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Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-60651
PROSPECTUS
WINSTON HOTELS, INC.
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
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COMMON STOCK
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Winston Hotels, Inc. (the "Company") hereby offers to the holders of shares
of its Common Stock, par value $.01 per share (the "Common Stock") and other
interested investors, the opportunity to participate in the Company's Dividend
Reinvestment and Stock Purchase Plan (the "Plan"). The Plan provides a simple
and convenient method for shareholders and other interested investors to invest
cash dividends and optional cash payments in shares of Common Stock of the
Company. All holders of record of Common Stock and other interested investors
are eligible to participate in the Plan (a "Participant").
Participants may purchase additional shares of Common Stock by (i) having
the cash dividends on all, or part, of their shares of Common Stock
automatically reinvested, (ii) by receiving directly, as usual, their cash
dividends, if, as and when declared, on shares of Common Stock registered in
their names and investing in the Plan by making cash payments of not less than
$100 per payment or more than $10,000 per month ("optional cash payments"),
(iii) by investing both their cash dividends and such optional cash payments, or
(iv) for Participants who are not shareholders of the Company, by making an
initial optional cash investment of not less than $250 or more than $10,000.
Shares may be purchased for the Plan either on the open market, at market
prices, or directly from the Company, at a discount ranging between 0% to 5% of
market prices in the Company's discretion.
Effective June 20, 2000, Branch Banking & Trust Company ("BB&T") shall
serve as the Company's Plan administrator and transfer agent.
A shareholder may begin participating in the Plan by completing an
Authorization Form and returning it to BB&T, as plan administrator. An
interested investor that is not presently a shareholder of the Company, but
desires to become a Participant by making an initial investment in Common Stock,
may join the Plan by signing an Authorization Form and returning it, together
with such initial investment to BB&T. Participants may terminate their
participation at any time. Shareholders who do not wish to participate in the
Plan need take no action and will continue to receive their cash dividends, if,
as and when declared, as usual. The Company suggests that this Prospectus be
retained for future reference.
The Common Stock is listed on the New York Stock Exchange under the symbol
"WHX." On June 14, 2000, the last reported sale price of the Common Stock on the
New York Stock Exchange was $7.688 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS JUNE 14, 2000.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"), pursuant to the Exchange
Act. Such reports, proxy statements and other information filed by the Company
may be examined without charge at, or copies obtained upon payment of prescribed
fees from, the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and are also available for
inspection and copying at the regional offices of the Commission located at 7
World Trade Center, New York, New York 10048 and at 500 West Madison Street,
Chicago, Illinois 60661-2511. The Common Stock of the Company is listed on the
New York Stock Exchange, and such material can also be inspected and copied at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005. Such reports, proxy statements, and other information can also be
obtained from the Internet at http:www.sec.gov.
The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations promulgated thereunder, with respect to the Common Stock offered
pursuant to this Prospectus. This Prospectus, which is part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the exhibits and financial schedules thereto. For further
information concerning the Company and the Common Stock offered hereby,
reference is made to the Registration Statement and the exhibits and schedules
filed therewith, which may be examined without charge at, or copies obtained
upon payment of prescribed fees from, the Commission and its regional offices at
the locations listed above. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
(File No. 0-23732) are incorporated herein by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1999;
(b) Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2000;
(c) the description of the Common Stock of the Company included in the
Company's Registration Statement on Form 8-A (File No. 0-23732), dated
August 1, 1997, as amended August 8, 1997, and including any amendment or
report filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the securities made hereby shall be deemed to
be incorporated by reference in this Prospectus and made a part hereof from the
date of the filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other document subsequently filed with the
Commission which also is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference herein (not including
the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should be
directed to: Winston Hotels, Inc., 2626 Glenwood Avenue, Suite 200, Raleigh,
North Carolina 27608, Attention: Investor Relations, telephone number (919)
510-8003.
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING INFORMATION
This Prospectus and any accompanying prospectus supplement contains or
incorporates by reference certain "forward looking" statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. You can identify these statements by use of words like "may," "will,"
"expect," "anticipate," "estimate," or "continue" or similar expressions. The
cautionary statements incorporated by reference from Exhibit 99.1 of our Annual
Report on Form 10-K for the year ended December 31, 1999 under the caption "Risk
Factors", and other similar statements contained in this Prospectus and any
accompanying prospectus supplement, identify important factors with respect to
the forward looking statements, including risks and uncertainties, which could
cause actual results to differ materially from those indicated by the forward
looking statements.
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THE COMPANY
We are a self-advised and self-administered real estate investment trust,
or REIT, which was organized on June 2, 1994. Through WINN Limited Partnership,
we own, acquire and develop hotels with nationally recognized franchise
affiliations. We control the partnership as its sole general partner, and hold
approximately 92.9% of the outstanding units plus 100% of the outstanding
preferred units of the partnership. As the sole general partner of the
partnership, we have the full, complete and exclusive power under the
partnership agreement to manage and control the business of the partnership.
We specialize in the acquisition, development and rehabilitation of premium
limited-service, high-end extended-stay and full-service hotels. Through the
partnership and its subsidiary, we currently own 50 hotels having an aggregate
of 6,843 rooms as of June 14, 2000. We seek to enhance shareholder value by:
- participating in any increased room revenue from the hotels we currently
own and any subsequently acquired or developed hotels through percentage
leases (as described below);
- acquiring additional hotels, or interests in hotels, that meet our
investment criteria; and
- selectively developing hotels as appropriate under market conditions.
In order for us to qualify as a REIT, neither we nor our subsidiaries can
operate hotels. Therefore, we lease all of our hotels pursuant to leases that
provide for rent payments based, in part, on revenues from the hotels. These
"percentage leases" are designed to allow us to participate in any growth in
revenues at the hotels by providing that a portion of each hotel's room revenues
in excess of specified amounts will be paid to us as percentage rent. We
currently lease 48 of the total 50 hotels to CapStar Winston Company, L.L.C.,
one of the hotels to Bristol Hotels & Resorts, Inc. and one of the hotels to
Prime Hospitality Corp. CapStar Winston operates 38 of the 48 hotels it leases
from us. Interstate Management and Investment Corporation, or IMIC, operates
nine hotels and Promus Hotels, Inc., operates one hotel, each under management
agreements with CapStar Winston.
Our executive offices are located at 2626 Glenwood Avenue, Suite 200,
Raleigh, North Carolina 27608, and our telephone number is (919) 510-6010.
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DESCRIPTION OF THE PLAN
The provisions of the Company's Dividend Reinvestment and Stock Purchase
Plan are set forth below in question and answer format. The Company's Board of
Directors has reserved 1,500,000 shares of Common Stock for issuance under the
Plan.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide holders of record of shares of Common
Stock and other interested investors with a simple and convenient method of
investing cash dividends or optional cash payments, or both, to purchase
additional shares of Common Stock or to make an initial investment in Common
Stock, as applicable, without payment of any brokerage commissions, fees or
service charges. Shares of Common Stock purchased under the Plan will either be
original issue shares or shares purchased in the open market by the Plan
administrator, BB&T, (see Question 4). To the extent shares of Common Stock are
purchased by BB&T in the open market, the Company will not receive any proceeds.
To the extent the shares of Common Stock are original issue shares, the Company
will receive additional funds for its working capital and general corporate
purposes. See "Use of Proceeds".
ADVANTAGES
2. WHAT ARE THE OPTIONS AVAILABLE TO PARTICIPANTS?
Shareholders may purchase additional shares of Common Stock by (i) having
the cash dividends on all, or part, of their shares of Common Stock
automatically reinvested, (ii) by receiving directly, as usual, their cash
dividends, if, as and when declared, on shares of Common Stock and investing in
the Plan by making cash payments of not less than $100 per payment or more than
$10,000 per month, or (iii) by investing their cash dividends and making such
optional cash payments. Interested investors that are not shareholders of the
Company may make an initial cash investment in Common Stock of not less than
$250 and not more than $10,000.
3. WHAT ARE THE ADVANTAGES OF THE PLAN?
No brokerage commissions, fees or service charges are paid by Participants
in connection with purchases under the Plan, provided, however that if shares
are registered in the name of a nominee or broker, such nominee or broker may
charge a commission or fee. Full investment of dividends is possible under the
Plan because the Plan permits fractions of shares, as well as whole shares, to
be purchased and credited to Participants' accounts. Regular statements of
account provide simplified record keeping. Persons not presently shareholders of
the Company may become Participants by making an initial cash investment of not
less than $250 and not more than $10,000 to purchase shares of Common Stock. In
addition, the free custodial services provided in connection with the Plan serve
to protect against loss, theft or destruction of certificates.
ADMINISTRATION
4. WHO ADMINISTERS THE PLAN FOR PARTICIPANTS?
BB&T has been designated by the Company as its agent to administer the Plan
for Participants, maintain records, send regular statements of account to
Participants and perform other duties relating to the Plan. Shares of Common
Stock purchased under the Plan will be held by BB&T as agent for Participants
and
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registered in the name of BB&T or its nominee. BB&T also serves as Transfer
Agent for the Common Stock. Should BB&T resign, or be asked to resign, another
agent will be asked to serve.
All communications regarding the Plan should be sent to BB&T addressed as
follows:
REGULAR MAIL OVERNIGHT OR HAND DELIVERY
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Branch Banking & Trust Company Branch Banking & Trust Company
Corporate Trust Services Corporate Trust Services
P.O. Box 2887 223 West Nash Street
Wilson, NC 27894-2887 Wilson, NC 27893
1-800-213-4314 1-800-213-4314
PARTICIPATION
5. WHO IS ELIGIBLE TO PARTICIPATE?
All holders of record of shares of Common Stock are eligible to participate
in the Plan. In order to be eligible to participate, beneficial owners of shares
of Common Stock whose shares are registered in names other than their own (for
example, shares registered in the name of a broker, bank nominee or trustee)
must either arrange for the holder of record to join the Plan or have the shares
they wish to enroll in the Plan transferred to their own names. In addition, an
interested investor that is not a shareholder may participate in the Plan by
making an initial cash investment in Common Stock of not less than $250 or more
than $10,000.
6. HOW DOES SOMEONE BECOME A PARTICIPANT?
An eligible shareholder may join the Plan by checking the box of his choice
on an Authorization Form and returning it to BB&T. A postage-paid envelope is
provided for this purpose. Company shareholders whose shares are registered in
the name of a nominee or broker must have the nominee or broker sign the
Authorization Form and return it to BB&T. Additional Authorization Forms may be
obtained at any time by contacting BB&T. An interested investor that is not
presently a shareholder of the Company, but desires to become a Participant by
making an initial cash investment in Common Stock, may join the Plan by signing
an Authorization Form and forwarding it, together with such initial investment,
to BB&T.
If a Participant establishes a joint account, the Participants jointly and
severally agree that each of them will have authority on behalf of the joint
account to make transaction requests of BB&T, including, but not limited to,
transactions such as selling or withdrawing shares, changing account address or
options, and to generally deal with BB&T on behalf of the joint account as fully
and completely as if either Participant alone were interested in the account.
Notwithstanding the foregoing, BB&T may, in its sole discretion, do any of the
following if conflicting instructions are received from joint account
participants:
(a) Choose which instructions to follow and which to disregard;
(b) Terminate the account pursuant to Question 21; and/or
(c) Take other appropriate legal action.
7. WHEN MAY A SHAREHOLDER OR AN INTERESTED INVESTOR JOIN THE PLAN?
A shareholder or other interested investor may join the Plan at any time
and will remain a Participant until participation is terminated (see Question
21) or all shares held in the Participant's Plan account are sold.
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If an Authorization Form specifying reinvestment of dividends is received
by BB&T at least two business days before the record date of a dividend payment,
reinvestment commences with that dividend payment. If the Authorization Form is
received after that date, reinvestment of dividends through the Plan begins with
the dividend payment following the next record date. Participation as to initial
investments will commence when the Authorization Form and the funds to be
invested have been received. Optional cash payments are invested as specified in
Question 14.
The Company has declared and paid dividends on Common Stock as follows
during the past three years:
DECLARATION DATE RECORD DATE PAYMENT DATE
- ---------------- ----------- ------------
April 1, 1997 April 11, 1997 April 17, 1997
June 10, 1997 July 7, 1997 July 15, 1997
September 24, 1997 October 7, 1997 October 16, 1997
December 2, 1997 December 30, 1997 January 16, 1998
February 3, 1998 March 31, 1998 April 16, 1998
May 5, 1998 June 30, 1998 July 16, 1998
September 9, 1998 September 30, 1998 October 16, 1998
December 4, 1998 December 30, 1998 January 18, 1999
March 9, 1999 March 31, 1999 April 16, 1999
June 16, 1999 June 30, 1999 July 16, 1999
September 20, 1999 September 30, 1999 October 22, 1999
December 17, 1999 December 31, 1999 January 17, 2000
March 8, 2000 March 31, 2000 April 14, 2000
8. WHAT DOES THE AUTHORIZATION FORM PROVIDE?
The Authorization Form provides for the purchase of additional shares of
Common Stock through the following options:
(a) If "Full Dividend Reinvestment" is selected, BB&T will elect to
receive all cash dividends payable on shares held in the Participant's
account and on any other shares of Company Common Stock registered in the
Participant's name. In addition, BB&T will invest in Common Stock all of
the cash dividends on all shares then or subsequently registered in the
Participant's account, as well as any optional cash payments the
Participant submits.
(b) If "Partial Dividend Reinvestment" is selected, BB&T will elect to
receive a portion of cash dividends payable on shares held in the
Participant's account and on any other shares of Common Stock registered in
the Participant's name. In addition, BB&T will invest in accordance with
the Plan that portion of cash dividends on shares held in the Participant's
account and any other shares of Common Stock registered in the
Participant's name as is designated in the appropriate space on the
Enrollment Card, as well as any optional cash payments the Participant
submits.
(c) If "Optional Cash Only" is selected, BB&T will not invest any
portion of cash dividends due the Participant on shares held in the
Participant's account or on shares held in the Participant's name. BB&T
will, however, invest any optional cash payments the Participant submits.
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9. HOW MAY PARTICIPANTS CHANGE INVESTMENT OPTIONS?
A Participant may change his investment option at any time by signing a new
Authorization Form and returning it to BB&T. A change in investment option will
be effective on the dividend payment date if the Authorization Form is received
by BB&T no later than the second business day preceding the related dividend
record date. If the Authorization Form is received by BB&T after the second
business day preceding the related dividend record date, the change will be
effective on the dividend payment date for the following quarter.
COSTS
10. ARE THERE ANY EXPENSES OF PARTICIPATION IN CONNECTION WITH PURCHASES UNDER
THE PLAN?
There will be no brokerage commissions or service charges to Participants
for purchases under the Plan, regardless of whether such purchases are direct
from the Company or open market purchases. Furthermore, all costs of
administration of the Plan are to be paid by the Company. See Question 21, "How
does a Participant terminate participation in the Plan?" and Question 22, "May a
portion of a Participant's Plan shares be sold?" for a discussion of payment by
Participants of brokerage costs associated with such termination of
participation and sale of shares under the Plan.
A $25 fee will be charged to Participants for each deposit returned for
unpaid funds or rejected automatic debit of bank account. Also, a $10 fee will
be charged to Participants for each duplicate statement beyond the most recent
prior year requested by such Participants. See Question 15, "What kind of
reports will be sent to Participants?"
If a Participant's shares are registered in the name of a nominee or
broker, such nominee or broker may charge a commission or fee for both shares
purchased in the open market and original issue shares.
PURCHASES
11. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR EACH PARTICIPANT?
The number of shares to be purchased for a Participant's account under the
Plan will depend on the amount of a Participant's dividends being reinvested,
the amount of any optional cash payments and the price of the shares of Common
Stock. Each Participant's account will be credited with that number of shares,
including fractions, equal to the total amount to be reinvested or invested
through optional cash payments, divided by the purchase price per share.
12. WHAT WILL BE THE PRICE OF SHARES OF COMMON STOCK PURCHASED UNDER THE PLAN?
The Plan provides the Participant with a convenient and attractive method
of investing cash dividends in, and/or making optional monthly cash purchases
of, additional shares of the Company's Common Stock. Shares issued by the
Company for sale under the Plan may be sold at prices reflecting a discount
between 0% and 5% (the "Discount") from market prices of Common Stock on the
NYSE. The Discount may change (but will not vary from the range of 0% to 5%)
from time to time or may be discontinued at the Company's discretion after a
review of current market conditions, the level of participation in the Plan and
the Company's current and projected capital needs. The Discount shall not apply
to shares purchased by BB&T on the open market.
Since purchase prices for the Common Stock are established on the
applicable investment date, a Participant loses any advantages otherwise
available from being able to select the timing of investments.
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Participants should recognize that neither the Company nor BB&T can assure a
profit or protect against a loss on shares of Common Stock purchased under the
Plan.
13. WHAT IS THE SOURCE OF SHARES PURCHASED UNDER THE PLAN?
The Plan provides BB&T the flexibility of using dividends and optional cash
payments as well as initial purchase payments to purchase shares of Common Stock
from the Company out of the Company's authorized but unissued shares of Common
Stock or on the open market.
14. HOW ARE OPTIONAL CASH PAYMENTS MADE?
Optional cash payments from existing shareholders may be made at any time
and in varying amounts of not less than $100 per payment or more than $10,000
per month. A shareholder may make an optional cash payment when enrolling in the
Plan by enclosing a check (made payable to Branch Banking & Trust Company) with
the Authorization Form. Thereafter, optional cash payments may be made through
the use of the optional cash payment form on the top of each statement, which
will be sent to Participants by BB&T or through automatic debit of a
Participant's authorized bank account.
Other interested investors that are not shareholders of the Company, but
have submitted Authorization Forms, are also eligible to make an initial
investment of not less than $250 or more than $10,000 in Common Stock through an
optional cash payment.
Optional cash payments will be invested weekly, generally on Wednesday, or
if the Common Stock is not traded on such day, the next trading day. However,
only payments received no later than the second business day preceding the
related weekly investment date will be invested on the related investment date.
Optional cash payments received after the second business day preceding the
related weekly investment date will be invested on the following weekly
investment date. NO INTEREST WILL BE PAID ON OPTIONAL CASH PAYMENTS. The same
amount of money need not be sent for each investment, and there is no obligation
to make an optional cash payment.
Optional cash payments must be in United States dollars. DO NOT SEND CASH.
In the event that any deposit is returned unpaid for any reason, BB&T will
consider the request for investment of such money null and void and shall
immediately remove from the Participant's account shares, if any, purchased upon
the prior credit of such money. BB&T shall thereupon be entitled to sell these
shares to satisfy any uncollected amounts. If the net proceeds of the sale of
such shares are insufficient to satisfy the balance of such uncollected amounts,
BB&T shall be entitled to sell such additional shares from the Participant's
account to satisfy the uncollected balance. A $25.00 fee will be charged for any
deposit returned unpaid. Checks should be made payable to BRANCH BANKING & TRUST
COMPANY and should be made out in U.S. funds drawn on a U.S. bank.
REPORTS TO PARTICIPANTS
15. WHAT KIND OF REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
Shareholders who participate in the Plan through the reinvestment of
dividends will be sent a quarterly statement of their accounts and persons who
participate through the investment of optional cash payments will be sent a
transactional statement for any months within which an optional cash payment is
invested. These statements of account will show any cash dividends and optional
cash payments received, the number of shares purchased, the purchase price for
the shares, the number of shares held for the Participant by BB&T, the number of
enrolled shares registered in the name of the Participant, and an accumulation
of the transactions
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for the calendar year to date. Quarterly statements will be mailed as soon as
practicable after each dividend payment date, and transactional statements will
be mailed as soon as practicable after the transaction has been completed. These
statements are a Participant's continuing record of the cost of his purchases
and should be retained for income tax purposes.
In addition, each Participant will receive the most recent Prospectus
constituting the Plan and copies of the same communications sent to every other
holder of shares of Common Stock, including the Company's Annual Report, Notice
of Annual Meeting and Proxy Statement and income tax information for reporting
distributions (including dividends) paid by the Company.
16. MAY PARTICIPANTS HAVE ADDITIONAL INVESTMENTS AUTOMATICALLY DEDUCTED FROM A
BANK ACCOUNT?
Yes. Participants may authorize monthly automatic deductions from an
account at a financial institution that is a member of the National Automated
Clearing House Association. To authorize monthly automatic deductions,
Participants should contact BB&T for an automatic debit authorization form.
Funds will be debited from the Participant's applicable bank account on the 28th
or the next business day to be invested on the first Wednesday of the next
month. Also, you can cancel any purchase scheduled to be made by automatic
deduction, provided the request is received by BB&T at least seven business days
prior to the date of the scheduled deduction.
DIVIDENDS
17. HOW ARE DIVIDENDS CREDITED TO PARTICIPANTS' ACCOUNTS UNDER THE PLAN?
On shares of Common Stock for which a Participant has directed that
dividends be reinvested, cash dividends will automatically be credited to a
Participant's account and reinvested in additional shares of Common Stock. Cash
dividends also will be automatically reinvested on all shares which have been
purchased under the Plan and credited to a Participant's account; provided,
however, that no dividends will be earned on such shares purchased under the
Plan until the dividend payment for the first dividend record date which follows
the date of purchase of such shares. On shares of Common Stock for which a
Participant has not directed that dividends be reinvested and on shares owned by
shareholders who are not participating in the Plan, cash dividends, as declared,
will be received by them by check as usual.
Any shares resulting from a stock split or stock dividend paid on shares
held in custody for the Participant by BB&T will be credited to the
Participant's account. Participants may request a certificate at any time for
any or all of their shares.
18. WILL PARTICIPANTS BE CREDITED WITH DIVIDENDS ON FRACTIONS OF SHARES?
Yes and dividends will be paid on the fractional shares.
19. WILL CERTIFICATES BE ISSUED FOR SHARES OF COMMON STOCK PURCHASED UNDER THE
PLAN?
Unless requested by a Participant, certificates for shares of Common Stock
purchased under the Plan will not be issued. Shares will be held in the name of
BB&T or its nominees. The number of shares credited to a Participant's account
under the Plan will be shown on such Participant's statement of account. This
service protects against loss, theft or destruction of stock certificates.
Certificates for any number of whole shares credited to an account under
the Plan will be issued upon the request of a Participant. The remaining whole
shares and fractions of shares, if any, will continue to be
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credited to the Participant's account. A request for issuance of Plan shares,
including issuance of all of the shares in a Participant's account, will not
constitute a termination of participation in the Plan by the Participant.
Termination may be effected only through the delivery to BB&T of a notice of
termination as outlined in Question 21, "How does a Participant terminate
participation in the Plan?"
Shares held by BB&T for the account of a Participant may not be pledged. A
Participant who wishes to pledge such shares must request that a certificate for
such shares be issued in his or her name.
Certificates for fractions of shares will not be issued under any
circumstances.
20. IN WHOSE NAME WILL CERTIFICATES BE ISSUED?
A Participant's account under the Plan will be maintained in the name in
which his shares of Common Stock were registered at the time the Participant
enrolled in the Plan. Consequently, if and when certificates for shares held
under the Plan are issued, such certificates will be issued only in that name.
Certificates will be issued for whole shares only.
TERMINATION OF PARTICIPATION
21. HOW DOES A PARTICIPANT TERMINATE PARTICIPATION IN THE PLAN?
A Participant may terminate participation in the Plan at any time by
contacting BB&T. At any time, BB&T can, for any reason, in its sole discretion,
require written confirmation of such a transaction request. A Participant's
notice of termination takes effect when such written notice is received by BB&T;
provided, however, if the notice of termination is received less than three
business days prior to the record date for a dividend payment date, the dividend
will be reinvested for that Participant's account. BB&T may terminate a
Participant's account by mailing a written notice of termination to the
Participant 30 days prior to such termination. The account then will be
terminated and all subsequent dividends will be paid to the Participant. When a
Participant terminates participation in the Plan, or upon termination of such
participation by BB&T, certificates for whole shares credited to a Participant's
account under the Plan will be issued to him and a cash payment will be made for
any fractional share. However, in the Participant's notice of termination of
participation in the Plan, the Participant may, if he desires, direct that all
of the shares credited to his account in the Plan, whether whole or fractional,
be sold. Such sales will be made at market. Any brokerage fees, transfer taxes
and other transaction expenses in connection with effecting such sales will be
paid by the withdrawing Participant. See Question 10, "Are there any expenses of
participation in connection with purchases under the Plan?" The proceeds of the
sale, net of such expenses, will be sent to the Participant.
Former Participants may become Participants in the Plan again at any time
by signing a new Authorization Form and returning it to BB&T.
SALES OF PLAN SHARES
22. MAY A PORTION OF A PARTICIPANT'S PLAN SHARES BE SOLD?
A Participant may sell all or part of shares of Common Stock held in the
Plan in either of two ways. First, the Participant may request certificates for
full shares and arrange for the sale of these shares through a securities broker
of the Participant's choice. Alternatively, within three business days after
receipt of instructions, BB&T will sell any portion or all of the shares held by
BB&T for the Participant. Such shares will be sold through independent
securities brokers selected by BB&T in its sole discretion. At any time, BB&T
can, for any reason, in its sole discretion, require written confirmation of
such a transaction request. The
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Participant will be charged a commission and other transaction expenses, which
amounts will be deducted from the cash proceeds paid to the Participant. Shares
being sold for the Participant may be aggregated with those of other Plan
Participants who have requested sales. In that case, the Participant will
receive proceeds based on the average sales price of all shares sold, less a pro
rata share of brokerage commissions, transfer and other taxes and other
transaction expenses. A check representing the proceeds of the sale of shares
will be forwarded to the Participant as soon as practicable after settlement of
the sale.
TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN
23. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
Under the current provisions of the Internal Revenue Code of 1986, as
amended (the "Code") the purchase of shares of Common Stock under the Plan will
generally result in the following federal income tax consequences:
(a) A dividend on shares of Common Stock will be treated for federal
income tax purposes as a dividend received by the Participant
notwithstanding that it is used to purchase additional Common Stock
pursuant to the Plan. The full amount of cash dividends reinvested under
the Plan plus any applicable discount represents dividend income to
Participants. In addition, the amount of any brokerage commissions,
mark-ups, and other fees or expenses incurred by the Company on behalf of a
Participant in connection with such purchases on the open market will also
constitute a dividend to such Participant for federal income tax purposes.
(b) Dividends paid to corporate shareholders, including amounts,
taxable as dividends to corporate Participants under (a) above, will not be
eligible for the corporate dividends-received deduction under the Code.
(c) A Participant's tax basis in additional shares of Common Stock
acquired under the Plan will be equal to the amount treated as a dividend
for federal income tax purposes. The Participant's holding period for such
shares of Common Stock will commence on the day after the investment date.
(d) A Participant will not realize any taxable income upon the receipt
of a certificate for full shares credited to the Participant's account. A
Participant will recognize gain or loss when a fractional share interest is
liquidated or when the Participant sells or exchanges shares received from
the Plan. Such gain or loss will equal the difference between the amount
which the Participant receives for such fractional share interest or such
shares and the tax basis therefor.
If you participate in the Plan, either (i) through both the dividend
reinvestment option and the optional cash purchase option, or (ii) solely
through the dividend reinvestment option, the amount of the Discount on any
shares of Common Stock you purchase through the Plan will be reported to the IRS
as taxable income. Consequently, your initial tax basis for those shares of
Common Stock will be the full purchase price before the Discount. This
information is reported to the IRS on your annual Form 1099.
In the case of Participants whose dividends are subject to withholding of
federal income tax, dividends will be reinvested less the amount of tax required
to be withheld.
The above is intended only as a general discussion of the current federal
income tax consequences of participation in the Plan. Participants should
consult their own tax advisers regarding the federal and state income tax
consequences (including the effects of any changes in the law) of their
individual participation in the Plan.
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OTHER INFORMATION
24. WHAT HAPPENS IF THE COMPANY ISSUES A STOCK DIVIDEND OR DECLARES A STOCK
SPLIT?
Any stock dividends or stock splits distributed by the Company on the
shares purchased for and credited to the account of a Participant under the Plan
will be added to the Participant's account. Stock dividends or stock splits
distributed on shares owned and held outside the Plan by a Participant
(including shares for which a Participant has directed that cash dividends be
reinvested) will be mailed directly to such Participant in the same manner as to
shareholders who are not participating in the Plan.
In the event the Company makes available to shareholders rights to purchase
additional shares of Common Stock or other securities, such rights will be made
available to Participants based on the number of shares (including fractional
share interests to the extent practicable) held in their Plan accounts on the
record date established for determining shareholders who are entitled to such
rights.
25. HOW WILL A PARTICIPANT'S SHARES BE VOTED AT MEETINGS OF SHAREHOLDERS?
BB&T will forward, as soon as practicable, any proxy solicitation materials
to the Participant. BB&T will vote any full and/or fractional shares of Common
Stock that it holds for the Participant's account in accordance with the
Participant's directions. If a Participant does not return a signed proxy to
BB&T, BB&T will not vote such shares.
26. WHAT IS THE RESPONSIBILITY OF THE COMPANY AND THE PLAN ADMINISTRATOR UNDER
THE PLAN?
Neither the Company nor BB&T will be liable for any act done in good faith
or for any good faith omission to act, including, without limitation, any claims
of liability arising out of failure to terminate a Participant's account upon
such Participant's death or adjudicated incompetency prior to the receipt of
notice in writing of such death or adjudicated incompetency, the prices at which
shares are purchased for the Participant's account, the times when purchases are
made or fluctuations in the market value of the Common Stock. Neither the
Company nor BB&T has any duties, responsibilities or liabilities except those
expressly set forth in the Plan.
THE PARTICIPANT SHOULD RECOGNIZE THAT THE COMPANY CANNOT ASSURE A PROFIT OR
PROTECT AGAINST A LOSS ON THE SHARES PURCHASED BY A PARTICIPANT UNDER THE PLAN.
27. MAY THE PLAN BE CHANGED OR DISCONTINUED?
While the Plan is intended to continue indefinitely, the Company reserves
the right to suspend or terminate the Plan at any time. The Company also
reserves the right to make modifications to the Plan. Notice of such suspension,
termination or modification will be sent to all Participants.
The Company intends to use its best efforts to maintain the effectiveness
of the Registration Statement filed with the Commission covering the offer and
sale of Common Stock under the Plan. However, the Company has no obligation to
offer, issue or sell Common Stock to Participants under the Plan if, at the time
of the offer, issuance or sale, such Registration Statement is for any reason
not effective. Also, the Company may elect not to offer or sell Common Stock
under the Plan to participants residing in any jurisdiction or foreign country
where, in the judgment of the Company, the burden or expense of compliance with
applicable blue sky or securities laws makes such offer or sale there
impracticable or inadvisable. In any of these
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circumstances, dividends, if, as and when declared, will be paid in the usual
manner to the shareholders and any optional cash payments received from such
shareholder will be returned to him.
28. CAN CHECKS BE WRITTEN AGAINST THE PARTICIPANT'S ACCOUNT?
No. A Participant may not draw checks or drafts against a Plan account.
USE OF PROCEEDS
The net proceeds from the sale of original issue shares of Common Stock
issued under the Plan will be used to increase working capital and for other
general purposes. The Company has no basis for estimating either the number of
shares of Common Stock that ultimately will be sold pursuant to the Plan or
prices at which such shares will be sold.
The Company will not receive any funds under the Plan from the purchase of
shares of Common Stock in the open market by BB&T.
EXPERTS
The consolidated balance sheets of Winston Hotels as of December 31, 1999
and 1998 and the consolidated statements of income, shareholders' equity and
cash flows for the years ended December 31, 1999, 1998 and 1997 and the
financial statement schedule as of December 31, 1999 and the Winston
Hospitality, Inc. statement of income, shareholders' equity and cash flows for
the ten months ended October 31, 1997 incorporated in this prospectus by
reference to our Annual Report on Form 10-K for the year ended December 31,
1999, have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing. The balance sheets of CapStar
Winston Company, L.L.C. as of December 31, 1999 and 1998 and the related
statements of operations, members' capital and cash flows for the years ended
December 31, 1999 and 1998 and the period from October 15, 1997 (date of
inception) through December 31, 1997 incorporated by reference in this
prospectus, have been incorporated herein in reliance on the report of KPMG LLP,
independent auditors, given on the authority of that firm as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the shares of Common Stock offered pursuant to this
Prospectus has been passed upon for the Company by King & Spalding, Atlanta,
Georgia. King & Spalding has relied on the opinion of Smith, Anderson, Blount,
Dorsett, Mitchell & Jernigan, L.L.P. with respect to all matters involving North
Carolina law.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK, IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN
ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
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TABLE OF CONTENTS
PAGE
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Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 3
Cautionary Statement Concerning
Forward Looking Information......... 3
The Company........................... 4
Description of the Plan............... 5
Use of Proceeds....................... 14
Experts............................... 14
Legal Matters......................... 14
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WINSTON HOTELS, INC.
COMMON STOCK
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PROSPECTUS
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JUNE 14, 2000
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