeting and voting in person. The proxy will be voted as specified
by the shareholder in the space provided on the Proxy Form or, if no
specification is made it will be voted in accordance with the terms thereof. In
voting by proxy in regard to the election of the directors to serve until the
2001 annual meeting of shareholders or until their successors are duly elected
and qualified, shareholders may vote in favor of all nominees, withhold their
votes as to all nominees or withhold their votes as to a specific nominee.
Shareholders may not abstain with respect to the election of directors.
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement and, if given or made, such
information or representation should not be relied upon as having been
authorized. This Proxy Statement does not constitute the solicitation of a
proxy, in any jurisdiction, from any person to whom it is unlawful to make such
proxy solicitation in such jurisdiction. The delivery of this Proxy Statement
shall not, under any circumstances, imply that there has not been any change in
the information set forth herein since the date of the Proxy Statement.
Each outstanding share of the Company's Common Stock, $.01 par value per
share (the "Common Stock"), is entitled to one vote. Cumulative voting is not
permitted. Only shareholders of record at the close of business on April 14,
2000 will be entitled to notice of and to vote at the Annual Meeting and at any
adjournments thereof. At the close of business on April 14, 2000, the Company
had outstanding 11,173,543 shares of Common Stock.
REQUIRED VOTE
Under Virginia law and the Company's Articles of Incorporation and Bylaws,
if a majority of the votes entitled to be cast on matters to be considered at a
meeting are present at the Annual Meeting so as to constitute a quorum, in
person or by proxy, directors are elected by a plurality of the votes cast. The
Board of Directors recommends a vote FOR each of the nominees for director.
No specific provisions of Virginia law, the Company's Articles of
Incorporation or the Company's Bylaws address the issue of abstentions or broker
non-votes. Brokers holding shares for beneficial owners ("Broker Shares") must
vote those shares according to the specific instructions they receive from the
owners. If specific instructions are not received, brokers generally may not
vote the shares in their discretion for the election of directors. Votes
"withheld" from particular director-nominees have the effect of a negative vote
with respect to such nominee because a plurality of the votes cast at a meeting
in which a quorum is present is required for the election of directors. Votes
withheld and Broker Shares that are not voted in the election of directors will
not be included in determining the number of votes cast.
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REPORTS OF BENEFICIAL OWNERSHIP
Under United States securities laws, the Company's directors and executive
officers, and persons who own more than 10% of the Common Stock, are required to
report their ownership of the Common Stock and any changes in ownership to the
Securities and Exchange Commission (the "SEC"). These persons are also required
by SEC regulations to furnish the Company with copies of these reports. Specific
due dates for these reports have been established, and the Company is required
to report in the Proxy Statement any failure to file such reports by those due
dates during the 1999 fiscal year.
Based solely upon its review of the reports furnished to the Company or
written representations from the Company's directors and executive officers, the
Company believes that all of these filing requirements were satisfied by the
Company's directors and executive officers and owners of more than 10% of the
Common Stock during 1999.
OWNERSHIP OF THE COMPANY'S COMMON STOCK
Security Ownership of Certain Beneficial Owners
The following tables sets forth, as of April 14, 2000 (unless otherwise
indicated), certain information regarding the beneficial ownership of shares of
the Company's Common Stock by (i) each person known to the Company to be the
beneficial owner of more than five percent (5%) of its capital stock, (ii) each
director of the Company, (iii) each executive officer of the Company, and (iv)
all directors and executive officers of the Company as a group. Unless
otherwise indicated, all shares are owned directly and the indicated person has
sole voting and investment power. The number of shares represents the number of
shares of Common Stock the person holds plus the number of shares of Common
Stock into which Units of limited partnership interest in Humphrey Hospitality
Limited Partnership ("HHLP") that are held may be redeemed in certain
circumstances. The percentage ownership is based on the total number of
outstanding shares of the Company's Common Stock plus the total number of Units
redeemable for shares of Common Stock.
Security ownership of beneficial owners of more than five percent (5%) of
capital stock:
<TABLE>
<CAPTION>
Amount and Nature
Name & Address of Beneficial of Beneficial Percent of
Owner Ownership Class (1)
- ---------------------------- ------------------ ----------
<S> <C> <C>
Mr. James I. Humphrey, Jr. 708,798 (1) 5.9%
12301 Old Columbia Pike, Suite 300
Silver Spring, MD 20904
Paul J. Schulte 925,491 (2) 7.7%
12301 Old Columbia Pike, Suite 300
Silver Spring, MD 20904
Steve H. Borgmann 920,786 (3) 7.6%
12301 Old Columbia Pike, Suite 300
Silver Spring, MD 20904
Mark H. Tallman 707,010 (4) 5.9%
P.O. Box 4397
Lincoln, NE 68504
</TABLE>
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(1) Assumes that all Units held by James I. Humphrey and the Humphrey
Affiliates are redeemed for shares of Common Stock.
(2) Includes 847,236 shares of Common Stock owned by Mr. Schulte, 29,500 shares
of Common Stock owned by Mr. Schulte's wife and 48,755 shares of Common
Stock over which Mr. Schulte has indirect beneficial ownership.
(3) Includes 812,975 shares of Common Stock owned by Mr. Borgmann and 107,811
shares of Common Stock over which Mr. Borgmann has indirect beneficial
ownership.
(4) Based solely on information filed by Mr. Tallman on Schedule 13G.
Security Ownership by Management
The following table sets forth the beneficial ownership of the Common Stock
as of April 14, 2000 by (i) each director and nominee, (ii) each executive
officer of the Company and (iii) all directors, nominees and executive officers
as a group. Unless otherwise indicated, such shares are owned directly and the
indicated person has sole voting and investment power.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial of Beneficial Percent of
Owner Ownership Class
- ------------------ ----------------- -----------
<S> <C> <C>
James I. Humphrey, Jr. 708,798 (1) 5.9%
Paul J. Schulte 925,491 (2) 7.7%
Steve H. Borgmann 920,786 (3) 7.6%
Jeffrey M. Zwerdling 94,934 (4) .8%
Loren Steele 11,700 .1%
Joseph Caggiano 22,050 .2%
George R. Whittemore 94,301 (5) .8%
All directors and executive officers as a group
(7 persons) 2,778,060 23.1%
</TABLE>
- ---------------
(1) Represents 703,179 shares of Common Stock issuable to Mr. Humphrey directly
upon redemption of his Units, 5,279 shares issuable to Humphrey Associates,
Inc. upon redemption of its Units and 340 shares issuable to Humphrey
Development, Inc. upon redemption of its Units. Mr. Humphrey is the sole
shareholder of Humphrey Associates, Inc. and the majority shareholder of
Humphrey Development, Inc. The redemption rights are exercisable at any
time subject to certain conditions.
(2) Includes 847,236 shares of Common Stock owned by Mr. Schulte, 29,500 shares
of Common Stock owned by Mr. Schulte's wife and 48,755 shares of Common
Stock over which Mr. Schulte has indirect beneficial ownership.
(3) Includes 812,975 shares of Common Stock owned by Mr. Borgmann and 107,811
shares of Common Stock over which Mr. Borgmann has indirect beneficial
ownership.
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(4) Includes 57,317 shares of Common Stock owned by Mr. Zwerdling and 37,617
shares of Common Stock over which Mr. Zwerdling has dispositive power.
(5) Includes 90,825 shares of Common Stock owned by Mr. Whittemore and 3,476
shares owned by Mr. Whittemore's wife.
1. ELECTION OF DIRECTORS
Nominees for Directors
Each of the Company's directors is elected by the shareholders of the
Company, at each annual meeting, for a term of one year and until their
respective successors are duly elected and qualified. The Board of Directors
currently has set the number of directors constituting the Board of Directors at
seven, all of whom will be elected at the Annual Meeting, four of whom are
Independent Directors. Independent Directors are directors who are not also
employees or executive officers of the Company.
The Company has no nominating committee of its Board of Directors. Nominees
for director are nominated by the entire Board of Directors. Each of the
nominees is currently a director and has served continuously since the year he
or she joined the Board.
If any nominee becomes unavailable or unwilling to serve as a director for
any reason, the persons named as proxies in the Proxy Form are expected to
consult with management of the Company in voting the shares represented by them.
The Board of Directors has no reason to doubt the availability of the nominees,
and all have indicated their willingness to serve as a director of the Company
if elected.
NOMINEES FOR ELECTION AS DIRECTORS
(TERMS EXPIRING 2001)
Paul J. Schulte, Member of the Investment Committee, Chairman of the Board,
and Chief Executive Officer. Mr. Schulte, age 66, was a founder, director and
President of Supertel Hospitality, Inc. He joined the Company's Board in
October 1999, following the consummation of the merger between Supertel and the
Company. Mr. Schulte has been involved in acquiring, developing, owning,
managing and operating economy motels for Supertel or its predecessors since
1978.
James I. Humphrey, Jr., Member of the Investment Committee, Vice Chairman of
the Board, President/Chief Operating Officer and Treasurer. Mr. Humphrey, age
57, is President and sole shareholder of Humphrey Associates, Inc., and has held
that position since 1978. Humphrey Associates, Inc. is a full-service real
estate corporation. Mr. Humphrey also served as President of Humphrey Hotels,
Inc. from 1989 to 1994. He currently serves on the Credit Assurance Review
Committee of the Maryland Housing Fund and has served on the Governor's Housing
Task Force in Maryland, the Maryland Housing Policy Commission and the Maryland
International Division Private Sector Advisory Council. Mr. Humphrey is a
graduate of the University of Maryland and obtained an M.B.A. degree from Loyola
College. Mr. Humphrey has served continuously as Director of the Company since
November 1994. Until the merger of Supertel and the Company, Mr. Humphrey also
served as the Chairman of the Board and Chief Executive Officer of the Company.
Steve H. Borgmann, Member of the Investment Committee, Executive Vice
President and Secretary. Mr. Borgmann, age 54, was a founder, director and
Executive Vice President of Supertel Hospitality, Inc. He joined the Company's
Board in October 1999, following the consummation of the merger between Supertel
and the Company. Mr. Borgmann has been involved in acquiring, developing,
owning, managing and operating economy motels for Supertel or its predecessors
since 1978. Mr. Borgmann received a Bachelor of Science degree from the
University of Nebraska - Lincoln in 1969.
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Jeffrey M. Zwerdling, Esq., Director and member of the Audit Committee. Mr.
Zwerdling, age 54, is Managing Partner at the law firm of Zwerdling and Oppleman
located in Richmond, Virginia. Mr. Zwerdling specializes in commercial real
estate law and general litigation. He is presently President and Director of
The Corporate Center, the owner of a 225,000 square foot office park complex
located in Richmond, Virginia. Mr. Zwerdling is a graduate of Virginia
Commonwealth University and obtained his J.D. degree from William & Mary Law
School. Mr. Zwerdling has served as a Director of the Company since November
1996.
George R. Whittemore, Director and Member of the Audit Committee. Mr.
Whittemore, age 49, served as a director and the President and Managing Officer
of Pioneer Federal Savings Bank and its parent Pioneer Financial Corporation
from September 1982 until August 1994, when these institutions were acquired by
a merger with Signet Banking Corporation. Mr. Whittemore was appointed
President of Mills Value Adviser, Inc., a registered investment advisor, in
April 1996. In October 1996, he was named a Senior Vice President of Anderson &
Strudwick, Incorporated, which served as underwriter for Humphrey Hospitality's
four public stock offerings. Mr. Whittemore is also a consultant to Mills
Management II, Inc., which is the manager and a member of a privately-held
limited liability company that was formed to, among other things, acquire hotels
that are substantially similar to the hotels owned by the Company. Mr.
Whittemore has served as a Director of the Company since November 1994.
Loren Steele, Director and Member of the Investment Committee. Mr. Steele,
age 59, is Past 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., the franchisor of Super 8 Motels. Mr.
Steele has been a Director of the Company since October 1999. He served as a
Director of Supertel from February 1994 to October 1999.
Joseph Caggiano, Director and Member of the Audit Committee. Mr. Caggiano,
age 74, retired, served as Vice Chairman Emeritus of Bozell, Jacobs, Kenyon &
Eckhardt, Inc. from 1991 through December 31, 1998. From 1974 to 1991, Mr.
Caggiano served as Chief Financial Officer and Vice Chairman of the Board of
Bozell & Jacobs, an advertising and public relations firm. Mr. Caggiano is also
a director of First Omaha Funds. Mr. Caggiano has been a Director of the
Company since October 1999. He served as a Director of Supertel from February
1994 to October 1999.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
IN FAVOR OF EACH OF THE NOMINEES FOR DIRECTORS
Director Meetings
The business of the Company is under the general management of its Board of
Directors as provided by the Company's Bylaws and the laws of Commonwealth of
Virginia, the Company's state of incorporation. The Company's Bylaws provide
that a majority of members of the Board of Directors must be independent
directors. There are presently seven directors, including four independent
directors. The Board of Directors held five meetings in 1999.
The Company has an Investment Committee and an Audit Committee of its Board
of Directors. The Company may, from time to time, form other committees as
circumstances warrant. Such committees have authority and responsibility as
delegated by the Board of Directors.
Audit Committee
The Audit Committee consists of three Independent Directors, Messrs.
Caggiano, Zwerdling and Whittemore. The Audit Committee will make
recommendations concerning the engagement of independent public accountants,
review with the independent public accountants the plans and results of the
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audit engagement, approve professional services provided by the independent
public accountants, review the independence of the independent public
accountants, consider the range of audit and non-audit fees and review the
adequacy of the Company's internal accounting controls. The current Audit
Committee was formed in October 1999 and held its first meeting in March of
2000.
Investment Committee
The Board of Directors has established an Investment Committee, which
currently consists of Messrs. Schulte, Borgmann, Steele and Humphrey. Any
acquisition, investment or purchase of property involving a total purchase price
of $3 million or more requires the approval of the Board of Directors, and any
transaction or series of related transactions involving less than such amount
may be effected by the Chief Executive Officer of the Company, or his designee,
without Board approval. The Investment Committee will review potential hotel
acquisitions, visit the sites of proposed hotel acquisitions, review the terms
of proposed percentage leases for proposed hotel acquisitions and make
recommendations to the Board of Directors with respect to proposed acquisitions.
The Acquisition Committee met five times in 1999.
Compensation of Directors
On October 27, 1999, the Board of Directors unanimously voted to increase the
annual fees paid to them by the Company for serving on the Board from $15,000 to
$20,000 per year effective January 1, 2000. The Board's action was intended to
make their fees more comparable to those of other public companies (including
REITs) that are of similar size to the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain Business Relationships Between Humphrey Hospitality and Its Directors
and Advisors
George R. Whittemore, a director, currently serves as a Senior Vice
President of Anderson & Strudwick, Incorporated. Anderson & Strudwick,
Incorporated was the sole underwriter of an underwritten public offering of the
Common Stock that was consummated on April 24, 1998.
Certain Transactions with Management
The Company and HHLP have entered into a number of transactions with Mr.
Humphrey and his affiliates in connection with the organization of the Company.
Mr. Humphrey is the majority shareholder of Humphrey Hospitality Management,
Inc., the lessee of each of the Company's hotels.
Acquisition of Hotels from Affiliates of Mr. Humphrey
HHLP has acquired, directly and indirectly, eight hotels from limited
partnerships in which Mr. Humphrey was a limited partner and one of his
affiliates was the general partner. The interests in these hotels and Solomons
Beacon Inn Limited Partnership were acquired in exchange for:
o the assumption of approximately $13.4 million of outstanding indebtedness of
the sellers of the eight hotels, most of which was guaranteed by Mr. Humphrey
and one of his affiliates and secured by the hotels;
o the issuance of an aggregate 527,866 Units of limited partnership interest in
HHLP to the Humphrey affiliates;
o the assumption and repayment of approximately $2.1 million of outstanding
indebtedness of the sellers of the hotels, of which approximately $1.2
million was repaid to a Humphrey affiliate;
o the payment of $247,000 in cash to satisfy the obligations of an affiliate of
Mr. Humphrey and to restore its negative capital account in one of the
limited partnerships selling a hotel; and
o the payment of approximately $4.6 million in cash to persons not affiliated
with Mr. Humphrey.
6
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HHLP acquired the Days Inn-Farmville, Virginia hotel in exchange for:
o 95,484 Units of limited partnership interest in HHLP, which are redeemable,
subject to certain limitations, for an aggregate of 95,484 shares of Common
Stock and
o the assumption of approximately $1.2 million of debt secured by that hotel,
which was repaid immediately with the proceeds from the Company's second
public stock offering.
HHLP acquired the Best Western Suites-Key Largo, Florida hotel pursuant to
a purchase agreement that was assigned to HHLP by another affiliate of Mr.
Humphrey. Pursuant to the assignment of the purchase agreement, the affiliate
received 34,023 Units of limited partnership interest in HHLP.
Guarantees by Mr. Humphrey
At December 31, 1999, Mr. Humphrey guaranteed, jointly and severally with the
Company, the payment of interest and principal on $2 million of the Company's
outstanding long-term debt. The debt is secured by 15 of the Company's hotels.
Guarantees by Messrs. Schulte and Borgmann
At December 31, 1999, Messrs. Schulte and Borgmann guaranteed, jointly and
severally with the Company, the payment of interest and principal on $5 million
of the Company's outstanding long-term debt. The debt is secured by 10 of the
Company's hotels.
Leases and Right of First Opportunity
During 1999, the Company's partnerships and Humphrey Hospitality Management
were parties to percentage leases with respect to each hotel owned by the
Company. Each lease has a non-cancelable term of ten years, which may be
renewed for an additional term of five years at Humphrey Hospitality
Management's option, subject to earlier termination upon the occurrence of
defaults thereunder and certain other events described therein. Pursuant to the
terms of the percentage leases, Humphrey Hospitality Management is required to
pay base rent and percentage rent on the revenue of the hotels and certain other
additional charges and is entitled to all profits from the operations of the
hotels after the payment of rent, operating and other expenses. Payments of
rent under the leases constituted all of the Company partnerships' and the
Company's revenue. For the period January 1, 1999 through December 31, 1999,
Humphrey Hospitality Management paid an aggregate of $15,833,000 in rent under
the hotel leases. The Company has granted Humphrey Hospitality Management a
right of first opportunity to lease and manage any hotels acquired or developed
by the Company.
Franchise Agreements
Humphrey Hospitality Management, which is majority owned by Mr. Humphrey,
holds all of the franchise licenses for each of the Company's hotels and is
expected to hold all of the franchise licenses for any subsequently acquired
hotel properties. During 1999, Humphrey Hospitality Management paid franchise
fees in the aggregate amount of approximately $2,000,000.
Non-Competition Agreement and Option Agreement
Pursuant to a Non-Competition Agreement among Mr. Humphrey, Humphrey
Associates, Inc., and the Company, while Mr. Humphrey is an officer or director
of the Company or has any ownership interest in the Company, and for five years
thereafter, neither Mr. Humphrey nor any affiliate of Mr. Humphrey will acquire,
develop, own, operate, manage or have any interest in any hotel that is within
20 miles of a hotel in which the Company or the Company's partnerships have
invested. The 20-mile prohibition may be waived by the Company's Independent
Directors if they determine that such development, ownership, management, or
operation will not have a material adverse affect on the operations of one or
more of the hotels in which the Company has invested. In addition, Mr. Humphrey
has agreed that neither he nor any of his affiliates will receive any brokerage
commissions or other fees with respect to hotels purchased by the Company.
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Mr. Schulte and Mr. Borgmann have also entered into Non-Competition
Agreements with the Company. Pursuant to those agreements, while Mr. Schulte or
Mr. Borgmann is an officer or director of the Company or has any ownership
interest in the Company, and for five years thereafter, neither he nor his
affiliates will acquire, develop, own, operate, manage or have any interest in
any hotel that is within 20 miles of a hotel in which the Company or the
Company's partnerships have invested. The 20-mile prohibition may be waived by
the Company's Independent Directors if they determine that such development,
ownership, management or operation will not have a material adverse effect on
the operations of one or more of the hotels in which the Company has invested.
In addition, Mr. Schulte and Mr. Borgmann have agreed that neither they nor any
of their affiliates will receive any brokerage commissions or other fees with
respect to hotels purchased by the Company.
Pursuant to an Option Agreement among Mr. Humphrey, Humphrey Associates, Inc.
and the Company, the Company will have an option to acquire any hotels acquired
or developed by Mr. Humphrey or any affiliate of Mr. Humphrey. At any time
during 12 months after a hotel is acquired by, or after the opening of a hotel
developed by Mr. Humphrey or any of affiliate of Mr. Humphrey, the Company may
purchase the applicable hotel under the option for a price equal to the fair
market value of the hotel, as determined by independent third-party appraisal,
but in no event less than the sum of the following: (i) acquisition or
development costs paid to unaffiliated third parties, (ii) capitalized interest
expense, (iii) the amount of equity investment in the hotel, including the cash
investment or advances of Mr. Humphrey and his affiliates, if any (to the extent
not covered in clauses (i) and (ii)), and (iv) a cumulative, non-compounded
return on the equity investment not to exceed the prime rate, as reported by The
Wall Street Journal, Eastern Edition, plus five percent (less any net cash flow
received by Mr. Humphrey or his affiliates with respect to such equity
investment). The Company currently anticipates that any such acquired or
developed hotel will have achieved stabilized operating revenue before the
Company would consider purchasing such hotel from Mr. Humphrey or his
affiliates. All transactions to acquire additional properties and any and all
transactions between the Company, the Company's partnerships or Solomon's Beacon
Inn Limited Partnership and Mr. Humphrey or his affiliates must be approved by a
majority of the Company's directors, including a majority of its Independent
Directors. In addition, the Option Agreement provides that in the event the
Company acquires a hotel from Mr. Humphrey or any of his affiliates in
connection with the Company's issuance of additional securities, Mr. Humphrey or
the affiliates may receive consideration for such property in additional Units,
provided that his and the affiliates' interests in the HHLP shall not exceed
28.54% of the total limited partnership interest in the HHLP.
Other
The Company has an agreement between it and Humphrey Hospitality Management
(the "Service Agreement") to provide accounting and securities reporting
services for the Company. Until the Company's merger with Supertel, the
Services Agreement provided that Humphrey Hospitality Management would perform
such services for an annual fee of $30,000 per year for as long as the Company's
portfolio included its initial hotels and the Comfort Suites-Dover, DE hotel.
The fee increased $10,000 per year (prorated from the time of acquisition) for
each additional hotel added to the Company's portfolio, not to exceed $100,000
in any year. At the time of the merger, the Company and Humphrey Hospitality
Management executed an amendment to the Services Agreement that increased the
annual amount to $300,000 per year. During 1999, the Company paid $135,522
pursuant to the Services Agreement.
EXECUTIVE COMPENSATION
The Company does not pay its executives any salary other than the
compensation that they receive as directors.
PERFORMANCE GRAPH
The following graph compares the change in the Company's total shareholder
return on shares of the Common Stock for the period December 31, 1994 through
December 31, 1999 (on October 30, 1996, the Common Stock began trading on The
Nasdaq Stock Market) with the changes in the Standard & Poor's 500 Stock Index
(the "S &P 500 Index") and the SNL Securities Hotel REIT Index ("Hotel REIT
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Index") for the same period, assuming a base share price of $100 per share of
the Common Stock and the Hotel REIT Index for comparative purposes. The Hotel
REIT Index is comprised of publicly traded REITs that focus on investments in
hotel properties. Total shareholder return equals appreciation in stock price
plus dividends paid and assumes that all dividends are reinvested. The
performance graph is not necessarily indicative of future investment
performance.
TOTAL RETURN PERFORMANCE
[GRAPH]
<TABLE>
<CAPTION>
Period Ending
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<S> <C> <C> <C> <C> <C> <C>
Index 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
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Humphrey Hospitality Trust, Inc. 100.00 143.28 160.72 234.33 197.67 181.08
S&P 500 100.00 137.58 169.03 225.44 289.79 350.78
SNL Hotel REITs 100.00 131.64 201.14 263.71 130.39 101.27
</TABLE>
9
<PAGE>
SHAREHOLDER PROPOSALS FOR 2001
The Board of Directors will make provisions for the presentation of
appropriate proposals by shareholders at the 2001 annual meeting of
shareholders, provided that such proposals are submitted by eligible
shareholders who have complied with the relevant regulations of the SEC.
Shareholder proposals intended to be submitted for presentation at the 2001
annual meeting of shareholders of the Company must be in writing and must be
received by the Company at its executive offices on or before December 20, 2000
for inclusion in the Company's proxy statement and the form of proxy relating to
such annual meeting. In addition, if the Company receives notice of a
stockholder proposal after March 6, 2001, the persons named as proxies in the
proxy statement for the 2001 Annual Meeting will have discretionary voting
authority to vote on such proposal at the 2001 Annual Meeting.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Reznick Fedder & Silverman, PC have served as auditors for the Company and
its subsidiaries and will continue to so serve until and unless changed by
action of the Board of Directors. A representative of Reznick Fedder &
Silverman is expected to be present at the Annual Meeting, will have the
opportunity to make a statement if he desires to do so and will be available to
respond to appropriate questions.
OTHER MATTERS
As of the date of this statement, management knows of no other business to
be brought before the Annual Meeting. If any other matters properly come before
the Annual Meeting, the proxies will be voted on such matters in accordance with
the judgment of the persons named as proxies therein, or their substitutes,
present and acting at the meeting.
The Company will furnish to each beneficial owner of Common Stock entitled
to vote at the Annual Meeting, upon written request to Paul Bollinger at 12301
Old Columbia Pike, Silver Spring, Maryland, telephone (301) 680-4357, additional
copies of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, including the financial statements and financial statement
schedules filed by the Company with the SEC.
By Order of the Board of Directors
STEVE H. BORGMANN
Executive Vice President and Secretary
April 19, 2000
<PAGE>
PROXY No. of Shares
HUMPHREY HOSPITALITY TRUST, INC.
12301 Old Columbia Pike, Silver Spring, MD 20904
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James I. Humphrey, Jr. as proxy with the
power to appoint such person's substitute, and hereby authorizes him to vote, as
designated below, all the shares of common stock of Humphrey Hospitality Trust,
Inc. held of record by the undersigned on April 14, 2000, at the annual meeting
of shareholders to be held on May 25, 2000 or any adjournment thereof.
1. ELECTION OF DIRECTORS
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name below.)
[_] Term Expiring 2001-- FOR ALL NOMINEES LISTED BELOW Paul J. Schulte;
James I. Humphrey, Jr.; Steve H. Borgmann; Jeffrey Zwerdling; George R.
Whittemore; Loren Steele; Joseph Caggiano
[_] WITHHOLD AUTHORITY to vote for all nominees.
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Please date and sign on the reverse side)
<PAGE>
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted for the election of all nominees for director.
DATED: ___________________ , 2000
Please sign exactly as name appears in left. When shares are held by joint
tenants, both should sign. If signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
___________________________
Signature
___________________________
Signature (if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
