proxy2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ x ]
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 §240.14a-12
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(Name of Registrant as Specified In Its Charter):
Ashford Hospitality Trust, Inc.
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant):
UNITE HERE
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 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:
PRELIMINARY PROXY STATEMENT
UNITE HERE
1775 K St., NW, Suite 620
Washington, DC 20006.
Tel: (202) 661-3665
Fax: (202) 223-8091
First released to shareholders:
April [__________], 2009
RE: INDEPENDENT CHAIRMAN PROPOSAL TO BE PRESENTED AT ANNUAL
SHAREHOLDERS MEETING OF ASHFORD HOSPITALITY
TRUST (NYSE: AHT)
Meeting Date and Time: _______, 2009
Location: [___________]
A STOCKHOLDER PROPOSAL WILL BE PRESENTED TO:
Amend the Bylaws of Ashford Hospitality to include a requirement
that the Chairman of the Board be independent, as defined by the New
York Stock Exchange (see full text of Bylaw amendment below).
To Fellow Ashford Shareholders:
We write to seek your support for a proposal amending the Bylaws of
Ashford Hospitality to require that the Chairman of the Board of
Directors be independent, as defined by the New York Stock Exchange
(see full text of our amendment below).
Our Corporation, Ashford Hospitality Trust, Inc., made some risky
bets at the height of the hotel cycle. In 2007, it acquired a 51-hotel
portfolio from CNL Hotels for $2.4 billion, more than doubling our debt
and issuing additional equity at $11.75 per share. Also in 2007,
Ashford resumed its mezzanine lending business as the credit markets
became less favorable to hotel lending.
Chairman Archie Bennett, Jr. executed a central role in both of these
strategic decisions. He is neither independent of the Corporation nor
its Chief Executive Officer.
Chairman Bennett earns an annual salary from Ashford, which totaled
$300,000 in 2007. He is the father of Montgomery Bennett, Ashford’s
CEO. Messrs Archie and Montgomery Bennett are 100% owners of Remington
Lodging and its affiliates, which managed 43 of Ashford’s hotels as of
year-end 2007, and were paid $24 million in 2007 in hotel and project
management fees.
In March 2008, the Board of Directors recognized our Chairman’s role in
the CNL acquisition by granting a “special one-time award of 145,000
equity securities … based on his contributions to the integration of
key transactions initiated during 2007, most specifically the CNL
transaction.” Our Chairman chose to receive those securities in
the form of partnership units, not shares of the Corporation, while our
shares have decline by more than 90% since that transaction was
announced.
Furthermore, Ashford was advised in this acquisition by Eastdil
Secured, where another Ashford Director, Mr. Charles Toppino, was at
the time a Senior Managing Director. Eastdil was paid a $1,125,000
“success fee” for the CNL transaction. Mr. Toppino serves on Ashford’s
Compensation Committee, which sets our compensation policies for
Chairman Bennett, CEO Bennett and other executive officers.
The Chairman of our Board also chairs the Mezzanine Loan Investment
Executive Committee, which was formed by the Board of Directors in 2007
to evaluate and approve mezzanine lending activity by the Corporation.
Notes receivable have more than doubled in 2008, including a $98
million investment in a short term loan to Extended Stay America.
According to a December 8, 2008 Wall Street Journal article, “Extended
Stay Hotels Inc. is in early talks that could result in turning the
hotel chain over to its lenders….” Not only is our Corporation
highly-leveraged, but its financial resources were allocated to risky
mezzanine loans just as the hotel cycle started its decline.
Ashford’s Board of Directors has suspended dividends on common shares
through 2009, except for dividend payments required to maintain REIT
status, in conjunction with amending the terms of its credit facility.
The job of all Boards of Directors is to exercise independent oversight
of corporate management, including the Chief Executive Officer, to
protect shareholders’ investment and maximize shareholder value.
Ashford’s Board lacks that independent leadership, and we believe
Ashford’s recent risk-taking argues that its Board needs more checks
and balances on management to improve shareholder value through this
economic crisis.
Below is the full text of our proposal:
RESOLVED, pursuant to Maryland General Corporation Law, Section
2-109(b) and Article VI, Section 8 of the Amended and Restated Bylaws
of Ashford Hospitality Trust, Inc. (the “Corporation”), that the
following be added to Article III, Section 10 of the Corporation’s
Bylaws:
A. The Chairman of the Board shall be a
director who is independent from the Corporation.
B. For purposes of this Bylaw, “independent”
has the meaning set forth in the New York Stock Exchange (“NYSE”)
listing standards. If the Corporation’s common stock is listed on
another exchange and not on the NYSE, such other exchange’s definition
of independence shall apply.
C. The Board of Directors shall assess
semi-annually whether a Chairman who was independent at the time he or
she was elected is no longer independent. If the Chairman is no
longer independent, the Board of Directors shall select a new Chairman
who satisfies the requirements of this Bylaw within 60 days of such
assessment.
D. This Bylaw shall apply prospectively, so as
not to violate any contractual obligation of the Corporation in effect
when this Bylaw was adopted. The Board shall terminate any such
contractual obligation as soon as it has the legal right to do so.
E. Notwithstanding any other Bylaw, the
Board may not amend the above without shareholder ratification.
F. Each of the above provisions is
severable.
IT IS FURTHER RESOLVED that if any law bars shareholders from making
the above amendments, then this resolution shall be deemed a
recommendation to the Board.
We urge all shareholders to vote FOR this proposal.
VOTING PROCEDURES:
PLEASE USE THE ENCLOSED BLUE PROXY CARD TO VOTE FOR THE PROPOSAL. YOU
SHOULD ALSO HAVE RECEIVED A PROXY CARD FROM MANAGEMENT. IF YOU SUPPORT
OUR PROPOSAL, DO NOT SEND BACK MANAGEMENT’S CARD. ANY PROXY CARD YOU
HAVE SIGNED IS CANCELLED OUT BY SUBMITTING A LATER-DATED PROXY CARD.
In corporate elections, simply submitting a new proxy card with a later
date on it revokes your prior card. A proxy vote may be revoked any
time prior to the tally at the shareholders meeting by signing
and submitting a new proxy card, by sending written notice of
revocation to the proxy holder, or by appearing at the meeting and
voting in person.
We intend to solicit at least a majority of the voting power of the
outstanding stock. In order to vote for this proposal, you will need to
return our proxy card unless management gives you the specific
opportunity to vote for or against this proposal on its proxy card.
The record date for eligibility to vote is March __ , 2009. We are not
nominating candidates to the Board, nor will we seek any discretionary
voting authority for the meeting, meaning that we will vote all proxy
cards strictly as you direct, and if matters come up on which you have
not given us instructions, we will not vote your shares on those
matters. We do not anticipate any matters to be raised at the meeting
other than what are already in the Company’s proxy statement, as the
Company’s bylaws require advance notice be given management of any
matters to be raised at the meeting. We incorporate by reference all
information concerning the board of directors and voting procedures
contained in management’s proxy statement at pages ____.
INFORMATION ON PARTICIPANTS IN THIS SOLICITATION:
The participants in this solicitation will be UNITE HERE and its staff,
including Courtney Alexander. These staff members are located at the
UNITE HERE offices at 1775 K St., NW, Suite 620, Washington, D.C. 20006.
UNITE HERE represents approximately 450,000 active members and more
than 400,000 retirees throughout North America. UNITE HERE owns 318
shares of Ashford Hospitality Trust common stock. UNITE HERE and its
affiliates have engaged in shareholder solicitations on corporate
governance issues at several companies over the past decade. It is an
active member of the Council of Institutional Investors (CII), an
association of 130 public, labor, and corporate pension funds with
assets exceeding $3 trillion which advocates for good corporate
governance practices.
Ashford Hospitality’s workforce is not unionized. UNITE HERE Affiliates
represent workers at various hotels owned by Ashford; those employees
work for several management companies, including Hilton, Hyatt, and
Remington Hotel Corporation, a hotel operating company 100% owned by
Archie and Montgomery Bennett. UNITE HERE’s Affiliate in Philadelphia
has a labor dispute at the Philadelphia Airport Embassy Suites (owned
by Ashford, managed by Remington), which is being boycotted by the
Union.
We do not seek your support in labor matters, and do not believe that
enactment of the proposal would have any impact on such matters.
Developments in labor matters will not lead UNITE HERE to refrain from
presenting its proxy cards at the meeting: we are committed to
following through with conveying shareholders' views at the meeting.
UNITE HERE will bear all solicitation costs (anticipated at $10,000)
and will not seek reimbursement from the Company. UNITE HERE will
solicit proxies by mail, phone, e-mail, fax and in person using its
regular staff, who shall not receive any additional compensation, but
they may also hire an outside solicitor. They will reimburse banks,
brokers, and other custodians, nominees or fiduciaries for reasonable
expenses incurred in forwarding proxy material to beneficial owners.
IV. YOUR RIGHT TO MAKE SHAREHOLDER PROPOSALS
If a shareholder has owned more than $2000 worth of stock for more than
a year and meets the other criteria of SEC Rule 14a-8, he or she then
has a legal right to have a proposal appear in management’s proxy
statement and card. The deadline for shareholders to submit proposals
for inclusion in management’s proxy statement for the year 2009 is
_____.
V. EXECUTIVE COMPENSATION/SECURITY OWNERSHIP OF MANAGEMENT AND 5% OWNERS
We incorporate by reference the information contained in management’s
proxy statement at pages ___.
IF YOU HAVE ANY QUESTIONS, CALL UNITE HERE AT (202) 661-3665.
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PROXY CARD
Solicited by UNITE HERE for Annual Shareholders Meeting of
Ashford Hospitality Trust (May __, 2009)
The undersigned hereby designates Courtney Alexander, with full power
of substitution, as the proxy of the undersigned for the sole purpose
of voting all stock of the undersigned in the manner marked below at
the Ashford Hospitality Trust annual shareholders meeting for 2009.
This proxy card grants no discretionary voting authority: if matters
come before the meeting other than the items below, the stock of the
undersigned will not be voted on such matters.
1. ELECTION OF DIRECTORS
[ ] FOR ALL NOMINEES.
[ ] WITHHOLD ALL NOMINEES
[ ] WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE. WRITE
NAME(S) OF NOMINEES BELOW:
UNITE HERE MAKES NO RECOMMENDATION ON THE DIRECTORS ELECTION
2. TO RATIFY THE APPOINTMENT OF [to be included when named in Ashford’s
proxy statement] AS INDEPENDENT AUDITORS FOR THE 2009 FISCAL YEAR
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
UNITE HERE MAKES NO RECOMMENDATION ON THE RATIFICATION OF THE AUDITOR
3. UNITE HERE SHAREHOLDER PROPOSAL TO HAVE INDEPENDENT CHAIRMAN:
FOR THIS PROPOSAL:
AGAINST THIS PROPOSAL:
ABSTAIN:
If no direction is made above, UNITE HERE will vote this card FOR the
proposal and not vote it in the directors' election.
Dated: _____________
SIGNATURE:________________________________________
PRINT: _____________________________________________
NAME:_____________________________________________
TITLE (if shares not held in above name): _________________
Optional: contact information so we can make sure your vote gets
counted and provide you more information about shareholder issues at
Ashford (your contact information will not be put to any other use):
Telephone:__________ . Fax: ____________. Email
Address:______________
This card can be returned in the enclosed envelope or faxed to (202)
223-8091.