<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1996
Commission file number: 1-10881
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
Gaylord Entertainment Company
401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Gaylord Entertainment Company
One Gaylord Drive
Nashville, TN 37214
<PAGE> 2
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE> 3
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1996 AND 1995
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
Statement of Net Assets Available for Benefits - December 31, 1996 2
Statement of Net Assets Available for Benefits - December 31, 1995 3
Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 1996 4
NOTES TO FINANCIAL STATEMENTS 5
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a - Schedule of Assets Held for Investment 13
Purposes at December 31, 1996
Schedule II: Item 27d - Schedule of Reportable Transactions for 16
for the Year Ended December 31, 1996
</TABLE>
<PAGE> 4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Gaylord Entertainment Company
401(k) Savings Plan:
We have audited the accompanying statements of net assets available for
benefits of the GAYLORD ENTERTAINMENT COMPANY 401(K) SAVINGS PLAN as of
December 31, 1996 and 1995, and the related statements of changes in net assets
available for benefits for the year ended December 31, 1996. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Gaylord
Entertainment Company 401(k) Savings Plan as of December 31, 1996 and 1995, and
the changes in net assets available for benefits for the year ended December
31, 1996, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes (Schedule I) and reportable transactions (Schedule
II) are presented for the purpose of additional analysis and are not a required
part of the basic financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The fund
information in the statement of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets and
changes in net assets for each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly
stated, in all material respects, in relation to the basic financial statements
taken as a whole.
Nashville, Tennessee
June 13, 1997 ARTHUR ANDERSEN LLP
- 1 -
<PAGE> 5
- 2 -
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
CORE STOCK STABLE BALANCED AGGRESSIVE INTERNATIONAL
FUND VALUE FUND FUND STOCK FUND STOCK FUND BOND FUND
---------- ------------ -------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments $18,317 $16,238 $13,868 $8,962 $1,921 $1,608
Cash and cash equivalents - - - - - -
Loans to Participants - - - - - -
Investment income adjustment
receivable - 219 - - - -
Interest and dividend income
receivable 731 - - - - 8
Transfers due among funds 160 121 124 135 36 23
------- ------- ------- ------ ------ ------
Total Assets 19,208 16,578 13,992 9,097 1,957 1,639
------- ------- ------- ------ ------ ------
LIABILITIES:
Accrued administrative expenses - - - - - -
------- ------- ------- ------ ------ ------
Total Liabilities - - - - - -
------- ------- ------- ------ ------ ------
NET ASSETS AVAILABLE FOR BENEFITS $19,208 $16,578 $13,992 $9,097 $1,957 $1,639
======= ======= ======= ====== ====== ======
<CAPTION>
GET STOCK LOANS TO CONTROL
FUND PARTICIPANTS ACCOUNT TOTAL
--------- ------------ ------- -------
<S> <C> <C> <C> <C>
ASSETS:
Investments $4,936 $ - $ - $65,850
Cash and cash equivalents 7 - 817 824
Loans to Participants - 1,759 - 1,759
Investment income adjustment
receivable - - - 219
Interest and dividend income
receivable - - - 739
Transfers due among funds 73 - (672) -
------ ------ ----- -------
Total Assets 5,016 1,759 145 69,391
------ ------ ----- -------
LIABILITIES:
Accrued administrative expenses - - 11 11
------ ------ ----- -------
Total Liabilities - - 11 11
------ ------ ----- -------
NET ASSETS AVAILABLE FOR BENEFITS $5,016 $1,759 $ 134 $69,380
====== ====== ===== =======
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE> 6
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GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
EQUITY STABLE BALANCED GET STOCK CONTROL
FUND VALUE FUND FUND FUND ACCOUNT TOTAL
------- ---------- -------- --------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments $20,302 $22,417 $13,618 $5,073 $ - $61,410
Cash and cash equivalents - - - 15 612 627
Investment income adjustment receivable - 266 - - - 266
Transfers due among funds 200 159 127 65 (551) -
------- ------- ------- ------ ---- -------
NET ASSETS AVAILABLE FOR BENEFITS $20,502 $22,842 $13,745 $5,153 $ 61 $62,303
======= ======= ======= ====== ==== =======
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE> 7
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GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
CORE STOCK
(EQUITY) STABLE BALANCED AGGRESSIVE INTERNATIONAL
FUND VALUE FUND FUND STOCK FUND STOCK FUND BOND FUND
---------- ---------- -------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Participants $ 1,690 $ 1,131 $ 1,160 $ 866 $ 218 $ 128
Employer, net of forfeitures 577 536 422 297 72 45
------- ------- ------- ------ ------- ------
Total contributions 2,267 1,667 1,582 1,163 290 173
------- ------- ------- ------ ------- ------
Investment income:
Net appreciation (depreciation)
in fair value of investments 1,496 765 884 280 129 32
Interest 1,883 349 284 - - -
Dividends 150 - 494 307 84 69
------- ------- ------- ------ ------- ------
Total investment income 3,529 1,114 1,662 587 213 101
------- ------- ------- ------ ------- ------
Total additions 5,796 2,781 3,244 1,750 503 274
------- ------- ------- ------ ------- ------
DEDUCTIONS:
Benefits paid to participants 1,617 4,009 1,247 118 38 19
Other 21 88 22 9 - 9
------- ------- ------- ------ ------- ------
Total deductions 1,638 4,097 1,269 127 38 28
------- ------- ------- ------ ------- ------
LOANS TO PARTICIPANTS (406) (439) (330) (252) (36) (45)
INTERFUND TRANSFERS (5,046) (4,509) (1,398) 7,726 1,528 1,438
------- ------- ------- ------ ------- ------
NET INCREASE (DECREASE) (1,294) (6,264) 247 9,097 1,957 1,639
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 20,502 22,842 13,745 - - -
------- ------- ------- ------ ------- ------
End of year $19,208 $16,578 $13,992 $9,097 $ 1,957 $1,639
======= ======= ======= ====== ======= ======
<Capiton>
GET STOCK LOANS TO CONTROL
FUND PARTICIPANTS ACCOUNT TOTAL
--------- ------------ ------- -----
<S> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Participants $ 651 $ - $ - $ 5,844
Employer, net of forfeitures 224 - (62) 2,111
------ ------ ----- -------
Total contributions 875 - (62) 7,955
------ ------ ----- -------
Investment income:
Net appreciation (depreciation)
in fair value of investments (978) - - 2,608
Interest - 62 - 2,578
Dividends 313 - - 1,417
------ ------ ----- -------
Total investment income (665) 62 - 6,603
------ ------ ----- -------
Total additions 210 62 (62) 14,558
------ ------ ----- -------
DEDUCTIONS:
Benefits paid to participants 404 12 (125) 7,339
Other 3 - (10) 142
------ ------ ----- -------
Total deductions 407 12 (135) 7,481
------ ------ ----- -------
LOANS TO PARTICIPANTS (201) 1,709 -
INTERFUND TRANSFERS 261 - - -
------ ------ ----- -------
NET INCREASE (DECREASE) (137) 1,759 73 7,077
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 5,153 - 61 62,303
------ ------ ----- -------
End of year $5,016 $1,759 $ 134 $69,380
====== ====== ===== =======
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE> 8
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GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. DESCRIPTION OF PLAN
The following summary of the Gaylord Entertainment Company 401(k) Savings
Plan (the "Plan") is provided for general information purposes.
Participants should refer to the Plan Document for more complete
information.
PURPOSE OF THE PLAN
The Plan was established October 1, 1980, to encourage and assist employees
in adopting a regular savings program and to help provide additional
security for their retirement. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Prior to January 1, 1992, the Plan was named "The Retirement Savings Plan
and Trust for Employees of The Oklahoma Publishing Company and Affiliated
Corporations (the 'Prior Plan')" and participants in the Prior Plan included
employees of both the Oklahoma Publishing Company ("OPUBCO") and the Gaylord
Entertainment Company (the "Company"). As a result of reorganization on
October 30, 1991, in which both OPUBCO and the Company participated,
effective July 1, 1992, the net assets related to participating employees of
OPUBCO were transferred to the newly established "Retirement Savings Plan
and Trust for the Employees of The Oklahoma Publishing Company," and the
Prior Plan was restated and named "The Retirement Savings Plan and Trust for
Employees of Gaylord Entertainment Company and Affiliated and Adopting
Corporations."
Since that time, the Plan has been amended and restated both on January 1,
1995 and April 1, 1996. As part of the April 1, 1996 amendment and
restatement, the Plan became the Gaylord Entertainment 401(k) Savings Plan.
ELIGIBILITY
An employee is eligible to participate in the Plan upon the earliest of
January 1, April 1, July 1 or October 1 (the "entry dates") as of which such
employee has both completed one thousand hours of service during an
eligibility computation period, as defined by the Plan, and attained the age
of twenty-one years. Classes of employees excluded from participation in
the Plan include (see the Plan Document for more complete information): (1)
certain employees covered by collective bargaining agreements, (2) casual
employees, (3) leased employees and (4) hourly employees who were hired on
an "on-call" basis. Participation in the Plan is voluntary. In order to
participate, an eligible employee must apply for participation on the Plan's
application for enrollment form at least twenty days prior to the entry date
on which the employee desires to begin participation.
<PAGE> 9
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CONTRIBUTIONS AND VESTING
A participant may elect to make tax deferred contributions in amounts
between one and sixteen percent of his or her compensation through regular
payroll deferrals (the "compensation reduction contribution"). For each
compensation reduction contribution, the Company makes a contribution (the
"employer matching contribution") to the Plan in an amount equal to fifty
percent of that portion of the participant's compensation reduction
contribution which is not in excess of six percent of the participant's
compensation.
Participants are fully vested at all times in their compensation reduction
contributions, rollover contributions and any earnings thereon.
Participants vest in the employer matching contributions beginning at forty
percent after completing two years of service, as defined by the Plan,
increasing by twenty percent with each additional year of service. As such,
participants with five or more years of service are fully vested in their
entire account balances. Participants retiring at the normal retirement age
or becoming permanently and totally disabled, as defined by the Plan, are
fully vested in their entire account balances. The forfeited balances of
terminated participants' nonvested accounts are used to reduce future
employer contributions. In general, the Plan has the right to limit
employee and employer contributions in order to comply with ERISA and the
Internal Revenue Service.
INVESTMENT OPTIONS
Participants may direct the investment of all contributions and prior
account balances into funds established by the Plan. Participants can
allocate their investments in 1% increments in seven investment funds:
<TABLE>
<S> <C>
Core Stock Fund- Invests in shares of a fund of a registered investment company
(formerly the Equity that invests primarily in a portfolio of common stocks and
Fund) American Depository Receipts.
Stable Value Fund- Invests in a combination of guaranteed annuity contracts with
unaffiliated insurance companies and shares of funds of
registered investment companies that invest primarily in
insurance contracts, bonds, savings investments and
money market instruments of insurance companies and banks.
Balanced Fund- Invests in shares of a fund of a registered investment company
that invests in a combination of stocks and convertible securities.
Aggressive Stock Invests in shares of a fund of a registered investment company
Fund - that invests primarily in common stocks, emphasizing small to
medium-size emerging-growth companies.
</TABLE>
<PAGE> 10
- 7 -
<TABLE>
<S> <C>
International Stock Invests in shares of a fund of a registered investment company
Fund - that invests primarily in common stocks and convertibles of foreign
issuers.
Bond Fund - Invests in shares of a fund of a registered investment company
that invests in debt securities, including U.S. government securities,
corporate bonds, mortgage related securities and securities denominated
in foreign currencies.
GET Stock Fund- Invests in shares of Gaylord Entertainment Company, Class A common stock.
</TABLE>
Participants can elect to change their investment allocations at any time by
use of a telephone voice response system maintained for such purpose.
Participants are limited to allocate a maximum of 30% of their contributions
and account balances to the GET Stock Fund.
DISTRIBUTIONS
Participants may withdraw their vested account balances upon retirement,
death, disability, termination of employment, or early retirement as defined
by the Plan. Participants can choose to have the amount of their vested
account balances either paid to them in lump sum, rolled over directly into
another qualified Plan or individual retirement account, or used to purchase
an annuity with an unaffiliated insurance company. Participants with vested
account balances less than $3,500 automatically receive lump sum
distributions.
In cases of financial hardship (as defined by the Plan) or where a
participant has attained the age of 59-1/2 years, a participant may elect,
while still in the employment of the Company, to withdraw all or part of the
amount invested in his or her account from compensation reduction
contributions. Cases of financial hardship are reviewed and approved by the
Plan's Benefits Trust Committee or its designee in accordance with the
applicable provisions of ERISA. A participant may elect at any time to
withdraw amounts that were contributed to the Plan as a rollover
contribution (subject to certain limitations of the Plan).
Upon the death of a participant who has an Hour of Service prior to January
1, 1992 and prior to the start of his or her benefit payments, the
participant's spouse (if any) is eligible to receive benefits in the form of
a qualified pre-retirement survivor annuity. If, at the time of death, a
participant's vested account balance was less than $3,500, a lump sum
distribution, rather than a qualified pre-retirement survivor annuity, is
made to the eligible surviving spouse.
<PAGE> 11
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TRUSTEE
The assets of the Plan are administered under the terms of trust agreements
between the Company and NationsBank of Texas, N.A. and Charles Schwab Trust
Company.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to terminate the Plan at any time subject to the provisions
of ERISA. In the event the Plan is terminated, participants vest fully in
their account balances.
ADMINISTRATIVE EXPENSES
Substantially all of the administrative expenses of the Plan are paid by the
Company with the exception of certain administrative costs related to
transactions initiated by participants.
LOANS TO PARTICIPANTS
Beginning April 1, 1996 a participant may borrow the lesser of $50,000 or
50% of his or her vested account balance with a minimum loan amount of
$1,000. Loans are repayable through payroll deductions over periods ranging
up to 60 months unless the loan is to be used to acquire, construct or
substantially reconstruct the participant's principal residence. Each loan
bears an interest rate of prime plus 2% and is fixed over the life of the
note. The interest rate at December 31, 1996 was 10.25%.
PLAN AMENDMENTS
Effective April 1, 1996, as discussed above, the Plan was amended and
restated to: require Participants to pay certain administrative costs
related to transactions they have initiated, provide for daily Participant
account valuations, require Participants to exhaust their entitlement to
loans under the Plan before applying for a hardship distribution, increase
the number of loans that may be outstanding at any one time from one to
three and implement pass-through voting of GET stock held by the Plan's
Trust.
<PAGE> 12
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual basis of
accounting. The preparation of the financial statements in conformity with
generally accepted accounting principles requires the Plan's management to
use estimates and assumptions that affect the accompanying financial
statements and disclosures. Actual results could differ from these
estimates.
INCOME RECOGNITION
Interest income is recorded as earned on the accrual basis. Dividend income
is recorded on the ex-dividend date.
INVESTMENT VALUATION
Cash equivalents are stated at cost, which approximates market value.
Marketable securities are stated at fair value. Securities traded on a
national securities exchange are valued at the last reported sales price on
the last business day of the year. Investments traded in the
over-the-counter market and listed securities for which no sale was reported
on the last day of the plan year are valued at the last reported bid price.
Investment contracts are reported at fair value as of December 31, 1996 and
1995, respectively, in accordance with SOP 94-4.
NET APPRECIATION IN FAIR VALUE OF INVESTMENTS
Net realized and unrealized appreciation (depreciation) is recorded in the
accompanying statement of changes in net assets available for benefits, with
fund information, as net appreciation (depreciation) in fair value of
investments.
3. CONTRACTS WITH INSURANCE COMPANIES
The Plan has investment contracts with unaffiliated companies which expire
in various years and typically reinvest funds from expiring contracts into
new investment contracts. These contracts pay a stated rate of interest and
require that all interest be reinvested in the respective contracts. One
such contact was an investment with the Executive Life Insurance Company
("Executive Life").
On April 11, 1991, the Insurance Commissioner of California placed Executive
Life into conservatorship. On February 9, 1994, the Retirement Savings Plan
Committee elected, on behalf of the Plan, to opt into a Court appointed
Rehabilitation Plan (the "Rehabilitation Plan") whereby the original
investment in Executive Life would be replaced by an "Interest Only Pension
GIC Contract" with Aurora National Life Assurance ("Aurora"). This
restructured contract pays a fixed rate of interest, provides for recovery
of the majority of the investment's original principal value and accrued
interest as of April 1, 1991, and extends the original maturity of the
investment to October, 1998.
<PAGE> 13
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Under the terms of the Rehabilitation Plan, amounts distributed by Aurora
were restricted from access and deposited in the name of the Plan into the
Executive Life Insurance Company Rehabilitation Plan Holdback Trust (the
"Holdback Trust") as appointed by the Superior Court of California. During
fiscal 1996 this investment in the Holdback Trust was distributed to the
Plan.
As of December 31, 1996, the amount equal to the difference between the
original carrying value of the Executive Life contract and the contract
value of the rehabilitated investment with Aurora is carried as an
investment income adjustment receivable in the accompanying statement of net
assets. Subsequent to year-end an amendment was made to the Plan allowing a
one-time contribution from the Company in the amount of the investment
income adjustment receivable. On April 18, 1997 the Plan received this one
time contribution from the Company.
4. INVESTMENTS IN EXCESS OF 5% OF NET ASSETS
As of December 31, 1996 and 1995, the following investments were in excess
of 5% of net assets:
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
John Hancock Diversified Stock Fund (1K) $18,317 $20,302
Dodge and Cox Balanced Fund 13,868 -
Firstar Trust Company Institutional Investors GIC Fund 13,661 12,946
AIM Constellation Fund 8,962 -
Gaylord Entertainment Company,
Class A common stock 4,936 5,073
American Balanced Fund - 13,618
Capital Trust Company Capital Preservation Fund - 3,760
Massachusetts Mutual Life Insurance group annuity contract - 2,624
</TABLE>
5. TAX STATUS
The Plan obtained its latest determination letter in June 1995, in which the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code.
As discussed in Note 1, the Plan was amended and restated on April 1, 1996.
Accordingly, the Plan has submitted a determination letter request to the
Internal Revenue Service. The Plan Administrator and the Plan's tax counsel
believe that the Plan is currently being operated in compliance with
applicable requirements of the Internal Revenue Code and that a favorable
determination will be received from the Internal Revenue Service.
Therefore, they believe that the Plan was qualified and the related trust
was tax exempt as of the financial statement date.
<PAGE> 14
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6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
As discussed in Note 2, the financial statements of the Plan, as prepared
under generally accepted accounting principles, record distributions to
participants as deductions when paid. The Department of Labor requires that
amounts allocated to participants who have elected to withdraw from the
Plan, but have not yet been paid, be recorded as a liability on the Form
5500.
The following is a reconciliation of the net assets at December 31, 1996 and
1995, per the financial statements to the Form 5500.
<TABLE>
DECEMBER 31, DECEMBER 31,
1996 1995
(IN THOUSANDS) (IN THOUSANDS)
-------------- --------------
<S> <C> <C>
Net assets available for benefits per the
financial statements $69,380 $62,303
Deduct: Amounts allocated to withdrawing
participants (125) (1,090)
------- -------
Net assets available for benefits per the Form
5500 $69,255 $61,213
======= =======
</TABLE>
The following is a reconciliation of benefits paid for 1996 and 1995, per
the financial statements to the Form 5500.
<TABLE>
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
(IN THOUSANDS) (IN THOUSANDS)
------------------ ------------------
<S> <C> <C>
Benefits paid to participants per the
financial statements $ 7,338 $4,493
Add: Amounts allocated to withdrawing
participants at December 31, 1996 and
1995 125 1,090
Deduct: Amounts allocated to
withdrawing participants at December
31, 1995 and 1994 (1,090) (672)
------- ------
Benefits paid per the Form 5500 $ 6,373 $4,911
======= ======
</TABLE>
7. SUBSEQUENT EVENTS
INTERNAL REVENUE SERVICE EXAMINATION
The Plan is currently undergoing an examination by the Internal Revenue
Service for the plan years ending December 31, 1995 and 1994. Management
believes the ultimate outcome of the examination will not have a material
effect on the Plan's financial position.
<PAGE> 15
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PROPOSED MERGER OF COMPANY
On February 9, 1997, the Company entered into an agreement (the "Merger
Agreement") with Westinghouse Electric Corporation ("Westinghouse") and G
Acquisition Corp., a wholly owned subsidiary of Westinghouse ("Sub"),
pursuant to which Sub will be merged (the "Merger") with and into the
Company, with the Company continuing as the surviving corporation and a
wholly owned subsidiary of Westinghouse. Prior to the Merger, the Company
will be restructured (the "Restructuring") so that certain assets and
liabilities that are part of the Company's hospitality, attractions, music,
television and radio businesses, including all of the Company's long-term
debt, as well as the Country Music Television cable networks outside of the
United States and Canada ("CMT International") and the management of and
option to acquire Z Music, Inc., will be transferred to or retained by a
wholly owned subsidiary of the Company ("New Gaylord"), or one of New
Gaylord's wholly owned subsidiaries. As a result of the Restructuring and
the Merger, substantially all of the assets of the Company's cable networks
business (other than CMT International and Z Music), consisting primarily of
The Nashville Network and the domestic and Canadian operations of Country
Music Television, and certain other related business (collectively, the
"Cable Networks Business"), and certain liabilities related thereto will be
held by the Company or one of its subsidiaries (other than New Gaylord) and
will be acquired by Westinghouse in the Merger.
Following the Restructuring and on the day prior to the effective time of
the Merger, the Company will distribute (the "Distribution") pro rata to its
stockholders all of the outstanding capital stock of New Gaylord. As a
result of the Distribution, each holder of record of the Company's common
stock on the record date for Distribution will receive a number of shares of
New Gaylord common stock equal to one-third the number of shares of the
Company's common stock held by such holder, and cash in lieu of any
fractional shares.
In the Merger, the Company's stockholders will receive shares of
Westinghouse common stock valued at the agreed upon transaction price of
$1,550,000,000, at a per share consideration to be determined in accordance
with the Merger Agreement that will be based upon the market price of the
Westinghouse common stock and the number of outstanding shares of the
Company's common stock; provided that Westinghouse will not be required to
issue more than 110 million shares of Westinghouse common stock (or 88
million shares in the event that Westinghouse consummates the anticipated
separation of its media and industrial businesses into two companies prior
to the effective time of the Merger). The Distribution and the Merger are
subject to the satisfaction or waiver or a number of conditions, including
Company stockholder approval of the Merger, certain regulatory approvals,
and Internal Revenue Service rulings that the Distribution, Merger, and
certain of the transactions comprising the Restructuring will be tax-free
transactions.
As a result of these transactions, the Plan will be assigned to New Gaylord.
The cable networks employ approximately 10% of the total participants in
the Plan. The Company will continue to maintain the plan for those
participants. No part of the Plan or its assets will be merged with any
benefit plan of Westinghouse.
<PAGE> 16
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Schedule I
Page 1 of 3
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUER, BORROWER, LESSOR, INCLUDING MATURITY DATE, CURRENT
OR SIMILAR PARTY RATE OF INTEREST, OR COLLATERAL COST VALUE
- ------------------------------------- ------------------------------- ------- -------
<S> <C> <C> <C>
Equity Fund:
- ------------
Investments:
John Hancock Diversified
Stock Fund (1K) Equity separate account $16,951 $18,317
------- -------
Total in Equity Fund 16,951 18,317
------- -------
Stable Value Fund:
- ------------------
Investments:
Aurora National Life Group annuity contract,
Insurance Company 5.61%, 9/3/98 (a) 2,567 2,567
Firstar Trust Company Common and collective trust
Institutional Investors GIC fund
Fund 13,671 13,671
------- -------
Total in Stable Value Fund 16,238 16,238
------- -------
Balanced Fund:
- --------------
Investments:
Dodge and Cox Balanced Fund Equity and fixed income
mutual fund 13,148 13,868
------- -------
Total in Balanced Fund 13,148 13,868
------- -------
</TABLE>
(a) See Note 3 to financial statements.
(continued)
The accompanying notes to financial statements are an integral part of this
supplemental schedule.
<PAGE> 17
- 14 -
Schedule I
Page 2 of 3
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1996
(IN THOUSANDS)
(continued)
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUER, BORROWER, LESSOR, INCLUDING MATURITY DATE, CURRENT
OR SIMILAR PARTY RATE OF INTEREST, OR COLLATERAL COST VALUE
- ------------------------------------- ------------------------------- ------- -------
<S> <C> <C> <C>
Aggressive Stock Fund:
- ----------------------
Investments:
AIM Constellation Fund Equity mutual fund $ 8,701 $ 8,962
------- -------
Total in Aggressive Stock
Fund 8,701 8,962
------- -------
International Equity Fund:
- --------------------------
Investments:
American AAdvantage Common stocks and
International Equity Fund- convertibles of foreign
Institutional Class issuers 1,806 1,921
------- -------
Total in International
Equity Fund 1,806 1,921
------- -------
Bond Fund:
- ----------
Investments:
PIMCO Total Return Fund Debt securities and fixed
income mutual fund 1,579 1,608
------- -------
Total in Bond Fund 1,579 1,608
------- -------
</TABLE>
(continued)
The accompanying notes to financial statements are an integral part of this
supplemental schedule.
<PAGE> 18
- 15 -
Schedule I
Page 3 of 3
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1996
(IN THOUSANDS)
(continued)
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE,
IDENTITY OF ISSUER, BORROWER, LESSOR, RATE OF INTEREST CURRENT
OR SIMILAR PARTY OR COLLATERAL COST VALUE
------------------------------------- ---------------------------- ------- -------
<S> <C> <C> <C>
GET Stock Fund:
---------------
Investments:
* Gaylord Entertainment Common stock, class A,
Company 215,782 shares $ 5,488 $ 4,936
------- -------
Total in GET Stock Fund 5,488 4,936
------- -------
Loans to Participants:
----------------------
* Various Loans to participants - interest
rate of 10.25% 1,759 1,759
------- -------
Total Loans to Participants 1,759 1,759
------- -------
Total Assets Held for
Investment Purposes $65,670 $67,609
======= =======
</TABLE>
(*) Represents a party in interest.
The accompanying notes to financial statements are an integral part of this
supplemental schedule.
<PAGE> 19
- 16 -
Schedule II
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
PURCHASES SALES
---------------------- -------------------------------------------------------
IDENTITY OF ISSUER,
BORROWER, LESSOR OR DESCRIPTION OF NUMBER OF PURCHASE NUMBER OF
SIMILAR PARTY INVESTMENT TRANSACTIONS PRICE TRANSACTIONS SELLING PRICE COST OF ASSETS NET GAIN
- ---------------------- --------------------- ------------ -------- ------------ ------------- -------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
AIM Constellation Fund Common Stock Fund 124 $ 9,558,129 56 $ 864,521 $ 859,594 $ 4,927
Dodge and Cox Balanced Fund Common and Collective
Trust Fund 102 16,649,388 251 3,516,117 3,503,115 13,002
Firstar Institutional Common and Collective
Investors GIC Fund Trust Fund 121 5,359,136 166 5,424,264 1,547,512 3,876,752
John Hancock Diversified
Stock Fund (1K) Equity Separate 125 2,805,774 258 7,832,144 7,764,855 67,289
Account
</TABLE>
The accompanying notes to financial statements are an
integral part of this supplemental schedule.
<PAGE> 20
The following Exhibit is included herein:
No. Item Sequential Page
- --- ---- ---------------
23 Consent of Independent Public Accountants
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Benefit Trust Committee has duly caused this Annual Report to be signed on its
behalf by the undersigned hereunto duly authorized.
GAYLORD ENTERTAINMENT COMPANY
401 (k) SAVINGS PLAN
By: /s/ Rod Connor
--------------------------
Rod Connor
Benefit Trust Committee
June 30, 1997
<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated June 13, 1997 included in this Annual Report on Form 11-K of
the Gaylord Entertainment Company 401(k) Savings Plan into Gaylord
Entertainment Company's previously filed Registration Statement File Number
33-65626.
Nashville, Tennessee
June 30, 1997
ARTHUR ANDERSEN LLP
