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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
---------------
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
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WYNDHAM HOTEL CORPORATION
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Consent Solicitation 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)(l) and 0-11.
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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WYNDHAM HOTEL CORPORATION
2001 BRYAN STREET
DALLAS, TEXAS 75201
(214) 863-1000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1997
TO THE STOCKHOLDERS OF WYNDHAM HOTEL CORPORATION
The Annual Meeting of Stockholders of Wyndham Hotel Corporation, a
Delaware corporation (the "Company"), will be held on Monday, April 28, 1997,
at 10:00 a.m., Central time, at the Wyndham Anatole, Hotel Dallas, Texas, for
the following purposes:
1. To elect three directors to serve for a period of three years
and until their successors shall have been elected and qualified; and
2. To transact such other business as may properly come before
the meeting or any adjournment(s) thereof.
Information regarding the matters to be acted upon at the annual meeting
is contained in the Proxy Statement attached to this Notice.
Only stockholders of record at the close of business on March 25, 1997 are
entitled to notice of, and to vote at, such meeting or any adjournment(s)
thereof. A complete list of the stockholders entitled to vote at the meeting
will be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours for a period of 10 days prior to
the meeting at the corporate offices of the Company, 2001 Bryan Street, Suite
2300, Dallas, Texas 75201.
It is important that your shares be represented at the Annual Meeting. If
you do not expect to attend in person, please sign and date the form of Proxy
and return it in the enclosed envelope. Stockholders who do plan to attend may
vote at the Annual Meeting. The form of Proxy is enclosed as a separate,
single-card insert within the mailing envelope in which this Proxy Statement is
contained. Stockholders who attend the Annual Meeting may revoke their proxies
and vote in person if they desire.
By Order of the Board of Directors
CARLA S. MORELAND
Secretary
Dallas, Texas
March 25, 1997
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WYNDHAM HOTEL CORPORATION
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1997
SOLICITATION OF PROXIES
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Wyndham Hotel Corporation, a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders of the Company (the "Annual
Meeting") to be held on Monday, April 28, 1997, at 10:00 a.m., Central time and
at any adjournment(s) thereof. Solicitation of proxies may be made in person
or by mail, telephone or telegram by directors, officers, employees, or other
authorized designees of the Company. The Company also may request banking
institutions, brokerage firms, custodians, trustees, nominees and fiduciaries
to forward solicitation material to the beneficial owners of Common Stock held
of record by such persons, and the Company will reimburse the forwarding
expense. All reasonable costs of preparing, printing, assembling and mailing
the form of proxy and the material used in the solicitation thereof and all
clerical and other expenses of solicitation will be paid by the Company. The
approximate date on which this Proxy Statement and form of proxy were first
sent to stockholders is April 4, 1997. All proxies in the accompanying form
that are duly signed, dated and returned will be voted as specified therein at
the Annual Meeting or any adjournment thereof, but unless otherwise specified,
will be deemed to grant authority to vote:
(1) FOR the election of the three nominees listed under
"Election of Directors" as nominees of the Company for election as
Class I directors, for a three-year term; and
(2) At the discretion of the persons named in the enclosed
form of proxy, on any other matter that may properly come before the
Annual Meeting or any adjournment thereof.
The purpose of the Annual Meeting and the matters to be acted upon are set
forth in the foregoing attached Notice of Annual Meeting of Stockholders. As of
the date of this Proxy Statement, the Board of Directors knows of no other
business that will be presented for consideration at the Annual Meeting.
However, if any such other business shall properly come before the Annual
Meeting, votes will be cast pursuant to said proxies in respect of any such
other business in accordance with the judgment of the persons acting under said
proxies.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on March 25, 1997
will be entitled to vote on matters presented at the Annual Meeting or any
adjournment thereof. The stock transfer books of the Company will not be
closed. At the record date, there were outstanding and entitled to be voted
20,018,299 shares of common stock, $.01 par value, of the Company ("Common
Stock").
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the Common Stock of the Company entitled to vote is
necessary to constitute a quorum at the meeting. If a quorum is not present or
represented at the meeting, the stockholders entitled to vote thereat, present
in person or represented by proxy, have the power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum is present or represented. Abstentions and broker non-votes (when a
broker holding shares for a client in street name is not permitted to vote on
certain matters without the client's instructions) are counted for purposes of
determining the presence or absence of a quorum for the transaction of
business; however, abstentions and broker non- votes are not counted in the
election of directors and will have no effect in determining whether a proposal
is approved on matters other than the
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election of directors, except that abstentions will be counted as votes cast,
which will have the same effect as a negative vote on such matter.
On all matters submitted to a vote at the Annual Meeting, or any
adjournment(s) thereof, each holder of Common Stock will be entitled to one
vote, in person or by proxy, for each share of stock owned of record at the
close of business on March 25, 1997. Cumulative voting for directors is not
permitted.
A stockholder giving a proxy pursuant to this solicitation may revoke it
at any time before it is exercised by giving a subsequent proxy or by
delivering to the Secretary of the Company a written notice of revocation prior
to the voting of the proxy at the Annual Meeting. No proxy will be used if the
stockholder is personally present at the Annual Meeting and expresses a desire
to vote his or her shares in person.
STOCK OWNERSHIP OF DIRECTORS, CERTAIN EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS
The following table sets forth as of March 25, 1997 information regarding
the beneficial ownership of shares of Common Stock for (i) each of the
Company's executive officers named in the Summary Compensation Table, (ii) each
Company director, (iii) all directors and executive officers as a group, and
(iv) each person known by the Company who was on such date the beneficial owner
of more than five percent of the outstanding Common Stock.
SHARES
NAME OF EACH BENEFICIALLY PERCENT
BENEFICIAL OWNER (1) OWNED OF CLASS
- -------------------- ----- --------
CF Securities, L.P.(2)(3) . . . . . . . . . . . . . . . . . . . . . . 9,447,745 47.20%
Harlan R. Crow(3) . . . . . . . . . . . . . . . . . . . . . . . 100 *
James D. Carreker(4) . . . . . . . . . . . . . . . . . . . . . . . . 1,371,777 6.85%
Leslie V. Bentley(5) . . . . . . . . . . . . . . . . . . . . . . . . 392,057 1.96%
Anne L. Raymond . . . . . . . . . . . . . . . . . . . . . . . . . . . 380,151 1.90%
Stanley M. Koonce, Jr. . . . . . . . . . . . . . . . . . . . . . . . 388,001 1.94%
Carla S. Moreland(6) . . . . . . . . . . . . . . . . . . . . . . . . 10,563 *
Eric A. Danziger (7) . . . . . . . . . . . . . . . . . . . . . . . . 381,234 1.90%
Bedrock Partners, L.P.(8) . . . . . . . . . . . . . . . . . . . . . . 2,276,055 11.37%
Daniel A. Decker(9) . . . . . . . . . . . . . . . . . . . . . . -- --
Robert A. Whitman(9) . . . . . . . . . . . . . . . . . . . . . . -- --
Susan T. Groenteman (10) . . . . . . . . . . . . . . . . . . . . . . 31,250 *
James C. Leslie . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 *
Philip J. Ward . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
------ ------
Directors and executive officers as a group (16 persons) . . . . . . 14,351,455(11) 71.70%
__________________________
* Less than 1%.
(1) The address of each beneficial owner, with the exception of CF
Securities, L.P., Bedrock Partners, L.P. and Susan T. Groenteman, is
2001 Bryan Street, Suite 2300, Dallas, Texas 75201.
(2) The address of CF Securities, L.P. is 2001 Ross Avenue, Suite 3200,
Dallas, TX 75201.
(3) Harlan R. Crow directly holds 100 shares of Common Stock. Mill Springs
Holdings, Inc. ("Mill Springs") is the general partner of CF
Securities, L.P. Mr. Crow is a principal stockholder of Mill Springs
and its sole director. Mr. Crow disclaims beneficial ownership of all
Common Stock held by CF Securities, L.P.
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(4) James D. Carreker directly holds 1,173,416 shares of Common Stock,
including 100 shares issued to Mr. Carreker in the initial formation
of the Company. Shares listed in the table include 77,671 shares held
in a trust for which Mr. Carreker is the special trustee and has full
voting rights. Mr. Carreker disclaims beneficial ownership of all
Common Stock held in the trust. On February 11, 1997, Wyndham
Employees, Ltd. ("WEL"), an employee benefit plan of the Company,
distributed (the "WEL Distribution") its holdings of Common Stock to
the participants in WEL. Mr. Carreker is a director and principal
stockholder of WHMC, which is the corporate general partner of WEL.
Shares listed in the table include 120,690 shares held by WHMC,
including 6,468 shares received by WHMC in the WEL Distribution. Mr.
Carreker disclaims beneficial ownership of all Common Stock held by
WHMC beyond his percentage ownership therein.
(5) Includes 61,680 shares held in trusts for which Mr. Bentley is the
special trustee and has full voting rights. Mr. Bentley disclaims
beneficial ownership of all Common Stock held in the trusts.
(6) Includes 9,963 shares received by Ms. Moreland in the WEL
Distribution.
(7) Mr. Danziger resigned from the Company in July 1996.
(8) The address of Bedrock Partners, L.P. is 2200 Ross Avenue, Suite 4200
West, Dallas, Texas 75201.
(9) Robert A. Whitman and Daniel A. Decker directly hold no shares of
Common Stock. Messrs. Whitman and Decker are principals of Hampstead
Group L.L.C. ("Hampstead"), an affiliate of Bedrock Partners, L.P.
Messrs. Whitman and Decker disclaim beneficial ownership of all Common
Stock held by Bedrock Partners, L.P.
(10) The address of Ms. Groenteman is 2001 Ross Avenue, Suite 3200, Dallas,
Texas 75201.
(11) Excludes shares held by Eric A. Danziger, who resigned from the
Company in July 1996.
ACTION TO BE TAKEN UNDER THE PROXY
All proxies in the accompanying form that are duly signed, dated and
returned will be voted as specified therein at the Annual Meeting and any
adjournment(s) thereof, but unless otherwise specified, will be deemed to grant
authority to vote (1) FOR the election of each of the individuals named below
as nominees for election as Class I directors of the Company, to serve for a
period of three years each and until his successor is elected and qualified;
and (2) at the discretion of the persons named in the enclosed form of proxy on
any other matter that may properly come before the Annual Meeting or any
adjournment(s) thereof.
Management knows of no matters, other than the foregoing, to be presented
for consideration at the Annual Meeting. If, however, any other matters
properly come before the Annual Meeting or any adjournment(s) thereof, it is
the intention of the persons named in the enclosed proxy to vote such proxy in
accordance with their judgment on any such matters.
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") divides the Board of Directors into three
classes serving staggered three-year terms. The Company's Board of Directors
currently consists of ten directorships, with Classes I and II consisting of
three directors each and Class III consisting of four directors. The term of
Class I expires at the 1997 Annual
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Meeting of Stockholders, the term of Class II expires at the 1998 Annual
Meeting of Stockholders, and the term of Class III expires at the 1999 Annual
Meeting of Stockholders.
Three directors will be elected at the Annual Meeting. Each of the
directors elected at the Annual Meeting will hold office for a term of three
years and will serve until their successors are elected and qualified. Proxies
cannot be voted for more than three nominees.
Subject to the provisions of the Company's Stockholders' Agreement, dated
May 24, 1996, among the Company and the stockholders listed on the signature
page thereto (the "Stockholders Agreement"), and the rights of the holders of
any series of preferred stock then outstanding, the Company's Certificate of
Incorporation provides that any director of the Company may be removed from
office only for cause and only by the affirmative vote of the holders of a
majority of the voting power of the then outstanding shares of capital stock of
the Company entitled to vote generally in the election of directors.
The persons named below are the Board of Directors' nominees for election
as directors of the Company. The nominees presently serve as directors of the
Company and have served since the date of election indicated. Should any of the
nominees named herein for the office of director become unwilling to accept
nomination or election, it is intended that the persons acting under the proxy
will vote for the election, in his stead, of such other person or persons as
the Board of Directors of the Company may recommend. The Board of Directors has
no reason to believe that any nominee will be unable or unwilling to serve if
elected.
The vote of a plurality of the shares entitled to vote on the election of
directors and represented in person or by proxy at the Annual Meeting is
required for the election of directors.
The nominees named below have been designated according to the provisions
of the Stockholders' Agreement. Pursuant to the Stockholders' Agreement,
Messrs. Carreker and Crow are designees of the "Crow/Wyndham Stockholders" as
defined under the Stockholders' Agreement, and Mr. Leslie is a designee of the
"Hampstead Stockholders" as defined under the Stockholders' Agreement. The
directors continuing in office also were designated and elected pursuant to the
Stockholders' Agreement. Ms. Groenteman and Ms. Raymond, and Messrs. Bentley,
Koonce and Ward are designees of the Crow/Wyndham Stockholders, and Messrs.
Decker and Whitman are designees of the Hampstead Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES.
NOMINEES FOR DIRECTOR
Term expires in 1997
JAMES D. CARREKER, age 49, has served as President and Chief Executive
Officer of the Company and its predecessors since May 1988 and as a director of
the Company since February 1996. He also served as Chief Executive Officer of
Trammell Crow Company, an affiliated commercial real estate management and
development company, from August 1994 to December 1995. Prior to 1988, Mr.
Carreker served as President of Burdine's, the Miami based division of
Federated Department Stores. Mr. Carreker has been a director of Homegate
Hospitality, Inc. since October 1996.
HARLAN R. CROW, age 47, has served as a director of the Company since
April 1996. Mr. Crow is the chief executive officer of Crow Family Holdings, an
investment company managing investments in a variety of real estate related and
other businesses, a position he has held since 1986. Prior to 1986, Mr. Crow
was a Regional Partner in the office building unit of Trammell Crow Company, an
affiliated commercial real estate management and development company. Mr. Crow
is a former member of the Board of Directors of Texas Commerce Bancshares, a
banking institution. In any given year within the past five years, Mr. Crow has
indirectly owned interests in over 1,000 partnerships (or affiliates of
partnerships) or corporations. In the past five years, Mr. Crow was a general
partner, officer or director in approximately 90 partnerships or
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corporations, or affiliates of such partnerships or corporations, that filed
for protection under federal bankruptcy laws. In addition, in the past five
years, Mr. Crow was a general partner, executive officer or director in
approximately 15 partnerships or corporations, or affiliates of such
partnerships or corporations, that were placed in receivership. Mr. Crow has
been a director of Homegate Hospitality, Inc. since October 1996.
JAMES C. LESLIE, age 41, has served as a director of the Company since
June 1996. Mr. Leslie has served as President and Chief Operating Officer of
The Staubach Company since March 1996. Mr. Leslie served as Chief Financial
Officer of The Staubach Company from 1982 to 1992 and President - Staubach
Financial Services from January 1992 to March 1996. Mr. Leslie is also
President and a board member of Wolverine Holding Company and serves on the
boards of Columbus Realty Trust, FM Properties, Inc., Forum Retirement
Partners, L.P., and The Staubach Company. Mr. Leslie is a certified public
accountant.
DIRECTORS CONTINUING IN OFFICE
Term expires in 1998
SUSAN T. GROENTEMAN, age 42, has served as a director of the Company since
April, 1996. Ms. Groenteman is the Director (chief operating officer) of Crow
Family Holdings, an investment company managing investments in a variety of
real estate related businesses, along with other industries, a position she has
held since 1988. From 1986 through 1998, Ms. Groenteman was Controller of Crow
Family Holdings. Ms. Groenteman served in a variety of positions for Crow Hotel
Company, a predecessor to the Company. In any given year within the past five
years, Ms. Groenteman has served as an executive officer or director in over
1,000 partnerships (or affiliates of partnerships) or corporations. In the past
five years, Ms. Groenteman has served as an executive officer or director of
approximately 90 partnerships or corporations, or for affiliates of such
entities, that filed for protection under federal bankruptcy laws. In addition,
in the past five years, Ms. Groenteman served as an executive officer or
director in approximately 15 partnerships or corporations, or affiliates of
such partnerships or corporations, that were placed in receivership.
PHILIP A. WARD, age 48, has served as a director of the Company since June
1996. Mr. Ward is the Senior Managing Director in charge of the Real Estate
Investment Division of CIGNA Investments, Inc., a division of CIGNA
Corporation, a position he has held since December 1985. Mr. Ward joined
Connecticut General's Mortgage and Real Estate Department (a predecessor of
CIGNA) in 1971 and became an officer in 1987. Since joining CIGNA, Mr. Ward has
held real estate investment assignments in Mortgage and Real Estate Production
and in Portfolio Management. Mr. Ward is also a director of the Simon DeBartolo
Group, Inc., of Indianapolis, Indiana, and a director of the Connecticut
Housing Investment Fund.
ROBERT A. WHITMAN, age 43, has served as a director of the Company since
April 1996. Since 1991, Mr. Whitman has been President and Co-Chief Executive
Officer of Hampstead, an investment firm, which indirectly through Bedrock
Partners, L.P. is a significant stockholder of the Company. Prior to 1991, Mr.
Whitman served as the Managing Partner and Chief Executive Officer of Trammell
Crow Ventures, the real estate investment, banking and investment management
unit of Trammell Crow Company, and from 1988 to 1992, Mr. Whitman also served
as Chief Financial Officer for Trammell Crow Company, an affiliated entity. Mr.
Whitman is a director of Forum Group, Inc. ("Forum Group"), a company traded on
the Nasdaq Stock Market that is engaged in the ownership and operation of
senior living facilities and is also a director of Mountasia Entertainment
International, Inc. ("Mountasia"). Mr. Whitman is a past director and Vice
Chairman of the Board of Bristol Hotel Company ("Bristol").
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Term expires in 1999
LESLIE V. BENTLEY, age 45, has been employed by the Company since March
1985, has served as Executive Vice President and Wyndham Garden Division
President of the Company since May 1990 and was elected a director of the
Company in January 1997. From January 1987 to June 1988, Mr. Bentley served as
Regional Vice President of the Company. From June 1988 to December 1988, Mr.
Bentley served as Vice President of Operations of the Company, and from
December 1988 to may 1990, he served as Senior Vice President of Operations of
the Company. Prior to joining the Company, Mr. Bentley was employed by Marriott
Hotels for eight years.
DANIEL A. DECKER, age 44, has served as a director of the Company since
April 1996. Since 1990, Mr. Decker has been a partner of Hampstead, as well as
being a stockholder of Bristol, and of other companies not involved in the
lodging business. Prior to 1990, Mr. Decker was a partner in the Dallas law
firm of Decker, Hardt, Kopf, Harr, Munsch & Dinan, P.C. Mr. Decker was a
director of Forum Group from June of 1993 until March of 1996. Mr. Decker is a
past director of Bristol and is presently a director of Mountasia.
STANLEY M. KOONCE, JR., age 48, has served as Executive Vice
President--Marketing, Planning and Technical Services of the Company since
October 1994, was elected a director of the Company in January 1997 and served
as Senior Vice President of Sales and Marketing of the Company from October
1989 to October 1994. Mr. Koonce served as President of CUC Travel Services, a
division of CUC International, in Stanford, Connecticut from 1986 to 1989, as
Vice President of the Marketing Department with American Express from 1979 to
1986 and as a Director of Finance and Planning for American Airlines from 1976
to 1979.
ANNE L. RAYMOND, age 39, joined the Company in 1983 as Controller and
served in that and other financial capacities through September 1987. From
September 1987 to July 1994, she served as Investment Manager for Crow Family
Holdings, an affiliated entity, where her responsibilities included managing
and overseeing Crow Family Holdings' interests in the Trammell Crow Company, an
affiliated entity, and Wyndham. Upon the formation of the Crow Investment Trust
in August 1994, Ms. Raymond was named Director--Capital Markets thereof and had
responsibility for developing and maintaining investment relationships with
real estate capital sources. In March 1995, Ms. Raymond officially rejoined the
Company as Executive Vice President and Chief Financial Officer, and was
elected a director of the Company in April 1996.
MEETINGS AND COMMITTEES OF BOARD OF DIRECTORS
After the Company's initial public offering in May 1996, the Company's
Board of Directors held four meetings during 1996. Each director attended
during the year at least 75% of the aggregate of (i) the total number of
meetings held by the Board and (ii) the total number of meetings held by all
committees on which he or she served. The Board of Directors has an Audit
Committee, a Compensation Committee, an Executive Committee and a Retainer
Stock Plan Committee.
Executive Committee. The Executive Committee currently consists of Messrs.
Carreker, Crow and Whitman. The Committee did not meet during 1996. The
Executive Committee has the authority, between meetings of the Board of
Directors, to take all actions with respect to the management of the Company's
business that require action by the Board of Directors, except with respect to
matters (i) that by law, contract or other express Board policy must be
approved by the entire Board of Directors or certain specified directors, (ii)
that are delegated to other committees of the Board of Directors or (iii) that
involve the acquisition or disposition of assets for total consideration
exceeding $25 million or the creation of a liability of the Company exceeding
$25 million.
Audit Committee. The Audit Committee currently consists of Messrs. Leslie
and Ward. The Committee did not meet during 1996. The functions performed by
the Audit Committee include (i) assisting in the selection of the Company's
independent auditors, (ii) reviewing the arrangements for and the scope of
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the auditors' examination of the Company's financial statements and (iii)
meeting with the auditors, the Board of Directors and officers of the Company
to review the adequacy of the Company's internal controls.
Compensation Committee. During 1996, the Compensation Committee consisted
of Mr. Decker and Ms. Groenteman. The Committee did not meet during 1996. Due
to recent changes in Federal Securities Laws, in January 1997 the composition
of the Committee was changed to Mr. Leslie and Mr. Ward. The functions
performed by the Compensation Committee include (i) assisting in the
determination of the salaries and incentive bonuses of the executive officers
of the Company and (ii) administering the Company's 1996 Long Term Incentive
Plan.
Retainer Stock Plan Committee. The Retainer Stock Plan Committee currently
consists of Mr. Carreker and Ms. Raymond. The Committee did not meet during
1996. The functions performed by the Retainer Stock Plan Committee include
administering the Company's Non-Employee Directors' Retainer Stock Plan.
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EXECUTIVE COMPENSATION
SUMMARY EXECUTIVE COMPENSATION TABLE
The following table shows for 1996 all compensation earned by or awarded
to (i) the Chief Executive Officer, (ii) the other four most highly compensated
executive officers of the Company and (iii) one additional executive officer of
the Company who would have been included under category (ii) above but who was
not an executive officer of the Company at the end of 1996 (the "Named
Officers"). The compensation reflected below represents compensation earned by
the Named Officers in 1996 (a) in their current positions with the Company and
(b) in their corresponding positions with Wyndham Hotel Company Ltd. ("Old
Wyndham"), a predecessor of the Company, prior to the consummation of the
Company's initial public offering in May 1996.
====================================================================================================================================
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
-----------------------------------------------------------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND FISCAL COMPENSATION UNDERLYING COMPENSATION
POSITION YEAR SALARY($) BONUS ($)(1) ($)(2) OPTIONS (#) ($)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
James D. Carreker 1996 $350,000 $350,000 --- 183,000 $ 2,102
President, Chief Executive
Officer and Director
Leslie V. Bentley 1996 200,000 160,000 --- 80,000 1,135
Executive Vice President
and Wyndham Garden Division
President
Anne L. Raymond 1996 200,000 160,000 --- 80,000 867,180(4)
Executive Vice President,
Chief Financial Officer and
Director
Stanley M. Koonce, Jr. (5) 1996 175,000 160,000 --- 80,000 1,498
Executive Vice President --
Marketing, Planning and
Technical Services
Carla S. Moreland 1996 171,923 87,500 --- 37,500 1,631
Vice President -- General
Counsel and Secretary
Eric A. Danziger (6) 1996 119,231 35,917 --- 60,000(7) 1,107,983(4)
Executive Vice President
and Wyndham Hotels and
Resorts Division President
====================================================================================================================================
(1) All bonuses have been awarded pursuant to the terms of the Company's
bonus plan.
(2) None of the Named Officers received any perquisites or other personal
benefits in 1996 that in the aggregate exceeded the lesser of $50,000
or 10% of such Named Officer's salary and bonus for such year.
(3) Unless otherwise noted, consists of contributions by the Company to
the Company's 401(k) plan.
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(4) Non-cash compensation was reported and recorded for Mr. Danziger and
Ms. Raymond in the amounts of $1,107,983 and $866,642, respectively,
reflecting compensation relating to equity participation in Old
Wyndham and other affiliated entities, which equity was purchased at
fair market value. In accordance with generally accepted accounting
principles, in 1996 no equity participation compensation expense was
required to be reported or recorded for Messrs. Carreker, Bentley or
Koonce or Ms. Moreland.
(5) The Company's fiscal compensation year runs from March 1 to February
28. Effective January 21, 1997, Mr. Koonce's base salary was increased
to $200,000. Mr. Koonce's bonus was calculated on the basis of a
$200,000 base salary.
(6) Mr. Danziger resigned from the Company in July 1996. Amount reflected
in salary column represents actual salary earned in 1996. Due to his
resignation from the Company in 1996, Mr. Danziger will not receive a
1996 bonus. The amount reflected in the bonus column represents a
bonus advance made to Mr. Danziger in 1996. This amount is owed by Mr.
Danziger to the Company.
(7) Because of Mr. Danziger's resignation, the stock options awarded to
him were forfeited.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding the grant of
stock options during 1996 or as 1996 compensation to the Named Officers.
INDIVIDUAL GRANTS
------------------------------------------------------- POTENTIAL REALIZED VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS EMPLOYEES IN PRICE EXPIRATION OPTION TERM
NAME AND POSITION GRANTED(#)(1) FISCAL YEAR(2) ($/SH) DATE 5%($) 10%($)
- -----------------------------------------------------------------------------------------------------------------------------------
James D. Carreker 130,000 (3) 16% $16.00 5/17/06 $1,308,101 $3,314,984
53,000 (4) $23.75 1/20/07 791,621 2,006,123
Leslie V. Bentley 60,000 (3) 7% $16.00 5/17/06 603,739 1,529,993
20,000 (4) $23.75 1/20/07 298,725 757,028
Eric A. Danziger (5) 60,000 (3) 5% $16.00 5/17/06 -- --
Anne L. Raymond 60,000 (3) 7% $16.00 5/17/06 603,739 1,529,993
20,000 (4) $23.75 1/20/07 298,725 757,028
Stanley M. Koonce, Jr. 60,000 (3) 7% $16.00 5/17/06 603,739 1,529,993
20,000 (4) $23.75 1/20/07 298,725 757,028
Carla S. Moreland 27,500 (3) 3% $16.00 5/17/06 276,714 701,247
10,000 (4) $23.75 1/20/07 149,362 378,514
_______________________________
(1) The options vest 20% on the third anniversary, 50% on the fourth
anniversary and 100% on the fifth anniversary.
(2) The indicated percentages are based on all options granted to employees of
Wyndham for 1996, including those granted on January 21, 1997 as 1996
compensation.
(3) Represents options granted in connection with the Company's initial public
offering.
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(4) Represents options granted on January 21, 1997 for 1996 compensation.
(5) Mr. Danziger resigned from the Company in July 1996. Consequently, such
stock options were forfeited.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information regarding the exercise of
stock options during 1996 by the Named Officers and the estimated values of
unexercised options held by such individuals at year-end.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END ($)
-------------------------- ----------------------
(#)
---
SHARES
ACQUIRED ON VALUE UNEXER- UNEXER-
NAME AND POSITION EXERCISE (#) REALIZED ($) EXERCISABLE CISABLE EXERCISABLE CISABLE
----------------- ------------ ------------ ----------- ------- ----------- -------
James D. Carreker . . . . 0 0 0 130,000 0 $1,121,250
Leslie V. Bentley . . . . 0 0 0 60,000 0 517,500
Eric A. Danziger (1). . . 0 0 0 60,000 0 --
Anne L. Raymond . . . . . 0 0 0 60,000 0 517,500
Stanley M. Koonce, Jr. . 0 0 0 60,000 0 517,500
Carla S. Moreland . . . . 0 0 0 27,500 0 237,188
_________________
(1) Mr. Danziger resigned from the Company in July 1996. Consequently, such
stock options were forfeited.
COMPENSATION OF DIRECTORS
The Company pays each member of the Company's Board of Directors who
is not an employee of the Company (a "Non- Employee Director") an annual
retainer of $25,000 for his service as a member of the Board of Directors.
Pursuant to the Company's Non-Employee Directors' Retainer Stock Plan,
Non-Employee Directors may elect to receive their annual retainer fees in cash
or in the form of shares of Common Stock of the Company, and may elect to defer
receipt of all or a portion of such fee, whether paid in cash or shares of
Common Stock.
The Company also pays each Non-Employee director a fee of $1,000 for
each committee meeting attended ($1,200 for each committee meeting attended as
a committee chairman).
The Company's outside directors are reimbursed by the Company for
their travel expenses incurred in connection with their attendance at meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, Ms. Groenteman, who is an executive officer of Trammell
Crow Company, served on the Compensation Committee of the Company's Board of
Directors. During 1996, Mr. Carreker served on an advisory board of directors
of Trammell Crow Company and in such capacity served on the Compensation
Committee of such board.
Ms. Groenteman and Mr. Carreker, along with certain other directors
and executive officers of the Company, are parties to transactions with the
Company as described below under "Certain Relationships and Transactions."
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CERTAIN RELATIONSHIPS AND TRANSACTIONS
GENERAL
On May 24, 1996, immediately prior to the consummation of the
Company's initial public offering, the Company succeeded to the hotel
management and related business of Old Wyndham, ownership of six Wyndham brand
hotels and leasehold interests relating to 12 additional Wyndham brand hotels.
The following discussion of certain relationships and transactions assumes that
the formation of the Company occurred on January 1, 1996 and includes (i) hotel
management and related fees paid to the Company by certain affiliates; (ii)
capital contributions, loans and other payments made by the Company to certain
affiliates in connection with the Company's entry into hotel management
contracts with related parties; (iii) transactions between the Company (which
includes its predecessors and combined subsidiaries) on the one hand, and (a)
entities in which Mr. and Mrs. Trammell Crow, various descendants of Mr. and
Mrs. Trammell Crow, and various corporations, partnerships, trusts and other
entities beneficially owned or controlled by such persons (collectively, the
"Crow Family Members"), (b) James D. Carreker, Leslie V. Bentley, Anne L.
Raymond and Stanley M. Koonce, Jr. (the "Senior Executive Officers") or (c)
Bedrock Partners, L.P. ("Bedrock"), in which Messrs. Whitman and Decker,
directors of the Company, have ownership interests, on the other hand, relating
to the transactions comprising the formation of the Company; and (iv) loans
made to the Senior Executive Officers of the Company and WEL that the Company
purchased in connection with its formation.
RELATED PARTY TRANSACTIONS
During 1996, the Company received hotel management fees in the
aggregate amount of $11,413,315 from the partnerships owning Wyndham hotels
("Hotel Partnerships") listed below, in which Crow Family Members (which
includes Harlan R. Crow, a director of the Company) have an interest. Some or
all of the Senior Executive Officers of the Company have an ownership interest
in seven of such Hotel Partnerships.
During 1996, the Company received payments in the aggregate amount of
$6,741,861 from the Hotel Partnerships listed below, in which Crow Family
Members have an interest. Some or all of the Senior Executive Officers have an
ownership interest in seven of such Hotel Partnerships. The payments were
received as reimbursements for certain administrative, tax, legal, accounting,
finance, risk management, sales and marketing services provided by the Company
to such entities.
Hotel Partnership(1) Hotel
-------------------- -----
Anatole Hotel Investors, L.P. Wyndham Anatole
Hotel Bel Age Associates, L.P. Wyndham Bel Age
Bristol Hotel Associates, Ltd. Wyndham Bristol
Playhouse Square Hotel Limited Partnership Wyndham Playhouse Square
Franklin Plaza Associates Wyndham Franklin Plaza
Houston Greenspoint Hotel Associates Wyndham Greenspoint
MTD Associates Wyndham Milwaukee Center
Itasca Hotel Company Wyndham Northwest Chicago
Hotel and Convention Center Partners I-XI, Ltd. Wyndham Palm Springs
CLC Limited Partnership Wyndham Las Colinas
Atlanta Midtown Associates Wyndham Garden Hotel-Midtown Atlanta
Novi Garden Hotel Associates Wyndham Garden Hotel-Novi
Amgreen-Heritage Hotel Partnership, Ltd. Wyndham Garden Hotel-Orange County Airport
Pleasanton Hotel Associates, Ltd. Wyndham Garden Hotel-Pleasanton
Wood Dale Garden Hotel Partnership Wyndham Garden Hotel-Wood Dale
Convention Center Boulevard Hotel, Limited Wyndham Riverfront
During 1996, the Company received payments in the aggregate amount of
$429,978 from the Hotel Partnerships listed above, in which Crow Family Members
have an interest. Some or all of the Senior
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Executive Officers have an ownership interest in seven of such Hotel
Partnerships. The payments were received as fees for certain design and
construction services provided by the Company to such entities.
During 1996 the Senior Executive Officers (and Eric A. Danziger, who
resigned from the Company in 1996) incurred indebtedness to Wyndham Finance
Limited Partnership ("WFLP"), a partnership owned by Crow Family Members. In
addition, WEL, in which certain executive officers of the Company had an
interest, incurred indebtedness to WFLP. The purpose of the loans was to
finance such officers' and WEL's capital contributions to Old Wyndham and
various Hotel Partnerships in which the officers and WEL acquired ownership
interests. In addition, one Senior Executive Officer used a portion of the
indebtedness to finance housing and education expenses. Notes representing such
loans were purchased by the Company in May of 1996 in connection with its
formation for a cash payment to WFLP in the amount of $18,575,648, which was
equivalent to the aggregate outstanding principal and accrued interest
severally owing by the Senior Executive Officers (and Mr. Danziger) and WEL to
WFLP. Such promissory notes, which are made payable to the Company, accrue
interest at 6% per annum and are fully secured by the pledge of shares of
Common Stock held by the note obligors. The outstanding principal and accrued
interest (compounded quarterly) is payable in a single lump sum in May 2001.
The aggregate balances of the notes representing such loans made to each Senior
Executive Officer, Mr. Danziger and WEL that were purchased by the Company in
connection with its formation, are as follows:
Aggregate
Balance(1)
----------
James D. Carreker $ 5,135,155
Leslie V. Bentley $ 1,890,000
Anne L. Raymond $ 4,625,275
Stanley M. Koonce, Jr. $ 1,925,465
Eric A. Danziger(2) $ 2,829,227
WEL(3) $ 3,043,838
__________________________
(1) The aggregate balances are as of December 31, 1996, include principal
and accrued interest and reflect indebtedness incurred prior to
January 1, 1996.
(2) Mr. Danziger resigned from the Company in July 1996.
(3) The indebtedness owed by WEL to the Company was repaid by the
participants in WEL in connection with the WEL Distribution in
February 1997.
In 1995, the Company made loans to WHC-LG Hotel Partners
L.P.,Pleasanton Hotel Partners, L.P. and New Orleans Hotel I, L.P., each of
which is owned directly or indirectly by Crow Family Members and the Senior
Executive Officers (the "Investing Partnerships"). The purpose of the loans was
to finance such Investing Partnerships' acquisition, construction and
renovation of hotels owned by the following three Hotel Partnerships: WHC-LG
Hotel Associates, L.P. (La Guardia Airport), Pleasanton Hotel Associates, Ltd.
(Pleasanton Garden) and Convention Center Boulevard Hotel Limited (Wyndham
Riverfront). The aggregate amount of such loans was $6,431,263, all of which
was outstanding as of December 31, 1996. The loans are secured by the Investing
Partnerships' partnership interests in the Hotel Partnerships. The loans accrue
interest at 9%, are payable in May, October and December of 2005 and are
reduced by any cash distributions by such Hotel Partnerships to the Investing
Partnerships.
During 1995, WFLP incurred indebtedness to the Company in the amount
of $1,253,754 for the purpose of acquiring or developing hotel properties, to
be managed by the Company, in which the Senior Executive Officers have
ownership interests. The loan is evidenced by a promissory note, bears an
adjustable rate of interest based on the prime rate and is due and payable on
April 15, 2000.
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During 1996, the Company received hotel management fees in the
aggregate amount of $4,165,217 from the Hotel Partnerships listed below, in
which Bedrock has an ownership interest (Messrs. Whitman and Decker, directors
of the Company, have ownership interests in Bedrock).
During 1996, the Company made cash advances in the aggregate amount of
$328,650 to the Hotel Partnerships listed below, in which Bedrock has an
ownership interest. The advances were used to pay certain renovations costs for
Wyndham Garden Hotels that were redeveloped by Bedrock. The advances are repaid
through Bedrock's redevelopment fund. At December 31, 1996, no amounts were
outstanding.
During 1996, the Company received payments in the aggregate amount of
$139,318 from the Hotel Partnerships listed below, in which Bedrock has an
ownership interest. The payments were received as fees for certain design and
construction services provided by the Company to such entities.
During 1996, the Company received payments in the aggregate amount of
$1,584,726 from the Hotel Partnerships listed below, in which Bedrock has an
ownership interest. The payments were received as reimbursements for certain
administrative, tax, legal, accounting, finance, risk management, sales and
marketing services provided by the Company to such entities.
Hotel Partnership(1) Hotel
-------------------- -----
Grand Avenue Partners L.P. Wyndham Checkers Hotel
Bedrock Metrolux Investment Partners Level I, L.P. Wyndham Hotel at Metrocenter
Bedrock Annapolis Investment Partners Level I, L.P. Wyndham Garden Hotel-Annapolis
Burlington Garden Partners Level I, L.P. Wyndham Garden Hotel-Burlington
CC Bedrock Investment Partners Level I, L.P. Wyndham Garden Hotel-Culver City
BRP Denver Garden Partners Level I, L.P. Wyndham Garden Hotel-Denver
Detroit Metro Partners Level I, L.P. Wyndham Garden Hotel-Detroit Airport
Bedrock Marin Investment Partners Level I, L.P. Wyndham Garden Hotel-Marin/San Rafael
BR Partners--Monrovia Level I, L.P. Wyndham Garden Hotel-Monrovia
Bedrock Oakbrook Investment Partners Level I, L.P. Wyndham Garden Hotel-Oakbrook
O'Hare Garden Partners Level I, L.P. Wyndham Garden Hotel-O'Hare
Garden LBV Investment Partners I, L.P. Wyndham Garden Hotel-Lake Buena Vista
Bedrock Kingsway Investment Partners Level I, L.P. Wyndham Garden Hotel-Piscataway
BR Pittsburgh Airport Level I, L.P. Wyndham Garden Hotel-Pittsburgh
BRP Waltham Investment Partners Level I, L.P. Wyndham Garden Hotel-Waltham
KC Plaza Investment Partners, Level I L.P. Wyndham Garden-Kansas City
Bed Lex Investment Partners, Level I L.P. Wyndham Garden-Lexington
__________________________
(1) Cash advances were not made by the Company to all of the Hotel
Partnerships in 1996.
During 1996, the Company made payments in the aggregate amount of
$1,742,369 to Wyndham Travel Management Ltd., an entity owned by Lucy
Billingsley (the daughter of Trammell Crow), for travel services provided to
the Company.
During 1996, the Company made payments in the aggregate amount of
$850,330 as lease payments for its corporate office space to Tower 2001 Limited
Partnership, a partnership in which Crow Family Members have an ownership
interest. The Company's current lease on its corporate office space expires in
May 1997. Following this period, the lease reverts to a month-to-month term.
The Company currently is in the process of obtaining alternate office space in
the Dallas area for its executive offices and expects to relocate by the third
quarter of 1997.
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During 1996, the Company received payments in the aggregate amount of
$182,720 from Crow-Los Patios Limited, a senior assisted living facility in
which certain Crow Family Members have an ownership interest. The payments were
received as management fees.
During 1996, the Company made payments in the aggregate amount of
$288,577 to GHMB, Inc., an entity owned by Mr. Bentley for the operation of
liquor concessions at the Wyndham Garden Commerce.
During 1996, the Company received payments in the aggregate amount of
$514,232 from Convention Center Boulevard Hotel Limited, Waterfront Hotel
Associates, S.E. and WHC-LG Hotel Associates, L.P., Hotel Partnerships in which
Crow Family Members and some or all of the Senior Executive Officers have an
interest. The payments were received as construction and renovation fees for
the Wyndham Riverfront and Wyndham San Juan Hotels and for the Company's La
Guardia Airport hotel.
The Company is a guarantor of the obligations of Playhouse Square
Hotel Limited Partnership (the owners of which include Crow Family Members and
the Senior Executive Officers, except for Ms. Raymond) to fund operating
deficits relating to such Hotel Partnership. The guarantee requires the
guarantors (including the Company) to advance up to $600,000 per year to the
extent the Hotel Partnership experiences operating deficits, with maximum
required advances of $2.3 million over the term of the guarantee extending from
1995 to 2000. Playhouse Square Hotel Limited Partnership has caused to be
deposited the sum of $1,000,000 as a reserve to secure the payment of the
guaranteed obligations and to fund operating deficits. The Company has not to
date been required to make any advance under the guarantee.
Pursuant to the terms of the management contract signed in 1994, for
the San Juan hotel, the Company had made a commitment to provide furniture,
fixtures and equipment at a fixed price of $6.0 million. The Company had funded
$2.6 million as of December 31, 1996. In addition, with respect to the
Riverfront hotel, the Company has entered into an operating deficit guaranty,
which requires the Company to fund up to $230,000 in working capital per year
for three years after the hotel is opened in the event that the hotel generates
inadequate cash flow. In addition, the Company has guaranteed $875,000 in
indebtedness relating to the Riverfront hotel. The Company also made a
commitment to provide furniture, fixtures and equipment for the Riverfront
hotel at a fixed price of $2.1 million. The actual cost of such furniture,
fixtures and equipment (including certain other expenses) was approximately
$2.4 million. The Company has indirectly paid the excess amount of
approximately $300,000 by contributing such amount to Convention Center
Boulevard Hotel Limited, the partnership that owns the Riverfront hotel (the
"Riverfront Partnership"). The contribution is treated as having been made on
behalf of Crow Family Members and the Senior Executive Officers, who have an
indirect ownership interest in the Riverfront Partnership. The Company is
entitled to repayment of the contributed amount out of distributions made by
the Riverfront Partnership in respect of the contributed amount. The Company
also paid certain pre-opening expenses for the Riverfront hotel in the amount
of $495,000.
Pursuant to the terms of its management agreement signed in 1995,
relating to the Wyndham Hotel at Los Angeles Airport (the "LAX"), Wyndham
agreed to loan $4,560,000 to be applied to costs of refurbishment of the LAX.
The refurbishment loan is evidenced by a promissory note (the "Note
Receivable"), which had been partially funded in the amount of $3,973,736 as of
December 31, 1996. The Company's obligation to make the remaining advances
under the refurbishment loan is secured by a letter of credit, which, in turn,
was collateralized by $865,439 in cash as of December 31, 1996. Prior to the
formation of the Company in 1996, WHC LAX Associates, L.P. ("WHC LAX"), a
limited partnership owned by Crow Family Members and the Senior Executive
Officers, paid to Wyndham $4,560,000 in return for Wyndham's agreement to pay
to WHC LAX all payments that Wyndham receives under the Note Receivable.
Wyndham also agreed that, insofar as the WHC LAX's $4,560,000 payment to the
Company exceeds advances that Wyndham is obligated to make, but has not yet
made, under the Note Receivable, it would pay to WHC LAX interest at a variable
rate that has ranged from 5.25% to 5.81% per annum on the unfunded amounts. As
of December 31, 1996, the Company had accrued such interest in the amount of
$31,779.
In 1996, James D. Carreker received a $100,000 consulting fee for
services provided as a consultant to Trammell Crow Company, an entity in which
Crow Family Members have an interest.
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17
The Company has entered into a five year service agreement with ISIS
2000, an entity owned by Crow Family Members and the Senior Executive Officers,
whereby ISIS 2000 will provide centralized reservations and property management
services to all Wyndham brand hotels. The services will be provided for a fee
comprised of an initial link-up charge plus a per reservation fee and a per
hotel charge for the property management system. The service fee payable by the
Company totaled $772,372 in 1996. The Company has entered into an asset
management agreement with ISIS 2000 providing for human resource, finance,
accounting, payroll, legal and tax services. In addition, the Company had
guaranteed operating leases on behalf of ISIS 2000 in the approximate amount of
$2.4 million as of December 31, 1996.
In 1996, the Company made payments to Trammell Crow Company in the
amount of $937,051 for contract labor (including related costs) provided to the
Company for management information services.
The Company has made insurance premium payments to Wynright Insurance
("Wynright"), an entity owned by Crow Family Members and the Senior Executive
Officers, with respect to certain insurance policies maintained for the benefit
of the Company and hotels owned or leased by the Company. Such payments totaled
$592,774 in 1996. The Company also will enter into an asset management
agreement with Wynright providing for human resource, finance, accounting,
payroll, legal and tax services.
In 1996, a subsidiary of the Company entered into a master management
agreement (the "Agreement") with Homegate, an entity in which Crow Family
Members have an interest, which provides for the Company to manage up to 60
extended-stay hotel properties and to provide Homegate with market research, a
preferred vendor program, a proprietary property management software package,
and national and local marketing efforts. In addition, Messrs. Carreker and
Harlan R. Crow serve on the board of Homegate. The Company and Homegate have
agreed that Homegate will pay Wyndham or an affiliate a one-time fee of $25,000
for Wyndham's provision of design services in developing the initial prototype,
certain other fees for the provision of software and other services, and a
commission of 5% of the aggregate purchase price of all items that Homegate
purchases through Wyndham's purchasing department. Homegate also must reimburse
Wyndham for up to $100,000 for the costs incurred in developing Homegate's
payroll and accounts payable software and for developing a marketing database,
which costs will be reimbursed ratably upon the signing of the first 10
management contracts. Wyndham and Homegate will agree upon any fees to be paid
with respect to ongoing systems support and maintenance services.
The Company currently manages six extended-stay hotel properties for
Homegate pursuant to separate management agreements, as provided for by the
Agreement. The aggregate amount of management, technical service, purchasing
and other fees paid to Wyndham totaled $206,849 in 1996.
In connection with the execution of the Agreement, certain Crow Family
Members have agreed to grant Wyndham a right of first refusal affording Wyndham
a preferential right to purchase their shares in connection with any proposed
sale by any of such parties or their affiliates of shares of Homegate Common
Stock into the public market pursuant to Rule 144 under the Securities Act or
pursuant to a shelf registration statement filed pursuant to such Act.
BEDROCK INVESTMENT PROGRAM
In May 1994, the Company entered into an Investment Agreement and an
Option Agreement (collectively, the "Bedrock Agreements") with Bedrock pursuant
to which, as amended, Bedrock agreed to provide up to $335 million in equity
and debt capital (the "Investment Program") to acquire hotels or hotel
management companies and to make hotel related investments that are approved by
both the Company and Bedrock. Approximately $196 million of debt and equity
capital had been invested pursuant to the Investment Program as of December 31,
1996. Although the commitments of certain of the participants in the Investment
Program expire in mid-1997, the Company will be entitled to manage any
Investment Program hotel for a term of 15 years. Pursuant to the terms of the
Investment Agreement, Bedrock is not required to invest a minimum amount of
capital through the Investment Program, and Wyndham had not invested in any of
the 17 hotels acquired pursuant to the Investment Program. Pursuant to the
Investment Agreement, as amended, the Company and Bedrock have agreed that the
Company will be permitted to manage any hotel with 250 or fewer
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rooms that is sourced by Bedrock. Subject to certain limitations, certain Crow
Family Members have the right to co-invest with Bedrock in the Investment
Program. The Company also has certain limited rights to co-invest with Bedrock
in the Investment Program; provided, however, that once the Company elects to
co-invest in Investment Program projects, it must co-invest in each subsequent
project or it would forfeit additional rights to co-invest. At December 31,
1996, the Company had executed management contracts with Bedrock for 17 Wyndham
brand hotels through the Investment Program.
Pursuant to a Registration Rights Agreement, Bedrock has certain
registration rights with respect to 2,276,055 shares of Common Stock that may
require the Company upon written notice to register such shares for sale.
Bedrock also entered into the Stockholders' Agreement with the Company, Crow
Family Members, the Senior Executive Officers and Ms. Groenteman, which
provides for, among other things, representation on the Company's Board of
Directors and certain rights regarding corporate governance.
The Bedrock Agreement provides for a contingent payment (the
"Contingent Option Payment") to Old Wyndham, for distribution to the
non-Bedrock owners of Old Wyndham, at such time as all hotels financed by the
Investment Program achieve an investment return target of 15% on all equity
capital invested through such program plus certain overhead costs. The amount
of the Contingent Option Payment is 10% of all cash proceeds realized in excess
of the investment return target. The Contingent Option Payment is due 70% upon
the achievement of the investment target return and 30% upon Bedrock's
disposition of its entire interest in Wyndham. A separate entity owned by Crow
Family Members and the Senior Executive Officers has purchased the right to the
Contingent Option Payment for $10,000 from the owners of Old Wyndham in
connection with the Company's initial public offering.
BENEFITS OF THE FORMATION OF THE COMPANY TO RELATED PARTIES
In connection with their participation in the transactions related to
the formation of the Company, certain major stockholders, directors and
executive officers of the Company received the following benefits.
At the closing of the initial public offering of the Company, Crow
Family Members received, collectively, 9,487,391 shares of Common Stock and
$19.6 million in cash in exchange for their interests in the businesses
acquired by the Company in connection with its formation (of which 31,250
shares were transferred indirectly to Ms. Groenteman shortly following the
initial public offering). In addition, Crow Family Members received $3.8
million in cash as a result of the repayment of certain loans that they made to
certain of the businesses acquired by the Company in connection with its
formation. WFLP, a partnership owned by Crow Family Members, received $18.6
million in cash for the sale of promissory notes that represented obligations
of the Senior Executive Officers and WEL Caribbean Hotel Management Company
("CHMC"), which is owned by certain Crow Family Members, received $6.0 million,
in cash, as consideration for the release and discharge of the Company's
payment obligations under an agreement with CHMC.
The Senior Executive Officers of the Company received the following
number of shares of Common Stock in exchange for their respective interests in
the businesses acquired by the Company in connection with its formation:
-- James D. Carreker: 1,173,416 shares;
-- Leslie V. Bentley: 330,377 shares
-- Anne L. Raymond: 380,151 shares; and
-- Stanley M. Koonce, Jr.: 388,001 shares.
Bedrock (in which Messrs. Whitman and Decker have ownership interests)
received 2,276,055 shares of Common Stock in consideration of Bedrock's
transfer to the Company of the certain options owned by Bedrock and to purchase
Wyndham Common Stock and contribution by Bedrock in the amount of $10.0
million.
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TCI, which is owned by certain Crow Family Members and the Senior
Executive Officers, received a payment of approximately $250,000 from the
Company as a commission that was paid to an employee of TCI for his efforts in
facilitating the sale of the 11 Wyndham Garden Hotels to Hospitality Properties
Trust.
POLICY WITH RESPECT TO RELATED PARTY TRANSACTIONS
With respect to material transactions (or series of related
transactions) between the Company and related parties, the Company has
implemented a policy requiring any such transaction to be approved by a
majority of the directors not affiliated with the Company, if any, upon such
directors' determination that the terms of the transaction are no less
favorable to the Company than those that could be obtained from unrelated third
parties. The policy defines a material related party transaction (or series of
related transactions) as one involving a purchase, sale, lease or exchange of
property or assets or the making of any investment with a value to the Company
in excess of $1.0 million or a service agreement (or series of related
agreements) with a value in excess of $1.0 million in any fiscal year. There
can be no assurance that this policy always will be successful in eliminating
the influence of conflicts of interest.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities to file
with the Securities and Exchange Commission reports of ownership and changes in
ownership of Common Stock of the Company. Executive officers, directors and
greater than ten-percent stockholders are required by regulations of the SEC to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1996, a Form 4
inadvertently was not filed for James D. Carreker, resulting in the failure to
timely report 100 shares of Common Stock purchased by Mr. Carreker following
the Company's initial public offering. In addition, a Form 4 inadvertently was
not filed for Glen H. Griffith, resulting in the failure to timely report 600
shares of Common Stock purchased by Mr. Griffith in connection with the
Company's initial public offering and 5,000 shares purchased in the open market
following the Company's initial public offering. A Form 4 also inadvertently
was not filed for John P. Klumph, resulting in the failure to timely report the
sale of 200 shares of Common Stock by Mr. Klumph following the initial public
offering.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
is currently composed of two outside directors of the Company. The Committee
assists in the determination of the salaries and incentive bonuses of the
executive officers and reports its determination to the Board of Directors. The
Committee also administers the Company's 1996 Long Term Incentive Plan and,
subject to the provisions of such plan, determines grants under it for all
employees, including executive officers.
The following report has been provided by the Compensation Committee
(the "Committee") of the Company's Board of Directors. The Company's initial
public offering commenced on May 21, 1996. Thereafter, the Committee was
formed, initially consisting of Ms. Groenteman and Mr. Decker. The Committee
did not meet or make recommendations with respect to base salary paid to senior
executive officers in 1996, because base salary amounts were set prior to the
Company's initial public offering in May 1996 and the establishment of the
Committee. Awards of stock options to certain executive officers and key
employees of the Company were made by the full Board of Directors prior to the
initial public offering. Due to recent changes in Federal Securities Laws, the
composition of the Committee was changed in January 1997. The Committee
currently consists of Messrs. Leslie and Ward, each of whom is a non-employee
director of the Company. The Committee held its first meeting in January 1997,
and approved annual cash bonuses to the Company's executive officers, reviewed
the Company's traditional compensation practices and made awards of stock
options to certain executive officers and key employees of the Company.
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Compensation Philosophy. The Company's executive compensation
philosophy is designed to provide competitive levels of compensation that
integrate pay with the Company's annual and long-term performance goals, reward
above average corporate performance, recognize individual initiative and
achievements, assist the Company in attracting and retaining talented
executives and align the interests of executives with the long-term interests
of the Company's stockholders. In balancing the foregoing objectives, the
Company believes that the compensation of the senior executives and other
executives of the Company should consist of a combination of base salary,
short-term annual incentive bonus and long-term stock options. The Company's
base salary component is designed to be comparable to median base salaries of
other organizations in the hotel industry. The Company emphasizes
performance-related incentive compensation in order to reward the Company's
executives for the creation of long-term stockholder value. The Company
believes that this balance reflects each executive's position, tenure and
experience, while providing them with strong financial incentives to achieve
key business and individual performance objectives. The Company also believes
that the resulting compensation package rewards high levels of performance in
excess of other comparable organizations.
The Company takes into account various qualitative and quantitative
indicators of corporate, departmental and individual performance in determining
the level of compensation for the senior executives. The Company considers such
corporate performance measures as net income, earnings per share, revenues,
operating margins, hotel operating performance and the achievement of targeted
hotel unit growth, and may vary its quantitative measurements from employee to
employee and from year to year. Departmental objectives relate to achieving
functional goals and financial targets established for each executive's
assigned area of responsibility. The Company also recognizes the importance of
individual achievements that may be difficult to quantify, and accordingly
recognizes qualitative factors, such as demonstrated leadership ability and
overall contributions to the Company.
Base Salary. Base salaries for the senior executives are set at levels
considered appropriate in light of their position, tenure and performance. Base
salaries are reviewed annually by the Committee and adjusted based on
evaluations of the executives' past and projected contributions to the Company
and changes in competitive pay levels. To assist in establishing base salaries,
the Company obtained a survey from a hospitality industry source of
compensation practices of other companies in the hotel industry of
approximately the Company's size (the comparator group). The comparator group
is not identical to the peer group included in the Company's performance chart
contained in this Proxy Statement, although some companies in the peer group
are included in the comparator group. In general, base salaries are established
at the median level of base salaries for the comparator group.
Incentive Compensation. The Company maintains an annual bonus plan
that is designed to link a substantial portion of annual executive compensation
with individual, departmental and corporate performance. At the beginning of
each year, a comprehensive business plan is established for the Company, and
each senior executive is responsible for certain goals and objectives within
the business plan depending upon his or her area of responsibility within the
Company. Each senior executive also is responsible for contributing to the
achievement of Company-wide financial and operating goals. The CEO's goals and
objectives are Company-wide and include growth in net income and earnings per
share, hotel unit growth and effective management and career development of the
Company's executive officers and key employees.
Under the Company's annual bonus plan, a target bonus is established
for each level of the Company's officers that results in the payment of a
specified percentage of the officer's salary if his or her annual goals and
objectives are achieved. A minimum performance level must be achieved by the
Company, the officer and his or her department or division before any bonus may
be earned. Thereafter, an established progression rewards higher levels of
achievement with greater bonus payments, subject to a predetermined maximum.
For the Company's CEO and senior executives, bonus targets are measured against
each officer's achievement of the goals and objectives outlined for such
officer in the Company's annual business plan. The Company's CEO is eligible
for an annual bonus of 20% to 100% of his annual salary, depending upon his
performance as determined by the Committee and the Board of Directors. As a
percentage of salary, bonuses for senior executives range from 20% to 80%,
depending upon performance, as evaluated by the CEO and the Senior Vice
President of Human Resources and reviewed by the Committee. Bonuses for the
Company's senior
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officers range from 10% to 50% of salary. For 1996, the Company determined that
the performance of each of the senior executives was superior based on Company,
departmental and individual performance and, therefore, awarded the maximum
bonuses available under the plan.
Long-Term Incentive Plan. The Company's 1996 Long-term Incentive Plan
(the "Incentive Plan") authorizes the granting of incentive and non-qualified
stock options, stock appreciation rights, restricted stock and performance
units to key executives and other key employees of the Company and its
subsidiaries. In order to align the interests of senior executives with the
interests of stockholders, the Committee's current policy regarding stock
awards is to grant stock options. However, the Committee reserves the right to
grant restricted stock or other awards as it deems appropriate. The Committee
has used the Incentive Plan for periodic grants of stock options with an
exercise price equal to the fair market value of a share of Common Stock on the
date of the grant. To encourage retention, the ability to exercise options
granted under the Incentive Plan is subject to vesting restrictions.
At the time of the Company's initial public offering, the Board of
Directors established a five-year schedule for the grant of stock options in an
amount and on a timetable that reflected trends within the comparator group for
the award of stock options and certain assumptions concerning the size, value
and growth of the Company. The schedule provided for the grant of a fixed
number of stock options to senior executives and other officers at the time of
the Company's initial public offering and in the subsequent four years. A
certain portion of the options available for award is allocated to the senior
executives, and the remainder is available for grant to the other eligible
participants in the Incentive Plan. It is the Committee's practice to award
stock options based on the grants set forth in the schedule, although the
Committee has the authority to alter awards or consider additional participants
for the Incentive Plan. The options granted to the senior executives in and for
1996 are set forth in the table under the caption "Option Grants in Last Fiscal
Year."
Chief Executive Officer Compensation. The Committee reviews the
compensation of the CEO, who is responsible for the strategic and financial
performance of the Company, and the Committee's recommendation is subject to
approval by the Board of Directors. The Committee did not review Mr. Carreker's
base salary of $350,000 in 1996, as this amount was set prior to the Company's
initial public offering in May 1996 and the establishment of the Committee.
Based on the comparator group information presented to the Committee, however,
the Committee believes that Mr. Carreker's base salary was consistent with base
salaries being paid to chief executive officers of comparable companies in the
hotel industry. The Committee approved a formula bonus for Mr. Carreker of
$350,000, or 100% of his 1996 base salary. The bonus paid to Mr. Carreker
reflects the Company's operating performance, profitability and growth during
1996 as well as his individual performance. In accordance with the option grant
schedule, Mr. Carreker also received two grants of options for 1996, one grant
prior to the Company's initial public offering and one grant to reflect the
Company's performance throughout the year.
Policy Concerning Tax Deductibility of Compensation. To the extent
readily determinable and as one of the factors in its consideration of
compensation matters, the Committee considers the anticipated tax treatment to
the Company and to its executives of various payments and benefits. Some types
of compensation payments and their deductibility (e.g., the spread on exercise
of non-qualified options) depend upon the timing of an executive's vesting or
exercise of previously granted rights. Further, interpretations of and changes
in the tax laws and other factors beyond the Committee's control also affect
the deductibility of compensation. For these and other reasons, the Committee
will not necessarily limit executive compensation to that deductible under
Section 162(m). The Company has structured the Incentive Plan to comply with
the requirements of Section 162(m). The Committee will consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent with
its other compensation objectives.
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The foregoing report has been approved by both the 1996 and 1997
members of the Committee.
James C. Leslie
Philip J. Ward
Daniel A. Decker
Susan T. Groenteman
March 15, 1997
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STOCKHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative
total return of the Company's Common Stock, Standard & Poor's 500 Stock Index
(the "S&P 500") and Standard and Poor's Hotel-Motel Index (the "S&P Hotel-Motel
Index") over the period of May 21, 1996 through December 31, 1996. The graph
assumes an initial investment of $100 on May 21, 1996, the date the Company's
Common Stock began trading on the New York Stock Exchange, and the reinvestment
of dividends, if any. The assumed investment in the Company's Common Stock at
the beginning of the period is at a price per share of $16.00, the initial
public offering price.
[TOTAL RETURN TO STOCKHOLDERS GRAPH]
5/21/96 6/28/96 9/30/96 12/31/96
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TOTAL RETURN ANALYSIS
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WYNDHAM HOTEL CORP. 100.00 130.47 114.06 153.91
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S&P HOTEL-MOTEL INDEX 100.00 106.07 90.45 88.30
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S&P 500 100.00 99.90 102.99 111.58
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Data from Bloomberg Financial Markets
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INDEPENDENT AUDITORS
The Company's financial statements for the fiscal year ended December
31, 1996 have been audited by Coopers & Lybrand L.L.P., independent auditors
("Coopers & Lybrand"), and the Board of Directors has selected Coopers &
Lybrand to audit and report on the financial statements of the Company for the
current fiscal year, which will end on December 31, 1997. A representative of
Coopers & Lybrand is expected to be present at the Annual Meeting with an
opportunity to make a statement, and such representative is expected to be
available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any proposal by a stockholder of the Company intended to be presented
at the 1998 Annual Meeting of Stockholders must be received by the Company at
its principal executive office by December 5, 1997 to be considered for
inclusion in the Company's Proxy Statement and form of proxy. Any such proposal
must also comply with the other requirements of the proxy solicitation rules of
the Securities and Exchange Commission.
ANNUAL REPORT
The Company's 1996 Annual Report to Stockholders is being mailed to
all stockholders of record together herewith.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996, UPON THE WRITTEN REQUEST OF
ANY PERSON WHO WAS A STOCKHOLDER (OF RECORD OR BENEFICIALLY) AT THE CLOSE OF
BUSINESS ON MARCH 25, 1997. REQUESTS FOR SUCH REPORT SHOULD BE DIRECTED TO THE
COMPANY AT 2001 BRYAN STREET, SUITE 2300, DALLAS, TEXAS 75201, ATTENTION: CARLA
S. MORELAND, SECRETARY.
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OTHER MATTERS
The Company is not aware of any matters that may come before the
Annual Meeting other than those referred to in the Notice of Annual Meeting of
Stockholders. If any other matters shall properly come before the meeting, the
persons named in the accompanying proxy form intend to vote thereon in
accordance with their best judgment.
By Order of the Board of Directors
/s/ CARLA S. MORELAND
-----------------------------
Carla S. Moreland
Secretary
Dallas, Texas
March 25, 1997
ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND RETURN
THE ACCOMPANYING PROXY.
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PROXY WYNDHAM HOTEL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (1) acknowledges receipt of the Notice of Annual
Meeting of Stockholders of Wyndham Hotel Corporation (the "Company") to be held
on April 28, 1997 and the Proxy Statement in connection therewith, and (2)
constitutes and appoints James D. Carreker, Anne L. Raymond and Carla S.
Moreland and each of them (acting by majority, or if only one be present, then
by that one alone), his or her attorneys and proxies, with full power of
substitution and revocation to each, for and in the name, place and stead of the
undersigned, to vote, and act with respect to, all of the shares of Common
Stock, par value $.01 per share (the "Common Stock"), of the Company standing in
the name of the undersigned or with respect to which the undersigned is entitled
to vote and act, at said meeting and at any adjournment(s) thereof, and
especially to vote as designated below.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR all nominees listed in Proposal 1 and in accordance with the
discretion of the named proxies as to other matters. The undersigned may revoke
this proxy at any time before it is voted by delivering to the Secretary of the
Company either a written revocation of the proxy or a duly executed proxy
bearing a later date, or by appearing at the Annual Meeting and voting in
person.
(Continued on other side)
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27
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(Continued from reverse side)
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all
nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
James D. Carreker, Harlan R. Crow and James C. Leslie
2. IN THEIR DISCRETION ON ANY OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT(S) THEREOF.
Dated: , 1997
---------------------
Please Sign Here
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PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS. IF SHARES ARE HELD BY
JOINT TENANTS, BOTH MUST SIGN. IF
SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY AN
AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED
PERSON.
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