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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-K/A
(AMENDMENT NO. 1)
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Year Ended December 31, 1997
BRISTOL HOTEL COMPANY
14295 Midway Road
Dallas, Texas 75244
972-391-3910
Commission File No. 1-14062
Incorporated in Delaware IRS No. 75-2584227
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Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
Common Stock, Par Value $.01 per share New York Stock Exchange
------------
The Company (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90 days.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
required and will not be contained in a definitive proxy statement incorporated
by reference in Part III of this Form 10-K.
The aggregate market value of the voting stock held by non-affiliates of
the Company at April 22, 1998 was $317,937,740. Such computation excludes
11,885,523 shares held by the Company's two largest shareholders, directors and
executive officers. At April 22, 1998, there were 43,806,401 shares of Common
Stock outstanding.
Documents incorporated by reference: None
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PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The management of Bristol Hotel Company (the "Company" or "Bristol") is under
the direction of the Bristol Board of Directors (the "Bristol Board"). Each
director is elected to serve until his or her successor is elected and
qualified. Set forth below is certain information regarding the directors and
executive officers of Bristol.
<TABLE>
<CAPTION>
Year Elected
Name and Position Director
----------------- -------------
<S> <C>
J. Peter Kline
Chief Executive Officer, President and Director.......................................1995
John A. Beckert
Chief Operating Officer, Executive Vice President and Director........................1995
Reginald K. Brack, Jr.
Director..............................................................................1997
David A. Dittman
Director..............................................................................1995
Craig H. Hunt
Director..............................................................................1997
Robert H. Lutz, Jr.
Director..............................................................................1995
Donald J. McNamara
Chairman of the Board and Director....................................................1994
Richard C. North
Director..............................................................................1997
Kurt C. Read
Director..............................................................................1997
</TABLE>
J. Peter Kline, 50, has been a director of the Company since February 1995.
Since 1981, Mr. Kline has been the President and Chief Executive Officer of the
Company (and its predecessor, Harvey Hotel Companies).
John A. Beckert, 44, has been a director of the Company since February 1995.
Since 1981, Mr. Beckert has been the Chief Operating Officer and Executive Vice
President of the Company (and its predecessor, Harvey Hotel Companies). Mr.
Beckert is the brother of Richard N. Beckert, the Senior Vice President,
Administration of the Company.
Reginald K. Brack, Jr., 60, has been a director of the Company since May 1997.
Since July 1997, Mr. Brack has been the Chairman Emeritus of Time, Inc. Prior to
such period, Mr. Brack was the Chairman and Chief Executive Officer of Time,
Inc. from December 1986 to July 1997.
David A. Dittman, 52, has been a director of the Company since December 1995.
Since 1990, Mr. Dittman has been the Dean of the Cornell University School of
Hotel Administration and an E.M. Statler Professor.
Craig H. Hunt, 45, has been a director of the Company since April 1997. Mr. Hunt
has been President of Holiday Inn Hotels and Suites since 1997, and a member of
the Holiday Hospitality Corporation Board of Directors since 1990. During 1996
and 1997, Mr. Hunt was the President of Americas Franchise Division of Holiday
Inns. Prior to 1996, he served as Senior Vice President and Chief Operating
Officer for Company Managed Hotels -- Americas, and Senior Vice President and
managing director for the United States, Caribbean and Latin American Region of
Holiday Inn International.
Robert H. Lutz, Jr., 48, has been a director of the Company since December 1995.
Since 1994, Mr. Lutz has
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been the Chairman and Chief Executive Officer, and is a member of the executive
committee, of Amresco, Inc., a financial services company. From 1991 to 1994,
Mr. Lutz served as President and Chief Operating Officer of Balcor/Allegiance
Realty Group, a subsidiary of American Express Company engaged in real estate
ownership and management.
Donald J. McNamara, 45, has been Chairman of the Board since November 1994. Mr.
McNamara has been the Chairman and Co-Chief Executive Officer of The Hampstead
Group, L.L.C. ("Hampstead"), a privately held real estate investment company and
an affiliate of United/Harvey Holdings, L.P. ("Holdings") since the founding of
the firm in 1988. Mr. McNamara also is a director of Catellus Development
Corporation. Mr. McNamara also served on the FelCor Suite Hotels, Inc. board of
directors from July 1994 until November 1997.
Richard C. North, 48, has been a director of the Company since 1997. Mr. North
has been the Group Finance Director of Bass plc since 1994. Prior to 1994, Mr.
North served as the Group Finance Director of The Burton Group.
Kurt C. Read, 35, has been a director of the Company since April 1997. Mr. Read
has been a Senior Vice President of Hampstead since 1989.
Jeffrey P. Mayer, 41, has been Senior Vice President and Chief Financial Officer
of the Company since January, 1996. Prior to joining the Company, Mr. Mayer
served as Senior Vice President, Corporate Controller and Chief Accounting
Officer of Host Marriott Corporation (formerly Marriott Corporation)
("Marriott") from 1993 to 1996, as Vice President - Project Finance of Marriott
from 1991 to 1993 and in various positions with Marriott's finance department
from 1986 to 1991. Prior to joining Marriott, Mr. Mayer was Audit Manager with
Arthur Andersen & Company in Atlanta, GA.
Robert L. Miars, 48, has been Senior Vice President - Design, Construction &
Engineering of the Company since February 1995. Prior to joining the Company,
Mr. Miars was President of Huie Miars Custom Homes from 1989 to February 1995
and President of Huie Miars Construction Company from 1989 to 1995.
Edward J. Rohling, 43, was Senior Vice President - Corporate Development at his
departure from the Company on March 15, 1998. Mr. Rohling served in other senior
management positions with the Company (and its predecessor, Harvey Hotel
Companies) from 1988 to 1996.
Pursuant to a stockholders' agreement, each of Holiday Corporation and Bass
America, Inc., as a group (the "Bass Entities"), and Holdings has agreed to vote
its Bristol Common Shares and take all other necessary actions in order to
ensure that the Bristol Board is comprised of three persons designated by
Holdings, three persons designated by the Bass Entities, and Messrs. Kline and
Beckert and one person designated by Messrs. Kline and Beckert. By a separate
agreement, Messrs. Kline and Beckert have agreed to vote for the designees of
Holdings and the Bass Entities. One of the three directors to be designated by
each of Holdings and the Bass Entities, and the director designated by Messrs.
Kline and Beckert, must be an Outside Director. For this purpose, an "Outside
Director" is a Director who is not an employee, executive officer or affiliate
of Bristol, the Bass Entities or Holdings and who is not an associate of a
business primarily engaged in operating, managing or developing Mid-Scale
Lodging Facilities and who qualifies as an "independent director" within the
meaning of the NYSE Listed Company Manual. A "Mid-Scale Lodging Facility" is a
full-service lodging facility providing a degree of sophistication and
full-service amenities and facilities which (i) are of a type and standard
generally consistent with hotels operated as Holiday Inn hotels, (ii) do not
primarily offer suites, (iii) are not designed to accommodate extended stays,
and (iv) do not generally compete as upscale or economy hotels.
Holdings has designated Donald J. McNamara, Kurt C. Read and Robert H. Lutz, Jr.
(Outside Director) as its designees; Messrs. Kline and Beckert have designated
David A. Dittman as their Outside Director designee; and the Bass Entities have
designated Richard C. North, Reginald K. Brack, Jr. (Outside Director) and Craig
H. Hunt as their designees. Pursuant to a separate agreement, Bass plc has
agreed to cause the directors designated by the Bass Entities to vote for Donald
J. McNamara to serve as Chairman of the Board so long as he is a director of the
Company.
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ITEM 11. EXECUTIVE COMPENSATION.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the compensation
paid to the Company's chief executive officer and each of the four other most
highly compensated executive officers of the Company (the "Named Executive
Officers") who earned at least $100,000 in total salary and bonus in 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Securities All Other
Name and Principle Position Year Salary Bonus (1) Options (2) Compensation (3)
- ------------------------------------- ---- --------- --------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
J. Peter Kline ...................... 1997 $457,307 $ 91,461 30,000 $ 4,750
President and Chief Executive Officer 1996 $250,502 $ 69,350 -- --
1995 $231,353 $ 87,183 225,000 $ 2,073
John A. Beckert ..................... 1997 $457,307 $ 91,461 30,000 $ 4,750
Chief Operating Officer and ......... 1996 $250,502 $ 69,350 -- --
Executive Vice President ............ 1995 $231,353 $ 79,724 225,000 $ 2,072
Jeffery P. Mayer (4) ............... 1997 $257,115 $ 51,423 25,000 $ 44,723
Senior Vice President and ........... 1996 $188,159 $ 56,448 195,000 $ 46,633
Chief Financial Officer ............. 1995 -- -- -- --
Edward J. Rohling ................... 1997 $232,404 $ 46,481 -- $ 3,567
Senior Vice President, Corporate .... 1996 $199,541 $ 55,480 30,000 --
Development ........................ 1995 $163,576 $ 82,922 216,000 $ 2,088
Robert L. Miars ..................... 1997 $229,604 $ 68,881 20,000 $ 4,750
Senior Vice President, .............. 1996 $144,503 $120,515 15,000 --
Construction and Design ............. 1995 $126,422 $ 74,282 49,500 --
</TABLE>
(1) The bonus amounts for all years are based on amounts earned during the
calendar year regardless of when paid.
(2) Reflects options to acquire shares of Bristol Common Stock granted
pursuant to the Company's 1995 Equity Incentive Plan, adjusted to
reflect the 1997 three-for-two stock split (the "Stock Split").
(3) Consists entirely of contributions by the Company to Bristol's 401(k)
plan except for Mr. Mayer, whose 1997 other compensation consists of
$3,462 of contributions to the Company's 401(k) plan and $41,261 for
relocation expenses. Mr. Mayer's 1996 other compensation consists
entirely of relocation expenses.
(4) Mr. Mayer joined the Company in January 1996.
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STOCK OPTION GRANTS
The following table sets forth certain information with respect to options
granted to the Named Executive Officers during 1997.
OPTION GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (1)
OPTIONS EMPLOYEES OR EXPIRATION -------------------------
NAME GRANTED IN 1997 BASE PRICE DATE 5% 10%
---- ------- ------- ---------- ---- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. Peter Kline..................... 30,000 6.09% $ 26.00 2007 $ 490,538 $ 1,243,119
John A. Beckert.................... 30,000 6.09 26.00 2007 490,538 1,243,119
Jeffrey P. Mayer................... 25,000 5.07 26.00 2007 408,782 1,035,933
Edward J. Rohling.................. - - - - - -
Robert L. Miars.................... 20,000 4.06 26.00 2007 327,025 828,746
</TABLE>
(1) The potential realizable value portion of the foregoing table
illustrates value that might be realized upon exercise of the options
immediately prior to the expiration of their term, assuming the
specified compounded rates of appreciation on Bristol Common Stock over
the term of the options. These numbers do not take into account
provisions of certain options providing termination of the option
following termination of employment, nontransferability or vesting over
periods. The use of the assumed 5% and 10% returns is established by
the Securities and Exchange Commission (the "Commission") and is not
intended by the Company to forecast possible future appreciation of the
price of Bristol Common Stock.
Each of the aforementioned options becomes exercisable over a four year period,
with 25% of the total number of shares covered thereby becoming exercisable on
each of the first four anniversaries of the date of grant, and expires on the
tenth anniversary of the date of grant.
The following table sets forth certain information with respect to options held
at December 31, 1997 by the Named Executive Officers.
OPTION VALUES AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
Securities Underlying Value of Unexercised
Unexercised Options in-the-Money Options
at December 31, 1997 (1) at December 31, 1997 (2)
----------------------------- ----------------------------
Name Unexercisable Exercisable Unexercisable Exercisable
---- ------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
J. Peter Kline.......................... 255,000 - $ 4,756,013 $ -
John A. Beckert......................... 255,000 - 4,756,013 -
Jeffrey P. Mayer........................ 181,000 39,000 2,331,885 563,831
Edward J. Rohling....................... 240,000 6,000 4,749,480 67,977
Robert L. Miars ...................... 81,500 3,000 1,223,314 33,989
</TABLE>
(1) This represents the total number of shares subject to stock options
held by the Named Executive Officers at December 31, 1997. These
options were granted on various dates during the years 1995 through
1997.
(2) The closing price per share of Bristol Common Stock as reported in the
New York Stock Exchange (the "NYSE") Composite Transactions Report on
December 31, 1997 was $29.0625. Value is calculated on the basis of the
difference between the option exercise price and $29.0625 multiplied by
the number of shares of Bristol Common Stock covered by the option.
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COMPENSATION PLANS AND ARRANGEMENTS
Director Compensation
Each director who is not a full-time employee of the Company or an employee of
an affiliate of Bristol is granted annually a non-qualified option to purchase
7,500 Bristol Common Shares at an exercise price equal to the market price of
the Bristol Common Shares at the close of business on the date of grant.
Directors are also reimbursed for their out-of-pocket expenses incurred in
connection with their attendance at meetings of the Bristol Board and committees
of the Bristol Board and other activities relating to their position as a
director.
Management Bonus Plan
The Company's Management Bonus Plan provides key management employees of the
Company with cash bonuses based upon the achievement of specified targets and
goals for the Company and for the particular employees. Each officer of the
Company is eligible to receive annual bonus awards based on the achievement of
performance criteria, as well as personal criteria, established by the
Compensation Committee.
401(k) Plan
Bristol maintains and offers to its employees and executive officers a profit
sharing plan with a 401(k) feature (the "Bristol 401(k) Plan"). Eligible
employees may contribute to the Bristol 401(k) Plan through salary deferral
elections of not less than 1% nor more than 16% of their salary. The Company
makes matching contributions of $.50 for each dollar contributed, up to 6% of a
participant's salary. The Bristol Board may in its sole discretion grant
additional matching contributions, subject to statutory limitations.
Contributions by participants are 100% vested and contributions by the Company
vest over a period of years, becoming fully vested after five years of
continuous employment. The Bristol 401(k) Plan is intended to qualify under
Section 401 of the Code so that contributions by participants or by the Company
to the Bristol 401(k) Plan, and income earned on such contributions, are not
taxable to the participants until withdrawn from the Bristol 401(k) Plan.
Incentive Plan
The Bristol Incentive Plan is designed to attract and retain qualified officers
and other key employees of the Company. The Bristol Incentive Plan authorizes
the grant of options to purchase Bristol Common Shares, stock appreciation
rights, restricted shares, deferred shares, performance shares and performance
units. The Compensation Committee administers the Bristol Incentive Plan and
determines to whom awards are to be granted, as well as the number of shares,
the exercise period and other terms and conditions of a particular grant.
As of December 31, 1997, there were outstanding options granted under the
Bristol Incentive Plan to purchase an aggregate of 2,069,441 Bristol Common
Shares. These options generally vest over four or five years from the date of
grant, with certain options becoming fully vested upon specified anniversary's
from the date of grant.
Employment Agreements
Messrs. Kline and Beckert have entered into employment agreements with Bristol
that expire in 2001 and provide for the payment of an annual base salary of at
least $450,000. Messrs. Kline and Beckert are also eligible to receive future
grants of stock-based incentive awards and other benefits provided to senior
executives of Bristol, including bonuses of up to 50% of base pay.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
Mr. North is a member of the Company's Compensation Committee of the Board of
Directors. The Company paid fees to subsidiaries of Bass plc, of which Mr. North
is Group Finance Director. In 1997, the Company paid $21.8 million pursuant to
franchise agreements and for related marketing, advertising and reservation
services, and $1.3 million pursuant to an Interim Services Agreement. These
agreements are more fully described in Item 13. Certain Relationships and
Related Transactions.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Bristol Common Stock, as of the close of business on March 31, 1998
by (i) each person known to the Company to own beneficially more than 5% of the
Bristol Common Stock, (ii) each director and Named Executive Officer of the
Company, and (iii) all directors and executive officers of the Company as a
group. Except as otherwise indicated, the address for each of the individuals
named in the table is 14295 Midway Road, Dallas, Texas 75244. For purposes of
the table, a person or group of persons is deemed to have "beneficial ownership"
of any shares as of a given date which such person has the right to acquire
within 60 days after such date.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------------------------
Number of Percentage of
Shares Owned Outstanding Shares(1)
------------- ---------------------
<S> <C> <C>
United/Harvey Holdings, L.P.(2) ........... 14,059,677 31.08%
4200 Texas Commerce Tower W
2200 Ross Avenue
Dallas, Texas 75201
Bass plc (3) .............................. 14,041,962 31.04%
20 North Audley Street
London, W1Y1WE
Baron Capital (4) ......................... 5,384,200 11.90%
767 Fifth Avenue, 24th Floor
New York, New York 10153
Cohen & Steers Capital Management, Inc. (5) 2,438,500 5.39%
757 Third Avenue
New York, New York 10017
J. Peter Kline (6) ........................ 1,343,601 2.97%
Robert L. Miars (7) ....................... 977,154 2.16%
John A. Beckert (6) ....................... 848,604 1.88%
Edward J. Rohling (8) ..................... 382,260 *
Jeffrey P. Mayer (9) ...................... 69,000 *
David A. Dittman (10) ..................... 22,500 *
Robert H. Lutz, Jr. (10) .................. 22,500 *
Reginald K. Brack, Jr. (11) ............... 9,600 *
Donald J. McNamara (12) ................... -- --
Craig H. Hunt ............................. -- --
Richard C. North .......................... -- --
Kurt C. Read .............................. -- --
All directors and executive officers
as a group (14 persons)................... 4,014,479 8.88%
</TABLE>
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (CONTINUED)
Legend:
* Less than 1%
(1) Assumes issuance of 1,428,571 shares as partial consideration for the
acquisition of 20 Midwestern hotels (the "Omaha Acquisition"). Total
consideration for the Omaha Acquisition is $19.1 million in cash,
$40.9 million of assumed debt and 1,428,571 shares of Bristol Common
Stock. The Omaha Acquisition is expected to close April 30, 1998.
(2) Includes 1,342,791 shares which may be purchased from Mr. Huie upon
exercise of Holdings' portion of a call option.
(3) Bass America, Inc. owns 10,455,033 Bristol shares, which represents
23.11% of outstanding Bristol shares, and Holiday Corporation owns
3,586,929 Bristol shares which represents 7.93% of outstanding
Bristol shares. Both corporations are subsidiaries of Bass plc.
(4) As reported in a Schedule 13 G/A filed with the Commission February
13, 1998.
(5) As reported in a Schedule 13 G/A filed with the Commission February
12, 1998.
(6) Includes 150,000 shares which Messrs. Kline and Beckert each have the
right to acquire through the exercise of options.
(7) Includes 3,000 shares which Mr. Miars has the right to acquire
through the exercise of options.
(8) Mr. Rohling left the Company March 15, 1998.
(9) Includes 69,000 shares which Mr. Mayer has the right to acquire
through the exercise of options.
(10) Includes 22,500 shares which Messrs. Dittman and Lutz each have the
right to acquire through the exercise of options, including 7,500
shares which Messrs. Dittman and Lutz will each have the right to
acquire after the 1998 Annual Meeting.
(11) Includes 7,500 shares which Mr. Brack has the right to acquire after
the 1998 Annual Meeting through the exercise of options.
(12) Mr. McNamara is the founder and Co-Chief Executive Officer of
Hampstead. Holdings and its general partner were formed by Hampstead.
The limited partners of Holdings include entities affiliated with
Hampstead and certain unaffiliated institutional investors, none of
which has the right to direct the management of the business of
Holdings. However, by virtue of the foregoing relationships, Mr.
McNamara may be deemed to beneficially own the shares of Bristol
Common Stock owned by Holdings. Mr. McNamara disclaims beneficial
ownership of all shares owned by Holdings and, accordingly, such
shares are not shown in the table as being beneficially owned by him.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
HOTEL PROPERTIES AGREEMENT
In April 1997, Bristol and Holiday Corporation and its affiliates (collectively,
the "Holiday Entities") entered into a hotel properties agreement (the "Hotel
Properties Agreement") pursuant to which Bristol agreed to offer to the Holiday
Entities the opportunity to enter into a standard Holiday franchise agreement
for each hotel that Bristol acquires, manages or develops that meets specified
criteria. The Hotel Properties Agreement requires that 85% of the rooms in
Bristol's owned, leased and managed hotel portfolio be operated under a Holiday
Inn brand, subject to certain limitations and approvals.
In April 1997, Bristol also agreed to enter into franchise agreements with
Holiday Hospitality pursuant to which certain Bristol properties will be
rebranded to Holiday Hospitality brands, subject to normal franchising
procedures. Franchise fees for these rebranded hotels will equal 1% of room
revenue in 1998, 3% in 1999 and 5% in 2000. Amounts paid to the Holiday Entities
pursuant to franchise agreements and related marketing, advertising and
reservation services were $21.8 million in 1997, including $13.1 million as
franchise royalty fees and $4.5 million as franchise marketing fees.
As of April 1, 1998, Bass plc, through its subsidiaries Bass America, Inc. and
Holiday Corporation, owned approximately 31% of the Bristol Common Shares.
Richard C. North, Craig H. Hunt and Reginald K. Brack, Jr. serve as designees of
the Bass Entities on the Bristol Board.
INTERIM SERVICES AGREEMENT
In April 1997, Bristol entered into an interim services agreement with Holiday
Hospitality pursuant to which Holiday Hospitality agreed to continue to provide
certain accounting, payroll, and employee benefit services to Bristol during the
transition period following the Holiday Inn Acquisition. Bristol reimbursed
Holiday Hospitality $1.3 million for the estimated costs incurred in providing
such services during 1997. This agreement terminated in October 1997.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Company has duly caused this Form 10-K/A to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 29th day of April, 1998.
BRISTOL HOTEL COMPANY
BY: /s/ John D. Bailey
--------------------------------
John D. Bailey
Vice President, Controller and
Chief Accounting Officer
9
