SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CNL Hospitality Properties, Inc.
(formerly known as CNL American Realty Fund, Inc.)
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ]Fee paid previously with preliminary materials.
[ ]Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, of
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
P R O X Y CNL HOSPITALITY PROPERTIES, INC.
(formerly known as CNL American Realty Fund, Inc.)
The undersigned hereby appoints James M. Seneff, Jr. and Robert A. Bourne,
and each of them, as proxies, with full power of substitution in each, to vote
all shares of common stock of CNL Hospitality Properties, Inc. (formerly known
as CNL American Realty Fund, Inc.) (the "Company") which the undersigned is
entitled to vote, at the Annual Meeting of Stockholders of the Company to be
held on May 12, 1999, at 10:00 a.m., local time, and any adjournment thereof, on
all matters set forth in the Notice of Annual Meeting and Proxy Statement, dated
March 29, 1999, a copy of which has been received by the undersigned, as
follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING ITEMS:
<TABLE>
<CAPTION>
<S> <C>
1. Election of Seven Directors
--------------------------------------------------------
Nominees: |_| FOR ALL |_| WITHHELD FOR ALL |_| FOR ALL NOMINEES, EXCEPT VOTE WITHHELD FOR:
Charles E. Adams (Write that nominee's name above)
Robert A. Bourne
Lawrence A. Dustin
John A. Griswold
Matthew W. Kaplan
Craig M. McAllaster
James M. Seneff, Jr.
</TABLE>
2. Proposal to expand the class of investors for whom the Board of Directors
is authorized to waive the common and preferred share ownership limitations
under certain circumstances (See Proxy Statement page 11)
|_| FOR |_| AGAINST |_| ABSTAIN
3. Other Matters:
Grant authority upon such other matters as may come before the Meeting as
they determine to be in the best interest of the Company.
|_| FOR |_| AGAINST |_| ABSTAIN
(PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE,
AND RETURN IN ENCLOSED ENVELOPE)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
IF YOU SIGN, DATE AND MAIL YOUR PROXY WITHOUT INDICATING HOW YOU WANT TO VOTE,
YOUR PROXY WILL BE COUNTED AS A VOTE "FOR" THE MATTERS STATED. IF YOU FAIL TO
RETURN YOUR PROXY, YOUR PROXY WILL NOT BE COUNTED. EACH STOCKHOLDER IS URGED TO
SUBMIT A SIGNED AND DATED PROXY.
Dated: __________________, 1999
_______________________________
_______________________________
Signature(s) of Stockholder(s)
IMPORTANT: Please mark this
Proxy, date it, sign it
exactly as your name(s)
appear(s) and return it in the
enclosed postage paid
envelope. Joint owners should
each sign personally.
Trustees and others signing in
a representative or fiduciary
capacity should indicate their
full titles in such capacity.
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
(formerly known as CNL American Realty Fund, Inc.)
400 East South Street
Orlando, Florida 32801
March 29, 1999
To our Stockholders:
You are cordially invited to attend the annual meeting of stockholders
of CNL Hospitality Properties, Inc. (formerly known as CNL American Realty Fund,
Inc.) (the "Company") on May 12, 1999 at 10:00 a.m. at the CNL Management Center
at 450 E. South Street, Suite 101, Orlando, Florida. The directors and officers
of the Company look forward to greeting you personally. Enclosed for your review
are the proxy, proxy statement, notice of meeting for the annual meeting of
stockholders and annual report.
This year's proxy requests your vote on a proposal to expand the class
of investors for whom the Board of Directors is authorized, under certain
circumstances, to waive the common and preferred share ownership limitation and
to vote for the election of directors. The proposal for expansion of the class
of investors reflects the Board's desire to provide better investment
opportunities for the Company in the context of its business. Therefore, the
Board of Directors unanimously recommends that you vote to approve the proposals
presented in this year's proxy statement. Your vote counts. Please complete and
return the attached ballot today. Thank you for your attention to this matter.
Sincerely,
/s/ James M. Seneff, Jr. /s/ Robert A. Bourne
- -------------------------- ------------------------
James M. Seneff, Jr. Robert A. Bourne
Chairman of the Board and President
Chief Executive Officer
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
(formerly known as CNL American Realty Fund, Inc.)
400 East South Street
Orlando, Florida 32801
Notice of Annual Meeting of Stockholders
To Be Held May 12, 1999
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of CNL
HOSPITALITY PROPERTIES, INC. (formerly known as CNL American Realty Fund, Inc.)
(the "Company") will be held at 10:00 a.m. local time, on May 12, 1999, at the
CNL Management Center at 450 E. South Street, Suite 101, Orlando, Florida, for
the following purposes:
1. To elect seven directors.
2. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation (the "Articles") expanding the class
of investors for whom the Board of Directors can waive, under
certain circumstances, the common and preferred share
ownership limitations contained in the Company's Articles.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on March 12 ,
1999, will be entitled to notice of and to vote at the annual meeting or at any
adjournment thereof.
Stockholders are cordially invited to attend the meeting in person.
WHETHER OR NOT YOU NOW PLAN TO ATTEND THE MEETING, YOU ARE ASKED TO
COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY FOR WHICH A POSTAGE
PAID RETURN ENVELOPE IS PROVIDED. IT IS IMPORTANT THAT YOUR SHARES BE VOTED. IF
YOU DECIDE TO ATTEND THE MEETING YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES
IN PERSON.
By Order of the Board of Directors,
Lynn E. Rose
Secretary
March 29, 1999
Orlando, Florida
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
(formerly known as CNL American Realty Fund, Inc.)
400 East South Street
Orlando, Florida 32801
PROXY STATEMENT
This proxy statement is furnished by the Board of Directors of CNL
Hospitality Properties, Inc. (formerly known as CNL American Realty Fund, Inc.)
(the "Company") in connection with the solicitation by management of proxies to
be voted at the annual meeting of stockholders to be held on May 12, 1999, and
at any adjournment thereof, for the purposes set forth in the accompanying
notice of such meeting. All stockholders of record at the close of business on
March 12 , 1999, will be entitled to vote.
Any proxy, if received in time, properly signed and not revoked, will be
voted at such meeting in accordance with the directions of the stockholder. If
no directions are specified, the proxy will be voted FOR each Proposal set forth
in this proxy statement. Any stockholder giving a proxy has the power to revoke
it at any time before it is exercised. A proxy may be revoked (1) by delivery of
a written statement to the Secretary of the Company stating that the proxy is
revoked, (2) by presentation at the annual meeting of a subsequent proxy
executed by the person executing the prior proxy, or (3) by attendance at the
annual meeting and voting in person.
Votes cast in person or by proxy at the annual meeting will be tabulated
and a determination will be made as to whether or not a quorum is present. The
Company will treat abstentions as shares that are present and entitled to vote
for purposes of determining the presence or absence of a quorum, but as unvoted
for purposes of determining the approval of any matter submitted to the
stockholders. If a broker submits a proxy indicating that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with respect
to such matter.
Solicitation of proxies will be primarily by mail. However, directors and
officers of the Company also may solicit proxies by telephone or telegram or in
person. All of the expenses of preparing, assembling, printing and mailing the
materials used in the solicitation of proxies will be paid by the Company.
Arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to forward soliciting materials, at the expense of the Company,
to the beneficial owners of shares held of record by such persons. In addition,
the Company has engaged D.F. King, a professional proxy solicitation firm, to
aid in the solicitation of proxies at a fee of approximately $5,000, plus
reimbursement of reasonable out-of-pocket costs and expenses. The Company has
agreed to indemnify D.F. King against certain liabilities that it may incur
arising out of the services it provides in connection with the annual meeting of
stockholders. It is anticipated that this proxy statement and the enclosed proxy
first will be mailed to stockholders on or about March 29, 1999.
As of March 12, 1999, 8,000,575 shares of common stock of the Company were
outstanding. Each share of common stock entitles the holder thereof to one vote
on each of the matters to be voted upon at the annual meeting. As of the record
date, officers and directors of the Company had the power to vote approximately
7.64% of the outstanding shares of common stock.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
PROPOSAL I: Election of Directors.............................................................. 3
Executive Compensation............................................................. 9
Performance Comparison............................................................. 10
PROPOSAL II: Amendment to the Company's Amended and Restated Articles
of Incorporation to Increase the Common and Preferred Share
Ownership Limit................................................................ 11
SECURITY OWNERSHIP............................................................................................ 13
CERTAIN TRANSACTIONS.......................................................................................... 15
INDEPENDENT AUDITORS.......................................................................................... 16
OTHER MATTERS................................................................................................. 16
PROPOSALS FOR NEXT ANNUAL MEETING............................................................................. 16
ANNUAL REPORT................................................................................................. 16
</TABLE>
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
Background
As a result of recent developments, the Board of Directors is now comprised
of seven, rather than five individuals, all but two of whom have been on the
Board of Directors for a limited period of time. These changes have occurred as
a result of two developments.
Change in Independent Directors. In February 1999, the Company's then
existing three independent directors, G. Richard Hostetter, J. Joseph Kruse and
Richard C. Huseman, determined that it would be in the best interests of the
Company that they resign as directors, in order to mitigate certain perceived
conflicts of interest with CNL American Properties Fund, Inc., for which they
also serve as independent directors. So that a majority of the Board of
Directors would continue to be comprised of independent directors, the Board of
Directors appointed Charles E. Adams, John A. Griswold and Craig M. McAllaster
to the Board to serve on an interim basis until the upcoming annual meeting of
stockholders. Each of Messrs. Adams, Griswold and McAllaster were subsequently
nominated by the Board of Directors for election at the upcoming annual meeting.
Joint Investment by the Company and Five Arrows. In February 1999, the
Company executed a series of agreements with Five Arrows Realty Securities II
L.L.C. ("Five Arrows"), pursuant to which the Company and Five Arrows formed a
jointly-owned real estate investment trust, CNL Hotel Investors, Inc. ("Hotel
Investors"), for the purpose of acquiring up to eight hotels from various
sellers affiliated with Western International (the "Hotels").
Five Arrows has committed to invest up to $65.9 million towards the
purchase of the Hotels, including $50.9 million in Hotel Investors and $15
million through the purchase of the Company's common stock, the proceeds of
which will be used to partially fund the Company's investment in Hotel
Investors. If all eight Hotels are purchased, the aggregate purchase price to
Hotel Investors will be approximately $184 million.
To date, Hotel Investors has purchased four of the eight Hotels for an
aggregate purchase price of approximately $90.5 million (the "Initial Hotels").
As a result of these purchases, Five Arrows has funded $31.5 million of its
$50.9 million commitment to Hotel Investors and purchased 590,770 shares of the
Company's common stock.
In recognition of the significant investment commitment made by Five
Arrows, pursuant to the transaction documents, Five Arrows can nominate one
member to the Company's Board of Directors. Accordingly, in connection with the
closing on the Initial Hotels, Matthew W. Kaplan was nominated by Five Arrows
and appointed to the Company's Board of Directors. So that a majority of the
Board of Directors would continue to be comprised of independent directors,
Lawrence A. Dustin was appointed to the Board of Directors at the same time as
an additional independent director. Both Mr. Kaplan and Mr. Dustin were
appointed on an interim basis to serve until the upcoming annual meeting of
stockholders, and were subsequently nominated by the Board of Directors for
election at the upcoming annual meeting.
Nominees
The persons named below have been nominated by the Board of Directors for
election as directors to serve until the next annual meeting of stockholders or
until their successors shall have been elected and qualified. Messrs. Bourne and
Seneff have been directors since June 1996. As discussed above, Messrs. Adams,
Dustin, Griswold, Kaplan and McAllaster have served as directors since early
1999. The table sets forth each nominee's name, age, principal occupation or
employment during at least the last five years, and directorships in other
public corporations.
The Company's officers and directors have advised the Company that they
intend to vote their shares of common stock for the election of each of the
nominees. Proxies will be voted FOR the election of the following nominees
unless authority is withheld.
<PAGE>
Name and Age Background
Charles E. Adams, 36 Mr. Adams is
currently the president and a founding
principal with Celebration Associates,
Inc., a real estate advisory and
development firm with offices in
Celebration, Florida and Charlotte,
North Carolina. Celebration Associates
specializes in large-scale master
planned communities, seniors housing and
specialty commercial developments. Mr.
Adams joined The Walt Disney Company in
1990 and from 1996 until May 1997 served
as vice president of community business
development for The Celebration Company
and Walt Disney Imagineering. He was
responsible for Celebration Education,
Celebration Network, Celebration Health
and Celebration Foundation, as well as
New Business Development, Strategic
Alliances, Retail Sales and Leasing,
Commercial Sales and Leasing, the
development of Little Lake Bryan and
Celebration. Previously, Mr. Adams was
responsible for the initial residential,
amenity, sales and marketing, consumer
research and master planning efforts for
Celebration. Additionally, Mr. Adams
participated in the planning for
residential development at EuroDisney in
Paris, France. He was a founding member
of the Celebration School Board of
Trustees and served as president and
founding member of the Celebration
Foundation Board of Directors. Mr. Adams
is a founding member of the Health Magic
Steering Committee and council member on
the Recreation Development Council for
the Urban Land Institute. Before joining
The Walt Disney Company in 1990, Mr.
Adams worked with Trammell Crow
Residential developing luxury apartment
communities in the Orlando and
Jacksonville, Florida areas. Mr. Adams
received a B.A. from Northeast Louisiana
University in 1984 and a M.B.A. from
Harvard Graduate School of Business in
1989.
Robert A. Bourne, 51 Mr. Bourne has
served as President and a director of
the Company since June 1996 and as
President and a director of CNL
Hospitality Advisors, Inc., the
Company's advisor (the "Advisor") since
its inception in January 1997. Mr.
Bourne has also served as Vice Chairman
and Treasurer of CNL American Properties
Fund, Inc., a public, unlisted real
estate investment trust, since February
1999, as a director since May 1994 and
as President from May 1994 through
February 1999 and as a director of CNL
Fund Advisors, Inc., its advisor, since
its inception in 1994, as President from
inception through October 1997, as its
Treasurer since September 1997 and as
Vice Chairman since October 1997. He has
also served as President and a director
of CNL Health Care Properties, Inc., a
public, unlisted real estate investment
trust, since inception, and of CNL
Health Care Advisors, Inc., its advisor.
Mr. Bourne is President and Treasurer of
CNL Group, Inc., President, Treasurer, a
director, and a registered principal of
CNL Securities Corp. (the managing
dealer of the Company's current public
offering), President, Treasurer and a
director of CNL Investment Company, and
Chief Investment Officer, a director and
Treasurer of CNL Institutional Advisors,
Inc., a registered investment advisor.
Mr. Bourne served as President of CNL
Institutional Advisors, Inc. from the
date of its inception through June 30,
1997. Mr. Bourne served as President and
a director from July 1992 to February
1996, served as Secretary and Treasurer
from February 1996 through December
1997, and has served as Vice Chairman of
the Board of Directors since February
1996, of Commercial Net Lease Realty,
Inc., a public real estate investment
trust that is listed on the New York
Stock Exchange. In addition, Mr. Bourne
served as President of CNL Realty
Advisors, Inc. from 1991 to February
1996, and served as a director of CNL
Realty Advisors, Inc. from May 1992
through December 1997, and as Treasurer
and Vice Chairman from February 1996
through December 1997, at which time
such company merged with Commercial Net
Lease Realty, Inc. Mr. Bourne, who
joined CNL Securities Corp. in 1979, has
participated as a general partner or
joint venturer in over 100 real estate
ventures involved in the financing,
acquisition, construction, and rental of
restaurants, office buildings, apartment
complexes, hotels, and other real
estate. Included in these real estate
ventures are approximately 64 privately
offered real estate limited partnerships
with investment objectives similar to
one or more of the Company's investment
objectives, in which Mr. Bourne,
directly or through an affiliated
entity, serves or has served as a
general partner. Mr. Bourne received a
B.A. in Accounting from Florida State
University.
Lawrence A. Dustin, 53 Mr. Dustin is a
principal of BBT, an advisory company
specializing in hotel operations,
marketing and development. Mr. Dustin
has 29 years of experience in the
hospitality industry. From 1994 to
September 1998, Mr. Dustin served as
Senior Vice President of lodging of
Universal Studios Recreation Group,
where he was responsible for matters
related to hotel development, marketing,
operations and management. Mr. Dustin
supervised the overall process of
developing the five highly themed hotels
and related recreational amenities
within Universal Studios Escape and
provided guidance for hotel projects in
Universal City, California, Japan and
Singapore. From 1989 to 1994, Mr. Dustin
served as a shareholder, chief executive
officer and director of AspenCrest
Hospitality, Inc., a professional
services firm which helped hotel owners
enhance both the operating performance
and asset value of their properties.
From 1969 to 1989, Mr. Dustin held
various positions in the hotel industry
including 14 years in management with
Westin Hotels & Resorts. Mr. Dustin
received a B.A. from Michigan State
University in 1968.
John A. Griswold, 50 Mr. Griswold
currently serves as president of Tishman
Hotel Corporation, an operating unit of
Tishman Realty & Construction Co., Inc.,
founded in 1898. Tishman Hotel
Corporation is a hotel developer, owner
and operator, and has provided such
services for more than 85 hotels,
totalling more than 30,000 rooms. Mr.
Griswold joined Tishman Hotel
Corporation in 1985. From 1981 to 1985,
Mr. Griswold served as General Manager
of the Buena Vista Palace Hotel in the
Walt Disney World Village. From 1978 to
1981, he served as vice president and
general manager of the Homestead Resort,
a luxury condominium resort in Glen
Arbor, Michigan. Mr. Griswold served as
an operations manager for the Walt
Disney Company from 1971 to 1978. He was
responsible for operational, financial
and future planning for multi-unit
dining facilities in Walt Disney World
Village and Lake Buena Vista Country
Club. He is a member of the board of
directors of the Florida Hotel & Motel
Association and the First Orlando
Foundation. Mr. Griswold received a B.S.
from the School of Hotel Administration
at Cornell University in Ithaca, New
York.
Matthew W. Kaplan, 36 Mr. Kaplan serves
as a director of the Advisor, CNL Hotel
Investors, Inc., CNL Financial Services,
Inc. and CNL Financial Corporation. Mr.
Kaplan is a managing director of
Rothschild Realty Inc. where he has
served since 1992, and where he is
responsible for securities investment
activities including acting as portfolio
manager of Five Arrows Realty Securities
LLC, a $900 million private investment
fund. From 1990 to 1992, Mr. Kaplan
served in the corporate finance
department of Rothschild Inc., an
affiliate of Rothschild Realty Inc. Mr.
Kaplan served as a director of
Ambassador Apartments Inc. from August
1996 through May 1998 and is a member of
the Urban Land Institute. Mr. Kaplan
received a B.A. with honors from
Washington University in 1984 and a
M.B.A. from the Wharton School of
Finance and Commerce at the University
of Pennsylvania in 1988.
Craig M. McAllaster, 47 Dr. McAllaster
has served as director of the executive
MBA program at the Roy E. Crummer
Graduate School of Business at Rollins
College since 1994. Besides his duties
as director, he is on the management
faculty and serves as executive director
of the international consulting
practicum programs at the Crummer
School. Prior to Rollins College, Dr.
McAllaster was on the faculty at the
School of Industrial and Labor Relations
and the Johnson Graduate School of
Management, both at Cornell University,
and the University of Central Florida.
Dr. McAllaster spent over ten years in
the consumer services and electronics
industry in management, organizational
and executive development positions. He
is a consultant to many domestic and
international companies in the areas of
strategy and leadership. Dr. McAllaster
received a B.S. from the University of
Arizona in 1973, a M.S. from Alfred
University in 1981 and a M.A. and
Doctorate from Columbia University in
1987.
James M. Seneff, Jr., 52 Mr. Seneff
currently serves as Chairman of the
Board, Chief Executive Officer and a
director of the Company and of the
Advisor. Mr. Seneff also serves as
Chairman of the Board, Chief Executive
Officer and a director of CNL American
Properties Fund, Inc. and CNL Health
Care Properties, Inc., public, unlisted
real estate investment trusts, and CNL
Fund Advisors, Inc. and CNL Health Care
Advisors, Inc., the advisor of each
respective REIT. Mr. Seneff is a
principal stockholder of CNL Group,
Inc., a diversified real estate company,
and has served as its Chairman of the
Board of Directors, director, and Chief
Executive Officer since its formation in
1980. CNL Group, Inc. is the parent
company of CNL Securities Corp., which
is acting as the managing dealer of the
Company's current public offering, CNL
Investment Company, CNL Fund Advisors,
Inc. and CNL Hospitality
Advisors, Inc., the Company's Advisors.
Mr. Seneff has been Chairman of the
Board, Chief Executive Officer and a
director of CNL Securities Corp. since
its formation in 1979. Mr. Seneff also
has held the position of Chairman of the
Board, Chief Executive Officer,
President and a director of CNL
Management Company, a registered
investment advisor, since its formation
in 1976, has served as Chief Executive
Officer, Chairman of the Board and a
director of CNL Investment Company, and
Chief Executive Officer and Chairman of
the Board of Commercial Net Lease
Realty, Inc. since 1992, served as Chief
Executive Officer and Chairman of the
Board of CNL Realty Advisors, Inc. from
its inception in 1991 through 1997 at
which time such company merged with
Commercial Net Lease Realty, Inc., a
public real estate investment trust that
is listed on the New York Stock Exchange
and has held the position of Chief
Executive Officer, Chairman of the Board
and a director of CNL Institutional
Advisors, Inc., a registered investment
advisor, since its inception in 1990.
Mr. Seneff also serves as a director
of First Union National Bank of Florida,
N.A. Mr. Seneff previously served on
the Florida State Commission on Ethics
and is a former member and past Chairman
of the State of Florida Investment
Advisory Council, which recommends to
the Florida Board of Administration
investments for various Florida employee
retirement funds. The Florida Board of
Administration, Florida's principal
investment advisory and money management
agency, oversees the investment of more
than $60 billion of retirement funds.
Since 1971, Mr. Seneff has been active
in the acquisition, development, and
management of real estate projects and,
directly or through an affiliated
entity, has served as a general partner
or joint venturer in over 100 real
estate ventures involved in the
financing, acquisition, construction,
and rental of restaurants, office
buildings, apartment complexes, hotels,
and other real estate. Included in these
real estate ventures are approximately
65 privately offered real estate limited
partnerships with investment objectives
similar to one or more of the Company's
investment objectives, in which Mr.
Seneff, directly or through an
affiliated entity, serves or has served
as a general partner. Mr. Seneff
received his degree in Business
Administration from Florida State
University.
In the event that any nominee(s) should be unable to accept the office of
director, which is not anticipated, it is intended that the persons named in the
proxy will vote FOR the election of such other person in the place of such
nominee(s) for the office of director as the Board of Directors may recommend.
The affirmative vote of a majority of the shares of common stock present in
person or represented by proxy and entitled to vote is required for the election
of directors.
A majority of the Company's directors are required to be independent, as
that term is defined in the Company's Articles of Incorporation. Messrs. Adams,
Dustin, Griswold and McAllaster are independent directors.
Compensation of Directors
During the year ended December 31, 1998, each of the former independent
directors earned $6,000 for serving on the Board of Directors. Each of the
former independent directors also received $750 per Board meeting attended ($375
for each telephonic meeting in which the director participated), including
committee meetings. The Company has not, and in the future will not, pay any
compensation to the directors of the Company who also serve as officers and
directors of the Company's Advisor.
The Board of Directors met six times during the year ended December 31,
1998, and the average attendance by directors at Board meetings was
approximately 97 percent. Each member of the Board of Directors as it was
constituted during 1998 attended at least 89 percent of the total meetings of
the Board and of any committee on which he served.
Committees of the Board of Directors
The Company has a standing Audit Committee, the members of which are
selected by the Board of Directors each year. The Audit Committee makes
recommendations to the Board of Directors as to the independent accountants of
the Company and reviews with such accounting firm the scope of the audit and the
results of the audit upon its completion. During 1998, the Audit Committee was
comprised of Messrs. Hostetter, Kruse and Huseman. The Audit Committee met twice
during the year ended December 31, 1998.
The Company has a standing Compensation Committee, the members of which are
selected by the full Board of Directors each year. During 1998, the Compensation
Committee was comprised of Messrs. Hostetter, Kruse and Huseman. The
Compensation Committee makes recommendations to the Board of Directors as to the
compensation and fees to be paid to the directors of the Company. The
Compensation Committee met once during the year ended December 31, 1998.
The Company does not have a nominating committee.
<PAGE>
Executive Officers
The executive officers of the Company are as follows:
Name Age Position
James M. Seneff, Jr. 52 Chief Executive Officer and
Chairman of the Board
Robert A. Bourne 51 President
Charles A. Muller 40 Chief Operating Officer and
Executive Vice President
Jeanne A. Wall 40 Executive Vice President
Lynn E. Rose 50 Secretary and Treasurer
C. Brian Strickland 36 Vice President of Finance and
Administration
Charles A. Muller. Chief Operating Officer and Executive Vice President.
Mr. Muller joined CNL Group, Inc. in October 1996 and is responsible for the
planning and implementation of CNL's interest in hotel industry investments,
including acquisitions, development, project analysis and due diligence. Mr.
Muller currently serves as Executive Vice President of CNL Hospitality Advisors,
Inc., the Advisor, and Executive Vice President of CNL Hotel Development
Company. Mr. Muller joined CNL following more than 15 years of broadbased hotel
industry experience. From 1993 to 1996, Mr. Muller served as a Director of
Operations for Tishman Hotel Corporation where he was responsible for the
company's market review and valuation analysis efforts. At Tishman, Mr. Muller
played a significant role in the development of a new 600-room golf resort in
Puerto Rico, and was active in several project management and development
assignments. From 1989 to 1993, Mr. Muller served as a Development Manager for
Wyndham Hotels & Resorts where he was responsible for new business development
and company growth through acquisitions, development and management contracts.
At Wyndham, Mr. Muller was also responsible for market review and feasibility
analysis efforts in markets across the United States and the Caribbean. Prior to
joining Wyndham, Mr. Muller worked for Pannell Kerr Forster as a hotel industry
consultant and spent four years with AIRCOA (currently Richfield Hospitality)
where he was responsible for capital expenditure planning, property renovations
and construction management. From 1981 through 1985, Mr. Muller held several
management positions in hotel operations. Mr. Muller received a B.S. in Hotel
Administration from Cornell University in 1981 and has served on the Market,
Finance and Investment Analysis Committee of the American Hotel & Motel
Association.
Jeanne A. Wall. Executive Vice President. Ms. Wall serves as Executive Vice
President and director of the Advisor. Ms. Wall is also Executive Vice President
of CNL American Properties Fund, Inc. and CNL Health Care Properties, Inc.,
public, unlisted real estate investment trusts, and their advisors, CNL Fund
Advisors, Inc. and CNL Health Care Advisors, Inc., respectively. Ms. Wall
currently serves as Executive Vice President of CNL Group, Inc., a diversified
real estate company. Ms. Wall has served as Chief Operating Officer of CNL
Investment Company and of CNL Securities Corp. since November 1994 and has
served as Executive Vice President of CNL Investment Company since January 1991.
In 1984, Ms. Wall joined CNL Securities Corp. In 1985, Ms. Wall became Vice
President of CNL Securities Corp. In 1987, she became a Senior Vice President
and in July 1997, she became Executive Vice President of CNL Securities Corp. In
this capacity, Ms. Wall serves as national marketing and sales director and
oversees the national marketing plan for the CNL investment programs. In
addition, Ms. Wall oversees product development, partnership administration and
investor services for programs offered through participating brokers. Ms. Wall
also has served as Senior Vice President of CNL Institutional Advisors, Inc., a
registered investment advisor, from 1990 to 1993, as Vice President of CNL
Realty Advisors, Inc. since its inception in 1991 through 1997, and as Vice
President of Commercial Net Lease Realty, Inc., a public real estate investment
trust that is listed on the New York Stock Exchange, from 1992 through 1997. Ms.
Wall holds a B.A. in Business Administration from Linfield College and is a
registered principal of CNL Securities Corp. Ms. Wall currently serves as a
trustee on the Board of the Investment Program Association and is a member of
the Corporate Advisory Council for the International Association For Financial
Planning and previously served on the Direct Participation Program committee
for the National Association of Securities Dealers .
<PAGE>
Lynn E. Rose. Secretary and Treasurer. Ms. Rose serves as Secretary,
Treasurer and a director of the Advisor. Ms. Rose is also Secretary of CNL
American Properties Fund, Inc. and CNL Health Care Properties, Inc., public,
unlisted real estate investment trusts, and as Secretary and a director of their
advisors, CNL Fund Advisors, Inc. and CNL Health Care Advisors, Inc.,
respectively. Ms. Rose, a certified public accountant, has served as Secretary
of CNL Group, Inc. since 1987, as Chief Financial Officer of CNL Group, Inc.
since December 1993, and served as Controller of CNL Group, Inc. from 1987 until
December 1993. In addition, Ms. Rose has served as Chief Financial Officer and
Secretary of CNL Securities Corp. since July 1994. She has served as Chief
Operating Officer, Vice President and Secretary of CNL Corporate Services, Inc.
since November 1994. Ms. Rose also has served as Chief Financial Officer and
Secretary of CNL Institutional Advisors, Inc. since its inception in 1990, as
Secretary and a director of CNL Realty Advisors, Inc. from its inception in 1991
through 1997, and as Treasurer of CNL Realty Advisors, Inc. from 1991 to
February 1996. In addition, Ms. Rose served as Secretary and Treasurer of
Commercial Net Lease Realty, Inc., a public real estate investment trust listed
on the New York Stock Exchange, from 1992 to February 1996. Ms. Rose also
currently serves as Secretary for approximately 50 additional corporations. Ms.
Rose oversees the legal compliance, accounting, tenant compliance, and reporting
for over 250 corporations, partnerships and joint ventures. Prior to joining
CNL, Ms. Rose was a partner with Robert A. Bourne in the accounting firm of
Bourne & Rose, P.A., Certified Public Accountants. Ms. Rose holds a B.A. in
Sociology from the University of Central Florida. She was licensed as a
certified public accountant in 1979.
C. Brian Strickland. Vice President of Finance and Administration. Mr.
Strickland currently serves as Vice President of Finance and Administration of
the Advisor. Mr. Strickland supervises the companies' financial reporting,
financial control and accounting functions as well as forecasting, budgeting and
cash management activities. He is also responsible for regulatory compliance,
equity and debt financing activities and insurance for the companies. Mr.
Strickland joined the Advisor in April 1998 with an extensive accounting
background. Prior to joining CNL, he served as Vice President of taxation with
Patriot American Hospitality, Inc., where he was responsible for implementation
of tax planning strategies on corporate mergers and acquisitions and where he
performed or assisted in strategic processes in the REIT industry. From 1989 to
1997, Mr. Strickland served as director of tax and asset management for Wyndham
Hotels & Resorts where he was integrally involved in structuring acquisitive
transactions, including the roll-up and initial public offering of Wyndham Hotel
Corporation and its subsequent merger with Patriot American Hospitality, Inc. In
his capacity of director of asset management, he was instrumental in the
development and opening of a hotel and casino in San Juan, Puerto Rico. Prior to
1989, Mr. Strickland was senior tax accountant for Trammell Crow Company where
he provided tax consulting services to Regional Development Offices. From 1986
to 1988, Mr. Strickland was tax accountant for Ernst & Whinney where he was a
member of the real estate practice group. Mr. Strickland is a certified public
accountant and holds a B.S. in accounting.
The backgrounds of Messrs. Seneff and Bourne are described at "ELECTION
OF DIRECTORS."
EXECUTIVE COMPENSATION
Annual Compensation
No annual or long-term compensation was paid by the Company to the Chief
Executive Officer for services rendered in all capacities to the Company during
the period June 12, 1996 (date of inception) through December 31, 1996 or during
the years ended December 31, 1997 and 1998. In addition, no executive officer of
the Company received an annual salary or bonus from the Company during the year
ended December 31, 1998. The Company's executive officers also are employees and
executive officers of the Advisor or its affiliates and receive compensation
from CNL Group, Inc. in part for services in such capacities. See "Certain
Transactions" for a description of the fees payable and expenses reimbursed to
Hospitality Advisors.
<PAGE>
PERFORMANCE COMPARISON
Set forth below is a comparison of the cumulative total stockholder return
on the Company's common stock, based on the offering price of the common stock
and assuming the reinvestment of distributions ("CHP"), with the S&P 500 Index
("S&P 500") and with the income rate of return for equity REITS from the
National Association of Real Estate Investment Trusts ("NAREIT") from November
1997 through December 31, 1998. The comparison assumes the investment of $100 on
November 1, 1997 (the approximate date operations of the company commenced).
MONTHLY RETURN INDEXES
<TABLE>
<CAPTION>
<S> <C>
DATE S&P 500 NAREIT THE COMPANY
-------------------------- -------------------- ------------------------- -----------------------
11/1/97 $100.00 $100.00 $100.00
12/1/97 101.72 100.56 100.25
1/1/98 102.85 100.93 100.50
2/1/98 110.26 101.49 100.75
3/1/98 115.91 101.97 101.00
4/1/98 117.08 102.25 101.26
5/1/98 115.07 102.94 101.51
6/1/98 119.74 103.50 101.76
7/1/98 118.47 103.73 102.02
8/1/98 101.34 104.36 102.44
9/1/98 107.83 104.98 103.04
10/1/98 116.60 105.39 103.64
11/1/98 123.66 106.05 104.25
12/1/98 130.79 106.60 104.85
</TABLE>
The S&P 500 index contains both a capital and income component to its total
return. For companies included in the S&P 500 index, their total return is
measured by dividing the sum of (a) the cumulative amount of dividends for the
measurement period, assuming dividend reinvestment, and (b) the difference
between the registrant's share price at the end and the beginning of the
measurement period; by the share price at the beginning of the measurement
period. There is currently no public trading market for the Company's shares,
therefore, the share price is fixed at $10 per share and its return is composed
of only the cumulative amount of distributions for the measurement period,
assuming reinvestment of distributions. The NAREIT income index for equity REITs
measures only the cumulative amount of distributions for the measurement period.
In order to display a more comparative return, the component of the NAREIT total
return attributable to increases in share price has not been included in the
cumulative return.
(1) No operations commenced until the Company received minimum offering proceeds
and funds were released from escrow on October 15, 1997. The Company did not
acquire any properties until July 1998, therefore, the graph does not reflect
results as if the Company's net offering proceeds had been fully invested in
properties for the periods presented.
<PAGE>
PROPOSAL II
APPROVAL OF AN AMENDMENT TO THE COMPANY'S AMENDED
AND RESTATED ARTICLES OF INCORPORATION TO
INCREASE COMMON AND PREFERRED SHARE OWNERSHIP LIMITS
The Company's Amended and Restated Articles of Incorporation (the
"Articles") contain a number of restrictions on stock ownership designed to
prevent the Company's status as a REIT from being jeopardized by its ownership
structure. Among these restrictions is a ceiling on the amount of the Company's
stock any one person can own. Under Section 7.6(ii) of the Articles, no person
can beneficially own (or have ownership attributed to him or her) more than 9.8%
of the Company's common stock (the "Common Share Ownership Limit").
The Common Share Ownership Limit operates as supplemental protection
against REIT disqualification in that federal tax law permits one person to own
more than 9.8% of the common stock so long as other ownership restrictions
contained in Section 7.6 are met. For that reason, Section 7.6(ix) of the
Articles provides that the Board of Directors may waive the Common Share
Ownership Limit with respect to a particular investor if the Board of Directors
concludes that such other restrictions will still be complied with even if the
investor owns more than the Common Share Ownership Limit.
As currently drafted, however, Section 7.6(ix) prohibits the Board from
using its authority to waive the Common Share Ownership Limit with respect to
any investor who is an individual, including investors who are deemed to be
individuals under federal tax law. In light of tax law, however, this
restriction is not necessary, and now serves to unduly prohibit the Board of
Directors from permitting an investment that would not otherwise violate the
Company's ownership limitations and would not affect the Company's qualification
as a REIT.
This unnecessary restriction on the Board of Directors' authority has
adverse effects on the ability of the Company to raise capital. As Section
7.6(ix) is currently drafted, the Board of Directors cannot permit an
individual, and investors deemed under certain federal tax law to be an
individual, to acquire more than the Common Share Ownership Limit, even if the
Board of Directors were to determine that the ownership limitations in the
Articles would otherwise be met and that the investment would be in the best
interests of the Company.
Moreover, the inability of the Board of Directors to waive the Common Share
Ownership Limit may impact the investment that Five Arrows has committed to make
in the Company, which commitment is discussed in connection with Proposal I
above. Depending on the timing of the closing, if any, of Hotel Investors'
purchase of any or all of the four remaining Hotels, Five Arrows may be
purchasing shares of common stock in the Company that would, absent a waiver,
cause Five Arrows to own more than 9.8% of the then outstanding shares of
Company common stock. Under the applicable federal tax law, however, Five Arrows
is deemed an "individual", and thus the Board of Directors cannot waive the
Common Share Ownership Limit as it would apply to Five Arrows.
In such circumstance, under the transaction agreements with Five Arrows,
the portion of the Five Arrows investment in the Company that would cause Five
Arrows to exceed the Common Share Ownership Limit would be made in the form of
debt, rather than equity, which would be converted to shares of common stock at
such time as application of the Common Share Ownership Limit would not prohibit
Five Arrows from owning such additional common stock. Such debt would, however,
become due and payable on July 1, 2000 if not converted to common stock prior to
that time.
In light of these concerns, the Board of Directors of the Company has
unanimously approved and directed that there be submitted to stockholders for
their approval an amendment (the "Amendment") to Article VII of the Company's
Articles which would, as discussed above, expand the class of investors for whom
the Board of Directors could waive the limits on common and preferred stock
ownership under certain circumstances, by deleting the prohibition on the Board
of Directors waiving the Common Share Ownership Limit (or the similar preferred
stock ownership limit) for any investor who is deemed an individual under
certain federal tax law. The Amendment as set forth below and approved by the
Board of Directors makes no other change to the existing text of Section 7.6(ix)
and would not adversely affect the Company's REIT qualification. Upon approval
of the Amendment, the Board will waive the common share ownership limit as it
would apply to Five Arrows.
<PAGE>
The text of the proposed Amendment is set forth below:
RESOLVED, that Section 7.6(ix) of Article VII of the Company's Amended and
Restated Articles of Incorporation, as amended, be amended to read as follows:
The Board of Directors, upon receipt of a ruling from the Internal
Revenue Service, an opinion of counsel or other evidence satisfactory to
the Board of Directors, in its sole discretion, in each case to the effect
that the restrictions contained in subparagraphs (c), (d) and (e) of
Section 7.6(ii) will not be violated, may waive or change, in whole or in
part, the application of the Common or Preferred Share Ownership Limit with
respect to any Person. In connection with any such waiver or change, the
Board of Directors may require such representations and undertakings from
such Person or affiliates and may impose such other conditions as the Board
deems necessary, advisable or prudent, in its sole discretion, to determine
the effect, if any, of the proposed transaction or ownership of Equity
Shares on the Company's status as a REIT.
Approval of this Amendment requires the affirmative vote of a majority of
the outstanding shares of the Company's common stock entitled to vote thereon.
The Company's officers and directors have advised the Company that they intend
to vote their shares of common stock for the Amendment. The Board of Directors
unanimously recommends that stockholders vote for the Amendment. Proxies will be
voted for the Amendment unless stockholders designate otherwise.
The Amendment, if approved by stockholders, will become effective on the
date the Amendment is filed with the Maryland Department of Assessments and
Taxation. It is anticipated that the appropriate filing to effect the Amendment
will be made as soon after the annual meeting as practicable.
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of March 12, 1999, the number and
percentage of outstanding shares beneficially owned by all persons known by the
Company to own beneficially more than five percent of the Company's common
stock, by each director and nominee, and by all officers and directors as a
group, based upon information furnished to the Company by such stockholders,
officers and directors.
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Shares
Charles E. Adams 0 --
One Peach Lane
Ft. Mill, SC 29716
Robert A. Bourne 0 --
400 East South Street
Orlando, FL 32801
Lawrence A. Dustin 0 --
6148 - 133rd Avenue NE
Kirkland, WA 98033
John A. Griswold 0 --
1200 EPCOT Resorts Blvd.
Lake Buena Vista, FL 32830
Matthew W. Kaplan 590,770 (1) 7.38%
1251 Avenue of the Americas
51st Floor
New York, NY 10020
Craig M. McAllaster 0 --
1000 Holt Avenue - 2722
Winter Park, FL 32789-4499
Charles A. Muller 500 (2) (3)
400 East South Street
Orlando, FL 32801
James M. Seneff, Jr. 20,000 (4) (3)
400 East South Street
Orlando, FL 32801
All directors and executive 611,270 7.64%
officers as a group (11 persons)
(1) Five Arrows Realty II, LLC, a Delaware Limited Liability company in which
Rothschild Realty Investors II, LLC, the managing member has appointed Mr.
Kaplan, among others, as a manager of Five Arrows Realty Securities II,
LLC. Mr. Kaplan disclaims beneficial ownership of such shares.
(2) Represents shares held by Mr. Muller as an individual.
(3) Less than one percent.
(4) Represents shares held by the Advisor of which Mr. Seneff is a director.
Mr. Seneff and his wife share beneficial ownership of the Advisor through
their ownership of CNL Group, Inc. The Advisor is a majority owned
subsidiary of CNL Group, Inc.
Compliance With Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the "SEC"). To the Company's knowledge, all officers,
directors or persons who own more than ten percent of the Company's stock who
were required to file Forms 3 or 4 during 1998 did so on a timely basis.
<PAGE>
CERTAIN TRANSACTIONS
All of the executive officers of the Company are executive officers of the
Advisor, a majority owned subsidiary of CNL Group, Inc., of which Messrs. Seneff
and Bourne are affiliates. In addition, Messrs. Seneff and Bourne, Ms. Rose and
Ms. Wall are executive officers of CNL Securities Corp., the managing dealer of
the Company's offering of shares of common stock, and a wholly owned subsidiary
of CNL Group, Inc. Messrs. Seneff and Bourne are directors of the Company, the
Advisor and CNL Securities Corp., and Ms. Rose is a director of the Advisor. Mr.
Kaplan is a director of the Company and the Advisor. Administration of the
day-to-day operations of the Company is provided by the Advisor, pursuant to the
terms of an advisory agreement (the "Advisory Agreement"). The Advisor also
serves as the Company's consultant in connection with policy decisions to be
made by the Company's Board of Directors, manages the Company's properties and
renders such other services as the Board of Directors deems appropriate. The
Advisor also bears the expense of providing the executive personnel and office
space to the Company. The Advisor is at all times subject to the supervision of
the Board of Directors of the Company and has only such functions and authority
as the Company may delegate to it as the Company's agent.
CNL Securities Corp. is entitled to receive selling commissions amounting
to 7.5% of the total amount raised from the sale of shares of common stock for
services in connection with the offering of shares, a substantial portion of
which has been or will be paid as commissions to other broker-dealers. For the
year ended December 31, 1998, the Company had incurred $2,377,026 of such fees,
of which approximately $2,201,000 was paid by CNL Securities Corp. as
commissions to other broker-dealers.
In addition, CNL Securities Corp. is entitled to receive a marketing
support and due diligence expense reimbursement fee equal to 0.5% of the total
amount raised from the sale of shares, a portion of which may be reallowed to
other broker-dealers. For the year ended December 31, 1998, the Company had
incurred $158,468 of such fees, the majority of which were reallowed to other
broker-dealers and from which all bona fide due diligence expenses were paid.
The Advisor is entitled to receive acquisition fees for services in
identifying the properties and structuring the terms of the acquisition and
leases of the properties and structuring the terms of the mortgage loans equal
to 4.5% of gross proceeds, loan proceeds from permanent financing and amounts
outstanding on the line of credit, if any, at the time of listing, but excluding
that portion of the permanent financing used to finance Secured Equipment
Leases. For the year ended December 31, 1998, the Company had incurred
$1,426,216 of such fees.
The Company and the Advisor have entered into an advisory agreement
pursuant to which the Advisor will receive a monthly asset management fee of
one-twelfth of 0.60% of the Company's real estate asset value and the
outstanding principal balance of any Mortgage Loans as of the end of the
preceding month. The management fee, which will not exceed fees which are
competitive for similar services in the same geographic area, may or may not be
taken, in whole or in part as to any year, in the sole discretion of the
Advisor. All or any portion of the management fee not taken as to any fiscal
year shall be deferred without interest and may be taken in such other fiscal
year as the Advisor shall determine. During the year ended December 31, 1998,
the Company incurred $68,114 of such fees.
The Company incurs operating expenses which, in general, are those expenses
relating to administration of the Company on an ongoing basis. Pursuant to the
advisory agreement described above, the Advisor is required to reimburse the
Company the amount by which the total operating expenses paid or incurred by the
Company exceed in any four consecutive fiscal quarters, the greater of two
percent of average invested assets or 25 percent of net income (the "Expense
Cap"). During the year ended December 31, 1998, the Company's operating expenses
exceeded the Expense Cap by $92,733; therefore, the Advisor reimbursed the
Company such amount in accordance with the advisory agreement.
The Advisor and its affiliates provide accounting and administrative
services to the Company (including accounting and administrative services in
connection with the offering of shares) on a day-to-day basis. For the year
ended December 31, 1998, the Company incurred a total of $644,189 for these
services, $494,729 of such costs representing stock issuance costs, $9,084
representing acquisition related costs and $140,376 representing general
operating and administrative expenses, including costs related to preparing and
distributing reports required by the Securities and Exchange Commission.
All amounts paid by the Company to affiliates of the Company are believed
by the Company to be fair and comparable to amounts that would be paid for
similar services provided by unaffiliated third parties.
INDEPENDENT AUDITORS
Upon recommendation of and approval by the Board of Directors, including
the independent directors, PricewaterhouseCoopers LLP has been selected to act
as independent certified public accountants for the Company during the current
fiscal year.
A representative of PricewaterhouseCoopers LLP will be present at the
annual meeting and will be provided with the opportunity to make a statement if
desired. Such representative will also be available to respond to appropriate
questions.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
annual meeting other than those stated above. If any other business should come
before the annual meeting, the person(s) named in the enclosed proxy will vote
thereon as he or they determine to be in the best interests of the Company.
PROPOSALS FOR NEXT ANNUAL MEETING
Any stockholder proposal to be considered for inclusion in the Company's
proxy statement and form of proxy for the annual meeting of stockholders to be
held in 2000 must be received at the Company's office at 400 East South Street,
Orlando, Florida 32801, no later than November 30, 1999.
Notwithstanding the aforementioned deadline, under the Company's By-laws, a
stockholder must follow certain other procedures to nominate persons for
election as directors or to propose other business to be considered at an annual
meeting of stockholders. These procedures provide that stockholders desiring to
make nominations for directors and/or to bring a proper subject before a meeting
must do so by notice timely received by the Secretary of the Company. With
respect to proposals for the 2000 annual meeting, the Secretary of the Company
must receive notice of any such proposal no earlier than February 11, 2000, and
no later than March 13, 2000.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1998, accompanies this proxy statement.
By Order of the Board of Directors,
Lynn E. Rose
Secretary
March 29, 1999
Orlando, Florida
<PAGE>
SHAW PITTMAN POTTS & TROWBRIDGE
2300 N STREET, N.W.
WASHINGTON, D.C. 20037
FACSIMILE: (202) 663-8007
March 17, 1999
VIA EDGAR
- ---------
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: CNL Hospitality Properties, Inc.
File No. 0-24097
Ladies and Gentlemen:
Enclosed for filing are the definitive proxy materials, including the
notice of annual meeting, letter to stockholders, proxy statement and proxy card
of CNL Hospitality Properties, Inc. relating to its 1999 annual meeting of
stockholders. The preliminary proxy materials, including the notice of annual
meeting, letter to stockholders, preliminary proxy statement and preliminary
proxy were filed on March 5, 1999. Please contact me at the above address or, if
by telephone, at (202) 663-8217 if you have any comments on the enclosed
materials.
Sincerely,
/s/ Patrick T. Connors
------------------------
Patrick T. Connors
Enclosures
