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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Wyndham International, Inc.
(Name of Registrant As Specified in its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
_____________________________
(2) Aggregate number of securities to which transaction applies:
_____________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
$___________
(4) Proposed maximum aggregate value of transaction: $___________
(5) Total fee paid: $___________
[ ] Fee paid previously with preliminary materials: $_____________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid: $______________________
(2) Form, Schedule or Registration Statement No.:______________________
(3) Filing Party:______________________________________________________
(4) Date Filed:_____________________________________
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WYNDHAM INTERNATIONAL, INC.
1950 Stemmons Freeway, Suite 6001
Dallas, Texas 75207
----------------
NOTICE OF THE 2000 ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD MAY 26, 2000
To the Stockholders
of Wyndham International, Inc.:
Wyndham International, Inc., a Delaware corporation (the "Company" or
"Wyndham"), cordially invites you to attend the 2000 annual meeting of its
stockholders at The Wyndham Anatole, located at 2201 Stemmons Freeway, Dallas,
Texas 75207, on May 26, 2000, at 10:00 a.m. Dallas time, for the following
purposes:
(1) To elect to Wyndham's Board of Directors six directors, consisting of
three Class A Directors, two Class B Directors and one Class C
Director, to serve until the 2003 annual meeting of stockholders or
until their respective successors are duly elected and qualified;
(2) To amend the Company's 1997 Incentive Plan, as amended and restated as
of June 29, 1999, to increase the number of shares available for
issuance pursuant to awards made under such plan;
(3) To ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the 2000 fiscal year; and
(4) To transact such other business as may properly come before the annual
meeting or any adjournments thereof.
All of the above matters are more fully described in the accompanying proxy
statement. The Board of Directors of Wyndham has established the close of
business on March 29, 2000 as the record date for determining the stockholders
entitled to notice of, and to vote at, the annual meeting or any adjournment
thereof.
We urge stockholders, whether or not they plan to attend the annual
meeting, to sign, date and mail the enclosed proxy card in the envelope
provided. If a stockholder who has submitted a proxy attends the annual
meeting in person, that stockholder may revoke the proxy and vote in person on
all matters submitted at the annual meeting.
By Order of the Board of Directors,
James D. Carreker
Chairman of the Board of Directors
April 28, 2000
Dallas, Texas
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WYNDHAM INTERNATIONAL, INC.
1950 Stemmons Freeway, Suite 6001
Dallas, Texas 75207
----------------
PROXY STATEMENT
----------------
2000 ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD MAY 26, 2000
April 28, 2000
INTRODUCTION
The board of directors (the "Board of Directors") of Wyndham International,
Inc., a Delaware corporation (the "Company" or "Wyndham"), hereby solicits
your proxy on behalf of Wyndham for use at the 2000 annual meeting (the
"Annual Meeting") of Wyndham's stockholders and at any postponements or
adjournments thereof. The Annual Meeting will be held at The Wyndham Anatole,
located at 2201 Stemmons Freeway, Dallas, Texas 75207, on May 26, 2000, at
10:00 a.m. Dallas time.
At the Annual Meeting, the following matters will be considered:
(1) The election to Wyndham's Board of Directors of six directors,
consisting of three Class A Directors, two Class B Directors and one
Class C Director, to serve until the 2003 annual meeting of
stockholders or until their respective successors are duly elected and
qualified;
(2) The amendment of the Company's 1997 Incentive Plan, as amended and
restated as of June 29, 1999 (the "Incentive Plan"), to increase the
number of shares available for issuance pursuant to awards made under
the Incentive Plan;
(3) The ratification of the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as the Company's independent auditors for
the 2000 fiscal year; and
(4) The transaction of such other business as may properly come before the
Annual Meeting.
The Board of Directors recommends that stockholders vote FOR the election
as directors of the nominees named herein, FOR the proposed amendment of the
Incentive Plan and FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as the Company's independent auditors for the 2000
fiscal year.
This is Wyndham's first annual meeting of stockholders since Wyndham was
restructured effective June 30, 1999. Prior to the restructuring, the shares
of common stock of Wyndham ("Old Wyndham") were paired and traded together
with the shares of common stock of Patriot American Hospitality, Inc.
("Patriot") on a one for one basis and were referred to as paired shares. As a
result of the restructuring, Patriot became a wholly-owned subsidiary of
Wyndham and each outstanding paired share was converted into a share of
Wyndham Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"). As part of the restructuring, Wyndham also issued shares of Series B
Convertible Preferred Stock, par value $.01 per share (the "Series B Preferred
Stock"), to a group of investors (the "Investors") for $1 billion.
Wyndham's principal executive office is located at 1950 Stemmons Freeway,
Suite 6001, Dallas, Texas 75207, and its telephone number is (214) 863-1000.
Wyndham expects to mail this proxy statement and the accompanying proxy on or
about April 28, 2000.
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RECORD DATE AND VOTING
Record Date
The Board of Directors has established the close of business on March 29,
2000 (the "Record Date"), as the record date for determining the holders of
voting securities entitled to notice of, and to vote at, the Annual Meeting.
On the Record Date, Wyndham had outstanding and entitled to vote 167,721,297
shares of Class A Common Stock and 10,288,477.066 shares of Series B Preferred
Stock.
Voting Rights, Quorum and Required Vote
Voting Rights. Only Class A Common Stockholders are entitled to vote on the
election of the Class A Directors and only Series B Preferred Stockholders are
entitled to vote on the election of the Class B Directors. The Class A Common
Stockholders and the Series B Preferred Stockholders are entitled to vote
together as a single class on the election of the Class C Director, on the
proposed amendment to the Incentive Plan, on the proposal to ratify the
appointment of the auditors and on any other matter that may properly come
before the Annual Meeting. Each share of Class A Common Stock is entitled to
one vote and each share of Series B Preferred Stock is entitled to 11.6414
votes. Consequently, a total of 167,721,297 votes may be cast by Class A
Common Stockholders and a total of 119,772,276.916 votes may be cast by Series
B Preferred Stockholders.
Quorum. A majority of the outstanding shares of Class A Common Stock,
represented in person or by proxy, will constitute a quorum for purposes of
electing Class A Directors, and a majority of the outstanding shares of Series
B Preferred Stock, represented in person or by proxy, will constitute a quorum
for purposes of electing Class B Directors. With respect to election of the
Class C Director, the proposed amendment to the Incentive Plan, the
ratification of the appointment of auditors and any other matter that may be
presented at the meeting, stockholders holding shares representing a majority
of the votes entitled to be cast thereon will constitute a quorum.
Shares that are represented at the Annual Meeting but abstain from voting
on any or all matters and shares that are "broker non-votes" (i.e., shares
held by brokers or nominees which are represented at the meeting but with
respect to which the broker or nominee does not have discretionary power to
vote on a particular matter and has received no instructions from the
beneficial owners thereof or persons entitled to vote thereon) will be counted
in determining whether a quorum is present at the Annual Meeting.
Required Vote for Election of Directors. Directors will be elected by a
plurality of votes cast that are entitled to vote on the election of such
director. Abstentions and broker non-votes will be disregarded and will have
no effect on the outcome of the election of directors.
Required Vote for Amendment of Incentive Plan and Ratification of Auditors.
The favorable vote of a majority of the total votes represented by the shares
of Class A Common Stock and Series B Preferred Stock present in person or by
proxy is required to approve the proposed amendment to the Incentive Plan and
to ratify the appointment by the Board of Directors of PricewaterhouseCoopers
LLP as the Company's independent auditors for the current fiscal year.
Consequently, an abstention from voting on either such proposal will have the
effect of a negative vote with respect to such proposal. Broker non-votes will
be treated as not present and not entitled to vote with respect to the
proposed amendment to the Incentive Plan and the ratification of the
appointment of the auditors. Because each such proposal must be approved by
the affirmative vote of a majority of the voting power present at the meeting,
broker non-votes will have no effect on the outcome of the vote on such
proposal.
Proxies
Each executed and returned proxy will be voted according to the directions
indicated on that proxy. If no direction is indicated, the proxy will be voted
according to the Board of Directors' recommendations, which are contained in
this proxy statement.
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The Board of Directors does not intend to present, and has no information
that others will present, any business at the Annual Meeting that requires a
vote on any other matter. If any other matter requiring a vote properly comes
before the Annual Meeting, the proxyholders will vote the proxies that they
hold in accordance with their best judgment, including voting them to adjourn
the Annual Meeting to another time if a quorum is not present at the Annual
Meeting or if they believe that an adjournment is in the best interests of
Wyndham.
Each stockholder giving a proxy has the power to revoke it at any time
before the shares it represents are voted. This revocation is effective upon
receipt, at any time before the Annual Meeting is called to order, by the
Secretary of Wyndham of either (i) an instrument revoking the proxy or (ii) a
duly executed proxy bearing a later date than the preceding proxy.
Additionally, a stockholder may change or revoke a previously executed proxy
by voting in person at the Annual Meeting.
Solicitation Agent and Certain Reimbursements
Wyndham will bear the cost to solicit proxies. Wyndham has retained
Georgeson Shareholder Communications, Inc. (the "Solicitation Agent") to
solicit proxies for the Annual Meeting. The Solicitation Agent may solicit
proxies from the stockholders and other persons in person or by mail,
facsimile transmission, telephone, personal interview, or any other means.
Wyndham will pay the Solicitation Agent a fee of $7,500 and reimburse it for
its out-of-pocket expenses in connection with this solicitation. Wyndham also
will reimburse banks, brokers, custodians, fiduciaries, nominees, securities
dealers, trust companies, and other persons for the reasonable expenses that
they incur when forwarding this proxy statement and the accompanying materials
to the beneficial owners of shares of Class A Common Stock and the Series B
Preferred Stock. Wyndham's directors and officers also may solicit proxies
from stockholders and other persons by any of the means described above.
Wyndham will not pay these directors and officers any extra compensation for
participating in this solicitation.
PROPOSAL 1
ELECTION OF DIRECTORS
General
The Board of Directors currently consists of nineteen directors, which are
divided into the following classes: (i) the Class A Directors, consisting of
eight directors, (ii) the Class B Directors, consisting of eight directors,
and (iii) the Class C Directors, consisting of three directors. Each of these
classes of directors is further divided into three classes by term of office.
The Class A Directors consist of three Class A-I Directors, two Class A-II
Directors and three Class A-III Directors. The Class B Directors consist of
two Class B-I Directors, three Class B-II Directors and three Class B-III
Directors. The Class C Directors consist of one Class C-I Director, one Class
C-II Director and one Class C-III Director. The terms of the current Class A-
I, Class B-I and Class C-I Directors expire at the Annual Meeting. The terms
of the current Class A-II, Class B-II and Class C-II Directors expire at the
2001 annual meeting, and the terms of the current Class A-III, Class B-III and
Class C-III Directors expire at the 2002 annual meeting. At the 2000 Annual
Meeting, the directors who are elected to succeed the current Class A-I, Class
B-I and Class C-I Directors will be elected for a three-year term. At the
annual meeting in 2001, the successors to the Class A-II, Class B-II and Class
C-II Directors whose terms expire at that meeting will be elected for a two-
year term. At each annual meeting beginning in 2002, successors to the
directors whose terms expire at that annual meeting will be elected for a one-
year term.
At the Annual Meeting, the following six nominees are to be considered for
election to a term of three (3) years that expires at the annual meeting of
stockholders to be held in 2003: (i) Class A-I Directors-Leonard Boxer, Fred
J. Kleisner and Rolf E. Ruhfus, (ii) Class B-I Directors-Marc J. Rowan and
Scott M. Sperling, and (iii) Class C-I Director-Paul Fribourg. In accordance
with Wyndham's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation"), the nominees for Class A-I Directors have
been nominated by the Class A Nominating Committee, the nominees for Class B-I
Directors have been nominated by a majority of the Class B Directors, and the
nominee for Class C-I Director has been nominated by a majority of the Class C
Directors.
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The Board of Directors recommends that the stockholders vote "FOR" the
election of the nominees named in this proxy statement. See "--Nominees"
below. The thirteen remaining directors, whose terms of office expire in 2001
and 2002, will continue to serve after the Annual Meeting until their
respective terms of office expire or their successors are duly elected and
qualified. See "--Other Directors" below.
Nominees
Class A-I Directors
Leonard Boxer has served as a director of Wyndham since July 1997. He
served as a director of Patriot and its predecessor from September 1995 to
July 1997. He has been a partner and chairman of the real estate department of
the law firm of Stroock & Stroock & Lavan in New York, New York since 1987.
Previously, he was a founder and managing partner and head of the real estate
department of Olnick Boxer Blumberg Lane & Troy, a real estate law firm in New
York. Mr. Boxer is a member of the Board of Trustees of New York University
Law School. He is a member of the New York Regional Cabinet of the United
States Holocaust Memorial Museum. Mr. Boxer holds a B.A. and an L.L.B. from
New York University. Mr. Boxer is 61 years old.
Fred J. Kleisner is the President and Chief Executive Officer of Wyndham.
He has served as Wyndham's President since August 1999 and as its Chief
Executive Officer since March 27, 2000. From August 1999 to March 2000, Mr.
Kleisner also served as the Company's Chief Operating Officer. From March 1998
to August 1999, he was President and Chief Operating Officer of The Americas,
for Starwood Hotels & Resorts Worldwide, Inc. Hotel Group. His experience in
the industry also includes senior positions with Westin Hotels and Resorts,
where he was President and Chief Operating Officer from 1995 to 1998;
Interstate Hotels, where he was Executive Vice President and Group President
of Operations from 1990 to 1995; The Sheraton Corporation, where he was Senior
Vice President, Director of Operations, North America Division-East from 1985
to 1990; and Hilton Hotels, where for 16 years he served as General Manager of
several landmark hotels, including The Waldorf Astoria and The Waldorf Towers
in New York, The Capital Hilton in Washington, D.C., and The Hilton Hawaiian
Village in Honolulu. Mr. Kleisner, who holds a B.A. degree in Hotel Management
from Michigan State University, completed advanced studies at the University
of Virginia and Catholic University of America. Mr. Kleisner is 55 years old.
Rolf E. Ruhfus has served as a director of Wyndham since June 1998. Mr.
Ruhfus currently serves as Chairman of the Board of Directors and Chief
Executive Officer of Summerfield Corporation and Ruhfus Hotel Corporation. He
previously served as Chairman of the Board of Directors and Chief Executive
Officer of Summerfield Hotel Corporation from 1987 through June 1998 when
Summerfield was acquired by Wyndham. Prior to founding Summerfield, Mr. Ruhfus
served as President of Residence Inn Corporation. Mr. Ruhfus holds a B.A. from
Western Michigan University, an M.B.A. from the Wharton School of Business and
a Ph.D. in Marketing from the University of Munster, Germany. Mr. Ruhfus is 55
years old.
Class B-I Directors
Marc J. Rowan became a director of Wyndham in June 1999. Mr. Rowan is one
of the founding principals of (1) Apollo Advisors, L.P., which, together with
its affiliates, acts as the managing general partner of the Apollo Investment
Funds, private securities investment funds; and (2) Lion Advisors, L.P., a
financial advisor to, and representative of, institutional investors with
respect to securities investments. Mr. Rowan is also a director of Samsonite
Corporation, Vail Resorts, Inc., National Financial Partners Corporation, NRT
Incorporated, Quality Distribution Inc. and Raw Medium Group, Inc. Mr. Rowan
is also active in charitable activities and is a founding member and serves on
the executive committee of the Youth Renewal Fund and is a member of the board
of directors of National Jewish Outreach Program and the Undergraduate
Executive Board of The Wharton School of Business. Mr. Rowan is 37 years old.
Scott M. Sperling became a director of Wyndham in June 1999. Mr. Sperling
is a Managing Director at Thomas H. Lee Company. In this capacity, he is or
has been a director of PriCellular Corp., Experian (the former TRW credit and
information business), Safelite Glass Corp., The Learning Company, Fisher
Scientific International, Inc., General Chemical Corp., Livent, Inc., and a
number of private companies. During the ten
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years prior to joining Thomas H. Lee Company, Mr. Sperling was Managing
Partner of the Aeneas Group, the private capital affiliate of the Harvard
Management Company, Inc. Prior to 1984, Mr. Sperling was a Senior Consultant
with the Boston Consulting Group, Inc. focusing on business and corporate
strategies. He holds an M.B.A. degree from Harvard University and a B.S. from
Purdue University. Mr. Sperling is 42 years old.
Class C-I Director
Paul Fribourg became a director of Wyndham in June 1999. Mr. Fribourg has
served as Chief Executive Officer of Continental Grain Company since July
1997. Since 1976, Mr. Fribourg has held numerous positions with Continental
Grain Company including President and Chief Operating Officer from 1994 to
1997 and Executive Vice President of the Commodity Marketing Group from 1990
to 1994. Mr. Fribourg also serves on the boards of Loews Corporation, the YMCA
of Greater New York, The Browning School, New York University and the America-
China Society. Mr. Fribourg holds a B.A. from Amherst College and completed
the Advanced Management Program at Harvard Business School. Mr. Fribourg is 46
years old.
Other Directors
The following persons will continue to serve as directors of Wyndham after
the Annual Meeting until their terms of office expire (as indicated below) or
until their successors are duly elected and qualified.
Class A Directors
Karim Alibhai has served as a director of Wyndham since October 1997. Mr.
Alibhai served as the President and Chief Operating Officer of Wyndham until
his resignation on June 30, 1999. Prior to joining Wyndham in October 1997,
Mr. Alibhai was the President and Chief Executive Officer of the Gencom Group,
an affiliated group of companies that acquired, developed, renovated, leased
and managed hotel properties in the United States and Canada through Gencom
American Hospitality. Mr. Alibhai holds a B.A. from Rice University. Mr.
Alibhai is 36 years old. Mr. Alibhai is a Class A-III director whose term
expires in 2002.
James D. Carreker has served as the Chairman of the Board of Directors of
Wyndham since January 1998. He served as Chief Executive Officer of Wyndham
from January 1998 to March 2000. He served as a director of Patriot from
January 1998 to June 1999, and has served as the Chief Executive Officer of
Patriot since February 1999. Prior to the merger of Wyndham Hotel Corporation
with the Company and Patriot in January 1998, Mr. Carreker had served as
Chairman of the Board, Chief Executive Officer and President of Wyndham Hotel
Corporation from May 1988 to January 1998 and as a director of Wyndham Hotel
Corporation from February 1996 to January 1998. He also served as Chief
Executive Officer of Trammell Crow Company, a national real estate company,
from August 1994 to December 1995. Prior to 1988, Mr. Carreker served as
President of Burdine's, the Miami based division of Federated Department
Stores. Mr. Carreker also serves as a director of Crow Family Holdings and of
Carreker-Antinori, Inc., a computer service company that completed its initial
public offering in May 1998. Mr. Carreker holds a B.S. and a Master of
Business Administration from Oklahoma State University. Mr. Carreker is 52
years old. Mr. Carreker is a Class A-II director whose term expires in 2001.
Milton Fine became a director of Wyndham in June 1999. He served as a
director of Patriot from June 1998 through June 1999. Mr. Fine co-founded
Interstate Hotels Corporation in 1961 and was Chairman of the Board prior to
Wyndham's acquisition of Interstate Hotels Corporation in June 1998. Mr. Fine
also served as the Chief Executive Officer of Interstate Hotels Corporation
through March 1996. Mr. Fine is a member of the Advisory Board of Greenwich
Street Capital Partners, Inc. He is also a member of the Board of Trustees of
the University of Pittsburgh. Mr. Fine is a life trustee of the Carnegie
Institute and Chairman of the Board of the Carnegie Museum of Art. He is a
member of the Board of Directors of the Andy Warhol Museum in Pittsburgh,
Pennsylvania. Mr. Fine is a magna cum laude graduate and also holds a J.D.
from the University of Pittsburgh. Mr. Fine is 73 years old. Mr. Fine is a
Class A-III director whose term expires in 2002.
Susan T. Groenteman has served as a director of Wyndham since January 1998.
Ms. Groenteman had served as a director of Wyndham Hotel Corporation, a
subsidiary of Wyndham, from April 1996 to January 1998. Ms. Groenteman is a
member of the Board of Directors and Chief Operating Officer of Crow Family
Holdings, an
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investment company managing investments in a variety of real estate related
businesses, along with other industries, a position she has held since 1988.
In any given year within the past five years, Ms. Groenteman has served as an
executive officer or director in over 1,000 partnerships (or affiliates of
partnerships) or corporations. In the past five years, Ms. Groenteman has
served as an executive officer or director of approximately six partnerships
or corporations, or for affiliates of such entities, that filed for protection
under federal bankruptcy laws. In addition, in the past five years, Ms.
Groenteman served as an executive officer or director in approximately 15
partnerships or corporations, or affiliates of such partnerships or
corporations, that were placed in receivership. Ms. Groenteman holds a
Bachelor of Business Administration from the University of Texas at Arlington.
Ms. Groenteman is 46 years old. Ms. Groenteman is a Class A-III director whose
term expires in 2002.
Sherwood M. Weiser has served as a director of Wyndham since October 1997.
Currently, Mr. Weiser is the Chairman and Chief Executive Officer of Carnival
Resorts & Casinos, a hotel and gaming management and development firm. In
1970, Mr. Weiser founded The Continental Companies. Carnival Resorts & Casinos
was a successor to The Continental Companies. In June 1998, Wyndham acquired
the hospitality-related businesses of CHCI, the parent corporation of Carnival
Resorts & Casinos. Mr. Weiser is a director of Carnival Corporation and Mellon
United National Bank, a subsidiary of Mellon Bank. He is a graduate of the
Ohio State University School of Business and holds a J.D. from the Case
Western Reserve University School of Law. Mr. Weiser is 69 years old. Mr.
Weiser is a Class A-II director whose term expires in 2001.
Class B Directors
Leon D. Black became a director of Wyndham in June 1999. Mr. Black is one
of the founding principals of (1) Apollo Advisors, L.P., which, together with
its affiliates, acts as the managing general partner of the Apollo Investment
Funds, private securities investment funds; (2) Apollo Real Estate Advisors,
L.P. which, together with its affiliates, acts as the managing general partner
of the Apollo Real Estate Investment Funds, private real estate investment
funds; and (3) Lion Advisors, L.P., a financial advisor to, and representative
of, institutional investors with respect to securities investments. Mr. Black
is also a director of Samsonite Corporation, Sequa Industries, Inc., United
Rentals, Inc. and Vail Resorts, Inc. He also serves as a trustee of The Museum
of Modern Art, Mount Sinai-NYU Medical Center, Lincoln Center for the
Performing Arts and Vail Valley Foundation. Mr. Black holds an M.B.A. from
Harvard University and a B.A. from Dartmouth College. Mr. Black is 48 years
old. Mr. Black is a Class B-II director whose term expires in 2001.
Thomas H. Lee became a director of Wyndham in June 1999. Mr. Lee founded
Thomas H. Lee Company in 1974 and since that time has served as its President.
From 1966 through 1974, Mr. Lee was with First National Bank of Boston where
he directed the bank's high technology lending group from 1968 to 1974 and
became a Vice President in 1973. Prior to 1966, Mr. Lee was a securities
analyst in the institutional research department of L.F. Rothschild & Co. in
New York. Mr. Lee serves or has served as a director of numerous public and
private corporations, including Finlay Enterprises, Inc., General Nutrition
Companies, Inc., Playtex Products, Inc., Safelite Glass Corp., Snapple
Beverage Corp. and Vail Resorts, Inc. In addition, Mr. Lee serves as a trustee
or overseer of a number of civic and charitable organizations including, in
Boston, Beth Israel Deaconess Medical Center, Brandeis University, Harvard
University and the Museum of Fine Arts, as well as in New York City, Lincoln
Center for the Performing Arts, Mount Sinai-NYU Medical Center and the Whitney
Museum of American Art. Mr. Lee is a 1965 graduate of Harvard College. Mr. Lee
is 56 years old. Mr. Lee is a Class B-III director whose term expires in 2002.
Alan M. Leventhal became a director of Wyndham in June 1999. Mr. Leventhal
is co-founder of Beacon Capital Partners and serves as its Chairman and Chief
Executive Officer. Prior to founding Beacon Capital Partners, Mr. Leventhal
served as President and Chief Executive Officer of Beacon Properties
Corporation, a publicly traded real estate investment trust. Mr. Leventhal
received his Bachelor's degree in Economics from Northwestern University in
1974 and his Master of Business Administration from the Amos Tuck School of
Business Administration at Dartmouth College in 1976. Mr. Leventhal is a
trustee of Boston University, Northwestern University and the New England
Aquarium Corporation and recently served as First Vice Chair of
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the National Association of Real Estate Investment Trusts. He is also a member
of the Board of Overseers of WGBH and Beth Israel Deaconess Medical Center.
Mr. Leventhal has lectured at the Amos Tuck School of Business Administration
at Dartmouth College and the Massachusetts Institute of Technology Center for
Real Estate. Mr. Leventhal has been awarded the Realty Stock Review's
"Outstanding CEO Award" for 1996, 1997 and 1998, and the Commercial Property
News' "Office Property Executive of the Year" for 1996. Mr. Leventhal is 47
years old. Mr. Leventhal is a Class B-III director whose term expires in 2002.
William L. Mack became a director of Wyndham in June 1999. Mr. Mack is a
founding principal and managing partner of Apollo Real Estate Advisors, L.P.,
which, together with its affiliates, acts as the managing general partner of
the Apollo Real Estate Investment Funds, private real estate investment funds.
Beginning in 1969, Mr. Mack served as Managing Partner of the Mack Company, a
privately held real estate company which was merged with the Cali Realty
Corporation (now Mack-Cali Realty Corporation) of which Mr. Mack has served as
a director since 1997. Mr. Mack is also a director of The Bear Stearns
Companies, Inc., Koger Equity, Inc. and Vail Resorts, Inc. Mr. Mack attended
the Wharton School of Business and Finance at the University of Pennsylvania
and received a B.S. degree in business administration, finance and real estate
from New York University. Mr. Mack is 60 years old. Mr. Mack is a Class B-III
director whose term expires in 2002.
Lee S. Neibart became a director of Wyndham in June 1999. Mr. Neibart has
been a principal since 1993 of Apollo Real Estate Advisors, L.P., which
together with its affiliates, acts as the managing general partner of the
Apollo Real Estate Investment Funds, private real estate investment funds.
From 1979 to 1993, he was Executive Vice President and Chief Operating Officer
of the Robert Martin Company, a private real estate development and management
firm, with which he was associated for over 14 years. Mr. Neibart is a
director of Atlantic Gulf Communities Corp., Koger Equity, Inc., NextHealth,
Inc. and Roland International Corporation. Mr. Neibart received a B.A. from
the University of Wisconsin and an M.B.A. from New York University. Mr.
Neibart is 49 years old. Mr. Neibart is a Class B-II director whose term
expires in 2001.
Scott A. Schoen became a director of Wyndham in June 1999. Mr. Schoen, a
Managing Director at Thomas H. Lee Company, joined the firm in 1986. Prior to
joining the firm, Mr. Schoen was in the Private Finance Department of Goldman,
Sachs & Co. Mr. Schoen received a B.A. in History from Yale University, a J.D.
from Harvard Law School and an M.B.A. from the Harvard Graduate School of
Business Administration. He is a member of the New York Bar. Mr. Schoen is or
has been a director of First Alert, Inc., LaSalle Re Holdings Ltd, Rayovac
Corporation, Signature Brands, Inc., Syratech Corporation, TransWestern
Publishing, United Industries and a number of private companies. Mr. Schoen is
also a director of United Way of Massachusetts Bay. Mr. Schoen is 41 years
old. Mr. Schoen is a Class B-II director whose term expires in 2001.
Class C Directors
Norman Brownstein became a director of Wyndham in June 1999. Mr. Brownstein
serves as Chairman of the Board of the law firm Brownstein Hyatt & Farber,
P.C. Mr. Brownstein is nationally recognized for his extensive experience in
real estate law and commercial transactions. Mr. Brownstein is a member of the
American College of Real Estate Lawyers and the American, Colorado, and Denver
Bar Associations and numerous other professional organizations. Mr. Brownstein
is presently a director of the National Jewish Center for Immunology and
Respiratory Medicine, a Trustee of the Simon Wiesenthal Center and a Vice
President of the American Israel Public Affairs Committee. Mr. Brownstein
received a B.S. and a J.D. from the University of Colorado at Boulder. Mr.
Brownstein is 56 years old. Mr. Brownstein is a Class C-II director whose term
expires in 2001.
Stephen T. Clark became a director of Wyndham in June 1999. Since 1995, Mr.
Clark has been President of Cypress Realty, Inc., a real estate investor and
developer based in Houston, Texas and serves as a director of Beacon Capital
Partners, Inc. Previously, Mr. Clark served as Managing Director of Harvard
Private Capital Group where he directed the group responsible for real estate
investment and management activities. Prior to joining Harvard Private Capital
Group, Mr. Clark was a partner in Clark-Pilgrim Limited Partnership and in
Trammell Crow Company where he was in charge of office and industrial
activities in Philadelphia and
7
<PAGE>
Delaware. He received a Masters in Business Administration degree from Harvard
Business School and received his undergraduate degree from Duke University.
Mr. Clark serves as Chairman of the Board of Abacoa Development Company and
Cypress Senior Living, Inc. Mr. Clark is 44 years old. Mr. Clark is a Class C-
III director whose term expires in 2002.
Meetings and Committees of the Board of Directors
The Board of Directors of Wyndham held six meetings during 1999. No
director attended less than 75% of the aggregate number of meetings held
during 1999 of the Board of Directors and any board committee of which he or
she was a member, except that Mr. Fribourg attended only one of the two Board
of Director meetings held during 1999 subsequent to his election to the Board.
Set forth below are descriptions of the standing committees of the Board of
Directors and the names of the current members of such committees.
Executive Committee. The executive committee consists of Messrs. Alibhai,
Carreker, Fine, Leventhal, Rowan, Sperling and Mack. In addition, Mr. Fred J.
Kleisner, in his capacity as Chief Operating Officer, and Mr. Richard L.
Mahoney, in his capacity as Chief Financial Officer, serve on the committee in
an ex officio capacity. The Executive Committee has the full power and
authority of the Board of Directors in the management of the business and
affairs of the Company between meetings of the Board of Directors, except that
the executive committee cannot effect certain fundamental corporate actions as
provided under Delaware law. In addition, final approval of the full Board of
Directors is required for any of the following: (i) any individual transaction
involving the issuance of debt securities by the Company or its subsidiaries
involving aggregate proceeds to the Company in excess of $75 million or the
issuance of equity securities by the Company or its subsidiaries involving
aggregate proceeds to the Company in excess of $10 million; (ii) any
transaction constituting a "change of control" of the Company within the
meaning of such term under the Securities Purchase Agreement, dated as of
February 18, 1999, by and among the Company and the other parties thereto;
(iii) entry by the Company into a new line of business; (iv) any capital
commitment by the Company where the Company's share of the commitment involved
exceeds $75 million; (v) any transaction that provides a disproportionate
benefit to the holders of the Series B Preferred Stock; (vi) any change to the
scope of the authority or the identity of the members of the executive
committee, the audit committee, the compensation committee or the capital
commitments committee; and (vii) any change to the classification of the
directors. The executive committee held one meeting during 1999.
Capital Commitments Committee. The capital commitments committee consists
of Messrs. Rowan and Sperling (or in Mr. Sperling's absence, Mr. Schoen). In
addition, Mr. Kleisner, in his capacity as Chief Operating Officer, and Mr.
Mahoney, in his capacity as Chief Financial Officer, serve on this committee
in an ex officio capacity. Mr. Carreker also served on this committee until
his resignation on March 27, 2000. The capital commitments committee
facilitates the execution of the Company's business strategy and oversight of
the business and affairs of the Company. The capital commitments committee has
the full power and authority of the executive committee in the management of
the business and affairs of the Company between meetings of the executive
committee, except that the final approval of the executive committee or the
full Board of Directors, as appropriate, is required in connection with any
transaction where the Company's share of the capital commitment exceeds $20
million per annum. The capital commitments committee held more than seven
meetings during 1999.
Audit Committee. The audit committee consists of Messrs. Boxer, Brownstein
and Clark. The audit committee makes recommendations concerning the engagement
of independent public accountants, reviews with the independent public
accountants the plans and results of the audit engagement, approves
professional services provided by the independent public accountants, reviews
the independence of the independent public accountants, considers the range of
audit and non-audit fees, reviews the adequacy of Wyndham's internal
accounting controls and reviews related party transactions. The audit
committee held seven meetings during 1999.
8
<PAGE>
Compensation Committee. The compensation committee consists of Messrs.
Boxer, Clark, Rowan, Schoen and Weiser. The compensation committee determines
compensation of Wyndham's executive officers and directors and administers the
1997 Incentive Plan. The compensation committee held eight meetings during
1999.
Class A Nominating Committee. Wyndham's Certificate of Incorporation
provides that the nominees for Class A Directors shall be nominated by a Class
A Director Nominating Committee that shall consist of each of the Class C
Directors then in office and the same number of Class A Directors then in
office, who shall be selected by a majority vote of the Class A Directors then
in office. In March 2000, the Class A Directors selected Messrs. Carreker and
Weiser and Ms. Groenteman to serve as the Class A Directors on the Class A
Nominating Committee. This committee, which held no meetings during 1999, held
one meeting in March 2000 at which the committee selected the nominees for
Class A Directors to be elected at the Annual Meeting.
Selection of Class B Directors and Class C Directors. As provided in the
Certificate of Incorporation, the nominees for Class B Directors are selected
by a majority vote of the Class B Directors then in office and the nominee for
Class C Directors is selected by a majority vote of the Class C Directors then
in office. In March 2000, the Class B Directors and Class C Directors selected
by written consent their respective nominees for Class B-I Directors and Class
C-I Director.
Director Compensation
Currently, any director who is not an employee of Wyndham is paid an annual
retainer fee as follows: Class A Directors receive a retainer fee of $12,500;
Class B Directors receive no retainer fee; and Class C Directors receive a
retainer fee of $25,000. In addition, except for the Class B Directors, each
director is paid $1,000 for attendance at each meeting of the Board of
Directors and $750 for participating in a telephonic board meeting. Except for
the Class B Directors, each director is paid $1,000 ($1,250 for the chairman
of the committee) for attendance, whether in person or telephonic, at each
meeting of a committee of the Board of Directors of which such director is a
member. Both the annual retainer fee and meeting fees are payable in cash, but
each director may elect in advance to defer the receipt of all or part of
their fees and to receive such deferred fees at a later date in the form of
Class A Common Stock. In addition, Wyndham reimburses directors for their out-
of-pocket expenses incurred in connection with their service on the Board of
Directors. In lieu of cash compensation, Wyndham makes an aggregate amount of
$100,000 available on an annual basis, which is used for charitable
contributions as directed by the Class B Directors. Directors who are
employees of Wyndham do not receive any fees for their service on the Board of
Directors or a committee thereof.
During late 1998 and the first two months of 1999, the Wyndham and Patriot
boards of directors held numerous board meetings to consider strategic
alternatives for the companies. A special coordinating committee of the boards
of directors, consisting of Messrs. Boxer and Weiser and Ms. Groenteman for
Wyndham, was also established and met numerous times during the last two
months of 1998 and the first two months of 1999. The compensation committees
of the boards of directors, which at the time consisted of Arch K. Jacobson
and James C. Leslie for Wyndham, also met several times to discuss special
compensation issues. One director, Ms. Groenteman, who served as co-point
person of the coordinating committee, worked full-time on these matters. In
light of their extraordinary effort, in lieu of the normal meeting fees for
the last two months of 1998 and the first two months of 1999, each non-
employee director of Wyndham (Messrs. Boxer, Ruhfus and Burton C. Einspruch,
M.D.) received $20,000 in fees; members of the Wyndham compensation committee
received $40,000 in fees; members of the Wyndham coordinating committee, other
than Ms. Groenteman, received $65,000 in fees; and Ms. Groenteman received
$200,000 in fees. These fees were payable in 1999 in either cash or deferred
paired shares, at the election of each director. Mr. Weiser and Ms. Groenteman
elected to receive their fees in cash. Messrs. Boxer and Jacobson and Dr.
Einspruch elected to receive their fees in deferred paired shares.
9
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth, as to the Chief Executive Officer and as to
each of the four other most highly compensated executive officers of the
Company who were serving as executive officers as of December 31, 1999 (the
"named executive officers"), information concerning all compensation paid for
services to the Company in all capacities for each of the last three fiscal
years.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
-------------------------
Annual Compensation(1) Restricted Securities
----------------------------- Stock Underlying All Other
Year Salary($) Bonus($) Awards Options(#) Compensation
---- --------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
James D. Carreker...... 1999 $316,865 $ 750,000 $2,049,997(3) 1,300,000(4) $ 51,152(5)
Chairman of the 1998 $571,036 -- -- -- $ 648(6)
Board(2)
Fred J. Kleisner....... 1999 $258,077 $ 750,000 $ 761,250(7) 1,100,000(8) $ 738,455(9)
Chief Executive
Officer and
President(2)
Richard Mahoney........ 1999 $273,461 $ 450,000 $ 612,831(11) 850,000(12) $1,312,625(13)
Executive Vice
President and Chief
Financial
Officer(10)
Leslie V. Bentley...... 1999 $337,595 $ 240,000 -- 450,000(14) $ 2,362(15)
Executive Vice 1998 $320,192 $ 120,000 -- 117,928(16) $ 2,308(17)
President
Stanley M. Koonce,
Jr. .................. 1999 $312,692 $ 105,000 -- 400,000(19) $ 850(20)
Executive Vice 1998 $310,902 $ 120,000 -- 117,928(16) $ 792(21)
President(18)
William W. Evans III... 1999 $302,884 $1,500,000 -- 57,216(23) $1,516,268(24)
Executive Vice 1998 $374,461 -- $ 999,996(25) -- $ 289(26)
President (22) 1997 $275,440(27) $ 303,373 $4,525,068(28) 601,074(29) $ 148(30)
</TABLE>
- --------
(1) Does not include "Other Annual Compensation" because amounts of certain
perquisites and other noncash benefits provided by Wyndham did not exceed
the lesser of $50,000 or 10% of the total annual base salary and bonus
disclosed in this table for the respective officer.
(2) Mr. James D. Carreker served as the Chairman of the Board and Chief
Executive Officer of the Company throughout 1999. On March 27, 2000, Mr.
Carreker resigned his position as Chief Executive Officer and Mr. Fred J.
Kleisner was appointed Chief Executive Officer in addition to his
previous title as President.
(3) On February 19, 1999, Wyndham awarded the equivalent of 200,000
restricted shares to Mr. Carreker. The equivalent market value of the
shares on the date of grant was $5.375 per share and the aggregate market
value of such shares on December 31, 1999 was $587,500. The restrictions
on these shares lapse on each anniversary commencing January 1, 2000 at
the following rates: year 1: 40%, year 2: 30%, and year 3: 30%. On
February 19, 1999, Wyndham awarded 216,666 restricted shares of Class A
Common Stock to Mr. Carreker. Mr. Carreker received 72,222 shares of
Class A Common Stock on June 30, 1999, and will receive 72,222 shares of
Class A Common Stock on each of the first and second anniversaries of the
date of grant. The equivalent to the market value of the shares on the
date of grant was $4.50 per share and the aggregate market value of such
shares on December 31, 1999 was $636,456.
(4) On April 19, 1999, Wyndham granted non-qualified options to purchase the
equivalent of 1,300,000 shares to Mr. Carreker. These options vest on
each anniversary of the date of grant at the rate of 20% per year.
(5) Such amount includes $5,260 of life insurance premiums, $22,545 of
disability premiums, $15,000 in tax preparation fees and $8,347 in
payments for an automobile lease.
(6) Such amount includes $360 of term life insurance premiums paid by Wyndham
for the benefit of Mr. Carreker and $288 contributed by Wyndham to Mr.
Carreker's 401(k) account.
10
<PAGE>
(7) On August 12, 1999, Wyndham awarded 203,000 restricted shares of Class A
Common Stock to Mr. Kleisner. The market value of the shares on the date
of grant was $3.75 per share and the aggregate market value of such
shares on December 31, 1999 was $596,313. The restrictions on these
shares lapse on each anniversary of the date of grant at the rate of 33
1/3% per year.
(8) On August 12, 1999, Wyndham granted non-qualified options to purchase
1,100,000 shares of Class A Common Stock to Mr. Kleisner. These options
vest on each anniversary of the date of grant at the rate of 20% per
year.
(9) Such amount includes a $550,000 signing bonus, a $174,929 relocation
allowance, $671 in life insurance premiums, $1,174 in disability premiums
and $11,681 of imputed interest on a non-interest bearing note.
(10) On April 12, 2000, Mr. Mahoney resigned his positions as Executive Vice
President and Chief Financial Officer of the Company effective May 19,
2000.
(11) On May 7, 1999, Wyndham awarded the equivalent of 121,053 restricted
shares of Class A Common Stock to Mr. Mahoney. The equivalent market
value of the shares on the date of grant was $5.0625 per share and the
aggregate market value of such shares on December 31, 1999 was $355,593.
The restrictions on these shares lapse on the first anniversary of the
date of grant.
(12) On May 7, 1999, Wyndham granted non-qualified options to purchase the
equivalent of 850,000 shares of Class A Common Stock to Mr. Mahoney.
These options vest on each anniversary of the date of grant at the rate
of 20% per year.
(13) Such amount includes a $1,250,000 signing bonus, a $61,645 relocation
allowance, $81 in life insurance premiums and $899 in disability
premiums.
(14) On April 19, 1999, Wyndham granted non-qualified options to purchase the
equivalent of 450,000 shares to Mr. Bentley. These options vest on each
anniversary of the date of grant at the rate of 20% per year.
(15) Such amount includes $1,096 in life insurance premiums and $1,266 in
disability premiums.
(16) On February 2, 1998, Wyndham granted the executive: 1) non-qualified
options to purchase 10,733 paired shares which options vest on each
anniversary of the date of grant at the following rates: year 1: 30%;
year 2: 30% and year 3: 40% and 2) non-qualified options to purchase
88,925 paired shares which options vest on each anniversary of the date
of grant at the following rates: year 1: 20%; year 2: 20%; year 3: 30%
and year 4: 30%. On November 13, 1998, pursuant to an option repricing
program, the non-qualified options to purchase 10,733 paired shares were
surrendered and exchanged for non-qualified options to purchase 1,967
paired shares and the non-qualified options to purchase the equivalent of
88,925 paired shares were surrendered and exchanged for non-qualified
options to purchase 16,303 paired shares. As part of the June 30, 1999
restructuring of the Company, these options became fully vested and
exercisable for equivalent shares of Class A Common Stock.
(17) Such amount includes $139 of term life insurance premiums paid by Wyndham
for the benefit of Mr. Bentley and $2,169 contributed by Wyndham to Mr.
Bentley's 401(k) account.
(18) Mr. Koonce resigned his position as Executive Vice President of Wyndham
effective April 28, 2000.
(19) On April 19, 1999, Wyndham granted non-qualified options to purchase the
equivalent of 400,000 shares of Class A Common Stock to Mr. Koonce. These
options vest on each anniversary of the date of grant at the rate of 20%
per year.
(20) Such amount includes $850 in life insurance premiums.
(21) Such amount includes $146 of term life insurance premiums paid by Wyndham
for the benefit of Mr. Koonce and $646 contributed by Wyndham to Mr.
Koonce's 401(k) account.
(22) On June 30, 1999, Mr. Evans resigned his position as President and Chief
Operating Officer of Patriot and as Executive Vice President of Wyndham.
(23) On June 1, 1999, Wyndham granted to Mr. Evans non-qualified options to
purchase the equivalent of 57,216 shares of Class A Common Stock. In
connection therewith, options to purchase 601,074 paired shares were
surrendered and repriced accordingly.
11
<PAGE>
(24) Such amount represents severance payments of $1,511,310, life insurance
premiums of $2,838 and disability premiums of $2,120.
(25) On December 31, 1998, Patriot awarded the equivalent of 166,666
restricted shares to Mr. Evans. The equivalent of the market value of the
shares on the date of grant was $6.00 per share and the aggregate market
value of such shares on December 31, 1999 was $489,581. Mr. Evans
received 55,556 shares of Class A Common Stock on June 30, 1999, and will
receive 55,555 shares of Class A Common Stock on each of the first and
second anniversaries thereof. The aggregate market value of such shares
on December 31, 1999 was $489,581.
(26) Such amount represents term life insurance premiums paid by Patriot.
(27) Such amount includes $940 paid to Mr. Evans to cover commuting expenses.
(28) On February 14, 1997, Patriot awarded the equivalent of 200,003
restricted shares to Mr. Evans. Taking into account the various stock
splits which occurred in 1997, the equivalent of the market value of the
shares on the date of grant was $22.625 per share and the aggregate
market value of such paired shares on December 31, 1999 was $587,509. The
restrictions lapsed with respect to 25% of the shares on March 1, 1998
and with respect to the balance of shares on December 31, 1998.
(29) On February 14, 1997, Patriot granted non-qualified options to purchase
601,074 paired shares to Mr. Evans. These options were to vest in 12
equal quarterly installments beginning on April 1, 1997, but became fully
vested and exercisable on November 27, 1998. On June 1, 1999, these
options were surrendered by Mr. Evans and repriced and exchanged for
options to purchase 57,216 shares of Class A Common Stock.
(30) Such amount represents term life insurance premiums paid by Patriot for
the benefit of Mr. Evans.
The following table sets forth certain information concerning the options
granted to the named executive officers during 1999.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------
Potential Realizable
% of Total Value at Assumed
Number of Options Annual Rates of Stock
Securities Granted to Price Appreciation for
Underlying Employees Exercise or Option Term ($)(2)
Options in Fiscal Base Expiration ----------------------
Granted(#) Year(1) Price ($/Sh) Date 5% 10%
---------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
James D. Carreker....... 1,300,000(3) 11.35% $ 5.00 04/19/2009 $4,087,815 $10,359,326
Fred J. Kleisner........ 1,100,000(3) 9.61% $ 3.75 08/12/2009 $2,594,190 $ 6,574,188
Richard Mahoney......... 850,000(3) 7.42% $ 4.75 05/07/2009 $2,539,162 $ 6,434,735
Leslie V. Bentley....... 450,000(3) 3.93% $ 5.00 04/19/2009 $1,415,013 $ 3,585,921
Stanley M. Koonce, Jr... 400,000(3) 3.49% $ 5.00 04/19/2009 $1,257,789 $ 3,187,485
William W. Evans III.... 57,216(4) 0.50% $5.1875 06/30/2002 $ 46,784 $ 98,243
</TABLE>
- --------
(1) Options to purchase a total of 11,449,735 shares of Class A Common Stock
were granted to employees in 1999.
(2) The amounts under the columns labeled "5%" and "10%" are included by the
Company pursuant to certain rules promulgated by the Securities and
Exchange Commission (the "Commission") and are not intended to forecast
future appreciation, if any, in the price of the Class A Common Stock.
Such amounts are based on the assumption that the named persons hold the
options for the full term of the options. The actual value of the options
will vary in accordance with the market price of the Class A Common Stock.
(3) Options are subject to a 5-year vesting schedule, with one-fifth becoming
exercisable on each of the first, second, third, fourth and fifth
anniversaries of the date of grant.
(4) Options are fully vested.
12
<PAGE>
The following table sets forth certain information concerning options
exercised in 1999 by the named executive officers and all unexercised options
held by the named executive officers as of December 31, 1999.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options at In-the-Money Options at
Shares Fiscal Year-End(#) Fiscal Year-End(2)
Acquired Value ------------------------- -------------------------------
on Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable(3) Unexercisable(3)
-------------- -------------- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James D. Carreker....... -- $ -- 78,048 1,300,000 -- --
Fred J. Kleisner........ -- $ -- -- 1,100,000 -- --
Richard Mahoney......... -- $ -- -- 850,000 -- --
Leslie V. Bentley....... -- $ -- 47,722 450,000 -- --
Stanley M. Koonce,
Jr. ................... -- $ -- 47,722 400,000 -- --
William W. Evans III.... -- $ -- 57,216 -- -- --
</TABLE>
- --------
(1) Values are determined by aggregating, for each option exercise in 1999,
the amount calculated by multiplying (i) an amount calculated by
subtracting the exercise price paid for each such exercise from the
closing price of the Class A Common Stock as of the date of such exercise
by (ii) the number of shares of Class A Common Stock acquired upon such
exercise.
(2) Based upon the closing price of the Class A Common Stock of $2.9375 on
December 31, 1999.
(3) None of the unexercised options are in-the-money.
13
<PAGE>
Stock Option Repricing
On June 1, 1999, in connection with their respective severance agreements,
Wyndham gave Mr. Alibhai and Mr. Evans the opportunity to surrender their
existing options in exchange for new options, which have a Black-Scholes value
equal to the old options, but were for fewer shares, at an exercise price of
$5.1875. The new options are exercisable until June 30, 2002. The new exercise
price was based on the closing sale price of the paired shares on June 1,
1999, as reported by the NYSE.
During 1998, Wyndham commenced an option repricing program for certain
optionees holding stock options with an exercise price per share in excess of
$7.547 on November 13, 1998. The new exercise price was based on the average
stock price for the five-day period beginning November 9, 1998 and ending
November 13, 1998. All optionees, other than the directors and the top two
executive officers, were given the opportunity to surrender certain options in
exchange of new options which have a Black-Scholes value equal to the old
options, but were for fewer shares, at an exercise price of $7.547 per share.
The new options retained the original vesting and expiration dates of the old
options. The options set forth below were the only options repriced for the
executive officers in the last ten years.
<TABLE>
<CAPTION>
Number of
Number of Securities Length of
Securities Market Exercise Underlying Original Option
Underlying Price at Price at New Options Term Remaining
Date of Options Time of Time of Exercise After at the Date of
Repricing Repriced Repricing Repricing Price Repricing Repricing
--------- ---------- --------- --------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
William W. Evans III
(1)................... 06/01/99 601,074 $5.1875 $ 22.48 $5.1875 57,216 3 years, 1 month
Executive Vice
President
Karim Alibhai.......... 06/01/99 601,065 $5.1875 $19.449/ $5.1875 100,000 3 years, 1 month
President and Chief $29.872
Operating Officer (2)
Leslie V. Bentley...... 11/13/98 88,925 $ 7.279 $ 24.224 $ 7.547 16,303 9 years 3 months
Executive Vice 11/13/98 10,733 $ 7.279 $ 24.224 $ 7.547 1,967 9 years 3 months
President
Stanley M. Koonce,
Jr. .................. 11/13/98 88,925 $ 7.279 $ 24.224 $ 7.547 16,303 9 years 3 months
Executive Vice 11/13/98 10,733 $ 7.279 $ 24.224 $ 7.547 1,967 9 years 3 months
President (3)
Lawrence S. Jones...... 11/13/98 85,866 $ 7.279 $ 23.059 $ 7.547 17,173 9 years 4 months
Executive Vice 11/13/98 10,733 $ 7.279 $ 23.059 $ 7.547 2,147 9 years 4 months
President and
Treasurer (4)
Richard A. Holtzman.... 11/13/98 13,953 $ 7.279 $ 24.224 $ 7.547 2,558 9 years 3 months
Executive Vice
President (5)
Thomas W. Lattin....... 11/13/98 33,625 $ 7.279 $ 24.224 $ 7.547 6,617 9 years 3 months
Executive Vice
President (6)
Michael A. Grossman.... 11/13/98 41,806 $ 7.279 $ 24.224 $ 7.547 7,665 9 years 3 months
Executive Vice 11/13/98 10,733 $ 7.279 $ 24.224 $ 7.547 1,967 9 years 3 months
President
Carla S. Moreland...... 11/13/98 32,200 $ 7.279 $ 24.224 $ 7.547 5,903 9 years 3 months
Executive Vice 11/13/98 6,977 $ 7.279 $ 24.224 $ 7.547 1,279 9 years 3 months
President and
General Counsel
</TABLE>
- --------
(1) On June 30, 1999, Mr. Evans resigned his positions as President and Chief
Executive Officer of Patriot and Executive Vice President of the Company.
(2) On June 30, 1999, Mr. Alibhai resigned his positions as President and
Chief Operating Officer of the Company.
(3) Mr. Koonce resigned his position as Executive Vice President effective
April 28, 2000.
(4) Mr. Jones resigned his positions as Executive Vice President and Treasurer
effective July 13, 1999.
(5) Mr. Holtzman resigned his position as Executive Vice President effective
October 22, 1999.
(6) Mr. Lattin resigned his position as Executive Vice President effective
October 29, 1999.
Board of Directors Report on Repricing of Options
On June 1, 1999, as part of their respective severance agreements, Wyndham
repriced options held by Messrs. Alibhai and Evans. Messrs. Alibhai and Evans
surrendered their existing options in exchange for new
14
<PAGE>
options, having a Black-Scholes value equal to the old options, but for fewer
shares, at an exercise price of $5.1875. The new options are exercisable until
June 30, 2002. The new exercise price was based on the closing sale price of
the paired shares on June 1, 1999, as reported by the NYSE.
The compensation committee (which at the time consisted of persons who are
no longer directors of Wyndham) and the Board of Directors determined that the
option repricing was appropriate in the context of the total severance package
and the contributions of Messrs. Alibhai and Evans to the Company. Also,
because of Mr. Alibhai's continued involvement with the Company as a director
and Mr. Evans' continued involvement as a consultant, the compensation
committee and Board of Directors determined that it was appropriate that their
separation packages have an equity component. In this way, the economic
interests of Messrs. Alibhai and Evans would be aligned with the stockholders'
interests. Messrs. Alibhai and Evans will benefit from the repriced options
only if the share price increases.
Submitted by the Board of Directors
<TABLE>
<S> <C>
Karim Alibhai Alan M. Leventhal
Leon D. Black William L. Mack
Leonard Boxer Lee S. Neibart
Norman Brownstein Paul A. Nussbaum
James D. Carreker Marc J. Rowan
Stephen T. Clark Rolf E. Ruhfus
Milton Fine Scott A. Schoen
Paul Fribourg Scott M. Sperling
Susan T. Groenteman Sherwood M. Weiser
Thomas H. Lee
</TABLE>
Employment Agreements, Termination of Employment and Change-in-Control
Arrangements
James D. Carreker. Wyndham and Mr. Carreker have entered an employment
agreement dated as of August 18, 1999, but effective as of April 19, 1999. On
March 27, 2000, Wyndham and Mr. Carreker amended the employment agreement.
Pursuant to the employment agreement, as amended, Mr. Carreker has agreed to
serve as Chairman of the Board of Wyndham for a term of five years beginning
on April 19, 1999. Beginning on the third anniversary of the employment
agreement and continuing every even-numbered year thereafter, the employment
agreement will automatically be extended for successive two-year periods
unless otherwise terminated by either party. Mr. Carreker's annual base salary
is $600,000, which may be increased by the Board of Directors during the term
of the agreement. Mr. Carreker is eligible to receive annual incentive
compensation to be determined by the compensation committee of the Board of
Directors of up to three times his then current base salary.
Pursuant to the employment agreement, Wyndham entered into a non-qualified
stock option agreement with Mr. Carreker pursuant to which Mr. Carreker was
granted options to purchase 1.3 million shares of Class A Common Stock at
$5.00 per share. The option vests in equal annual installments over a five
year period, with the option for the first 260,000 shares vesting and becoming
exercisable on April 19, 2000. In the event of a change in control (as defined
in Mr. Carreker's employment agreement), the vesting date for any unvested
portion of the option shall be accelerated by two years. If within 18 months
after a change in control Mr. Carreker's employment is terminated by the
Company without "cause" or by Mr. Carreker for "good reason," any unvested
portions of the option immediately vest and become exercisable.
Pursuant to the employment agreement, Wyndham and Mr. Carreker amended a
promissory note owing by Mr. Carreker to Wyndham. The amended note is in the
original principal amount of $5,769,861, is nonrecourse to Mr. Carreker and
secured by 184,970 shares of Class A Common Stock, and bears interest at 6%
per annum. The note is payable on demand, or if no demand is made, on the
earlier of April 19, 2004 or 30 days after any termination of the employment
agreement by the Company for "cause" or by Mr. Carreker not for "good reason."
Notwithstanding the foregoing, if Mr. Carreker terminates his employment
during the one year period commencing March 27, 2000 pursuant to a provision
allowing him to terminate for any reason during such
15
<PAGE>
period, then the note shall remain payable on demand through the third
anniversary of the date of termination and if demand has not previously been
made and an event of default does not thereafter occur, then the note shall
become payable on April 19, 2006. All proceeds from sales of the shares
securing the note must be applied to the prepayment of the note. Pursuant to
the employment agreement, Wyndham also agreed to loan Mr. Carreker an amount
equal to any income taxes due by reason of his repayment of the foregoing
note.
Upon termination of employment due to the death or disability of Mr.
Carreker, Wyndham will pay any accrued and unpaid base salary, incentive
compensation and pro rated incentive compensation for the year in which
termination occurs. In addition, all unvested stock options and stock-based
grants will immediately vest and will be exercisable for one year or the
remaining option term, if later. Additionally, Wyndham will pay health
insurance premiums in the case of disability for Mr. Carreker, his spouse and
other dependents for two years and in the case of death, for Mr. Carreker's
spouse and other dependents for five years.
If employment is terminated by Mr. Carreker for "good reason," or if
Wyndham terminates his employment without "cause," Wyndham will pay Mr.
Carreker all accrued and unpaid base salary, incentive compensation and pro
rated incentive compensation for the year in which termination occurs. In
addition, Wyndham will pay Mr. Carreker a severance payment in accordance with
Wyndham's then current severance policies, but at a minimum, Mr. Carreker
would be entitled to a severance payment (the "Severance Amount") equal to the
greater of (a) $3,000,000 or (b) three times the sum of his "applicable base
salary" (determined in accordance with the employment agreement) and average
incentive compensation (determined in accordance with the employment
agreement). Additionally, for a period of three years, Wyndham will provide
Mr. Carreker with an office and related facilities and an assistant at a
location of his respective choosing. For a period of one year, Wyndham would
pay for Mr. Carreker the cost of executive placement services. All unvested
stock options and stock-based grants held by Mr. Carreker will immediately
vest and become exercisable for one year or the remaining option term (not to
exceed four years). Additionally, for three years Wyndham will pay health
insurance premiums for Mr. Carreker, his spouse and other dependents and
provide certain benefits to Mr. Carreker, including payment of disability and
life insurance premiums.
If a "change in control", as defined in the employment agreement, occurs
and Mr. Carreker's employment is terminated for any reason other than death,
disability or by Mr. Carreker without "good reason" within 90 days prior to or
18 months after such change in control, then in lieu of the Severance Amount
Wyndham must pay Mr. Carreker a lump sum equal to (i) the greater of the
Severance Amount or $3,000,000 plus (ii) any amount considered a "parachute
payment" under Section 280G of the Internal Revenue Code (including gross-up
payments to cover any excise tax due). In addition, upon a change in control,
all stock options and other stock-based grants to Mr. Carreker will
immediately vest and become exercisable, whereupon at any time during the
option term (but not to exceed five years after the change in control), Mr.
Carreker or his estate any require Wyndham to purchase all such stock options
for $5,000,000 in cash or allow Mr. Carreker to exercise all or any part of
such stock options. In addition, Wyndham shall also loan Mr. Carreker all
funds due by him for income taxes with respect to such stock option treatment.
Amounts payable to Mr. Carreker in connection with a termination due to a
change in control shall be "grossed-up" to cover any excise tax due.
Fred J. Kleisner. In connection with Mr. Kleisner's appointment on March
27, 2000 as the Chief Executive Officer of the Company, Wyndham and Mr.
Kleisner are in the process of renegotiating Mr. Kleisner's employment
agreement. Pursuant to his current employment agreement dated as of August 12,
1999, Mr. Kleisner has agreed to serve as President of Wyndham for a term of
three years, which automatically will be extended for successive one-year
periods unless otherwise terminated. Mr. Kleisner's annual base salary is
$550,000, which may be increased by the Board of Directors during the term of
the agreement. Mr. Kleisner is eligible to receive incentive compensation to
be determined by the compensation committee of up to two times his then
current base salary.
Upon termination of employment due to death or disability of Mr. Kleisner,
Wyndham will pay all accrued and unpaid base salary and pro rated incentive
compensation for the year in which termination occurs. Additionally, Wyndham
will pay health insurance premiums for one year for Mr. Kleisner, his spouse
and other dependents.
16
<PAGE>
If employment is terminated by Mr. Kleisner for "good reason," or if
Wyndham terminates his employment without "cause," Wyndham will pay Mr.
Kleisner all accrued and unpaid base salary and pro rated incentive
compensation for the year in which termination occurs. In addition, Wyndham
will pay Mr. Kleisner a severance amount equal to the sum of his average base
salary and average incentive compensation payable for the remaining term of
employment or 24 months, whichever is higher, subject to certain setoffs.
If a "change in control," as defined in the employment agreement, occurs
and Mr. Kleisner's employment is terminated by the Company without "cause" or
by Mr. Kleisner for "good reason" within 18 months of such change in control,
the Company shall pay the severance amount in equal installments over twenty-
four months and all stock options and other stock-based awards shall
immediately vest and become exercisable for 360 days. Also, Wyndham will pay
health insurance premiums for Mr. Kleisner, his spouse and other dependents
for one year. In addition, Wyndham will provide Mr. Kleisner with a tax gross-
up payment to cover any excise tax due.
In conjunction with the execution of the employment agreement, Wyndham (a)
paid Mr. Kleisner a signing bonus of $550,000, (b) agreed to provide a bridge
loan to Mr. Kleisner to purchase a residence in Dallas, (c) granted Mr.
Kleisner a non-qualified option to acquire 1.1 million shares of Class A
Common Stock at a price of $3.75 per share, which option vests in five equal
annual installments commencing August 12, 2000, (d) loaned Mr. Kleisner
$850,000 pursuant to a no personal liability nonrecourse note, and (e) granted
Mr. Kleisner a restricted unit award of 203,000 shares of Class A Common Stock
that vests in three equal annual installments commencing August 12, 2000. The
option agreement provides that upon a "change in control," the vesting date
for any unvested portions of the option shall be accelerated by two years, and
if within 18 months after a "change in control," Mr. Kleisner's employment is
terminated by Wyndham without "cause" or by Mr. Kleisner for "good reason,"
any unvested portions of the option will immediately vest and become
exercisable.
Leslie V. Bentley. Wyndham and Mr. Bentley are parties to an amended and
restated employment agreement dated as of April 19, 1999, pursuant to which
Mr. Bentley has agreed to serve as an Executive Vice President of Wyndham for
a term of three years, which automatically will be extended for successive
one-year periods unless otherwise terminated. Mr. Bentley's annual base salary
is $350,000, which shall be redetermined annually by the Board of Directors
during the term of the agreement. Mr. Bentley is eligible to receive incentive
compensation as determined by the Board.
Upon termination of employment due to death or disability, Wyndham will pay
all accrued and unpaid base salary and incentive compensation and will pay
health insurance premiums for one year for Mr. Bentley, his spouse and other
dependents.
If employment is terminated by Mr. Bentley for "good reason" or by Wyndham
without "cause," Wyndham will pay Mr. Bentley all accrued and unpaid base
salary and incentive compensation. In addition, Wyndham will pay Mr. Bentley a
severance amount equal to the sum of his average base salary and average
incentive compensation payable for the remaining term of employment or 24
months, whichever is higher, subject to certain setoffs.
If a "change in control," as defined in the employment agreement, occurs
and Mr. Bentley's employment is terminated by the Company without "cause" or
by Mr. Bentley for "good reason" within 18 months of such change in control,
the Company shall pay the severance amount in equal installments over twenty-
four months and all stock options and other stock-based awards shall
immediately vest and become exercisable for 360 days. Also, Wyndham will pay
health insurance premiums for Mr. Bentley, his spouse and other dependents for
one year. In addition, Wyndham will provide Mr. Bentley with a tax gross-up
payment to cover any excise tax due.
In conjunction with the execution of the employment agreement, Wyndham (a)
granted Mr. Bentley a non-qualified option to acquire 450,000 paired shares
(now Class A Common Stock) at a price of $5.00 per share, which option shall
vest in five equal annual installments commencing April 19, 2000, (b) entered
into an amended and restated promissory note in the original principal amount
of $2,123,607, which is non-recourse to Mr. Bentley, secured by 68,079 shares
of Class A Common Stock, bears interest at 6% per annum and is payable
17
<PAGE>
on the earlier of April 19, 2002 or ten days after termination of employment,
and (c) loaned Mr. Bentley $430,000 evidenced by a promissory note that is
recourse to Mr. Bentley, bears interest at 7% per annum and is payable on the
earlier of April 19, 2002 or 60 days after termination of employment. Pursuant
to the employment agreement, Wyndham agreed to loan Mr. Bentley an amount
equal to any income taxes due upon maturity of the non-recourse note described
above.
Richard Mahoney. On April 12, 2000, Mr. Mahoney tendered his resignation as
Executive Vice President and Chief Operating Officer of Wyndham to be
effective May 19, 2000. The Company and Mr. Mahoney are party to an employment
agreement dated as of May 26, 1999, pursuant to which Mr. Mahoney was paid an
annual base salary of $450,000. In conjunction with the execution of the
employment agreement, Wyndham (a) paid Mr. Mahoney a signing bonus of
$1,250,000, (b) granted Mr. Mahoney a non-qualified option to acquire 850,000
shares of Class A Common Stock at a price of $4.75 per share, which option was
to vest in five equal annual installments, commencing May 7, 2000, (c) granted
Mr. Mahoney a non-forfeitable restricted share award of 121,053 shares of
Class A Common Stock, and (d) provided Mr. Mahoney certain other benefits.
Because Mr. Mahoney terminated his employment without "good reason," he will
forfeit the remaining four installments of the stock option and will have 90
days from the date of termination to exercise the first installment of the
stock option.
Stanley M. Koonce, Jr. Mr. Koonce has resigned his position as Executive
Vice President effective April 28, 2000. Pursuant to the terms of his
separation agreement, Wyndham has agreed to pay Mr. Koonce on April 28, 2000
any accrued and unpaid salary and a pro rata bonus of $43,680 for 2000.
Wyndham also has agreed to (a) pay Mr. Koonce a severance payment of $890,400
over a twenty-four month period commencing April 29, 2000, subject to certain
setoffs, (b) pay health insurance premiums until the earlier of twelve months
or the date of his eligibility for similar coverage by a new employer, (c)
provide certain out-placement services, and (d) extend to April 28, 2004 the
maturity of no personal liability non-recourse promissory note in the original
principal amount of $2,163,455 so long as Mr. Koonce complies with certain
continuing covenants in his employment agreement.
William W. Evans, III. Mr. Evans resigned his positions as Executive Vice
President of Wyndham and President and Chief Operating Officer of Patriot
effective June 30, 1999. Pursuant to the terms of his separation agreement,
Wyndham and Patriot paid Mr. Evans a severance payment of $1,511,310 and an
incentive bonus of $1,500,000 at the time of termination. In addition, (a) all
of Mr. Evans' options to purchase 601,074 paired shares were repriced by
canceling such options and issuing new, fully vested options to purchase
57,216 paired shares (now Class A Common Stock) at a purchase price of $5.1875
per paired share, which options are exercisable until June 30, 2002, and (b)
agreed to a vesting schedule with respect 166,666 restricted shares previously
granted to Mr. Evans pursuant to which 55,556 shares vested on June 30, 1999
and 55,555 shares shall vest on the first and second anniversaries thereof
provided Mr. Evans makes himself available for certain consulting services.
Mr. Evans is also allowed to participate in certain benefit plans for a year.
Report of the Compensation Committee on Executive Compensation
This compensation committee report relates to compensation decisions made
by the compensation committee of the Board of Directors. This compensation
committee report shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing
under the Securities Act of 1933 or under the Securities Exchange Act of 1934,
except to the extent that Wyndham specifically incorporates this information
by reference, and shall not otherwise be deemed filed under such laws.
Objectives of Executive Compensation. Wyndham's executive compensation
program is intended to attract, motivate and retain key executives who are
capable of leading Wyndham effectively and continuing its long-term growth.
The compensation program for executives is comprised of base salary, annual
incentives and long-term incentive awards. Base salary is targeted to be
within a reasonable range of compensation for comparable companies and for
comparable levels of expertise by executives. Annual incentives are based upon
the achievement of one or more performance goals. Wyndham uses stock options
and other equity based compensation in its long-term incentive programs.
18
<PAGE>
Compensation Committee Procedures. The compensation committee establishes
the general compensation policies of Wyndham and implements and monitors the
compensation and incentive plans and policies of Wyndham. The Wyndham
compensation committee is composed of five directors, none of whom is
currently an officer or employee of Wyndham. Final compensation determinations
for each fiscal year are generally made after the end of the fiscal year,
after audited financial statements for such year become available. At that
time, bonuses, if any, are determined for the past year's performance, base
salaries for the following fiscal year are set and long-term incentives, if
any, are granted.
In setting base salary and determining annual incentive and long-term
incentive awards, the compensation committee reviews recommendations by Mr.
Carreker for executive officers other than himself. The compensation committee
also reviews compensation levels of executive officers at other hospitality
companies and real estate investment trusts with revenues comparable to those
of Wyndham. Some of these companies are the same companies that comprise the
Dow Jones Industry Group Lodging to which Wyndham's stock performance is
compared in this proxy statement. The compensation committee believes that the
compensation information for these groups is comparable since both groups
contain hospitality companies of similar size and performance.
The compensation committee also reviews data contained in published surveys
on executive compensation. The compensation committee based its decisions
regarding 2000 base salary and annual cash bonus amounts for the year ended
December 31, 1999, in part, upon its review of such data. In general, the 2000
base salary for most executives is in the 75th percentile of the median base
salary for comparable companies. The cash bonus for 1999 is generally below
the median for comparable companies.
Members of the compensation committee consult periodically by telephone
prior to their meetings at which compensation decisions are made. The
compensation committee exercises its independent discretion in determining the
compensation of the executive officers.
Each element of the executive compensation, as well as the compensation of
the Chief Executive Officer, is discussed separately below.
Base Salary. Base salaries are a fixed component of total compensation and
do not relate to the performance of the Company. Base salaries are determined
by the compensation committee after reviewing salaries paid by hospitality
companies of similar size and performance. For 2000, the average base salary
increase was about 5 percent.
Annual Incentives. Annual incentives are provided in the form of cash
bonuses. Annual incentives are designed to reward executives and management
for the annual growth and achievement of the Company and are therefore
generally tied to the Company's performance. The compensation committee awards
cash bonuses to those executives who meet established goals, with the amount
of the award based upon each executive's base salary and the level to which
such executive's performance met and exceeded the established goal. For the
three top senior executives, the goal for bonus is three-fold: EBITDA targets,
total return to shareholders and individual performance, except that for 1999,
Messrs. Kleisner and Mahoney, who joined the Company in 1999, were awarded
guaranteed bonuses pursuant to the terms of their employment agreements. With
respect to Mr. Carreker, although EBITDA and shareholder return targets were
not met, the compensation committee determined that a bonus of $750,000 was
appropriate based on Mr. Carreker's individual performance. For executives in
hotel operations, the goal for bonus is three-fold: revenue growth versus
competition, EBITDA targets and individual performance. Although revenue
growth goals for hotel operations for 1999 were met, with the Company keeping
pace with or out-performing most of its competitors, EBITDA results were not
met. In view of these mixed results, the compensation committee determined to
award reduced bonuses in recognition of superior individual performances.
Executives in hotel operations with the title Corporate Vice President and
above who received superior ratings from their immediate superiors received
average bonuses equal to 30 percent of their base salaries. For executives in
corporate operations, the goal for bonus is two-fold: individual performance
and achievement of key corporate objectives such as effecting the
recapitalization and restructuring of the Company and developing and
implementing its post-restructuring business plan. Many of the corporate
19
<PAGE>
objectives for 1999 were met and executives in corporate operations with the
title of Senior Vice President who received superior ratings from their
immediate superiors received average bonuses equal to 45 percent of their base
salaries. In some instances, bonuses have been awarded pursuant to
requirements in the employment agreements.
Long-term Incentives. Long-term incentives are provided through the grant
of restricted stock awards and stock options. These grants are designed to
align executives' interests with the long-term goals of the Company and the
interests of the Company's stockholders and encourage high levels of stock
ownership among executives. The Company has a broad-based stock option award
program that is granted annually to generally all employees with the title
"General Manager" and up. These annual option grants vest over three years.
New executives are eligible to receive a one-time initial option grant that
vests over four years. In addition, executives who are marked as high
potential and key to the long-term growth of the Company may receive a
Chairman's award which entitles them to receive a special option award that
vests over five years. Both the one-time initial option grants and the
Chairman's awards are more generous in size than the annual option grants.
Executives who are parties to employment agreements and other selected
executives may receive restricted stock grants that vest over four years. It
is intended that only a select group of executives will receive restricted
stock grants.
Compensation of Chief Executive Officer. The compensation committee set Mr.
Carreker's base salary for the year ended December 31, 1999 at or around the
median base salary for chief executive officers of comparable companies. Mr.
Carreker's 1999 base salary was $600,000.
Mr. Carreker was awarded a bonus of $750,000 for 1999 in recognition of his
individual performance in leading the Company through a difficult transition
year associated with the restructuring.
In connection with entering into a new employment agreement with Mr.
Carreker in August 1999, the Company granted Mr. Carreker an option to
purchase 1.3 million shares of Class A Common Stock at $5.00 per share, which
option vests in equal annual installments over a five year period. Factors
considered by the compensation committee in determining the stock option grant
were the desire to maintain an equity position for Mr. Carreker comparable to
that of other chief executive officers in comparable companies and the desire
to ensure Mr. Carreker's continued employment with the Company.
The compensation committee of Old Wyndham considered that it was very
important to keep the top executives focused on facilitating a strategic
transaction or investment that would be in the best interests of the
stockholders. Towards this end, the compensation committee of Old Wyndham
engaged a compensation consultant to assist them in designing a special
retention and incentive plan for the top executives that would motivate the
executives to support the best possible transactions for Old Wyndham and that
would be fair and reasonable to stockholders. The consultant advised the
compensation committee of Old Wyndham that market practice would support the
adoption of a special retention plan for those selected executives whose
continued employment and active role in supporting a strategic transaction was
critical. After careful review of the compensation consultant's report and
consultation with counsel, the compensation committee of Old Wyndham approved
a special retention plan. Payments would be made under the special retention
plan upon the execution of, and in some instances, the closing of a strategic
transaction. The compensation committee of Old Wyndham considered the
agreement with the Investors pursuant to which the Investors agreed to
purchase the Series B Preferred Stock to be a strategic transaction that would
entitle executives to receive payments under the special retention plan.
Pursuant to the special retention plan, in February, 1999, Mr. Carreker
received a paired share award in the amount of 216,666 shares. The first
installment of 72,222 paired shares was paid on June 30, 1999 upon the closing
of the restructuring of Wyndham, and 72,222 Class A Common Shares will become
payable on each of the first and second anniversaries thereof. No other
Wyndham executive received an award under the special retention plan. Also on
February 19, 1999, the Company awarded Mr. Carreker a restricted share award
of 200,000 paired shares. The restrictions on these shares lapse on each
anniversary commencing January 1, 2000 at the following rates: year 1: 40%,
year 2: 30% and year 3: 30%.
20
<PAGE>
Tax Considerations. The compensation committee's executive compensation
strategy is designed to be cost- and tax-effective. Therefore, the
compensation committee's policies are, where possible and considered
appropriate, to preserve corporate tax deductions, including the deductibility
of compensation paid to the named executive officers pursuant to Section
162(m) of the Internal Revenue Code, while maintaining the flexibility to
approve compensation arrangements which they deem to be in the best interests
of Wyndham and its stockholders, but which may not always qualify for full tax
deductibility.
Submitted by the Compensation Committee
Leonard Boxer
Stephen T. Clark
Mark J. Rowan
Scott A. Schoen
Sherwood M. Weiser
STOCK PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total
stockholder return assuming $100 was invested at September 27, 1995, the date
Patriot completed its initial public offering, assuming reinvestment of any
dividends, of the paired shares (and after June 30, 1999, the Class A Common
Stock), the Dow Jones Industry Group Lodging, the Standard & Poor's 500 Index
and the National Association of Real Estate Investment Trusts Total Return
Equity Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
9/27/95 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Wyndham International,
Inc..................... $100 $215 $192 $267 $ 58 $ 31
Dow Jones Industry Group
Lodging................. $100 $ 99 $152 $162 $111 $103
S&P 500 Index............ $100 $106 $130 $174 $224 $271
NAREIT Equity REIT Total
Return Index............ $100 $104 $141 $169 $140 $133
</TABLE>
In the Company's 1999 proxy statement, the cumulative total return of the
paired shares was compared to that of the stock of companies in the S&P 500
Index and the NAREIT Total Return Equity Index. Because the Company is no
longer a REIT, the Company believes it is more appropriate to compare the
performance of the Company's Class A Common Stock to the Dow Jones Industry
Group Lodging than to the NAREIT Total Return Equity Index. Consequently, in
subsequent years management intends to compare the performance of the Class A
Common Stock only to that of the S&P 500 Index and the Dow Jones Industry
Group Lodging.
21
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Except as otherwise noted, the following table sets forth certain
information as of March 1, 2000 as to the security ownership of those persons
owning of record or known to Wyndham to be the beneficial owner of more than
five percent of the Class A Common Stock or the Series B Preferred Stock, each
of the directors of Wyndham, director nominees and the executive officers of
Wyndham, and all directors and executive officers of Wyndham as a group. All
share ownership amounts have been adjusted to give effect to a dividend on the
Series B Preferred Stock that was paid on March 31, 2000 in additional shares
of Series B Preferred Stock. So far as is known to the Company, the persons
named below have sole voting and investment power with respect to the number
of shares set forth opposite their names unless otherwise indicated. In
accordance with applicable SEC rules, shares issuable within 60 days upon
exercise of options, conversion of convertible securities or vesting of
restricted stock awards are deemed to be outstanding for the purpose of
computing the percentage ownership of persons beneficially owning such
securities, but have not been deemed to be outstanding for the purpose of
computing the percentage ownership of any other person. Each share of Series B
Preferred Stock is convertible into 11.6414 shares of Class A Common Stock.
<TABLE>
<CAPTION>
Series B Preferred
Class A Common Stock Stock
------------------------ ---------------------------
Number of Percent Number of Percent
Beneficial Owner Shares of Class Shares of Class
---------------- ----------- -------- -------------- --------
<S> <C> <C> <C> <C>
Karim Alibhai............. 3,871,396(1) 2.3%
Leslie V. Bentley......... 611,655(2) *
Leon D. Black............. -- (3) 0
Leonard Boxer............. 109,117(4) *
Norman Brownstein......... 175,000 *
James D. Carreker......... 2,275,883(5) 1.4%
Stephen T. Clark.......... 10,374 *
Milton Fine............... 3,188,255(6) 1.9%
Paul Fribourg............. -- 0
Susan T. Groenteman....... 28,152(7) *
Fred J. Kleisner.......... 30,000 *
Stanley M. Koonce, Jr..... 707,857(8) *
Thomas H. Lee............. -- 0 -- (9) 0
Alan M. Leventhal......... -- 0 -- (10) 0
William L. Mack........... 350,784(11) *
Richard L. Mahoney........ 310,000(12) *
Carla S. Moreland......... 136,496(13) *
Lee S. Neibart............ 4,672(14) *
Paul A. Nussbaum.......... 2,109,921(15) 1.3%
Anne L. Raymond........... 703,577(16) *
Marc J. Rowan............. -- 0
Rolf E. Ruhfus............ 1,871,271(17) 1.1%
Scott A. Schoen........... -- 0 -- (18) 0
Scott M. Sperling......... -- 0 -- (19) 0
Sherwood M. Weiser........ 704,539(20) *
All directors and
executive officers as a
group.................... 17,198,949 10.3%
Southeastern Asset
Management, Inc. and
Longleaf Partners Small-
Cap Fund................. 15,450,400(21) 9.2% -- --
Investors................. 121,845,181 42.1% 10,466,539.715(22) 100.0%
Apollo Investors......... 56,353,525 25.1% 4,840,785.919(23) 46.3%
Beacon Investors......... 18,276,814 9.8% 1,569,984.203(24) 15.0%
THL Investors............ 36,675,275 17.9% 3,150,417.919(25) 30.1%
Chase Equity Associates,
L.P..................... 3,046,130 1.8% 261,663.519(26) 2.5%
CMS Investors............ 889,453 * 76,404.325(27) *
CKE Investors............ 121,839 * 10,465.992(28) *
PW Hotel I, LLC and
PaineWebber Capital,
Inc..................... 3,046,130 1.8% 261,663.519(29) 2.5%
Guayacan Investors....... 121,839 * 10,465.922(30) *
Strategic Real Estate
Investors............... 3,046,130 1.8% 261,663.519(31) 2.5%
The Bonnybrook Trust, The
Franklin Trust and The
Dartmouth Trust......... 268,046 * 23,025.028(32) *
</TABLE>
22
<PAGE>
- --------
* Less than 1%.
(1) Includes options to purchase 100,000 shares of Class A Common Stock
granted to Mr. Alibhai which are currently exercisable. The number of
shares beneficially held by Mr. Alibhai includes an aggregate 19,898
shares beneficially owned by Gencom Executive Plan, Inc. Mr. Alibhai
disclaims beneficial ownership of these shares, except to the extent of
his ownership interest in such corporation.
(2) Includes options to purchase 137,722 shares of Class A Common Stock
granted to Mr. Bentley which are currently exercisable or will be
exercisable within 60 days of the date of this Proxy Statement.
(3) Does not include shares held by family trusts over which Mr. Black does
not serve as trustee or by other family members (collectively, the "Family
Trusts") or the Apollo Investors, as described in note 23 below. Mr. Black
disclaims beneficial ownership of all securities held by the Family Trusts
and the Apollo Investors.
(4) Includes options to purchase 42,933 shares of Class A Common Stock granted
to Mr. Boxer which are currently exercisable.
(5) Includes options to purchase 338,048 shares of Class A Common Stock
granted to Mr. Carreker which are currently exercisable or will be
exercisable within 60 days of the date of this Proxy Statement. The number
of shares beneficially held by Mr. Carreker includes 99,605 shares
beneficially owned by the Carreker Descendants Trust, of which Mr.
Carreker is trustee, for the benefit of certain family members and 154,773
shares beneficially owned by Wyndham Hotel Management Corporation, of
which Mr. Carreker is President and a shareholder.
(6) Includes 1,164,604 shares beneficially owned by the Milton Fine 1997
Charitable Remainder Unitrust; 1,159,619 shares beneficially owned by the
Milton Fine 1998 Charitable Remainder Unitrust; 740,597 shares
beneficially owned by the Milton Fine Grantor Annuity Trust; and 46,507
shares beneficially owned by IHC#1018 and IHC Associates Corp., two
corporations that are 100% owned by Mr. Fine.
(7) Includes options to purchase 10,733 shares of Class A Common Stock granted
to Ms. Groeteman which are currently exercisable.
(8) Includes options to purchase 127,722 shares of Class A Common Stock
granted to Mr. Koonce which are currently exercisable or will be
exercisable within 60 days of the date of this Proxy Statement.
(9) Does not include shares held by family trusts and shares held by THL
Equity Fund, THL Foreign Fund, THL Foreign Fund B, THL Charitable and
AIFTHL PAH LLC, as described in note 25 below. Mr. Lee disclaims
beneficial ownership of all such securities.
(10) Does not include shares held by the Beacon Investors, as described in
note 24 below. Mr. Leventhal disclaims beneficial ownership of all
securities held by such entities.
(11) Does not include shares held by family trusts over which Mr. Mack does
not serve as trustee or by other family members (collectively, the
"Family Trusts") or shares held by the Apollo Investors, as described in
note 23 below. Mr. Mack disclaims beneficial ownership of all securities
held by the Family Trusts and the Apollo Investors.
(12) Includes options to purchase 170,000 shares of Class A Common Stock
granted to Mr. Mahoney which will be exercisable within 60 days of the
date of this Proxy Statement.
(13) Includes options to purchase 122,405 shares of Class A Common Stock
granted to Ms. Moreland which are currently exercisable or will be
exercisable within 60 days of the date of this Proxy Statement.
(14) Does not include shares held by the Apollo Investors, as described in
note 23 below. Mr. Neibart disclaims beneficial ownership of all
securities held by the Apollo Investors.
(15) Includes options to purchase 1,154,448 shares of Class A Common Stock
granted to Mr. Nussbaum which are currently exercisable. The number of
shares beneficially owned by Mr. Nussbaum includes 237,487 shares held by
PANCO Services, Inc. and 89,445 shares held by SEP fbo Paul A. Nussbaum.
(16) Includes options to purchase 98,270 shares of Class A Common Stock
granted issued to Ms. Raymond which are currently exercisable or will be
exercisable within 60 days of the date of this Proxy Statement.
(17) Includes 74,953 shares held by Hotel Growth Partners, L.P.
23
<PAGE>
(18) Does not include shares held by THL Equity Fund, THL Foreign Fund and THL
Foreign Fund B, as described in note 25 below.
(19) Does not include shares held by THL Equity Fund, THL Foreign Fund and THL
Foreign Fund B, as described in note 25 below.
(20) Includes options to purchase 21,467 shares of Class A Common Stock
granted to Mr. Weiser which are currently exercisable. The number of
shares beneficially held by Mr. Weiser includes 254 shares and 3,460
partnership units in Patriot American Hospitality Partnership, L.P. and
Wyndham International Operating Partnership, L.P. held by SMW WLT, LLC
and 23,604 partnership units in Patriot American Hospitality Partnership,
L.P. and Wyndham International Operating Partnership, L.P. held by Mr.
Weiser individually.
(21) Based on Schedule 13G filed on February 11, 2000 by Southeastern Asset
Management, Inc. ("Southeastern"), Longleaf Partners Small-Cap Fund
("Longleaf") and O. Mason Hawkins, each of whose address is 6410 Poplar
Ave., Suite 900, Memphis, Tennessee 38119. According to the Schedule 13G,
Southeastern is a registered investment advisor and all such shares are
owned legally by its investment advisory clients and none are owned
directly or indirectly by Southeastern. Longleaf is an open-end
management investment company managed by Southeastern. According to the
Schedule 13G, Southeastern and Longleaf share voting and dispositive
power with respect to such shares. Mr. Hawkins is the Chairman of the
Board and CEO of Southeastern.
(22) All of the Investors are parties to a Stockholders' Agreement dated as of
June 29, 1999, pursuant to which each of (i) Apollo Management IV, L.P.
and Apollo Real Estate IV, L.P., and (ii) THL Equity Advisors IV, LLC
(collectively, the "Lead Stockholders") have the right, for so long as
the Investors are entitled to designate eight Class B directors, to
designate four directors to the Board. At such time as the Investors are
entitled to designate fewer than eight Class B directors, the right to
designate will be allocated between the Lead Stockholders based on a
formula. For so long as the Stockholders' Agreement is in effect, each
Investor has agreed to vote its shares of Class A Common Stock and Series
B Preferred Stock in favor of the director nominees of the Lead
Stockholders. Pursuant to the Stockholders' Agreement, the Investors have
also agreed to certain restrictions on the transfer of their shares of
Series B Preferred Stock. By virtue of the Stockholders' Agreement and
the relationships among the Investors, the Investors may be deemed to
constitute a "group" within the meaning of Rule 13d-5(b) under the
Exchange Act. As a member of a group, each Reporting Person may be deemed
to share voting and dispositive power with respect to, and therefore
beneficially own, the shares beneficially owned by the members of the
group as a whole. Each person or entity who has filed a Schedule 13D with
respect to the shares expressly disclaims beneficial ownership of shares
held by any other Investors and of shares held individually by certain
directors or executive officers of certain Investors.
(23) Consists of the following entities (with the number of shares of Series B
Preferred Stock directly beneficially owned by such entity being
indicated): Apollo Investment Fund IV, L.P. ("Apollo Investment IV"),
2,533,148.400 shares; Apollo Overseas Partners IV, L.P. ("Apollo
Overseas"), 135,825.426 shares; Apollo Advisors IV, L.P. ("Apollo
Advisors IV); Apollo Management IV, L.P. ("Apollo Management IV"); Apollo
Real Estate Investment Fund IV, L.P. ("Apollo Real Estate IV),
1,334,486.522 shares; Apollo Real Estate Advisors IV, L.P. ("Apollo Real
Estate Advisors IV"); and AIF/THL PAH LLC ("AIFTHL"), 837,325.321 shares.
Apollo Advisors IV is the general partner of Apollo Investment IV and
Apollo Overseas. Apollo Management IV is the day-to-day manager of Apollo
Investment and Apollo Overseas. Apollo Real Estate Advisors IV is the
general partner of Apollo Real Estate IV and an affiliate of Apollo
Management IV. Apollo Management IV and THL Equity Advisors IV, LLC ("THL
Advisors") serve as the managers of AIFTHL. They share voting and
dispositive power with respect to 31.25% of the securities held by AIFTHL
and Apollo Management IV has the sole right to direct the voting and
disposition of the remaining securities held by AIFTHL. By virtue of the
relationships among the Apollo Investors, each of the Apollo Investors
may be deemed to share voting and dispositive power with respect to the
shares directly beneficially owned by the Apollo Investors. The address
of each of the foregoing Apollo Investors is c/o Apollo Advisors IV,
L.P., Two Manhattanville Road, Purchase, New York 10577. Messrs. Black,
Mack and Neibart are founding principals of Apollo Real Estate Advisors
IV, and Mr. Black is also a founding principal of Apollo Advisors IV.
Each of Messrs. Black, Mack and Neibart expressly disclaims beneficial
24
<PAGE>
ownership of the shares held by the Apollo Investors. The foregoing
information is based on the Schedule 13D filed by the Apollo Investors on
July 13, 1999 (with share amounts adjusted to reflect subsequent stock
dividends).
(24) Consists of the following entities (with the number of shares of Series B
Preferred Stock directly beneficially owned by such entity being
indicated): Beacon Capital Partners, L.P. ("Beacon LP"), 216,342.837
shares; BCP Voting Inc. ("BCP Voting"), as voting trustee for the Beacon
Capital Partners Voting Trust, 1,105,072.574 shares; Beacon Capital
Partners, Inc. ("Beacon"); and Beacon Lodging, Inc. ("Beacon Lodging"),
248,568.792 shares. Beacon is the general partner of Beacon LP. BCP
Voting is a wholly-owned subsidiary of Beacon. Beacon may be deemed the
beneficial owner of the shares held by Beacon LP, BCP Voting and Beacon
Lodging. Each of Beacon LP, BCP Voting and Beacon Lodging has shared
voting and shared dispositive power with respect to the shares directly
owned by it, and Beacon has shared voting and shared dispositive power
with respect to the shares beneficially owned by it. Mr. Leventhal is
Chairman of the Board and Chief Executive Officer of Beacon and Messrs.
Sperling and Clark are directors of Beacon and BCP Voting. The address of
Beacon LP, BCP Voting, Beacon and Beacon Lodging is c/o Beacon Capital
Partners Inc., 1 Federal Street, 26th Floor, Boston, Massachusetts 02110.
The foregoing information is based on the Schedule 13D filed by the
Beacon Investors on July 13, 1999, as amended by Amendment No. 1 thereto
filed on December 17, 1999 (with share amounts adjusted to reflect
subsequent stock dividends).
(25) Consists of the following entities and persons (with the number of shares
of Series B Preferred Stock directly beneficially owned by such entity or
person being indicated): Thomas H. Lee Equity Fund IV, L.P. ("THL Equity
Fund"), 2,668,322.657 shares; Thomas H. Lee Foreign Fund IV, L.P. ("THL
Foreign Fund"), 92,239.052 shares; Thomas H. Lee Foreign Fund IV-B, L.P.
("THL Foreign Fund B"), 259,155.688 shares; THL Equity Advisors IV, LLC
("THL Advisors"); Thomas H. Lee Charitable Investment Limited Partnership
("THL Charitable"), 17,349.556 shares; Thomas H. Lee; and the following
parties (the "Affiliate Purchasers") who are employed by or affiliated
with employees of Thomas H. Lee Company: State Street Bank & Trust
Company as Trustee of the 1997 Thomas H. Lee Nominee Trust, 40,509.399
shares; David V. Harkins, 9,332.886 shares; The 1995 Harkins Gift Trust,
1,045.561 shares; Scott A Schoen, 7,783.065 shares; C. Hunter Boll,
7,783.065 shares; Sperling Family Limited Partnership, 7,783.065 shares;
Anthony J. DiNovi, 7,783.065 shares; Thomas M. Hagerty, 7,783.065 shares;
Warren C. Smith, Jr., 7,361.135 shares; Smith Family Limited Partnership,
421.930 shares; Seth W. Lawry, 3,242.686 shares; Kent R. Weldon,
2,166.249 shares; Terrence M. Mullen, 1,725.796 shares; Todd M. Abbrecht,
1,725.796 shares; Charles A. Brizius, 1,297.692 shares; Scott Jaeckel,
488.821 shares; Soren Oberg, 488.821 shares; Thomas R. Shepherd, 911.779
shares; Joseph J. Incandela, 455.889 shares; Wendy L. Masler, 208.906
shares; Andrew D. Flaster, 208.906 shares; Robert Schiff Lee 1988
Irrevocable Trust, 784.171 shares; Stephen Zachary Lee, 784.171 shares;
Charles W. Robins as Custodian for Jesse Lee, 522.780 shares; Charles W.
Robins, 208.906 shares; James Westra, 208.906 shares; Adam A. Abramson,
130.695 shares; Joanne M. Ramos, 73.065 shares; and Wm. Matthew Kelley,
130.695 shares. The address of each of THL Equity Fund, THL Foreign Fund,
THL Foreign Fund B, THL Advisors, THL Charitable and Thomas H. Lee is c/o
Thomas H. Lee Company, 75 State Street, Suite 2600, Boston, Massachusetts
02109. Information with respect to AIFTHL is set forth in note 23 above.
THL Advisors is the general partner of THL Equity Fund, THL Foreign Fund
and THL Foreign Fund B. Thomas H. Lee is the general partner of THL
Charitable and the Managing Member of THL Advisors. Each of THL Equity
Fund, THL Foreign Fund, THL Foreign Fund B, THL Charitable and the
Affiliate Purchasers has shared voting and shared dispositive power with
respect to the shares held directly by such entity or person. In
addition, Mr. David V. Harkins may be deemed to share voting and
dispositive power over the shares held by the Harkins Gift Trust. The
filing of the Schedule 13D is not an admission that Mr. Harkins is the
beneficial owner of such shares. Mr. Warren C. Smith, Jr. may be deemed
to share voting and dispositive power over the shares held by the Smith
Family Limited Partnership. The filing of the Schedule 13D is not an
admission that Mr. Smith is the beneficial owner of such shares. AIFTHL
has shared voting and shared dispositive power with respect to the shares
it directly owns. THL Advisors may be deemed to share voting and
dispositive power with respect to the shares owned directly by Equity
Fund, Foreign Fund and Foreign Fund B, and to share voting
25
<PAGE>
and dispositive power with respect to 2,910,361 of the shares directly
owned by AIFTHL. The filing of the Schedule 13D is not an admission that
THL Advisors is the beneficial owner of any such shares. Mr. Thomas H. Lee
may be deemed to share voting and dispositive power with respect to the
shares beneficially owned by THL Advisors and Charitable Investment. The
filing of the Schedule 13D is not an admission that Mr. Lee is the
beneficial owner of any such shares. Each of the foregoing entities and
persons expressly disclaims beneficial ownership of shares held by any
other Investors or of shares held individually by certain directors or
executive officers of certain of the Investors. The foregoing information
is based on the Schedule 13D filed by the THL Investors on July 12, 1999
(with share amounts adjusted to reflect subsequent stock dividends).
(26) Based on Schedule 13D filed by Chase Equity Associates, L.P. on July 13,
1999, as amended by Amendment No. 1 thereto filed on February 14, 2000
(with share amount adjusted to reflect subsequent stock dividends). The
address of Chase Equity Associates, L.P. is c/o Chase Capital Partners,
380 Madison Avenue, 12th Floor, New York, New York 10017.
(27) Consists of the following entities (with the number of shares of Series B
Preferred Stock directly beneficially owned by such entity indicated):
CMS Co-Investment Subpartnership, 73,893.328 shares; CMS Diversified
Partners, L.P. ("CMS Diversified"), 2,510.997 shares; CMS Co-Investment
Partners, L.P. ("CMS Co-Investment"); CMS Co-Investment Partners I-Q,
L.P. ("CMS Co-Investment I-Q"); CMS Co-Investment Associates, L.P. ("CMS
Associates"); CMS 1997 Investment Partners, L.P. ("CMS 1997"); CMS/DP
Associates, L.P. ("CMS/DP"); MSPS Co-Investment, Inc. ("MSPS Co-
Investment"); CMS 1997, Inc.; MSPS/DP, Inc. ("MSPS/DP"); and CMS 1995,
Inc. CMS Co-Investment Subpartnership is a general partnership whose
partners are CMS Co-Investment Partners and CMS Co-Investment Partners I-
Q. CMS Associates and CMS 1997 serve as the general partners of CMS Co-
Investment Partners and CMS Co-Investment Partners I-Q. The sole general
partner of CMS Associates is MSPS Co-Investment and the sole general
partner of CMS 1997 is CMS 1997, Inc. The address of each of the
foregoing entities is c/o CMS Affiliated Partnerships, Two Bala Plaza,
333 City Line Avenue, Suite 300, Bala Cynwyd, Pennsylvania 19004. CMS Co-
Investment Subpartnership has sole voting and dispositive power with
respect to the shares that it directly owns, but CMS Co-Investment
Subpartnership, CMS Co-Investment, CMS Co-Investment I-Q, CMS Associates
and CMS 1997 may be deemed to share voting and dispositive power with
respect to such shares and the shares owned directly by CMS Diversified.
CMS Diversified has sole voting and dispositive power with respect to the
shares that it directly owns, but CMS Diversified, CMS/DP and CMS 1997
may be deemed to share voting and dispositive power with respect to such
shares and the shares owned directly by CMS Co-Investment Subpartnership.
The foregoing information is based on the Schedule 13D filed by the CMS
Investors on July 12, 1999 (with share amounts adjusted to reflect
subsequent stock dividends).
(28) Consists of the following entities and persons (with the number of shares
of Series B Preferred Stock directly beneficially owned by such entity or
person indicated): CKE Associates LLC ("CKE"), 10,465.992 shares; The
Ovitz Family Limited Partnership ("OFLP"); The Michael and Judy Ovitz
Revocable Trust (the "Ovitz Trust"); and Michael S. Ovitz. OFLP is the
managing member of CKE and the Ovitz Trust is the general partner of
OFLP. Mr. Ovitz and his wife, Judy L. Ovitz, serve as the trustees of the
Ovitz Trust. CKE has shared voting and dispositive power with respect to
the shares directly owned by it and each of OFLP, the Ovitz Trust and Mr.
Ovitz may be deemed to share voting and dispositive power with respect to
such shares. The address of each of the foregoing is c/o Dreyer, Edmonds
& Associates, 335 South Grand Avenue, Suite 4150, Los Angeles, California
90071. The foregoing is based on the Schedule 13D filed by the CKE
Investors on July 13, 1999 (with share amounts adjusted to reflect
subsequent stock dividends).
(29) Based on the Schedule 13D filed on July 12, 1999 by PW Hotel I, LLC ("PW
Hotel") and PaineWebber Capital, Inc. ("PW") (with share amounts adjusted
to reflect subsequent stock dividends), each of whose address is 1285
Avenue of the Americas, New York, New York 10019. PW Hotel has direct
beneficial ownership of 261,663.519 shares of Series B Preferred Stock.
PW is the managing member of PW Hotel. PW and PW Hotel share voting and
dispositive power with respect to such shares.
(30) Consists of the following entities and persons (with the number of shares
of Series B Preferred Stock directly owned by such entity or person being
indicated): Guayacan Private Equity Fund Limited
26
<PAGE>
Partnership ("GPEF"), 10,465.922 shares; Advent-Morro Equity Partners, Inc.
("AMEP"); Venture Management, Inc. ("VMI") and Cyril L. Meduna. The general
partner of GPEF is AMEP, which is controlled by VMI, which in turn is
wholly-owned by Mr. Meduna. By virtue of the relationship among these
parties, each may be deemed to share beneficial ownership of the shares
owned by GPEF. The address of each of the foregoing entities and persons is
c/o Advent-Morro Partners, Banco Popular Building, Suite 903, 206 Calle
Tetuan, San Juan, PR 00902. The foregoing information is based on the
Schedule 13D filed by the Guayacan Investors on July 13, 1999 (with share
amounts adjusted to reflect subsequent stock dividends).
(31) Consists of the following entities (with the number of shares of Series B
Preferred Stock directly beneficially owned by such entity being
indicated): Strategic Real Estate Investments I, L.L.C. ("Strategic"),
261,663.519 shares; Lend Lease Real Estate Investments, Inc. ("Lend
Lease"); and Rosen Consulting Group, Inc. ("Rosen"). The address of
Strategic and Rosen is 1995 University Avenue, Suite 550, Berkeley,
California 94704, and the address of Lend Lease is 3424 Peachtree Road,
Suite 800, Atlanta, Georgia 30326. Strategic has shared voting and
dispositive power with respect to the shares directly owned by it. Each
of the foregoing entities expressly disclaims beneficial ownership of any
shares not held directly by such Investor. The foregoing share amount
does not include 1,096,799 shares of Class A Common Stock that are
managed by Lend Lease Rosen Real Estate Securities, Inc. for its clients.
Mr. Kenneth T. Rosen, a Manager of Strategic, is also Chief Executive
Officer of Lend Lease Rosen Real Estate Securities, Inc. The foregoing
information is based on the Schedule 13D filed by the Strategic Real
Estate Investors on July 12, 1999 (with share amounts adjusted to reflect
subsequent stock dividends).
(32) Based on the Schedule 13D filed on July 14, 1999 by The Bonnybrook Trust
("Bonnybrook"), The Franklin Trust ("Franklin") and The Dartmouth Trust
("Dartmouth") (with share amounts adjusted to reflect subsequent stock
dividends). Bonnybrook is the direct beneficial owner of 7,326.145 shares
of Series B Preferred Stock; Franklin is the direct beneficial owner of
5,232.961 shares of Series B Preferred Stock; and Dartmouth is the direct
beneficial owner of 10,465.922 shares of Series B Preferred Stock. The
address of each of Bonnybrook, Dartmouth and Franklin is c/o The Beacon
Companies, 2 Oliver Street, Boston, Massachusetts 02110. Alan M.
Leventhal, a director of Wyndham, is a trustee of each of Bonnybrook,
Franklin and Dartmouth.
Effective June 30, 1999, Wyndham consummated a restructuring that included
the purchase of Series B Preferred Stock by the Investors. As of the Record
Date, there were 10,288,477.066 shares of Series B Preferred Stock
outstanding. The Investors are entitled to vote the Series B Preferred Stock
on all matters voted on by the holders of Wyndham's capital stock, except that
special rules apply in the case of the election of directors as described
elsewhere in this proxy statement. Each share of Series B Preferred Stock held
by the Investors entitles the holder to cast the same number of votes as the
holder would have been able to cast if its shares were converted into Wyndham
Class B Common Stock. On this "as converted" basis, the Investors held as of
the Record Date approximately 42% of the voting power of Wyndham's capital
stock. Because a portion of the dividends paid to the Investors on their
Series B Preferred Stock is paid in additional shares of Series B Preferred
Stock, assuming Wyndham issues no other voting shares, the "as converted"
voting power of the Investors would rise to approximately 52% by June 30,
2005.
27
<PAGE>
PROPOSAL 2
AMENDMENT TO INCENTIVE PLAN
The Board of Directors recommends that the stockholders approve an amendment
to the Incentive Plan to increase the total number of shares available for
issuance pursuant to awards made under the Incentive Plan (the "Proposed
Amendment").
Proposed Amendment
The Incentive Plan currently provides that the aggregate number of shares of
Class A Common Stock available for grants of awards under the Plan shall be the
sum of (i) 3,000,000 shares, plus (ii) as of the beginning of each calendar
quarter, beginning with October 1, 1997, 10% of any net increase since the
beginning of the preceding calendar quarter in the total number of paired
shares (and after June 29, 1999, shares of Class A Common Stock) actually
outstanding (assuming all units of partnership interest in the Company's two
operating partnerships that are subject to redemption are converted into shares
of Class A Common Stock), reduced by (iii) the aggregate number of shares of
Class A Common Stock subject to awards under the Incentive Plan. As of April
20, 2000, 19,026,305 shares of Class A Common Stock were subject to outstanding
awards under the Incentive Plan, leaving as of such date only 918,401 shares of
Class A Common Stock available for future awards under the Incentive Plan. In
addition, on March 27, 2000, the Board of Directors approved an additional
592,100 options that have not yet been awarded.
The Board of Directors believes that the Incentive Plan has been worthwhile
in attracting and retaining employees and promoting their ownership interests
in the Company. The Board of Directors believes that the number of shares
available for future awards under the Incentive Plan is not sufficient to
enable the Company to continue to make grants under the Incentive Plan at
levels that the Board of Directors has determined is appropriate. Accordingly,
on March 27, 2000, the Board of Directors, acting on the recommendation of its
Compensation Committee, adopted the Proposed Amendment to the Incentive Plan,
subject to the approval by the stockholders, to increase the number of shares
of Class A Common Stock available for issuance pursuant to awards made under
the Incentive Plan to an amount equal to 7.5% of the outstanding Class A Common
Stock determined on a fully diluted basis. For purposes of the Proposed
Amendment, "fully diluted basis" means the assumed conversion of all
outstanding shares of Series A Preferred Stock and Series B Preferred Stock,
the assumed exercise of all outstanding stock options and the assumed
conversion of all units of partnership interest in Patriot American Hospitality
Partnership, L.P. and Wyndham International Operating Partnership, L.P. that
are subject to redemption. As of April 20, 2000, 23,357,325 shares would
constitute 7.5% of the outstanding shares of Class A Common Stock determined on
a fully diluted basis. Since awards relating to 19,026,305 shares are currently
outstanding, 4,331,020 shares of Class A Common Stock would, as of April 20,
2000, be available for future awards under the Incentive Plan if the Proposed
Amendment is approved.
The Board of Directors recommends that the stockholders vote "FOR" the
Proposed Amendment.
Summary of the Incentive Plan
The Incentive Plan, as adopted by the Board of Directors, was approved by
the Company's stockholders on November 5, 1997. On June 29, 1999, the Incentive
Plan was amended and restated in connection with the restructuring of the
Company to reflect, among other things, that awards under the Incentive Plan
shall relate to the Class A Common Stock. The purpose of the Incentive Plan is
to encourage and enable the officers, employees, directors and other key
persons (including consultants) of the Company and its affiliates upon whose
judgment, initiative and efforts the Company largely depends for the successful
conduct of its business to acquire a proprietary interest in the Company. The
material terms of the Incentive Plan are summarized below. The summary is
qualified in its entirety by the full text of the Incentive Plan. Any
capitalized terms used herein but not defined shall have the meanings ascribed
to them in the Incentive Plan.
Plan Administration; Eligibility. The Incentive Plan is administered by the
Compensation Committee. All members of the Compensation Committee must be "non-
employee directors" as that term is defined under the rules promulgated by the
SEC and "outside directors" as defined in Section 162(m) of the Code and the
regulations promulgated thereunder.
28
<PAGE>
The Compensation Committee has the full power to select, from among the
persons eligible for awards, the individuals to whom awards will be granted,
to make any combination of awards to participants, and to determine the
specific terms of each award, subject to the provisions of the Incentive Plan.
Persons eligible to participate in the Incentive Plan are generally those
employees and consultants of the Company and its subsidiaries whose efforts
contribute to the performance or success of the Company and its subsidiaries,
as selected from time to time by the Compensation Committee. Non-employee
directors of the Company are also eligible for awards under the Incentive
Plan. Each award granted under the Incentive Plan will be evidenced by a
written agreement containing such provisions not inconsistent with the
Incentive Plan as the Compensation Committee shall approve.
Available Shares. Under the Incentive Plan, the aggregate number of shares
of Class A Common Stock available for grants of awards shall (subject to
adjustment in the event of a stock split, stock dividend or other change in
capitalization) be the sum of (i) 3,000,000 shares plus (ii) as of the
beginning of each calendar quarter, beginning with October 1, 1997, 10 percent
of any net increase since the beginning of the preceding calendar quarter in
the total number of shares of Class A Common Stock actually outstanding
(assuming all units of partnership interest in the Company's two operating
partnerships that are subject to redemption are converted into shares of Class
A Common Stock), reduced by (iii) the aggregate number of shares of Class A
Common Stock subject to awards under the Incentive Plan.
The maximum number of shares of Class A Common Stock with respect to which
awards may be granted to any person under the Incentive Plan in any calendar
year is 1,500,000 shares of Class A Common Stock and the maximum number of
shares of Class A Common Stock (subject to adjustment in the event of a stock
split, stock dividend or certain other changes in capitalization) for which
Share Awards, Deferred Unit Awards and Restricted Unit Awards may be granted
under the Incentive Plan may not exceed 40 percent of the shares of Class A
Common Stock issuable under the Incentive Plan.
Options. The option exercise price of each Option will be determined by the
Compensation Committee, but may not be less than 100 percent of the fair
market value of the shares on the date of grant. The Option price may not be
reduced after the date of grant, except in the case of stock split, stock
dividend or certain other changes in capitalization or events which, in the
judgment of the Compensation Committee, necessitates such action. The
foregoing does not prohibit the Compensation Committee from authorizing the
exchange of outstanding Options for new Options for fewer shares at a reduced
exercise price so long as the exchange is made on a comparable value basis (as
determined under a generally recognizable option pricing model).
The term of each Option will be fixed by the Compensation Committee and may
not exceed ten years from the date of grant. The Compensation Committee will
determine at what time or times each Option may be exercised and the period of
time, if any, after retirement, death, disability or termination of employment
during which Options may be exercised. Options may be made exercisable in
installments, and the exercisability of Options may be accelerated by the
Compensation Committee in connection with the death, disability or other
termination of a participant.
Upon exercise of an Option, the Option exercise price must be paid in full
either in cash or in the form of a cash equivalent acceptable to the
Compensation Committee or, if the Compensation Committee so permits, by
delivery of shares of Class A Common Stock already owned by the optionee or by
means of a promissory note. The exercise price may also be delivered to the
Company by a broker pursuant to irrevocable instructions to the broker from
the optionee.
The Compensation Committee, in its discretion, may grant Options to
Independent Directors and such grants may vary among individual Independent
Directors.
Share Awards. The Compensation Committee may also grant Share Awards
consisting of shares of Class A Common Stock awarded to a participant as
incentive compensation or in lieu of current cash compensation. Such Share
Awards are free of any vesting restrictions.
29
<PAGE>
Restricted Unit Awards. The Compensation Committee may also grant Restricted
Unit Awards to eligible participants subject to such conditions and
restrictions as the Compensation Committee may determine. These conditions and
restrictions, which will be specified in the agreement relating to such
Restricted Unit Award, may include the satisfaction of a vesting restriction
period or the achievement of certain performance objectives or continued
employment with the Company through a specified restricted period. These
performance objectives may include, among others, return on equity, funds from
operations, cash available for distribution, earnings per share, return on
assets or capital, or increase in fair market value of shares of Class A Common
Stock. The Restricted Units have no voting rights. The purchase price, if any,
of Restricted Unit Awards will be determined by the Compensation Committee. If
the performance objectives and other restrictions are not attained, the
participants may forfeit their Restricted Unit Awards. If the restrictions are
attained, the participants will be entitled to receive shares of Class A Common
Stock. The recipient of Restricted Unit Awards will not have rights as a
stockholder until the Restricted Unit Awards are earned and settled by the
issuance of shares of Class A Common Stock.
Deferred Unit Awards. Subject to the approval of the Compensation Committee,
an eligible participant may, pursuant to an advance written election, receive
all or a portion of his compensation in Deferred Units. These Deferred Units
would have the same fair market value as shares of Class A Common Stock on the
date immediately prior to the date the compensation would otherwise be paid.
The terms and conditions of the deferral are as agreed upon by the participant
and the Compensation Committee and set forth in an agreement. Deferred Unit
Awards are settled in one or more installments of shares of Class A Common
Stock and the cash equivalent of any fractional share. The recipient of
Deferred Units will not have rights as a stockholder until the Deferred Units
are settled by the issuance of shares of Class A Common Stock.
Dividend Equivalent Rights. The Compensation Committee may grant Dividend
Equivalent Rights, which entitle the recipient to receive credits for cash
dividends that would have been paid if the recipient had held specified shares
of Class A Common Stock. Dividend Equivalent Rights may be granted as a
component of another award or as a freestanding award. Dividend equivalents
credited under the Incentive Plan may be paid currently or may be deemed to be
reinvested in additional shares of Class A Common Stock, which may thereafter
accrue additional dividend equivalents at fair market value at the time of
deemed reinvestment or such other price as may then apply under a dividend
reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights
may be settled in cash, shares of Class A Common Stock, or a combination
thereof, in a single installment or installments, as specified in the award.
The recipient of an award of Dividend Equivalent Rights will not have any
rights as a stockholder until the Dividend Equivalent Rights are earned and
settled by the issuance of shares of Class A Common Stock.
Adjustments Upon Change in Shares of Class A Common Stock. The Compensation
Committee will make appropriate adjustments in outstanding awards to reflect
stock dividends, stock split-ups and similar events or if there occurs any
event which, in the judgment of the Compensation Committee, necessitates such
action. In the event of a merger or sale of all or substantially all of the
assets of the Company in which outstanding shares of Class A Common Stock are
exchanged for securities, cash or other property of an unrelated corporation or
business entity, or in the event of liquidation of the Company, the Board of
Directors of the Company, or the board of directors of any corporation assuming
the obligations of the Company may, in its discretion, take any one or more of
the following actions as to outstanding Awards: (i) provide that such Awards
shall be assumed or equivalent awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof) or (ii) provide that all
Awards will terminate immediately prior to the consummation of such
transaction. If Awards are terminated, all Awards, other than Options, shall be
fully settled in cash or in kind at such appropriate consideration as
determined by the Compensation Committee in its sole discretion after taking
into account the consideration payable per share of Class A Common Stock
pursuant to the business combination (the "Merger Price") and all Options shall
be fully settled, in cash or in kind, in an amount equal to the difference
between (A) the Merger Price times the number of shares of Class A Common Stock
subject to such outstanding Options (to the extent then exercisable at prices
not in excess of the Merger Price) and (B) the aggregate exercise price of all
such outstanding options; provided, however, that each participant shall be
permitted, within a specified
30
<PAGE>
period determined by the Compensation Committee prior to the consummation of
the transaction, to exercise all outstanding Options, including those that are
not then exercisable, subject to the consummation of the transaction.
Amendments and Termination. The Board of Directors may amend or terminate
the Incentive Plan from time to time. However, no such action may be taken
which adversely affects any rights under outstanding awards without the
holder's consent. Further, amendments to the Incentive Plan shall be subject
to approval by the stockholders if (i) the amendment increases the aggregate
number of shares of Class A Common Stock that may be issued under the
Incentive Plan, (ii) the amendment changes the class of individuals eligible
to become participants, or (iii) the amendment materially increases the
benefits that may be provided under the Incentive Plan.
Tax Aspects Under the U.S. Internal Revenue Code
The following is a brief summary of the principal federal income tax
consequences of awards made under the Incentive Plan. It does not describe all
federal tax consequences under the Incentive Plan, nor does it describe state
or local tax consequences.
Options. No taxable income would generally be realized by a participant
upon the grant of an Option. Upon the exercise of the Option, ordinary income
is realized by the optionee in an amount equal to the difference between the
option price and the fair market value of the shares of Class A Common Stock
on the date of exercise, and the Company receives a tax deduction for the same
amount. Upon subsequent disposition of the shares of Class A Common Stock,
appreciation or depreciation after the date of exercise is treated as either
short-term or long-term capital gain or loss depending on how long the shares
of Class A Common Stock have been held. Special rules will apply where all or
a portion of the exercise price of the Option is paid by tendering shares of
Class A Common Stock.
Share Awards. A participant who receives a Share Award will generally
realize ordinary taxable income at the time of the receipt of the shares of
Class A Common Stock subject to the award. The Company will be entitled to a
corresponding tax deduction at such time, subject to the discussion of Code
Section 162(m) below.
Restricted Unit Awards. A participant who receives a Restricted Unit Award
under the Plan will generally not realize ordinary taxable income at the time
of the grant, and the Company will not be entitled to a tax deduction at such
time. The participant will normally realize ordinary taxable income at the
time or times the Restricted Unit Award is settled by the issuance to the
participant of shares of Class A Common Stock. The Company will be entitled to
a corresponding tax deduction at the time of such settlement, subject to the
discussion of Code Section 162(m) below.
Deferred Unit Awards. In general, a participant who receives a Deferred
Unit Award under the Plan will not realize ordinary taxable income at the time
of the grant of the award, but will, assuming an agreement setting forth the
terms and conditions of the deferral has been timely entered into, realize
ordinary income at the time or times that the award is settled by the payment
to the participant of shares of Class A Common Stock and the cash equivalent
of any fractional share. At the time of such settlement, the Company will be
entitled to a corresponding tax deduction, subject to the discussion of Code
Section 162(m) below.
Dividend Equivalent Rights. A participant in the Plan who receives an award
of Dividend Equivalent Rights will generally only realize ordinary taxable
income at the time or times the participant receives a settlement of such
rights payable in cash or shares of Class A Common Stock or both. At such time
the Company will be entitled to a corresponding tax deduction, subject to the
discussion of Code Section 162(m) below.
Limitation on Company's Deduction. Section 162(m) of the Code generally
provides that a publicly-held corporation will not be allowed a deduction for
employee compensation paid for the taxable year to its chief executive officer
or to its four highest compensated officers other than the chief executive
officer (each, an
31
<PAGE>
"Applicable Employee") to the extent that such compensation with respect to
any such Applicable Employee exceeds $1,000,000. Any compensation that
qualifies as "performance-based compensation" is not subject to this deduction
limitation. The Company believes that all Options awarded pursuant to the Plan
will qualify as performance-based compensation, and the compensation
attributable to such awards will not, in the taxable year of exercise, be
considered part of any non-performance-based compensation that is subject to
the $1,000,000 deduction limitation. Restricted Unit Awards and any awards of
Dividend Equivalent Rights will qualify as performance-based compensation only
to the extent to such awards are made subject to vesting restrictions that are
conditioned on the attainment of Company performance goals or objectives that
are generically described in the Plan. However, Share Awards and any other
award made under the Plan that is not subject to vesting or other restrictions
that require the attainment of a Company performance goal that is generically
described in the Plan will not qualify as performance-based compensation, and
amounts of compensation attributable to such awards will be added, in the year
otherwise deductible, to all other components of compensation that are subject
to the deduction limitation. The classification of a Deferred Unit Award as
performance-based compensation will depend upon whether the cash compensation
being deferred pursuant to the award qualified as performance-based
compensation.
Awards under the Incentive Plan
The Company cannot determine the exact number of Awards that may be granted
in the future to executive officers, other employees or directors under the
Incentive Plan. As of April 20, 2000, a total of 17,537,165 options were
outstanding under the Incentive Plan. On April 20, 2000, the closing sale
price of the Class A Common Stock, as reported on the New York Stock Exchange,
was $2.125 per share and the aggregate market value of the Class A Common
Stock underlying such options was $37.2 million. In addition, as of April 20,
2000, restricted unit awards for a total of 1,368,087 shares of Class A Common
Stock and stock grants for a total of 121,053 shares of Class A Common Stock
had been granted under the Incentive Plan.
As of April 20, 2000, non-qualified options have been granted under the
Incentive Plan since its inception in 1997 as follows: James D. Carreker,
1,300,000 shares; Fred J. Kleisner, 2,001,250 shares; Richard Mahoney, 850,000
shares; Leslie V. Bentley, 468,270 shares; Stanley M. Koonce, Jr., 418,270
shares; William W. Evans, III, 57,216 shares; all current executive officers
as a group, 7,465,093 shares; all current directors who are not executive
officers as a group, 153,665 shares; and all employees who are not executive
officers, 9,918,407 shares. The foregoing amounts do not include old options
that were surrendered in exchange for new options in connection with the
repricing of options as discussed under "Stock Option Repricing." The above
amounts include the options granted in 1999 as set forth under "Option Grants
in Last Fiscal Year," as well as new options that were approved by the Board
of Directors on March 27, 2000. As of April 20, 2000, restricted unit awards
have been granted under the Incentive Plan as follows: Mr. Carreker, 416,666
shares; Mr. Kleisner, 203,000 shares; Mr. Evans, 166,666 shares; all current
executive officers as a group, 619,666 shares; and all employees who are not
executive officers, 748,421 shares. As of April 20, 2000, share awards have
been granted under the Incentive Plan to only Mr. Mahoney in the amount of
121,053 shares of Class A Common Stock.
32
<PAGE>
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed PricewaterhouseCoopers LLP, independent certified public
accountants, as independent auditors of Wyndham's financial statements for the
year ending December 31, 2000. PricewaterhouseCoopers LLP has acted as
auditors for Wyndham since August 19, 1999.
The Board of Directors has decided to afford the stockholders the
opportunity to express their opinions on the matter of auditors, and,
accordingly, is submitting to the stockholders at the Annual Meeting a
proposal to ratify the appointment by the Board of Directors of
PricewaterhouseCoopers LLP. If a majority of the votes represented by the
shares of Class A Common Stock and Series B Preferred Stock present, in person
or by proxy, and entitled to vote on this proposal are not voted in favor of
the ratification of the appointment of PricewaterhouseCoopers LLP, the Board
of Directors will interpret this as an instruction to seek other auditors. The
Board of Directors recommends that the stockholders vote "FOR" the
ratification of the appointment of PricewaterhouseCoopers LLP as the Company's
independent auditors.
It is expected that representatives of PricewaterhouseCoopers LLP will be
present at the Annual Meeting and will be available to respond to appropriate
questions. These representatives will be given an opportunity to make a
statement if they desire to do so.
33
<PAGE>
CERTAIN TRANSACTIONS
Separation Agreements
Paul A. Nussbaum. On February 26, 1999, Wyndham and Paul A. Nussbaum
entered into a separation agreement whereby Mr. Nussbaum resigned his
positions as Chairman of the Board of Directors and Chief Executive Officer of
Patriot. Pursuant to the separation agreement, Mr. Nussbaum remained as a
Director of Wyndham.
In accordance with the terms of the separation agreement, the severance
amount was to be paid as follows: $2,000,000 payable on the earlier of the
consummation of the $1 billion equity investment or January 1, 2000 and the
remaining $1,200,000 payable in twelve monthly installments commencing with
the first day of the month next following the date of the $2,000,000 payment.
On June 30, 1999, the Company paid Mr. Nussbaum $1,750,000, net of $250,000 of
interest payments made by the Company on the NationsBank Loan. In addition, on
June 30, 1999, the Company paid the first monthly installment of $100,000. As
of December 31, 1999, Mr. Nussbaum is owed $500,000 of severance under the
terms of the separation agreement.
On August 13, 1999, in accordance with the terms of the separation
agreement, Wyndham repaid the outstanding balance of the NationsBank Loan, and
executed a promissory note and security agreement with Mr. Nussbaum in an
amount of $7,846,000. The promissory note is secured by 449,818 shares of
Class A Common Stock and any and all distributions and dividends which may
from time to time be paid or payable on such shares. The promissory note bears
interest at 5.5% per annum compounded annually, and matures on August 13,
2005.
Additionally, Mr. Nussbaum's outstanding unvested options to purchase
Wyndham shares vested and will remain fully exercisable for the period of
their respective terms. Mr. Nussbaum elected to exchange his options on a
Black Scholes neutral basis for new options with an exercise price equal to
the fair market value of a share on the election date. On June 1, 1999, Mr.
Nussbaum exchanged 3,078,406 options at varying prices from $11.18 to $33.58
for 1,154,448 options at $5.1875. Mr. Nussbaum will also receive 250,000
shares equally over a three year period, of which 83,334 have vested as of
December 31, 1999. Additionally, any restrictions were lifted from existing
shares held by Mr. Nussbaum.
As a condition to receiving the second and third installments of the
shares, Mr. Nussbaum has agreed to provide non-exclusive consulting services
to Wyndham for a period of two years following the resignation date. In
consideration of the consulting services, Wyndham shall pay a consulting fee
of $75,000 per month during the first year of the consulting period and
$50,000 per month during the second year of the consulting period. As of
December 31, 1999, the Company has paid Mr. Nussbaum $675,000 in consulting
fees. Additionally, Mr. Nussbaum will receive other amounts as provided for in
the separation agreement.
Karim Alibhai. Mr. Alibhai resigned his positions as President and Chief
Operating Officer of Wyndham effective as of June 30, 1999. Pursuant to the
terms of his separation agreement, Wyndham agreed to (a) pay Mr. Alibhai
$180,000 as a pro rata incentive bonus for 1999, (b) permit Mr. Alibhai to
participate in certain health and other benefit plans for two years,
(c) provide certain hotel space to Mr. Alibhai until November 21, 1999, and
(d) reprice as of June 1, 1999 all of Mr. Alibhai's options to purchase
601,065 paired shares by canceling such options and issuing new, fully vested
options to purchase 100,000 shares of Class A Common Stock at a purchase price
of $5.1875 per share, which options are exercisable until June 30, 2002.
Gencom
In connection with Wyndham's acquisition of Gencom Interests, Inc. on July
30, 1999, Mr. Alibhai received 400,883 shares of Wyndham Class A Common Stock.
These shares were issued in consideration of Mr. Alibhai's ownership interests
in Gencom Interests, Inc. and valued at approximately $1,813,000 at the date
of merger.
34
<PAGE>
Wyndham Merger
As part of the merger of Wyndham Hotel Corporation with and into Patriot in
January 1998, Patriot entered into an Omnibus Purchase and Sale Agreement, as
well as 11 individual purchase and sale agreements with various descendants of
Mr. and Mrs. Trammell Crow, and various corporations, partnerships, trusts and
other entities beneficially owned or controlled by such persons (collectively,
the "Crow Family Members"), Mr. Carreker, Mr. Bentley and Mr. Koonce, for the
acquisition of 11 hotels. As part of such merger, the Crow Family Members
received $52,227,598 in addition to 6,427,217 paired shares and 4,860,876
shares of Patriot series A preferred stock. Mr. Carreker received $7,661,087
and 1,638,988 paired shares, Mr. Bentley received $2,189,652 and 468,423
paired shares, Mr. Koonce received $2,166,908 and 463,580 paired shares, and
Ms. Groenteman received $174,530 and 37,337 paired shares. Additionally, after
payment of outstanding indebtedness and other transactional expenses, the
entities had available for distribution approximately $64,731,000 for the Crow
Family Members, approximately $1,527,000 for Mr. Carreker, and approximately
$462,000 for each of Mr. Bentley and Mr. Koonce. Also, as part of the Wyndham
merger, stock options granted to Messrs. Carreker, Bentley and Koonce and Ms.
Moreland became immediately exercisable in accordance with their terms.
As part of the Wyndham merger, Crow Family Members and certain Wyndham
senior executives retained the right to receive additional consideration on
April 30, 2000 based on a formula pertaining to the performance of Wyndham
Riverfront New Orleans and Wyndham Garden Laguardia as set forth in the
Omnibus Purchase and Sale Agreement. On April 6, 2000, Wyndham paid $9,555,575
and $7,156,263, respectively, as additional consideration.
Summerfield Acquisition
As part of Wyndham's acquisition of SF Hotels Company, L.P. in June 1998,
Mr. Rolf E. Ruhfus and entities beneficially owned or controlled by Mr. Ruhfus
received $40,885,214 in cash and 1,368,009 units of limited partnership
interest in each of the Wyndham partnership and the Patriot partnership.
Effective January 15, 1999, an additional 1,311,709 units of limited
partnership interest valued at approximately $8,969,000 were issued as
additional consideration pursuant to the purchase agreement. Of the units
issued, Mr. Ruhfus received 327,993 units with an approximate value at the
time of issuance of $2,243,000. Effective February 8, 2000, Wyndham paid an
additional $32.8 million as additional consideration pursuant to the purchase
agreement. Of the amount paid, Mr. Ruhfus received approximately $12,966,000.
Pursuant to the purchase agreement, Wyndham may be obligated to pay additional
amounts if certain performance criteria for certain hotels under development
are achieved.
As part of the Summerfield acquisition, Mr. Ruhfus retained the right to a
15% participation with the Company in the appreciation in value of the Miami
Airport Summerfield based on terms set forth in a carried interest payment
agreement.
GAH Acquisition-Phase II
As part of the acquisition of CHCI by the Company and Patriot on June 30,
1998, the Company and Patriot may be obligated on September 30, 2000 and
September 30, 2002 to pay Mr. Alibhai and Mr. Weiser additional consideration,
in each case based upon the performance of specified assets, based on formulas
as set forth in merger and contribution agreements.
Loan from Beacon Capital Partners, L.P.
In May 1999, Beacon Capital Partners, L.P. loaned $25 million to the
Company and Patriot. The loan was subsequently increased to $45 million. The
Company and Patriot paid Beacon Capital Partners, L.P. a financing fee of
2.50% of the loan principal in May 1999. On July 1, 1999, the loan was
transferred to Wyndham in consideration for the issuance by Wyndham of 450,000
shares of Series B Preferred Stock.
35
<PAGE>
Other Related Party Transactions
On June 15, 1999, Wyndham acquired the controlling 1% interest in Crowne
Plaza Ravinia and Wyndham Windwatch for $156,000, from former senior executive
officers of the Company and Mr. Nussbaum.
The Company licenses from Mr. Nussbaum the name and trademark of Patriot
American Hospitality, Inc. under a perpetual no-cost license agreement.
During 1999, Wyndham received hotel management fees in the aggregate amount
of $6,463,365 from the partnerships owning Wyndham hotels listed below, in
which Crow Family Members and certain Wyndham senior executive officers
(Messrs. Carreker, Bentley and Koonce) have an interest.
During 1999, Wyndham received payments in the aggregate amount of
$3,992,087 from the hotel partnerships listed below, in which Crow Family
Members and certain Wyndham senior executive officers (Messrs. Carreker,
Bentley and Koonce) have an interest. The payments were received as
reimbursements for certain administrative, tax, legal, accounting, finance,
risk management, sales and marketing services provided by Wyndham to such
entities.
<TABLE>
<CAPTION>
Hotel Partnership Hotel
----------------- -----
<S> <C>
Anatole Hotel Investors, L.P. Wyndham Anatole
Bristol Hotel Associates, Ltd. Wyndham Bristol
Playhouse Square Hotel Limited Partnership Wyndham Playhouse Square
MTD Associates Wyndham Milwaukee Center
Hotel and Convention Center Partners I-XI,
Ltd. Wyndham Palm Springs
Amgreen-Heritage Hotel Partnership, Ltd. Wyndham Garden Hotel-Orange
Waterfront-Hotel Associates, S.E. Wyndham Old San Juan
</TABLE>
During 1999, Wyndham received hotel management fees in the aggregate of
$12,672,683 from the owner of the hotels listed below in which Milton Fine,
Paul Nussbaum, Karim Alibhai, Rolf Ruhfus or Sherwood Weiser has an interest.
<TABLE>
<CAPTION>
1999 Aggregate
Management and
Milton Fine Service Fees
- ----------- --------------
<S> <C>
Marriott-Harrisburg, PA.......................................... $186,887
Marriott Reach Resort-Key West, FL............................... 259,372
Marriott-Pittsburgh Airport...................................... 222,889
Marriott-Albany, NY.............................................. 283,085
Marriott Mission Valley, San Diego............................... 262,063
Marriott Minnetonka, Minneapolis................................. 223,422
Marriott Greentree, Pittsburgh................................... 143,695
Marriott Providence.............................................. 592,001
Marriott Trumbull................................................ 135,046
Embassy Suites Chicago........................................... 289,570
Marriott Courtyard, St. Louis.................................... 42,741
Marriott Courtyard-Westborough, Boston........................... 42,911
Marriott Courtyard Orange........................................ 87,305
<CAPTION>
1999 Aggregate
Management and
Paul Nussbaum Service Fees
- ------------- --------------
<S> <C>
Marriott Residence Inn, Houston.................................. $211,150
Holiday Inn Astrodome, Houston Medical Center.................... 211,886
Days Inn Astrodome, Houston...................................... 47,826
Sheraton Astrodome, Houston...................................... 509,039
Radisson Astrodome, Houston...................................... 104,076
Sheraton Edmonton................................................ 209,967
Inn at Maingate dba Doubletree Maingate.......................... 449,575
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
1999 Aggregate
Management and
Karim Alibhai Service Fees
- ------------- --------------
<S> <C>
Days Inn Astrodome, Houston...................................... $ 47,826
Days Inn Greenspoint, Houston.................................... 24,984
Hampton Inn Corpus Christi....................................... 46,712
Hawthorne Suites, Houston........................................ 68,337
Holiday Inn Stevens Point-Portage County, WI..................... 257,553
Holiday Inn Astrodome, Houston................................... 211,886
Inn at Maingate dba Doubletree Maingate, Kissimmee, FL........... 449,575
Marriott Residence Inn, Houston Medical Center................... 211,150
Sheraton Astrodome, Houston...................................... 509,039
Wyndham Miami-Biscayne Bay....................................... 487,172
Radisson Astrodome, Houston...................................... 104,076
Days Inn Austin.................................................. 15,117
Radisson Acapulco................................................ 117,999
Wyndham Montreal................................................. 866,567
<CAPTION>
1999 Aggregate
Management and
Rolf Ruhfus Service Fees
- ----------- --------------
<S> <C>
Summerfield Suites-Bridgewater................................... $ 798,830
Summerfield Suites-Burlington.................................... 686,294
Summerfield Suites Chicago Downtown.............................. 447,041
Summerfield Suites Charlotte..................................... 240,160
Summerfield Suites Gaithersburg.................................. 516,944
Summerfield Suites Pleasanton.................................... 523,208
Summerfield Suites Scottsdale.................................... 313,537
Summerfield Suites-Plymouth Meeting.............................. 513,676
Summerfield Suites-Harrison...................................... 283,391
Sierra Suites-Atlanta Buckhead................................... 192,806
Sierra Suites-Atlanta Perimeter.................................. 157,844
Sierra Suites-Bothell............................................ 124,228
Sierra Suites-Chantilly.......................................... 220,620
Sierra Suites-Orlando............................................ 326,128
Sierra Suites-Lake Buena Vista................................... 369,031
Sierra Suites-Phoenix Metro Center............................... 112,752
Sierra Suites-Piscataway......................................... 203,827
Sierra Suites-Pleasanton......................................... 306,611
Sierra Suites-San Jose Sierra.................................... 540,203
Sierra Suites-Scottsdale......................................... 156,044
Sierra Suites-Waltham............................................ 411,673
Sierra Suites-Woburn............................................. 253,541
<CAPTION>
1999 Aggregate
Management and
Sherwood Weiser Service Fees
- --------------- --------------
<S> <C>
Holiday Inn Dayton Mall, Ohio.................................... $ 148,733
Sheraton University City, Philadelphia........................... 417,471
Wyndham Miami-Biscayne Bay....................................... 487,172
Westin Hotel Providence, RI...................................... 370,245
Washington Duke.................................................. 1,056,891
</TABLE>
In connection with managing the hotels, the Company was owed, as of December
31, 1999, approximately $5,930,000 for management fees, service fees, and
reimbursements from 15 hotels in which Mr. Alibhai has an ownership interest
and approximately $1,406,000 for management fees for 2 hotels in which Mr.
Weiser has an ownership interest.
37
<PAGE>
During 1999, the Company made lease payments of $3,150,334 to an affiliate
of Summerfield Associates, L.P., a partnership in which Rolf Ruhfus has an
ownership interest, related to the hotels listed below:
<TABLE>
<S> <C>
Sierra Suites Atlanta Cumberland............................... $ 638,271
Sierra Suites Phoenix Camelback................................ 1,056,920
Sierra Suites Westborough...................................... 1,455,143
</TABLE>
In 1999, the Company paid a consulting fee of $87,500 to Mr. Ruhfus.
During 1996, Wyndham senior executive officers incurred indebtedness to
Wyndham Finance Limited Partnership ("WFLP"), a partnership owned by the Crow
Family Members. Notes representing such loans were purchased by Wyndham Hotel
Corporation in May 1996 in connection with its formation for a cash payment to
WFLP in the amount of $18,576,000, which is equivalent to the aggregate
outstanding principal and accrued interest severally owing by the Wyndham
senior executive officers to WFLP. Such promissory notes, which are made
payable to Wyndham, accrue interest at 6% per annum and are secured by the
pledge of shares of Class A Common Stock held by the note obligors. The
balance of the notes including principal and accrued interest are due and
payable in April 2002 for three of the notes. The note for Mr. Carreker is
payable in April 2004. The aggregate principal amount of such loans, including
interest, are as follows:
<TABLE>
<CAPTION>
December 31, 1999
-----------------
<S> <C>
James D. Carreker............................................ $5,508,103
Leslie V. Bentley............................................ 6,115,303
Stanley M. Koonce, Jr........................................ 2,250,746
Anne L. Raymond.............................................. 2,292,982
</TABLE>
During 1999, the Company made payments in the aggregate amount of $1.4
million as lease payments for corporate office space to an entity in which
Crow Family Members had an ownership interest.
In March 2000, Wyndham sold its Sierra Suites(R) hotel brand, properties
and related assets to Sierra Suites Hotel Company, L.P., an entity affiliated
with Mr. Ruhfus for approximately $53.0 million. The transaction includes the
sale by Wyndham of one owned and three leased properties, seventeen franchise
and management contracts for Sierra Suites(R) and nine management contracts
for Summerfield Suites.
In 1999, the Company made payments in the aggregate amounts of $153,000 as
lease payments for the Summerfield divisional offices in Wichita, Kansas to
Summerfield Associates L.P., a partnership in which Rolf Ruhfus has an
ownership interest. The leases terminate in June 2001.
During 1999, Wyndham made payments in the aggregate amount of $371,000 to
Wyndham Travel Management Ltd., an entity owned by Lucy Billingsley, the
daughter of Mr. Trammell Crow, for travel services provided to Wyndham.
During 1998, Patriot provided William W. Evans III with a non-recourse loan
of $424,375 to assist Mr. Evans with the payment of income taxes in the
vesting of his restricted paired shares. This loan is secured by 53,667 paired
shares and bears interest at 7.5% per annum. The loan is due on November 27,
2003, or 60 days after Mr. Evans' termination of employment, if earlier. As
part of Mr. Evan's separation agreement, the loan became due on or before
August 29, 1999. Patriot agreed to accept the collateral shares in full
satisfaction of the principal amount and accrued interest on the loan.
During 1998, Wyndham provided Lawrence S. Jones with a non-recourse loan of
$300,000, which was increased to $750,000 in 1999. This loan bears interest at
7% per annum and is due on October 5, 2001. As provided in Mr. Jones's
employment agreement, a portion of the loan may be forgiven upon Mr. Jones's
termination of employment with the Company. In accordance with this employment
agreement, the outstanding principal and accrued interest was forgiven when
Mr. Jones resigned his position with Wyndham on July 13, 1999.
38
<PAGE>
During 1999, Wyndham provided Mr. Bentley a recourse loan of $350,000. The
loan bears interest at the rate of LIBOR plus 3.00% (equal to the rate of
Wyndham's rate on its revolving credit facility). The loan is due on the
earlier of October 14, 2003 or sixty days after the termination of Mr.
Bentley's employment.
Pursuant to the terms of its management agreement relating to the Wyndham
Hotel at Los Angeles Airport, Wyndham agreed to loan $4,560,000 to be applied
to costs of refurbishment of the hotel. The refurbishment loan is evidenced by
a promissory note, which has been partially funded in the amount of $4,237,000
as of December 31, 1999. Prior to the formation of Wyndham, WHC LAX
Associates, L.P., a limited partnership owned by Crow Family Members and
Wyndham senior executive officers, paid Wyndham $4,560,000 in return for
Wyndham's agreement to pay to WHC LAX Associates, L.P. all payments that
Wyndham receives under the $4,560,000 promissory note. Wyndham also agreed
that, insofar as the WHC LAX Associates, L.P.'s $4,560,000 payment to Wyndham
exceeds advances that Wyndham is obligated to make, but has not yet made,
under the $4,560,000 promissory note, it would pay to WHC LAX Associates, L.P.
interest at a variable rate that has ranged from 5.25% to 5.81% per annum on
the unfunded amounts. As of December 31, 1999, Wyndham has accrued such
interest in the amount of $71,226.
The Company, in connection with the Wyndham merger, assumed a service
agreement with ISIS 2000, an entity affiliated with members of the Crow family
and certain senior executive officers of the Company (Messrs. Carreker,
Bentley and Koonce), to provide centralized reservations and property
management services to all Wyndham branded hotels as well as other hotels
owned by the Company. On May 7, 1999, Patriot exercised its option to purchase
ISIS 2000 for a cash payment of $3,073,000. The service fees incurred by the
Company in 1999, prior to the acquisition, were $1,985,000.
In 1999, the Company made payments in the aggregate amount of $6,134,000 to
Kinetic Group Limited Partnership, an entity 50% owned by Trammell Crow
Company and 50% owned by an entity owned by Crow Family Members and certain
Wyndham senior executive officers (Messrs. Carreker, Bentley and Koonce and
Ms. Raymond). The payments were made under the terms of a service agreement
whereby Kinetic Group Limited Partnership provides management information
services to the Company. On April 30, 1999, Wyndham's option to purchase
certain interests in Kinetic Group Limited Partnership expired without being
exercised.
In 1997, Wyndham entered into a construction loan agreement with the
Wyndham Anatole Hotel, in which Crow Family Members have an ownership
interest. Under the agreement, Wyndham made a loan in the amount of
$10,000,000 for the construction costs of the hotel.
Norman Brownstein, a director of Wyndham, is chairman of Brownstein Hyatt &
Farber P.C., a law firm that has advised Wyndham on certain matters related to
litigation and real property transactions.
In 1999, Wyndham amended its management contract for the Wyndham Anatole
Hotel to provide that the owners of the hotel may terminate the management
contract following the next annual meeting of Wyndham stockholders after the
completion of the $1 billion equity investment if Paul Nussbaum continues on
the Board of Directors of Wyndham following Wyndham's annual meeting of
stockholders in 2000. Mr. Nussbaum has notified Wyndham in writing that if his
standing for reelection in 2000 would give the owners of the Wyndham Anatole
the right to terminate the hotel's management agreement, he will not stand for
reelection at that time. Additionally, the owners of the Wyndham Anatole Hotel
may terminate the management contract if Mr. Carreker ceases to be the chief
executive officer of the Company. Mr. Carreker resigned his position as Chief
Executive Officer of the Company on March 27, 2000.
In 1999, the Company managed Wyndham branded hotels for affiliates of
Hampstead Group L.L.C. An entity owned by Crow Family Members and Wyndham
senior executive officers may be entitled to a contingent payment at such time
as all such hotels achieve an investment return target of 15% on all equity
capital invested through such program plus certain overhead costs. The amount
of such contingent payment is 10% of all cash proceeds realized in excess of
the investment return target.
39
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires directors and officers of Wyndham, and persons who
own more than 10% of the Class A Common Stock, to file with the Commission
initial reports of Class A Common Stock ownership and reports of changes in
such ownership. A reporting person must file a Form 3--Initial Statement of
Beneficial Ownership of Securities within 10 days after such person becomes a
reporting person. A reporting person must file a Form 4--Statement of Changes
of Beneficial Ownership of Securities within 10 days after any month in which
such person's beneficial ownership of securities changes, except for certain
changes exempt from the reporting requirements of Form 4. Such exempt changes
include stock options granted under a plan qualifying pursuant to Rule 16b-3
under the Exchange Act. A reporting person must file a Form 5--Annual
Statement of Beneficial Ownership of Securities within 45 days after the end
of the issuer's fiscal year to report any changes in ownership during such
year not reported on a Form 4, including changes exempt from the reporting
requirements of Form 4.
The Commission's rules require Wyndham's reporting persons to furnish
Wyndham with copies of all Section 16(a) reports that they file. Based solely
upon a review of the copies of such reports furnished to Wyndham and written
representations that no other reports were required with respect to the year
ended December 31, 1999, Wyndham believes that the reporting persons have
complied with all applicable Section 16(a) filing requirements for 1999 on a
timely basis.
STOCKHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
In order for stockholder proposals which are submitted pursuant to Rule
14a-8 of the Exchange Act to be considered for inclusion in Wyndham's proxy
statement for the 2001 annual meeting, they must be received by the Secretary
of Wyndham at Wyndham's principal executive office no later than December 30,
2000. Pursuant to Rule 14a-4(c)(1) under the Exchange Act, if any stockholder
proposal intended to be presented at the 2001 annual meeting without inclusion
in Wyndham's proxy statement for such meeting is received at Wyndham's
principal executive offices after February 14, 2001, then any proxy that
management solicits for such meeting will confer discretionary authority to
vote on such proposal so long as such proposal is properly presented at the
meeting.
FORM 10-K
The Company will provide without charge to any stockholder, upon the
stockholder's written request, a copy of the Company's Annual Report on Form
10-K for the year ended December 31, 1999. Requests should be sent to
Shareholder Relations, Wyndham International, Inc., 1950 Stemmons Freeway,
Suite 6001, Dallas, Texas 75207.
By Order of the Board of Directors
James D. Carreker
Chairman of the Board of Directors
April 28, 2000
Dallas, Texas
40
<PAGE>
APPENDIX I
WYNDHAM INTERNATIONAL, INC.
1997 INCENTIVE PLAN
(As Amended and Restated
as of June 29, 1999)
<PAGE>
WYNDHAM INTERNATIONAL, INC.
1997 INCENTIVE PLAN
(As Amended and Restated
as of June 29, 1999)
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I - DEFINITIONS..................................................... 1
1.01 Affiliate..................................................... 1
1.02 Agreement..................................................... 1
1.03 Award or Awards............................................... 2
1.04 Board......................................................... 2
1.05 Code.......................................................... 2
1.06 Committee..................................................... 2
1.07 Deferred Unit Award........................................... 2
1.08 Dividend Equivalent Rights.................................... 2
1.09 Effective Date................................................ 2
1.10 Exchange Act.................................................. 2
1.11 Fair Market Value............................................. 2
1.12 Independent Director.......................................... 3
1.13 Company....................................................... 3
1.14 Stock......................................................... 3
1.15 Share Award................................................... 3
1.16 Participant................................................... 3
1.17 Plan.......................................................... 3
1.18 Restricted Unit Award......................................... 3
ARTICLE II - PURPOSES....................................................... 3
ARTICLE III - ADMINISTRATION................................................ 4
ARTICLE IV - ELIGIBILITY.................................................... 5
ARTICLE V - SHARES SUBJECT TO PLAN.......................................... 6
5.01 Shares Issued................................................. 6
5.02 Substitute Awards............................................. 7
ARTICLE VI - OPTIONS........................................................ 7
6.01 Award......................................................... 7
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
6.02 Option Price.................................................. 7
6.03 Stock Options Granted to Independent Directors................ 8
6.04 Maximum Option Period......................................... 8
6.05 Nontransferability............................................ 8
6.06 Transferable Options.......................................... 9
6.07 Employee Status............................................... 9
6.08 Exercise...................................................... 9
6.09 Payment....................................................... 9
6.10 Shareholder Rights............................................ 10
ARTICLE VII - SHARE AWARDS.................................................. 11
ARTICLE VIII - RESTRICTED UNIT AWARDS....................................... 11
8.01 Award......................................................... 11
8.02 Vesting....................................................... 11
8.03 Performance Objectives........................................ 12
8.04 Employee Status............................................... 12
8.05 Shareholder Rights............................................ 12
8.06 Nontransferability............................................ 13
ARTICLE IX - DEFERRED UNIT AWARDS........................................... 13
9.01 Elections to Receive Deferred Unit Awards in Lieu of
Compensation................................................ 13
9.02 Terms and Conditions.......................................... 13
9.03 Form of Payment............................................... 13
9.04 Shareholder Rights............................................ 14
9.05 Nontransferability............................................ 14
ARTICLE X - DIVIDEND EQUIVALENT RIGHTS...................................... 14
10.01 Awards........................................................ 14
10.02 Payment....................................................... 15
10.03 Shareholder Rights............................................ 15
10.04 Nontransferability............................................ 15
ARTICLE XI - CHANGE IN CONTROL PROVISIONS................................... 16
ARTICLE XII - ADJUSTMENT UPON CHANGE IN STOCK............................... 17
12.01 Adjustments................................................... 17
12.02 Mergers or Other Corporate Transactions....................... 17
ARTICLE XIII - COMPLIANCE WITH LAW.......................................... 18
ARTICLE XIV - GENERAL PROVISIONS............................................ 19
14.01 Effect on Employment and Service.............................. 19
14.02 Unfunded Plan................................................. 19
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
14.03 Rules of Construction......................................... 20
ARTICLE XV - AMENDMENT...................................................... 20
ARTICLE XVI - EFFECTIVE DATE OF PLAN........................................ 20
ARTICLE XVII - GOVERNING LAW................................................ 21
</TABLE>
(iii)
<PAGE>
WYNDHAM INTERNATIONAL, INC.
1997 INCENTIVE PLAN
(As Amended and Restated as of June 29, 1999)
The name of the plan is the Wyndham International, Inc. 1997 Incentive Plan
(the "Plan"). The purpose of the Plan is to encourage and enable the officers,
employees, Independent Directors and other key persons (including consultants)
of Wyndham International, Inc. (the "Company") and its Affiliates upon whose
judgment, initiative and efforts the Company largely depends for the successful
conduct of its business to acquire a proprietary interest in the Company. It is
anticipated that providing such persons with a direct stake in the Company's
welfare will assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.
ARTICLE I - DEFINITIONS
-----------------------
1.01 Affiliate means any "subsidiary" or "parent" corporation (within the
---------
meaning of Section 424 of the Code) of the Company or means any corporation or
other entity (other than the Company) in any unbroken chain of corporations or
other entities beginning with the Company if each of the corporations or
entities (other than the last corporation or entity in the unbroken chain) owns
stock or other interests possessing 50 percent or more of the economic interest
or the total combined voting power of all classes of stock or other interests in
one of the other corporations or entities in the chain.
1.02 Agreement means a written agreement (including any amendment or
---------
supplement thereto) between the Company and a Participant specifying the terms
and conditions of an Award.
<PAGE>
1.03 Award or Awards, except when referring to a particular category of
----- ------
grant under the Plan, shall include Options, Share Awards, Restricted Unit
Awards, Deferred Unit Awards, or awards of Dividend Equivalent Rights.
1.04 Board means the Board of Directors of the Company.
-----
1.05 Code means the Internal Revenue Code of 1986, and any amendments
----
thereto.
1.06 Committee means the Compensation Committee of the Board. Each member
---------
of the Committee shall be an "outside director" within the meaning of Section
162(m) of the Code and the regulations promulgated thereunder and a "non-
employee director" within the meaning of Rule 16b-3(b)(3)(i) promulgated under
the Exchange Act.
1.07 Deferred Unit Award means an award granted pursuant to Article IX
-------------------
which entitles the holder to defer receipt of current cash compensation in
exchange for a right to receive shares of Stock in the future at the price or
prices set forth in the Agreement.
1.08 Dividend Equivalent Rights means an award granted pursuant to Article
--------------------------
X which entitles the holder to receive compensation based on cash dividends and
distributions payable with respect to shares of Stock.
1.09 Effective Date means the date on which the Plan is approved by
--------------
shareholders as set forth in Article XVII.
1.10 Exchange Act means the Securities Exchange Act of 1934, as amended
------------
and as in effect on the date of this Agreement.
1.11 Fair Market Value means, on any given date, the closing price of a
-----------------
share of Stock, as reported on the New York Stock Exchange. In any case, if no
sale of shares of Stock
2
<PAGE>
is made on the New York Stock Exchange on that date, then Fair Market Value
shall be determined as of the next preceding day on which there was a sale of
such security.
1.12 Independent Director means a member of the Board who is not also an
--------------------
employee of the Company or any Affiliate.
1.13 Company means Wyndham International, Inc.
-------
1.14 Stock means the Class A common stock of the Company.
-----
1.15 Share Award means shares of Stock awarded to a Participant under
-----------
Article VII as incentive compensation or in lieu of current cash compensation.
1.16 Participant means an employee of the Company or an Affiliate, a
-----------
member of the Board, or an individual whose efforts contribute to the
performance or success of the Company or an Affiliate, who satisfies the
requirements of Article IV and is selected by the Committee to receive an Award
under the Plan.
1.17 Plan means the Wyndham International, Inc. 1997 Incentive Plan.
----
1.18 Restricted Unit Award means an Award granted pursuant to Article VIII
---------------------
which entities the holder to receive a payment of shares of Stock upon the
satisfaction of the vesting restriction period or performance goals.
ARTICLE II - PURPOSES
---------------------
The Plan is intended to assist the Company and its Affiliates in recruiting
and retaining individuals with ability and initiative by enabling such persons
to participate in the future success of the Company and its Affiliates, and to
associate their interests with those of the Company and its shareholders.
3
<PAGE>
The Plan is intended to permit the grant of Options which do not qualify
under Section 422 of the Code as incentive stock options. The Plan is also
intended to permit the grant of Share Awards, Restricted Unit Awards, Deferred
Unit Awards and Dividend Equivalent Rights. The proceeds received by the
Company from the sale of shares of Stock pursuant to this Plan shall be used for
general corporate purposes. Each Option or other Award may be exercised,
terminated, canceled, forfeited, transferred or otherwise disposed of only in
units consisting of shares of Stock.
ARTICLE III - ADMINISTRATION
----------------------------
The Plan shall be administered by the Committee. The Committee shall have
authority to grant any Awards upon such terms (not inconsistent with the
provisions of this Plan) as the Committee may consider appropriate. Such terms
may include conditions (in addition to those contained in this Plan) on the
exercisability of all or any part of an Option or on the transferability or
forfeitability of any Award. The Committee may in connection with the death,
disability or other termination of employment of a Participant or a Change in
Control of the Company accelerate the time at which any Option may be exercised
or, the time at which a Restricted Unit Award may become transferable or
nonforfeitable. In addition, the Committee shall have complete authority to
interpret all provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend, and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific
power to the Committee shall not be construed as limiting any power or authority
of the Committee. Any decision made, or action taken, by the Committee or in
connection with the administration of
4
<PAGE>
this Plan shall be final and conclusive. No member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any Agreement
or Award. All expenses of administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or more officers of
the Company all or part of the Committee's authority and duties with respect to
grants and awards to individuals who are not "covered employees" within the
meaning of Section 162(m) of the Code or subject to the reporting and other
provisions of Section 16 of the Exchange Act. Any such delegation by the
Committee shall include a limitation as to the amount of Awards that may be
granted during the period of the delegation and shall contain guidelines as to
the determination of the exercise price of any Option, the conversion ratio or
price of other Awards and the vesting criteria. The Committee may revoke or
amend the terms of a delegation at any time but such action shall not invalidate
any prior actions of the Committee's delegate or delegates that were consistent
with the terms of the Plan.
ARTICLE IV - ELIGIBILITY
------------------------
Any employee of the Company or an Affiliate (including a corporation or
other entity that becomes an Affiliate after the adoption of this Plan) or a
person whose efforts contribute to the performance or success of the Company or
an Affiliate (including a corporation or other entity that becomes an Affiliate
after the adoption of this Plan), including a consultant, is eligible to
participate in this Plan if the Committee, in its sole discretion, determines
that such person has contributed significantly or can be expected to contribute
significantly to the profits or growth of the Company or an Affiliate.
Independent Directors of the Company are also eligible to participate in this
Plan.
5
<PAGE>
ARTICLE V - SHARES SUBJECT TO PLAN
----------------------------------
5.01 Shares Issued. Subject to adjustment as provided in Section 13.01,
-------------
the aggregate number of shares of Stock available from time to time for all
Awards under this Plan shall be such aggregate number of shares as does not
exceed the sum of (i) 3,000,000 shares; plus (ii) as of the beginning of each
calendar quarter, beginning with October 1, 1997, 10 percent of any net increase
since the beginning of the preceding calendar quarter in the total number of
shares of Stock actually outstanding (assuming all units of partnership interest
in the Patriot American Hospitality Partnership, L.P. and the Wyndham
International Operating Partnership, L.P. that are subject to redemption rights
are converted into shares of Stock)]; reduced by (iii) the aggregate number of
shares of Stock subject to Awards under this Plan. For purposes of this
limitation, if any portion of an Award is forfeited, canceled, reacquired by the
Company, satisfied without the issuance of Stock or otherwise terminated, the
shares of Stock underlying such portion of the Award shall be added back to the
shares of Stock available for issuance under the Plan. Notwithstanding the
foregoing, the maximum number of shares of Stock for which Restricted Unit
Awards, Share Awards and Deferred Unit Awards may be granted under this Plan
during the term of the Plan shall not exceed forty percent (40%) of the shares
of Stock issuable under the Plan, and the maximum number of shares of Stock with
respect to which Awards may be granted during any calendar year period to any
Participant shall not exceed 1,500,000 shares, subject to adjustment as provided
in Section 12.01.
Shares of Stock to be delivered under the Plan shall be made available by
the Company from authorized and unissued shares of Stock issued by the Company
directly to the holder.
6
<PAGE>
5.02 Substitute Awards. The Committee may grant Awards under the Plan in
-----------------
substitute for stock and stock-based awards held by employees of another
employer who become employees of the Company or an Affiliate as the result of a
merger or consolidation of the employer with the Company or an Affiliate, or the
acquisition by the Company or an Affiliate of property or stock of the employer.
The Administrator may direct that the substitute awards be granted on such terms
and conditions as the Administrator consider appropriate in the circumstances
whether or not specifically authorized under the Plan. Unless otherwise
provided by the Administrator, any grants of shares of Stock under this Section
5.02 shall not count against the shares of Stock available for issuance under
the Plan under Section 5.01.
ARTICLE VI - OPTIONS
--------------------
6.01 Award. In accordance with the provisions of Article IV, the Committee
-----
will designate each individual to whom an Option is to be granted and will
specify the number of shares of Stock covered by such awards.
6.02 Option Price. The price per share of Stock purchased on the exercise
------------
of an Option shall be determined by the Committee on the date of grant;
provided, however, that the price per share of Stock purchased on the exercise
of any Option shall not be less than one hundred percent (100%) of the Fair
Market Value of a share of Stock on the date of grant of such Option. Except as
provided in Section 12.01, the Option price may not be reduced after the date of
grant. The foregoing sentence is not intended to, and shall not be interpreted
to, prohibit the Committee from authorizing the exchange of outstanding Options
for new Options
7
<PAGE>
for fewer shares at a reduced exercise price so long as the exchange is made on
a comparable value basis (as determined under a generally recognizable option
pricing model).
6.03 Stock Options Granted to Independent Directors. Prior to 1999, each
----------------------------------------------
Independent Director who was serving as Director of the Company on each annual
meeting of shareholders, beginning with the 1997 annual meeting, was
automatically granted on such day a non-qualified stock option to acquire 10,000
shares of Stock, subject to adjustments as provided in Section 12.01. The
exercise price per share of Stock covered by an Option granted under this
Section 6.03 shall be equal to the Fair Market Value of a share of Stock on the
date of grant.
The Committee, in its discretion, may grant additional Options to
Independent Directors. Any such grant may vary among individual Independent
Directors. Unless otherwise determined by the Committee, an Option granted
under Section 6.03 shall be exercisable in full as of the grant date.
6.04 Maximum Option Period. The maximum period in which an Option may be
---------------------
exercised shall be determined by the Committee on the date of grant and may not
exceed ten years from the date such Option was granted.
6.05 Nontransferability. Except as provided in Section 6.06, each Option
------------------
granted under this Plan shall be nontransferable except by will or by the laws
of descent and distribution. During the lifetime of the Participant to whom the
Option is granted, the Option may be exercised only by the Participant. No
right or interest of a Participant in any Option shall be liable for, or subject
to, any lien, obligation, or liability of such Participant.
8
<PAGE>
6.06 Transferable Options. Section 6.05 to the contrary notwithstanding,
--------------------
the Committee may provide in an Agreement regarding a given Option that an
Option that is not an incentive stock option may be transferred by a Participant
to the Participant's children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership in which such family members are
the only partners; provided, however, that the Participant may not receive any
consideration for the transfer. The holder of an Option transferred pursuant to
this section shall be bound by the same terms and conditions that governed the
Option during the period that it was held by the Participant.
6.07 Employee Status. In the event that the terms of any Option provide
---------------
that it may be exercised only during employment or within a specified period of
time after termination of employment, the Committee may decide to what extent
leaves of absence for governmental or military service, illness, temporary
disability, or other reasons shall not be deemed interruptions of continuous
employment.
6.08 Exercise. Subject to the provisions of this Plan and the applicable
--------
Agreement, an Option may be exercised in whole at any time or in part from time
to time at such times and in compliance with such requirements as the Committee
shall determine. An Option granted under this Plan may be exercised with
respect to any number of whole shares less than the full number for which the
Option could be exercised. A partial exercise of an Option shall not affect the
right to exercise the Option from time to time in accordance with this Plan and
the applicable Agreement with respect to the remaining shares subject to the
Option.
6.09 Payment. Unless otherwise provided by the Agreement, payment of the
-------
Option price shall be made in cash or a cash equivalent acceptable to the
Committee. If the
9
<PAGE>
Agreement provides, payment of all or part of the option price may be made by
surrendering to the Company previously owned whole shares of Stock (which the
Participant has held for at least six months prior to the delivery of such
shares of Stock or which the Participant purchased on the open market and for
which the Participant has good title, free and clear of all liens and
encumbrances). If shares of Stock are used to pay all or part of the Option
price, the sum of the cash, cash equivalent, and the Fair Market Value
(determined as of the day preceding the date of exercise) of the shares of Stock
surrendered must not be less than the option price of the shares of Stock for
which the Option is being exercised. If the Agreement provides, payment of all
or part of the option price may be made by the Participant delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; provided that
in the event the Participant chooses to pay the purchase price as so provided,
the Participant and the broker shall comply with such procedures and enter into
such agreements of indemnity and other agreements as the Committee shall
prescribe as a condition of such payment procedure. If the Agreement provides
and if the Board has authorized the loan of funds to the Participant for the
purpose of enabling or assisting the Participant to exercise his Option, payment
of the option price may be made by the Participant with a promissory note,
provided that at least so much of the exercise price as represents the par value
of the shares of Stock shall be paid other than with a promissory note.
6.10 Shareholder Rights. No Participant shall have any rights as a
------------------
shareholder with respect to shares of Stock subject to his Option until the date
of exercise of such Option.
10
<PAGE>
ARTICLE VII - SHARE AWARDS
--------------------------
In accordance with the provisions of Article IV, the Committee will
designate each individual to whom a Share Award is to be made and will specify
the number of shares of Stock covered by such award. A Share Award shall be
granted as incentive compensation or in lieu of current cash compensation
otherwise payable to a Participant and shall be free of any vesting
restrictions. The Company shall issue or cause to be issued shares of Stock to
a Participant who receives a Share Award.
ARTICLE VIII - RESTRICTED UNIT AWARDS
-------------------------------------
8.01 Award. In accordance with the provisions of Article IV, the Committee
-----
will designate each individual to whom a Restricted Unit Award is to be made and
will specify the number of shares of Stock covered by such award. Such an award
shall entitle the Participant to receive a payment of shares of Stock upon the
satisfaction of the vesting restriction period or satisfaction of performance
objectives; provided, however, that the Committee may permit a Participant to
elect, pursuant to an advance written election delivered to the Company no later
than the date prescribed to the Committee, to defer receipt of some or all of
the shares of Stock.
8.02 Vesting. The Committee, on the date of the award, shall prescribe
-------
that a Participant's rights in the Restricted Unit Award shall be forfeitable or
otherwise restricted for a period of time or subject to such conditions as may
be set forth in the Agreement. The period of restriction shall be at least
three years; provided, however, that the minimum period of restriction shall be
at least one year in the case of a Restricted Unit Award that will become
transferable and nonforfeitable on account of the satisfaction of performance
objectives
11
<PAGE>
prescribed by the Committee. During the restriction period, the Committee may
provide that the Participant's Restricted Unit Award be credited with Dividend
Equivalent Rights.
8.03 Performance Objectives. In accordance with Section 8.02, the
----------------------
Committee may prescribe that Restricted Unit Awards will become vested,
transferable, or both, based on objectives stated with respect to the Company's,
an Affiliate's, or an operating unit's return on equity, funds from operations,
cash available for distribution, earnings per share, total earnings, earnings
growth, return on capital, return on assets, or Fair Market Value of the shares
of Stock. If the Committee, on the date of the award, prescribes that a
Restricted Unit Award shall become nonforfeitable and transferable only upon the
attainment of performance objectives stated with respect to one or more of the
foregoing criteria, the shares of Stock subject to such Restricted Unit Award
shall become nonforfeitable and transferable only to the extent that the
Committee certifies that such objectives have been achieved.
8.04 Employee Status. In the event that the terms of any Restricted Unit
---------------
Award provide that shares of Stock may become transferable and nonforfeitable
thereunder only after completion of a specified period of employment, the
Committee may decide in each case to what extent leaves of absence for
governmental or military service, illness, temporary disability, or other
reasons shall not be deemed interruptions of continuous employment.
8.05 Shareholder Rights. No Participant shall, as a result of receiving a
------------------
Restricted Unit Award, have any rights as a shareholder until and to the extent
that the Restricted Unit Award is settled by the issuance of shares of Stock.
After the Restricted Unit Award is settled in shares of Stock, a Participant
will have all the rights of a shareholder with respect to such
12
<PAGE>
shares of Stock. The Company shall issue, or cause to be issued, shares of Stock
to the Participant.
8.06 Nontransferability. A Restricted Unit Award shall be nontransferable
------------------
except by will or by the laws of descent and distribution. No right or interest
of a Participant in any Restricted Unit Award shall be liable for, or subject
to, any lien, obligation, or liability of such Participant.
ARTICLE IX - DEFERRED UNIT AWARDS
---------------------------------
9.01 Elections to Receive Deferred Unit Awards in Lieu of Compensation.
-----------------------------------------------------------------
The Committee may, in its sole discretion, permit a Participant to elect,
pursuant to an advance written election delivered to the Company no later than
the date specified by the Committee, to defer receipt of all or a portion of the
cash compensation otherwise due to such Participant. The amount of the deferred
compensation shall be converted to a Deferred Unit Award using the Fair Market
Value of the shares of Stock on the date immediately prior to the date the cash
compensation would otherwise be paid.
9.02 Terms and Conditions. At the time the Participant makes a deferred
--------------------
compensation election, the Committee shall direct the Company to enter into an
Agreement with the Participant which sets forth the terms and conditions of
deferral, including the timing of payment and any vesting schedule. During the
term of deferral, the Participant's Deferred Unit Award will be credited with
Dividend Equivalent Rights.
9.03 Form of Payment. Deferred Unit Award shall be settled in shares of
---------------
Stock, in a single installment or installments. A fractional share of a
Deferred Unit shall be settled in cash. The Company shall issue, or cause to be
issued, shares of Stock to the Participant.
13
<PAGE>
9.04 Shareholder Rights. No Participant shall, as a result of receiving a
------------------
Deferred Unit Award, have any rights as a shareholder until and to the extent
that the Deferred Unit Award is settled by the issuance of shares of Stock.
After the Deferred Unit Award is settled in shares of Stock, a Participant will
have all the rights of a shareholder with respect to such shares of Stock.
9.05 Nontransferability. A Deferred Unit Award shall be nontransferable
------------------
except by will or by the laws of descent and distribution. No right or interest
of a Participant in any Deferred Unit Award shall be liable for, or subject to,
any lien, obligation, or liability of such Participant.
ARTICLE X - DIVIDEND EQUIVALENT RIGHTS
--------------------------------------
10.01 Awards. In accordance with the provisions of Article IV, the
------
Committee will designate each individual to whom an award of Dividend Equivalent
Rights is to be made. An award of Dividend Equivalent Rights entitles the
recipient to receive credits based on cash dividends that would have been paid
on the shares of Stock specified in the award of Dividend Equivalent Rights (or
other award to which it relates) if such shares had been issued to and held by
the recipient. An award of Dividend Equivalent Rights may be granted hereunder
to any Participant as a component of another award or as a freestanding award.
The terms and conditions of Dividend Equivalent Rights shall be specified in the
Agreement. Dividend equivalents credited to the holder of a Dividend Equivalent
Rights may be paid currently or may be deemed to be reinvested in additional
shares of Stock, which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of reinvestment or such
other price as may then apply under a dividend reinvestment plan
14
<PAGE>
sponsored by the Company, if any. Dividend Equivalent Rights granted as a
component of another award may provide that such Dividend Equivalent Rights
shall be settled upon exercise, settlement, or payment of, or lapse of
restrictions on, such other award, and that such Dividend Equivalent Rights
shall expire or be forfeited or annulled under the same conditions as such other
award. Dividend Equivalent Rights granted as a component of another award may
also contain terms and conditions different from such other award.
10.02 Payment. In the discretion of the Committee and as provided in the
-------
Agreement, Dividend Equivalent Rights may be settled in cash, shares of Stock,
or a combination thereof, in a single installment or installments.
10.03 Shareholder Rights. No Participant shall, as a result of receiving an
------------------
award of Dividend Equivalent Rights, have any rights as a shareholder until and
to the extent that the award of Dividend Equivalent Rights is earned and settled
by the issuance of shares of Stock. After an award of Dividend Equivalent Rights
is earned, if settled completely or partially in shares of Stock, a Participant
will have all the rights of a shareholder with respect to such shares of Stock.
The Company shall issue, or cause to be issued, shares of Stock to the
Participant.
10.04 Nontransferability. Unless otherwise provided in the Agreement,
------------------
Dividend Equivalent Rights granted under this Plan shall be nontransferable
except by will or by the laws of descent and distribution. No right or interest
of a Participant in any Dividend Equivalent Rights shall be liable for, or
subject to, any lien, obligation, or liability of such Participant.
15
<PAGE>
ARTICLE XI - CHANGE IN CONTROL PROVISIONS
-----------------------------------------
(a) A "Change in Control" with respect to the Company shall be deemed to
have taken place if any of the following events occurs:
(i) Any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than an Affiliate, a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then outstanding securities;
or
(ii) individuals who, as of July 2, 1997, constitute the Board and
any new director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in clauses
(i) or (iii) of this paragraph) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at least eighty
percent (80%) of the directors then still in office who either were directors as
of July 2, 1997 or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board; or
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with or into any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least sixty percent (60%) of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after
16
<PAGE>
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.
(b) Upon the occurrence of a Change in Control, unless otherwise provided
in an Agreement, each Participant shall have immediate vesting of, and the
immediate right to, exercise all outstanding Options, and any risk of forfeiture
included in any Restricted Unit Award and Dividend Equivalent Rights shall
lapse.
(c) Notwithstanding the foregoing, this Article XI shall cease to apply
after June 29, 1999.
ARTICLE XII - ADJUSTMENT UPON CHANGE IN STOCK
---------------------------------------------
12.01 Adjustments. The maximum number of shares of Stock as to which awards
-----------
may be granted under this Plan, the terms of outstanding awards and the per
individual limitations on the number of shares of Stock for which Options or
other Awards may be granted, shall be adjusted as the Committee shall determine
to be equitably required in the event that (a) the Company (i) effects one or
more stock dividends, stock split-ups, subdivisions or consolidations of shares
or (ii) engages in a transaction to which Section 424 of the Code applies or (b)
there occurs any other event which, in the judgment of the Committee,
necessitates such action. Any determination made under this Article XII by the
Committee shall be final and conclusive.
12.02 Mergers or Other Corporate Transactions. Upon consummation of a
---------------------------------------
consolidation, merger, or sale of all or substantially all of the assets of the
Company in which outstanding shares of Stock are exchanged for securities, cash,
or other property of an
17
<PAGE>
unrelated corporation or business entity, or in the event of a liquidation of
the Company (in each case, a "Transaction"), the Board, or the board of
directors of any corporation assuming the obligations of the Company, may, in
its discretion, take any one or more of the following actions, as to outstanding
Awards: (i) provide that such Awards shall be assumed or equivalent awards shall
be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to the Participants, provide that all Awards
will terminate immediately prior to the consummation of the Transaction. In the
event that, pursuant to clause (ii) above, Awards will terminate immediately
prior to the consummation of the Transaction, all Awards, other than Options,
shall be fully settled in cash or in kind at such appropriate consideration as
determined by the Committee in its sole discretion after taking into account the
consideration payable per share of Stock pursuant to the business combination
(the "Merger Price") and all Options shall be fully settled, in cash or in kind,
in an amount equal to the difference between (A) the Merger Price times the
number of shares of Stock subject to such outstanding Options (to the extent
then exercisable at prices not in excess of the Merger Price) and (B) the
aggregate exercise price of all such outstanding Options; provided, however,
that each Participant shall be permitted, within a specified period determined
by the Committee prior to the consummation of the Transaction, to exercise all
outstanding Options, including those that are not then exercisable, subject to
the consummation of the Transaction.
ARTICLE XIII - COMPLIANCE WITH LAW
AND APPROVAL OF REGULATORY BODIES
---------------------------------
No Option shall be exercisable, no shares of Stock shall be issued, no
certificates for shares of Stock shall be delivered, and no payment shall be
made under this Plan except in compliance with all applicable federal and state
laws and regulations (including, without
18
<PAGE>
limitation, withholding tax requirements), any listing agreement to which the
Company is a party, and the rules of all domestic stock exchanges on which the
Stock may be listed. The Company shall have the right to rely on an opinion of
its counsel as to such compliance. Any share certificate issued to evidence a
share of Stock when a Share Award is granted, or for which an Option is
exercised or a Restricted Unit Award or Deferred Unit Award settled, may bear
such legends and statements as the Committee may deem advisable to assure
compliance with federal and state laws and regulations. No Option shall be
exercisable, no Share Award shall be granted, no share of Stock shall be issued,
no certificate for shares of Stock shall be delivered, and no payment shall be
made under this Plan until the Company has obtained such consent or approval as
the Committee may deem advisable from regulatory bodies having jurisdiction over
such matters.
ARTICLE XIV - GENERAL PROVISIONS
--------------------------------
14.01 Effect on Employment and Service. Neither the adoption of this Plan,
--------------------------------
its operation, nor any documents describing or referring to this Plan (or any
part thereof) shall confer upon any individual any right to continue in the
employ or service of the Company or an Affiliate or in any way affect any right
and power of the Company or an Affiliate to terminate the employment or service
of any individual at any time with or without assigning a reason therefor.
14.02 Unfunded Plan. The Plan, insofar as it provides for grants, shall be
-------------
unfunded, and the Company shall not be required to segregate any assets that may
at any time be represented by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that
19
<PAGE>
may be created pursuant to this Plan. No such obligation of the Company shall be
deemed to be secured by any pledge of, or other encumbrance on, any property of
the Company.
14.03 Rules of Construction. Headings are given to the articles and
---------------------
sections of this Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.
ARTICLE XV - AMENDMENT
----------------------
The Board may amend or terminate this Plan from time to time; provided,
however, that no amendment may become effective until shareholder approval is
obtained if (i) the amendment increases the aggregate number of shares of Stock
that may be issued under the Plan, (ii) the amendment changes the class of
individuals eligible to become Participants or (iii) the amendment materially
increases the benefits that may be provided under the Plan. No amendment shall,
without a Participant's consent, adversely affect any rights of such Participant
under any award outstanding at the time such amendment is made. Nothing in this
Article XV shall limit the Board's authority to take any action pursuant to
Section 12.02.
ARTICLE XVI - EFFECTIVE DATE OF PLAN
------------------------------------
Options, Restricted Unit Awards, Deferred Unit Awards and Dividend
Equivalent Rights may be granted under this Plan upon its adoption by the Board,
provided that no such Award shall be effective or exercisable unless this Plan
is approved by the holders of a majority of the votes present or represented and
entitled to be cast by the Company's shareholders, voting either in person or by
proxy, at a duly held shareholders' meeting. Share
20
<PAGE>
Awards may be granted under this Plan upon the later of its adoption by the
Board or its approval by shareholders in accordance with the preceding sentence.
ARTICLE XVII - GOVERNING LAW
----------------------------
The Plan and all Awards and action taken thereunder shall be governed by,
and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles.
<PAGE>
Proposed Amendment - to be effective upon approval by the stockholders
5.01 Shares Issued. Subject to adjustment as provided in Section 12.01,
-------------
the aggregate number of shares of Stock available from time to time for all
Awards under this Plan shall be such aggregate number of shares as does not
exceed 7.5% of the shares of Stock outstanding, which figure shall be calculated
on a "fully diluted basis." For purposes of this Section 5.01, "fully diluted
basis" shall mean the assumed conversion into shares of Stock of all outstanding
shares of the Company's Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock, the assumed exercise of all outstanding options to
acquire shares of Stock and the assumed conversion into shares of Stock of all
units of partnership interest in Patriot American Hospitality Partnership, L.P.
and Wyndham International Operating Partnership, L.P. that are subject to
redemption. For purposes of this limitation, if any portion of an Award is
forfeited, canceled, reacquired by the Company, satisfied without the issuance
of Stock or otherwise terminated, the shares of Stock underlying such portion of
the Award shall be added back to the shares of Stock available for issuance
under the Plan. Notwithstanding the foregoing, no reduction in the number of
shares of Stock actually outstanding (as calculated on a fully diluted basis)
shall affect the validity of any Awards previously granted under this Plan or
affect the validity of or restrict the issuance of shares of Stock pursuant to
Awards previously granted under this Plan. Notwithstanding the foregoing, the
maximum number of shares of Stock for which Restricted Unit Awards, Share Awards
and Deferred Unit Awards may be granted under this Plan during the term of the
Plan shall not exceed forty percent (40%) of the shares of stock issuable under
the Plan, and the maximum number of shares of Stock with respect to which Awards
may be granted during any calendar year period to any Participant shall not
exceed 1,500,000 shares, subject to adjustment as provided in Section 12.01.
Shares of Stock to be delivered under the Plan shall be made available by
the Company from authorized and unissued shares of Stock issued by the Company
directly to the holder.
<PAGE>
- --------------------------------------------------------------------------------
PROXY WYNDHAM INTERNATIONAL, INC.
1950 Stemmons Freeway, Suite, 6001, Dallas, Texas 75207
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF WYNDHAM INTERNATIONAL, INC.
I hereby appoint Carla S. Moreland, as proxyholder, with the full power of
substitution and resubstitution, and hereby authorize her to represent me and to
vote for me as designated on the reverse side, at the annual meeting (the
"Annual Meeting") of Wyndham International, Inc., a Delaware corporation
("Wyndham"), to be held on May 26, 2000, at 10:00 a.m., Dallas time, at the
Wyndham Anatole at 2201 Stemmons Freeway, Dallas, Texas 75207, and at any
postponement or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
below, or if no direction is indicated below, in accordance with the
recommendation of the Board of Directors on each proposal. This proxy will be
voted, in the discretion of the proxyholder, upon other business as may properly
come before the annual Meeting or any adjournment thereof.
Please vote and sign on other side and return promptly in the enclosed envelope.
<PAGE>
---------------------------------
WHEN PROXY IS OKAYED PLEASE SIGN
& DATE IT ABOVE
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
WYNDHAM INTERNATIONAL, INC.
May 26, 2000
Class A
Please detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
A [X] Please mark your __ |
votes as in this | |
example |
_______
FOR ALL nominees
listed at right WITHHOLD AUTHORITY
(except as marked to to vote for all
the contrary) nominees listed at right
(1) THE
ELECTION OF [_] [_]
DIRECTORS:
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "For All" box and write that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
Nominees for Class A-1 Directors:
Leonard Boxer
Fred J. Kleisner
Rolf E. Ruhfus
Nominee for Class C-1 Director:
Paul Fribourg
(2) The proposal to amend Wyndham's 1997 Incentive Plan, as amended and
restated as of June 29, 1999, to increase the number of shares available
for issuance pursuant to awards made under such plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) The proposal to ratify the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as Wyndham's independent auditors for the 2000
fiscal year.
FOR AGAINST ABSTAIN
[_] [_] [_]
The undersigned hereby acknowledges receipt of the Proxy Statement dated
April 28, 2000 and hereby revokes any proxy or proxies heretofore given to vote
at said meeting or any adjournment thereof.
(PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED SELF-ADDRESSED AND
POSTMARKED ENVELOPE)
SIGNATURES Dated: SIGNATURES Dated:
-------------- ---------- ------------- ----------
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
PROXY WYNDHAM INTERNATIONAL, INC.
1950 Stemmons Freeway, Suite, 6001, Dallas, Texas 75207
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF WYNDHAM INTERNATIONAL, INC.
I hereby appoint Carla S. Moreland, as proxyholder, with the full power of
substitution and resubstitution, and hereby authorize her to represent me and to
vote for me as designated on the reverse side, at the annual meeting (the
"Annual Meeting") of Wyndham International, Inc., a Delaware corporation
("Wyndham"), to be held on May 26, 2000, at 10:00 a.m., Dallas time, at the
Wyndham Anatole at 2201 Stemmons Freeway, Dallas, Texas 75207, and at any
postponement or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
below, or if no direction is indicated below, in accordance with the
recommendation of the Board of Directors on each proposal. This proxy will be
voted, in the discretion of the proxyholder, upon other business as may properly
come before the annual Meeting or any adjournment thereof.
Please vote and sign on other side and return promptly in the enclosed envelope.
<PAGE>
---------------------------------
WHEN PROXY IS OKAYED PLEASE SIGN
& DATE IT ABOVE
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
WYNDHAM INTERNATIONAL, INC.
May 26, 2000
Series B
Please detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
A [X] Please mark your __ |
votes as in this | |
example |
_______
FOR ALL nominees
listed at right WITHHOLD AUTHORITY
(except as marked to to vote for all
the contrary) nominees listed at right
(1) THE
ELECTION OF [_] [_]
DIRECTORS:
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "For All" box and write that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
Nominees for Class B-1 Directors:
Marc J. Rowan
Scott M. Sperling
Nominee for Class C-1 Director:
Paul Fribourg
(2) The proposal to amend Wyndham's 1997 Incentive Plan, as amended and
restated as of June 29, 1999, to increase the number of shares available
for issuance pursuant to awards made under such plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) The proposal to ratify the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as Wyndham's independent auditors for the 2000
fiscal year.
FOR AGAINST ABSTAIN
[_] [_] [_]
The undersigned hereby acknowledges receipt of the Proxy Statement dated
April 28, 2000 and hereby revokes any proxy or proxies heretofore given to vote
at said meeting or any adjournment thereof.
(PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED SELF-ADDRESSED AND
POSTMARKED ENVELOPE)
SIGNATURES Dated: SIGNATURES Dated:
-------------- ---------- -------------- ----------
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
