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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 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GAYLORD ENTERTAINMENT COMPANY
(Name of Registrant as Specified In Its Charter)
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(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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[GAYLORD ENTERTAINMENT
COMPANY LOGO]
April 2, 2001
Dear Gaylord Entertainment Company Stockholder:
You are cordially invited to attend the 2001 Annual Meeting of Stockholders
of Gaylord Entertainment Company.
Details of the business that will be conducted at the Annual Meeting are
given in the attached Notice of Annual Meeting, Proxy Statement, and proxy card.
It is important that your shares be represented and voted at the Annual
Meeting. If you do not plan to attend the Annual Meeting, please complete, sign,
and return the enclosed proxy card promptly in the accompanying reply envelope.
If you decide to attend the Annual Meeting and wish to change your proxy vote,
you may do so automatically by voting in person at the Annual Meeting.
We look forward to seeing you at the Annual Meeting.
Sincerely,
E. K. Gaylord II
Chairman of the Board
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GAYLORD ENTERTAINMENT COMPANY
ONE GAYLORD DRIVE
NASHVILLE, TENNESSEE 37214
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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TIME.......................... 10:00 a.m. on Thursday, May 3, 2001
PLACE......................... Opryland Hotel
2800 Opryland Drive
Nashville, Tennessee
ITEMS OF BUSINESS............. (1) To approve an amendment to the company's
Certificate of Incorporation eliminating
classes of directors and providing for
the election of the entire board
annually. The Amendment is set forth in
Appendix A to this proxy statement.
(2) To elect three members of the Board of
Directors for terms of: (i) one year, if
the amendment to the Certificate of
Incorporation is approved, or (ii) three
years, if the amendment is not approved.
(3) To approve Arthur Andersen LLP as the
independent accountants for fiscal year
2001.
(4) To transact such other business as may
properly come before the Meeting and any
adjournment or postponement.
RECORD DATE................... You can vote if you were a stockholder of
record on March 12, 2001.
ANNUAL REPORT................. Our 2000 Annual Report, which is not part of
the proxy soliciting material, is also
enclosed.
PROXY VOTING.................. It is important that your shares be
represented and voted at the Meeting. Please
MARK, SIGN, DATE, AND PROMPTLY RETURN the
enclosed proxy card in the postage-paid
envelope.
A proxy may be revoked at any time prior to its exercise at the Meeting.
By Order of the Board of Directors,
Nashville, Tennessee THOMAS J. SHERRARD
April 2, 2001 Secretary
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PROXY STATEMENT
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We have sent you this proxy statement and the accompanying proxy card because
the Board of Directors of Gaylord Entertainment Company ("Gaylord," the
"Company," "we," or "us") is soliciting your proxy to vote at the 2001 Annual
Meeting of Stockholders on May 3, 2001. This mailing commenced on or about April
2, 2001.
TABLE OF CONTENTS
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QUESTIONS AND ANSWERS............................................................1
ITEM 1 - AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION........3
ITEM 2 - ELECTION OF THREE DIRECTORS.............................................4
NOMINEES FOR DIRECTOR.......................................................4
CONTINUING DIRECTORS........................................................5
BOARD AND COMMITTEE MEMBERSHIP..............................................6
DIRECTOR COMPENSATION.......................................................8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.................8
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............................8
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS....................................9
ITEM 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS..................9
BENEFICIAL OWNERSHIP.............................................................10
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS, AND 5% STOCKHOLDERS....10
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.....................13
EXECUTIVE COMPENSATION...........................................................14
SUMMARY COMPENSATION TABLE..................................................14
OPTION GRANTS IN 2000.......................................................16
TOTAL OPTIONS EXERCISED IN 2000 AND YEAR-END OPTION VALUES..................16
PENSION PLANS...............................................................17
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.....................20
EMPLOYMENT, SEVERANCE, AND CHANGE IN CONTROL ARRANGEMENTS........................23
AUDIT COMMITTEE REPORT...........................................................24
AUDIT FIRM FEES..................................................................25
PERFORMANCE GRAPH................................................................26
APPENDIX A - AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
APPENDIX B - AUDIT COMMITTEE CHARTER
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QUESTIONS AND ANSWERS
WHO CAN VOTE?
You can vote if you were a stockholder of our Common Stock, par value $.01 per
share, at the close of business on the record date, March 12, 2001. On the
record date, there were 33,418,522 common shares outstanding.
WHAT MAY I VOTE ON?
You may vote on:
- - An amendment to the Company's Certificate of Incorporation eliminating
classes of directors and providing for the election of the entire board
annually;
- - The election of three nominees as directors for terms that expire in:
(i) 2002, if the amendment to the Certificate of Incorporation is
approved, or (ii) 2004, if the amendment is not approved; and
- - The ratification of the appointment of independent accountants to audit
our financial statements for our fiscal year 2001.
HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSALS?
The Board recommends that you vote:
- - FOR the amendment to the Company's Certificate of Incorporation;
- - FOR each nominee to the Board; and
- - FOR the appointment of the independent auditors.
HOW DO I CAST MY VOTE?
If you hold the shares directly in your own name, you can vote in person at the
meeting or by mailing in the accompanying proxy card. If you vote by proxy, the
proxies identified on the back of the proxy card will vote your shares in
accordance with your instructions. If you submit a proxy card without giving
specific instructions, the proxies will vote your shares as recommended by the
Board of Directors.
If you hold your shares indirectly in the name of a bank, broker, or other
nominee, you should receive instructions from that nominee describing the
procedure for how you can vote your shares.
HOW DO I CHANGE MY VOTE?
You can revoke your proxy card by:
- - Submitting a new proxy card;
- - Giving written notice to the Secretary of the Company stating that you
are revoking your proxy card; or
- - Attending the Annual Meeting and voting your shares in person.
WHO WILL COUNT THE VOTE?
Representatives of our transfer agent, SunTrust Bank, will count the vote and
act as the independent inspectors of the election.
IS MY VOTE CONFIDENTIAL?
Yes. All proxy cards and vote tabulations that identify an individual
stockholder are kept confidential. Except to meet legal requirements, your vote
will not be disclosed to the Company unless:
- - A proxy solicitation is contested;
- - You write comments on the proxy card; or
- - You authorize disclosure of your vote.
This policy does not prevent the Company from ascertaining which stockholders
have voted or from taking actions designed to encourage stockholder voting.
HOW WILL THE PROXIES VOTE ON ANY OTHER BUSINESS BROUGHT UP AT THE MEETING?
We are not aware of any other business to be considered at the Annual Meeting.
If any other business is proposed and we decide to permit it to be presented at
the meeting, your signed proxy card authorizes the proxies to use their judgment
to vote on these other matters.
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WHAT IS A QUORUM?
A quorum is the number of shares that must be present to hold the Annual
Meeting. A majority of the outstanding shares of the Company stock, present in
person or represented by proxy, makes a quorum. If you submit a valid proxy card
or attend the meeting, your shares will be counted to determine whether there is
a quorum.
Abstentions and "broker non-votes" count towards the quorum. Broker non-votes
occur when a nominee (such as a bank or a broker) that holds shares on behalf of
a beneficial owner does not vote on a particular proposal because the nominee
did not receive voting instructions from the beneficial owner and the nominee
does not have discretionary voting power to vote the shares on the proposal.
WHAT VOTE IS NECESSARY TO PASS THE ITEMS OF BUSINESS AT THE ANNUAL MEETING?
The proposed amendment to the Restated Certificate of Incorporation requires the
affirmative vote of the holders of at least 66-2/3% of the shares which are cast
on the proposed amendment.
Directors must be elected by a plurality of the votes of the shares present (in
person or by proxy) and entitled to vote for the election of directors.
All other matters shall be determined based upon the vote of a majority of the
shares present (in person or by proxy) and entitled to vote on the matter.
Abstentions are, in effect, votes against proposals presented to stockholders
other than the election of directors. Broker non-votes have no effect on
proposals submitted to stockholders.
WHAT SHARES ARE INCLUDED ON MY PROXY CARD?
Your proxy card represents all shares registered in your name with the transfer
agent on the record date, including those shares owned pursuant to the Company's
Employee Stock Purchase Plan.
HOW ARE SHARES IN THE 401(K) SAVINGS PLAN VOTED?
Participants in the 401(k) Savings Plan are entitled to vote the shares held
under the Plan in their name. The proxy results for the shares held in the
401(k) Plan will be tabulated by our transfer agent and reported to the 401(k)
Plan trustee. The trustee will vote the shares at the meeting through the
custodian holding the shares.
WHEN ARE STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING DUE?
If you would like to submit a proposal for inclusion in our proxy statement for
the 2002 Annual Meeting, your proposal must be in writing and be received by us
at our principal executive offices by December 3, 2001.
If you want to bring business before the 2002 Annual Meeting which is not the
subject of a proposal submitted for inclusion in the proxy statement, our bylaws
require that you notify us in writing by March 4, 2002, but not before February
5, 2002. If you bring business before the 2002 annual meeting but the presiding
officer of that meeting determines that you did not notify us of that business
within the required time period, then the presiding officer will declare to the
meeting that your business was not properly brought before the meeting and your
business will not be transacted at that meeting.
HOW IS THIS PROXY SOLICITATION BEING CONDUCTED?
The Company will bear the cost of soliciting proxies for the Annual Meeting. In
addition to the use of mail, our officers may solicit proxies by telephone,
e-mail, or facsimile transmission. Upon request, we will reimburse brokers,
dealers, banks, and trustees, or their nominees, for reasonable expenses
incurred by them in forwarding proxy material to beneficial owners of shares of
our common stock.
CAN I GET ACCOMMODATIONS WHILE ATTENDING THE MEETING?
Yes. The Opryland Hotel has reserved a limited number of rooms at a rate of
$[TBD], single and double occupancy, per night. If you would like a room, please
make reservations by [TBD], 2001, by calling Corporate Relations at (615)
316-6003.
WILL THERE BE ANY ARRANGEMENTS FOR PARKING AT THE HOTEL?
[TBD]
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ITEM 1 - AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION
Item 1 is an amendment to the Company's Restated Certificate of Incorporation to
declassify the Board of Directors and to provide for annual election of all
directors.
The Company's Restated Certificate of Incorporation includes a provision, first
adopted in 1991 as part of the Certificate of Incorporation of the Company's
predecessor, that establishes a classified Board of Directors. This means that
one-third of the directors are elected annually, each for a three-year term.
The adoption by the Company--and many other major corporations--of a classified
board reflected widespread concern over hostile and non-negotiated attempts to
acquire corporations to the disadvantage of stockholders. A classified board was
widely viewed as discouraging proxy contests for the election of directors, or
acquisitions of substantial blocks of stock, by a person or group seeking to
acquire control of a company, because the extended, and staggered, terms of
directors could operate to prevent changing the composition of, or the
acquisition of control of, the board in a relatively short period of time. A
classified board was also viewed as promoting stability and continuity among a
corporation's directors.
Some investors have, however, come to view classified boards as having the
effect of insulating directors from a corporation's stockholders, and a number
of major corporations have determined that, regardless of the merits of a
classified board in deterring coercive takeover attempts, principles of good
corporate governance dictate that all directors of a corporation be elected
annually. The Board of Directors of the Company agrees with this conclusion.
Accordingly, the Board of Directors has unanimously approved, and recommends to
stockholders that they consider and approve, a proposal to amend the Company's
Restated Certificate of Incorporation to declassify the Board and to provide for
the annual election of all directors. The proposed amendment would not reduce
the term of any director elected prior to its effectiveness. It would, however,
if approved by the stockholders, apply to the directors elected at this 2001
Annual Meeting. Therefore if the proposed amendment is approved by the
stockholders, then (i) the terms of six directors--three directors elected at
the 1999 Annual Meeting, and three elected at this 2001 Annual Meeting--would
end with the 2002 Annual Meeting, and (ii) each director would be required to
stand for election at the 2003 Annual Meeting.
The text of the proposed amendment, which would replace Article VII of the
Company's current Restated Certificate of Incorporation, is attached as Appendix
A. Under Article IX of the Company's Restated Certificate of Incorporation, the
affirmative vote of the holders of at least 66-2/3% of the shares which are cast
on the proposed amendment are required for its adoption.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEM 1.
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ITEM 2 - ELECTION OF THREE DIRECTOR
Item 2 is the election of three directors to the Board of Directors.
Our Board currently has eight members. Under the Company's existing Certificate
of Incorporation, the Board is divided into three classes, with directors
holding office for staggered terms of three years and one of the classes elected
each year to succeed the directors whose terms are expiring.
The Board expects all of the nominees below to be available for election. In
case any nominee is not available, the proxies can vote your shares for a
substitute if you have submitted a proxy card.
The directors whose terms expire at the 2001 Annual Meeting are Edward L.
Gaylord, Joe M. Rodgers and Craig L. Leipold. Under the existing Certificate of
Incorporation they are the Class I directors. They have each been nominated to
serve as directors with a term expiring at the 2002 annual meeting except that
if the amendment to the Company's Certificate of Incorporation presented in Item
1 of this proxy statement is not approved, then they will serve as Class I
directors for a three-year term expiring in 2004.
Directors will be elected by a plurality of the shares present (in person or by
proxy) and entitled to vote for the election of directors.
Information follows about the age and business experience of each nominee and of
each of the continuing directors who will complete their respective terms at the
annual meetings in 2002 or 2003.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE THREE
NOMINEES.
NOMINEES FOR DIRECTOR
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TO BE ELECTED TO A TERM EXPIRING AT (I) THE 2002 ANNUAL
MEETING IF THE RESTATED CERTIFICATE OF INCORPORATION IS
AMENDED UNDER ITEM 1, OR (II) THE 2004 ANNUAL MEETING,
AS CLASS I DIRECTORS, IF ITEM 1 IS NOT APPROVED
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EDWARD L. GAYLORD Director since 1946. Age 81.
Mr. Edward L. Gaylord served as President and Chief Executive Officer of the
Company from 1974 until October 1991, and served as Chairman of the Board until
May 1999. Mr. Gaylord is currently serving as Chairman Emeritus. Mr. Gaylord is
also the chairman, chief executive officer, publisher and a director of The
Oklahoma Publishing Company, also known as OPUBCO, a newspaper publishing
company and an affiliate of the Company. Mr. Gaylord is active in numerous civic
and charitable organizations, and is (among others) chairman of the Oklahoma
Industries Authority, director and past president of the State Fair of Oklahoma,
chairman and director of The Oklahoma Medical Research Foundation, and chairman
and director of the National Cowboy Hall of Fame & Western Heritage Center. Mr.
Gaylord is the father of Mr. E. K. Gaylord II and Mrs. Christine Gaylord
Everest, both of whom are directors of the Company.
JOE M. RODGERS Director since 1991. Age 67.
Mr. Rodgers is chairman of The JMR Group, a private investment company
specializing in merchant and investment banking. Mr. Rodgers served as chairman
of the board and chief executive officer of Berlitz International, Inc., a
foreign language services company, from December 1991 until February 1993. From
1985 to 1989, Mr. Rodgers served as United States Ambassador to France. Mr.
Rodgers is also a director of AMR Corporation/American Airlines, Inc., Lafarge
Corporation, SunTrust Bank, Nashville, N.A., Towne Services, Inc., and Tractor
Supply Company.
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CRAIG L. LEIPOLD Director since 1999. Age 48.
Mr. Leipold is chairman and a governor of the Nashville Predators, a National
Hockey League expansion team that began its inaugural season in 1998. From 1989
until May 1999, he served as chairman and chief executive officer of
LaCrosse-Rainfair Safety Company. Before his association with LaCrosse-Rainfair,
he was founder and president of Ameritel Corporation of Neenah, Wisconsin. Mr.
Leipold also serves as a director of LaCrosse Footwear, Inc., and he is a member
of the Board of Governors of the National Hockey League. His civic activities
include service as a trustee of Hendrix College, a director of the Nashville
Area Chamber of Commerce, and a past chairman of the Wisconsin Sports Authority.
CONTINUING DIRECTORS
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TERM EXPIRING AT THE 2002 ANNUAL MEETING
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MARTIN C. DICKINSON Director since 1974. Age 65.
Mr. Dickinson is a retired officer of Scripps Bank in La Jolla, California, and
was a director of that bank from 1990 until 2000. Mr. Dickinson is also a
director of OPUBCO, the Broadmoor Hotel, H.G. Fenton Company, and the National
Cowboy Hall of Fame & Western Heritage Center. He is the chairman of The Scripps
Foundation for Medicines and Science.
CHRISTINE GAYLORD EVEREST Director since 1976. Age 49.
Mrs. Everest has served as vice president of OPUBCO since June 1996. She served
as senior assistant secretary of OPUBCO from October 1991 until June 1994 and as
secretary of OPUBCO from June 1994 until 1996. Mrs. Everest is also a director
of OPUBCO, a member of the Board of Regents of the University of Oklahoma, a
Trustee of University Health Partners, and a member of the Corporate Board of
the Presbyterian Health Foundation. Mrs. Everest is the daughter of Mr. Edward
L. Gaylord and the sister of Mr. E. K. Gaylord II, both of whom are directors of
the Company.
HOWARD L. WOOD Director since 1999. Age 61.
Mr. Wood is a co-founder and director of Charter Communications, Inc., an
operator of cable television properties in the United States. From 1993 until
December 1999, he served as vice chairman of Charter. Before the formation of
Charter in 1992, Mr. Wood was president and chief executive officer of Cencom
Cable Associates, Inc., an operator of cable television properties that he
joined in 1987. Prior to that time, Mr. Wood, a certified public accountant, was
with Arthur Andersen & Co., where he served as partner-in-charge of the St.
Louis tax division from 1973 until joining Cencom. Mr. Wood is a director of
Data Research, Inc.. He currently serves as a commissioner of the Missouri
Department of Conservation.
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TERM EXPIRING AT THE 2003 ANNUAL MEETING
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E. K. GAYLORD II Director since 1977. Age 43.
Mr. E. K. Gaylord II has served as the Company's Chairman of the Board since May
1999. He served as Vice-Chairman of the Board from May 1996 to May 1999. Mr.
Gaylord has been the president of OPUBCO since June 1994 and is also a director
of OPUBCO. Mr. Gaylord owns and operates the Lazy E Ranch in Guthrie, Oklahoma,
and is a director of the National Cowboy Hall of Fame & Western Heritage Center.
Mr. Gaylord is the son of Mr. Edward L. Gaylord and the brother of Mrs.
Christine Gaylord Everest, both of whom are directors of the Company.
MARY AGNES WILDEROTTER Director since 1997. Age 46.
Ms. Wilderotter has been the president and chief executive officer and a
director of Wink Communications, Inc., an interactive telecommunications and
media concern, since January 1997. Prior to January 1997, Ms. Wilderotter served
in varying capacities with AT&T Corporation, including executive vice president
of national operations for AT&T Wireless Services Inc. and chief executive
officer of AT&T's aviation communication division from August 1995 until January
1997. She also held senior management positions with McCaw Cellular from 1991
until August 1995. Ms. Wilderotter is a director of Airborne Express, Electric
Lightwave Company, American Tower Corporation, and The McClatchy Company. Ms.
Wilderotter is the daughter of Dennis J. Sullivan, Jr., President and Chief
Executive Officer of the Company.
DAVID MAISEL Age 38.
Mr. Maisel was appointed to the Company's Board of Directors in March 2001 to
fill a vacancy in the Class III directors. His term will expire at the 2003
annual meeting. Since September 1999 Mr. Maisel has been executive vice
president for corporate development at UPC Media, a European provider of cable
television, interactive television, and broadband internet service. From June
1998 until July 1999 Mr. Maisel served as president of Livent, Inc., a live
theatrical entertainment company organized under the laws of Canada. He was a
partner with Michael Ovitz/CKE Associates from April 1997 until May 1998, and he
served as director of strategic planning and corporate development for The Walt
Disney Company from October 1995 through March 1997.
BOARD AND COMMITTEE MEMBERSHIP
The Board of Directors held five regular and six special meetings during 2000.
The Board has two principal standing committees, the Audit Committee and the
Compensation Committee. The following table identifies the membership of the
committees (with each chairman denoted by an asterisk) and states the number of
committee meetings held in 2000.
AUDIT COMPENSATION
NAME COMMITTEE COMMITTEE
---- --------- ---------
Martin C. Dickinson X* X
Craig L. Leipold X
Joe M. Rodgers X X*
Mary Agnes Wilderotter X
Howard L. Wood X X
Meetings Held in 2000 4 7
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No director attended fewer than 75% of the aggregate meetings of the Board and
of the committees of which the director was a member in 2000, except that Mary
Agnes Wilderotter attended 72% of aggregate meetings.
THE AUDIT COMMITTEE
The Audit Committee is responsible for:
- - reviewing the financial information provided to stockholders and
others, the systems of internal controls which management and the Board
of Directors have established, the audit process, and the legal and
ethical conduct of the Company and its employees;
- - meeting with our independent accountants and with our director of
internal audit concerning, among other things, the scope of audits and
reports; and
- - recommending the annual appointment of independent accountants.
The Compensation Committee
The Compensation Committee is responsible for:
- - reviewing and approving all compensation and benefits for executive
officers;
- - advising on the setting of compensation for senior executives whose
compensation is not otherwise set by the Committee;
- - administering the Company's 1997 Omnibus Stock Option and Incentive
Plan (the "1997 Omnibus Plan");
- - advising management regarding employee benefit plans;
- - reviewing and recommending compensation for directors; and
- - publishing an annual Report on Executive Compensation for the
stockholders.
NOMINATING PROCEDURES
The Board does not have a standing nominating committee, but the Compensation
Committee has recommended candidates to the Board in the past. Also, the Board
as a whole may function as a nominating committee to select management's
nominees for election to the Board. The Board will also consider nominees
recommended by the stockholders.
If stockholders wish to nominate candidates, they must comply with the advance
notice procedure contained in our bylaws. Our Secretary must receive timely
notice of the nomination in proper written form.
For a stockholder's notice to be timely, it must be delivered to or mailed and
received at the principal executive offices of the Corporation (a) in the case
of a nomination to be voted on at an annual meeting, not less than 60 days nor
more than 90 days before the anniversary date of the immediately preceding
annual meeting of stockholders, except that if the annual meeting is called for
a date that is not within 30 days before or after the anniversary date, for the
stockholder's notice to be timely, it must be received not later than the close
of business on the tenth day after the day on which notice of the date of the
annual meeting was mailed or public disclosure of the date of the annual meeting
was made, whichever first occurs; and (b) in the case of a nomination to be
voted on at a special meeting of stockholders called for the purpose of electing
directors, not later than the close of business on the tenth day after the day
on which notice of the date of the special meeting was mailed or public
disclosure of the date of the special meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must set
forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the person's name, age, business address and
residence address, (ii) their person's principal occupation or employment, (iii)
the class or series and number of shares of the Company's capital stock which
are owned beneficially or of record by the person and (iv) any other information
relating to the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with solicitations
of proxies for election of directors pursuant to Section 14 of the Exchange Act,
and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the stockholder name and record address, (ii)
the class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by such stockholder, (iii) a
description of all arrangements or understandings between the stockholder and
each proposed nominee and any other person (including their names) pursuant to
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which the nomination(s) are to be made by that stockholder, (iv) a
representation that the stockholder intends to appear in person or by proxy at
the meeting to nominate the persons named in the notice and (v) any other
information relating to the stockholder that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder. The
stockholder's notice must be accompanied by a written consent of each proposed
nominee to being named as a nominee and to serve as a director if elected.
A stockholder's nomination will be disregarded if the presiding officer of the
meeting determines that a person was not nominated in accordance with this
nomination procedure.
DIRECTOR COMPENSATION
The Compensation Committee sets the compensation for directors. During 2000,
Board members who were not employed by the Company received the following
compensation:
- - Annual Board retainer: $30,000
- - Annual committee retainer: $5,000 per committee ($6,000 for committee
chairmen)
- - Per-meeting fee for attendance at special meetings of the Board or of a
committee: $1,500 (on November 16, 2000, the Compensation Committee
resolved that Directors shall not receive compensation for attendance
at special meetings held by conference call).
The Company has established a deferred compensation plan whereby non-employee
directors may defer their cash compensation until their retirement or
resignation from the Board. Currently none of the directors participate in the
deferred compensation plan.
Directors who are employed by the Company do not receive additional compensation
for their service as directors. All directors are reimbursed for their expenses
incurred in attending meetings. In addition, the Compensation Committee may vote
to grant stock options to directors. On February 17, 2000, Mr. Dickinson, Mrs.
Everest, Mr. Edward Gaylord, Mr. Leipold, Mr. Rodgers, Ms. Wilderotter and Mr.
Wood were each awarded options to purchase 7,000 shares of common stock at an
exercise price of $27.875 per share. All of these options are fully vested and
have terms of ten years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is composed of Mr.
Dickinson, Mr. Leipold, Mr. Rodgers, Ms. Wilderotter, and Mr. Wood. Mr.
Dickinson is also a director and stockholder of OPUBCO. Edward L. Gaylord, a
director of the Company, and E.K. Gaylord II, a director and executive officer
of the Company, are also directors, executive officers, and stockholders of
OPUBCO. There are no compensation committee interlocks or insider participation
in compensation decisions that the Company is required to report.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In addition to the relationships described in the previous section, which are
incorporated into this section by reference, certain other relationships and
transactions should be disclosed.
E.K. Gaylord II is an executive officer of the Company and of OPUBCO. E.K.
Gaylord II, Edward L. Gaylord, Christine Gaylord Everest, and Martin C.
Dickinson are directors of the Company and of OPUBCO, and voting trustees of a
voting trust that controls OPUBCO.
On March 9, 2001, the Company sold its stock and equity interests in five of its
businesses to OPUBCO for a purchase price of $22.00 million in cash. The
businesses sold were Gaylord Production Company, Gaylord Films, Pandora Films,
Gaylord Sports Management Group, and Gaylord Event Television. Since four of the
Company's directors also are directors of OPUBCO, and voting trustees of a
voting trust that controls OPUBCO, the transaction was reviewed and approved by
a special committee of the independent directors of the Company. The
8
13
Company received an appraisal from a firm that specializes in valuations related
to films, entertainment and service businesses as well as a fairness opinion
from an investment bank.
Craig L. Leipold has been a director of the Company since February 1999 and,
together with members of his immediate family, owns an 80.1% interest in
Nashville Hockey Club Limited Partnership, the limited partnership that owns the
Nashville Predators. The Company owns the remaining 19.9% interest in the
limited partnership. In November 1999, the Company entered into a Naming Rights
Agreement with the limited partnership whereby the Company purchased the right
to name the Nashville Arena as the "Gaylord Entertainment Center" and to place
certain advertising within the arena. Under the agreement, which has a 20-year
term, the Company is required to make annual payments of $2,050,000, subject to
a 5% annual increase, and to purchase a minimum number of tickets to Predators
games each year.
David B. Jones, an executive officer of the Company, was granted an
interest-free secured loan of up to $1,500,000 by the Company in November 1999
to assist Mr. Jones in purchasing a residence in Nashville, Tennessee. The
largest aggregate amount of indebtedness outstanding under the loan agreement
during 2000 was $740,000. The loan was repaid in full on August 15, 2000.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Under the Securities Exchange Act of 1934, as amended, and certain rules
promulgated thereunder, the Company is required to disclose in this Proxy
Statement the involvement of our directors with certain past legal proceedings.
These include bankruptcy proceedings for a corporation of which a director of
the Company was an executive officer at or within two years before the filing of
the corporation's bankruptcy petition. In November 1998, Livent Inc., of which
Mr. Maisel was president, filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. In July 1999, the United States
Bankruptcy Court for the Southern District of New York approved the sale of
substantially all of Livent's assets to SFX Entertainment, Inc.
ITEM 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Item 3 is the ratification of the appointment by the Board of Directors, upon
the recommendation of the Audit Committee, of Arthur Andersen LLP as our
independent accountants for 2001. Arthur Andersen LLP has served as our
independent accountants since 1983.
A representative of Arthur Andersen LLP will be present at the Annual Meeting.
The representative will be available to respond to your questions and may make a
statement if he or she desires. Although stockholder ratification of this
appointment is not required, our management believes that it is desirable. If
this appointment is not ratified, the Board will consider such fact as it deems
appropriate.
The affirmative vote of a majority of the shares present (in person or by proxy)
and entitled to vote on this proposal is required for adoption.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEM 3.
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BENEFICIAL OWNERSHIP
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS, AND 5% STOCKHOLDERS
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table describes the beneficial ownership of each current director,
each of the executive officers named in the Summary Compensation Table beginning
on page 14, and the executive officers and directors as a group. Unless
otherwise indicated in the notes, the information is given as of March 12, 2001
(the record date), and includes shares in which the director or executive
officer may be deemed to have a beneficial interest, including stock options
which are exercisable within 60 days of the record date.
Each director and executive officer has sole voting and investment power over
the shares listed in the table next to his or her name except as indicated in
the footnotes.
NUMBER OF SHARES PERCENT
NAME BENEFICIALLY OWNED OF CLASS
---- ------------------ --------
Edward L. Gaylord*................................................ 8,711,429(1) 25.4%
Christine Gaylord Everest*........................................ 1,114,730(2) 3.3
E. K. Gaylord II* +............................................... 2,719,101(3) 7.9
Martin C. Dickinson*.............................................. 1,359,156(4) 4.0
Craig L. Leipold*................................................. 40,766(5) **
David Maisel...................................................... 0 **
Joe M. Rodgers*................................................... 112,420(6) **
Mary Agnes Wilderotter*........................................... 53,500(7) **
Howard L. Wood*................................................... 46,385(8) **
Dennis J. Sullivan, Jr. +......................................... 10,000(9) **
David B. Jones +.................................................. 8,794(10) **
Carl W. Kornmeyer +............................................... 44,567(10)(11) **
Denise W. Warren +................................................ 5,000(10) **
All executive officers and directors
as a group (14 persons).................................. 11,878,717(12) 34.7
* Director
+ Named Executive Officer
** Less than 1%
SECURITY OWNERSHIP OF 5% STOCKHOLDERS
The following table describes all persons, other than those persons included in
the prior table, known to the Company who are the beneficial owners of more than
5% of our outstanding shares of common stock.
Beneficial ownership may under certain circumstances include both voting power
and investment power.
This information is provided for reporting purposes only and should not be
construed as an admission of actual beneficial ownership.
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NUMBER OF SHARES PERCENT
NAME BENEFICIALLY OWNED OF CLASS
---- ------------------ --------
Gabelli Funds, Inc., and certain other persons
named in footnote 13..................................... 6,027,741(13) 17.6%
One Corporate Center
Rye, NY 10580-1434
The Oklahoma Publishing Company ("OPUBCO")........................ 2,103,766(14) 6.1
OPUBCO Voting Trust............................................... 2,103,766(14) 6.1
GFI Company....................................................... 1,843,366(14) 5.4
9000 N. Broadway
Oklahoma City, OK 73114
Edith Gaylord Harper 1995 Revocable Trust......................... 2,133,371(15) 6.2
9000 N. Broadway
Oklahoma City, OK 73114
(1) Includes:
(a) 5,009,644 shares beneficially owned as trustee of the Edward L.
Gaylord Revocable Trust;
(b) 9,500 shares beneficially owned as trustee of the Thelma Gaylord
Irrevocable Trust;
(c) 143,583 shares beneficially owned as trustee of the Edward L.
Gaylord and Thelma F. Gaylord Foundation;
(d) 828,646 shares beneficially owned as trustee for the Mary I.
Gaylord Revocable Living Trust of 1985;
(e) 33,333 shares beneficially owned as a co-trustee of the Mary
Gaylord Foundation;
(f) 262,395 shares beneficially owned by Gayno, Inc., a corporation
controlled by Mr. Gaylord;
(g) 128,625 shares beneficially owned as a co-trustee of The Oklahoman
Foundation;
(h) 260,400 shares owned by OPUBCO, of which Mr. Gaylord is Chairman;
(i) 1,843,366 shares owned by GFI, a corporation wholly owned by
OPUBCO, of which Mr. Gaylord is a director; and
(j) 191,937 shares issuable upon the exercise of options.
Mr. Gaylord has shared voting and investment power with respect to the
shares listed in (e), (g), (h), and (i). Mr. Gaylord disclaims
beneficial ownership of the shares listed in (h) and (i).
(2) Includes:
(a) 849,163 shares owned directly;
(b) 691 shares owned or beneficially owned by Mrs. Everest's husband,
James H. Everest;
(c) 3,675 shares owned as a co-trustee of the Jean I. Everest
Foundation;
(d) 128,625 shares beneficially owned as a co-trustee of The Oklahoman
Foundation; and
(e) 132,576 shares issuable upon the exercise of options.
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Ms. Everest has shared voting and investment power with respect to the
shares listed in (c) and (d); and she has no voting or investment power
with respect to the shares listed in (b). Ms. Everest disclaims
beneficial ownership of the shares listed in (b).
(3) Includes:
(a) 402,500 shares owned directly;
(b) 128,625 shares beneficially owned as a co-trustee of The Oklahoman
Foundation;
(c) 260,400 shares owned by OPUBCO, of which E.K. Gaylord II is
President;
(d) 1,843,366 shares owned by GFI, a corporation wholly owned by
OPUBCO, of which E.K. Gaylord II is President; and
(e) 84,210 shares issuable upon the exercise of options.
E.K. Gaylord has shared voting and investment power with respect to the
shares listed in (b), (c), and (d). Mr. Gaylord disclaims beneficial
ownership of the shares listed in (c) and (d).
(4) Includes:
(a) 600,000 shares beneficially owned as a co-trustee of the Elizabeth
M. Dickinson Trust;
(b) 600,000 shares beneficially owned as president and a director of
the Donald C. Dickinson and Elizabeth M. Dickinson Foundation;
(c) 66,332 shares beneficially owned as the trustee for the Martin C.
Dickinson Revocable Trust;
(d) 560 shares beneficially owned by Mr. Dickinson's wife, Carol D.
Dickinson; and
(e) 92,264 shares issuable upon the exercise of options.
Mr. Dickinson has shared voting and investment power with respect to
the shares listed in (a) and (b); and he has no voting or investment
power with respect to the shares listed in (d). Mr. Dickinson disclaims
beneficial ownership of the shares listed in (d).
(5) Includes:
(a) 1,766 shares owned directly; and
(b) 39,000 shares issuable upon the exercise of options.
(6) Shares issuable upon the exercise of options.
(7) Includes:
(a) 500 shares beneficially owned as a co-trustee of the Wilderotter
Family Trust; and
(b) 53,000 shares issuable upon the exercise of options.
Ms. Wilderotter has shared voting and investment power with respect to
the shares listed in (a).
(8) Includes:
(a) 7,385 shares beneficially owned as trustee and lifetime beneficiary
of the Howard L. Wood Revocable Trust; and
(b) 39,000 shares issuable upon the exercise of options.
(9) Shares issuable upon the exercise of options.
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(10) Effective February 8, 2001, the following named executive officers were
awarded the right to receive the following shares of restricted stock,
all of which were issued after the record date:
David B. Jones 5,000 shares Carl W. Kornmeyer 4,000 shares
David B. Jones 3,500 shares Denise W. Warren 5,000 shares
With the exception of the grant of 3,500 shares to David B. Jones, the
restricted stock vests in 1/3 increments annually, commencing on
February 8, 2003, and is subject to performance-based vesting standards
and will be cancelled if the standards are not satisfied during 2001.
The 3.500 shares granted to Mr. Jones vest in 1/3 increments annually,
commencing on February 8, 2002, and have no performance-based vesting
standards.
(11) Includes:
(a) 719 shares owned directly;
(b) 75 shares owned by Mr. Kornmeyer's wife, Claudia Kornmeyer; and
(c) 39,773 shares issuable upon the exercise of options.
(12) Includes:
(a) 805,478 shares issuable upon the exercise of options; and
(b) 19,500 shares of restricted stock issued after the record date.
(13) Based on information set forth in Amendment No. 11 to Schedule 13D,
filed with the SEC on October 2, 2000, jointly by Gemini Capital
Management Limited ("Gemini"), Gabelli International Limited ("GIL"),
Gabelli International II Limited ("GIL II"), MJG Associates, Inc.,
("MJG"), Gabelli Funds, LLC ("Gabelli Funds"), GAMCO Investors, Inc.,
("GAMCO") (the sole Member of Gabelli Funds), Gabelli Asset Management,
Inc. ("GAMI") (the sole stockholder of GAMCO), Gabelli Group Capital
Partners, Inc. ("Gabelli Partners") (the majority stockholder of GAMI),
Marc J. Gabelli (the majority stockholder, President, and Chief
Investment Officer of Gemini), and Mario J. Gabelli (the majority
stockholder, Chairman of the Board of Directors, and Chief Executive
Officer of Gabelli Partners and GAMI, the sole stockholder and director
of MJG, and Chairman of the Board of Directors and a portfolio manager
of GIL and GIL II). The joint filers reported that GAMCO had sole
voting power with respect to 4,595,941 shares and sole investment power
with respect to 4,687,941 shares; and that Gabelli Partners, GAMI, and
Mario J. Gabelli each had indirect shared power to vote and invest
6,027,741 shares. In addition, the joint filers reported that Gemini
had sole voting and investment power over 16,000 shares, which are not
included in the table, and that Marc J. Gabelli was deemed to have
beneficial ownership of the 16,000 shares held by Gemini.
(14) Based on information set forth in Amendment No. 6 to Schedule 13D,
filed with the SEC on December 5, 2000, jointly by The Oklahoma
Publishing Company Voting Trust ("OPUBCO VT"), The Oklahoma Publishing
Company ("OPUBCO"), GFI Company ("GFI"), and others, and upon
subsequent written representations by OPUBCO VT. The joint filers
reported that OPUBCO VT, by virtue of its control of OPUBCO, has shared
voting and investment power with respect to 260,400 shares held by
OPUBCO and 1,843,366 shares held by GFI, a wholly owned subsidiary of
OPUBCO; that OPUBCO had sole voting and investment power with respect
to 260,400 shares held directly, and shared voting and investment power
with respect to 1,843,366 shares held by GFI; and that GFI has sole
voting and investment power with respect to 1,843,366 shares held
directly.
(15) William J. Ross, and David O. Hogan, the co-trustees of the Edith
Gaylord Harper 1995 Revocable Trust, have [_____] voting and shared
investment power with respect to the shares identified.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our executive
officers and directors and persons who beneficially own more than 10% of the
Company's shares to file reports of ownership and changes in ownership with the
SEC and the New York Stock Exchange.
Based solely on our review of those forms and certain written representations
from reporting persons, we believe that in 2000, our officers, directors, and
greater than 10% beneficial owners were in compliance with all applicable filing
requirements.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table shows the compensation information for
Mr. Sullivan, the Company's President and Chief Executive Officer, for other
individuals who served as chief executive officer at any time during 2000, and
for the four executive officers who were most highly compensated in 2000 (the
"Named Executive Officers").
ANNUAL LONG TERM
COMPENSATION COMPENSATION AWARDS
------------------------------------- -----------------------------
RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS ($) OPTIONS (#) COMPENSATION (1)
------------------ ---- ------ ----- ------------ ---------- ----------- ----------------
Dennis J. Sullivan, Jr.(2) 2000 $177,692 $ 0(3) $ 0 10,000 $ 5,583
President and Chief
Executive Officer
E. K. Gaylord II(4) 2000 420,833 100,000 200,625(5) 22,500 14,403
Chairman of the Board, 1999 290,083 75,000 0 32,000 10,417
President and Chief 1998 156,000 71,177 0 0 7,348
Executive Officer
Terry E. London(6) 2000 262,500 0$35,875 (7) 200,625(5) 22,500(8) 1,017,487(9)
President and Chief 1999 447,917 100,000 0 50,000 27,066
Executive Officer 1998 425,000 232,181 0 0 23,491
David B. Jones 2000 306,250 147,000 51,261 (10) 93,625(5) 10,500 20,079
President, Hospitality 1999 287,083 147,050 0 40,000 16,254
and Attractions Group 1998 166,827 84,635 0 65,000 3,504
Carl W. Kornmeyer 2000 280,800 84,240 53,500(5) 6,000 24,600
President, Music, Media 1999 279,900 334,946 0 20,000 18,181
and Entertainment Group 1998 270,000 163,620 0 0 14,800
Denise W. Warren(12) 2000 192,789 57,854 58,495 (12) 0 65,000 161
Senior Vice President and
Chief Financial Officer
Tim DuBois(13) 2000 404,444 701,130 1,393,750(5) 200,000(14) 554,681(15)
President, Creative
Content Group
(1) Includes contributions by the Company to the Supplemental Deferred
Compensation Plan (the "SUDCOMP Plan") and to the 401(k) Savings Plan
and premiums paid by the Company for group term life insurance. Such
compensation is reflected in the table below.
GROUP TERM LIFE
NAME YEAR SUDCOMP 401(K) INSURANCE PREMIUMS
---- ---- ------- ------ ------------------
Dennis J. Sullivan, Jr. ............ 2000 $ 5,331 $ 0 $ 252
E. K. Gaylord II.................... 2000 10,153 4,250 0
1999 5,617 4,800 0
1998 6,486 862 0
Terry E. London..................... 2000 4,758 3,400 9,329
1999 13,331 4,800 8,935
1998 10,197 4,800 8,494
David B. Jones...................... 2000 9,705 4,250 6,123
1999 7,077 3,684 5,493
1998 0 0 3,504
Carl W. Kornmeyer................... 2000 16,139 2,550 5,911
1999 7,531 4,800 5,850
1998 4,526 4,800 5,474
Denise W. Warren.................... 2000 0 0 161
Tim DuBois.......................... 2000 25,221 0 9,460
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(2) Employed as President and Chief Executive Officer of the Company, on an
interim basis, since September 14, 2000. Mr. Sullivan was paid a base
salary of $300,000 over the six-month term of his employment agreement,
ended March 14, 2001. Since expiration of that employment agreement, he
has continued to serve at the same base salary. [SDH: Confirm via TJS].
(3) Mr. Sullivan is eligible for a cash bonus in an amount up to 70% of the
base salary he received under his employment agreement (i.e. up to
$210,000). Any such bonus will be determined by the Compensation
Committee based 25% each upon the following four factors measured at
the termination of his employment: achievement of cost reductions;
achievement of operating cash flows; completion of financing
arrangements relating to the Florida hotel project; and satisfactory
and timely divestiture of assets identified by the board of directors.
(4) Served as President and Chief Executive Officer of the Company from
July 29, 2000 until September 14, 2000.
(5) The following persons were awarded the following numbers of shares of
restricted stock pursuant to the 1997 Omnibus Plan, to vest in three
annual increments beginning on the first anniversary of grant, subject
to the Company meeting certain performance targets in 2000:
E.K. Gaylord, II 7,500 shares
Terry E. London 7,500 shares
David B. Jones 3,500 shares
Carl W. Kornmeyer 2,000 shares
Tim DuBois 50,000 shares
In the cases of Messrs. Gaylord, Jones, and Kornmeyer, the Company did
not meet the performance target required for 2000 and therefore all of
the shares of restricted stock granted to those persons were cancelled
as of December 31, 2000. In the case of Mr. London, upon his departure
from the Company, the Compensation Committee canceled the specified
performance-based vesting conditions for his restricted stock, which
caused those shares to vest immediately without restriction. In the
case of Mr. DuBois, upon his departure from the Company, his shares of
restricted stock were cancelled pursuant to the terms of his restricted
stock agreement.
(6) Employed as President and Chief Executive Officer of the Company until
July 28, 2000.
(7) Includes a car valued at $33,000 provided to Mr. London as part of his
severance package.
(8) These options terminated effective July 28, 2000 pursuant to Mr.
London's departure from the Company.
(9) Includes $1,000,000 in severance pay.
(10) Includes $39,132 in moving expenses.
(11) Employed by the Company on April 24, 2000.
(12) Includes $52,995 in moving expenses.
(13) Employed as President of the Creative Content Group from February 15,
2000 until September 8, 2000.
(14) Effective September 13, 2000, Mr. DuBois' options were terminated as a
result of his departure from the Company.
(15) Includes $520,000 deferred signing bonus.
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OPTION GRANTS IN 2000
The following table summarizes all stock options the Board granted to the Named
Executive Officers in 2000. Individual grants are listed separately for each
Named Executive Officer
INDIVIDUAL GRANTS (1) POTENTIAL REALIZABLE
------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES EXERCISE EXPIRATION --------------------
NAME GRANTED IN 2000 PRICE DATE 5% 10%
---- ------- ------- ----- ---- -- ---
Dennis J. Sullivan, Jr.. 10,000 1.5% $ 20.3125 9/16/03 $ 32,018 $ 67,234
E. K. Gaylord II........ 22,500 3.4 26.7500 3/20/10 378,516 959,234
Terry E. London......... 22,500(2) 3.4 26.7500 3/20/10 NA(2) NA(2)
David B. Jones.......... 10,500(3) 1.6 26.7500 3/20/10 176,641 447,642
Carl W. Kornmeyer....... 6,000(3) 0.9 26.7500 3/20/10 100,938 255,796
Denise W. Warren........ 65,000(4) 10.0 23.4375 5/09/10 958,082 2,427,967
Tim DuBois.............. 200,000(5) 30.6 26.7500 3/20/10 NA(5) NA(5)
(1) All of the options are non-qualified stock options for common stock
granted pursuant to the 1997 Omnibus Plan, and were granted at the fair
market value on the date of grant. No SARs have been granted.
(2) Options terminated effective July 28, 2000 as a result of Mr. London's
departure from the Company.
(3) Options vest in 1/3 increments annually, commencing on March 20, 2003.
(4) Options vest in 1/3 increments annually, commencing on May 9, 2003.
(5) Options terminated effective September 13, 2000 as a result of Mr.
DuBois' departure from the Company.
TOTAL OPTIONS EXERCISED IN 2000 AND YEAR-END OPTION VALUES
The following table shows options that the Named Executive Officers exercised in
2000 and the value (stock price less exercise price) of the remaining options
held by those executive officers at year-end, using the closing price ($20.8750)
of our common stock on December 31, 2000.
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
ACQUIRED OPTIONS AT 12/31/00 MONEY OPTIONS AT 12/31/00
ON VALUE -------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
Dennis J. Sullivan, Jr -- -- 10,000 0 $5,625 $0
E. K. Gaylord II ..... -- -- 84,210 47,500 0 0
Terry E. London ...... 120,937 $1,988,344 0 0 0 0
David B. Jones ....... -- -- 0 115,500 0 0
Carl W. Kornmeyer .... -- -- 39,773 72,666 2,318 0
Denise W. Warren ..... -- -- 0 65,000 0 0
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PENSION PLANS
Employees of the Company and certain of its subsidiaries who have attained age
21 and completed at least one year of service with more than 1,000 hours of
service are eligible to participate in the Company's defined benefit pension
plan, referred to as the Retirement Plan. Accrued benefits are 100% vested after
five years of service.
Effective January 1, 2001, the Retirement Plan was amended to a cash balance
plan format. The benefit payable to a vested participant upon retirement at age
65, or age 55 with 15 years of service, is equal to the participant's notational
account balance. The account balance is based on a formula using interest and
contribution credits as shown below:
- -------------------------------------------------------------------------------
Beginning of month + (3% x Monthly + Interest = End of month account
account balance compensation) credit balance
- -------------------------------------------------------------------------------
The normal form of benefit is calculated in the form of a lump sum. The
participant may elect or may be required to take, based on marital status,
alternative forms of payment under the Retirement Plan.
"Interest credit" is defined as the product of the previous month's account
balance multiplied by one-twelfth of the interest credit rate.
"Interest credit rate" is defined as the variable rate of interest equal to the
lesser of:
(a) the constant maturities yield for 1-year U.S. Treasury Bills as
reported in the Federal Reserve Bulletin for the preceding month, or
(b) the interest rate on 30-year Treasury securities as specified by the
Commissioner of the Internal Revenue Service for the preceding month.
"Compensation" is defined as a participant's wages, salaries, fees, and other
amounts received for personal services actually rendered in the course of
employment. It excludes severance pay, distributions from any plan of deferred
compensation, amounts realized from the exercise of a nonqualified stock option,
amounts realized when restricted stock (or property) held by the employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture, amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option, and other amounts which received
special tax benefits. Compensation also includes any amounts contributed by the
Company on behalf of an employee either to a nonqualified plan of deferred
compensation or which are not includable in the gross income of the employee due
to Internal Revenue Code Sections 125, 402(e)(3), or 402(h). Compensation in
excess of the statutory compensation limit, which is $170,000 for fiscal year
2001, will be disregarded.
The Retirement Plan has a grandfather clause under which employees who were
active participants in the Retirement Plan before January 1, 2001, may receive
benefits calculated under the provisions of the Retirement Plan in effect before
that date. The benefits of such a grandfathered employee upon retirement will be
equal to the larger of (i) the benefit from the cash balance provisions
described above, and (ii) the benefit from the provisions of the Retirement Plan
in effect prior to January 1, 2001, under which the normal retirement benefit
payable to a vested participant upon retirement at age 65 is equal to the sum
of:
(A) 8.4% of the participant's average annual compensation multiplied by the
participant's years of benefit service, as defined in the Retirement Plan; and
(B) 6.4% of the excess, if any, of the participant's average annual compensation
over the annual integration level, as defined in the Retirement Plan, multiplied
by his or her years of benefit service.
The Company also maintains two non-qualified retirement plans to provide
benefits to certain employees: (i) the Retirement Benefit Restoration Plan (the
"Benefit Restoration Plan") and (ii) the Gaylord Entertainment Company
Supplemental Executive Retirement Plan (the "Mid-Career SERP"). These plans are
not prefunded and the beneficiaries' rights to receive distributions under them
constitute unsecured claims to be paid from the Company's general assets.
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The Benefit Restoration Plan provides a benefit to certain employees to
"replace" benefits lost due to Internal Revenue Code limitations imposed upon
qualified defined benefit pension plans. The benefit is determined by
calculating the Retirement Plan benefit without respect to any limitations
imposed by Section 415 and Section 401(a)(17) of the Internal Revenue Code and
subtracting the benefit payable to the employee from the Retirement Plan. In the
case of an employee who was an active participant in the Retirement Plan before
January 1, 2001, that employee's benefit under the Benefit Restoration Plan will
not be less than the benefit from the provisions of the Benefit Restoration Plan
in effect prior to January 1, 2001.
The Mid-Career SERP, which currently covers only one employee, provides a
monthly benefit to any executive designated as a participant. The benefit is
equal to 3% of average monthly compensation multiplied by the participant's
years of service. This amount is offset by the monthly annuity benefit values
from the (i) Benefit Restoration Plan, (ii) Retirement Plan, (iii) employer
matching contributions to the 401(k) Plan and the SUDCOMP Plan (assuming the
maximum match), (iv) one-half of the annual projected Social Security benefit
payable to the employee, and (v) any pension, profit sharing, retirement,
deferred compensation or similar plan maintained by a previous employer.
The following table shows the combined estimated annual pension payable under
the Retirement Plan and the Benefit Restoration Plan to employees upon
retirement in specified remuneration and years-of-service classifications. The
amounts shown in the table do not include benefits payable from Social Security.
The amount of estimated annual pension is based upon a pension formula which
applies to all participants in the Retirement Plan and the Benefit Restoration
Plan before January 1, 2001. The estimated amounts are based on the assumptions
that (i) payments under the Retirement Plan and the Benefit Restoration plan
will commence upon retirement at age 65 in 2001 in the form of a joint and 100%
survivor annuity, (ii) the integration level is $37,212, and (iii) the
Retirement Plan and the Benefit Restoration Plan will continue in force in their
present form.
PENSION PLAN TABLE
ESTIMATED
FIVE-YEAR ESTIMATED ANNUAL RETIREMENT AND RESTORATION BENEFITS
PAY AT FINAL AVERAGE --------------------------------------------------------------------------------------
AGE 65(1) COMPENSATION(2) YEARS OF SERVICE
--------- --------------- --------------------------------------------------------------------------------------
10 15 20 25 30 35 40
-------- -------- -------- -------- -------- -------- --------
$100,000 $ 90,000 $ 8,582 $ 12,873 $ 17,164 $ 21,455 $ 25,746 $ 30,037 $ 34,328
125,000 112,500 11,195 16,792 22,389 27,987 33,584 39,181 44,779
150,000 135,000 13,807 20,711 27,615 34,518 41,422 48,325 55,229
200,000 180,000 19,033 28,549 38,065 47,581 57,098 62,550 71,485
250,000 225,000 24,258 36,387 48,516 60,644 72,773 76,847 76,847
300,000 270,000 29,483 44,225 58,966 73,708 88,449 94,059 94,059
400,000 360,000 39,934 59,900 79,867 99,834 119,801 128,484 128,484
500,000 450,000 50,384 75,576 100,768 125,960 151,152 162,909 162,909
600,000 540,000 60,835 91,252 121,669 152,086 182,504 197,334 197,334
700,000 630,000 71,285 106,928 142,570 178,213 213,855 231,759 231,759
800,000 720,000 81,736 122,603 163,471 204,339 245,207 266,184 266,184
(1) The maximum annual compensation that can be recognized by a qualified
defined benefit pension retirement plan is $170,000 in 2001 (Internal
Revenue Code Section 401(a)(17)).
(2) Estimated five-year final average compensation is based on 90% of pay
at age 65.
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The estimated credited years of service for each named executive officer as of
December 31, 2000, are:
E. K. Gaylord II 5
David B. Jones 3
Carl W. Kornmeyer 27
Terry E. London 22
As a result of the Code Section 401(a)(17) limitation on eligible compensation,
the 2000 includable compensation in determining benefits under the Retirement
Plan was limited to $170,000 for the Named Executive Officers.
401 (K) SAVINGS PLAN
The Company maintains a 401(k) Savings Plan, a defined contribution plan with a
salary deferral arrangement under Section 401(k) of the Internal Revenue Code.
Certain employees who have attained age 21 and completed at least one year of
service with more than 1,000 hours of service are eligible to participate in the
401(k) Plan.
401(k) Plan participants are permitted to make elective contributions of between
1% and 20% of their "compensation," as that term is defined in the 401(k) Plan.
Under the plan, the Company matches 50% of each participant's contribution up to
6% of compensation. The Company's maximum contribution is equal to the lesser of
(i) 3% of the participant's compensation or (ii) any lesser amount specified by
Section 401(k).
A participant's elective contributions vest immediately. Matching contributions
vest according to the following schedule:
YEARS OF SERVICE PERCENT
- ---------------- -------
Less than 2..................................................... 0
2 to 3.......................................................... 40
3 to 4.......................................................... 60
4 to 5.......................................................... 80
5 or more....................................................... 100
Participants actively participating in the 401(k) Plan may apply for loans from
their 401(k) Plan accounts. Participants, however, may request no more than one
new loan each quarter and may have no more than three loans outstanding at any
time. They are also permitted to make in-service withdrawals and hardship
withdrawals in conformity with the terms of the 401(k) Plan.
Participating employees may invest both their own contributions and employer
contributions in one of eight funds, including a Company common stock fund.
Upon termination of employment, disability, death, or retirement, a participant
receives the value of his or her account. The form of benefit payment will be a
lump sum.
SUPPLEMENTAL DEFERRED COMPENSATION PLAN
The Company maintains a Supplemental Deferred Compensation Plan, or SUDCOMP
Plan, which is a deferred compensation arrangement for a select group of
management or highly compensated employees, including all of the Company's Named
Executive Officers. The SUDCOMP Plan is intended to provide benefits like those
provided under the 401(k) Plan, notwithstanding the limitations under the 401(k)
Plan imposed by Section 401(k) and Section 401(a)(17) of the Internal Revenue
Code. The SUDCOMP Plan is administered by the Benefits Trust Committee, the
internal committee charged with oversight of the Company's benefit plans, which
has the exclusive authority to select the employees who are entitled to
participate in the SUDCOMP Plan and to interpret and administer the SUDCOMP
Plan.
The terms of the SUDCOMP Plan are generally the same as the terms of the 401(k)
Plan except that:
- - employer matching contributions (if any) are 50% vested after two years
of service and 100% vested after three years of service;
- - elective contributions are limited to the lesser of 20% of compensation
or $80,000;
- - upon termination of employment for any reason, participants will
receive distributions from the SUDCOMP Plan based on a single lump-sum
election or in annual installments in two or three consecutive years;
- - distributions from the SUDCOMP Plan may not be rolled into an
Individual Retirement Account or another employer's defined
contribution plan; and
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- - distributions from the SUDCOMP Plan are taxed upon distribution.
Subject to review by an administrative committee, SUDCOMP Plan participants are
permitted to invest both their own contributions and employer contributions in
the same or similar funds made available to 401(k) Plan participants, other than
the common stock fund.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors reviews and approves the
annual compensation of the Company's executive officers and other key management
personnel. In addition, the Compensation Committee establishes policies and
guidelines for other benefits and administers compensation and certain other
benefit plans, including the awards of stock and stock options pursuant to the
1997 Omnibus Stock Option and Incentive Plan (the "1997 Omnibus Plan"). The
Compensation Committee is assisted in making compensation decisions by the
Company's management and the Company's independent professional compensation
consultants.
COMPENSATION POLICIES APPLICABLE TO EXECUTIVE OFFICERS
The principal objective of the Company is to maximize stockholder value and
provide "Entertainment with Integrity" through the development and enhancement
of the Company's primary business groups: hospitality and attractions, and
music, media and entertainment.
To further that objective, the Company's executive compensation program is
designed to:
- - attract, retain, and reward management personnel;
- - align executive and stockholder interests by rewarding performance that
enhances stockholder value; and
- - provide appropriate incentives for executives to achieve Company,
business unit, and individual performance goals.
At its first regular meeting of the year, the Compensation Committee reviews
management's performance during the prior year, adopts compensation policies for
the current year, and establishes each executive's compensation. The Committee,
however, may adjust an executive's total compensation at any time during the
year in light of increased job responsibilities or particularly meritorious
performance.
An executive's total compensation is composed of three primary components: base
salary compensation, annual incentive compensation, and long-term incentive
compensation. Each component is based on individual and group performance
factors which are measured objectively and subjectively by the Compensation
Committee.
BASE SALARY COMPENSATION
The 2000 base salary compensation of the Company's executive officers was based
on several factors. In general, the Compensation Committee sought to establish
base salaries at or near the 50th percentile of total compensation paid by
companies within the lodging, entertainment, media, and music industries with
whom the Company believes it competes for executive talent to executives
exercising responsibilities similar to those of executives with the Company, as
confirmed by an independent compensation consultant. Base salaries were adjusted
by the Compensation Committee, however, to reflect other factors such as an
individual executive officer's performance and base salary during the prior
year.
ANNUAL INCENTIVE COMPENSATION
On February 17, 2000, the Compensation Committee considered an annual incentive
plan presented by independent compensation consultants. The Committee referred
the plan to the full Board of Directors for consideration at a later meeting. On
March 20, 2000, the full Board approved a revised version of the annual
incentive plan previously considered by the Compensation Committee. Under the
approved plan, the Compensation Committee approved annual target incentives
designed to provide bonuses that would place the executive's total cash
compensation at the 75th percentile of peer group compensation upon the
achievement of specified Company, business-unit, and individual performance
goals.
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25
In general, for executives with Company-wide responsibilities, of their total
bonus payout,
- - 60% was predicated upon achievement of the Company's consolidated
operating cash flow target;
- - up to 20% was based on departmental performance; and
- - up to 40% was based on the achievement of individual performance goals.
For those executives who manage a particular operating group, of their total
bonus payout,
- - 20% was predicated upon achievement of the Company's operating cash
flow target;
- - up to 60% was based on unit or group performance;
- - up to 20% was based on departmental performance; and
- - up to 20% was based on the achievement of individual performance goals.
In addition, the CEO was authorized to award a discretionary bonus in an amount
not to exceed 20% of targeted bonus payouts. The Board instructed the CEO that
in awarding this discretionary bonus, he should consider heavily the executive's
accomplishments in developing synergies among the various groups within the
Company.
LONG-TERM INCENTIVE COMPENSATION
The Compensation Committee believes that a powerful way of aligning the
long-term interests of executive officers with those of stockholders is to award
equity-based compensation in the form of stock options and restricted stock. On
February 17, 2000, the Compensation Committee considered a recommendation on
long-term incentive compensation presented by independent compensation
consultants. The Committee referred the proposed plan to the full Board of
Directors for consideration at a later meeting.
On March 20, 2000, the full Board approved a revised version of the proposed
long-term incentive plan. The plan intends to provide incentives and rewards to
senior management based upon long-term performance of the Company's strategic
plan and stock price appreciation, in a way which aligns management's goals with
stockholder interests. Under the approved plan, executives were categorized into
a "tier," with the members of each tier receiving awards of stock options and,
for some tiers, grants of restricted stock based upon the accomplishment of
annual criteria that collectively move the Company towards the accomplishment of
the Company's five-year strategic plan. All stock options awarded would vest
ratably over a five year period, with one-third vesting annually beginning three
years after the grant, and may be exercised at the market price on the date of
the award. All restricted stock awards would vest ratably over a four year
period, with one-third vesting annually beginning two years after the grant. All
restricted stock awards are canceled in the event that the annual performance
criteria are not met. With two exceptions, the restricted stock grants made in
2000 were cancelled as the Company did not achieve its operating targets.
CEO COMPENSATION
In reviewing and approving Mr. London's compensation in 2000, the Compensation
Committee considered many of the same criteria relied upon with respect to the
other executive officers, including the compensation of peer group executives
within the entertainment, lodging and media industries, the performance of the
Company in 1999, and the scope of Mr. London's executive responsibilities.
Mr. E. K. Gaylord II, Chairman of the Board of Directors, served in the capacity
of interim CEO for approximately six weeks in August and September, 2000. Mr.
Gaylord did not request, and the Compensation Committee did not consider, any
change to Mr. Gaylord's then existing compensation as Chairman.
In reviewing and approving the compensation of Dennis J. Sullivan as interim
president and CEO, the Compensation Committee took into consideration the nature
of the responsibilities that Mr. Sullivan would have as interim President and
CEO, the compensation of peer group executives for such short-term interim
executive positions, and the needs of the Company for a short-term interim
President and CEO. Based upon these factors, the Compensation Committee awarded
Mr. Sullivan compensation in the form of base salary, equity compensation
consisting of immediately vested options to purchase 10,000 shares of the
Company's common stock at $20.3125 per share, and the opportunity to be paid a
performance
21
26
bonus during 2001 in an amount up to 70% of the base salary, such bonus to be
determined by the Compensation Committee based 25% each upon the following four
factors measured at the termination of his employment: achievement of cost
reductions; achievement of operating cash flows; completion of financing
arrangements relating to the Florida hotel project; and satisfactory and timely
divestiture of certain assets identified by the Board of Directors.
POLICY WITH RESPECT TO DEDUCTIBILITY OF COMPENSATION
Federal tax law limits the tax deduction that the Company may take with respect
to the compensation of any executive officer that exceeds $1.0 million, unless
the compensation is "performance-based." The Company's stock incentive plans are
designed to provide "performance-based" compensation which should minimize the
impact of this tax limit.
The Compensation Committee believes that all incentive compensation of the
Company's current executive officers will qualify as a tax deductible expense
when paid. The Compensation Committee will continue to evaluate, however,
whether it will approve annual compensation arrangements exceeding $1.0 million
and whether it will attempt to qualify any such amounts for deductibility under
the federal tax laws.
CONCLUSION
The Compensation Committee believes that the Company's executive compensation
program aligns the interests of executives and stockholders by linking
performance to the creation of stockholder value. The program has been
successful in attracting and retaining quality executive officers, and is
integral to the future growth and success of the Company.
COMPENSATION COMMITTEE:
JOE M. RODGERS, CHAIRMAN
MARTIN C. DICKINSON
CRAIG L. LEIPOLD
MARY AGNES WILDEROTTER
HOWARD L. WOOD
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EMPLOYMENT, SEVERANCE, AND CHANGE IN CONTROL ARRANGEMENTS
All stock options granted under the Omnibus Plan become immediately exercisable
or otherwise non-forfeitable in full in the event of a change in control of the
Company. A change in control includes, among other things, the following events:
- - any unaffiliated entity acquires a majority of our voting securities;
- - the Company's stockholders approve certain mergers, or a liquidation or
sale of the Company's assets; or
- - more than half of our directors are replaced during a two-year period,
with certain exceptions.
In September 2000, the Company entered into an employment agreement with Dennis
J. Sullivan, Jr. to serve a six month term of employment as President and Chief
Executive Officer of the Company. The agreement provided for a base salary of
$300,000 for the six month period, plus the grant of immediately vested options
to purchase 10,000 shares of the Company's common stock at the exercise price of
$20.3125 per share. Mr. Sullivan is also eligible for a cash bonus upon the
termination of his employment as described under "Compensation Committee Report
on Executive Compensation." Since the termination of Mr. Sullivan's employment
agreement, he has continued to serve on an interim basis at the same base
salary.
Mr. Kornmeyer entered into a change of control agreement prior to the CBS merger
(as described in Note 1 to the Performance Graph on page 26). The Company
assumed this change of control agreement following the merger. The change of
control agreement provides for a two-year employment period upon the occurrence
of a "change of control" (as defined in the agreement). In the event Mr.
Kornmeyer is terminated or his compensation is reduced prior to the expiration
of the two year employment period, he is entitled to a lump sum payment equal to
250% of the sum of his base salary and cash incentive bonus.
In addition to that change of control agreement, in February 2001 Mr. Kornmeyer
entered into a severance agreement with the Company. Under the severance
agreement, if the Company terminates Mr. Kornmeyer's employment without cause,
or if Mr. Kornmeyer resigns because the Company has transferred him to a
business location outside of the Nashville metropolitan area or reduced his
authority and responsibility below his current level, then the Company will pay
Mr. Kornmeyer $1,585,965. Under the terms of the severance agreement, Mr.
Kornmeyer may elect to receive the severance compensation provided under either
the severance agreement or the earlier change of control agreement, but not
both.
The Company has entered into severance agreements with Mr. Jones (in February
1999) and Ms. Warren (in February 2001). Each severance agreement provides for a
two-year employment agreement upon the occurrence of a "change of control" (as
defined in the agreement). In the event that the executive is terminated, his or
her compensation is reduced, or he or she is required to relocate his or her
residence more than 100 miles from the executive's city of employment prior to
the expiration of the two year employment period, then the executive is entitled
to a lump sum payment equal to 150% of the sum of his or her base salary and
cash incentive bonus received in the last 12 months of employment, subject to an
additional payment for purposes of tax reimbursement.
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AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is composed of three directors who
are independent directors as defined in Section 303.01(B)(2)-(3) of the NYSE's
listing standards. As required by that Section, each member of the Committee is
financially literate and at least one member of the Committee has accounting or
financial management expertise. The Audit Committee operates under a written
charter adopted by the Board of Directors on May 9, 2000, which is included as
Appendix B to this proxy statement. The Committee will review and reassess the
adequacy of the charter at least once each year.
The primary purpose of the Audit Committee is to assist the Board in fulfilling
its fiduciary oversight responsibilities by reviewing the financial information
provided to stockholders and others, the systems of internal controls which
management and the Board of Directors have established, the audit process, and
the legal and ethical conduct of the Company and its employees. In fulfilling
that purpose, the Audit Committee has (1) reviewed and discussed the Company's
audited financial statements for the year ended December 31, 2000, with
management and Arthur Andersen LLP, the Company's independent auditors; (2)
discussed with the independent auditors the matters required to be discussed by
Statement on Auditing Standards No. 61, Codification of Statements on Auditing
Standards, as modified or supplemented; and (3) received the written disclosures
and the letter from the independent auditors required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees, and has
discussed with the independent auditors the independent auditors' independence.
The Audit Committee also has considered whether the provision by Arthur Andersen
LLP of the information technology services and other non-audit services
described in this proxy statement under the captions "Audit Firm Fees -
Financial Information Systems Design and Implementation Fees" and "Audit Firm
Fees - All Other Fees" are compatible with maintaining the independence of the
Company's auditors.
Based on the foregoing reviews and discussions, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2000,
for filing with the Securities and Exchange Commission. The Audit Committee also
recommended the appointment of Arthur Andersen LLP as the Company's independent
auditors for the year 2001.
AUDIT COMMITTEE:
Martin C. Dickinson, Chairman
Joe M. Rodgers
Howard L. Wood
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AUDIT FIRM FEES
During the fiscal year 2000, the Company retained Arthur Andersen LLP, the
Company's principal accountants, to provide services in the following categories
and aggregate fee amounts billed:
Audit Fees: $292,000 for professional services rendered for the audit of the
Company's annual financial statements, statutory audits of certain international
subsidiaries and the quarterly reviews of the condensed financial statements
included in the Company's Forms 10-Q for 2000.
Financial Information Systems Design and Implementation Fees: $2,912,620 for
hardware and software design and implementation services primarily related to
engagements for Gaylord Digital, the Company's Internet-directed business. These
services consisted of infrastructure development of networking hardware and
software systems to support internal operations, development and integration of
e-commerce systems to support sales operations; and consultation and development
of e-commerce infrastructure facilities through third-party internet networks.
The Company's management directed the scope of the work to be performed and was
responsible for all management decisions with respect to the services performed
by Arthur Andersen.
All Other Fees: $1,035,499 for all services other than those stated in the
preceding two paragraphs. These services included federal, state and local tax
services; audits of the Company's employee benefit plans; audits of certain of
the Company's subsidiaries in connection with financing transactions; assistance
with certain offering documents related to the issuance of debt securities; due
diligence in connection with proposed business transactions; and technology risk
management services.
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30
PERFORMANCE GRAPH
The following Performance Graph and accompanying table compare the cumulative
total stockholder return on our common stock from October 1, 1997 (see Note 1
below), through December 31, 2000, with the cumulative total return of the Dow
Jones Lodging Index, the Dow Jones Entertainment Index, and the Russell 2000
Index. The comparative data assumes $100.00 was invested on October 1, 1997, in
the common stock and in each of the indices and assumes that any dividends paid
were reinvested.
[GRAPH]
BASE PERIOD
COMPANY/INDEX NAME 10/1/97 (1) 12/31/97 12/31/98 12/31/99 12/31/00
------------------ ----------- -------- -------- -------- --------
Gaylord Entertainment Company..................... $100.00 $113.64 $109.44 $111.78 $[NEED]
Dow Jones Lodging Index........................... 100.00 104.73 79.90 79.43 [NEED]
Dow Jones Entertainment Index..................... 100.00 119.56 228.25 290.01 [NEED]
Russell 2000 Index................................ 100.00 96.65 94.19 114.21 [NEED]
(1) Until September 30, 1997, the Company was a wholly owned subsidiary of
a corporation which was then known as Gaylord Entertainment Company, or
"Old Gaylord." On October 1, 1997, Old Gaylord consummated a
transaction with Westinghouse Electric Corporation (which became CBS
Corporation, and is referred to here as "CBS"), pursuant to which Old
Gaylord became a wholly owned subsidiary of CBS. Prior to the merger,
Old Gaylord was restructured by transferring its assets and
liabilities, other than the assets and certain related liabilities to
be acquired by CBS to the Company and its subsidiaries. Following the
restructuring, on September 30, 1997, Old Gaylord distributed pro rata
to its stockholders all of the outstanding capital stock of the
Company. Immediately following the CBS merger, the Company changed its
name to Gaylord Entertainment Company.
April 2, 2001
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APPENDIX A
GAYLORD ENTERTAINMENT COMPANY
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
Article VII of the Corporation's Restated Certificate of Incorporation
is deleted and the following substituted in lieu thereof:
VII.
(A) Management by Board of Directors
The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors.
(B) Number; Election by Stockholders; Term; Vacancies; Removal; Rights
of Holders of Preferred Stock
(1) Number of Directors. The number of directors of the Corporation
shall be not less than one nor more than fifteen, with the exact number
of directors to be determined from time to time by resolution adopted
by the affirmative vote of a majority of the entire Board of Directors.
(2) Election by Stockholders; Term. Each director elected at the
2001 annual meeting of stockholders or at a later date shall hold
office until the next annual meeting of stockholders after such
election and until his successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement,
disqualification or removal from office. The term of each director
elected prior to the 2001 annual meeting of stockholders for a term
ending on the date of a subsequent annual meeting of stockholders shall
not be affected hereby and shall continue for the full term for which
such director was elected and until his successor shall be elected and
shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office.
(3) Vacancies. Any vacancy on the Board of Directors, howsoever
resulting, may be filled by a majority of the directors then in office,
even if less than a quorum, or by a sole remaining director. Any
director elected to fill such a vacancy shall hold office until the
next annual meeting of stockholders and until his successor shall be
elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification or removal from office.
(4) Rights of Holders of Preferred Stock. Notwithstanding the
foregoing, whenever the holders of any one or more classes or series of
Preferred Stock issued by the Corporation shall have the right, voting
separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling
of vacancies and other features of such directorships shall be governed
by the terms of this Restated Certificate of Incorporation or the
resolution or resolutions adopted by the Board of Directors pursuant to
Article IV applicable thereto.
(5) Removal of Directors. Subject to the rights, if any, of the
holders of shares of Preferred Stock then outstanding, any or all of
the directors of the Corporation may be removed from office at any
time, but only for cause and only by the affirmative vote of the
holders of a majority of votes represented by the outstanding shares of
the Corporation then entitled to vote generally in the election of
directors.
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APPENDIX B
GAYLORD ENTERTAINMENT COMPANY
AUDIT COMMITTEE CHARTER
STATEMENT OF POLICY
The Audit Committee is a committee of the Board of Directors. Its primary
function is to assist the Board in fulfilling its fiduciary oversight
responsibilities by reviewing the financial information provided to shareholders
and others, the systems of internal controls which management and the Board of
Directors have established, the legal and ethical conduct of the Company and its
employees, and the audit process.
OPERATING POLICIES
1. The membership of the Audit Committee shall consist of at least three
outside directors of the Board of Directors, all of whom shall be
financially literate. Audit Committee members and the Committee
Chairman shall be designated by the Board of Directors. The duties and
responsibilities of a member of the Audit Committee are in addition to
those duties set out for a member of the Board of Directors.
2. Each member of the Audit Committee shall be independent. The Board of
Directors shall determine the independence of each member of the Audit
Committee based on the guidelines set forth in the NYSE Listed Company
Manual.
3. The Committee shall meet at least four times per year or more
frequently as circumstances require. The Committee may ask members of
management or others to attend the meeting and provide pertinent
information as necessary.
4. The Committee shall have the power to conduct or authorize
investigations into any matters within the Committee's scope of
responsibilities. The Committee shall be empowered to retain
independent counsel, accountants, or others to assist it in the conduct
of any investigation.
RESPONSIBILITIES
In meeting its responsibilities, the Audit Committee is expected to:
1. Review its charter on an annual basis and, as appropriate, recommend
amendments to the Board.
2. Request and review a statement from the Independent Accountant
delineating all relationships between the Independent Accountant and
the Company to determine the independence of the Independent
Accountant.
3. Review and recommend to the Board of Directors the Independent
Accountant to be nominated together with its proposed compensation.
Review and recommend to the Board the discharge of the Independent
Accountant.
4. Provide an open and independent avenue of communication between
Internal Audit, the Independent Accountant, and the Board of Directors.
5. Review and recommend to the Board of Directors the appointment,
replacement, reassignment, or dismissal of the Director of Internal
Audit.
6. Confirm and assure the independence of Internal Audit and the
Independent Accountant, including a review of management consulting
services and related fees provided by the Independent Accountant.
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33
7. Inquire of Director of Internal Audit, the Independent Accountant, and
appropriate management about significant risks or exposures and assess
the steps management has taken to minimize such risks to the Company.
8. Review and approve with the Director of Internal Audit and the
Independent Accountant (a) the audit scope and plan of Internal Audit
and (b) the audit scope and plan of the Independent Accountant.
9. Review with the Director of Internal Audit and the Independent
Accountant the coordination of Internal Audit and Independent
Accountant to assure completeness of coverage, reduction of redundant
efforts, and the effective use of Internal Audit resources to minimize
costs of the Independent Accountant.
10. Discuss with the Independent Accountant:
(a) The Independent Accountant's independence.
(b) The matters required to be discussed by Statement on Auditing
Standards No. 61.
11. Review with management and the Independent Accountant at the completion
of the annual examination:
(a) The Company's annual financial statements and related
footnotes.
(b) The Independent Accountant's audit of the financial statements
and the report thereon.
(c) Any significant changes required in the Independent
Accountant's audit plan.
(d) Any difficulties or disputes with management encountered
during the course of the audit.
(e) Other matters related to the conduct of the audit which are to
be communicated to the Committee under Generally Accepted
Auditing Standards.
12. Consider and review with management and the Director of Internal Audit:
(a) All significant findings and recommendations of Internal Audit
together with management's responses.
(b) Any difficulties encountered in the course of its audits,
including any restrictions on the scope of its work or access
to required information.
(c) Any changes required in the planned scope of its audit plan.
(d) The Internal Audit Department budget and staffing.
(e) The Internal Audit Department charter.
(f) Internal Audit's compliance with the IIA's Standards for the
Professional Practice of Internal Auditing.
13. Review filings with the SEC and other published documents containing
the Company's financial statements. Consider whether the information
contained in these documents is consistent with the information
contained in the financial statements and is in compliance with
applicable regulatory requirements. Recommend to Board of Directors
whether the audited annual financial statements should be included in
the Company's Annual Report on Form 10-K.
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14. Review policies and procedures with respect to officer's expense
accounts and perquisites, including their use of corporate assets, and
consider the results of any review of these areas by Internal Audit or
the Independent Accountant.
15. As necessary, review with the Director of Internal Audit and the
Independent Accountant the results of their review of the Company's
actions in monitoring compliance with the Corporate Code of Business
Ethics.
16. Review legal and regulatory matters that may have a material impact on
the financial statements, related Company compliance policies, and
programs and reports received from regulators.
17. As requested by the Director of Internal Audit and/or the Independent
Accountant, meet with the Director of Internal Audit, the Independent
Accountant, and management in separate executive sessions to discuss
any matters that the Committee or any of these parties believe should
be discussed privately with the Committee.
18. Perform other functions as assigned by law, the Company's charter or
bylaws, or the Board of Directors.
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PROXY
GAYLORD ENTERTAINMENT COMPANY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 3, 2001
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF GAYLORD ENTERTAINMENT COMPANY
The undersigned hereby appoints E.K. Gaylord II and E.L. Gaylord, and
each of them, as proxies, with full power of substitution, to vote all shares of
the undersigned as shown on the reverse side of this proxy at the Annual Meeting
of Stockholders of Gaylord Entertainment Company (the "Company") to be held at
the Opryland Hotel, 2800 Opryland Drive, Nashville, Tennessee, on Thursday, May
3, 2001, at 10:00 a.m., local time, and any adjournment(s) thereof.
Your shares will be voted in accordance with your specifications on the
opposite side. IF NO CHOICE IS SPECIFIED, SHARES WILL BE VOTED FOR THE PROPOSAL
TO AMEND THE RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD O
DIRECTORS; FOR THE ELECTION OF THE THREE (3) NOMINEES SET FORTH BELOW; FOR THE
PROPOSAL TO RATIFY THE APPOINTMENT OF ACCOUNTANTS; AND, IN THE DISCRETION OF THE
PERSONS ENTITLED TO VOTE THE SHARES, FOR OR AGAINST ANY OTHER MATTER THAT MAY
PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT(S) THEREOF, IN EACH
CASE AS MORE FULLY SET FORTH IN THE ACCOMPANYING PROXY STATEMENT OF THE COMPANY.
VOTES MUST BE INDICATED [X] USING BLACK OR BLUE INK ONLY.
(Continued, and to be dated and signed on the other side.)
GAYLORD ENTERTAINMENT COMPANY
1. Proposal to amend the Company's Restated Certificate of Incorporation
to declassify the Board of Directors and to provide for annual election
of all directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF DIRECTORS. Nominees for (i) a one-year term ending in 2002
if Item 1 is approved, or (ii) if Item 1 is not approved, a three-year
term ending in 2004: Edward L. Gaylord, Joe M. Rodgers and Craig L.
Liepold
[ ] FOR ALL NOMINEES (except as indicated below)
[ ] AUTHORITY WITHHELD TO VOTE FOR ALL NOMINEES
To withhold authority to vote for any individual nominee, mark "FOR ALL
NOMINEES" and write the excepted nominee's name on the line below.
Exception:
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3. PROPOSAL TO RATIFY THE APPOINTMENT OF ACCOUNTANTS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. IN THE DISCRETION OF THE PERSON(S) ENTITLED TO VOTE THE SHARES ON ANY
OTHER MATTER THAT MAY PROPERLY COME BEFORE SAID MEETING OR ANY
ADJOURNMENTS THEREOF.
Dated: , 2001.
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Signature
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Signature(s), if held jointly
Please sign exactly as your name
appears on your stock certificate.
If registered in the names of two or
more persons, each should sign.
Executors, administrators, trustees,
guardians, attorneys, and corporate
officers should show their full
title.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
