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 ss. 240.14a-11(c) or ss. 240.14a-12
AmeriVest Properties Inc.
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(Name of Registrant as Specified In Its Charter)
James F. Etter, President
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(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:
Not applicable
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2) Aggregate number of securities to which transaction applies:
Not applicable
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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):
Not applicable
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4) Proposed maximum aggregate value of transaction:
Not applicable
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5) Total fee paid:
Not applicable
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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: Not applicable
2. Form Schedule or Registration Statement No.: Not applicable
3. Filing party: Not applicable
4. Date Filed: Not applicable
AMERIVEST PROPERTIES INC.
7100 Grandview Avenue, Suite 1
Arvada, Colorado 80002
(303) 421-1224
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held May 8, 1997
The Annual Meeting of the stockholders of AmeriVest Properties Inc. (the
"Company") will be held on May 8, 1997 at 3:00 p.m. (local time) at Denver
Marriott West, 1717 Denver West Boulevard, Golden, Colorado, for the following
purposes:
1. To elect two Class 1 directors of the Company's Board Of Directors;
2. To ratify the selection of Wheeler Wasoff, P.C. to serve as the
Company's independent certified accountants for the year ending
December 31, 1997; and
3. To transact any other business that properly may come before the
meeting.
Only the stockholders of record as shown on the transfer books of the
Company at the close of business on March 31, 1997 are entitled to notice of,
and to vote at, the Stockholder Meeting.
All stockholders, regardless of whether they expect to attend the meeting
in person, are requested to complete, date, sign and return promptly the
enclosed form of proxy in the accompanying envelope (which requires no postage
if mailed in the United States). The person executing the proxy may revoke it by
filing with the Secretary of the Company an instrument of revocation or a duly
executed proxy bearing a later date, or by electing to vote in person at the
Stockholder Meeting.
ALL STOCKHOLDERS ARE EXTENDED A CORDIAL INVITATION TO ATTEND THE
STOCKHOLDER MEETING.
By the Board Of Directors
JAMES F. ETTER
President
Arvada, Colorado
April 4, 1997
PROXY STATEMENT
AMERIVEST PROPERTIES INC.
7100 Grandview Avenue, Suite 1
Arvada, Colorado 80002
(303) 421-1224
ANNUAL MEETING OF STOCKHOLDERS
to be held
May 8, 1997
This Proxy Statement is provided in connection with the solicitation of
proxies by the Board Of Directors of AmeriVest Properties Inc., a Delaware
corporation (the "Company" or "AmeriVest"), to be voted at the Annual Meeting Of
Stockholders of the Company to be held at 3:00 p.m. (local time) on May 8, 1997
at the Denver Marriott West, 1717 Denver West Boulevard, Golden, Colorado or at
any adjournment or postponement of the meeting. The Company anticipates that
this Proxy Statement and the accompanying form of proxy will be first mailed or
given to stockholders of the Company on or about April 4, 1997.
The shares represented by all proxies that are properly executed and
submitted will be voted at the meeting in accordance with the instructions
indicated on the proxies. Unless otherwise directed, the shares represented by
proxies will be voted for each of the two nominees for Class 1 directors whose
names are set forth on the proxy card and in favor of ratification of the
selection of Wheeler Wasoff, P.C. as the Company's independent auditors, as
described in this Proxy Statement.
A stockholder giving a proxy may revoke it at any time before it is
exercised by delivering written notice of revocation to the Company, by
substituting a new proxy executed at a later date, or by requesting, in person
at the Annual Meeting, that the proxy be returned.
The solicitation of proxies is to be made principally by mail; however,
following the original solicitation, further solicitations may be made by
telephone or oral communication with stockholders of the Company. Officers,
directors and employees of the Company may solicit proxies, but without
compensation for such solicitation other than their regular compensation as
employees of the Company. Arrangements also will be made with brokerage houses
and other custodians, nominees and fiduciaries to forward solicitation materials
to beneficial owners of the shares held of record by those persons. The Company
may reimburse those persons for reasonable out-of-pocket expenses incurred by
them in so doing. All expenses involved in preparing, assembling and mailing
this Proxy Statement and the enclosed material will be paid by the Company. A
majority of the issued and outstanding shares of the Company's common stock (the
"Common Stock") entitled to vote, represented either in person or by proxy,
constitutes a quorum at any meeting of the stockholders.
Unless the context indicates otherwise, the term the "Company" or
"AmeriVest" shall be used in the Proxy Statement to include AmeriVest Properties
Inc. and all its subsidiaries that existed during the period of reference.
1
ELECTION OF DIRECTORS
AmeriVest's Amended And Restated Certificate Of Incorporation provides that
the Board Of Directors of the Company be divided into three classes, designated
Class 1, Class 2 and Class 3. Directors from each class are elected once every
three years for a three-year term. John Labate and James F. Etter serve as the
Class 1 directors, Charles R. Hoffman serves as the Class 2 director, and Robert
J. McFann serves as the Class 3 director. The terms of the current Class 1
directors expire at the Annual Meeting. At the Annual Meeting, the stockholders
will elect two Class 1 directors to hold office until the annual meeting of
stockholders to be held in the year 2000 and thereafter until their successors
are elected and have qualified. The affirmative vote of a majority of the shares
represented at the meeting is required to elect each director. Cumulative voting
is not permitted in the election of directors. Consequently, each stockholder is
entitled to one vote for each share of Common Stock held in his or her name. In
the absence of instructions to the contrary, the persons named in the
accompanying proxy shall vote the shares represented by that proxy for Mr. Etter
and Mr. Labate as nominees of the Board Of Directors for Class 1 directors of
AmeriVest. There is no nominating committee of the Board Of Directors.
Each of Mr. Etter and Mr. Labate has consented to be named herein and to
serve on the Board if elected. It is not anticipated that either Mr. Etter or
Mr. Labate will become unable or unwilling to accept nomination or election,
but, if that should occur, the persons named in the proxy intend to vote for the
election of such other person as the Board Of Directors may recommend.
AmeriVest completed a public offering of its common stock and redeemable
common stock purchase warrants in November 1996. The underwriter of that public
offering, I.A. Rabinowitz & Co. (the "Underwriter"), has the right until
November 1999 to designate one person to serve as a member of the Company's
Board Of Directors pursuant to the Underwriting Agreement between the
Underwriter and the Company. The Underwriter's designee as director must be
reasonably acceptable to AmeriVest. There is no restriction on whether the
person designated is a director, officer, partner, employee, or affiliate of the
Underwriter. As of the date of this Proxy Statement, the Underwriter has not
indicated a designee for director and has not informed the Company of whether
the Underwriter intends to designate a director.
The following table sets forth, with respect to each director, the
director's age, his positions and offices with AmeriVest, the expiration of his
term as a director, and the year in which he first became a director of
AmeriVest. Individual background information concerning each of the directors
follows the table. For additional information concerning the directors,
including stock ownership and compensation, see "EXECUTIVE COMPENSATION", "STOCK
OWNERSHIP OF DIRECTORS AND PRINCIPAL STOCKHOLDERS", and "CERTAIN TRANSACTIONS
WITH MANAGEMENT AND PRINCIPAL STOCKHOLDERS".
Expiration Of
Position With The Term As Initial Date
Name Age Company Director As Director
---- --- ----------------- ------------- ------------
James F. Etter 53 President; Chief 1997 Annual 1995
Financial Officer; and Meeting
Director
2
Expiration Of
Position With The Term As Initial Date
Name Age Company Director As Director
---- --- ----------------- ------------- ------------
John Labate(1)(2) 48 Director 1997 Annual 1995
Meeting
Charles R. Hoffman(1) 60 Chairman Of The 1998 Annual 1994
Board Meeting
Robert J. McFann(2) 79 Director; and Secretary 1999 Annual 1994
Meeting
============================================================================================================================
(1) Member of the Audit Committee of the Board Of Directors.
(2) Member of the Acquisition Committee of the Board Of Directors.
James F. Etter has served as President of AmeriVest since May 1995, as a
director since December 1995, and as Chief Financial Officer since July 1996.
From 1994 until he joined the Company, Mr. Etter acted as a consultant with
respect to acquisitions. Mr. Etter served as President and Chief Executive
Officer of Recycling Management Company from 1990 until 1994. From 1988 until
1990, Mr. Etter acted as a real estate consultant, completing an extensive
review and evaluation of financial and data processing needs for Litchfield By
The Sea, a real estate development/resort project, and establishing a new real
estate and property management company near the Wild Dunes Resort. From 1985
until 1988, Mr. Etter served as Vice President, Chief Financial Officer for
Resort Operations, and President of Wild Dunes Real Estate, Inc. Mr. Etter also
assisted in establishing a chain of restaurants when he served as President and
Chief Executive Officer of BEST Food Systems, Inc., a franchisee of GD Ritzy's.
He also served as Vice President of Finance for Braswell Shipyards, Inc.,
assisting with negotiations for a $28 million financing package with multiple
lenders. In addition, Mr. Etter has been the chief financial officer of Sam
Solomon & Company, a public company which subsequently was acquired by Service
Merchandise & Company, and a principal at Arthur Young & Company, now known as
Ernst & Young, an international accounting firm. Mr. Etter received his Masters
of Business Administration and his Bachelors of Business Administration degrees
from the University of Cincinnati.
Charles R. Hoffman has served as a director of AmeriVest since August 1994
and as Chairman of the Board since May 1995. Mr. Hoffman has served as a member
of the Audit Committee of the Board of Directors since July 1995. In July 1994,
Mr. Hoffman retired as President of Texaco Pipeline Inc. In that capacity he had
executive responsibility for more than 1,200 employees and over 2,900 miles of
pipeline. He also has experience in the crude oil terminal and transportation
business with companies such as Getty Pipeline, Inc., Getty Trading And
Transportation Company, and Skelly Pipe Line, Inc. He has served on the boards
of directors of a number of pipeline systems and as president of two pipeline
systems. Mr. Hoffman received his Bachelor of Science and Masters of
Science/Civil Engineering degrees from the Missouri School Of Mines And
Metallurgy.
John A. Labate has served as a director of AmeriVest since May 1995. Mr.
Labate has served as a member of each of the Audit Committee and of the
Acquisition Committee of the Board of Directors since July 1995. Mr. Labate has
3
served as Chief Financial Officer since June 1995 and since January 1992 as the
Vice President - Finance, Secretary, and Treasurer of Crown Resources
Corporation, a publicly traded, Denver, Colorado based international gold mining
and exploration company. From 1987 through 1991, Mr. Labate served as Corporate
Controller of Bond International Gold, Inc., a New York Stock Exchange listed
international mining and processing company based in Denver, Colorado. Prior to
1987, Mr. Labate served as controller and manager of other mining companies and
equipment manufacturing companies. Mr. Labate received his Bachelor of Science
degree in accounting from San Diego State University.
Robert J. McFann has served as a director of AmeriVest since August 1994
and as Secretary since May 1995. Mr. McFann has served as a member of the
Acquisition Committee of the Board of Directors since July 1995. Mr. McFann has
been retired since 1996. He previously was the principal owner and President of
Hy Grade Meat Company, a private company which grew to a mid-sized hotel and
restaurant supply house under his direction. Prior to this, he worked for Cudahy
Meat Company in its sales department as well as other positions. He has served
on the Board of Directors of the Bank Of Aurora and for several years managed a
diverse family owned investment portfolio of commercial real estate, family
owned businesses and other investments.
Committees And Meetings.
The Board Of Directors maintains an Audit Committee and an Acquisition
Committee. The Audit Committee was formed to perform the following functions:
recommend to the Board Of Directors the independent auditors to be employed;
discuss the scope of the independent auditors' examination; review the financial
statements and the independent auditors' report; solicit recommendations from
the independent auditors regarding the internal controls and other matters;
review all related party transactions for potential conflicts of interest; make
recommendations to the Board Of Directors; and perform other related tasks as
requested by the Board. During the year ended December 31, 1996, the Audit
Committee, currently consisting of Messrs. Hoffman and Labate, did not meet as
its functions were conducted by the Board Of Directors meeting in full.
The Acquisitions Committee was formed to perform the following functions:
recommend to the Board Of Directors an acquisitions policy and strategy; review
and update the acquisitions policy and strategy periodically; review proposed
acquisitions and make recommendations to the Board concerning those
acquisitions; review past acquisitions and make recommendations to the Board;
and perform other related tasks as requested by the Board. During the year ended
December 31, 1996, the Acquisitions Committee currently consisting of Messrs.
Labate and McFann, did not meet as its functions were conducted by the Board Of
Directors meeting in full.
The Board Of Directors met seven times during 1996 and each director
participated in all meetings of the Board Of Directors.
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 directors, executive officers and
holders of more than 10% of the Company's common stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
The Company believes that during the year ended December 31, 1996, its officers,
directors and holders of more than 10% of the Company's common stock complied
with all Section 16(a) filing requirements. In making these statements, the
Company has relied upon the written representations of its directors and
officers and the Company's review of the monthly statements of changes filed
with the Company by its officers and directors.
4
EXECUTIVE COMPENSATION
Summary Compensation Table.
The following table sets forth in summary form the compensation received
during each of the Company's last three completed fiscal years by the Company's
current and former President. No employee of the Company received total salary
and bonus exceeding $100,000 during any of the last three fiscal years.
Annual Compensation
Long-Term
Compen- Other Annual
Name and Fiscal Year Salary Bonus sation -- Compen-
Principal Position Ended ($)(1) ($) Options sation ($)
- ------------------ ----------- ------- ----- ------- ----------
James F. Etter, 1996 $90,000 5,000 10,000 $6,000(2)
President
1995 $42,000 -0- 20,000 $17,400(3)
1994 $ -0- -0- -0- -0-
C.J. Hedlund, Former 1996 $ -0- -0- -0- -0-
President
1995 $ -0- -0- -0- -0-
1994 $ 6,000 -0- -0- -0-
- ---------------
(1) The dollar value of base salary (cash and non-cash) received.
(2) $6,000 to reimburse for medical insurance coverage.
(3) $15,000 to reimburse for moving expenses and $2,400 to reimburse for
medical insurance coverage.
Option Grants Table
The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended December 31, 1996 to the
Company's President. See "-Employment Contracts And Termination Of Employment
And Change-In-Control Arrangements-1995 Stock Option Plan", and "--Option
Grants", below.
Option Grants For Fiscal Year Ended December 31, 1996
% of Total
Options Granted
Options to Employees in Exercise or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
- ---- ---------- --------------- ---------------- ----------
James F. Etter 10,000 100% $5.00/share 12-31-01
President
5
Aggregated Option Exercises And Fiscal Year-End Option Value Table.
The following table sets forth information concerning each exercise of
stock options during the fiscal year ended December 31, 1996 by the Company's
President, and the fiscal year-end value of unexercised options held by the
President.
Aggregated Option Exercises
For Fiscal Year Ended December 31, 1996
And Year-End Option Values
Value of
Unexercised
Number of In-The-Money
Unexercised Options Options at
at Fiscal Fiscal Year-End
Year-End (#)(3) ($) (4)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) (1) Realized ($) (2) Unexercisable Unexercisable
- ---------------------------- ---------------- ------------------- ---------------- -------------
James F. Etter -0- -0- 10,000/20,000 Not applicable(5)
President
- ---------------------
(1) The number of shares received upon exercise of options during the fiscal
year ended December 31, 1996.
(2) With respect to options exercised during the Company's fiscal year ended
December 31, 1996, the dollar value of the difference between the option
exercise price and the market value of the option shares purchased on the
date of the exercise of the options.
(3) The total number of unexercised options held as of December 31, 1996
separated between those options that were exercisable and those options
that were not exercisable.
(4) For all unexercised options held as of December 31, 1996, the aggregate
dollar value of the excess is the market value of the stock underlying
those options over the exercise price of those unexercised options. For
purposes of this table, the market value used for the Common Stock is its
closing sales price on December 31, 1996 of $3.4375 per share as reported
on the Nasdaq SmallCap Stock Market.
(5) The option exercise price of $5.00 per share is greater than the closing
sales price of $3.4375 for the Common Stock on December 31, 1996 as
reported on the Nasdaq SmallCap Stock Market. The unexercised options
therefore were not "in-the-money" and did not have any value on December
31, 1996.
Employment Contracts And Termination Of Employment And Change-In-Control
Arrangements
Employment Agreement With James F. Etter. The Company entered into an
Employment Agreement with James F. Etter effective as of January 1, 1996, which
was amended effective as of January 1, 1997. Pursuant to the Employment
Agreement, Mr. Etter will serve as the President and Chief Executive Officer of
the Company and will devote substantially all his business time to the Company.
6
For the 1996 fiscal year, the Employment Agreement provided for the payment of
salary at the rate of $7,500 per month and a bonus of $5,000 to be paid at the
time that the Company's securities became publicly traded. This occurred in
November 1996. The Agreement also provides that the Company will reimburse Mr.
Etter for up to $500 per month of medical insurance premiums paid by Mr. Etter.
Pursuant to the amendment to the Employment Agreement effective as of
January 1, 1997, Mr. Etter's salary was increased to $8,333 per month and the
Company agreed to consider paying Mr. Etter a bonus at the end of each year of
the Employment Agreement, which bonus will be at the discretion of the Board and
will be based on criteria determined by the Board. At the time of amending the
Employment Agreement, the Board also granted to Mr. Etter options to purchase
10,000 shares of Common Stock. See below, "--Option Grants".
If the Company is acquired by another company, and if the acquiring company
does not offer Mr. Etter a position in the Denver area at a salary level equal
to or greater than his then current salary, then all unexercised stock options
held by Mr. Etter would immediately become exercisable, and the Company would
pay Mr. Etter a bonus equal to one year's salary.
As the Company's operations are instituted, it is anticipated that
additional personnel and outside consultants may be hired.
1995 Stock Option Plan. Pursuant to the Company's 1995 Stock Option Plan
(the "Option Plan"), the Company may grant options to purchase an aggregate of
130,000 shares of the Company's common stock to key employees, directors, and
other persons who have or are contributing to the success of the Company. The
options granted pursuant to the Option Plan may be incentive options qualifying
for beneficial tax treatment for the recipient or they may be non-qualified
options. With respect to options granted to persons other than directors of the
Company who are not also employees of the Company, the Option Plan is
administered by an option committee that determines the terms of the options
subject to the requirements of the Option Plan. Directors of the Company who are
not also employees of the Company ("Outside Directors") automatically receive
options to purchase 12,000 shares pursuant to the Option Plan at the time of
their election as an Outside Director. These options held by Outside Directors
are not exercisable at the time of grant, but options to purchase 4,000 shares
become exercisable for each Outside Director on December 30 of each of the first
three years immediately following the date of grant of the options to that
Outside Director. The exercise price for options granted to Outside Directors is
the fair market value of the Common Stock on the date of grant, and all options
granted to Outside Directors expire five years from the date of grant. On the
date that all of an Outside Director's options have become exercisable, options
to purchase an additional 12,000 shares, which are not exercisable at the time
of grant, shall be granted to that Outside Director. In May 1995, the Outside
Directors were granted an aggregate of 48,000 options with an exercise price of
$5.00 per share pursuant to the Option Plan, 12,000 of which subsequently
expired without being exercised.
Compensation Of Outside Directors. Outside Directors are paid $250 per
month plus $300 for each meeting of the Board Of Directors that they attend.
Directors also will be reimbursed for expenses incurred in attending meetings
and for other expenses incurred on behalf of the Company. In addition, each
director who is not an employee automatically receives options to purchase
shares of Common Stock pursuant to the Option Plan. See above, "-1995 Stock
Option Plan".
Option Grants. In addition to the automatic grants of options to Outside
Directors described above under "-1995 Stock Option Plan", incentive stock
options have been granted pursuant to the Company's Stock Option Plan on two
7
occasions. In May 1995, the Company granted to Mr. Etter options to acquire up
to 20,000 shares of the Company's Common Stock at an exercise price of $5 per
share. 4,000 of these options became exercisable on each of December 30, 1995
and 1996, an additional 4,000 of these options will become exercisable on each
of December 30, 1997, 1998 and 1999, and all of these options expire on May 20,
2000. On December 9, 1996, the Company granted to Mr. Etter options to purchase
up to an additional 10,000 shares of Common Stock at an exercise price of $5 per
share. On that date, the last sale price for the Company's Common Stock on the
Nasdaq SmallCap Stock Market was $4.50. 2,000 of these options became
exercisable on December 30, 1996, an additional 2,000 of these options will
become exercisable on each of December 30, 1997, 1998, 1999 and 2000, and all of
these options expire on December 9, 2001.
STOCK OWNERSHIP OF DIRECTORS AND PRINCIPAL STOCKHOLDERS
The following table summarizes certain information as of December 31, 1996
with respect to the beneficial ownership of the Company's common stock (i) by
the Company's directors, (ii) by stockholders known by the Company to own 5% or
more of the Company's common stock, and (iii) by all officers and directors as a
group.
As Of March 10, 1997
----------------------------------------------
Percentage Of Class
Name And Address Of Beneficial Owner Number Of Shares Beneficially Owned
------------------------------------ ---------------- -------------------
Charles R. Hoffman 40,300(1) 2.3%
208 Somerset
Bentonville, Arizona 72712
John A. Labate 8,000(1) 0.6%
5260 South Beeler Court
Englewood, Colorado 80111
Robert J. McFann 87,000(1) 6.2%
3260 Zephyr Court
Wheat Ridge, Colorado 80033
James F. Etter 32,600(2) 2.3%
7100 Grandview Avenue
Suite 1
Arvada, Colorado 80002
C.J. Hedlund 118,130(3) 8.4%
2296 Augusta Drive
Evergreen, Colorado 80439
S. Kris Bandal 98,000(4) 7.1%
6043 Hudson Road, #140
Woodbury, Minnesota 55126
Weston Associates Inc. 146,200(5) 10.3%
855 S. Newcombe Way
Denver, Colorado 80226
All Officers And Directors As A Group (Four Persons) 167,900(1)(2) 11.8%
- ---------------
8
(1) Includes or consists of options to purchase 8,000 shares of Common Stock
that currently are exercisable, that were granted to each Outside Director
pursuant to the Option Plan. See "EXECUTIVE COMPENSATION--Employment Contracts
And Termination Of Employment And Change-In-Control Arrangements--1995 Stock
Option Plan." Also includes 4,000 currently exercisable common stock purchase
warrants ("Warrants") for Robert J. McFann.
(2) Consists of an aggregate of 17,100 shares of Common Stock owned by Mr.
Etter, his wife, and minor daughter, 10,000 shares of Common Stock issuable upon
one exercise of currently exercisable options, and 4,000 shares of Common Stock
issuable upon the exercise of Warrants. See "EXECUTIVE COMPENSATION--Employment
Contracts And Termination Of Employment And Change-In-Control
Arrangements--Option Grants".
(3) Includes 8,090 shares over which Mr. Hedlund has sole voting power and an
additional 91,540 over which he has shared voting power as disclosed in a
Schedule 13D dated March 5, 1997 provided to the Company by Mr. Hedlund. Also
includes 18,500 shares issuable upon the exercise of Warrants over which Mr.
Hedlund has shared voting power.
(4) Consists of 98,000 shares over which Mr. Bandal has sole voting power
as disclosed in a Schedule 13D dated March 5, 1997 provided to the Company by
Mr. Bandal.
(5) Includes 108,000 shares over which Weston Associates Inc. ("Weston") has
sole voting power as disclosed in a Schedule 13D dated November 5, 1996 provided
to the Company by Weston. Also includes 38,200 shares issuable upon the exercise
of Warrants over which Weston has sole voting power.
CERTAIN TRANSACTIONS WITH MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The Company has been involved in the following transactions with its
current and past directors and officers and by persons known by the Company to
be the beneficial owners of 5% or more of the Company's Common Stock.
Transactions With Founder. C.J. Hedlund was a founder, former President and
a former director of the Company and currently is the beneficial owner of 8.4%
of the Company's Common Stock. See above, "STOCK OWNERSHIP OF DIRECTORS AND
PRINCIPAL STOCKHOLDERS". He resigned from his positions as President and from
his position of a director in March 1994. Mr. Hedlund has interests in certain
of the transactions with the Company that are described below.
Stock Transactions With Promoters, Initial Officers, Directors And
Affiliates. In August 1993, the Company issued an aggregate of 100,000 shares of
Common Stock at a purchase price of $.005 per share in connection with the
formation of the Company. 62,000 of these shares were issued to C. J. Hedlund
and certain persons with whom he is affiliated, and 4,000 of these shares were
issued to each of Mr. Hedlund's two adult sons. Subsequently, Mr. Hedlund
returned 32,000 shares to the Company, Mr. Hedlund's wife returned 6,000 shares
to the Company, and an unrelated party returned an additional 12,000 shares to
the Company. The shares were returned to the Company in order to make the
Company's capital structure more desirable for a public offering, and the
Company did not compensate the transferors. In December 1995, the Maxine G.
Hedlund Trust, a living trust of which Maxine Hedlund, the wife of C.J. Hedlund,
is the beneficiary, sold 33,000 shares of the Company's Common Stock to Robert
J. McFann and Wandeline McFann for $4.50 per share. Mr. McFann is a director and
the Secretary of the Company.
Ownership Of Consolidated Broadway Properties, Ltd. In August 1995,
pursuant to a Purchase And Sale Agreement (the "Broadway Agreement") with
Consolidated Broadway Properties, Ltd. ("CBP"), the Company acquired the
industrial office/showroom building located at 5961 Broadway, Adams County,
Colorado (the "Broadway Property"). As consideration for the Broadway Property,
the Company issued 84,000 shares of its Common Stock to CBP and assumed a
mortgage in the original face amount of $1,232,000, which had an outstanding
principal balance of $1,205,000 at July 1, 1995. CBP previously had purchased
9
the Broadway Property on October 1, 1993 for aggregate consideration of
$1,332,000, consisting of a cash payment of $83,418 and the assumption of
$1,232,000 in debt. The price paid by CBP in 1993 was determined through
negotiations between CBP and the prior owner. Mr. Hedlund is the general partner
of CBP. Continental Western Services, Inc., an entity of which Mr. Hedlund's
wife is the President, a director and a 34 percent shareholder, owned 56.8% of
CBP at the time of the Company's acquisition of the Broadway Property. Also at
that time, Charles Hoffman and Robert McFann, who are directors of the Company,
owned approximately 2.2% and 2.5%, respectively, of CBP. In December 1995, the
84,000 shares of the Company's Common Stock received by CBP in exchange for the
Broadway Property were transferred pro rata to the partners of CBP. Mr. Hoffman,
together with his wife received 6,300 shares of the Company's Common Stock, and
Mr. McFann received 7,000 shares, from the pro rata transfer made by CBP in
December 1995. In December 1995, Continental Western Services, Inc., which
received 55,160 shares of the Company's Common Stock from the CBP pro rata
assignment, sold 53,620 of those shares for $4.50 per share to three purchasers,
one of whom was a former director of the Company and one of whom already was a
stockholder of the Company at that time.
Property Management; Administrative Services. The Company has entered into
property management contracts pursuant to which AmeriCo manages the Properties.
These agreements are effective as of the date on which the Company acquired the
respective Property. Although the property management contracts do not provide
for changes to their terms, the Company can terminate any of them after one year
from their respective effective dates. AmeriCo will receive 5% of the gross
rental income, reimbursement of the cost of any on-site personnel, and an amount
equal to 5% of the total costs related to on-site personnel. In addition, the
Company has entered into an agreement with AmeriCo pursuant to which AmeriCo
provides the Company with accounting and clerical services as well as general
office support, including telephone, fax, and other services, for an aggregate
cost of $500 per month. C.J. Hedlund beneficially owns 51% of the outstanding
common stock of AmeriCo.
Property Acquisition; Brokerage Services. C.J. Hedlund, the Company, and
Colorado Bighorn entered into an agreement effective as of October 30, 1996
pursuant to which Mr. Hedlund and Colorado Bighorn have granted to the Company
the right of first refusal to participate in any real estate transaction in
which Mr. Hedlund, Colorado Bighorn, or any of their affiliated entities is
involved or for which Mr. Hedlund, Colorado Bighorn, or any of their affiliated
entities otherwise receives compensation, except that the right of first refusal
will not apply to any proposed transaction that relates solely to their serving
in a brokerage function, such as a listing or selling broker. Also as part of
this transaction, the Company entered into broker listing agreements with
Colorado Bighorn pursuant to which Colorado Bighorn will serve as the Company's
broker for all purchase and sale transactions during the period of the
agreement. Pursuant to these listing agreements, the Company will pay Colorado
Bighorn a standard real estate commission for each purchase or sale transaction
entered into by the Company, including those pursuant to the right of first
refusal granted to the Company by Mr. Hedlund and Colorado Bighorn. This
agreement and the listing agreements are for one year terms beginning on October
30, 1996. The agreement may be terminated by the Company earlier than the end of
the one year period in the event that either Mr. Hedlund or Colorado Bighorn
Corporation does not perform its duties satisfactorily, as determined by the
Board of Directors of the Company in its sole discretion. In addition, this
agreement and the listing agreements may be renewed by the Company, at its
election, for five additional one year terms. Mr. Hedlund is the beneficial
owner of Colorado Bighorn.
10
Purchase Of The Stock Of CSP And GBI. In October 1996, the Company
purchased the stock of CSP, which owned the Self-Storage Facilities, and the
stock of GBI, which owned the Giltedge Office Building. The respective purchase
prices were $2,604,000 for the stock of CSP and $721,000 for the stock of GBI.
C. J. Hedlund is the former general partner, the current representative, and a
0.83% beneficial owner of the entity that was the Seller of the stock of CSP and
GBI, and two directors of the Company, Messrs. Hoffman and McFann, beneficially
owned 2.4% and 1.0%, respectively, of the Seller of the stock of CSP and GBI.
Loans To The Company. During 1993 and 1994, Electro-Media of Colorado, Inc.
("Electro-Media") advanced the Company a total of $219,290 for organizational,
operational, and other expenses. This amount was repaid, with interest of
$10,157, in July 1994. During 1995, Electro-Media loaned the Company $125,000
for the Company's operating expenses prior to completion of the Company's
initial Public Offering. The loan accrued interest at 11% per annum. An
additional $75,000 was loaned to the Company in 1996 at the same interest rate
of 11% per annum. These two loans from Electro-Media totalling $200,000 were
repaid, with interest of $16,125, as of October 30, 1996. At the time of these
transactions, C.J. Hedlund was the Chairman of the Board of Directors of
Electro-Media, and his wife was Electro-Media's majority shareholder.
Conflicts Of Interest Policies. The Company's Board of Directors and its
officers are subject to certain provisions of Delaware law which are designed to
eliminate or minimize the effects of certain potential conflicts of interest. In
addition, the Bylaws provide that any transaction between the Company and an
interested party must be fully disclosed to the Board Of Directors, and that a
majority of the directors not otherwise interested in the transaction (including
a majority of independent directors) must make a determination that such
transaction is fair, competitive and commercially reasonable and on terms and
conditions not less favorable to the Company than those available from
unaffiliated third parties.
All future transactions between the Company and the Company's officers,
directors and 5 percent stockholders will be on terms no less favorable than
could be obtained from independent third parties and will be approved by a
majority of the independent, disinterested directors of the Company. The Company
believes that by following these procedures it will be able to mitigate the
possible effects of these conflicts of interest.
PROPOSAL TO RATIFY THE SELECTION OF WHEELER WASOFF, P.C. AS AUDITORS
The Board Of Directors recommends that the stockholders of the Company vote
in favor of ratifying the selection of the certified public accounting firm of
Wheeler Wasoff, P.C. of Denver, Colorado as the auditors who will continue to
audit financial statements, review tax returns, and perform other accounting and
consulting services for the Company for the fiscal year ending December 31, 1997
or until the Board Of Directors, in its discretion, replaces them. Wheeler
Wasoff, P.C. has audited the Company's financial statements since the fiscal
year ended April 10, 1995.
An affirmative vote of the majority of shares represented at the meeting is
necessary to ratify the selection of auditors. There is no legal requirement for
submitting this proposal to the stockholders; however, the Board Of Directors
believes that it is of sufficient importance to seek ratification. Whether the
proposal is approved or defeated, the Board may reconsider its selection of
Wheeler Wasoff, P.C. It is expected that one or more representatives of Wheeler
Wasoff, P.C. will be present at the Annual Meeting and will be given an
11
opportunity to make a statement if they desire to do so and to respond to
appropriate questions from stockholders.
On April 10, 1995, the Company engaged Wheeler Wasoff, P.C. as the
Company's independent accountant to replace HEIN + ASSOCIATES LLP, which was
dismissed by the Company on that date. The change of accountants was approved by
the Board Of Directors of the Company. HEIN + ASSOCIATES LLP had not issued a
report on the Company's financial statements. There have been no disagreements
with HEIN + ASSOCIATES LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure.
OTHER BUSINESS
The Board Of Directors of the Company is not aware of any other matters
that are to be presented at the Annual Meeting, and it has not been advised that
any other person will present any other matters for consideration at the
meeting. Nevertheless, if other matters should properly come before the Annual
Meeting, the stockholders present, or the persons, if any, authorized by a valid
proxy to vote on their behalf, shall vote on such matters in accordance with
their judgment.
VOTING PROCEDURES
Votes at the Annual Meeting Of Stockholders are counted by Inspectors of
Election appointed by the Chairman of the meeting. If a quorum is present, an
affirmative vote of a majority of the votes entitled to be cast by those present
in person or by proxy is required for the approval of items submitted to
stockholders for their consideration, including the election of directors and
the ratification of the selection of the independent auditors, unless a
different number of votes is required by statute or the Company's Certificate Of
Incorporation. Abstentions by those present at the meeting are tabulated
separately from affirmative and negative votes and do not constitute affirmative
votes. If a stockholder returns his proxy card and withholds authority to vote
for any or all of the nominees, the votes represented by the proxy card will be
deemed to be present at the meeting for purposes of determining the presence of
a quorum but will not be counted as affirmative votes. Shares in the name of
brokers that are not voted are treated as not present.
RESOLUTIONS PROPOSED BY INDIVIDUAL STOCKHOLDERS
In order to be considered for inclusion in the Company's Proxy Statement
and form of proxy relating to the Company's next Annual Meeting Of Stockholders
following the end of the Company's 1997 fiscal year, proposals by individual
stockholders must be received by the Company no later than December 5, 1997.
12
AVAILABILITY OF REPORTS ON FORM 10-KSB
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF
ITS ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 TO
ANY OF THE COMPANY'S STOCKHOLDERS OF RECORD, OR TO ANY STOCKHOLDER WHO OWNS THE
COMPANY'S COMMON STOCK LISTED IN THE NAME OF A BANK OR BROKER AS NOMINEE, AT THE
CLOSE OF BUSINESS ON MARCH 31, 1997. ANY REQUEST FOR A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-KSB SHOULD BE MAILED TO THE SECRETARY, AMERIVEST
PROPERTIES INC., 7100 GRANDVIEW AVENUE, SUITE 1, ARVADA, COLORADO 80002, (303)
421-1224.
This Notice and Proxy Statement are sent by order of the Board Of
Directors.
Dated: April 4, 1997 James F. Etter
President
* * * * *
13
PROXY PROXY
For the Annual Meeting Of Stockholders of
AMERIVEST PROPERTIES INC.
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints James F. Etter and Robert J. McFann, or
either of them, as proxies or ------------------ (stockholders may strike the
person(s) designated by Management and insert the name and address of the
person(s) to vote the proxy and mail the proxy to the named proxy holder(s))
with power of substitution to vote all the shares of the undersigned with all of
the powers which the undersigned would possess if personally present at the
Annual Meeting Of Stockholders of AmeriVest Properties Inc. (the "Corporation"),
to be held at 3:00 P.M. on May 8, 1997, at Denver Marriott West, 1717 Denver
West Boulevard, Golden, Colorado, or any adjournments thereof, on the following
matters:
1. ELECTION OF CLASS 1 DIRECTORS
FOR all Nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary below) To Vote for all Nominees below
John A. Labate
James F. Etter
2. Proposal to ratify the selection by the Board of Directors of Wheeler
Wasoff, P.C. as the independent certified accountants for the Corporation
for the year ending December 31, 1997.
For Against Abstain
--- --- ---
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Unless contrary instructions are given, the shares represented by this
proxy will be voted in favor of Items 1 and 2. This proxy is solicited on behalf
of the Board of Directors of AmeriVest Properties Inc.
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE, SIGN AND RETURN
THIS PROXY IN THE ACCOMPANYING ENVELOPE.
Date:
------------------------------------------
Signature:
--------------------------------------
Signature:
--------------------------------------
(Please sign exactly as shown on your stock
certificate and on the envelope in which this
proxy was mailed. When signing as partner,
corporate officer, attorney, executor,
administrator, trustee, guardian, etc., give
full title as such and sign your own name as
well. If stock is held jointly, each joint owner
should sign.)