UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER: 1-14331
----------------------
MERISTAR HOTELS & RESORTS, INC.
(NAME OF REGISTRANT)
DELAWARE 52-2101815
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1010 Wisconsin Ave., NW
Washington, DC 20007
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (202) 965-4455
Securities registered pursuant to Section 12(b) of the Act:
----------------------
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, par value $0.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of April 27, 2001 was $58,060,997.
The number of shares of Common Stock outstanding as of April 27, 2001 was
37,170,499.
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EXPLANATORY NOTE
The purpose of this amendment is to amend and restate Part III of the
Registrant's Annual Report on Form 10-K filed with the Securities and Exchange
Commission on April 2, 2001 (the "Form 10-K"). The amended and restated items
are as follows:
Item 10. Directors and Executive Officers of the Registrant.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Item 13. Certain Relationships and Related Transactions.
These items were omitted from the Form 10-K in reliance on instructions included
in Form 10-K permitting the Registrant to incorporate such items by reference to
the Registrant's proxy statement, provided such proxy statement is filed within
120 days of the Registrant's fiscal year-end. As the Registrant intends to file
its proxy statement later than 120 days from its fiscal year-end, it is
providing these items as part of this Form.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth information concerning our directors and
executive officers as of April 30, 2001:
NAME AGE POSITION
Paul W. Whetsell 50 Chairman, Chief Executive Officer
David E. McCaslin 43 Director, President
Steven D. Jorns 52 Director
Daniel L. Doctoroff 42 Director
S. Kirk Kinsell 46 Director
James B. McCurry 52 Director
Kent R. Hance 58 Director
James R. Worms 55 Director
John Emery 37 Chief Investment Officer
James A. Calder 38 Chief Financial Officer
Paul W. Whetsell has been Chairman of the Board of Directors and Chief
Executive Officer of the Company since August 1998 and his current term as a
Class III director expires at the Annual Meeting in 2003. Mr. Whetsell has also
been Chairman of the Board of Directors and Chief Executive Officer of MeriStar
Hospitality Corporation since August 1998. Prior to August 1998, Mr. Whetsell
had been Chairman of the Board of Directors of CapStar Hotel Company since 1996
and had served as President and Chief Executive Officer of CapStar Hotel
Company since its founding in 1987.
David E. McCaslin has been a director and President of the Company since
August 1998 and his current term as a Class II director expires at the Annual
Meeting in 2002. Mr. McCaslin served as Chief Operating Officer of CapStar
Hotel Company from 1994 until August 1998. Mr. McCaslin joined CapStar in 1987
as a General Manager and was named Vice President of Operations in 1988.
Steven D. Jorns has been Vice Chairman of the Board of Directors since August
1998 and is up for re-election for a three-year term expiring at the Annual
Meeting in 2004. Mr. Jorns has also been Vice Chairman of the Board of
Directors of MeriStar Hospitality Corporation since August 1998. Mr. Jorns was
Chief Operating Officer of the Company from August 1998 until January 1999. From
April 1996 to August 1998, Mr. Jorns was the Chairman of the Board of Directors,
Chief Executive Officer and President of American General Hospitality
Corporation. Mr. Jorns was also the founder of American General Hospitality,
Inc. and had served since its formation in 1981 until August 1998 as its
Chairman of the Board of Directors, Chief Executive Officer and President.
Daniel L. Doctoroff has been a director of the Company since August 1998 and
is up for re-election for a three-year term expiring at the Annual Meeting in
2004. Mr. Doctoroff is a Managing Partner of Oak Hill Capital Management, Inc.,
the management company for Oak Hill Capital Partners, L.P., a private
investment partnership. Mr. Doctoroff has been Managing Director of Oak Hill
Partners, Inc., the investment advisor to several private investment funds, and
its predecessor since August 1987; Vice President and Director of Acadia
Partners MGP, Inc. since March 1992; Vice President of Keystone, Inc. since
March 1992; and a Managing Partner of Insurance Partners Advisors, L.P. since
February 1994. Mr. Doctoroff is also a director of MeriStar Hospitality
Corporation and Williams Scotsman, Inc.
S. Kirk Kinsell has been a director of the Company since August 1998 and his
current term as a Class II director expires at the Annual Meeting in 2002. Mr.
Kinsell is currently President and CEO of Micell Technologies in Raleigh, North
Carolina. Mr. Kinsell was the President and Chief Operating Officer of Apple
South, Inc. from 1997 until November 1998. Prior to joining Apple South, Mr.
Kinsell served as President of the Franchise Division of ITT Sheraton and its
Four Point Hotels from 1995 to 1997. Immediately prior to joining ITT Sheraton,
Mr. Kinsell worked in various positions with Holiday Inn Worldwide, from 1988
to 1995, culminating with senior vice president in its Franchise division.
James B. McCurry has been a director of the Company since August 1998 and his
current term as a Class II director expires at the Annual Meeting in 2002. Mr.
McCurry has been Chief Executive Officer of Cerespan.com since May 2000. From
July 1997 until May 2000, Mr. McCurry was a Partner at Bain & Company, an
international management consulting firm specializing in corporate strategy.
Mr. McCurry served from December 1994 through December 1996 as Chief Executive
Officer of NeoStar Retail Group, Inc. ("NeoStar"), a specialty retailer of
consumer software. NeoStar filed a voluntary petition under Chapter 11 of the
U.S. Bankruptcy Code in September 1996. From April 1983 to December 1994, Mr.
McCurry was the Chairman of Babbage's Inc., a consumer software retailer, which
merged with Software Etc. Stores, Inc. in December of 1994 to form NeoStar.
Kent R. Hance has been a director of the Company since August 1998 and his
current term as a Class III director expires at the Annual Meeting in 2003.
Since 1994, Mr. Hance has been a law partner in the firm Hance, Scarborough &
Wright, L.L.P., in Austin, Texas, and from 1991 to 1994, he was a law partner
in the firm of Hance and Gamble. From 1985 to 1987, he was a law partner with
Boyd, Viegal and Hance. Mr. Hance also served as a member of the Texas Railroad
Commission from 1987 until 1991 and as its Chairman from 1989 until 1990. From
1979 to 1985, Mr. Hance served as a member of the United States Congress. In
addition, Mr. Hance served as a State Senator in the State of Texas from 1975
to 1979 and was a professor of business law at Texas Tech University from 1969
to 1973.
James R. Worms has been a director of the Company since August 1998 and his
current term as a Class III director expires at the Annual Meeting in 2003. Mr.
Worms has served since August 1995 as a Managing Director of William E. Simon &
Sons L.L.C., a private investment firm and merchant bank, and President of
William E. Simon & Sons Realty, through which the firm conducts its real estate
activities. Prior to joining William E. Simon & Sons, Mr. Worms was employed in
various capacities since March 1987 by Salomon Brothers Inc, an international
investment banking firm, culminating with Managing Director. Mr. Worms is also
a director of MeriStar Hospitality Corporation.
John Emery has served as Chief Investment Officer of the Company since April
2000. Mr. Emery has been Chief Operating Officer of MeriStar Hospitality
Corporation since April 2000 and was elected to MeriStar Hospitality's board of
directors on May 9, 2000. From August 1998 to April 2000, Mr. Emery was Chief
Financial Officer and Secretary of MeriStar Hospitality Corporation. From June
1997 to August 1998, Mr. Emery served as Chief Financial Officer and Secretary
of CapStar Hotel Company. From March 1996 to June 1997, Mr. Emery served as
Treasurer of CapStar. From September 1995 to March 1996, Mr. Emery served as
Director of Finance of CapStar. Prior to that, from January 1987 to September
1995, Mr. Emery worked for Deloitte & Touche LLP in various capacities,
culminating with Senior Manager for the hotel and real estate industries.
James A. Calder has served as Chief Financial Officer of the Company since
August 1998. From September 1997 until August 1998, Mr. Calder served as Senior
Vice President of Finance of CapStar Hotel Company. From May 1995 to September
1997, Mr. Calder served as Senior Vice President and Corporate Controller of
ICF Kaiser International, Inc. Prior to that, from July 1984 to May 1995, he
worked for Deloitte & Touche LLP in various capacities, culminating with Audit
Senior Manager for the real estate industry. He is a Certified Public
Accountant.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires directors and executive officers
of the Company, and persons who own more than 10% of the issued and
outstanding shares of Common Stock, to file reports of beneficial ownership
and changes in beneficial ownership with the Securities and Exchange
Commission. Directors, executive officers and greater than 10% stockholders
are required by SEC regulation to furnish the Company copies of all Section
16(a) forms they file.
Based on a review of the copies of the forms furnished to the Company or
representations by reporting persons, all of the filing requirements
applicable to its officers, directors and greater than 10% stockholders were
met for fiscal year 2000.
ITEM 11: EXECUTIVE COMPENSATION.
The following table sets forth all compensation paid by the Company during
2000 with respect to the Chief Executive Officer and its other most highly
compensated executive officers (the "Named Executive Officers").
Long-Term Compensation
-------------------------------------
Annual Compensation
------------------------------ Restricted Securities
Name And Principal Other Annual Stock Underlying All Other
Position Year Salary Bonus Compensation Awards Options Compensation
------------------ ---- -------- -------- ------------ ----------- ------------- ------------
Paul W. Whetsell........ 2000 $190,000 -- 23,044 -- -- --
Chief Executive 1999 190,000 $163,500 -- -- 125,000 --
Officer and Chairman 1998 82,480 63,540 2,312 -- -- --
of the Board
David E. McCaslin....... 2000 300,000 140,740 5,513 -- -- 212,100
President 1999 300,000 219,000 2,813 -- /(1)//(2)/ 100,000 287,850
1998 127,313 100,200 -- -- 87,500 --
James A. Calder......... 2000 200,000 87,300 1,676 -- -- 106,050
Chief Financial 1999 200,000 128,000 -- -- /(1)//(2)/ 75,000 143,925
Officer 1998 83,333 57,000 -- -- 47,500 --
John Emery.............. 2000 15,289 29,700 -- -- -- --
Chief Investment 1999 -- -- -- -- -- --
Officer 1998 -- -- -- -- -- --
- --------
(1) On February 4, 1999, the Compensation Committee approved the grant by
MeriStar Hospitality Corporation to (i) Mr. McCaslin of options to purchase
150,000 shares of MeriStar Hospitality Corporation at $19.19 per share,
which vest over three years, and 15,000 restricted shares of MeriStar
Hospitality Corporation, which vests over five years, pursuant to the
MeriStar Hospitality Corporation Incentive Plan and (ii) Mr. Calder of
options to purchase 75,000 shares of MeriStar Hospitality Corporation at
$19.19 per share, which vest over three years, and 7,500 restricted shares
of MeriStar Hospitality Corporation, which vests over five years, pursuant
to the MeriStar Hospitality Corporation Incentive Plan.
(2) In December 1999, the Compensation Committee approved the grant by
MeriStar Hospitality Corporation of MeriStar Hospitality Corporation
common stock and other equity compensation to Messrs. McCaslin and Calder
(the "Restricted Equity Award"). The Restricted Equity Award is satisfied
by issuing a combination of MeriStar Hospitality Corporation common stock,
which is subject to a three-year vesting period beginning March 31, 2000
(the "Restricted Stock"), and a new class of partnership units in the
subsidiary operating partnership of MeriStar Hospitality Corporation,
which is subject to the satisfaction of certain performance criteria
("POPs"). The stock portion of the Restricted Equity Award is valued based
on the closing price per share of the common stock on the date of grant.
Pursuant to the Restricted Equity Award, Mr. McCaslin received options to
purchase 50,000 shares of MeriStar Hospitality Corporation at $14.88 per
share and 125,000 shares of common stock and other equity compensation
granted as follows (i) 62,500 shares of Restricted Stock on March 31,
2000, and (ii) 62,500 POPs on March 29, 2000. Pursuant to the Restricted
Equity Award, Mr. Calder received options to purchase 25,000 shares of
MeriStar Hospitality Corporation at $14.88 per share and 62,500 shares of
common stock and other equity compensation granted as follows (i) 31,250
shares of Restricted Stock on March 31, 2000, and (ii) 31,250 POPs on
March 29, 2000.
Stock Option Grants
Messrs. Whetsell, Emery, McCaslin and Calder were not granted options in
fiscal year 2000.
COMPENSATION PLANS
THE EMPLOYEE INCENTIVE PLAN
The purpose of the MeriStar Hotels & Resorts, Inc. Incentive Plan (the
"Incentive Plan") is to (i) attract and retain employees and other service
providers with ability and initiative, (ii) provide incentives to those deemed
important to the success of the Company and related entities, and (iii) align
the interests of these individuals with the interests of the Company and its
stockholders through opportunities for increased stock ownership.
Administration
The Incentive Plan is administered by the Compensation Committee. The
Compensation Committee may delegate its authority to administer the Incentive
Plan. The Compensation Committee may not, however, delegate its authority with
respect to grants and awards to individuals subject to Section 16 of the
Exchange Act. As used in this summary, the term "Administrator" means the
Compensation Committee or its delegate, as appropriate.
Eligibility
Each employee of the Company or of an affiliate of the Company or any other
person whose efforts contribute to the Company's performance, excluding an
employee who is a member of the Board of Directors, is eligible to participate
in the Incentive Plan ("Participants"). The Administrator may, from time to
time, grant stock options, stock awards, incentive awards, or performance
shares to Participants.
Options
Options granted under the Incentive Plan may be incentive stock options
("ISOs") or nonqualified stock options. An option entitles a Participant to
purchase shares of Common Stock from the Company at the option price. The
option price may be paid in cash, with a cash equivalent, with shares of
Common Stock, or with a combination of cash and Common Stock. The option price
will be fixed by the Administrator at the time the option is granted, but the
price cannot be less than 100% for existing employees (85% in connection with
the hiring of new employees) of the share's fair market value on the date of
grant; provided, however, no more than 10% of the shares under the Incentive
Plan will be granted at less than 100% of fair market value. The exercise price
of an ISO may not be less than 100% of the share's fair market value on the date
of grant (110% of the fair market value in the case of an ISO granted to a 10%
stockholder of the Company). Options may be exercised at such times and subject
to such conditions as may be prescribed by the Administrator but the maximum
term of an option is ten years in the case of an ISO or five years in the case
of an ISO granted to a 10% stockholder.
ISOs may only be granted to employees; however, no employee may be granted
ISOs (under the Incentive Plan or any other plan of the Company) that are first
exercisable in a calendar year for Common Stock having an aggregate fair market
value (determined as of the date the option is granted) exceeding $100,000. In
addition, no Participant may be granted options in any calendar year for more
than 750,000 shares of Common Stock.
Stock Awards
Participants also may be awarded shares of Common Stock pursuant to a stock
award. A Participant's rights in a stock award will be nontransferable or
forfeitable or both unless certain conditions prescribed by the Administrator
are satisfied. These conditions may include, for example, a requirement that
the Participant continue employment with the Company for a specified period or
that the Company or the Participant achieve stated, performance-related
objectives. The objectives may be stated with reference to the fair market
value of the Common Stock or the Company's, a subsidiary's, or an operating
unit's return on equity, earnings per share, total earnings, earnings growth,
return on capital or return on assets or other
acceptable performance criteria. A stock award, no portion of which is
immediately vested and nonforfeitable, will be restricted, in whole or in part,
for a period of at least three years; provided, however, that the period will
be at least one year in the case of a stock award that is subject to objectives
based on one or more of the foregoing performance criteria. The maximum number
of stock awards that may be granted to an individual in any calendar year
cannot exceed 50,000 shares of Common Stock and no more than 30% of the shares
available under the Incentive Plan may be issued in the form of Stock Awards.
Incentive Awards
Incentive awards also may be granted under the Incentive Plan. An incentive
award is an opportunity to earn a bonus, payable in cash, upon attainment of
stated performance objectives. The objectives may be stated with reference to
the fair market value of the Common Stock or on the Company's, a subsidiary's,
or an operating unit's return on equity, earnings per share, total earnings,
earnings growth, return on capital or return on assets or other acceptable
performance criteria. The period in which performance will be measured will be
at least one year. No Participant may receive an incentive award payment in any
calendar year that exceeds the lesser of (i) 100% of the Participant's base
salary (prior to any salary reduction or deferral election) as of the date of
grant of the incentive award or (ii) $250,000.
Performance Share Awards
The Incentive Plan also provides for the award of performance shares. A
performance share award entitles the Participant to receive a payment equal to
the fair market value of a specified number of shares of Common Stock if
certain standards are met. The Administrator will prescribe the requirements
that must be satisfied before a performance share award is earned. These
conditions may include, for example, a requirement that the Participant
continue employment with the Company for a specified period or that the Company
or the Participant achieve stated, performance-related objectives. The
objectives may be stated with reference to the fair market value of the Common
Stock or on the Company's, a subsidiary's, or an operating unit's return on
equity, earnings per share, total earnings, earnings growth, return on capital
or return on assets or other acceptable performance criteria. To the extent that
performance shares are earned, the obligation may be settled in cash, in Common
Stock, or by a combination of the two. No Participant may be granted performance
shares for more than 12,500 shares of Common Stock in any calendar year.
Transferability
Awards granted under the Incentive Plan are generally nontransferable. The
Compensation Committee may, however, grant awards other than ISOs, which are
transferable to Permitted Family Members.
Share Authorization
In no event may the total number of shares of Common Stock covered by
outstanding ISOs granted under the Incentive Plan, plus the number of shares of
Common Stock issued pursuant to the exercise of ISOs, whenever granted under
the Incentive Plan, exceed fifteen (15%) percent of the number of shares of
Common Stock. All awards made under the Incentive Plan will be evidenced by
written agreements between the Company and the Participant. The share
limitation and the terms of outstanding awards will be adjusted, as the
Compensation Committee deems appropriate, in the event of a stock dividend,
stock split, combination, reclassification, recapitalization or other similar
event. As of April 27, 2001, the closing price of a share of Common Stock on
the New York Stock Exchange was $1.65.
Termination and Amendment
No option or stock award may be granted and no performance shares may be
awarded under the Incentive Plan more than ten years after the earlier of the
date that the Incentive Plan is adopted by the Board of Directors or the date
that it is approved by the Company's stockholders. The Board of Directors may
amend or terminate the Incentive Plan at any time, but, except as set forth in
the immediately preceding paragraph, an amendment will not become effective
without stockholder approval if the amendment materially (i) increases the
number of shares of Common Stock that may be issued under the Incentive Plan
(other than an adjustment as described above), (ii) changes the eligibility
requirements, or (iii) increases the benefits that may be provided under the
Incentive Plan.
THE DIRECTORS PLAN
The purpose of the MeriStar Hotels & Resorts, Inc. Non-Employee Directors Plan
(the "Directors Plan") is to attract experienced and knowledgeable persons to
serve as outside directors to the Company. There are no remaining awards
available to be issued under the Directors Plan. Pursuant to the terms of the
Directors Plan, the number of options that the Company is allowed to issue is no
more than 125,000 shares of Common Stock.
There are currently six members of the Board of Directors who are not
officers or employees of the Company or its subsidiaries (each an "Independent
Director"). Pursuant to the existing Directors Plan, each Independent Director
receives 7,500 options upon being elected as a director and 5,000 options at
each annual meeting of stockholders.
Share Authorization
A maximum of 125,000 shares of Common Stock may be issued under the Directors
Plan. The share limitation and terms of outstanding awards will be adjusted, as
the Compensation Committee deems appropriate, in the event of a stock dividend,
stock split, combination, reclassification, recapitalization or other similar
event.
Eligibility
The Directors Plan provides for awards to be granted to each Independent
Director.
Independent Director Compensation
Independent Directors of the Company will be paid an annual fee of $20,000.
In addition, each Independent Director will be paid $1,250 for attendance at
each meeting of the Board of Directors; $1,000 for attendance at each meeting
of a committee of the Board of Directors of which such director is a member and
$500 for each telephonic meeting of the Board of Directors or a committee
thereof of which such director is a member. Directors who are employees of the
Company will not receive any fees for their service on the Board of Directors
or a committee thereof. The Company will reimburse directors for their out-of-
pocket expenses in connection with their service on the Board of Directors.
Options
Pursuant to the Directors Plan, each Independent Director is awarded an
option to purchase 7,500 shares of Common Stock upon initial commencement of
service as a director, whether by appointment or election. Thereafter, each
Independent Director will be granted an option to purchase 5,000 shares of
Common Stock on the first business day following the Company's annual meeting
of stockholders. The exercise price of option grants will be 100% of the fair
market value of the Common Stock on the date of grant, and options will vest in
three annual installments. The exercise price may be paid in cash, cash
equivalents acceptable to the Compensation Committee, Common Stock or a
combination thereof. Options granted under the Directors Plan, once vested, are
exercisable for ten years from the date of grant. Upon termination of service
as a director, options which have not vested are forfeited and vested options
may be exercised until they expire. All options accelerate upon a change in
control of the Company.
Company Common Stock in Lieu of Fees
Independent Directors may elect to receive all or a portion of their annual
retainer in shares of Common Stock rather than cash. Unless an Independent
Director elects otherwise, fees paid in stock will be paid at the same time as
fees paid in cash.
Amendment and Termination
The Directors Plan provides that the Board of Directors may amend or
terminate the Directors Plan at any time. An amendment will not become
effective without stockholder approval if the amendment (i) materially
increases the number of shares that may be issued under the Directors Plan or
(ii) stockholder approval would be required for compliance with stock exchange
rules. No options may be granted under the Directors Plan after December 31,
2008.
Certain Federal Income Tax Consequences
Generally, an eligible director does not recognize any taxable income, and
the Company is not entitled to a deduction upon the grant of an option. Upon
the exercise of an option, the eligible director recognizes ordinary income
equal to the excess of the fair market value of the shares acquired over the
option exercise price, if any. The director will then take a basis in such
shares equal to their fair market value at the time of option exercise, and any
gain or loss subsequently recognized upon a sale or exchange of such shares
will be treated as capital gain or loss to such director. Special rules may
apply as a result of Section 16 of the Securities Exchange Act of 1934, as
amended. The Company is generally entitled to a deduction equal to the
compensation taxable to the eligible director as ordinary income. Eligible
directors may be subject to backup withholding requirements for federal income
tax. Options are generally non-transferable. However, the Directors Plan
authorizes the granting of options that are transferable to Permitted Family
Members.
The transfer of an option to a Permitted Family Member will have no immediate
tax consequences to the Company, the director or the Permitted Family Member.
Upon the subsequent exercise of the transferred option by the Permitted Family
Member, the director will realize ordinary income in an amount measured by the
difference between the option exercise price and the fair market value of the
shares on the date of exercise, and the employer will be entitled to a
deduction in the same amount. Any difference between such fair market value and
the price at which the Permitted Family Member may subsequently sell such
shares will be treated as capital gain or loss to the Permitted Family Member,
long-term or short-term depending on the length of time the shares have been
held by the Permitted Family Member.
STOCK PURCHASE PLAN
Each employee of the Company customarily employed at least 20 hours or more
per week by the Company or an affiliate (as defined in the Company's stock
purchase plan (the "Stock Purchase Plan")), other than an employee who owns
beneficially 5% or more of the outstanding Common Stock, is eligible to
participate in the Stock Purchase Plan. Under the Stock Purchase Plan,
participating employees may elect to authorize the Company to withhold a
minimum of $200 per quarter and a maximum of 8% or $25,000 (whichever is less)
of the participating employee's base pay, which amounts will be used to
purchase Common Stock from the Company on a monthly basis. The purchase price
of Common Stock will equal a designated percentage from 85% to 100% of the
closing sales price for Common Stock as reported on the Composite Transactions
Tape of the NYSE (except as described below) on the first trading day of the
month or on the last trading day of the month, whichever is less. The
designated percentage will be established annually by the Compensation
Committee which is responsible for the administration of the Stock Purchase
Plan.
Common Stock purchased under the Stock Purchase Plan is held in custodial
accounts until sold or distributed at the participant's request. The custodian
may charge a fee for the execution of any such sale or for the delivery of
share certificates. The participant may not elect to purchase stock under the
Stock Purchase Plan for three months after a withdrawal or sale of Common Stock
under the Stock Purchase Plan. Shares purchased under the Stock Purchase Plan
may not be sold for six months after their purchase. Any cash dividends paid on
Common Stock held in a participant's account will be reinvested in additional
Common Stock (at 100% of fair market value). Non-cash distributions on Common
Stock held in a participant's account will be distributed to the participant.
The Company has reserved 1,500,000 shares of Common Stock for issuance under
the Stock Purchase Plan. Such shares may be from authorized and unissued
shares, treasury shares or a combination thereof. The Stock Purchase Plan will
remain in effect until terminated by the Board, or until all shares authorized
for issuance thereunder have been issued. The Stock Purchase Plan may be
amended from time to time by the Board. No amendment will increase the
aggregate number of shares of Common Stock that may be issued and sold under
the Stock Purchase Plan (except for authorizations pursuant to the anti-
dilution provisions of the Stock Purchase Plan) without further approval by the
Company's shareholders.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Paul W. Whetsell and
John Emery, dated as of April 1, 2000, and David E. McCaslin and James A.
Calder dated as of August 3,1998. With respect to Messrs. Whetsell and Emery,
the agreement is for an initial term of three and one-half years in the case of
Mr. Whetsell, and three years in the case of Mr. Emery, with the agreements
automatically renewing on a year-to-year basis thereafter unless terminated in
accordance with their terms. The other employment agreements are for an initial
term of three years, with automatic renewals on a year-to-year basis
thereafter, unless terminated in accordance with their respective terms.
Certain material terms of these agreements are as follows:
Base Salary
Mr. Whetsell receives a base salary of $190,000 per year (Mr. Whetsell will
receive a base salary of $285,000 per year as an employee of MeriStar
Hospitality Corporation). Mr. Emery receives a base salary of $120,000 per year
(Mr. Emery will receive a base salary of $230,000 per year as an employee of
MeriStar Hospitality Corporation), Mr. McCaslin receives a base salary of
$300,000 per year and Mr. Calder receives a base salary of $200,000 per year.
Annual Incentive Bonus
Each executive is eligible to receive an annual incentive bonus at the
following targeted amounts of base salary:
Maximum
Threshold Bonus
Target Target Amount
--------- ------ -------
Paul W. Whetsell....................................... 25% 125.0% 150.0%
John Emery............................................. 25% 112.5% 137.5%
David E. McCaslin...................................... 25% 100.0% 125.0%
James A. Calder........................................ 25% 85.0% 100.0%
The amount of the annual bonus is based on the achievement of predefined
operating or performance goals and other criteria to be established by the
Compensation Committee of the Board of Directors.
Long-Term Incentives
Each executive is eligible to participate in the Incentive Plan. Awards are
made in the discretion of the Compensation Committee.
Certain Severance Benefits
If, at any time during the term of their respective employment agreements or
any automatic renewal period, the employment of Messrs. Whetsell, Emery,
McCaslin, or Calder is terminated, he shall be entitled to receive the benefits
described below.
Termination by the Company Without Cause or by the Executive with Good
Reason. In the case of Messrs. Whetsell and Emery, if the executive is
terminated without cause or voluntarily terminates with "good reason," he is
entitled to a lump sum payment equal to the product of (x) the sum of (A) his
total then annual base salary and (B) the amount of his bonus for the preceding
year, or if the term of the employment agreement is terminated in its initial
year his target bonus for such year multiplied by (y) the greater of (A) two
and one-half (2 1/2) in the case of Mr. Whetsell, and two (2) in the case of
Mr. Emery, and (B) a fraction, the numerator of which is the number of days
remaining in the term of the employment agreements, without further extension,
and the denominator of which is 365. In addition, all of the executive's
options and restricted stock will immediately vest and become exercisable for a
period of one year thereafter and shares of restricted stock previously granted
to the executive will become free from all contractual restrictions, effective
as of the termination date. In addition, the Company will continue in effect
certain benefits under the employment agreement, including, but not limited to,
life and health insurance plans, or their equivalent for a period equal to the
greater of two and one-half years in the case of Mr. Whetsell, or two years in
the case of Mr. Emery, or the remaining term of the employment agreement,
without further extension.
Messrs. McCaslin and Calder will receive (i) a lump sum payment equal to one
times their then annual base salary, (ii) the amount of their bonus for the
preceding year, (iii) immediate vesting and exercisability of all unvested
stock options and restricted stock awards and (iv) the continuance of certain
benefits under their employment agreements, but only until the earlier of (x)
one year from the end of the term of their respective employment agreements or
(y) the date on which the executive obtains health insurance coverage from a
subsequent employer.
Termination Due to Death or Disability. Upon termination due to death or
disability, the executive or his estate will receive a lump sum payment equal
to the executive's base salary, plus the pro rata portion of his bonus for the
fiscal year in question, in addition to payment for one year of any other
compensation due the executive pursuant to his employment contract. Any
unvested portion of such executive's stock options and restricted stock will
vest immediately and become exercisable for one year thereafter, and shares of
restricted stock previously granted shall become free from all contractual
restrictions.
Voluntary Termination or Termination for Cause. Upon voluntary termination or
termination for "cause" by the Company, the executive will receive any accrued
and unpaid base salary through the termination date. Any unvested options will
terminate immediately, and any vested options held by the executive will expire
ninety (90) days after the termination date.
Termination Following a Change in Control. If Messrs. Whetsell or Emery is
terminated without cause or voluntarily terminates with "good reason" within 24
months following a "Change in Control," the executive will receive the
following benefits: (i) a lump sum payment equal to the product of (x) the sum
of (A) his then annual base salary and (B) the amount of his bonus for the
preceding year or if the term of the employment agreement is terminated in its
initial year his target bonus for such year multiplied by (y) the greater of
(A) in the case of Mr. Whetsell, three and one-half (3 1/2) and in the case of
Mr. Emery, three (3), and (B) a fraction the numerator of which is the number
of days remaining in the term of the employment agreement, without further
extension, and the denominator of which is 365; (ii) all unvested stock options
held by the executive will immediately vest and be exercisable for the period
of one (1) year thereafter and shares of restricted stock previously granted to
the executive will become free from all contractual restrictions; and (iii) the
continuance of certain benefits under the employment agreement, including, but
not limited to, life and health insurance plans, or their equivalent for a
period equal to the greater of two years or the remaining term of the
employment agreement, without further extension. In the case of Messrs.
McCaslin and Calder, they would each be entitled to the same type of benefits
provided the termination occurred within 18 months of the Change in Control,
except their lump sum payment will only be two (2) times the sum of their then
annual base salary plus bonus and the total payments would be limited to the
amount which is deductible under section 280G of the Internal Revenue Code; but
only if, by reason of such limitation, the net after tax benefit of the
executive shall exceed the net after tax benefit if such limitation were not
made.
Change in Control Payments. In the case of Messrs. Whetsell or Emery, in the
event that any accelerated vesting of the executive's rights with respect to
stock options, restricted stock or any other payment, benefit or compensation
results in the imposition of an excise tax payable by the executive under
section 4999 of the Internal Revenue Code, or any successor or other provision
with respect to "excess parachute payments" within the meaning of section
280G(b) of the Internal Revenue Code, the Company will make a cash payment to
the executive in the amount of such excise tax (the "Excise Tax Payment") and
shall also make a cash payment to the executive in an amount equal to the total
of federal, state and local income and excise taxes for which the executive may
be liable on account of such Excise Tax Payment.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of April 27, 2001 by (i) all persons known by the
Company to own beneficially more than 5% of the Common Stock, (ii) each
director who is a stockholder, (iii) each of the Named Executive Officers, and
(iv) all directors and executive officers as a group.
Shares Beneficially Owned
------------------------------
Name & Address of Beneficial Owner Number Percentage
- ---------------------------------- --------------- --------------
Keystone, Inc. (1).............................. 6,511,629 17.5%
Wellington Management Company, LLP (2).......... 3,544,000 9.5
Franklin Resources, Inc. (3).................... 2,109,200 5.7
FMR Corp. (4)................................... 2,038,300 5.5
First Capital Alliance, LLP (5)................. 2,122,333 5.7
James A. Calder (6)............................. 94,431 *
Daniel L. Doctoroff (7)......................... 99,874 *
Kent R. Hance(8)................................ 27,117 *
Steven D. Jorns(9).............................. 1,242,264 3.3
S. Kirk Kinsell(8).............................. 6,667 *
David E. McCaslin(10)........................... 317,228 *
James B McCurry(8).............................. 6,667 *
John Emery(11).................................. 217,355 *
Paul W. Whetsell(12)............................ 824,986 2.2
James R. Worms(8)............................... 46,904 *
Executive officers and directors as a group (10
persons)....................................... 2,879,326 7.7
- --------
* Represents less than 1% of the class.
(1) Beneficial ownership information is based on the Schedule 13D/A filed by
Keystone, Inc., Oak Hill Capital Partners, L.P., Oak Hill Capital
Management Partners, L.P., Cherwell Investors, Inc., Group 31, Inc.,
MHX Investors, L.P., Arbor REIT, L.P., FW Hospitality, L.P., Capital
Partnership, J. Taylor Crandall and Robert M. Bass (all located at 201 Main
Street, Suite 3100, Fort Worth, Texas 76012) and MC Investment Corporation,
Penobscot Partners, L.P., and PTJ Merchant Banking Partners, L.P. (all
located at 65 E. 55th Street, New York, New York 10022), filed on
December 19, 2000 .
(2) Beneficial ownership information is based on the Schedule 13G/A filed by
Wellington Management Company, LLP (located at 75 State Street, Boston
Massachusetts 02109), filed on February 13, 2001.
(3) Beneficial ownership information is based on Schedule 13G/A jointly filed
by Franklin Advisers, Inc., Franklin Resources, Inc., Charles B. Johnson,
Rupert H. Johnson, Jr. and Franklin Advisers, Inc. (all located at 777
Mariners Island Boulevard, San Mateo, California 94404), dated February 2,
2001.
(4) Beneficial ownership information is based on a Schedule 13G/A jointly
filed by Edward C. Johnson, Abigail P. Johnson and Fidelity Management &
Research Company (all located at 82 Devonshire Street, Boston,
Massachusetts 02109) dated February 14, 2001.
(5) Beneficial ownership information is based on Schedule 13G filed by First
Capital Alliance Limited Partnership, First Capital Alliance, LLC, Richard
Newman and Henry Chu (all located at 440 S. LaSalle Street, Suite 1614,
Chicago, Illinois 60605) dated February 1, 2001.
(6) Includes 84,167 shares of Common Stock subject to vested options.
(7) Mr. Doctoroff's beneficial holdings include 21,667 shares of common stock
that have vested under options granted.
(8) Includes 6,667 shares of common stock subject to vested options.
(9) Includes 168,334 shares of common stock subject to vested options.
(10) Includes 229,167 shares of common stock subject to vested options.
(11) Includes 151,355 shares of common stock subject to vested options.
(12) Includes (i) 216,667 shares of Common Stock subject to vested options and
(ii) shares held by entities over which Mr. Whetsell has beneficial
ownership within the meaning of Rule 13d-3.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Ownership Interests in Certain Managed Hotels
As of December 31, 2000, Mr. Whetsell and corporations owned by him own,
directly or indirectly, minority equity interests in two hotels which the
Company manages. Mr. Whetsell exercises management control over the entities
that own the above mentioned interests in these hotels. Except as described
below, such interests were acquired prior to the formation of CapStar Hotel
Company, the Company's predecessor. For the year ended December 31, 2000, the
Company received approximately $204,422 in management fees from the Affiliated
Hotels.
Stock Ownership
Daniel L. Doctoroff, a director of the Company, is a principal stockholder of
Oak Hill Capital Partners, L.P. which is an affiliate of Keystone, Inc., a
principal stockholder of the Company. See "Principal Stockholders."
Relationships among Officers and Directors
Mr. Whetsell is an executive officer, director and security holder and Mr.
Jorns is a director and stockholder of MeriStar Hospitality Corporation, the
owner of 105 hotels managed by the Company.
Purchase of Promissory Notes
A partnership indirectly controlled by Mr. Whetsell sold promissory notes due
from the owners of two properties managed by the Company to the Company on
March 11, 1999 in exchange for $343,650 which represented the current balance
due under the promissory notes. One of the promissory notes was paid in full to
the Company during January 2000.
Sale of Partnership Units
On December 31, 1999, the Company sold three partnership units in a
partnership which owns a hotel managed by the Company to a partnership
indirectly controlled by Mr. Whetsell. The three units were sold for $145,500
which was the fair market value of the units at the time of sale.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
MeriStar Hotels & Resorts, Inc. has duly caused this Amendment No. 1 to its
Annual Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.
MERISTAR HOTELS & RESORTS, INC.
By: /s/ Paul W. Whetsell
--------------------
Paul W. Whetsell
Chief Executive Officer and
Chairman of the Board
Dated: April 30, 2001
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Paul W. Whetsell and David E. McCaslin, such
person's true and lawful attorneys-in-fact and agents, with full power of
substitution and revocation, for such person and in such person's name, place
and stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to this report filed pursuant to the requirements of
Securities Exchange Act of 1934, and to file the same with all exhibits thereto,
and the other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
things requisite and necessary to be done, as fully to all intents and purposes
as such person might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report and the foregoing Power of Attorney have been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Paul W. Whetsell Chief Executive Officer and Chairman of the April 30, 2001
- -------------------- Board of Directors (Principal Executive Officer)
Paul W. Whetsell
______________________ Vice Chairman of the Board of Directors April __, 2001
Steven D. Jorns
/s/ David E. McCaslin President and Director April 30, 2001
- ----------------------
David E. McCaslin
/s/ James A. Calder Chief Financial Officer (Principal Financial April 30, 2001
- ---------------------- and Accounting Officer)
James A. Calder
______________________ Director April __, 2001
Daniel L. Doctoroff
/s/ Kent R. Hance Director April 30, 2001
- ----------------------
Kent R. Hance
/s/ S. Kirk Kinsell Director April 30, 2001
- ----------------------
S. Kirk Kinsell
/s/ James B. McCurry Director April 30, 2001
- ----------------------
James B. McCurry
______________________ Director April __, 2001
James R. Worms
EXHIBIT INDEX
Exhibit No. Description of Document
----------- -----------------------
2.1* Acquisition Agreement, dated as of March 15, 1998, among MeriStar
H&R Operating Company, L.P., American General Hospitality
Corporation, American General Hospitality, Inc., AGHL GP, Inc.,
the None. general partner of AGH Leasing, L.P., and the limited
partners of AGH Leasing, Inc.
2.2** Form of Contribution, Assumption and Indemnity Agreement between
CapStar Hotel Company and MeriStar H&R Operating Company, L.P.
3.1* Amended and Restated Certificate of Incorporation of the Company
3.2* By-laws of the Company
4.1* Specimen Common Stock certificate
4.4* Form of Rights Agreement
4.5**** Form of Stock Purchase Agreement dated as of March 31, 1999
4.6**** Amendment to Stock Purchase Agreement dated April 15, 1999
4.7**** Form of Registration Rights Agreement dated as of March 31, 1999
4.8***** Rights Agreement Amendment, dated December 8, 2000, between
MeriStar and the Rights Agent
10.1****** Form of Employment Agreement between the Company and Paul W.
Whetsell
10.2* Form of Employment Agreement between the Company and Steven D.
Jorns
10.3* Form of Employment Agreement between the Company and David E.
McCaslin
10.4* Form of Employment Agreement between the Company and James A.
Calder
10.5* Form of Employment Agreement between the Company and John E.
Plunket
10.6* Form of Equity Incentive Plan of the Company
10.7* Form of Non-Employee Directors' Incentive Plan of the Company
10.8*** Form of Intercompany Agreement among MeriStar Hotels & Resorts,
Inc., MeriStar H&R Operating Company, L.P., MeriStar Hospitality
Corporation and MeriStar Hospitality Operating Partnership, L.P.
(Incorporated by reference to Exhibit 99.4 to CapStar Hotel
Company's Report on Form 8-K dated March 17, 1998, No. 1-11903)
10.9*** Form of Revolving Credit Agreement, dated as of August 3, 1998
between MeriStar H&R Operating Company, L.P., and MeriStar
Hospitality Operating Partnership, L.P.
10.10*** Form of Employee Stock Purchase Plan
10.11******* Form of Senior Secured Revolving Credit Facility, dated as of
February 29, 2000 between MeriStar H&R Operating Company, L.P.
and Societe Generale, Southwest Agency, as Arranger and
Administrative Agent
10.12**** Form of Agreement of Limited Partnership of MIP Lessee, LP dated
as of March 31, 1999.
10.13******* Amendment to Revolving Credit Agreement, dated as of February 29,
2000, between MeriStar H&R Operating Company, L.P. and MeriStar
Hospitality Operating Partnership, L.P.
10.14******* Form of Employment Agreement between the Company and John Emery
10.15 Amended Intercompany Agreement, dated as of January 1, 2000,
between MeriStar Hospitality Corporation, MeriStar Hospitality
Operating Partnership, L.P., MeriStar Hotel Lessee, Inc.,
MeriStar Hotels & Resorts, Inc. and MeriStar H&R Operating
Company L.P.
10.16 First Amendment, dated as of December 31, 2000, to Senior Secured
Credit Agreement among MeriStar H&R Operating Company L.P. and
Societe Generale, Southwest Agency, as Arranger and
Administrative Agent.
21 Subsidiaries of the Company
23 Consent of KPMG LLP
29 Power of Attorney (see signature page)
- --------
* Incorporated by reference to the Company's Registration Statement on
Form S-1 (File No. 333-49881), filed with the Securities and Exchange
Commission on August 12, 1998.
** Incorporated by reference to Exhibit 99.4 to CapStar Hotel Company's
Report on Form 8-K dated March 17, 1998, No. 1-11903.
*** Incorporated by reference to the Company's Annual Report on Form 10-K
(File No. 001-14331), filed with the Securities and Exchange
Commission on March 22, 1999.
**** Incorporated by reference to the Company's Quarterly Report on Form
10-Q (File No. 001-14331), filed with the Securities and Exchange
Commission on May 7, 1999.
***** Incorporated by reference to Exhibit 4.1 to MeriStar Hotels & Resort,
Inc.'s Report on Form 8-K (File No. 1-14331) dated December 12, 2000.
****** Incorporated by reference to the Company's Quarterly Report on Form
10-Q (File No. 001-14331), filed with the Securities and Exchange
Commission on November 13, 2000.
******* Incorporated by reference to the Company's Annual Report on Form 10-K
(File No. 001-14331), filed with the Securities and Exchange
Commission on March 15, 2000.