<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
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 under Rule 14a-12
HOSPITALITY PROPERTIES TRUST
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------
(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):
-------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------
(5) Total fee paid:
-------------------------------------------
|_| Fee paid previously with preliminary materials:
-------------------------------------------
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------
(3) Filing Party:
---------------------------------
(4) Date Filed:
---------------------------------
<PAGE>
HOSPITALITY PROPERTIES TRUST
400 CENTRE STREET
NEWTON, MASSACHUSETTS 02458
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000
To the Shareholders of Hospitality Properties Trust
Notice is hereby given that the Annual Meeting of Shareholders of
Hospitality Properties Trust, a Maryland real estate investment trust (the
"Company"), will be held at 9:00 A.M. on Tuesday, May 16, 2000, at the Sheraton
Newton Hotel, 320 Washington Street, Newton, Massachusetts, for the following
purposes:
1. To elect two Trustees in Group II of the Company's Board of Trustees.
2. To consider and act upon such other matters as may properly come before
the meeting.
The Board of Trustees has fixed the close of business on March 27, 2000 as
the record date for determination of the shareholders entitled to notice of and
to vote at the meeting.
By Order of the Board of Trustees,
John G. Murray, SECRETARY
March 31, 2000
WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE SIGN, DATE AND RETURN
YOUR PROXY IN THE ENVELOPE ENCLOSED HEREWITH.
<PAGE>
HOSPITALITY PROPERTIES TRUST
400 CENTRE STREET
NEWTON, MASSACHUSETTS 02458
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 16, 2000
-------------------
INTRODUCTION
A Notice of the Annual Meeting of Shareholders (the "Meeting") of
Hospitality Properties Trust, a Maryland real estate investment trust (the
"Company"), is set forth on the preceding page, and there is enclosed herewith a
form of proxy solicited by the Board of Trustees of the Company. The cost of
this solicitation will be borne by the Company. In addition to solicitation by
mail, the Trustees and officers of the Company may solicit proxies personally or
by telephone or telegram. This proxy statement is being first sent to
shareholders on or about March 31, 2000, together with a copy of the Annual
Report to Shareholders for the year ended December 31, 1999 (including audited
financial statements of the Company).
Only shareholders of record as of the close of business on March 27, 2000
(the "Record Date") are entitled to notice of and to vote at the Meeting and/or
any adjournment thereof. The outstanding shares of beneficial interest of the
Company on the Record Date entitled to vote consisted of 56,462,612 common
shares of beneficial interest, $.01 par value per share (the "Common Shares").
The holders of the outstanding Common Shares are entitled to one vote per Common
Share.
All Common Shares represented by valid proxies received by the Company prior
to the Meeting will be counted for purposes of determining the presence of a
quorum for purposes of taking action on the proposal set forth below and will be
voted as specified in the proxies. If no specification is made by the
shareholder, the Common Shares will be voted FOR the election of each of the
Board's two nominees, as set forth below. To be elected, the Board's nominees
set forth below must receive the affirmative vote of a majority of the Common
Shares issued and outstanding. Abstentions are considered present for purposes
of determining a quorum. A shareholder marking the proxy "Withhold" will not be
counted as voting in favor of any nominee for Trustee. A shareholder giving a
proxy has the power to revoke it any time prior to its exercise by delivering to
the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date, or by attending the Meeting and voting his or her Common
Shares in person.
ITEM 1. ELECTION OF TWO TRUSTEES IN GROUP II OF THE BOARD OF TRUSTEES
The number of Trustees of the Company is currently fixed at five, and the
Board of Trustees is currently divided into three groups, with two Trustees in
Group I, two Trustees in Group II and one Trustee in Group III. Trustees in each
Group are elected to three-year terms.
<PAGE>
The business of the Company is conducted under the general direction of the
Board of Trustees as provided by the Amended and Restated Declaration of Trust
of the Company, as amended (the "Declaration of Trust"), the Bylaws of the
Company, as amended (the "Bylaws"), and the laws of the State of Maryland, the
state in which the Company was organized on May 12, 1995.
The Declaration of Trust provides that a majority of the Board of Trustees
will be composed of Independent Trustees who are not affiliated with REIT
Management & Research, Inc. ("RMR"), a Delaware corporation which is the
Company's investment advisor, or with HRPT Properties Trust ("HRP") and who do
not serve as officers of the Company. John L. Harrington, Arthur G. Koumantzelis
and William J. Sheehan are currently Independent Trustees.
The entire Board of Trustees functions as an Executive Compensation
Committee to implement the Company's 1995 Incentive Share Award Plan (the
"Plan"). A subcommittee of the Executive Compensation Committee composed of the
Independent Trustees reviews the performance of RMR under its advisory agreement
with the Company and the award of Common Shares, other than awards of Common
Shares to Independent Trustees described below, under the Plan. See "Certain
Relationships and Related Transactions." The Executive Compensation Committee
has not met independently of meetings of the Board of Trustees, but is free to
do so. The Company does not have a Nominating Committee.
The Board of Trustees has appointed an Audit Committee consisting of the
three Independent Trustees. The Audit Committee makes recommendations concerning
the engagement of independent public accountants, reviews with the independent
public accountants the procedures for conducting and the results of the audit
engagement, approves professional services provided by the independent public
accountants, considers the appropriateness of audit and nonaudit fees charged
and reviews the adequacy of the Company's internal accounting controls. The
Audit Committee met three times in 1999.
During 1999, the Board of Trustees held six meetings. Each Trustee attended
75% or more of the total number of meetings of the Board and any Committee of
which he was a member.
The Company pays its Independent Trustees an annual fee of $20,000 plus a
fee of $500 for each meeting attended and reimburses expenses incurred by all of
its Trustees for attending meetings. Under the Plan, each Independent Trustee
automatically receives an annual grant of 300 Common Shares at the first meeting
of the Board of Trustees following each Annual Meeting of Shareholders. See
"Other Information." In addition, the Independent Trustee serving as Chairman of
the Audit Committee, which position rotates annually among the Independent
Trustees, is paid an additional $2,000 per year for such service.
The present Trustees in Group II are William J. Sheehan and Gerard M.
Martin. The term of the Group II Trustees elected at the Meeting will expire at
the Company's 2003 Annual Meeting of Shareholders. To be elected, each nominee
for Trustee of the Company must receive the vote of a majority of the Common
Shares issued and outstanding. The Board of Trustees has proposed
Messrs. Sheehan and Martin as nominees for re-election as Group II Trustees. The
persons named in the enclosed proxy intend to vote such proxy for the election
of each of the Board's two nominees, except to the extent that a shareholder has
indicated on its proxy cared that its vote should be withheld from either or
both such nominees. HRP and Messrs. Martin and Portnoy, who have voting control
over an aggregate of 4,348,495 Common Shares (approximately 7.7% of Common
Shares outstanding and entitled to vote at the Meeting), intend to vote in favor
of the election of Mr. Sheehan and Mr. Martin as Group II Trustees.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ELECTION OF WILLIAM J.
SHEEHAN AND GERARD M. MARTIN AS GROUP II TRUSTEES.
2
<PAGE>
The principal occupations for the past five years and ages as of March 1,
2000 of Mr. Sheehan and Mr. Martin are as follows:
NOMINEES FOR TERMS EXPIRING IN 2003
WILLIAM J. SHEEHAN AGE: 55
Mr. Sheehan has been a Trustee of the Company since its initial public
offering in 1995 and currently serves as Executive Vice President of Finance of
Ian Schrager Hotels LLC (formerly Ian Schrager Hotels, Inc.). From 1995 until
May 1999, Mr. Sheehan served as Chief Financial Officer of Ian Schrager Hotels
LLC. Prior to his employment with Ian Schrager Hotels LLC, Mr. Sheehan was a
self-employed consultant on financial and operating matters to companies in the
hotel industry from 1993 until May 1995. Mr. Sheehan is a certified hotel
administrator, an Ambassador of the Educational Institute of the American Hotel
and Motel Association and has been a speaker at various hotel industry
conferences.
GERARD M. MARTIN AGE: 65
Mr. Martin has been a Managing Trustee of the Company since its organization
in 1995. Mr. Martin also serves as Managing Trustee of HRP. Since 1999,
Mr. Martin has been a Managing Trustee of Senior Housing Properties Trust
("SNH"), which was a subsidiary of HRP prior to the distribution of a majority
of its shares by HRP to the HRP shareholders in October 1999. He is also a 50%
shareholder and Director of RMR. Mr. Martin was a Director of Horizon Healthcare
Corporation ("HHC") from February 1994 until his resignation in July 1996.
Mr. Martin served as interim President of the Company from the Company's
formation until John G. Murray's election to such office in March 1996.
Mr. Martin has been active in the real estate industry for more than 30 years as
a manager, developer, builder and owner.
In addition to Messrs. Sheehan and Martin, the following persons currently
serve on the Board of Trustees or serve as executive officers of the Company.
Their principal occupations for the last five years and their ages as of
March 1, 2000 are as follows:
CONTINUING TRUSTEES
BARRY M. PORTNOY AGE: 54
Mr. Portnoy has been a Managing Trustee of the Company since its
organization in 1995, Managing Trustee of HRP since its organization in 1986 and
Managing Trustee of SNH since 1999. Mr. Portnoy is Chairman of RMR and a
Director and 50% shareholder of RMR. Mr. Portnoy was a Director of HHC from
February 1994 until his resignation in July 1996. Mr. Portnoy has been actively
involved in real estate and real estate finance activities as an investor and
manager for approximately 20 years. Mr. Portnoy was a partner of the law firm of
Sullivan & Worcester LLP, counsel to the Company, from 1978 through March 31,
1997, where he served as Chairman from 1994 through March 1997. Mr. Portnoy is a
Group I Trustee; his term will expire at the Company's 2002 Annual Meeting of
Shareholders.
JOHN L. HARRINGTON AGE: 63
Mr. Harrington has been the Chief Executive Officer of the Boston Red Sox
Baseball Club for over five years and is Executive Director and Trustee of the
Yawkey Foundation and a Trustee of the JRY Trust. Mr. Harrington was a Trustee
of HRP from 1991 through August 1995 and has been a Trustee of the Company since
its initial public offering in 1995. Mr. Harrington has been a Trustee of SNH
since
3
<PAGE>
October 1999. Mr. Harrington is a Group I Trustee; his term will expire at the
Company's 2002 Annual Meeting of Shareholders.
ARTHUR G. KOUMANTZELIS AGE: 69
Mr. Koumantzelis has been the President and Chief Executive Officer of
Gainesborough Investments LLC, a private investment company, since June 1998. He
is also currently a Trustee of Milo Trust, Lemoni Trust and a member of the
Board of Directors of Wang Healthcare Information Systems, Inc. From 1990 until
February 1998, Mr. Koumantzelis was Senior Vice President and Chief Financial
Officer of Cumberland Farms, Inc., a private company engaged in the convenience
store business and in the distribution and retail sale of gasoline.
Mr. Koumantzelis was a Trustee of HRP from 1992 through August 1995.
Mr. Koumantzelis has been a Trustee of the Company since its organization in
1995 and a Trustee of SNH since October 1999. Mr. Koumantzelis is a Group III
Trustee; his term will expire at the Company's 2001 Annual Meeting of
Shareholders.
EXECUTIVE OFFICERS
JOHN G. MURRAY AGE: 39
Mr. Murray is the President, Chief Operating Officer and Secretary of the
Company. Mr. Murray is also Executive Vice President of RMR. Prior to his
election to the office of President and Chief Operating Officer in March 1996,
Mr. Murray served as Treasurer and Chief Financial Officer of the Company.
Mr. Murray served in various capacities for HRP from 1993 until August 1995 and
for RMR and its affiliates since 1993. Mr. Murray is a certified public
accountant.
THOMAS M. O'BRIEN AGE: 33
Mr. O'Brien is the Treasurer and Chief Financial Officer of the Company.
Mr. O'Brien is also a Vice President of RMR. Prior to his election to these
offices in March 1996, Mr. O'Brien was employed by Arthur Andersen LLP for eight
years, most recently as an audit manager, with clients primarily in the
hospitality and real estate industries. Mr. O'Brien is a certified public
accountant.
ETHAN S. BORNSTEIN AGE: 26
Mr. Bornstein is the Vice President of the Company. Prior to his election to
the office of Vice President in October 1999, Mr. Bornstein was employed by RMR
for two years. From 1995 until July 1997, Mr. Bornstein was employed by E&Y
Kenneth Leventhal and focused primarily on appraisal, feasibility and consulting
projects in the real estate industry.
JOHN R. HOADLEY AGE: 28
Mr. Hoadley is the Controller of the Company. Prior to his election to the
office of Controller in October 1999, Mr. Hoadley served as Assistant Controller
of RMR from 1998 until October 1999. Mr. Hoadley was employed by Arthur Andersen
LLP from 1993 to 1998, most recently as a senior auditor, with clients primarily
in the real estate and utilities industries. Mr. Hoadley is a certified public
accountant.
There are no family relationships among any Trustees and the current
executive officers of the Company. Executive officers serve at the discretion of
the Board of Trustees.
4
<PAGE>
OTHER INFORMATION
COMPENSATION OF EXECUTIVE OFFICERS
The Company does not have any employees; services which otherwise would be
provided by employees are performed by RMR. Payments by the Company to RMR for
services during 1999 are described in "Certain Relationships and Related
Transactions."
Except with respect to incentive share awards, the Company has not paid and
has no current plans to pay compensation to its executive officers. RMR, which
conducted the day-to-day operations of the Company during 1999, compensated
Messrs. Martin, Portnoy, Murray, O'Brien, Bornstein and Hoadley in connection
with their services to RMR and to the Company. The following table provides
summary long-term compensation information for restricted share awards made for
the past three years to executive officers of the Company. Messrs. Bornstein and
Hoadley, who were newly elected as officers of the Company in 1999, have
received no restricted share awards from the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
RESTRICTED
NAME AND PRINCIPAL POSITION YEAR SHARE AWARDS(1)
- - --------------------------- -------- ---------------
<S> <C> <C>
John G. Murray.............................................. 1999 $62,100
President and Chief Operating Officer 1998 $74,319
1997 $60,880
Thomas M. O'Brien........................................... 1999 $48,600
Treasurer and Chief Financial Officer 1998 $58,163
1997 $45,660
</TABLE>
- - ------------------------
(1) All incentive share awards have been granted pursuant to the Plan and each
provides that one-third of each incentive share award vests immediately upon
grant and one-third vests on each of the first and second anniversaries of
the grant. In the event any executive officer who has been granted an
incentive share award ceases to perform the duties of an officer of the
Company and is no longer an officer or employee of the Company's advisor
during the vesting period of such award, the Common Shares which have not
yet vested may be repurchased by the Company for nominal consideration,
unless vesting of those Common Shares is accelerated by the Board of
Trustees. At December 31, 1999, the aggregate 8,600 and 6,600 Common Shares
granted as incentive share awards under the Plan to Messrs. Murray and
O'Brien, respectively, had a value of $163,938 and $125,813 respectively,
based upon a $19.0625 per share closing price for the Common Shares as
reported on the New York Stock Exchange on that date. Vested and unvested
Common Shares are entitled to dividends as declared by the Company. The
dollar amounts shown in the table represent the number of restricted Common
Shares awarded during the years shown which have vested or continue to be
subject to vesting multiplied by the closing price for the Common Shares on
the New York Stock Exchange on the date of grant.
5
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has an Executive Compensation Committee comprised of the entire
Board of Trustees. A subcommittee of the Executive Compensation Committee
composed of the Independent Trustees (Messrs. Harrington, Sheehan and
Koumantzelis) makes recommendations for grants of shares under the Plan and such
recommendations are acted upon by the full Board of Trustees. Certain
relationships between the Company and certain Trustees are described under
"Certain Relationships and Related Transactions."
PERFORMANCE GRAPH--COMPARISON OF CUMULATIVE TOTAL RETURN
The graph below shows, for the periods indicated, the Company's cumulative
total shareholder return on its Common Shares (assuming a $100 investment on
August 31, 1995, the first day following the beginning of public trading in the
Company's Common Shares on the New York Stock Exchange for which all information
set forth below is available) as compared with (a) the National Association of
Real Estate Investment Trust, Inc.'s index of all tax-qualified real estate
investment trusts listed on the New York Stock Exchange, the American Stock
Exchange and the Nasdaq/National Market System (NAREIT) and (b) the Standard &
Poor's 500 Index. The comparison assumes all dividends are reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HPT NAREIT S&P 500 INDEX
<S> <C> <C> <C>
08/31/1995 100.00 100.00 100.00
12/31/1995 110.20 106.50 110.49
12/31/1996 130.30 144.58 135.84
12/31/1997 159.07 171.84 181.15
12/31/1998 128.24 139.50 232.91
12/31/1999 109.82 130.46 281.92
</TABLE>
6
<PAGE>
EXECUTIVE COMPENSATION REPORT
The Company developed and implemented its 1995 Incentive Share Award Plan
(the "Plan") in recognition of the following circumstances. First, the Company's
Common Shares are primarily a yield vehicle for shareholders and do not
appreciate in value in the same manner as other equity securities. Therefore, a
conventional stock option plan would not provide appropriate incentives for the
Company's management. Second, because the executive officers of the Company are
employees of its investment advisor, REIT Management & Research, Inc. ("RMR"),
and not of the Company, and receive their salary compensation from RMR, the
Trustees wished to establish a vehicle which would, among other things,
(a) foster a continuing identity of interest between management of the Company
and its shareholders, and (b) recognize that the Company's executive officers
perform certain duties on behalf of the Company, primarily with regard to
shareholder relations and investor communications, which fall outside of the
services covered by the advisory agreement with RMR. In granting incentive share
awards, the Trustees consider factors such as the amount and terms of restricted
Common Shares previously granted to executive officers and the amount of time
spent and complexity of the duties performed by executive officers on behalf of
the Company, including speaking at Company conferences, road shows and making
additional presentations, interfacing with analysts and preparing and
distributing shareholder reports, materials, statements and other information.
The Trustees have imposed vesting restrictions and may impose other conditions
on the granted Common Shares, which may further promote continuity of
management.
In 1999, John G. Murray, President and Chief Operating Officer of the
Company, received a grant of 2,300 Common Shares under the Plan, 766 Common
Shares of which vested immediately upon grant, 767 of which will vest on each of
the first and second anniversaries of the date of grant. In 1999, Thomas M.
O'Brien, the Treasurer and Chief Financial Officer of the Company, received a
grant of 1,800 Common Shares under the Plan, 600 of which vested immediately
upon the grant and 600 of which will vest on each of the first and second
anniversaries of the grant. The determination of the number of Common Shares
granted to Messrs. Murray and O'Brien was not specifically based on an estimate
of the Company's performance, but instead was based on the fair market value of
the Common Shares granted, the number of Common Shares previously granted to
each such individual, and the Board's opinion as to the value of the "outside"
services to the Company, as discussed above, performed by each individual.
BOARD OF TRUSTEES
John L. Harrington
Arthur G. Koumantzelis
Gerard M. Martin
Barry M. Portnoy
William J. Sheehan
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Shares by (i) each person known to the Company to be the
beneficial owner of more than 5% of the outstanding Common Shares, (ii) each
Trustee and executive officer of the Company and (iii) all Trustees and
executive officers of the Company as a group. Unless otherwise indicated, each
person or entity named below has sole voting and investment power with respect
to all Common Shares shown to be beneficially owned by such person or entity,
subject to the matters set forth in the footnotes to the table below.
The table sets forth information regarding beneficial ownership of Common
Shares as of the Record Date.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------
NUMBER OF
NAME AND ADDRESS(1) SHARES PERCENT
- - ------------------- --------- --------
<S> <C> <C>
HRPT Properties Trust....................................... 4,000,000 7.1%
REIT Management & Research, Inc.(2)......................... 4,000,000 7.1%
Barry M. Portnoy(3)......................................... 4,163,149 7.4%
Gerard M. Martin(3)......................................... 4,163,150 7.4%
John L. Harrington(4)(5).................................... 1,919 *
William J. Sheehan(4)(5).................................... 1,906 *
Arthur G. Koumantzelis(4)(5)................................ 1,916 *
John G. Murray(6)........................................... 8,600 *
Thomas M. O'Brien(7)........................................ 7,855 *
Ethan S. Bornstein(8)....................................... 0 *
John R. Hoadley(8).......................................... 0 *
All Trustees and executive officers as a group (nine
persons)(2)(3)............................................ 4,348,495 8.2%
</TABLE>
- - ------------------------
* Less than 1%
(1) The address of HRP is 400 Centre Street, Newton, MA 02458. The address of
each other named person or entity is c/o Hospitality Properties Trust, 400
Centre Street, Newton, MA 02458.
(2) As HRP's advisor, RMR may under applicable regulatory definitions be deemed
to own beneficially HRP's 4,000,000 Common Shares. RMR, however, expressly
disclaims any beneficial ownership of HRP's 4,000,000 Common Shares.
(3) Mr. Portnoy owns 163,149 Common Shares directly, and Mr. Martin owns 163,150
Common Shares directly. HRP, of which Messrs. Portnoy and Martin are
Managing Trustees, owns 4,000,000 Common Shares. Messrs. Portnoy and Martin
may be deemed to have beneficial ownership of the Common Shares owned by
HRP. Messrs. Portnoy and Martin disclaim beneficial ownership of HRP's
Common Shares.
(4) Each Independent Trustee receives a grant of 300 Common Shares per annum as
part of his compensation.
(5) Includes shares acquired under the Company's dividend reinvestment plan.
(6) 6,300 of these Common Shares are vested; 2,300 will vest in installments
during 2000 and 2001.
(7) As to a total of 6,600 Common Shares issued under the Plan, 4,800 are
vested; 1,800 will vest in installments during 2000 and 2001. Mr. O'Brien
also owns Common Shares purchased through the Company's dividend
reinvestment plan and on the open market.
(8) Messrs. Bornstein and Hoadley became executive officers in 1999 and were not
granted incentive share awards during 1999.
8
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into an agreement (the "Advisory Agreement") with
RMR under which RMR provides investment and administrative services to the
Company. RMR is owned by Messrs. Martin and Portnoy. The Advisory Agreement
provides for an annual base advisory fee equal to 0.70% of the Company's Average
Invested Capital (as defined in the Advisory Agreement) up to $250 million, and
0.50% of Average Invested Capital exceeding $250 million; and an annual
incentive fee, calculated on the basis of increases in the Company's annual cash
available for distribution per share. The incentive fee payable to RMR is 15% of
the increase in annual cash available for distribution per share (but in no
event more than $.02 per share), times the weighted average number of shares
outstanding in such year. Incentive fees are paid in restricted Common Shares.
Aggregate fees paid to RMR for services during 1999 were $11.2 million,
including $236,545 (based upon a per share price of $18.381) paid in 12,869
restricted Common Shares as an incentive fee. RMR's incentive shares for 1999
were sold by RMR to Barry Portnoy and Gerard Martin on February 1, 2000.
Until 1997, Mr. Portnoy was a partner of Sullivan & Worcester LLP, a law
firm which provides legal services to the Company and to HRP, SNH, RMR and
affiliates of each of the foregoing, and received payments from that firm during
1999 in respect of his retirement from that firm.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's Trustees and executive officers, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership of securities
with the Securities and Exchange Commission and the New York Stock Exchange.
Executive officers, Trustees and greater than 10% shareholders are required to
furnish the Company with copies of all forms they file pursuant to
Section 16(a). Based solely on review of the copies of such reports furnished to
the Company or representations that no such reports were required, the Company
believes that, during the 1999 fiscal year, all filing requirements applicable
to its executive officers, Trustees and greater than 10% shareholders were
timely met.
AUDITORS
The Company is not required to submit the selection of its auditor to a vote
of shareholders. Since its organization in 1995, the Company's independent
auditor has been Arthur Andersen LLP.
A representative of Arthur Andersen LLP is expected to be present at the
Meeting, with the opportunity to make a statement if desired, and is expected to
be available to respond to appropriate questions from shareholders who are
present at the Meeting.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the Company's 2001 Annual
Meeting of Shareholders pursuant to Rule 14a-8 under the Exchange Act must be
received by the Company at its principal executive offices not later than
December 1, 2000.
In order to be considered "timely" within the meaning of Rule 14a-4(c) under
the Exchange Act, notice of a shareholder proposal intended for presentation at
the Company's 2001 Annual Meeting of Shareholders made outside Rule 14a-8 under
the Exchange Act must be received by the Company no later
9
<PAGE>
than February 15, 2001 and no earlier than January 16, 2001 and must be made in
accordance with the provisions, requirements and procedures set forth in the
Company's Bylaws.
OTHER MATTERS
As of this time, the Board of Trustees knows of no other matters to be
brought before the Meeting. However, if other matters properly come before the
Meeting or any adjournment thereof, and if discretionary authority to vote with
respect thereto has been conferred by the enclosed proxy, the persons named in
the proxy will vote the proxy in accordance with their discretion as to such
matters.
By Order of the Board of Trustees
John G. Murray, SECRETARY
Newton, Massachusetts
March 31, 2000
10
<PAGE>
HOSPITALITY PROPERTIES TRUST
400 CENTRE STREET, NEWTON, MASSACHUSETTS 02458
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder of Hospitality Properties Trust, a Maryland
real estate investment trust (the "Company"), hereby appoints GERARD M. MARTIN,
JOHN G. MURRAY and BARRY M. PORTNOY, or any of them, as proxies for the
undersigned, with full power of substitution in each of them, to attend the
Annual Meeting of the Shareholders of the Company to be held at the Sheraton
Newton Hotel, 320 Washington Street, Newton, Massachusetts on Tuesday, May 16,
2000 at 9:00 a.m., and any adjournment or postponement thereof, to cast on
behalf of the undersigned all the votes that the undersigned is entitled to cast
at such meeting and otherwise to represent the undersigned at the meeting with
all powers possessed by the undersigned if personally present at the meeting.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting
of Shareholders and of the accompanying Proxy Statement and revokes any proxy
heretofore given with respect to such meeting.
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS
INSTRUCTED ON THE REVERSE SIDE. IF THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS
GIVEN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST "FOR" EACH
OF THE NOMINEES FOR TRUSTEE AND IN THE DISCRETION OF THE PROXY HOLDER ON ANY
OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR
POSTPONEMENT THEREOF.
PLEASE VOTE, DATE, AND SIGN ON REVERSE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NOTE: Please sign exactly as name(s) appear(s) hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
PLEASE GIVE FULL TITLE AS SUCH.
HAS YOUR ADDRESS CHANGED?
- - -------------------------------------------------------
- - -------------------------------------------------------
- - ------------------------------------------------------
<PAGE>
<TABLE>
<S> <C> <C>
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- - ---------------------------- 1. Election of Trustees in Group II:
HOSPITALITY PROPERTIES TRUST FOR ALL WITH FOR ALL
- - ----------------------------- NOMINEES -HOLD EXCEPT
GERARD M. MARTIN / / / / / /
WILLIAM J. SHEEHAN
If you do not wish your shares voted "For" a particular
nominee, mark the "For All Except" box and strike a line
through the name of the nominee. Your shares will be
voted for the remaining nominee.
RECORD DATE SHARES:
2. In their discretion, the Proxies are authorized to
vote on such other business as may properly come
before the meeting.
---------
Please be sure to sign and date this Proxy. Date
- - --------------------------------------------------------
- - -------------------------------------------------------- Mark box at right if an address change has been noted
on the reverse side of this card. / /
- - --------------------------------------------------------
Shareholder sign here Co-owner sign here
DETACH CARD DETACH CARD
</TABLE>
