This excerpt taken from the AHT DEF 14A filed Apr 17, 2009.
ASHFORDS STATEMENT IN OPPOSITION TO
PROPOSAL NUMBER THREE
The board of directors believes it is in the stockholders best interests for the board to have the flexibility to choose the most qualified individual to serve as the companys Chairman, whether or not that person is an independent director. Currently, Mr. Archie Bennett, Jr., serves as the Chairman of the board of directors because the board of directors believes Mr. Bennetts more than 40 years of hospitality industry-related experience and his in-depth familiarity with the day-to-day operations of the company make him uniquely situated and best qualified to serve in such capacity. The board believes that the loss of Mr. Bennetts valuable leadership on the board of directors would have a negative impact on the companys operations and ultimately on the stockholders.
The board believes it has implemented a corporate governance structure that not only complies with all NYSE independence requirements, but also ensures the necessary balance of independent judgment and company- and industry-specific expertise that serves the best interests of the companys stockholders. As discussed above under BOARD OF DIRECTORS AND COMMITTEE MEMBERSHIP, the board of directors is made up of a majority of independent directors; each of the audit, compensation and nominating/corporate governance committees are comprised solely of independent directors; and meetings of the non-management directors are held at least twice a year, including at least one meeting of only independent directors. The board complies with the following existing procedures to further mitigate any potential conflicts of interest, including but not limited to those arising from our relationship with Remington Hotels, LLC or affiliates (Remington):
Our charter provisions, governance policies and conflicts of interest policies are designed to ensure independent director input and control over matters involving potential conflicts of interest and thereby mitigate the perceived risks associated with such transactions.
Additionally, while we have no formal policy to mandate or enforce stock ownership by our chairman, Mr. Bennett currently holds 4,730,442 shares of our common stock or securities redeemable for cash, or at our option, convertible into common stock. A significant portion of Mr. Bennetts common stock position has been acquired through open market purchases. Mr. Bennetts significant equity holdings in our company act to align his interests with those of our shareholders and provide him with a substantial personal incentive to make business decisions that are in the best interests of our shareholders.
A final consideration in the boards recommendation to vote against this proposal is the existence of the non-compete agreement between the company and Mr. Bennett, as discussed above under POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL Chairman of our Board. The company has entered into a contractual obligation with Mr. Bennett that provides for a payment to him of $300,000 within 30 days of the failure to elect him to serve as Chairman of the board of directors. Additionally, upon such occurrence, all restricted equity securities held by Mr. Bennett would become fully vested, even if he continues to serve as a director. Given the policies and procedures in place to mitigate risks associated with related party transactions and the contractual obligation to pay Mr. Bennett $300,000 if he is no longer serving as chairman of the board, the board of directors does not believe that the proposal to amend the bylaws of the company is in the best interest of stockholders.
We believe that the governance practices we have in place should provide our stockholders with confidence that board and committee deliberations and decisions are made with significant input from independent directors, while not giving up the advantage of having company leaders, such as Mr. Archie Bennett, who understand the company and the hospitality industry. More importantly, we believe that our governance structure and Mr. Bennetts significant personal equity ownership in our company, allows the company to continue to benefit from our chairmans foresight and experience on operational matters without sacrificing our commitment to shareholder interests.
For the above reasons, the board of directors unanimously recommends that the stockholders vote AGAINST the stockholder proposal to amend the bylaws.