<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1998
REGISTRATION NO. 333-.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_____________________
HOST MARRIOTT CORPORATION
(Exact name of registrant as specified in its charter)
_____________________
<TABLE>
<S> <C> <C>
DELAWARE 7011 53-00895950
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
-----------------------------
</TABLE>
For Co-Registrants, please see "Table of Co-Registrants" on the following page)
<TABLE>
<S> <C>
Christopher G. Townsend, Esq.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
10400 FERNWOOD ROAD 10400 FERNWOOD ROAD
BETHESDA, MARYLAND 20817-1109 BETHESDA, MARYLAND 20817-1109
301-380-9000 301-380-9000
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone number,
including area code, of registrant's principal executive offices) including area code, of agent for service)
</TABLE>
_____________________
Copies to:
J. WARREN GORRELL, JR., ESQ. BRUCE E. ROSENBLUM, ESQ.
BRUCE W. GILCHRIST, ESQ. LATHAM & WATKINS
HOGAN & HARTSON L.L.P. 1001 PENNSYLVANIA AVENUE, N.W., SUITE 1300
555 THIRTEENTH STREET, N.W. WASHINGTON, D.C. 20004
WASHINGTON, D.C. 20004-1109 (202) 637-2200
(202) 637-5600
--------------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement; as determined by
the Registrant.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.[X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[_]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1)(2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock of Host Marriott Corporation (the
"Company")..
- -----------------------------------------------------------------------------------------------------------------------------
Debt Securities of the Company (3)...................
- -----------------------------------------------------------------------------------------------------------------------------
Guarantees of Co-Registrants of Debt Securities (4)...
- -----------------------------------------------------------------------------------------------------------------------------
Preferred Stock of the Company........................
- -----------------------------------------------------------------------------------------------------------------------------
Warrants of the Company...............................
- -----------------------------------------------------------------------------------------------------------------------------
Subscription Rights (5)...............................
- -----------------------------------------------------------------------------------------------------------------------------
Depositary Shares.....................................
- -----------------------------------------------------------------------------------------------------------------------------
Preferred Stock Purchase Rights(6)....................
=============================================================================================================================
Total............................................... $2,500,000,000.00 (7) 100% $2,500,000,000.
==============================================================================================================================
<CAPTION>
====================================================================================
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
- ------------------------------------------------------------------------------------
<S> <C>
Common Stock of Host Marriott Corporation (the
"Company").........................................
- ------------------------------------------------------------------------------------
Debt Securities of the Company (3)...................
- ------------------------------------------------------------------------------------
Guarantees of Co-Registrants of Debt Securities (4)...
- ------------------------------------------------------------------------------------
Preferred Stock of the Company........................
- ------------------------------------------------------------------------------------
Warrants of the Company...............................
- ------------------------------------------------------------------------------------
Subscription Rights (5)...............................
- ------------------------------------------------------------------------------------
Depositary Shares.....................................
- ------------------------------------------------------------------------------------
Preferred Stock Purchase Rights(6)....................
===================================================================================
Total............................................... $863,000 (7)
===================================================================================
</TABLE>
(1) The proper maximum offering price per unit will be determined from time to
time by the Registrants in connection with the issuance by the Registrants
of the securities registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee, which
is calculated in accordance with Rule 457(o) under the Securities Act.
(3) If any Debt Securities are issued at an original issue discount, then the
offering price shall be in such greater principal amount as shall result in
an aggregate initial offering price not to exceed $2,500,000,000.00.
(4) No separate consideration will be received from purchasers of Debt
Securities with respect to these guarantees and, therefore, no registration
fee is attributable to the guarantees of the Debt Securities.
(5) Rights evidencing the right to purchase Debt Securities, Common Stock,
Preferred Stock, Depositary Shares or Warrants.
(6) The Preferred Stock Purchase Rights are initially carried and traded with
the Common Stock. The value of the Preferred Stock Purchase Rights, if
any, is reflected in the value of the Common Stock.
(7) In no event will the aggregate offering price of all securities issued from
time to time pursuant to this Registration Statement exceed
$2,500,000,000.00 or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies. The aggregate
amount of Common Stock registered hereunder is further limited to that
which is permissible under Rule 415(a)(4) under the Securities Act. The
securities registered hereunder may be sold separately or as units with
other securities registered hereby.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
TABLE OF CO-REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY STANDARD
STATE OR OTHER INDUSTRIAL IRS EMPLOYER
JURISDICTION CLASSIFICATION IDENTIFICATION
NAME OF INCORPORATION CODE NUMBER NUMBER
---- ---------------- ----------- ------
<S> <C> <C> <C>
HMC BN Corporation Delaware 7011 52-1982075
HMC Hotel Development Corporation Delaware 7011 52-2062680
HMC Retirement Properties, Inc. Delaware 7011 52-1536288
HMC SFO, Inc. Delaware 7011 52-1888778
HMH Marina, Inc. Delaware 7011 52-1943709
HMH Pentagon Corporation Delaware 7011 52-1859615
HMH Properties, Inc. Delaware 7011 52-1822042
HMH Realty Company, Inc. Delaware 7011 52-1928293
HMH Rivers, Inc. Delaware 7011 52-1928290
Host Airport Hotels, Inc. Delaware 7011 95-2744596
Host Marriott Hospitality, Inc. Delaware 7011 52-1822038
Marriott Financial Services, Inc. Delaware 7011 52-1320896
Marriott SBM Two Corporation Delaware 7011 52-1694383
</TABLE>
2
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 22, 1998
PROSPECTUS
$2,500,000,000
HOST MARRIOTT CORPORATION
DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES,
COMMON STOCK, WARRANTS AND SUBSCRIPTION RIGHTS
_____________________
Host Marriott Corporation, a Delaware corporation (the "Company" or
"Host Marriott"), directly or through agents, dealers, or underwriters
designated from time to time, may offer, issue and sell: (i) debt securities of
the Company consisting of debentures, notes or other evidences of indebtedness,
without par value (the "Debt Securities"); (ii) shares of common stock of the
Company, par value $1.00 per share (the "Common Stock"); (iii) shares of
preferred stock of the Company, without par value (the "Preferred Stock"); (iv)
shares of its Preferred Stock represented by depositary shares (the "Depositary
Shares"); (v) warrants to purchase Debt Securities, Common Stock, Preferred
Stock or Depositary Shares (the "Warrants"); and (vi) subscription rights
evidencing the right to purchase Debt Securities, Common Stock, Preferred Stock,
Depositary Shares or Warrants (the "Subscription Rights"), with an aggregate
public offering price of up to $2,500,000,000 (or the equivalent if the
securities are denominated in foreign currency or foreign currency units). The
Debt Securities may be issued as exchangeable and/or convertible Debt
Securities, exchangeable for or convertible into shares of Common Stock,
Preferred Stock or Depositary Shares. The Preferred Stock may be issued as
exchangeable and/or convertible Preferred Stock, exchangeable for or convertible
into Debt Securities or shares of Common Stock. The Company's payment
obligations under any series of Debt Securities may be guaranteed by certain of
the Company's various direct or indirect wholly-owned subsidiaries (each, a
"Guarantor" and collectively, the "Guarantors"). The Debt Securities, the
Common Stock, the Preferred Stock, the Depositary Shares, the Warrants and the
Subscription Rights (collectively, the "Offered Securities") may be offered,
separately or together, in one or more separate classes or series and in
amounts, at prices and on terms to be determined at the time of offering and to
be set forth in one or more supplements to this Prospectus (each, a "Prospectus
Supplement"). Additionally, the Company may issue Subscription Rights to its
stockholders.
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Debt
Securities, and any guarantees thereof, the specific designation, aggregate
principal amount, designated currency (or currency unit), purchase price,
maturity, interest rate (or manner of calculation thereof), time of payment of
interest (if any), terms of the subordination (if any), redemption or conversion
thereof, and any other specific terms of the Debt Securities; (ii) in the case
of Common Stock, the number of shares, purchase price and terms of the offering
and sale thereof; (iii) in the case of Preferred Stock, the specific
designation, number of shares, liquidation preference, purchase price, dividend,
voting, redemption, exchange and conversion provisions and any other specific
terms of the Preferred Stock; (iv) in the case of Depositary Shares, the
aggregate number of shares offered, the fractional share of Preferred Stock
represented by each such Depositary Shares and the purchase price; (v) in the
case of Warrants, the specific designations, number, duration, purchase price,
exercise price, detachability and any other terms in connection with the
offering, sale and exercise of the Warrants, as well as the terms on which, and
the securities for which, such Warrants may be exercised; and (vi) in the case
of Subscription Rights, the designations, number, exercise price and duration,
transferability, any oversubscription privilege and any other terms in
connection with the distribution of such Subscription Rights, as well as the
terms on which and the securities for which such Subscription Rights may be
exercised.
The Common Stock is traded on the New York Stock Exchange (the "NYSE")
under the symbol "HMT." Any Common Stock sold pursuant to a Prospectus
Supplement may be listed on the NYSE. On April 21, 1998, the last reported
sales price of the Common Stock on the NYSE was $21 1/4 per share. The
Company has not determined whether any of the other Offered Securities will be
listed on the NYSE. If the Company decides to seek listing of any such Offered
Securities, the Prospectus Supplement relating thereto will disclose such
exchange or market. The applicable Prospectus Supplement will also contain
information, where applicable, about certain material United States federal
income tax considerations relating to the Offered Securities covered by such
Prospectus Supplement.
_____________________
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.
_____________________
The Offered Securities may be offered directly to the Company's
stockholders (in the case of Subscription Rights) or to purchasers, directly or
through agents, underwriters or dealers, as designated from time to time, or
through a combination of such methods, each as set forth in the applicable
Prospectus Supplement. The Company reserves the sole right to accept, and
together with its agents, from time to time, to reject in whole or in part any
proposed purchase of Offered Securities to be made directly or through agents.
Certain terms of the offering and sale of the Offered Securities, including,
where applicable, the names of any underwriters, dealers, or agents, any
applicable commission, discounts and other items constituting compensation of
such underwriters, dealers or agents, and the proceeds to the Company from such
sale will be set forth in the accompanying Prospectus Supplement. See "Plan of
Distribution" for possible indemnification arrangements for underwriters,
dealers and agents.
No Offered Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of the
Offered Securities.
THE DATE OF THIS PROSPECTUS IS APRIL , 1998.
3
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND THEREIN, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY OFFERED SECURITIES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR
SUCH PERSON TO MAKE SUCH AN OFFERING OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL
UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE HEREIN OR IN ANY PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF OR OF SUCH PROSPECTUS SUPPLEMENT.
IN CONNECTION WITH THE OFFERING OF CERTAIN OFFERED SECURITIES, CERTAIN
PERSONS PARTICIPATING IN SUCH OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE EFFECT THE MARKET PRICES OF SUCH OFFERED
SECURITIES OR OTHER SECURITIES OF THE COMPANY INCLUDING STABILIZING
TRANSACTIONS, SYNDICATE COVERING TRANSACTIONS AND THE IMPOSITION OF PENALTY
BIDS. SPECIFICALLY, SUCH PERSONS MAY OVERALLOT IN CONNECTION WITH THE OFFERING
AND MAY BID FOR AND PURCHASE THE OFFERED SECURITIES IN THE OPEN MARKET.
AVAILABLE INFORMATION
The Company and the Guarantors have filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (together
with all amendments and exhibits thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Offered Securities. This Prospectus and any Prospectus Supplement do not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information about the Company and the Offered
Securities, reference is hereby made to the Registration Statement, including
the exhibits and schedules filed as a part thereof and otherwise incorporated
therein. Statements made in this Prospectus as to the contents of any agreement
or other document referred to herein are not necessarily complete, and in each
instance, reference is made to the copy of such document so filed, each such
statement being qualified in its entirety by such reference.
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files periodic reports, proxy statements and other
information with the Commission. The Registration Statement, including the
exhibits thereto, as well as such reports and other information filed by the
Company with the Commission, can be inspected, without charge, and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington D.C., 20549 and at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission
also maintains a site on the World Wide Web at http://www.sec.gov., which
contains reports, proxy statements and other information regarding registrants
that file electronically with the Commission and certain of the Company's
filings are available at such web site. Copies of such materials can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports and other
information concerning the Company can also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
4
<PAGE>
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are hereby incorporated by reference in, and shall be deemed to be a part
of, this Prospectus:
1. Host Marriott Corporation's Annual Report on Form 10-K for the
fiscal year ended January 2, 1998, filed with the Commission on March 27,
1998.
2. Current Report on Form 8-K filed by Host Marriott Corporation
dated April 17, 1998, filed on April 17, 1998.
3. Description of the Company's Common Stock included in a
Registration Statement on Form 10 filed with the Commission.
4. Description of the Company's Common Stock included in a
Registration Statement on Form 8-A filed with the Commission on February
10, 1989.
5. HMH Properties, Inc.'s Annual Report on Form 10-K for the fiscal
year ended January 2, 1998, filed with the Commission on March 27, 1998.
All documents filed by the Company or the Guarantors 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 all Offered
Securities to which this Prospectus relates shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the respective
dates of filing of such documents. Any statement contained in this Prospectus
or in any Prospectus Supplement or 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 and any Prospectus Supplement to the extent that
a statement contained herein or in any Prospectus Supplement or in any other
subsequently filed document which also is incorporated or 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 or any
Prospectus Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon request, a copy of
any of the foregoing documents (other than exhibits incorporated by reference
into such document). Requests for documents should be submitted to the
Corporate Secretary, Host Marriott Corporation, 10400 Fernwood Road, Bethesda,
Maryland, 20817-1109. The information relating to the Company contained in this
Prospectus does not purport to be comprehensive and should be read together with
the information contained in the documents incorporated or deemed to be
incorporated by reference herein.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including the documents that are incorporated herein by
reference, contains "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act and include
statements regarding the intent, belief or current expectations of the Company,
primarily with respect to capital expenditures, cost reduction, cash flow,
operating performance and improvements and related industry developments. When
used in this Prospectus, words such as "anticipate," "estimate," "plan,"
"project," "expect," "intend," "may be," "objective," "predict," "will be,"
"believes," and similar words or phrases are intended to identify such
statements. Such statements are subject to inherent uncertainties and risks
that could cause the actual results, performance or achievements of the Company
to differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and other important factors include, among other things:
substantial leverage; the Company's success in implementing its business
strategies; the terms of the Company's indebtedness; competition in, and risks
of, the lodging industry; general economic and business conditions; and other
factors referenced in this Prospectus. The Company disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward-looking
statement contained herein to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or circumstances on
which any such statement is based.
5
<PAGE>
THE COMPANY
The Company is one of the largest owners of hotels in the world, with 100
upscale and luxury full-service hotel lodging properties in its portfolio as of
April 16, 1998, primarily located in the United States. These properties are
generally operated under the Marriott brand and managed by Marriott
International, Inc. ("Marriott International"), formerly a wholly-owned
subsidiary of the Company. Four of the Company's properties are operated under
the Ritz-Carlton brand in which Marriott International acquired a 49% interest
in April 1995. The Marriott and Ritz-Carlton brand names are among the most
respected and widely recognized brand names in the lodging industry. The
Company also owns 31 senior living communities, all of which are managed by
Marriott International. The Company's primary focus is on the acquisition of
full-service hotel lodging properties. Since the beginning of 1994 through
April 16, 1998, the Company has added 73 full-service hotels representing more
than 34,000 rooms for an aggregate purchase price of approximately $3.4 billion.
On April 17, 1998, the Company announced that it had reached a definitive
agreement with various affiliates of The Blackstone Group and Blackstone Real
Estate Partners (collectively, "Blackstone") to acquire interests in 13 world-
class luxury hotels in the U.S. and certain other assets in a transaction valued
at approximately $1.775 billion, including the assumption of debt. Following
the transaction, Blackstone will have the largest ownership interest in Host
Marriott on a fully diluted basis. Host Marriott expects to pay approximately
$835 million in cash and assumed debt and to issue approximately 47 million
Operating Partnership units of the new operating partnership (the "Operating
Partnership"), to be formed as part of the Company's reorganization, described
below. Each Operating Partnership unit will be exchangeable for one share of
Host Marriott common stock (or its cash equivalent). Upon completion of the
acquisition, Blackstone will own approximately 19% of the shares outstanding of
Host Marriott common stock on a fully converted basis. The Blackstone portfolio
consists of two Ritz-Carltons, three Four Seasons, one Grand Hyatt, three Hyatt
Regencies and four Swissotel properties. These hotels are located in major urban
and convention/resort markets with significant barriers to new competition.
In addition, on April 17, 1998, Host Marriott announced that its Board of
Directors (the "Board") has authorized the Company to reorganize its remaining
business operations to qualify as a real estate investment trust ("REIT"),
effective as of January 1, 1999, and to spin-off its senior living communities
business ("Senior Living") through a taxable stock dividend to its shareholders.
After the REIT reorganization, which is subject to shareholder and final Board
approval, the Company intends to operate as an "UPREIT," with all of its assets
and operations conducted through the newly formed Operating Partnership of which
Host Marriott will be the general partner. Marriott International's role in
managing Marriott hotels owned by Host Marriott will be unchanged.
Host Marriott will distribute shares in Senior Living to its shareholders
at the time of the REIT reorganization and Host Marriott expects to make a cash
distribution at that time. The projected aggregate value of these distributions,
which are expected to be treated as taxable dividends to shareholders, is
currently estimated between $400 and $550 million. An additional taxable
distribution may be required in 1999. Senior Living is expected to own Host
Marriott's approximately $700 million portfolio of senior living properties.
This portfolio currently consists of 31 retirement communities, totaling 7,218
units in 12 states. The communities will continue to be managed by Marriott
International. In addition, Senior Living will lease substantially all of the
hotels owned by the REIT and its affiliates. Senior Living will operate
independently of Host Marriott, will be publicly listed and will pursue its own
growth opportunities. In order to facilitate the transition, there may initially
be some Board of Directors overlap, which will be eliminated over time.
Following the REIT reorganization, Host Marriott will own Operating
Partnership units in the Operating Partnership equal to the number of
outstanding shares of Host Marriott common stock at the time of the conversion.
The UPREIT structure will not affect the ownership by shareholders of their
existing Host Marriott shares. As part of the reorganization, limited partners
in Host Marriott's full-service hotel partnerships and joint ventures are
expected to be given an opportunity to receive, on a tax-deferred basis,
Operating Partnership units in the new Operating Partnership in exchange for
their current partnership interests. Furthermore, Host Marriott anticipates
repurchasing or exchanging its approximately $1.55 billion of outstanding debt
securities, adjusting the conversion
6
<PAGE>
ratio of it Quarterly Income Preferred Securities to reflect the distribution of
Senior Living and cash to Host Marriott stockholders, and issuing additional
debt and equity securities.
The Blackstone transaction is expected to close simultaneously with the
reorganization of Host Marriott as a real estate investment trust. At that
time, Blackstone's hotels and other assets will be contributed into the
Operating Partnership. The hotels will continue to be managed under the
existing management contracts.
The REIT expects to qualify as a real estate investment trust under federal
income tax law beginning January 1, 1999. However, consummation of the REIT
reorganization is subject to significant contingencies that are outside the
control of the Company, including final Board approval, consent of shareholders,
partners, bondholders, lenders, and ground lessors of Host Marriott, its
affiliates and other third parties. Accordingly, there can be no assurance that
the REIT reorganization will be completed or that it will be effective as of
January 1, 1999. Consummation of the Blackstone transaction is also subject to
certain conditions, including consummation of the REIT reorganization by March
31, 1999.
The Company's principal executive offices are located at 10400 Fernwood
Road, Bethesda, Maryland 20817-1109, and its telephone number is (301) 380-9000.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company anticipates that any net proceeds from the sale of Offered Securities
will be used for general corporate purposes, which may include, but are not
limited to, working capital, capital expenditures, acquisitions and the
repayment, refinancing or repurchase of the Company's indebtedness or capital
stock, including the Company's outstanding long-term debt securities. The
factors which the Company will consider in any refinancing will include the
amount and characteristics of any Offered Securities issued and may include,
among others, the impact of such refinancing on the Company's liquidity, debt-
to-capital ratio and earnings per share. When a particular series of Offered
Securities is offered, the Prospectus Supplement relating thereto will set forth
the Company's intended use for the net proceeds received from the sale of such
Offered Securities. Pending the application of the net proceeds, the Company
expects to invest such proceeds in short-term, interest-bearing instruments or
other investment-grade debt securities or to reduce indebtedness under the
Company's bank credit agreement.
RISK FACTORS
CERTAIN OF THE SECURITIES TO BE OFFERED HEREBY THEMSELVES MAY INVOLVE A
HIGH DEGREE OF RISK. SUCH RISKS WILL BE SET FORTH IN THE PROSPECTUS SUPPLEMENT
RELATING TO SUCH OFFERED SECURITIES.
ERISA MATTERS
The Company and its subsidiaries may each be considered a "party in
interest" (within the meaning of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) or a "disqualified person" (within the meaning of
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code")) with
respect to many employee benefit plans ("Plans") that are subject to ERISA. The
purchase of Offered Securities by a Plan that is subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of
Section 4975 of the Code (including individual retirement arrangements and other
plans described in Section 4975(e)(1) of the Code) and with respect to which the
Company or any of its affiliates is a service provider (or otherwise is a party
in interest or a disqualified person) may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Offered
Securities are acquired pursuant to and in accordance with an applicable
exemption. Any pension or other employee benefit plan proposing to acquire any
Offered Securities should consult with its counsel.
7
<PAGE>
RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's ratio of earnings to combined
fixed charges and preferred stock dividends on a historical basis for the
periods indicated.
<TABLE>
<CAPTION>
FISCAL YEAR
-------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ -------------- -------------- --------------
(IN MILLIONS, EXCEPT RATIO DATA)
<S> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed
charges and preferred stock dividends(a)..... 1.3X 1.0X -- -- --
Deficiency of earnings to combined fixed
charges and preferred stock dividends (b).... -- -- $70 $12 $45
</TABLE>
_________________
(a) The ratio of earnings to fixed charges and preferred stock dividends is
computed by dividing income from continuing operations before income taxes
and fixed charges and preferred stock dividends by total fixed charges and
preferred stock dividends. Fixed charges represent interest expense
(including capitalized interest), the amortization of debt issuance costs,
and the portion of rental expense that represents interest.
(b) The deficiency of earnings to fixed charges and preferred stock dividends
in 1995, 1994 and 1993 is largely the result of depreciation and
amortization of $122 million in 1995, $113 million in 1994 and $196 million
in 1993. In addition, the deficiency for 1995 was impacted by the $60
million pre-tax charge to write-down the carrying value of one undeveloped
land parcel to its estimated sales value.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated.
<TABLE>
<CAPTION>
FISCAL YEAR
-----------------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ -------------- -------------- --------------
(IN MILLIONS, EXCEPT RATIO DATA)
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (a).... 1.3X 1.0X -- -- --
Deficiency of earnings to fixed
charges (b)............................. -- -- $70 $12 $45
</TABLE>
___________________
(a) The ratio of earnings to fixed charges is computed by dividing income from
continuing operations before income taxes and fixed charges by total fixed
charges. Fixed charges represent interest expense (including capitalized
interest), the amortization of debt issuance costs, and the portion of
rental expense that represents interest.
(b) The deficiency of earnings to fixed charges in 1995, 1994 and 1993 is
largely the result of depreciation and amortization of $122 million in 1995,
$113 million in 1994 and $196 million in 1993. In addition, the deficiency
for 1995 was impacted by the $60 million pre-tax charge to write down the
carrying value of one undeveloped land parcel to its estimated sales value.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities offered hereby are to be issued under an indenture (the
"Indenture") to be executed by the Company and a trustee to be identified in the
applicable Prospectus Supplement, as trustee (the "Trustee"). The terms of the
Debt Securities will include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (the "TIA") as
in effect on the date of the Indenture. The Debt Securities will be subject to
all such terms, and potential purchasers of the Debt Securities are referred to
the Indenture and the TIA for a statement thereof. A copy of the form of
Indenture has been filed as an exhibit to the Registration Statement. Section
references used in this Prospectus refer to sections of the Indenture.
The Company may offer under this Prospectus up to $2,500,000,000 aggregate
principal amount of Debt Securities, or if Debt Securities are issued at a
discount, or in a foreign currency or composite currency, such
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<PAGE>
principal amount as may be sold for an initial public offering price of up to
$2,500,000,000. Unless otherwise specified in the applicable Prospectus
Supplement, the Debt Securities will represent direct, unsecured obligations of
the Company and will rank equally with all other unsecured and unsubordinated
indebtedness of the Company.
The following statements relating to the Debt Securities and the Indenture
are summaries and do not purport to be complete. Such summaries may make use of
certain terms defined in the Indenture and are qualified in their entirety by
express reference to the Indenture. Certain other specific terms of any series
of Debt Securities will be described in the applicable Prospectus Supplement.
To the extent that any particular terms of the Debt Securities described in a
Prospectus Supplement differ from any of the terms described herein, then such
terms described herein shall be deemed to have been superseded by such
Prospectus Supplement.
GENERAL
The terms of each series of Debt Securities will be established by or
pursuant to a resolution of the Board and set forth or determined in the manner
provided in an Officers' Certificate or by a supplemental indenture. (Indenture
sec. 2.2) The particular terms of each series of Debt Securities will be
described in a Prospectus Supplement relating to such series (including any
pricing supplement thereto).
The Debt Securities that may be offered under the Indenture are not limited
in aggregate principal amount. The Debt Securities may be issued in one or more
series with the same or various maturities, at par, at a premium, or at a
discount. The Prospectus Supplement (including any pricing supplement thereto)
will set forth the initial offering price, the aggregate principal amount and
the following terms of the Debt Securities in respect of which this Prospectus
is delivered: (1) the title of such Debt Securities; (2) the price or prices
(expressed as a percentage of the aggregate principal amount thereof) at which
the Debt Securities will be issued; (3) any limit on the aggregate principal
amount of such Debt Securities; (4) the date or dates on which principal on such
Debt Securities will be payable; (5) the rate or rates (which may be fixed or
variable) per annum or, if applicable, the method used to determine such rate or
rates (including any commodity, commodity index, stock exchange index or
financial index) at which such Debt Securities will bear interest, if any, the
date or dates from which such interest, if any, will accrue, the date or dates
on which such interest, if any, will commence and be payable and any regular
record date for the interest payable on any interest payment date; (6) the place
or places where principal of, premium, if any, and interest, if any, on such
Debt Securities will be payable; (7) the period or periods within which, the
price or prices at which and the terms and conditions upon which the Debt
Securities may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase the Debt
Securities, in whole or in part, pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof; (9) the dates, if any, on which
and the price or prices at which the Debt Securities will be repurchased by the
Company at the option of the Holders thereof and other detailed terms and
provisions of such repurchase obligations; (10) the denominations in which such
Debt Securities may be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (11) whether the Debt Securities are to be issuable
in the form of Certificated Debt Securities (as defined below) or Global Debt
Securities (as defined below); (12) the portion of principal amount of such Debt
Securities that shall be payable upon declaration of acceleration of the
maturity date thereof, if other than the principal amount thereof; (13) the
currency of denomination of such Debt Securities; (14) the designation of the
currency, currencies or currency units in which payment of principal of,
premium, if any, and interest, if any, on such Debt Securities will be made;
(15) if payments of principal of, premium, if any, or interest, if any, on the
Debt Securities are to be made in one or more currencies or currency units other
than that or those in which such Debt Securities are denominated, the manner in
which the exchange rate with respect to such payments will be determined; (16)
the manner in which the amounts of payment of principal of, premium, if any, or
interest, if any, on such Debt Securities will be determined, if such amounts
may be determined by reference to an index based on a currency or currencies
other than that in which the Debt Securities are denominated or designated to be
payable or by reference to a commodity, commodity index, stock exchange index or
financial index; (17) the provisions, if any, relating to any security provided
for such Debt Securities; (18) any addition to or change in the Events of
Default described herein or in the Indenture with respect to such Debt
Securities; (19) any addition to or change in the covenants described herein or
in the Indenture with respect to such Debt Securities and any change in the
acceleration provisions described herein or in the Indenture with respect to
such Debt Securities; (20) the terms and conditions, if any, upon which the Debt
Securities shall be exchanged for or converted into Common Stock,
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<PAGE>
Preferred Stock or Depository Shares; (21) any other terms of such Debt
Securities, which may modify or delete any provision of the Indenture insofar as
it applies to such series; (22) any depositories, interest rate calculation
agents, exchange rate calculation agents or other agents with respect to the
Debt Securities; (23) whether such Debt Securities rank as senior subordinated
Debt Securities or subordinated Debt Securities or any combination thereof; and
(24) the form and terms of any guarantee of the Debt Securities. (Indenture sec.
2.2)
Debt Securities may be issued that provide for an amount less than the
stated principal amount thereof to be due and payable upon declaration of
acceleration of the maturity thereof pursuant to the terms of the Indenture
("Discount Debt Securities"). Federal income tax considerations and other
special considerations applicable to any such Discount Debt Securities will be
described in the applicable Prospectus Supplement.
Debt Securities may be issued in bearer form, with or without coupons.
Federal income tax considerations and other special considerations applicable to
bearer securities will be described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units, or if the
principal of and any premium and interest, if any, on any series of Debt
Securities is payable in a foreign currency or currencies or a foreign currency
unit or units, the restrictions, elections, general tax considerations, specific
terms and other information with respect to such issue of Debt Securities and
such foreign currency or currencies or foreign currency unit or units will be
set forth in the applicable Prospectus Supplement.
EXCHANGE AND/OR CONVERSION RIGHTS
The terms, if any, on which Debt Securities of a series may be exchanged
for or converted into shares of Common Stock, Preferred Stock or Depository
Shares will be set forth in the Prospectus Supplement relating thereto.
TRANSFER AND EXCHANGE
Each Debt Security will be represented by either one or more global
securities (a "Global Debt Security") registered in the name of The Depository
Trust Company, as Depositary (the "Depositary") or a nominee of the Depositary
(each such Debt Security represented by a Global Debt Security being herein
referred to as a "Book-Entry Debt Security"), or a certificate issued in
definitive registered form (a "Certificated Debt Security"), as set forth in the
applicable Prospectus Supplement. Except as set forth under "-- Global Debt
Securities and Book-Entry System" below, Book-Entry Debt Securities will not be
issuable in certificated form.
CERTIFICATED DEBT SECURITIES. Certificated Debt Securities may be
transferred or exchanged at the Trustee's office or paying agencies in
accordance with the terms of the Indenture. No service charge will be made for
any transfer or exchange of Certificated Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The transfer of Certificated Debt Securities and the right to receive the
principal of, premium, if any, and interest, if any, on such Certificated Debt
Securities may be effected only by surrender of the certificate representing
such Certificated Debt Securities and either reissuance by the Company or the
Trustee of such certificate to the new Holder or the issuance by the Company or
the Trustee of a new certificate to the new Holder.
GLOBAL DEBT SECURITIES AND BOOK-ENTRY SYSTEM. Each Global Debt Security
representing Book-Entry Debt Securities will be deposited with, or on behalf of,
the Depositary, and registered in the name of the Depositary or a nominee of the
Depositary. Except as set forth below, Book-Entry Debt Securities will not be
exchangeable for Certificated Debt Securities and will not otherwise be issuable
as Certificated Debt Securities.
The procedures that the Depositary has indicated it intends to follow with
respect to Book-Entry Debt Securities are set forth below.
10
<PAGE>
Ownership of beneficial interests in Book-Entry Debt Securities will be
limited to persons that have accounts with the Depositary for the related Global
Debt Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Global Debt Security, the Depositary will
credit, on its book-entry registration and transfer system, the participants'
accounts with the respective principal amounts of the Book-Entry Debt Securities
represented by such Global Debt Security beneficially owned by such
participants. The accounts to be credited shall be designated by any dealers,
underwriters or agents participating in the distribution of such Book-Entry Debt
Securities. Ownership of Book-Entry Debt Securities will be shown on, and the
transfer of such ownership interests will be effected only through, records
maintained by the Depositary for the related Global Debt Security (with respect
to interests of participants) and on the records of participants (with respect
to interests of persons holding through participants). The laws of some states
may require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability to own,
transfer or pledge beneficial interests in Book-Entry Debt Securities.
So long as the Depositary for a Global Debt Security, or its nominee, is
the registered owner of such Global Debt Security, the Depositary or such
nominee, as the case may be, will be considered the sole owner or Holder of the
Book-Entry Debt Securities represented by such Global Debt Security for all
purposes under the Indenture. Except as set forth below, beneficial owners of
Book-Entry Debt Securities will not be entitled to have such securities
registered in their names, will not receive or be entitled to receive physical
delivery of a certificate in definitive form representing such securities and
will not be considered the owners or Holders thereof under the Indenture.
Accordingly, each person beneficially owning Book-Entry Debt Securities must
rely on the procedures of the Depositary for the related Global Debt Security
and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest, to exercise any rights of a Holder
under the Indenture.
The Company understands, however, that under existing industry practice,
the Depositary will authorize the persons on whose behalf it holds a Global Debt
Security to exercise certain rights of Holders of Debt Securities, and the
Indenture provides that the Company, the Trustee and their respective agents
will treat as the Holder of a Debt Security the persons specified in a written
statement of the Depositary with respect to such Global Debt Security for
purposes of obtaining any consents or directions required to be given by Holders
of the Debt Securities pursuant to the Indenture. (Indenture sec. 2.14.6)
Payments of principal of, premium, if any, and interest on Book-Entry Debt
Securities will be made to the Depositary or its nominee, as the case may be, as
the registered holder of the related Global Debt Security. (Indenture sec.
2.14.5) None of the Company, the Trustee or any other agent of the Company or
agent of the Trustee will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in such Global Debt Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Depositary, upon receipt of any payment of
principal of, premium, if any, or interest, if any, on a Global Debt Security,
will immediately credit participants' accounts with payments in amounts
proportionate to the respective amounts of Book-Entry Debt Securities held by
each such participant as shown on the records of the Depositary. The Company
also expects that payments by participants to owners of beneficial interests in
Book-Entry Debt Securities held through such participants will be governed by
standing customer instructions and customary practices, as is now the case with
the securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such participants.
If the Depositary is at any time unwilling or unable to continue as
Depositary or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depositary registered as a clearing agency under the Exchange
Act is not appointed by the Company within 90 days, the Company will issue
Certificated Debt Securities in exchange for each Global Debt Security. In
addition, the Company may at any time and in its sole discretion determine not
to have the Book-Entry Debt Securities of any series represented by one or more
Global Debt Securities and, in such event, will issue Certificated Debt
Securities in exchange for the Global Debt Securities of such series. Global
Debt Securities will also be exchangeable by the Holders for Certificated Debt
Securities if an Event of Default with respect to the Book Entry Debt Securities
represented by such Global Debt Securities has occurred and is continuing. Any
Certificated Debt Securities issued in exchange for a Global Debt Security will
be
11
<PAGE>
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received by
the Depositary from participants with respect to ownership of Book-Entry Debt
Securities relating to such Global Debt Security.
The foregoing information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
COVENANTS
Unless otherwise indicated in this Prospectus or a Prospectus Supplement,
the Debt Securities will not have the benefit of any covenants that limit or
restrict the Company's business or operations, the pledging of the Company's
assets or the incurrence of indebtedness of the Company.
The applicable Prospectus Supplement will describe any material covenants
in respect of a series of Debt Securities. Other than the covenants of the
Company included in the Indenture as described above or as described in the
applicable Prospectus Supplement, there are no covenants or other provisions in
the Indenture providing for a put or increased interest or otherwise that would
afford Holders of Debt Securities additional protection in the event of a
recapitalization transaction, a change of control of the Company or a highly
leveraged transaction.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all of its properties and assets to, any
Person (a "successor Person") unless (i) the Company is the surviving
corporation or the successor Person (if other than the Company) is a
corporation, partnership, trust or other entity organized and validly existing
under the laws of any U.S. domestic jurisdiction and expressly assumes the
Company's obligations on the Debt Securities and under the Indenture, (ii)
immediately after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing under the Indenture and (iii)
certain other conditions are met. In the event the Company's obligations on the
Debt Securities and under the Indenture are assumed by a successor Person, the
Company will be released from such obligations. (Indenture sec. 5.1)
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, the
following will be Events of Default under the Indenture with respect to Debt
Securities of any series: (a) default in the payment of any interest upon any
Debt Security of that series when it becomes due and payable, and continuance of
such default for a period of 30 days (unless the entire amount of such payment
is deposited by the Company with the Trustee or with a paying agent prior to the
expiration of such period of 30 days); (b) default in the payment of principal
of or premium, if any, on any Debt Security of that series when due and payable,
at maturity, upon redemption or otherwise; (c) default in the deposit of any
sinking fund payment, when and as due in respect of any Debt Security of that
series; (d) default in the performance or breach of any other covenant or
warranty of the Company in the Indenture (other than a covenant or warranty that
has been included in the Indenture solely for the benefit of a series of Debt
Securities other than that series), which default continues uncured for a period
of 30 days after written notice to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount of
the outstanding Debt Securities of that series as provided in the Indenture; (e)
certain events of bankruptcy, insolvency or reorganization with respect to the
Company; and (f) any other Event of Default provided with respect to Debt
Securities of that series that is described in the Prospectus Supplement
accompanying this Prospectus. No Event of Default with respect to a particular
series of Debt Securities (except as to certain events of bankruptcy, insolvency
or reorganization with respect to the Company) necessarily constitutes an Event
of Default with respect to any other series of Debt Securities. (Indenture sec.
6.1). The occurrence of an Event of Default may constitute an event of default
under the Company's bank credit agreements in existence from time to time. In
addition, the occurrence of certain Events of Default or an acceleration under
the Indenture may constitute an event of default under certain other
indebtedness of the Company outstanding from time to time.
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<PAGE>
If an Event of Default with respect to Debt Securities of any series
outstanding at the time occurs and is continuing, then in every such case the
Trustee or the holders of not less than 25% in principal amount of the
outstanding Debt Securities of that series may, by a notice in writing to the
Company (and to the Trustee if given by the holders), declare to be due and
payable immediately the principal (or, if the Debt Securities of that series are
Discount Debt Securities, such portion of the principal amount as may be
specified in the terms of that series) of and accrued and unpaid interest, if
any, on all Debt Securities of that series. In the case of an Event of Default
resulting from certain events of bankruptcy, insolvency or reorganization, the
principal (or such specified amount) of and accrued and unpaid interest, if any,
on all outstanding Debt Securities shall ipso facto become and be immediately
---- -----
due and payable without any declaration or other act on the part of the Trustee
or any Holder of outstanding Debt Securities. At any time after a declaration
of acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the holders of a majority in principal amount of the outstanding
Debt Securities of that series may rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal and
interest, if any, with respect to Debt Securities of that series, have been
cured or waived as provided in the Indenture. (Indenture sec. 6.2) For
information as to waiver of defaults see the discussion set forth below under
"Modification and Waiver."
The Indenture provides that the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
holder of outstanding Debt Securities, unless the Trustee receives indemnity
satisfactory to it against any loss, liability or expense. (Indenture sec.
7.1(e)) Subject to certain rights of the Trustee, the Holders of a majority in
principal amount of the outstanding Debt Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Debt Securities of that series. (Indenture sec.
6.12)
No Holder of any Debt Security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to the Indenture
or for the appointment of a receiver or trustee, or for any remedy under the
Indenture, unless such holder shall have previously given to the Trustee written
notice of a continuing Event of Default with respect to Debt Securities of that
series and unless also the holders of at least 25% in principal amount of the
outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in principal amount of the outstanding Debt Securities of that series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. (Indenture sec. 6.7) Notwithstanding the foregoing,
the Holder of any Debt Security will have an absolute and unconditional right to
receive payment of the principal of, premium, if any, and any interest on such
Debt Security on or after the due dates expressed in such Debt Security and to
institute suit for the enforcement of any such payment. (Indenture sec. 6.8)
The Indenture requires the Company, within 120 days after the end of each
of its fiscal years, to furnish to the Trustee a statement as to compliance with
the Indenture. (Indenture sec. 4.3) The Indenture provides that the Trustee may
withhold notice to the holders of Debt Securities of any series of any Default
or Event of Default (except in payment on any Debt Securities of such series)
with respect to Debt Securities of such series if it in good faith determines
that withholding such notice is in the interest of the Holders of such Debt
Securities. (Indenture sec. 7.5)
MODIFICATION AND WAIVER
Modifications to, and amendments of, the Indenture may be made by the
Company and the Trustee with the consent of the Holders of at least a majority
in principal amount of the outstanding Debt Securities of each series affected
by such modifications or amendments; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
outstanding Debt Security affected thereby: (a) reduce the amount of Debt
Securities whose Holders must consent to an amendment or waiver affecting such
series; (b) reduce the rate of or extend the time for payment of interest
(including default interest) on any such Debt Security; (c) reduce the principal
of or premium, if any, on or change the fixed maturity of any such Debt Security
or reduce the amount of, or postpone the date fixed for, the payment of any
sinking fund or analogous obligation with respect to such series of Debt
Securities; (d) reduce the principal amount of any such Discount Debt Securities
payable upon acceleration
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<PAGE>
of the maturity thereof; (e) waive a Default or an Event of Default in the
payment of the principal of, premium, if any, or interest, if any, on any such
Debt Security (except a rescission of acceleration of the Debt Securities of any
series by the Holders of at least a majority in aggregate principal amount of
the then outstanding Debt Securities of such series and a waiver of the payment
default that resulted from such acceleration); (f) make the principal of or
premium, if any, or interest, if any, on any such Debt Security payable in
currency other than that stated in the Debt Security; (g) make any change to
certain provisions of the Indenture relating to, among other things, the right
of Holders of Debt Securities of such series to receive payment of the principal
of, premium, if any, and interest, if any, on such Debt Securities and to
institute suit for the enforcement of any such payment and to waivers or
amendments; or (h) waive a redemption payment with respect to any such Debt
Security. (Indenture sec. 9.3) The Company and the Trustee may amend the
Indenture of the such Debt Securities without notice to or consent of any holder
of a Debt Security; (i) to cure any ambiguity, defect or inconsistency; (ii) to
comply with the Indenture's provisions regarding successor corporations; (iii)
to comply with any requirements of the Commission in connection with the
qualification of the Indenture under the TIA; (iv) to provide for Global Debt
Securities in addition to or in place of Certificated Debt Securities; (v) to
add to, change or eliminate any of the provisions of the Indenture in respect of
one or more series of Debt Securities; provided however, that any such addition,
change or elimination (A) shall neither (i) apply to any Debt Security of any
series created prior to the execution of such amendment and entitled to the
benefit of such provision, nor (2) modify the rights of a holder of any such
Debt Security with respect to such provision, or (B) shall become effective only
when there is no outstanding Debt Security of any series created prior to such
amendment and entitled to the benefit of such provisions; (vi) to make any
change that does not adversely affect in any material respect the interest of
any holder; or (vii) to establish additional series of Debt Securities as
permitted by the Indenture.
The holders of at least a majority in principal amount of the outstanding
Debt Securities of any series may on behalf of the holders of all Debt
Securities of that series waive, insofar as that series is concerned, compliance
by the Company with provisions of the Indenture other than certain specified
provisions. (Indenture sec. 9.2) The Holders of a majority in principal amount
of the outstanding Debt Securities of any series may on behalf of the Holders of
all the Debt Securities of such series waive any past default under the
Indenture with respect to such series and its consequences, except a default in
the payment of the principal of, premium, if any, or any interest, if any, on
any Debt Security of that series or in respect of a covenant or provision which
cannot be modified or amended without the consent of the Holder of each
outstanding Debt Security of such series affected; provided, however, that the
Holders of a majority in principal amount of the outstanding Debt Securities of
any series may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration. (Indenture sec.
6.13)
DEFEASANCE OF SECURITIES AND CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
LEGAL DEFEASANCE. The Indenture provides that, unless otherwise provided by
the terms of the applicable series of Debt Securities, the Company may be
discharged from any and all Obligations in respect of the Debt Securities of any
series (except for certain obligations to register the transfer or exchange of
Debt Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, and to maintain paying agencies and certain
provisions relating to the treatment of funds held by paying agents) upon the
deposit with the Trustee, in trust, of money and/or U.S. Government obligations
or, in the case of Debt Securities denominated in a single currency other than
U.S. Dollars, Foreign Government Obligations (as defined below), that, through
the payment of interest and principal in respect thereof in accordance with
their terms, will provide money in an amount sufficient in the opinion of a
nationally recognized firm of independent public accountants to pay and
discharge each installment of principal (and premium, if any) and interest, if
any, on and any mandatory sinking fund payments in respect of the Debt
Securities of such series on the stated maturity of such payments in accordance
with the terms of the Indenture and such Debt Securities. Such discharge may
occur only if, among other things, the Company shall have delivered to the
Trustee an opinion of counsel stating that the Company has received from, or
there has been published by, the United States Internal Revenue Service a ruling
or, since the date of execution of the Indenture, there has been a change in the
applicable United States federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of the Debt
Securities of such series will not recognize income, gain or loss for United
States federal income tax purposes as a result of such deposit, defeasance and
discharge and will be
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subject to United States federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred. (Indenture sec. 8.3)
DEFEASANCE OF CERTAIN COVENANTS. The Indenture provides that, unless
otherwise provided by the terms of the applicable series of Debt Securities,
upon compliance with certain conditions, (i) the Company may omit to comply with
the covenants described above under "--Consolidation, Merger and Sale of Assets"
and certain other covenants set forth in the Indenture, as well as any
additional restrictive covenants, or other provisions which may be set forth in
the applicable Prospectus Supplement, and any omission to comply with such
covenants will not constitute a Default or an Event of Default with respect to
the Debt Securities of such series ("covenant defeasance"). The conditions
include: the deposit with the Trustee of money and/or U.S. Government
Obligations or, in the case of Debt Securities denominated in a single currency
other than U.S. Dollars, Foreign Government Obligations, that, through the
payment of interest and principal in respect thereof in accordance with their
terms, will provide money in an amount sufficient in the opinion of a nationally
recognized firm of independent public accountants to pay and discharge each
installment of principal of, premium, if any, and interest, if any, on and any
mandatory sinking fund payments in respect of the Debt Securities of such series
on the stated maturity of such payments in accordance with the terms of the
Indenture and such Debt Securities; and the delivery to the Trustee of an
opinion of counsel to the effect that the Holders of the Debt Securities of such
series will not recognize income, gain or loss for United States federal income
tax purposes as a result of such deposit and related covenant defeasance and
will be subject to United States federal income tax on the same amounts and in
the same manner and at the same times as would have been the case if such
deposit and related covenant defeasance had not occurred. (Indenture sec. 8.4)
COVENANT DEFEASANCE AND EVENTS OF DEFAULT. In the event the Company
exercises its option to effect covenant defeasance with respect to any series of
Debt Securities and the Debt Securities of such series are declared due and
payable because of the occurrence of any Event of Default, the amount of money
and/or U.S. Government Obligations or Foreign Government obligations on deposit
with the Trustee will be sufficient to pay amounts due on the Debt Securities of
such series at the time of their stated maturity but may not be sufficient to
pay amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company shall
remain liable for such payments.
"Foreign Government Obligations" means, with respect to Debt Securities of
any series that are denominated in a currency other than U.S. Dollars, (i)
direct obligations of the government that issued or caused to be issued such
currency for the payment of which obligations its full faith and credit is
pledged or (ii) obligations of a Person controlled or supervised by or acting as
an agency or instrumentality of such government the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case under clauses (i) or (ii), are not callable or
redeemable at the option of the issuer thereof.
GUARANTEES
The Company's payment obligation under any series of Debt Securities may be
guaranteed by one or more Guarantors. The terms of any such guarantee will be
set forth in the applicable Prospectus Supplement.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the internal laws of the State of New York. (Indenture sec.
10.10).
REGARDING THE TRUSTEE
The Trustee with respect to any series of Debt Securities will be
identified in the Prospectus Supplement relating to such Debt Securities. The
Indenture and the provision of the TIA incorporated by reference therein contain
certain limitations on the rights of the Trustee, should it become a creditor of
the Company, to obtain payments of claims in certain cases, or to realize on
certain property received in respect of any such claim, as security or
otherwise. The Trustee and its affiliates may engage in, and will be permitted
to continue to engage in,
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other transactions with the Company and its affiliates, provided, however, that
if it acquires any conflicting interest (as defined in the TIA), it must
eliminate such conflict or resign.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee. The TIA and the Indenture provide that in the case an Event of Default
shall occur (and be continuing), the Trustee will be required, in the exercise
of its rights and powers, to use the degree of care and skill of a prudent man
in the conduct of his own affairs. Subject to such provision, the Trustee will
be under no obligation to exercise any of its rights or powers under the
Indenture at the request of any of the holders of the Debt Securities issued
thereunder, unless they have offered to the Trustee indemnity satisfactory to
it.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company's Restated Certificate of Incorporation (the "Company
Certificate") authorizes the issuance of a total of 601,000,000 shares of all
classes of stock, of which 600,000,000 shares are Common Stock and 1,000,000
shares are Preferred Stock. As of March 27, 1998, 204,180,501 shares of Common
Stock were outstanding and no shares of Preferred Stock were outstanding. The
following summaries of certain provisions of the Company's capital stock do not
purport to be complete and are subject to and qualified in their entirety by the
provisions of the Company Certificate, the Company's Amended and Restated Bylaws
(the "Bylaws") and the Company's Rights Agreement (as defined), each of which is
included as exhibits to the Registration Statement of which this Prospectus
forms a part, and by applicable law. In connection with the Company's adoption
of a shareholder rights plan, the Board authorized and reserved for issuance
300,000 shares of Series A Junior Participating Preferred Stock ("Junior
Preferred Stock"). No shares of Junior Preferred Stock are currently
outstanding.
COMMON STOCK
Subject to such preferential rights as may be granted by the Board in
connection with the future issuance of preferred stock, each holder of Common
Stock is entitled to one vote for each share registered in such holder's name on
the books of the Company on all matters submitted to a vote of shareholders.
Except as otherwise provided by law, the holders of Common Stock vote as one
class. Holders of Common Stock are entitled to such dividends as the Board may
declare out of funds legally available therefor. Subject to the prior rights of
creditors and the holders of any of the Company's preferred stock, if any, the
holders of Common Stock are entitled in the event of liquidation, dissolution or
winding up to share pro rata in the distribution of all remaining assets. There
are no redemption or sinking fund provisions applicable to the Common Stock, and
the Company Certificate provides that there shall be no preemptive rights. The
shares of Common Stock do not have cumulative voting rights. As a result, the
holders of Common Stock entitled to exercise more than 50% of the voting rights
in an election of directors will be able to elect 100% of the directors to be
elected if they choose to do so. All of the outstanding shares of Common Stock
are, and the shares of Common Stock offered hereby will be, fully paid and
nonaccessable.
PREFERRED STOCK
Under the Company Certificate, shares of Preferred Stock may be issued from
time to time, in one or more classes or series, as authorized by the Board,
generally without the approval of the shareholders. Prior to issuance of shares
of each series, the Board is required by the General Corporation Law of the
State of Delaware (the "DGCL") and the Company Certificate to adopt resolutions
and file a Certificate of Designation (the "Certificate of Designation") with
the Secretary of State of the State of Delaware, fixing for each such class or
series the designation, powers, preferences and rights of the shares of such
class or series and the qualifications, limitations or restrictions thereon,
including, but not limited to, dividend rights, dividend rate or rates,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, and the liquidation
preferences as are permitted by the DGCL. The Board could authorize the
issuance of shares of
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Preferred Stock with terms and conditions which could have the effect of
discouraging a takeover or other transaction which holders of some, or a
majority, of such shares might believe to be in their best interest or in which
holders of some, or a majority, of such shares might receive a premium for their
shares over the then-market price of such shares.
Subject to limitations prescribed by the DGCL, the Company Certificate and
the Bylaws, the Board is authorized to fix the number of shares constituting
each class or series of Preferred Stock and the designations and powers,
preferences and relative, participating, optional or other special rights,
including such provisions as may be desired concerning voting, redemption,
dividends, dissolution or the distribution of assets, conversion or exchange,
and such other subjects or matters as may be fixed by resolution of the Board or
duly authorized committee thereof. The Preferred Stock offered hereby will,
when issued, be fully paid and nonassessable and will not have, or be subject
to, any preemptive or similar rights.
Reference is made to the Prospectus Supplement relating to the class or
series of Preferred Stock being offered for the specific terms thereof,
including:
(i) The title and stated value of such Preferred Stock;
(ii) The number of shares of such Preferred Stock offered, the
liquidation preference per share and the purchase price of such Preferred Stock;
(iii) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred Stock;
(iv) Whether dividends shall be cumulative or non-cumulative and, if
cumulative, the date from which dividends on such Preferred Stock shall
accumulate;
(v) The procedures for any auction and remarketing, if any, for
such Preferred Stock;
(vi) The provisions for a sinking fund, if any, for such Preferred
Stock;
(vii) The provisions for redemption, if applicable, of such Preferred
Stock;
(viii) Any listing of such Preferred Stock on any securities exchange
or market;
(ix) The terms and conditions, if applicable, upon which such
Preferred Stock will be convertible into Common Stock of the Company, including
the conversion price (or manner of calculation thereof) and conversion period;
(x) The terms and conditions, if applicable, upon which Preferred
Stock will be exchangeable into Debt Securities of the Company, including the
exchange price (or manner of calculation thereof) and exchange period);
(xi) Voting rights, if any, of such Preferred Stock;
(xii) Whether interests in such Preferred Stock will be represented
by depositary shares;
(xiii) A discussion of any material and/or special United States
federal income tax considerations applicable to such Preferred Stock;
(xiv) The relative ranking and preferences of such Preferred Stock as
to dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company;
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(xv) Any limitations on issuance of any class or series of Preferred
Stock ranking senior to or on a parity with such series of Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company; and
(xvi) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
DELAWARE LAW; CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE AND BYLAWS AND THE
MARRIOTT INTERNATIONAL PURCHASE AGREEMENT
COMPANY CERTIFICATE AND BYLAWS. The Company Certificate contains several
provisions that will make difficult an acquisition of control of the Company by
means of a tender offer, open market purchases, a proxy fight or otherwise, that
is not approved by the Board. The Bylaws also contain provisions that could have
an antitakeover effect.
The purposes of the relevant provisions of the Company Certificate and
Bylaws are to discourage certain types of transactions, described below, which
may involve an actual or threatened change of control of the Company and to
encourage persons seeking to acquire control of the Company to consult first
with the Board to negotiate the terms of any proposed business combination or
offer. The provisions are designed to reduce the vulnerability of the Company to
an unsolicited proposal for a takeover that does not contemplate the acquisition
of all outstanding shares or is otherwise unfair to shareholders of the Company
or an unsolicited proposal for the restructuring or sale of all or part of the
Company. The Company believes that, as a general rule, such proposals would not
be in the best interests of the Company and its shareholders.
CLASSIFIED BOARD OF DIRECTORS. The Company Certificate provides for the
Board to be divided into three classes serving staggered terms so that
directors' current terms will expire at the 1998, 1999 or 2000 annual meeting of
shareholders.
The classification of directors has the effect of making it more difficult
for shareholders to change the composition of the Board in a relatively short
period of time. At least two annual meetings of shareholders, instead of one,
will generally be required to effect a change in a majority of the Board. Such a
delay may help ensure that the Board, if confronted by a holder attempting to
force a stock repurchase at a premium above market prices, a proxy contest or an
extraordinary corporate transaction, will have sufficient time to review the
proposal and appropriate alternatives to the proposal and to act in what it
believes are the best interests of the shareholders.
The classified board provision could have the effect of discouraging a
third party from making a tender offer or otherwise attempting to obtain control
of the Company, even though such an attempt might be beneficial to the Company
and its shareholders. The classified board provision could thus increase the
likelihood that incumbent directors will retain their positions. In addition,
since the classified board provision is designed to discourage accumulations of
large blocks of the Company's stock by purchasers whose objective is to have
such stock repurchased by the Company at a premium, the classified board
provision could tend to reduce the temporary fluctuations in the market price of
the Company's stock that could be caused by accumulations of large blocks of
such stock. Accordingly, shareholders could be deprived of certain opportunities
to sell their stock at a temporarily higher market price.
The Company believes that a classified board of directors helps to assure
the continuity and stability of the Board and business strategies and policies
as determined by the Board, because generally a majority of the directors at any
given time will have had prior experience as directors of the Company. The
classified board provision also helps assure that the Board, if confronted with
an unsolicited proposal from a third party that has acquired a block of the
voting stock of the Company, will have sufficient time to review the proposal
and appropriate alternatives and to seek the best available result for all
shareholders.
REMOVAL; FILLING VACANCIES. The Company Certificate provides that, subject
to any rights of the holders of preferred stock, only a majority of the Board
then in office shall have the authority to fill any vacancies on the
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Board, including vacancies created by an increase in the number of directors. In
addition, the Company Certificate provides that a new director elected to fill a
vacancy on the Board will serve for the remainder of the full term of his or her
class and that no decrease in the number of directors shall shorten the term of
an incumbent. Moreover, the Company Certificate provides that directors may be
removed with or without cause only by the affirmative vote of holders of at
least 66 2/3% of the voting power of the shares entitled to vote at the election
of directors, voting together as a single class. These provisions relating to
removal and filling of vacancies on the Board will preclude shareholders from
enlarging the Board or removing incumbent directors and filling the vacancies
with their own nominees.
LIMITATIONS ON SHAREHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS.
The Company Certificate and Bylaws provide that shareholder action can be taken
only at an annual or special meeting of shareholders and prohibit shareholder
action by written consent in lieu of a meeting. The Company Certificate and
Bylaws provide that, subject to the rights of holders of any series of preferred
stock, special meetings of shareholders can be called only by a majority of the
entire Board. Shareholders are not permitted to call a special meeting or to
require that the Board call a special meeting of shareholders. Moreover, the
business permitted to be conducted at any special meeting of shareholders is
limited to the business brought before the meeting by or at the direction of the
Board.
The provisions of the Company Certificate and Bylaws restricting
shareholder action by written consent may have the effect of delaying
consideration of a shareholder proposal until the next annual meeting unless a
special meeting is called by a majority of the entire Board. These provisions
would also prevent the holders of a majority of the voting power of the voting
stock from using the written consent procedure to take shareholder action and
from taking action by consent without giving all the shareholders entitled to
vote on a proposed action the opportunity to participate in determining such
proposed action. Moreover, a shareholder could not force shareholder
consideration of a proposal over the opposition of the Board by calling a
special meeting of shareholders prior to the time the Board believed such
consideration to be appropriate.
The Company believes that such limitations on shareholder action will help
to assure the continuity and stability of the Board and the Company's business
strategies and policies as determined by the Board, to the benefit of all of the
Company's shareholders. If confronted with an unsolicited proposal from Company
shareholders, the Board will have sufficient time to review such proposal and to
seek the best available result for all shareholders, before such proposal is
approved by such shareholders by written consent in lieu of a meeting or through
a special meeting of shareholders.
NOMINATIONS OF DIRECTORS AND SHAREHOLDER PROPOSALS. The Bylaws establish
an advance notice procedure with regard to the nomination, other than by or at
the direction of the Board, of candidates for election as directors (the
"Nomination Procedure") and with regard to shareholder proposals to be brought
before an annual or special meeting of shareholders (the "Business Procedure").
The Nomination Procedure provides that only persons who are nominated by or
at the direction of the Board, or by a shareholder who has given timely prior
written notice to the Corporate Secretary of the Company prior to the meeting at
which directors are to be elected, will be eligible for election as directors.
The Business Procedure provides that shareholder proposals must be submitted in
writing in a timely manner in order to be considered at any annual or special
meeting. To be timely, notice must be received by the Company (i) in the case of
an annual meeting, not less than 90 days prior to the annual meeting for a
director nomination, and not less than 120 days prior to the annual meeting for
a shareholder proposal or (ii) in the case of a special meeting not later than
the seventh day following the day on which notice of such meeting is first given
to shareholders for both a director nomination and a shareholder proposal.
Under the Nomination Procedure, notice to the Company from a shareholder
who proposes to nominate a person at a meeting for election as a director must
contain certain information about that person, including age, business and
residence addresses, principal occupation, the class and number of shares of
Common Stock beneficially owned, the consent to be nominated and such other
information as would be required to be included in a proxy statement soliciting
proxies for the election of the proposed nominee, and certain information about
the shareholder proposing to nominate that person. Under the Business Procedure,
notice relating to a shareholder
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proposal must contain certain information about such proposal and about the
shareholder who proposes to bring the proposal before the meeting, including the
class and number of shares of Common Stock beneficially owned by such
shareholder. If the Chairman or other officer presiding at a meeting determines
that a person was not nominated in accordance with the Nomination Procedure,
such person will not be eligible for election as a director, or if he determines
that the shareholder proposal was not properly brought before such meeting, such
proposal will not be introduced at such meeting. Nothing in the Nomination
Procedure or the Business Procedure will preclude discussion by any shareholder
of any nomination or proposal properly made or brought before an annual or
special meeting in accordance with the above-mentioned procedures.
The purpose of the Nomination Procedure is, by requiring advance notice of
nomination by shareholders, to afford the Board a meaningful opportunity to
consider the qualifications of the proposed nominees and, to the extent deemed
necessary or desirable by the Board, to inform shareholders about such
qualifications. The purpose of the Business Procedure is, by requiring advance
notice of shareholder proposals, to provide a more orderly procedure for
conducting annual meetings of shareholders and, to the extent deemed necessary
or desirable by the Board, to provide the Board with a meaningful opportunity to
inform shareholders, prior to such meetings, of any proposal to be introduced at
such meetings, together with any recommendation as to the Board's position or
belief as to action to be taken with respect to such proposal, so as to enable
shareholders better to determine whether they desire to attend such meeting or
grant a proxy to the Board as to the disposition of any such proposal. Although
the Bylaws do not give the Board any power to approve or disapprove shareholder
nominations for the election of directors or of any other proposal submitted by
shareholders, the Bylaws may have the effect of precluding a nomination for the
election of directors or precluding the conducting of business at a particular
shareholder meeting if the proper procedures are not followed, and may
discourage or deter a third-party from conducting a solicitation of proxies to
elect its own slate of directors or otherwise attempting to obtain control of
the Company, even if the conduct of such solicitation or such attempt might be
beneficial to the Company and its shareholders.
FAIR PRICE PROVISION. Article Fifteen of the Company Certificate (the
"Fair Price Provision") requires approval by the holders of 66 2/3% of the
voting power of the outstanding capital stock of the Company entitled to vote
generally in the election of directors (the "Voting Stock") as a condition for
mergers and certain other business combinations ("Business Combinations")
involving the Company and any holder of more than 25% of such voting power (an
"Interested Shareholder") unless the transaction is either (i) approved by a
majority of the members of the Board who are not affiliated with the Interested
Shareholder and who were directors before the Interested Shareholder became an
Interested Shareholder (the "Disinterested Directors") or (ii) certain minimum
price and procedural requirements are met.
The Fair Price Provision is designed to prevent a third party from
utilizing two-tier pricing and similar inequitable tactics in a takeover
attempt. The Fair Price Provision is not designed to prevent or discourage
tender offers for the Company. It does not impede an offer for at least 66 2/3%
of the Voting Stock in which each shareholder receives substantially the same
price for his or her shares as each other shareholder or which the Board has
approved in the manner described herein. Nor does the Fair Price Provision
preclude a third party from making a tender offer for some of the shares of
Voting Stock without proposing a Business Combination in which the remaining
shares of Voting Stock are purchased. Except for the restrictions on Business
Combinations, the Fair Price Provision will not prevent an Interested
Shareholder having a controlling interest of the Voting Stock from exercising
control over the Company or increasing its interest in the Company. Moreover, an
Interested Shareholder could increase its ownership to 66 2/3% and avoid
application of the Fair Price Provision. However, the separate provisions
contained in the Company Certificate and the Bylaws relating to "Classified
Boards of Directors" discussed above will, as therein indicated, curtail an
Interested Shareholder's ability to exercise control in several respects,
including such shareholder's ability to change incumbent directors who may
oppose a Business Combination or to implement a Business Combination by written
consent without a shareholder meeting. The Fair Price Provision would, however,
discourage some takeover attempts by persons intending to acquire the Company in
two steps and to eliminate remaining shareholder interests by means of a
business combination involving less consideration per share than the acquiring
person would propose to pay for its initial interest in the Company. In
addition, acquisitions of stock by persons attempting to acquire control through
market purchases may cause the market price of the stock to reach levels which
are higher than would otherwise be the case. The Fair Price
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Provision may thereby deprive some holders of the Common Stock of an opportunity
to sell their shares at a temporarily higher market price.
Although the Fair Price Provision is designed to help assure fair treatment
of all shareholders vis-a-vis other shareholders in the event of a takeover, it
is not the purpose of the Fair Price Provision to assure that shareholders will
receive a premium price for their shares in a takeover. Accordingly, the Board
is of the view that the adoption of the Fair Price Provision does not preclude
the Board's opposition to any future takeover proposal which it believes would
not be in the best interests of the Company and its shareholders, whether or not
such a proposal satisfies the minimum price criteria and procedural requirements
of the Fair Price Provision.
In addition, under Section 203 of the Delaware General Corporation Law as
applicable to the Company, certain "business combinations" (defined generally to
include (i) mergers or consolidations between a Delaware corporation and an
interested shareholder (as defined below) and (ii) transactions between a
Delaware corporation and an interested shareholder involving the assets or stock
of such corporation or its majority-owned subsidiaries, including transactions
which increase the interested shareholder's percentage ownership of stock)
between a Delaware corporation, whose stock generally is publicly traded or held
of record by more than 2,000 shareholders, and an interested shareholder
(defined generally as those shareholders, who, on or after December 23, 1987,
become beneficial owners of 15% or more of a Delaware corporation's voting
stock) are prohibited for a three-year period following the date that such
shareholder became an interested shareholder, unless (i) prior to the date such
shareholder became an interested shareholder, the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the shareholder becoming an interested shareholder, (ii) upon
consummation of the transaction that made such shareholder an interested
shareholder, the interested shareholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced (excluding
voting stock owned by officers who also are directors and voting stock held in
employee benefit plans in which the employees do not have a confidential right
to tender or vote stock held by the plan), or (iii) the business combination was
approved by the board of directors of the corporation and ratified by two-thirds
of the voting stock which the interested shareholder did not own. The three-year
prohibition also does not apply to certain business combinations proposed by an
interested shareholder following the announcement or notification of certain
extraordinary transactions involving the corporation and a person who had been
an interested shareholder during the previous three years or who became an
interested shareholder with the approval of a majority of the corporation's
directors.
SHAREHOLDER RIGHTS PLAN. The Company has adopted a shareholder rights plan
which may have anti- takeover effects. See "-- Preferred Stock Purchase Rights"
below.
AMENDMENT OF THE COMPANY CERTIFICATE AND BYLAWS. The Company Certificate
contains provisions requiring the affirmative vote of the holders of at least 66
2/3% the voting power of the stock entitled to vote generally in the election of
directors to amend certain provisions of the Company Certificate and Bylaws
(including the provisions discussed above). These provisions make it more
difficult for shareholders to make changes in the Company Certificate or Bylaws,
including changes designed to facilitate the exercise of control over the
Company. In addition, the requirement for approval by at least a 66 2/3%
shareholder vote will enable the holders of a minority of the Company's capital
stock to prevent holders of a less-than-66 2/3% majority from amending such
provisions of the Company's Certificate or Bylaws.
MARRIOTT INTERNATIONAL PURCHASE RIGHT. The Company granted to Marriott
International, for a period of ten years following the Marriott International
Distribution (i.e., until October 2003), the right to purchase a number of
shares equal in amount of up to 20% of each class of the Company's outstanding
voting stock at the then fair market value upon the occurrence of certain change
of control events involving the Company (the "Marriott International Purchase
Right"). The Marriott International Purchase Right may be exercised for a 30-
day period following the date a person or group of affiliated persons has (i)
become the beneficial owner of 20% or more of the total voting power of the then
outstanding shares of the Company's voting stock or (ii) announced a tender
offer for 30% or more of the total voting power of the then outstanding shares
of the Company's voting stock. These change of control events upon which the
Marriott International Purchase Right becomes exercisable are substantially
identical to those events that cause a distribution of the Rights under the
Rights Agreement (see "Preferred Stock
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Rights Agreement" below). Accordingly, certain share ownership of the Company's
voting stock by specified persons is exempt under the Rights Agreement, and
consequently will not result in a distribution of Rights, and will not cause the
Marriott International Purchase Right to become exercisable.
In connection with the Special Dividend, the Board amended the terms of the
Rights Agreement to provide that the exercise of the Marriott International
Purchase Right will not result in a distribution of the Rights. Accordingly,
upon exercise of the Marriott International Purchase Right, Marriott
International will be entitled to receive the Rights associated with the Common
Stock and will not be deemed an "Acquiring Person" under the Rights Agreement.
The purchase price for the Common Stock to be purchased upon the exercise
of the Marriott International Purchase Right is determined by taking the average
of the closing sale price of the Common Stock during the 30 consecutive trading
days preceding the date the Marriott International Purchase Right becomes
exercisable. The specific terms of the Marriott International Purchase Right are
set forth in the Marriott International Distribution Agreement.
The Marriott International Purchase Right will have an antitakeover effect.
Any person considering acquiring a substantial or controlling block of Common
Stock would face the possibility that its ability to exercise control would be
impaired by Marriott International's 20% ownership resulting from exercise of
the Marriott International Purchase Right. Moreover, so long as the Marriott
family's current percentage of ownership of Common Stock continues, the combined
Marriott family (including various trusts established by members of the Marriott
family) and Marriott International ownership following exercise of the Marriott
International Purchase Right may effectively block control by others. It is
also possible that the exercise price of the Marriott International Purchase
Right would be lower than the price at which a potential acquiror might be
willing to purchase a 20% block of shares of Common Stock because the purchase
price for the Marriott International Purchase Right is based on the average
trading price during a 30-day period which may be prior to the announcement of
the takeover event. This potential price differential may have a further
antitakeover effect by discouraging potential acquirers of the Company. The
antitakeover effect of the Marriott International Purchase Right will be in
addition to the antitakeover effects of the provisions contained in the Company
Certificate and Bylaws.
PREFERRED STOCK PURCHASE RIGHTS
The Company has adopted a shareholder rights plan as set forth in a Rights
Agreement dated February 3, 1989, as amended, between the Company and the Bank
of New York, as rights agent (the "Rights Agreement"). The following is a
summary of the terms of the Rights Agreement.
RIGHTS. Following the occurrence of certain events (the "Occurrence Date")
and except as described below, each right (a "Preferred Stock Purchase Right" or
"Right," and, collectively, the "Rights") will entitle the registered holder
thereof to purchase from the Company one one-thousandth of a share (a "Unit") of
Junior Preferred Stock at a price (the "Purchase Price") of $150 per Unit,
subject to adjustment. The Rights are not exercisable until the Occurrence Date.
The Rights expire on the tenth anniversary of the adoption of the Rights
Agreement, unless exercised in connection with a transaction of the type
described below or unless earlier redeemed by the Company.
Until a Right is exercised, the holder thereof, as such, will have no
rights as the Company shareholder, including, without limitation, the right to
vote or to receive dividends.
Initially, ownership of the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate certificates
representing the Rights (the "Rights Certificates") will be distributed. Until
the Occurrence Date (or earlier redemption or expiration of the Rights), the
Rights will be transferable only with the Common Stock, and the surrender or
transfer of any certificate of Common Stock will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate. The
Rights will separate from the Common Stock and an Occurrence Date will occur
upon the earlier of (i) 10 days following the date (a "Stock Acquisition Date")
of a public announcement that a person or group of affiliates or associated
persons (an
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"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding Common Stock or (ii) 10 business
days following the commencement of or announcement of an intention to make a
tender offer or exchange offer, the consummation of which would result in the
Acquiring Person becoming the beneficial owner of 30% or more of such
outstanding Common Stock (such date being called the Occurrence Date).
For purposes of the Rights Agreement, a person shall not be deemed to
beneficially own "Exempt Shares" which include (i) shares of Common Stock
acquired by such person by gift, bequest and certain other transfers, which
shares were Exempt Shares immediately prior to such transfer and were held by
such person continuously thereafter and (ii) shares acquired by such person in
connection with certain distributions of Common Stock with respect to Exempt
Shares which were held by such person continuously thereafter. In connection
with the Company's spin-off distribution of Marriott International, the Board
amended the Rights Agreement to provide that the shares of Common Stock acquired
by Marriott International upon exercise of the Marriott International Purchase
Right will be deemed "Exempt Shares" under the Rights Agreement, such that the
exercise of such right by Marriott International will not cause Marriott
International to be deemed an "Acquiring Person" under the Rights Agreement and
thus trigger a distribution of the Rights. See "--Delaware Law; Certain
Provisions of the Company's Certificate and Bylaws and the Marriott
International Purchase Agreement--Marriott International Purchase Right" above.
As soon as practicable following an Occurrence Date, Rights Certificates
will be mailed to holders of record of Common Stock as of the close of business
on the Occurrence Date. After such time, such separate Rights Certificates alone
will evidence the Rights and could trade independently from the Common Stock.
In the event (i) the Company is the surviving corporation in a merger with
an Acquiring Person and the Common Stock is not changed or exchanged, or (ii) an
Acquiring Person becomes the beneficial owner of 30% or more of the then
outstanding shares of Common Stock (except pursuant to an offer for all
outstanding shares of Common Stock which the Board determines to be fair to and
otherwise in the best interests of the Company and its shareholders), each
holder of a Right will, in lieu of the right to receive one one-thousandth of a
share of Junior Preferred Stock, thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. Notwithstanding any of the foregoing, following the occurrence of
any of the events set forth in this paragraph, all Rights that are (or, under
certain circumstances specified in the Rights Agreement, were) beneficially
owned by any Acquiring Person will be null and void. However, the Rights are not
exercisable following the occurrence of either of the events set forth above
until such time as the Rights are no longer redeemable by the Company as set
forth below.
For example, at an exercise price of $150 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase $300 worth
of Common Stock (or other consideration, as noted above) for $150. Assuming that
the Common Stock had a per share value of $30 at such time, the holder of each
valid Right would be entitled to purchase 10 shares of Common Stock for $150.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation (other than a merger
described in the second preceding paragraph or a merger which follows an offer
described in the second preceding paragraph), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right.
In general, the Board may redeem the Rights in whole, but not in part, at
any time until 10 days following the Stock Acquisition Date, at a price of $.01
per Right. After the redemption period has expired, the Company's right of
redemption may be reinstated if an Acquiring Person reduces its beneficial
ownership to 10% or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company.
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Immediately upon the action of the Board ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.01 per Right redemption price.
The purchase price payable, and the number of shares of Junior Preferred
Stock or other securities or property issuable upon exercise of the Rights are
subject to adjustment upon the occurrence of certain events with respect to the
Company, including stock dividends, subdivisions, combinations,
reclassifications, rights or warrants offerings of Junior Preferred Stock at
less than the then current market price and certain distributions of property or
evidences of indebtedness of the Company to holders of Junior Preferred Stock,
all as set forth in the Rights Agreement.
The Rights have certain antitakeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board, except pursuant to an offer conditioned on a
substantial number of Rights being acquired. The Rights should not interfere
with any merger or other business combination approved by the Board since the
Rights may be redeemed by the Company as set forth above.
JUNIOR PREFERRED STOCK. The material terms of the Junior Preferred Stock
are summarized herein; however, such summary is subject to the terms of the
Company Certificate and the certificate of designation relating to the Junior
Preferred Stock (the "Junior Preferred Stock Certificate of Designation").
Subject to the prior payment of cumulative dividends on any class of
preferred stock ranking senior to the Junior Preferred Stock, a holder of Junior
Preferred Stock will be entitled to cumulative dividends out of funds legally
available therefor, when, as and if declared by the Board, at a quarterly rate
per share of Junior Preferred Stock equal to the greater of (a) $10.00 or (b)
1,000 times (subject to adjustment upon certain dilutive events) the aggregate
per share amount of all cash dividends and 1,000 times (subject to adjustment
upon certain dilutive events) the aggregate per share amount (payable in kind)
of all noncash dividends or other distributions (other than dividends payable in
Common Stock or a sub-division of the outstanding shares of Common Stock)
declared on Common Stock, since the immediately preceding quarterly dividend
payment date for the Junior Preferred Stock (or since the date of issuance of
the Junior Preferred Stock if no such dividend payment date has occurred).
A holder of Junior Preferred Stock will be entitled to 1,000 votes (subject
to adjustment upon certain dilutive events) per share of Junior Preferred Stock
on all matters submitted to a vote of the Company shareholders. Such holders
will vote together with the holders of the Common Stock as a single class on all
matters submitted to a vote of the Company shareholders.
In the event of a merger or consolidation of the Company which results in
Common Stock being exchanged or changed for other stock, securities, cash and/or
other property, the shares of Junior Preferred Stock shall similarly be
exchanged or changed in an amount per share equal to 1,000 times (subject to
adjustment upon certain dilutive events) the aggregate amount of stock,
securities, cash and/or other property, as the case may be, into which each
share of Common Stock has been exchanged or changed.
In the event of liquidation, dissolution or winding up of the Company, a
holder of Junior Preferred Stock will be entitled to receive $1,000 per share,
plus accrued and unpaid dividends and distributions thereon, before any
distribution may be made to holders of shares of stock of the Company ranking
junior to the Junior Preferred Stock, and the holders of Junior Preferred Stock
are entitled to receive an aggregate amount per share equal to 1,000 times
(subject to adjustment upon certain dilutive events) the aggregate amount to be
distributed per share to holders of Common Stock.
In the event that dividends on the Junior Preferred Stock are in arrears in
an amount equal to six quarterly dividends thereon, all holders of Junior
Preferred Stock, voting separately as a class with the holders of any other
series of preferred stock of the Company with dividends in arrears, will be
entitled to elect two directors pursuant to provisions of the Company
Certificate. Such right to elect two additional directors shall continue at each
annual meeting until all dividends in arrears (including the then-current
quarterly dividend payment) have been paid or declared and set apart for
payment. Upon payment or declaration and reservation of funds for payment of all
such
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dividends, the term of office of each director elected shall immediately
terminate and the number of directors shall be such number as may be provided
for in the Company Certificate or Bylaws.
The Junior Preferred Stock is not subject to redemption. The terms of the
Junior Preferred Stock provide that the Company is subject to certain
restrictions with respect to dividends and distributions on and redemptions and
purchases of shares of stock of the Company ranking junior to or on a parity
with the Junior Preferred Stock in the event that payments of dividends or other
distributions payable on the Junior Preferred Stock are in arrears.
OUTSTANDING WARRANTS
In March 1993, the Company reached an agreement in principle with certain
holders and recent purchasers of its senior notes and debentures who had either
instituted or threatened litigation in response to the Company's spin-off
distribution of Marriott International (the "Special Dividend"). In August
1993, the United States District Court approved the agreement as a class action
settlement. In connection with such class action settlement, the Company issued
warrants ("Outstanding Warrants") to purchase up to 7.7 million shares of the
Company's Common Stock. As adjusted to reflect the Special Dividend, each
Outstanding Warrant entitles the holder, at any time prior to 5:00 p.m. on
October 8, 1998 (the "Expiration Time"), to purchase one share of Common Stock
from the Company and one-fifth share of Host Marriott Services Corporation
common stock, a former subsidiary of the Company whose common stock is currently
trading on the NYSE ("HM Services") at a price (the "Exercise Price") of $10.00.
The portion of the Exercise Price attributable to the HM Services common stock
is payable to HM Services. Both the Exercise Price and the number of shares
subject to the Outstanding Warrants are subject to certain adjustments.
Outstanding Warrants that are not exercised prior to the Expiration Time expire
and become void. The Company did not receive any proceeds from the issuance of
the Outstanding Warrants.
Outstanding Warrant holders will not be entitled to vote or to consent or
to receive notice as shareholders in respect of the meeting of shareholders or
the election of directors of the Company or any other matter, or possess any
rights whatsoever as to the operations of the Company.
The Company has also agreed to use its reasonable best efforts to obtain
any required approvals or registration under state securities laws for the
issuance of the Common Stock upon exercise of the Outstanding Warrants. Under
the Outstanding Warrant Agreement, however, Outstanding Warrants may not be
exercised by or, shares of Common Stock issued to, any Warrant holder in any
state where such exercise or issuance would be unlawful. The Outstanding
Warrants have no established trading market and no assurance can be given that
any such markets will develop.
As of March 27, 1998, approximately 550,000 Warrants were outstanding or
reserved for issuance.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may issue receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent a fractional interest of a share of a
particular series of Preferred Stock, as specified in the applicable Prospectus
Supplement. Shares of Preferred Stock of each series represented by Depositary
Shares will be deposited under a separate Deposit Agreement (each, a "Deposit
Agreement") among the Company and the depositary named therein (the "Preferred
Stock Depositary"). Subject to the terms of the Deposit Agreement, each owner of
a Depositary Receipt will be entitled, in proportion to the fractional interest
of a share of a particular series of Preferred Stock represented by the
Depositary Shares evidenced by such Depositary Receipt, to all the rights and
preferences of the Preferred Stock represented by such Depositary Shares
(including dividend, voting, conversion, redemption and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the issuance
and delivery of the Preferred Stock by the Company to the Preferred Stock
Depositary, the Company will cause the Preferred Stock Depositary to issue, on
behalf of the
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Company, the Depositary Receipts. Copies of the applicable form of Deposit
Agreement and Depositary Receipt may be obtained from the Company upon request,
and the statements made hereunder relating to the Deposit Agreement and the
Depositary Receipts to be issued thereunder are summaries of certain provisions
thereof and do not purport to be complete and are subject to, and qualified in
their entirety by reference to, all of the provisions of the applicable Deposit
Agreement and related Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the Preferred Stock to the record
holders of Depositary Receipts evidencing the related Depositary Shares in
proportion to the number of such Depositary Receipts owned by such holders,
subject to certain obligations of holders to file proofs, certificates and other
information and to pay certain charges and expenses to the Preferred Stock
Depositary.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Stock Depositary, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the Company,
sell such property and distribute the net proceeds from such sale to such
holders.
No distribution will be made in respect of any Depositary Share to the
extent that it represents any Preferred Stock converted into other securities.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption or converted into other securities), the
holders thereof will be entitled to delivery at such office, to or upon such
holder's order, of the number of whole or fractional shares of the Preferred
Stock and any money or other property represented by the Depositary Shares
evidenced by such Depositary Receipts. Holders of Depositary Receipts will be
entitled to receive whole or fractional shares of the related Preferred Stock on
the basis of the proportion of Preferred Stock represented by such Depositary
Share as specified in the applicable Prospectus Supplement, but holders of such
shares of Preferred Stock will not thereafter be entitled to receive Depositary
Shares therefor. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of shares of Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Company redeems shares of Preferred Stock held by the
Preferred Stock Depositary, the Preferred Stock Depositary will redeem, as of
the same redemption date, the number of Depositary Shares representing shares of
the Preferred Stock so redeemed, provided the Company shall have paid in full to
the Preferred Stock Depositary the redemption price of the Preferred Stock to be
redeemed plus an amount equal to any accrued and unpaid dividends thereon to the
date fixed for redemption. The redemption price per Depositary Share will be
equal to the corresponding proportion of the redemption price and any other
amounts per share payable with respect to the Preferred Stock. If fewer than all
the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected pro rata (as nearly as may be practicable without creating
fractional Depositary Shares) or by any other equitable method determined by the
Company.
From and after the date fixed for redemption, all dividends in respect of
the shares of Preferred Stock so called for redemption will cease to accrue, the
Depositary Shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the Depositary Receipts evidencing
the Depositary Shares so called for redemption will cease, except the right to
receive any moneys payable upon such redemption and any money or
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other property to which the holders of such Depositary Receipts were entitled
upon such redemption and surrender thereof to the Preferred Stock Depositary.
VOTING OF THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Preferred Stock Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Receipts evidencing the Depositary Shares which represent such
Preferred Stock. Each record holder of Depositary Receipts evidencing
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Preferred Stock
Depositary as to the exercise of the voting rights pertaining to the amount of
Preferred Stock represented by such holder's Depositary Shares. The Preferred
Stock Depositary will vote the amount of Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and the Company will
agree to take all reasonable action which may be deemed necessary by the
Preferred Stock Depositary in order to enable the Preferred Stock Depositary to
do so. The Preferred Stock Depositary will abstain from voting the amount of
Preferred Stock represented by such Depositary Shares to the extent it does not
receive specific instructions from the holders of Depositary Receipts evidencing
such Depositary Shares. The Preferred Stock Depositary shall not be responsible
for any failure to carry out any instruction to vote, or for the manner or
effect of any such vote made, as long as such action or non-action is in good
faith and does not result from negligence or willful misconduct of the Preferred
Stock Depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of each Depositary Receipt will be
entitled to the fraction of the liquidation preference accorded each share of
Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipt, as set forth in the applicable Prospectus Supplement.
CONVERSION OF PREFERRED STOCK
The Depositary Shares, as such, are not convertible into Common Stock or
any other securities or property of the Company. Nevertheless, if so specified
in the applicable Prospectus Supplement relating to an offering of Depositary
Shares, the Depositary Receipts may be surrendered by holders thereof to the
Preferred Stock Depositary with written instructions to the Preferred Stock
Depositary to instruct the Company to cause conversion of the Preferred Stock
represented by the Depositary Shares evidenced by such Depositary Receipts into
whole shares of Common Stock, other shares of Preferred Stock of the Company or
other shares of stock, and the Company has agreed that upon receipt of such
instructions and any amounts payable in respect thereof, it will cause the
conversion thereof utilizing the same procedures as those provided for delivery
of Preferred Stock to effect such conversion. If the Depositary Shares
evidenced by a Depositary Receipt are to be converted in part only, a new
Depositary Receipt or Receipts will be issued for any Depositary Shares not to
be converted. No fractional shares of Common Stock will be issued upon
conversion, and if such conversion would result in a fractional share being
issued, an amount will be paid in cash by the Company equal to the value of the
fractional interest based upon the closing price of the Common Stock on the last
business day prior to the conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares which
represent the Preferred Stock and any provision of the Deposit Agreement may at
any time be amended by agreement between the Company and the Preferred Stock
Depositary. However, any amendment that materially and adversely alters the
rights of the holders of Depositary Receipts or that would be materially and
adversely inconsistent with the rights granted to the holders of the related
Preferred Stock will not be effective unless such amendment has been approved by
the existing holders of at least 66% of the Depositary Shares evidenced by the
Depositary Receipts then outstanding. No amendment shall impair the right,
subject to certain exceptions in the Depositary Agreement, of any holder of
Depositary Receipts to surrender any Depositary Receipt with instructions to
deliver to the holder the related Preferred Stock and all money and other
property, if any, represented thereby, except in order to comply with law.
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Every holder of an outstanding Depositary Receipt at the time any such amendment
becomes effective shall be deemed, by continuing to hold such Receipt, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby.
The Deposit Agreement may be terminated by the Company upon not less than
30 days prior written notice to the Preferred Stock Depositary if a majority of
each series of Preferred Stock affected by such termination consents to such
termination, whereupon the Preferred Stock Depositary shall deliver or make
available to each holder of Depositary Receipts, upon surrender of the
Depositary Receipts held by such holder, such number of whole or fractional
shares of Preferred Stock as are represented by the Depositary Shares evidenced
by such Depositary Receipts together with any other property held by the
Preferred Stock Depositary with respect to such Depositary Receipt. In
addition, the Deposit Agreement will automatically terminate if (i) all
outstanding Depositary Shares shall have been redeemed, (ii) there shall have
been a final distribution in respect of the related Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company and
such distribution shall have been distributed to the holders of Depositary
Receipts evidencing the Depositary Shares representing such Preferred Stock or
(iii) each share of the related Preferred Stock shall have been converted into
securities of the Company not so represented by Depositary Shares.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Deposit Agreement. In addition, the
Company will pay the fees and expenses of the Preferred Stock Depositary in
connection with the performance of its duties under the Deposit Agreement.
However, holders of Depositary Receipts will pay the fees and expenses of the
Preferred Stock Depositary for any duties requested by such holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
RESIGNATION AND REMOVAL OF DEPOSITORY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary. A successor
Preferred Stock Depositary must be appointed within 60 days after delivery of
the notice of resignation or removal and must be a bank or trust company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward to holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented from or delayed in, by law or any circumstances beyond its control,
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performing their duties thereunder in good faith and without
negligence (in the case of any action or inaction in the voting of Preferred
Stock represented by the Depositary Shares), gross negligence or willful
misconduct, and the Company and the Preferred Stock Depositary will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Receipts, Depositary Shares or shares of Preferred Stock represented
thereby unless satisfactory indemnity is furnished. The Company and the
Preferred Stock Depositary may rely on written advice of counsel or accountants,
or information provided by persons presenting shares of Preferred Stock
represented thereby for deposit, holders of Depositary Receipts or other persons
believed in good faith to be competent to give such information, and on
documents believed in good faith to be genuine and signed by a proper party.
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In the event the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Company, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received from
the Company.
DESCRIPTION OF WARRANTS
The Company may issue warrants to purchase Debt Securities (the "Debt
Warrants"), Preferred Stock (the "Preferred Stock Warrants"), Depositary Shares
(the "Depositary Shares Warrants") or Common Stock (the "Common Stock Warrants,"
collectively the "Warrants"). Warrants may be issued independently or together
with any Offered Securities and may be attached to or separate from such Offered
Securities. The Warrants are to be issued under warrant agreements (each a
"Warrant Agreement") to be entered into between the Company and a bank or trust
company, as warrant agent (the "Warrant Agent"), all as shall be set forth in
the Prospectus Supplement relating to the Warrants being offered pursuant
thereto.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and Debt Warrant certificates representing such Debt Warrants, including the
following:
(i) the title for such Debt Warrants;
(ii) the aggregate number of such Debt Warrants;
(iii) the price or prices at which such Debt Warrants will be issued;
(iv) the designation, aggregate principal amount and terms of the Debt
Securities purchasable upon exercise of such Debt Warrants, and the procedures
and conditions relating to the exercise of such Debt Warrants;
(v) the designation and terms of any related Debt Securities with which
such Debt Warrants are issued, and the number of such Debt Warrants issued with
each such security;
(vi) the date, if any, on and after which such Debt Warrants and the
related Debt Securities will be separately transferable;
(vii) the principal amount of Debt Securities purchasable upon exercise of
each Debt Warrant, and the price at which such principal amount of Debt
Securities may be purchased upon such exercise;
(viii) the date on which such right shall expire;
(ix) the maximum or minimum number of such Debt Warrants which may be
exercised at any time;
(x) a discussion of the material United States federal income tax
considerations applicable to the exercise of such Debt Warrants; and
(xi) any other terms of such Debt Warrants and terms, procedures and
limitations relating to the exercise of such Debt Warrants.
Debt Warrant certificates will be exchangeable for new Debt Warrant
certificates of different denominations, and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders of
the securities purchasable upon such exercise and will not be entitled to
payments of principal of (or premium, if any) or interest, if any, on the
securities purchasable upon such exercise.
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OTHER WARRANTS
The applicable Prospectus Supplement will describe the following terms of
Preferred Stock Warrants, the Depositary Share Warrants or Common Stock Warrants
in respect of which this Prospectus is being delivered:
(i) the title of such Warrants;
(ii) the securities for which such Warrants are exercisable;
(iii) the price or prices at which such Warrants will be issued;
(iv) the number of such Warrants issued with each share of Preferred
Stock or Common Stock ;
(v) any provisions for adjustment of the number or amount of shares of
Preferred Stock or Common Stock receivable upon exercise of such Warrants or the
exercise price of such Warrants;
(vi) if applicable, the date on and after which such Warrants and the
related Preferred Stock or Common Stock will be separately transferable;
(vii) if applicable, a discussion of the material United States federal
income tax considerations applicable to the exercise of such Warrants;
(viii) any other terms of such Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Warrants;
(ix) the date on which the right to exercise such Warrants shall
commence, and the date on which such right shall expire; and
(x) the maximum or minimum number of such Warrants which may be
exercised at any time.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder of Warrants to purchase for cash such
principal amount of Debt Securities or shares of Preferred Stock, Common Stock
or Depositary Shares at such exercise price as shall in each case be set forth
in, or be determinable as set forth in, the Prospectus Supplement relating to
the Warrants offered thereby. Warrants may be exercised at any time up to the
close of business on the expiration date set forth in the Prospectus Supplement
relating to the Warrants offered thereby. After the close of business on the
expiration date, unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Warrants offered thereby. Upon receipt of payment and the
Warrant certificate properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, forward the Debt
Securities or shares of Preferred Stock or Common Stock purchasable upon such
exercise. If less than all of the Warrants represented by such Warrant
certificate are exercised, a new Warrant certificate will be issued for the
remaining Warrants.
DESCRIPTION OF SUBSCRIPTION RIGHTS
The Company may issue Subscription Rights to purchase (i) Common Stock (the
"Common Stock Rights"), (ii) Preferred Stock (the "Preferred Stock Rights"),
(iii) Depositary Shares (the "Depositary Share Rights") or (iv) Warrants to
purchase Preferred Stock or Common Stock (the "Warrant Rights" and, collectively
with the Common Stock Rights, Preferred Stock Rights and the Depository Share
Rights, the "Subscription Rights"). Subscription Rights may be issued
independently or together with any other Offered Security and may or may not be
transferable by the purchaser receiving the Subscription Rights. In connection
with any Subscription Rights
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offering to the Company's shareholders, the Company may enter into a standby
underwriting arrangement with one or more underwriters pursuant to which such
underwriter will purchase any Offered Securities remaining unsubscribed for
after such Subscription Rights offering. In connection with a Subscription
Rights offering to the Company's shareholders, certificates evidencing the
Subscription Rights and a Prospectus Supplement will be distributed to the
Company's shareholders on the record date for receiving Subscription Rights in
such Subscription Rights offering set by the Company.
The applicable Prospectus Supplement will describe the following terms of
Subscription Rights in respect of which this Prospectus is being delivered:
(i) the title of such Subscription Rights;
(ii) the securities for which such Subscription Rights are exercisable;
(iii) the exercise price for such Subscription Rights;
(iv) the number of such Subscription Rights issued to each shareholder;
(v) the extent to which such Subscription Rights are transferable;
(vi) if applicable, a discussion of the material United States federal
income tax considerations applicable to the issuance or exercise of such
Subscription Rights;
(vii) any other terms of such Subscription Rights, including terms,
procedures and limitations relating to the exchange and exercise of such
Subscription Rights;
(viii) the date on which the right to exercise such Subscription Rights
shall commence, and the date on which such right shall expire.
(ix) the extent to which such Subscription Rights includes an over-
subscription privilege with respect to unsubscribed securities.
(x) if applicable, the material terms of any standby underwriting
arrangement entered into by the Company in connection with the Rights offering.
EXERCISE OF SUBSCRIPTION RIGHTS
Each Subscription Right will entitle the holder of Subscription Rights to
purchase for cash such principal amount of shares of Preferred Stock, Depository
Shares, Common Stock, Preferred Stock Warrants, Depository Share Warrants,
Common Stock Warrants or any combination thereof, at such exercise price as
shall in each case be set forth in, or be determinable as set forth in, the
Prospectus Supplement relating to the Subscription Rights offered thereby.
Subscription Rights may be exercised at any time up to the close of business on
the expiration date for such Subscription Rights set forth in the Prospectus
Supplement. After the close of business on the expiration date, all unexercised
Subscription Rights will become void.
Subscription Rights may be exercised as set forth in the Prospectus
Supplement relating to the Subscription Rights offered thereby. Upon receipt of
payment and the Subscription Rights certificate properly completed and duly
executed at the corporate trust office of the Rights Agent or any other office
indicated in the Prospectus Supplement, the Company will, as soon as
practicable, forward the shares of Preferred Stock or Common Stock, Depository
Shares, Common Stock Warrants or Preferred Stock Warrants purchasable upon such
exercise. In the event that not all of the Subscription Rights issued in any
Rights offering are exercised, the Company may determine to offer any
unsubscribed Offered Securities directly to persons other than shareholders, to
or through agents, underwriters or dealers or through a combination of such
methods, (including pursuant to standby underwriting arrangements), as set forth
in the applicable Prospectus Supplement.
31
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities being offered hereby: (i)
directly to purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters; (v) directly to the Company's shareholders (in the case of
Subscription Rights); or (vi) through a combination of any such methods of sale.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions either: (i) at a fixed price or prices, which
may be changed; (ii) at market prices prevailing at the time of sale; (iii) at
prices related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Offered Securities may be solicited directly by the
Company. Offers to purchase Offered Securities may also be solicited by agents
designated by the Company from time to time. Any such agent, who may be deemed
to be an "underwriter" as that term is defined in the Securities Act, involved
in the offer or sale of the Offered Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth in the Prospectus Supplement.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Company will sell such Offered
Securities to the dealer, as principal. The dealer, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act, may then resell
such Offered Securities to the public at varying prices to be determined by such
dealer at the time of resale.
If an underwriter is, or underwriters are, utilized in the sale, the
Company will execute an underwriting agreement with such underwriters at the
time of sale to them and the names of the underwriters will be set forth in the
Prospectus Supplement, which will be used by the underwriter to make resales of
the Offered Securities in respect of which this Prospectus is delivered to the
public. In connection with the sale of Offered Securities, such underwriter may
be deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Offered Securities for whom they may act as agents. Underwriters
may also sell Offered Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Any underwriting compensation paid by the Company to underwriters in
connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement.
Pursuant to any standby underwriting agreement entered into in connection
with a Subscription Rights offering to the Company's shareholders, persons
acting as standby underwriters may receive a commitment fee for all securities
underlying the Subscription Rights that the underwriter commits to purchase on a
standby basis. Additionally, prior to the expiration date with respect to any
Subscription Rights, any standby underwriters in a Subscription Rights offering
to the Company's shareholders may offer such securities on a when-issued basis,
including securities to be acquired through the purchase and exercise of
Subscription Rights, at prices set from time to time by the standby
underwriters. After the expiration date with respect to such Subscription
Rights, the underwriters may offer securities of the type underlying the
Subscription Rights, whether acquired pursuant to a standby underwriting
agreement, the exercise of the Subscription Rights or the purchase of such
securities in the market, to the public at a price or prices to be determined by
the underwriters. The standby underwriters may thus realize profits or losses
independent of the underwriting discounts or commissions paid by the Company. In
the event that the Company does not enter into a standby underwriting
arrangement in connection with a Subscription Rights offering to the Company's
shareholders, the Company may elect to retain a dealer-manager to manage such a
Subscription Rights offering for the Company. Any such dealer-manager may offer
securities of the type underlying the Subscription Rights acquired or to be
acquired pursuant to the purchase and exercise of Subscription Rights and may
thus realize profits or losses independent of any dealer-manager fee paid by the
Company.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with the Company, to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which they may be
required to make in respect thereof.
32
<PAGE>
Underwriters and agents may engage in transactions with, or perform services
for, the Company in the ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters, dealers or other persons to solicit offers by certain
institutions to purchase Offered Securities pursuant to contracts providing for
payment and delivery on a future date or dates. Institutions with which such
contracts may be made include commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable institutions and
others. The obligations of any purchasers under any such contract will not be
subject to any conditions except that (i) the purchase of the Offered Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject, and (ii) if the Offered
Securities are also being sold to underwriters, the Company shall have sold to
such underwriters the Offered Securities not sold for delayed delivery. The
underwriters, dealers and such other persons will not have any responsibility in
respect of the validity or performance of such contracts. The Prospectus
Supplement relating to such contracts will set forth the price to be paid for
Offered Securities pursuant to such Contracts, the commission payable for
solicitation of such contracts and the date or dates in the future for delivery
of Offered Securities pursuant to such contracts.
Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule 104
permits stabilizing bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. The underwriters may over-
allot shares of the Common Stock in connection with an offering of Common Stock,
thereby creating a short position in the underwriters' account. Syndicate
covering transactions involve purchases of the Debt Securities in the open
market after the distribution has been completed in order to cover syndicate
short positions. Stabilizing and syndicate covering transactions may cause the
price of the Debt Securities to be higher than it would otherwise be in the
absence of such transactions. These transactions, if commenced, may be
discontinued at any time.
The anticipated date of delivery of Offered Securities will be set forth in
the applicable Prospectus Supplement relating to each offer.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Christopher G. Townsend, Esq., Senior Vice President and General Counsel or
other counsel to the Company. If the Offered Securities are distributed in an
underwritten offering or through agents, certain legal matters may be passed
upon for any agents or underwriters by counsel for such agents or underwriters
identified in the applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements and schedules of Host Marriott
Corporation and HMH Properties, Inc. incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.
33
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate of the fees and expenses, other than
underwriting discounts and commissions, payable or reimbursable by the Company
in connection with the distribution of the Offered Securities:
<TABLE>
<S> <C>
SEC Registration Fee........................................................ $863,000
Rating Agency Fees.......................................................... *
Legal Fees and Expenses..................................................... *
Accounting Fees and Expenses................................................ *
Printing Expenses........................................................... *
Trustee/Issuing & Paying Agent Fees and Expenses............................ *
Miscellaneous............................................................... *
----------
Total................................................................ $ *
==========
</TABLE>
*to be filed by amendment
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Eleven and Article Sixteen of the Company's Certificate and Section
7.7 of the Bylaws limit the personal liability of directors to the Company or
its shareholders for monetary damages for breach of fiduciary duty. The
provisions of the Company Certificate and Bylaws are collectively referred to
herein as the "Director Liability and Indemnification Provisions."
Set forth below is a description of the Director Liability and
Indemnification Provisions. Such description is intended as a summary only and
is qualified in its entirety by reference to the Company Certificate and the
Bylaws.
Elimination of Liability in Certain Circumstances. Article Sixteen of the
Company Certificate protects directors against monetary damages for breaches of
their fiduciary duty of care, except as set forth below. Under the Delaware
General Corporation Law, absent such limitation of liability provisions as are
provided in Article Sixteen, directors could generally be held liable for gross
negligence for decisions made in the performance of their duty of care but not
for simple negligence. Article Sixteen eliminates liability of directors for
negligence in the performance of their duties, including gross negligence. In a
context not involving a decision by the directors (i.e., a suit alleging loss to
the Company due to the directors' inattention to a particular matter), a simple
negligence standard might apply. Directors remain liable for breaches of their
duty of loyalty to the Company and its shareholders, as well as acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law and transactions from which a director derives improper
personal benefit. Article Sixteen does not eliminate director liability under
Section 174 of the Delaware General Corporation Law, which makes directors
personally liable for unlawful dividends or unlawful stock repurchases or
redemptions and expressly sets forth a negligence standard with respect to such
liability.
While the Director Liability and Indemnification Provisions provide
directors with protection from awards of monetary damages for breaches of the
duty of care, they do not eliminate the directors' duty of care. Accordingly,
these provisions will have no effect on the availability of equitable remedies
such as an injunction or rescission based upon a director's breach of the duty
of care. The provisions of Article Sixteen, which eliminates liability as
described above, will apply to officers of the Company only if they are
directors of the Company and are acting in their capacity as directors, and will
not apply to officers of the Company who are not directors. The
II-1
<PAGE>
elimination of liability of directors for monetary damages in the circumstances
described above may deter persons from bringing third-party or derivative
actions against directors to the extent such actions seek monetary damages.
Indemnification and Insurance. Under Section 145 of the Delaware General
Corporation Law, directors and officers as well as other employees and
individuals may be indemnified against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation--a
"derivative action") if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful. A similar standard of care is applicable in
the case of the derivative actions, except that indication only extends to
expenses (including attorneys' fees) incurred in connection with defense or
settlement of such an action, and the Delaware General Corporation Law requires
court approval before there can be any indemnification where the person seeking
indemnification has been found liable to the corporation.
Section 7.7 of the Bylaws provides that the Company shall indemnify any
person to whom, and to the extent, indemnification may be granted pursuant to
Section 145 of the Delaware General Corporation law.
Article Eleven of the Company Certificate provides that a person who was or
is made a party to, or is involved in, any action, suit or proceeding by reason
of the fact that he is or was a director, officer or employee of the Company
will be indemnified by the Company against all expenses and liabilities,
including counsel fees, reasonably incurred by or imposed upon him, except in
such cases where the director, officer or employee is adjudged guilty of willful
misconduct or malfeasance in the performance of his duties. Article Eleven also
provides that the right of indemnification shall be in addition to and not
exclusive of all other rights to which such director, officer or employee may be
entitled.
ITEM 16. EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT
------- ----------------------
NO.
--
1.1* -- Form of Underwriting Agreement
3.1(i) -- Restated Certificate of Incorporation of Marriott Corporation
(incorporated by reference to Current Report on Form 8-K dated
October 23, 1993).
3.1(ii) -- Certificate of Correction filed to correct a certain error in the
Restated Certificate of Incorporation of Host Marriott Corporation
filed in the Office of the Secretary of State of Delaware on
August 11, 1992, filed in the Office of the Secretary of State of
Delaware on October 11, 1994 (incorporated by reference to
Registration Statement No. 33-54545).
3.2 -- Amended Marriott Corporation Bylaws (incorporated by reference to
Current Report on Form 8-K dated October 23, 1993).
4.1* -- Form of Indenture
4.2* -- Specimen Common Stock Certificate
4.3* -- Certificate of Designation
4.4* -- Form of Preferred Stock Certificate
4.5* -- Form of Warrant Agreement
4.6* -- Form of Warrant
4.7* -- Form of Subscription Rights Certificate
5.1* -- Opinion of company counsel
12.1+ -- Computation of Ratio of Earnings to Fixed Charges
12.2+ -- Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
23.1* -- Consent of company counsel (included as part of their opinion
listed as Exhibit 5.1)
23.2+ -- Consent of Arthur Andersen LLP, independent public accountants
24.1+ -- Powers of Attorney (included on signature page)
25.1** -- Statement of Eligibility of Trustee on Form T-1
____________________
* To be filed by amendment or by a Current Report on Form 8-K pursuant to
Regulation S-K, Item 601(b).
** To be filed separately pursuant to Trust Indenture Act Section 305(b)(2).
+ Filed herewith.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
II-2
<PAGE>
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to set forth the
results of the subscription offer, the transactions by the underwriters during
the subscription period, the amount of unsubscribed securities to be purchased
by the underwriters, and the terms of any subsequent reoffering thereof. If any
public offering by the underwriters is to be made on terms differing from those
set forth on the cover page of the prospectus, a post-effective amendment will
be filed to set forth the terms of such offering.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(e) The Company hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of Prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of Prospectus filed by the Registrants pursuant to Rule
424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(f) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
Host Marriott Corporation
By: /s/ Robert E. Parsons, Jr.
--------------------------
Robert E. Parsons, Jr.
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Terence C. Golden President, Chief Executive Officer and Director April 17, 1998
- ------------------------------------
Terence C. Golden (Principal Executive Officer)
/s/ Robert E. Parsons, Jr. Executive Vice President and Chief April 17, 1998
- ------------------------------------
Robert E. Parsons, Jr. Financial Officer (Principal Financial Officer)
/s/ Donald D. Olinger Senior Vice President and Corporate April 17, 1998
- ------------------------------------
Donald D. Olinger Controller (Principal Accounting Officer)
/s/ Richard E. Marriott Chairman of the Board of Directors April 17, 1998
- ------------------------------------
Richard E. Marriott
/s/ R. Theodore Ammon Director April 17, 1998
- ------------------------------------
R. Theodore Ammon
/s/ Robert M. Baylis Director April 17, 1998
- ------------------------------------
Robert M. Baylis
/s/ J.W. Marriott, Jr. Director April 17, 1998
- ------------------------------------
J.W. Marriott, Jr.
/s/ Anne Dore McLaughlin Director April 17, 1998
- ------------------------------------
Anne Dore McLaughlin
/s/ Harry L. Vincent, Jr. Director April 17, 1998
- ------------------------------------
Harry L. Vincent, Jr.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMC BN Corporation
By: /s/ Robert E. Parsons, Jr.
--------------------------
Robert E. Parsons, Jr.
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints each of
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Robert E. Parsons, Jr. President and Director (Principal Executive April 17, 1998
- ------------------------------------
Robert E. Parsons, Jr. Officer)
/s/ Donald D. Olinger Vice President (Principal Financial Officer) April 17, 1998
- ------------------------------------
Donald D. Olinger
/s/ Bruce D. Wardinski Treasurer (Principal Accounting Officer) April 17, 1998
- ------------------------------------
Bruce D. Wardinski
/s/ Christopher G. Townsend Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
/s/ Christopher J. Nassetta Director April 17, 1998
- ------------------------------------
Christopher J. Nassetta
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMC Hotel Development Corporation
By: /s/ Robert E. Parsons, Jr.
--------------------------
Robert E. Parsons, Jr.
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Robert E. Parsons, Jr. President and Director April 17, 1998
- ------------------------------------ (Principal Executive Officer)
Robert E. Parsons, Jr.
/s/ Donald D. Olinger Vice President (Principal Financial Officer) April 17, 1998
- ------------------------------------
Donald D. Olinger
/s/ Bruce D. Wardinski Vice President and Treasurer April 17, 1998
- ------------------------------------ (Principal Accounting Officer)
Bruce D. Wardinski
/s/ Christopher G. Townsend Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMC Retirement Properties, Inc.
By: /s/ Christopher G. Townsend.
----------------------------
Christopher G. Townsend.
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Christopher G. Townsend President and Director April 17, 1998
- ------------------------------------ (Principal Executive Officer)
Christopher G. Townsend
/s/ Robert E. Parsons, Jr. Vice President, Chief Financial Officer April 17, 1998
- ------------------------------------ and Director (Principal Financial Officer
Robert E. Parsons, Jr. and Principal Accounting Officer)
/s/ Christopher J. Nassetta Vice President and Director April 17, 1998
- ------------------------------------
Christopher J. Nassetta
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMC SFO, Inc.
By: /s/ Christopher J. Nassetta
---------------------------
Christopher J. Nassetta
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Christopher J. Nassetta President and Director (Principal April 17, 1998
- ------------------------------------ Executive Officer)
Christopher J. Nassetta
/s/ Christopher G. Townsend Vice President and Director (Principal Financial April 17, 1998
- ------------------------------------ Officer)
Christopher G. Townsend
/s/ Donald D. Olinger Vice President (Principal Accounting Officer) April 17, 1998
- ------------------------------------
Donald D. Olinger
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMH Marina, Inc.
By: /s/ Robert E. Parsons, Jr.
--------------------------
Robert E. Parsons, Jr.
President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Robert E. Parsons, Jr. President (Principal Executive Officer) April 17, 1998
- ------------------------------------
Robert E. Parsons, Jr.
/s/ Christopher J. Nassetta Vice President and Director (Principal Financial April 17, 1998
- ------------------------------------ Officer and Principal Accounting Officer)
Christopher J. Nassetta
/s/ Christopher G. Townsend Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMH Pentagon Corporation.
By: /s/ Christopher J. Nassetta
---------------------------
Christopher J. Nassetta
President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Christopher J. Nassetta President (Principal Executive Officer and April 17, 1998
- ------------------------------------ Principal Financial Officer)
Christopher J. Nassetta
/s/ Donald D. Olinger Vice President (Principal Accounting Officer) April 17, 1998
- ------------------------------------
Donald D. Olinger
/s/ Robert E. Parsons, Jr. Vice President and Director April 17, 1998
- ------------------------------------
Robert E. Parsons, Jr.
/s/ Christopher G. Townsend Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMH Properties, Inc.
By: /s/ Robert E. Parsons, Jr.
--------------------------
Robert E. Parsons, Jr.
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Robert E. Parsons, Jr. President and Director (Principal April 17, 1998
- ------------------------------------ Executive Officer)
Robert E. Parsons, Jr.
/s/ Christopher G. Townsend Executive Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
/s/ Christopher J. Nassetta Executive Vice President April 17, 1998
- ------------------------------------
Christopher J. Nassetta
/s/ Bruce D. Wardinski Senior Vice President and Treasurer (Principal April 17, 1998
- ------------------------------------ Financial Officer)
Bruce D. Wardinski
/s/ Donald D. Olinger Vice President and Corporate Controller April 17, 1998
- ------------------------------------ (Principal Accounting Officer)
Donald D. Olinger
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
Host Airport Hotels, Inc.
By: /s/ Christopher J. Nassetta
---------------------------
Christopher J. Nassetta
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Christopher J. Nassetta President and Director (Principal Executive Officer) April 17, 1998
- ------------------------------------
Christopher J. Nassetta
/s/ Robert E. Parsons, Jr. Vice President and Director (Principal Financial April 17, 1998
- ------------------------------------ Officer and Principal Accounting Officer)
Robert E. Parsons, Jr.
/s/ Christopher G. Townsend Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMH Realty Company, Inc.
By: /s/ Christopher J. Nassetta
---------------------------------
Christopher J. Nassetta
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATED INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Christopher J. Nassetta President and Director (Principal April 17, 1998
- ------------------------------------ Executive Officer)
Christopher J. Nassetta
/s/ Robert E. Parsons, Jr. Vice President and Director (Principal April 17, 1998
- ------------------------------------ Financial Officer)
Robert E. Parsons, Jr.
/s/ Bruce D. Wardinski Vice President and Treasurer (Principal April 17, 1998
- ------------------------------------ Accounting Officer)
Bruce D. Wardinski
/s/ Christopher G. Townsend Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
HMH Rivers, Inc.
By: /s/ Christopher G. Townsend.
----------------------------
Christopher G. Townsend.
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Christopher G. Townsend President and Director (Principal April 17, 1998
- ------------------------------------ Executive Officer)
Christopher G. Townsend
/s/ Robert E. Parsons, Jr. Vice President and Director (Principal Financial April 17, 1998
- ------------------------------------ Officer)
Robert E. Parsons, Jr.
/s/ Donald D. Olinger Vice President (Principal Accounting Officer) April 17, 1998
- ------------------------------------
Donald D. Olinger
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
Host Marriott Hospitality, Inc.
By: /s/ Terence C. Golden.
----------------------
Terence C. Golden
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Terence C. Golden President and Chief Executive Officer April 17, 1998
- ------------------------------------ (Principal Executive Officer)
Terence C. Golden
/s/ Robert E. Parsons, Jr. Executive Vice President and Director April 17, 1998
- ------------------------------------ (Principal Financial Officer)
Robert E. Parsons, Jr.
/s/ Donald D. Olinger Vice President (Principal Accounting Officer) April 17, 1998
- ------------------------------------
Donald D. Olinger
/s/ Christopher J. Nassetta Executive Vice President and Director April 17, 1998
- ------------------------------------
Christopher J. Nassetta
/s/ Christopher G. Townsend Senior Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
Marriott Financial Services, Inc.
By: /s/ Robert E. Parsons, Jr.
--------------------------
Robert E. Parsons, Jr.
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Robert E. Parsons, Jr. President and Director (Principal April 17, 1998
- ------------------------------------ Executive Officer)
Robert E. Parsons, Jr.
/s/ Christopher J. Nassetta Vice President (Principal Financial Officer April 17, 1998
- ------------------------------------ and Principal Accounting Officer)
Christopher J. Nassetta
/s/ Christopher G. Townsend Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethesda, State of Maryland, on April 17, 1998.
Marriott SBM Two Corporation.
By: /s/ Robert E. Parsons, Jr.
--------------------------
Robert E. Parsons, Jr.
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Christopher G. Townsend as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in his name,
place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Robert E. Parsons, Jr. President and Director (Principal April 17, 1998
- ------------------------------------ Executive Officer)
Robert E. Parsons, Jr.
/s/ Christopher J. Nassetta Vice President and Director (Principal Financial April 17, 1998
- ------------------------------------ Officer and Principal Accounting Officer)
Christopher J. Nassetta
/s/ Christopher G. Townsend Vice President and Director April 17, 1998
- ------------------------------------
Christopher G. Townsend
</TABLE>
<PAGE>
EXHIBIT 12.1
HOST MARRIOTT CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS, EXCEPT RATIO AMOUNTS)
<TABLE>
<CAPTION>
Fiscal Year
-----------------------------------------------
1997 1996 1995 1994 1993
--------- -------- ------- ------- -----
<S> <C> <C> <C> <C> <C>
Income (loss) from continuing operations before income taxes............. $ 83 $ (8) $ (75) $ (16) $ (65)
Add (deduct)
Fixed charges......................................................... 378 285 206 184 157
Capitalized interest.................................................. (1) (3) (5) (10) (8)
Amortization of capitalized interest.................................. 5 7 6 8 5
Net losses related to certain 50% or less owned affiliate............. (1) 1 2 5 22
Minority interest in consolidated affiliates.......................... 32 6 2 1 1
--------- -------- ------- ------- ------
Adjusted earnings........................................................ $ 496 $ 288 $ 136 $ 172 $ 112
========= ======== ======= ======= ======
Fixed charges:
Interest on indebtedness and amortization of deferred financing costs. $ 302 $ 239 $ 178 $ 165 $ 147
Dividends on Convertible Preferred Securities of Subsidiary Trust..... 37 3 -- -- --
Portion of rents representative of the interest factor................ 39 33 17 11 2
Debt service guarantee interest expense of unconsolidated affiliates.. -- 10 11 8 8
--------- -------- ------- ------- ------
Total fixed charges...................................................... $ 378 $ 285 $ 206 $ 184 $ 157
========= ======== ======= ======= ======
Ratio of earnings to fixed charges....................................... 1.31x 1.01x -- -- --
========= ======== ======= ======= ======
Deficiency of earnings to fixed charges.................................. -- -- $ 70 $ 12 $ 45
========= ======== ======= ======= ======
</TABLE>
<PAGE>
EXHIBIT 12.2
HOST MARRIOTT CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(IN MILLIONS, EXCEPT RATIO AMOUNTS)
<TABLE>
<CAPTION>
Fiscal Year
-----------------------------------------------
1997 1996 1995 1994 1993
--------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C>
Income (loss) from continuing operations before income taxes................... $ 83 $ (8) $ (75) $ (16) $ (65)
Add (deduct)
Fixed charges............................................................... 378 285 206 184 157
Capitalized interest........................................................ (1) (3) (5) (10) (8)
Amortization of capitalized interest........................................ 5 7 6 8 5
Net losses related to certain 50% or less owned affiliate................... (1) 1 2 5 22
Minority interest in consolidated affiliates................................ 32 6 2 1 1
--------- -------- -------- -------- ------
Adjusted earnings.............................................................. $ 496 $ 288 $ 136 $ 172 $ 112
========= ======== ======== ======== ======
Fixed charges:
Interest on indebtedness and amortization of deferred financing costs....... $ 302 $ 239 $ 178 $ 165 $ 147
Dividends on Convertible Preferred Securities of Subsidiary Trust........... 37 3 -- -- --
Portion of rents representative of the interest factor...................... 39 33 17 11 2
Debt service guarantee interest expense of unconsolidated affiliates........ -- 10 11 8 8
--------- -------- -------- -------- ------
Total fixed charges............................................................ $ 378 $ 285 $ 206 $ 184 $ 157
========= ======== ======== ======== ======
Ratio of earnings to combined fixed charges and preferred stock dividends...... 1.31x 1.01x -- -- --
========= ======== ======== ======== ======
Deficiency of earnings to combined fixed charges and preferred stock dividends. -- -- $ 70 $ 12 $ 45
========= ======== ======== ======== ======
</TABLE>
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
February 27, 1998 included in Host Marriott Corporation's Form 10-K for the
fiscal year ended January 2, 1998 and HMH Properties, Inc.'s Form 10-K for the
fiscal year ended January 2, 1998 and to all references to our Firm included in
this registration statement.
/s/ Arthur Andersen LLP
Washington, D.C.
April 16, 1998
