UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D. C. 20549
 **FORM
10-K/A**
 (Amendment
No. 1)
 *(Mark
One)*
 þ
    ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
      the fiscal year ended:
    December
      31, 2004
 
 OR
 
 o
    TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
      the transition period from
    
    to
 
 Commission
file number 0-24097
 
 **CNL
HOTELS & RESORTS, INC.**
 *(Exact
name of registrant as specified in its charter)*
 
 **Maryland**
    
    **59-3396369**(State
      of other jurisdiction
      of
      incorporation or organization)
    
    (I.R.S.
      Employer
      Identification
      No.)
 
 **450
      South Orange Avenue**
      **Orlando,
      Florida**
    
    **32801**(Address
      of principal executive offices)
    
    (Zip
      Code)
 
 Registrant's
      telephone number
      (including
      area code)
    
    **(407)
      650-1000**
 
 Securities
registered pursuant to Section 12(b) of the Act:
 
 *Title
      of each class:*
      None
    *Name
      of exchange on which registered:*
      Not
      Applicable
 
 Securities
registered pursuant to Section 12(g) of the Act:
 Common
Stock, $0.01 par value per share
 *(Title
of class)*
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days: Yes [x] No [ ]
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
 
 Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Act). Yes [x] No [ ]
 
 *Aggregate
market value of the voting common stock held by non-affiliates of the
registrant:* No
established market exists for the Registrant’s shares of common stock, so there
is no market value for such shares. Based on the $20 share price from the
Registrant’s most recent best-efforts common stock offering (after giving effect
to a reverse stock split which became effective on August 2, 2004),
$3,055,641,880 of the Registrant’s common stock was held by non-affiliates as of
April 25, 2005.
 
 The
number of Shares of common stock outstanding as of April 25, 2005, was
152,829,594
  
  
 DOCUMENTS
INCORPORATED BY REFERENCE: NONE
 
 CONTENTS
 
 PageExplanatory
      Note
    
    3Part
      III.
    
    3Item
      10.
    Directors
      and Executive Officers of the Registrant
    3Item
      11.
    Executive
      Compensation
    8Item
      12.
    Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
    10Item
      13.
    Certain
      Relationships and Related Transactions
    11Item
      14.
    Principal
      Accountant Fees and Services
    14Signatures
    
    16
 
  2
   **EXPLANATORY
NOTE**
 
 CNL
Hotels & Resorts, Inc. (the “Company”) is filing this Amendment No. 1 to its
Annual Report on Form 10-K pursuant to General Instruction G(3) to Form 10-K for
the sole purpose of filing the information required to be disclosed pursuant to
Part III of Form 10-K for the Company’s fiscal year ended December 31, 2004.
 
 **PART
III**
 
 **Item
10. Directors and Executive Officers of the Registrant**
 
 **THE
BOARD OF DIRECTORS**
 
 Our Board
of Directors (the “Board”) currently consists of nine members, a majority of
whom are Independent Directors. Pursuant to our Articles of Incorporation, as
amended (“Articles”), each of our Directors is elected annually by our
stockholders to serve until the next annual meeting or until his or her
successor is duly elected and qualified. Our Executive Officers all serve at the
pleasure of our Board.
 
 The
following table sets forth certain information concerning the individuals who
are our current Directors:
 
 **Name**
    
    **Age**
    
    **Position**James
      M. Seneff, Jr.
    
    58
    
    Director
      and Chairman of the BoardRobert
      A. Bourne
    
    58
    
    Director
      and Vice Chairman of the BoardThomas
      J. Hutchison III
    
    63
    
    Chief
      Executive Officer and DirectorJohn
      A. Griswold
    
    56
    
    President,
      Chief Operating Officer and DirectorJ.
      Douglas Holladay
    
    58
    
    Independent
      DirectorJack
      F. Kemp
    
    69
    
    Independent
      DirectorCraig
      M. McAllaster
    
    53
    
    Independent
      DirectorDianna
      F. Morgan
    
    53
    
    Independent
      DirectorRobert
      E. Parsons, Jr.
    
    49
    
    Independent
      Director
 
 Set forth
below is a brief description of the business experience during at least the past
five years for each Director.
 
 *James
M. Seneff, Jr.* has
served as one of our Directors and as the Chairman of our Board of Directors
since our inception in June 1996. Mr. Seneff served as our Chief Executive
Officer from our inception through February 13, 2003, and he served as
co-Chief Executive Officer from February 14, 2003 through May 1, 2003.
Mr. Seneff is a Director, Chairman of the Board of Directors and served as
Co-Chief Executive Officer until April 2005 of CNL Hospitality Corp. (“CHC”).
Mr. Seneff is a principal stockholder of CNL Holdings, Inc., the parent
company of CNL Financial Group, Inc. (“CFG” or “CNL”), a diversified real estate
company, and has served as a Director, Chairman of the Board and Chief Executive
Officer of CFG and its subsidiaries since CFG’s formation in 1973. CFG is the
parent company, either directly or indirectly through subsidiaries, of
(1) CNL Real Estate Group, Inc. (“CREG”), which is the parent company of
the various CNL advisors to unlisted REITs, including CHC, CNL Retirement Corp.
and CNL Income Corp.; (2) CNL Capital Markets, Inc., which is the parent
company of CNL Investment Company and its subsidiary, CNL Securities Corp., a
registered broker-dealer that has served as managing dealer for various
CNL-affiliated public and private offerings, including, our five previous public
offerings, and (3) CNL Fund Advisors, Inc. and CNL Institutional Advisors,
Inc., registered investment advisors. CFG and the entities it has established
have grown to more than $16.8 billion in assets - $15.3 billion owned through
companies either established or acquired by CNL and $1.5 billion in assets it
manages for third-party investors - representing interests in more than 2,900
properties across North America. Mr. Seneff also serves as a Director and
Chairman of the Board of Directors of CNL Retirement Properties, Inc., a public,
unlisted REIT, as well as CNL Retirement Corp., its advisor. Mr. Seneff has
served as a Director and Chairman of the Board of Directors since 1992 and
served as Chief Executive Officer from 1992 until 2004 of Commercial Net Lease
Realty, Inc., a public REIT that is listed on the New York Stock Exchange
(“NYSE”). In addition, he has served as a Director and Chairman of the Board of
Directors since inception in 1994, served as Chief Executive Officer from 1994
through August 1999 and co-Chief Executive Officer from December 2000 through
September 2003 of Trustreet Properties, Inc., a public REIT that is listed on
the NYSE, formerly CNL Restaurant Properties, Inc.. Mr. Seneff has also
served as a Director and Chairman of the Board of Directors of CNL Securities
Corp. since 1979 and as its Chief Executive Officer since 1992. He has served as
a director of CNL Investment Company since 1990 and Chairman of the Board of
Directors since 2000; he also served as Chief Executive Officer from 2000 until
2004. Mr. Seneff has served as a director and Chairman of the Board of Directors
since July 2003 and as Chief Executive Officer from 2003 until 2004 of CNL
Institutional Advisors, Inc.. Mr. Seneff formerly served as a Director of
First Union National Bank of Florida, N.A., and currently serves as the Chairman
of the Board of Directors of CNLBank, a Florida commercial bank. He served on
the Florida
  3
  State
Commission on Ethics and is a former member and past Chairman of the State of
Florida Investment Advisory Council, which recommends to the Florida Board of
Administration investments for various Florida employee retirement funds. The
Florida Board of Administration is Florida’s principal investment advisory and
money management agency and oversees the investment of more than
$100 billion of retirement funds. Mr. Seneff received his degree in
Business Administration from Florida State University in 1968.
 
 *Robert
A. Bourne* has
served as one of our Directors and our Vice Chairman of our Board since our
inception in 1996. Mr. Bourne served as our Treasurer from 1996 until July
2004. Mr. Bourne also serves as a director, Vice Chairman of the Board of
Directors and as Treasurer of CHC. Mr. Bourne served as President of our
Company and of CHC from 1997 to June 2002. Mr. Bourne is also the President
and Treasurer of CFG and a director, Vice Chairman of the Board of Directors and
Treasurer of CNL Retirement Properties, Inc., as well as a director, Vice
Chairman of the Board of Directors and Treasurer of CNL Retirement Corp.
Mr. Bourne served as President of CNL Retirement Properties, Inc. and CNL
Retirement Corp. from 1998 and 1997, respectively, to June 2002. Mr. Bourne
also serves as a director, Vice Chairman of the Board and Treasurer of CNL
Income Properties, Inc, as well as CNL Income Corp., its advisor.
Mr. Bourne also serves as a director of CNLBank. He serves as a director
and Vice Chairman of the Board of Directors of Commercial Net Lease Realty, Inc.
Mr. Bourne has served as a director since inception in 1994, President from
1994 through February 1999, Treasurer from February 1999 through August 1999,
and Vice Chairman of the Board of Directors since February 1999, of Trustreet
Properties, Inc., formerly CNL Restaurant Properties, Inc. Mr. Bourne also
serves as a director, Chief Executive Officer, and Treasurer for various
affiliates of CFG, including CNL Investment Company, CNL Securities Corp., and
CNL Institutional Advisors, Inc. CFG and the entities it has established or
acquired have grown to more than $16.8 billion in assets - $15.3 billion owned
through companies either established or acquired by CNL and $1.5 billion in
assets it manages for third-party investors-representing interests in more than
2,900 properties across North America. Mr. Bourne began his career as a
certified public accountant employed by Coopers & Lybrand, Certified
Public Accountants, from 1971 through 1978, where he attained the position of
tax manager in 1975. Mr. Bourne graduated from Florida State University in
1970, where he received a B.A. in Accounting, with honors.
 
 *James
Douglas Holladay* has
served as one of our Independent Directors since July 2004. Mr. Holladay
has served as general partner of two firms: Thornton Group, LLC from 1996 to
2002, which invests in start-up business ventures and advises public and private
companies, and since 1998, he has also served as general partner of Park Avenue
Equity Partners, LP, a private equity fund that makes investments in operating
companies. Mr. Holladay is a director of Sunrise Senior Living, Inc.
Mr. Holladay was a Senior Officer with Goldman, Sachs & Co., an
international investment banking firm, until 1995. He also previously held
senior positions of responsibility in both the White House and Department of
State. Mr. Holladay has served as an advisor and Board member to numerous
organizations, both private and public, including Morehouse College, Harvard
University, Heidrick & Struggles, an executive search firm, Hughes
Supply, a wholesale distributor, and United Way International. Mr. Holladay
received a B.A. in 1969 from the University of North Carolina and an M.A. in
1978 from Princeton Theological Seminary and an M. Litt. in 1981 from Oxford
University.
 
 *Jack
F. Kemp* has
served as one of our Independent Directors since July 2004. Currently, Mr. Kemp
is the Founder and Chairman of Kemp Partners. In 1993, Mr. Kemp co-founded
Empower America, a public policy and advocacy organization, and has since served
as co-director of the organization. In August 1996, he received the Republican
Party’s nomination for Vice President under presidential candidate Bob Dole.
Prior to founding Empower America, Mr. Kemp served as Secretary of Housing
and Urban Development from 1990 to 1993, and as a U.S. Representative for
western New York from 1971 to 1989. Before his election to Congress,
Mr. Kemp played 13 years as a professional football quarterback and
co-founded the American Football League Players Association. He received a B.A.
in 1957 from Occidental College. Mr. Kemp also currently serves as a director
for Hawk Corporation, IDT Corporation, InPhonic, and Oracle Corporation.
 
 *Craig
M. McAllaster, Ed.D.* has
served as one of our Independent Directors since 1999. Dr. McAllaster is
Dean of the Roy E. Crummer Graduate School of Business at Rollins College. He
directed the Executive MBA program from 1994 through 2000, has been on the
management faculty and served as Executive Director of the international
consulting practicum programs at the Crummer School. Prior to Rollins College,
Dr. McAllaster was on the faculty at the School of Industrial and Labor
Relations and the Johnson Graduate School of Management, both at Cornell
University and the University of Central Florida. Dr. McAllaster spent over
ten years in the consumer services and electronics industry in management,
organizational and executive development positions. He is a consultant to a
variety of domestic and international companies in the areas of strategy and
leadership. Dr. McAllaster received a B.S. from the University of Arizona
in 1972, an M.S. from Alfred University in 1980 and an M.A. in 1985 and
Doctorate in 1987, both from Columbia University.
 
 *Dianna
F. Morgan* has
served as one of our Independent Directors since July 2004. Ms. Morgan had
a 30-year career with Walt Disney World Company, most recently serving as Senior
Vice President of Public Affairs from 1993 to 2001, where she was responsible
for government, community and media relations, as well as the Disney Institute.
She was appointed by Governor Jeb Bush to the University of Florida Board of
Trustees and previously served as a member of the Orange County Tourist
  4
  Development
Commission, the Florida Tourism Commission and Enterprise Florida.
Ms. Morgan received a B.A. in 1995 from Rollins College.
 
 *Robert
E. Parsons, Jr.* has
served as one of our independent Directors since September 2003. Since July
2004, Mr. Parsons has served as Executive Vice President and Chief
Financial Officer of Exclusive Resorts, a Denver-based luxury residence club.
Mr. Parsons is also the Managing Director of Wasatch Investments, which provides
advisory and consulting services to the real estate and lodging industries.
Prior to Wasatch Investments, Mr. Parsons spent 22 years at Host
Marriott Corporation, a REIT that owns full service hotel properties, where from
1995 to 2003, he served as Executive Vice President and Chief Financial Officer.
He also previously served as Chairman of the Hotel Development Council of the
Urban Land Institute. Mr. Parsons also serves as a director of TenFold
Corporation. Mr. Parsons received a B.A. in 1979 and an M.B.A. in 1981 from
Brigham Young University.
 
 *Thomas
J. Hutchison III* has
served as our Chief Executive Officer since May 2003 and has served as a
Director since July 2004. Mr. Hutchison has served as Co-Chief Executive
Officer of CHC since February 2003 and has been a director of CHC since August
2000. From June 2002 through March 2003, Mr. Hutchison served as our
President and President of CHC. From May 2000 to June 2002, Mr. Hutchison
served as our Executive Vice President and Executive Vice President of CHC, and
from May 2000 to July 2002, he served as Executive Vice President and from July
2002 to September 2004 as President and as Chief Executive Officer since June,
2004 of CNL Hotel Investors, Inc. In addition, Mr. Hutchison has served as
President and Chief Operating Officer of CREG, the parent company of CNL
Retirement Corp. and the parent company of CHC, since January 1, 2000. He
also served as the President and Chief Operating Officer of CNL
Realty & Development Corp. Mr. Hutchison also has served as
President and Chief Executive Officer of CNL Retirement Properties, Inc. and as
President and Chief Executive Officer of CNL Retirement Corp., its advisor, each
since August 2003. He currently serves as a director of CNL Retirement Corp.
Mr. Hutchison also serves as Chief Executive Officer of CNL Income
Properties, Inc., a public, unlisted REIT. In addition, Mr. Hutchison
serves as Chief Executive Officer and a director of CNL Income Corp., the
advisor to CNL Income Properties, Inc. From 2000 to June 2002,
Mr. Hutchison served as Executive Vice President of CNL Retirement
Properties, Inc. and CNL Retirement Corp. Mr. Hutchison joined CFG in
January 2000 with more than 30 years of senior management and consulting
experience in the real estate development and services industries. Prior to
joining CNL, Mr. Hutchison was President and owner of numerous real estate
services and development companies. From 1990 to 2000, he was Chairman and Chief
Executive Officer of Atlantic Realty Services, Inc. and TJH Development
Corporation. Since 1990, he has fulfilled a number of long-term consulting
assignments for large corporations, including managing a number of large
international joint ventures. From 1990 to 1991, Mr. Hutchison was the
court-appointed President and Chief Executive Officer of General Development
Corporation, a real estate community development company. From 1986 to 1990, he
was the Chairman and Chief Executive Officer of a number of real estate-related
companies engaged in the master planning and land acquisition of forty
residential, industrial and office development projects. From 1978 to 1986,
Mr. Hutchison was the President and Chief Executive Officer of Murdock
Development Corporation and Murdock Investment Corporation, as well as Murdock’s
nine service divisions. In this capacity, he managed an average of
$350 million of new development per year for over nine years. Additionally,
he expanded the commercial real estate activities to a national basis, and
established both a new extended care division and a hotel division that grew to
14 properties. Mr. Hutchison attended Purdue University and the University
of Maryland Business School.
 
 *John
A. Griswold* has
served as our President since March 2003, as our Chief Operating Officer since
October 2003 and as one of our Directors since July 2004. The functions of
Acquisitions and Business Development, Portfolio and Asset Management, Planning,
Design, Construction, and the Office of General Counsel report to
Mr. Griswold. Mr. Griswold also has served as a Director and President
of CHC since March 2003 and has been CHC’s Chief Operating Officer since October
2003, and has over 30 years of experience in the hospitality industry. From
January 1999 to February 2003, Mr. Griswold served as one of our
Independent Directors. From 1985 to March 2003, Mr. Griswold served as a
senior executive, including as president from 1999 to March 2003, of Tishman
Hotel Corporation, an operating unit of Tishman Realty & Construction
Co., Inc., founded in 1898. Tishman Hotel Corporation is one of the nation’s
largest developers, owners and operators of upscale full service hotels and
resorts. The Tishman Corporation provided such services for more than 85 hotels
totaling more than 30,000 rooms. Tishman’s major developments included the Walt
Disney World Swan and Dolphin resorts in Orlando, the Sheraton Chicago Hotel and
Towers, the Westin Rio Mar Beach Resort in Puerto Rico and the Westin New York
at Times Square. From 1981 to 1985, Mr. Griswold served as general manager
of the Buena Vista Palace Hotel in The Walt Disney World Resort. From 1978 to
1981, he served as vice president and general manager of the Homestead Resort, a
luxury condominium resort in Glen Arbor, Michigan. In addition,
Mr. Griswold served as an operations manager for The Walt Disney Company
from 1971 to 1978. He was responsible for operational, financial and future
planning for multi-unit dining facilities in Walt Disney World and Lake Buena
Vista Country Club. He is a member of the Board of Directors of the Florida
Hotel & Lodging Association, Chairman of Orlando/Orange County
Convention & Visitors Bureau, Inc. and Chairman of the First Orlando
Foundation. Mr. Griswold received a B.S. from the School of Hotel
Administration at Cornell University in June 1971.
 
  5
  **EXECUTIVE
OFFICERS**
 
 Our Executive Officers are as follows:
 **Name**
    
    **Age**
    
    **Position**Thomas
      J. Hutchison III
    
    63
    
    Chief
      Executive OfficerJohn
      A. Griswold
    
    56
    
    President
      and Chief Operating OfficerC.
      Brian Strickland
    
    42
    
    Executive
      Vice President, Chief Financial Officer, Corporate Secretary and
      TreasurerBarry
      A.N. Bloom
    
    41
    
    Senior
      Vice President of Portfolio Management and AdministrationMark
      E. Patten
    
    41
    
    Senior
      Vice President and Chief Accounting OfficerMarcel
      Verbaas
    
    35
    
    Senior
      Vice President and Chief Investment Officer
 *C. Brian
Strickland* has ** served as
our Senior Vice President of Finance and Administration from 1998 through 2002,
as our Executive Vice President since 2002 and as our Chief Financial Officer
since January 2004. Mr. Strickland has also served as our Corporate
Secretary since April 2004 and Treasurer since February 2005. Mr. Strickland has
served as Executive Vice President of CHC since July 2002 and Chief Financial
Officer of CHC since October 2004. Mr. Strickland also serves as Executive
Vice President for CNL Hotel Development Company and CNL Hotel Investors, Inc.
Mr. Strickland is responsible for all aspects of corporate finance and
capital market initiatives, as well as accounting, financial reporting and
forecasting. Since joining CHC in 1998, Mr. Strickland has overseen the
acquisition financing of over $6.0 billion in hotels and resorts and has
directed the implementation of our accounting, financial reporting and cash
management processes and procedures. From 1989 to 1997, Mr. Strickland
served as Director of Tax for Wyndham Hotels and Resorts, where he was
integrally involved in structuring acquisitive transactions including the
consolidation and initial public offering of Wyndham Hotels Corp. in 1996 and
its subsequent merger with Patriot American Hospitality, Inc. Prior to 1989,
Mr. Strickland was senior tax accountant for Trammell Crow Company, where
he provided consulting services to regional development offices. From 1986 to
1988, Mr. Strickland was a tax consultant with Ernst & Whinney,
where he was a member of the real estate practice group. Mr. Strickland is
a certified public accountant and received a B.A. in Accounting from Texas Tech
University in 1985.
 
 *Barry
A.N. Bloom* has
served as our Senior Vice President of Portfolio Management and Administration
since May 2003. Mr. Bloom also has served as Senior Vice President of CHC since
May 2003. Mr. Bloom is responsible for the oversight of select hotel
assets, as well as directing efforts in management and franchise agreement
administration, market planning and feasibility, real estate ownership issues,
hotel technology and integrating acquisitions into our existing portfolio
management systems. Immediately prior to joining CHC, Mr. Bloom served as
Vice President — Investment Management for Hyatt Development Corporation
for three years. At Hyatt, he was responsible for providing ownership discipline
and oversight for over 50 hotels and provided direction and decision making for
capital expenditures and real estate issues. Prior to serving as Vice President
of Hyatt, Mr. Bloom was a First Vice President at Tishman Hotel
Corporation, where he spent over 10 years in a variety of capacities
including investment banking, asset management and property management. Prior to
joining Tishman, he worked for VMS Realty Partners and Pannell Kerr Forster.
Mr. Bloom received an MBA from the Johnson School at Cornell University in
2001 and a B.S. from the School of Hotel Administration at Cornell University in
1986.
 
 *Mark
E. Patten* has
served as the Senior Vice President and Chief Accounting Officer of CHC since
February 2004 and has served as our Senior Vice President and Chief Accounting
Officer since April 2004. Mr. Patten is primarily responsible for our
financial accounting and reporting areas, Securities and Exchange Commission
(“SEC”) compliance, and our internal audit function. In this capacity,
Mr. Patten works closely with our Audit Committee and our Chief Financial
Officer in, among other things, establishing and maintaining efficient and
effective disclosure controls and compliance with SEC rules and regulations.
Mr. Patten brings 19 years of experience in the areas of accounting,
SEC reporting and corporate finance. Prior to his employment with us,
Mr. Patten served for less than one year as the Chief Financial Officer of
SRK Management Company, served two years with Danka Office Imaging Systems, a
publicly-traded provider of office imaging equipment and services as Vice
President of Finance, two years as Chief Financial Officer of World Commerce
Online, a publicly-traded software development firm, and nearly two years as
Chief Accounting Officer and Assistant Corporate Secretary for Vistana Inc., a
publicly-traded developer and operator of timeshare resorts. During
Mr. Patten’s tenure as Chief Financial Officer of World Commerce Online,
World Commerce Online filed a petition pursuant to Chapter 11 of the
federal bankruptcy laws. In addition, Mr. Patten spent 13 years with
KPMG, including two years in KPMG’s Department of Professional Practice in New
York and was elected into the partnership of KPMG in 1997. Mr. Patten
received a B.A. in accounting from the University of Florida in 1986 and
received his certification as a public accountant in 1988.
 
  6
  
  *Marcel
Verbaas* has
served as our  Senior
Vice President and Chief Investment Officer since January 2005. Mr. Verbaas also
served as Chief Investment Officer of CNL Retirement Corp. from July 2003 to
December 2004 and Senior Vice President of CNL Retirement Corp., the advisor to
CNL Retirement Properties, Inc., from September 2003 to December 2004. Mr.
Verbaas previously served as Senior Vice President of Structured Investments for
CHC from August 2000 through July 2003. Prior to joining CNL, he served as
Director of Corporate Finance for Stormont Trice Development Corporation, a
private hotel development company with substantial expertise in public-private
ventures, from July 1998 to August 2000. His responsibilities included the
negotiation of all debt and equity investments for development projects, as well
as the analysis of development and acquisition opportunities. Mr. Verbaas
acquired extensive real estate finance expertise through various originations
and underwriting positions with GE Capital Corp. and Ocwen Financial Corp.
During his tenure at Ocwen Financial Corp., he assisted in the formation of its
affiliated REIT. While he originated, structured and underwrote transactions in
all types of commercial real estate, Mr. Verbaas primarily focused on providing
financing in the hospitality industry. A native of The Netherlands, Mr. Verbaas
received a master’s degree in business economics from Erasmus University of
Rotterdam, The Netherlands.
  The
backgrounds of Messrs. Hutchison and Griswold are described above under
“ THE BOARD
OF DIRECTORS.”
 
 **AUDIT
COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT**
 
 We have a
standing Audit Committee, the members of which are selected by our Board each
year. The Audit Committee operates under a written charter adopted by our Board,
a copy of which was attached as Appendix F to the Company’s definitive
proxy statement filed on June 21, 2004. The members of our Audit Committee are
Robert E. Parsons, Jr., Craig M. McAllaster, and Dianna F. Morgan, all of whom
qualify as “Independent Directors” under our Articles, the NYSE listing
standards and applicable SEC rules. Mr. Parsons serves as Chairman of the
Audit Committee, and our Board has determined that he is an audit committee
financial expert as defined in Item 401 of Regulation S-K. We believe
that each of our Audit Committee members is financially sophisticated and able
to read and understand our financial statements. The Audit Committee met sixteen
times during the year ended December 31, 2004.
 
 The Audit
Committee helps to ensure the integrity of our financial statements and
evaluates the qualifications and independence of our independent auditor and
oversees the performance of our internal audit function. The Audit Committee’s
functions are to select, assist and meet with the independent auditor, oversee
each annual audit and quarterly reviews, ensure that we establish and maintain
our internal audit controls and approve the report that federal securities laws
require be included in our annual proxy statement. In addition, our Audit
Committee has established procedures for handling any complaints we receive
regarding accounting, internal accounting controls, or auditing matters, as well
as any confidential, anonymous submissions by any of our employees regarding
concerns about questionable accounting or auditing matters. We will provide
appropriate funding, as determined by our Audit Committee, to our independent
accountants, internal auditors, any advisors the Audit Committee employs and for
other expenses of the Audit Committee.
 
 ****
 **SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE**
 
 On July
30, 2004 the following individuals were elected as members of our Board of
Directors and did not properly file all applicable Form 3s within 10 days of
their election. The appropriate Form 3s were filed on the dates noted
below:
 
 Board
      Member
    
    Filing
      DateJack
      F. Kemp
    
    August
      18, 2004Dianna
      F. Morgan
    
    August
      18, 2004Thomas
      J. Hutchison III
    
    August
      18, 2004John
      A. Griswold
    
    August
      25, 2004J.
      Douglas Holladay
    
    August
      25, 2004
 
 
 7
  On
December 1, 2004, we granted restricted common stock to the following
individuals who did not properly file Form 4s by the end of the second business
day following the grants. Form 4s were filed on the dates noted
below:
 Board
      Member
    
    Filing
      DateJack
      F. Kemp
    
    January
      5, 2005Dianna
      F. Morgan
    
    January
      5, 2005J.
      Douglas Holladay
    
    January
      5, 2005Craig
      M. McAllaster
    
    January
      12, 2005Robert
      E. Parsons, Jr.
    
    January
      12, 2005
 
 During
the fiscal year ended December 31, 2004, we did not have any beneficial owners
who held more than ten percent of our common stock.
 
 **CODE
OF ETHICS**
 
 We have
adopted a code of ethics that applies to our Principal Executive Officer,
Principal Financial Officer, Principal Accounting Officer, and persons
performing similar functions. Our code of ethics, which is entitled “Code of
Business Conduct,” is available on the Internet at our website at http://www.cnlhotels.com by
accessing the “Investor Relations” link and then the “Corporate Governance”
link.
 
 **Item
11. Executive Compensation**
 
 **COMPENSATION
OF DIRECTORS AND EXECUTIVE OFFICERS**
 
 **Compensation
of Directors**
 
 Prior to
July 2004, each Independent Director received $1,000 per Board meeting
attended ($500 for each telephonic meeting in which the Director participated).
Beginning with the fiscal quarter ending on September 30, 2004, each
Independent Director was entitled to receive $10,000 quarterly in cash for
serving on our Board, and a quarterly stock grant of shares having a value equal
to $10,000 (based on an estimated price of $20 per share), and an attendance fee
of $2,000 per meeting of our Board or any committee of the Board, whether
attended in person or telephonically. Directors who are employees CHC will not
receive compensation for their services as Directors. During 2004, each
Independent Director received initial stock grants under the terms of our
long-term incentive plan, as follows:
 
 •
    All
      existing Directors who served prior to the 2004 Annual Meeting of
      Stockholders received a stock grant of 5,000 shares;•
    Members
      of the special committee formed in connection with our proposed merger
      with CHC (the “Special Committee”) received an additional stock grant of
      2,500 shares; and•
    New
      Directors elected in July 2004 who did not provide services prior to the
      2004 Annual Meeting of Stockholders received a stock grant of
      2,500 shares.
 
 Prior to
July 1, 2004, the members of the Audit Committee were entitled to receive $1,000
(or $1,500, in the case of the Chairman of the Audit Committee) per Audit
Committee Meeting attended in person or telephonically. In addition to the above
compensation, the Chairman of the Audit Committee was entitled to receive
$1,500 per meeting attended with our independent accountants in person or
telephonically and for each meeting with our independent accountants in which
the Chairman participated as the representative of the Audit
Committee.
 
 Beginning
in the fiscal quarter ended September 30, 2004, the Audit Committee Chairman was
entitled to receive compensation of $3,750 in cash for serving as Chairman, the
Chairman of our Compensation Committee was entitled to receive $2,500 and the
Chairman of our Nominating and Corporate Governance Committee, as well as our
other Board committee chairs (except as determined by our Board) was entitled to
receive $1,250. In each case, this compensation will be earned on a quarterly
basis.
 
 Directors
who are members of the Special Committee, formed in connection with the proposed
Merger with CHC, are entitled to receive additional fees for services as members
of that Special Committee. The members of the Special Committee received
compensation as follows: Mr. Parsons, the committee chair, received a
one-time payment of $90,000; Craig McAllaster (a current member of the Special
Committee) and Charles Adams (a former member of the Special Committee), each
received a one-time payment of $60,000; and each of the three received
$1,500 per meeting. Mr. Kemp will receive $30,000 for his current
participation on the Special Committee and will also receive $1,500 per each
Special Committee meeting that he attends.
  8
  
 On
December 31, 2004 a Special Litigation Committee comprised of our three
non-defendant Independent Directors, was formed for the purpose of monitoring
the arbitration proceedings regarding the Company and its directors rights and
obligations concerning indemnification as it pertains to legal defense and
liability associated with the class action lawsuit and subsequent administration
of indemnification and to approve local counsel to represent us in connection
with the arbitration proceedings.
 
 Directors
are also entitled to reimbursement for expenses incurred in fulfilling their
duties as our Directors and receive complimentary hotel rooms, food and
beverages and related services at our hotels and resorts when on personal
travel, including reimbursement for associated taxes. In 2005 we implemented a
deferred compensation program for our Directors, allowing them to defer all or a
portion of their compensation.
 
 The
following table summarizes the compensation that was paid to each Independent
Director for the year ended December 31, 2004:
 
 Independent
      Director
    
    Cash
      Payments
    
    Stock
      Grants *Charles
      Adams**
    
    $
      119,983
    
    7,500Lawrence
      Dustin**
    
    25,583
    
    5,000J.
      Douglas Holladay***
    
    33,916
    
    3,000Jack
      F. Kemp***
    
    30,916
    
    3,000Craig
      M. McAllaster***
    
    166,600
    
    8,000Robert
      E. Parsons, Jr.***
    
    205,550
    
    8,000Dianna
      F. Morgan***
    
    41,616
    
    3,000
 
 *****
    ****Shares
      of common stock.******
    Messrs.
      Adams and Dustin served as Directors until the 2004 Annual Meeting of
      Stockholders and did not stand for re-election.***
    Each
      of our Independent Directors was entitled to receive 500 shares for their
      services during the fourth quarter of 2004, which had not been granted as
      of December 31, 2004.
 **Executive
Officer Compensation**
 
 We did
not pay any compensation to our Officers and Directors who also served as
Officers and Directors of CHC or its affiliates. No annual or long-term
compensation was paid by us to any Officers for services rendered in any
capacity to us during the years ended December 31, 2004, 2003 and 2002.
 
 In
addition, none of our Officers received an annual salary or bonus from us during
the years ended December 31, 2004, 2003 and 2002. Our Officers were also
employees and Officers of CHC or its affiliates and received compensation from
CFG and its affiliates in part for services provided to us. See “Certain
Relationships and Related Transactions” for a description of the fees payable
and expenses reimbursed to CHC and its affiliates.
 
 If a
merger with CHC were to occur, our Officers would become our employees and would
be compensated by us. It is also anticipated that if such a merger were to
occur, our Officers would receive restricted stock grants under the terms of our
long-term incentive plan, which is administered and implemented by the
Compensation Committee. For additional information related to the possible
Merger, see “Item 13. Certain Relationships and Related Transactions.” Also see
“Item 13” for a discussion of the employment agreements that are effective upon
consummation of a Merger.
 
  9
  **Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters**
 
 The
following table sets forth, as of April 1, 2005, the number and percentage of
outstanding shares of common stock, par value $0.01 per share, beneficially
owned by each Director, by each of our Executive Officers, and by all Executive
Officers and Directors as a group, based upon information furnished to us by
such Directors and Executive Officers. We are not aware of any person or group
that is the beneficial owner of more than five percent of our outstanding common
stock. Unless otherwise listed, the address of each of the persons listed below
is c/o CNL Hotels & Resorts, Inc., CNL Center at City Commons, 450 South
Orange Avenue, Orlando, Florida 32801.
 
 NAME
      AND ADDRESS OF
      BENEFICIAL
      OWNER
    
    TOTAL
      NUMBER OF SHARES BENEFICIALLY OWNED
    
    PERCENT
      OF CLASSBarry
      A.N. Bloom
    
    --
    
    --Robert
      A. Bourne
    
    --
    
    --John
      A. Griswold
    
    --
    
    --J.
      Douglas Holladay
    
    3,000
    
    (1)Thomas
      J. Hutchison III
    
    --
    
    --Jack
      F. Kemp
    
    3,000
    
    (1)Craig
      M. McAllaster
    
    8,000
    
    (1)Dianna
      F. Morgan
    
    3,000
    
    (1)Robert
      E. Parsons, Jr.
    
    8,000
    
    (1)James
      M. Seneff, Jr.
    
    10,000
    
    (2)(1)C.
      Brian Strickland
    
    --
    
    --Mark
      E. Patten
    
    --
    
    --Marcel
      Verbaas
    
    --
    
    --All
      Directors and Executive Officers as a group (13 persons)
    
    35,000
    
    (2)(1)
 
 (1) Less
than one percent of the total amount of our outstanding shares of common
stock.
 
 (2)
Represents 10,000 shares held by CHC, of which Mr. Seneff is a director. Mr.
Seneff and his spouse share beneficial ownership of CHC through their ownership
of CFG, which they hold through ownership of its parent company, CNL Holdings,
Inc. CHC is a majority owned subsidiary of CFG.
 
 **Equity
Compensation Plan Information**
 
 The
following shares **** have been
authorized for issuance under our long-term incentive plan (share amounts in
thousands):
 
 Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
    
    Number
      of securities issued
    
    Weighted
      average exercise price of outstanding options, warrants and
      rights
    
    Number
      of securities available for future issuance under equity compensation
      plansLong-term
      incentive plan approved by stockholders
    1,788.0
    
    2.5
    
    n/a
    
    1,785.5
 
 Our
long-term incentive plan that awards may be granted under the plan in the form
of options to purchase shares of common stock, restricted common stock awards,
stock appreciation rights, deferred shares, performance shares and performance
units to our employees, Directors and consultants or any of our affiliates'
employees, directors and consultants. A total of 1,788,000 shares were initially
reserved for issuance as stock awards.  No one participant may receive
awards for more than 1.0 million shares of common stock in any one calendar
year. The plan is administered by the Compensation Committee of our Board.
 
  10
  **Item
13. Certain Relationships and Related Transactions**
 
 **CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS**
 
 On April
29, 2004, we entered into a merger agreement (the “Existing Merger Agreement”)
with CHC pursuant to which all of the outstanding shares of capital stock of CHC
would be exchanged for a total merger consideration of $297.0 million, comprised
of approximately $267.3 million of our common shares and approximately $29.7
million in cash. On April 8, 2005, we filed a Current Report on Form 8-K
reporting that the Special Committee of our Board, on our behalf, is in
discussions with CHC regarding the possible amendment of the Existing Merger
Agreement and that, although the Existing Merger Agreement remains in effect, it
is currently contemplated that the merger will not be consummated on its
present terms. We anticipate that if an amended merger agreement results from
such discussions, the amended merger agreement would be submitted to our
stockholders for approval. A merger between us and CHC, under whatever terms may
ultimately be consummated, if at all, is hereinafter referred to as “a Merger”.
 
 *Present
Terms of Existing Merger Agreement*
 
 Under the
terms of the Existing Merger Agreement we would assume and repay a loan in the
amount of approximately $11.0 million. Certain of our Officers, Directors and
their respective affiliates who own interests in CHC would receive $267.3
million worth of our shares of common stock and none of the cash. The Existing
Merger Agreement provides that upon consummation of a Merger, the surviving
corporation would continue as our wholly-owned subsidiary and would succeed to
all of the assets, liabilities and business of CHC, and CHC’s officers and other
employees will become our employees. As a result, we would become self-advised.
The Merger is subject to the fulfillment of certain conditions which have not
occurred as of the date of this Form 10-K/A. As a result, the Existing Merger
Agreement may be terminated at any time by either party, although neither party
has done so. There can be no assurance that we will agree with CHC to amend the
Existing Merger Agreement, or if amended, that such amended merger agreement or
any merger agreement will be consummated or the terms or the timing
thereof.
 
 Certain
of our Officers, Directors and affiliates are stockholders of CHC and under the
terms of the Existing Merger Agreement would receive, based on the per share
assumption, shares of our common stock if the Merger is consummated. James M.
Seneff, Jr., individually and through his ownership of CREG, owns 68.1 percent
of CHC; Robert A. Bourne owns 15.3 percent of CHC; Thomas J. Hutchison III owns
3.2 percent of CHC; John A Griswold owns 0.9 percent of CHC; C. Brian Strickland
owns 1.4 percent of CHC; and Barry A.N. Bloom owns 0.3 percent of
CHC.
 
 As a
condition to the Existing Merger Agreement, we agreed to enter into a
registration rights agreement with CHC’s stockholders who would receive our
common shares if a Merger were consummated (the “Registration Rights
Agreement”). The Registration Rights Agreement requires us, on up to two
occasions, on demand of holders of shares with an aggregate offering price equal
to at least $10.0 million, to use our best efforts to prepare and file a
registration statement within 90 days of the demand that covers the resale of
those shares, and the shares of any other holders of registration rights
electing to participate in the registration.
 
 During
the period from the execution of the Existing Merger Agreement until the
Effective Time (as defined in the Existing Merger Agreement), (i) CHC will
continue to earn and be paid asset management fees in accordance with the
advisory agreement, as amended, with CHC (the “Advisory Agreement”);
(ii) CHC will continue to earn and be paid development fees earned by CHC
and its affiliates in the ordinary course of business prior to the closing date
of the Merger; and (iii) CHC will continue to be reimbursed for expenses
incurred in the ordinary course of business, including but not limited to
accounting fees, in accordance with the terms of the Advisory Agreement. During
the period from April 29, 2004 until the effective time, CHC will not be
entitled to receive any other fees from us under the Advisory Agreement (or any
predecessor agreement thereto) or under our articles of incorporation or bylaws.
If the Existing Merger Agreement is terminated, we will be obligated to pay to
CHC, in addition to the fees described above, acquisition fees related to
permanent financing, as well as acquisition fees related to the sale of common
stock under the terms of our distribution reinvestment plan which would amount
to a total of approximately $82.7 million (as of March 16, 2005) in acquisition
fees, that CHC otherwise would be entitled to under the terms of the Advisory
Agreement. These fees have not been paid or accrued pursuant to the Existing
Merger Agreement.
 
 Some of
our Directors and all of our Officers, including Messrs. Seneff, Bourne,
Hutchison, Griswold, Strickland, Bloom and Patten, hold similar positions with
CHC. In addition, Mr. Bourne is an officer of CNL Securities Corp., an
affiliate of CHC and the managing dealer of our five prior public offerings of
common shares and a wholly-owned subsidiary of CFG. Mr. Seneff, jointly
with his wife, has ownership and voting control of CNL Holdings, Inc., the
parent of CFG and its subsidiaries which in turn, wholly owns CREG, the owner of
53.3 percent of the outstanding shares of common stock of CHC.  CHC is by
contract entitled to receive fees and compensation for services provided in
connection with our common stock offerings, and the acquisition, development,
management and sale of our assets. CNL Securities Corp. was by contract entitled
to receive fees and compensation for services provided in connection with prior
common stock offerings. Amounts incurred relating to these services
  11
  and to
our prior offerings were $109.6 million and $202.2 million for the
years ended December 31, 2004 and 2003, respectively. Of these amounts,
approximately $5.9 million and $10.1 million were paid in 2005 and
2004 and are included in “due to related parties” in the consolidated balance
sheets as of December 31, 2004 and 2003, respectively, filed as part of our
Form 10-K on March 16, 2005. The remainder was paid in the year incurred.
 
 For the
year ended December 31, 2004, CNL Securities Corp. was entitled to receive
selling commissions amounting to 7.5 percent of the total amount raised from the
sale of our common shares for services in connection with our public offerings
of those shares, the majority of which may be paid as commissions to other
broker-dealers. For the year ended December 31, 2004, we paid approximately
$47.5 million of such fees, the majority of which have been reallowed by
CNL Securities Corp. as commissions to unaffiliated broker-dealer firms.
 
 In
addition, for the year ended December 31, 2004, CNL Securities Corp. was
entitled to receive a marketing support fee and due diligence expense
reimbursements equal to 0.5 percent of the total amount raised from the sale of
shares in connection with our public offerings. For the year ended
December 31, 2004, we paid approximately $3.1 million of such fees,
the majority of which have been reallowed to other broker-dealers.
 
 CHC is
entitled to receive acquisition fees for services in identifying the properties
and structuring the terms of the acquisitions, leases of the properties and the
mortgage loans equal to 4.5 percent of the total amount raised from the sale of
shares and loan proceeds from permanent financing and a portion of the line of
credit proceeds that are used to acquire properties. For the year ended
December 31, 2004, we paid approximately $30.2 million of such fees.
 
 Development
Company, a subsidiary of CHC, is entitled to receive fees in connection with the
development, construction or renovation of certain properties, generally equal
to four to five percent of anticipated project costs. During the year ended
December 31, 2004, we paid approximately $2.2 million of such fees.
 
 On March
31, 2005, we entered into a renewal agreement (the “Renewal Agreement”) with CHC
with respect to the Advisory Agreement dated as of April 1, 2004 between us and
CHC, pursuant to which the Advisory Agreement was renewed for an additional
one-year term commencing on April 1, 2005, and ending on March 31,
2006.
 
 The
Renewal Agreement provides that with respect to the Acquisition Fees (as defined
in the Advisory Agreement) payable to CHC, we will determine the comparable
current market percentage Rate of Total Proceeds (as defined in the Advisory
Agreement) to be used in determining the Acquisition Fees, and will propose any
new Rate to CHC on or before May 1, 2005, which we did.  CHC will
respond to our proposal on or before June 1, 2005. If CHC does not respond by
June 1, 2005, the Rate proposed by us will be deemed to be the new Rate. In the
event that the parties cannot agree, after good faith negotiations, upon a new
Rate on or before July 1, 2005, the Parties will submit the determination of the
Rate to binding arbitration, so long as the arbitration of this matter will not
be inconsistent with applicable law or our articles of incorporation, as
amended.
 
 The
Renewal Agreement also provides that for purposes of the Merger Agreement, the
Renewal Agreement is subject to the provisions of Section 8.13 of the Merger
Agreement as if the Renewal Agreement was specifically referenced therein with
regard to advisory fees and reimbursement of expenses.
 
 Under our
current Advisory Agreement with CHC, CHC is entitled to receive a monthly asset
management fee of one-twelfth of 0.60 percent of our real estate asset value and
the outstanding principal balance of any mortgage loans as of the end of the
preceding month. The asset management fee, which is not allowed to exceed fees
which are competitive for similar services in the same geographic area, may or
may not be taken, in whole or in part as to any year, at the sole discretion of
CHC. All or any portion of the asset management fee not taken as to any fiscal
year will be deferred without interest and may be taken in such other fiscal
year as determined. During the year ended December 31, 2004, we incurred
approximately $26.5 million of such fees.
 
 We incur
operating expenses which, in general, are those expenses relating to our
administration on an ongoing basis. Pursuant to the Advisory Agreement then in
effect, CHC was required to reimburse us the amount by which the total operating
expenses paid or incurred by us exceed in any four consecutive fiscal quarters,
the greater of 2 percent of average invested assets or 25 percent of net
earnings. For the year ended December 31, 2004, our operating expenses did
not exceed these amounts.
 
 CHC and
its affiliates, including CNL Shared Services, Inc., a subsidiary of CNL
Holding, Inc., the parent of CFG, provide various administrative services to us,
including services related to accounting; financial, tax and regulatory
compliance reporting; stockholder distributions and reporting; due diligence and
marketing; and investor relations, on a day-to-day basis. For the year ended
December 31, 2004, we incurred a total of approximately $12.5 million
for these services, approximately $8.2
  12
  million
representing stock issuance costs and approximately $4.3 million
representing general operating and administrative expenses, including costs
related to the preparation and distribution of reports required by the SEC.
 
 We
maintain bank accounts in a bank in which Messrs. Seneff and Bourne serve
as Directors, and in which CFG, an affiliate of CHC, is a stockholder. The
amount deposited with this bank was approximately $41.7 million at
December 31, 2004.
 
 We own a
9.9 percent interest in CNL Plaza, Ltd., a limited partnership that owns an
office building located in Orlando, Florida, in which CHC and its affiliates
lease office space. The remaining interest in the limited partnership is owned
by several affiliates of CHC. In connection with this acquisition, we have
severally guaranteed a 16.67 percent share, or approximately $2.6 million, of a
$15.5 million unsecured promissory note of the limited partnership.
 
 We
believe all amounts paid by us to our affiliates are fair and comparable to
amounts that would be paid for similar services provided by unaffiliated third
parties.
 
 **Agreements
with Certain of Our Officers and Directors**
 
 Pursuant
to the Existing Merger Agreement, we have entered into employment agreements
with Messrs. Hutchison, Griswold, Strickland, and Bloom, which would be
effective as of the effective date of a Merger. We have also entered into
indemnification agreements with certain of our Directors and certain of our
Officers.
 
 We plan
to issue long-term incentive stock awards in the form of deferred shares
pursuant to the terms of a program to be administered by our Compensation
Committee. Under the terms of the Existing Merger Agreement, the program will
begin as of the effective date of a Merger and continue until December 31,
2007.
 
 **Covenants
Not to Compete**
 
 Pursuant
to the Existing Merger Agreement, during the period commencing on the effective
time of a Merger under such agreement and terminating on the fifteenth
anniversary of the effective time of such Merger (the “Restricted Period”), each
of CFG, CREG, James M. Seneff, Jr., and Robert A. Bourne (collectively, the
“CNL Group”) have agreed not to, and to cause each of their respective
affiliates not to, directly or indirectly engage in any activities within the
United States of America, Canada and Europe that are in competition with us or
the surviving corporation, including, but not limited to, (i) sponsoring or
organizing, or assisting any other person in sponsoring or organizing, an
investment vehicle in the lodging industry; or (ii) providing asset
management or other advisory services to, or assisting another person in
providing asset management or advisory services to, any investment vehicle in
the lodging industry; provided, however, that, the following will not violate
this restrictive covenant:
 •
    Activities
      taken by any member of the CNL Group, the CNL Group or any of their
      respective affiliates with respect to the investment in recreational
      facilities or recreational properties, including golf courses, ski
      resorts, campgrounds, recreational vehicle parks and marinas, in which
      lodging is only incidental to the primary purpose of the facility or
      property,•
    Activities
      taken by any member of the CNL Group, the CNL Group or any of their
      respective affiliates with respect to facilities, such as condominiums and
      time share properties, in which 50 percent or more of the ownership
      interests of such facility exist on a fractional basis,•
    The
      investment by Mr. Seneff, Mr. Bourne or any of their respective
      affiliates in certain specified properties.
 In
addition, under the employment agreements to be entered into under the terms of
the Existing Merger Agreement with Messrs. Hutchison, Griswold, Strickland
and Bloom, each such individual has agreed that he will not, during the term of
his respective employment agreement and for a period of one year thereafter (two
years in the case of Messrs. Hutchison and Griswold terminating employment
after a change of control) and except for certain limited exceptions, engage in,
or participate in any capacity in any business that engages in, any business
that is competitive with our business with assets in excess of
$500 million. Each such employment agreement provides for a variety of
remedies, including injunctive relief, if this provision is breached. These
provisions, coupled with the non-compete provisions contained in the Existing
Merger Agreement, and assuming the employment agreements would be renewed at the
expiration of their respective terms on similar terms, have the effect of
constraining the ability of Messrs. Hutchison, Griswold, Strickland and
Bloom to compete with us for one year after such individuals leave our employ.
However, there is no assurance that these and other provisions of the employment
agreements will not be changed in connection with any changes to the Existing
Merger Agreement.
 
  13
  **Item
14. Principal Accountant Fees and Services**
 
 **Audit
Fees**
 
 The
following table presents fees billed for services rendered by
PricewaterhouseCoopers, LLP (“PWC”), our independent accountants, for the fiscal
years ended December 31, 2004 and 2003.
 **Fiscal
      Year****2004**
    
    **2003**Audit
      Fees(a)
    
    $
    1,971,180
    
    $
    508,776Audit-Related
      Fees(b)
    
    
    849,971
    
    
    192,500Tax
      Fees(c)
    
    
    557,516
    
    
    147,189All
      Other Fees(d)
    
    
    —
    
    
    —Total
    
    $
    3,378,667
    
    $
    848,465
  (a)
    
    Audit
      Fees — Consist of professional services rendered in connection with
      the annual audit of our consolidated financial statements on
      Form 10-K, quarterly reviews of our interim financial statements on
      Form 10-Q and attestation services performed in connection with our
      certification pursuant to Section 404 of the Sarbanes-Oxley Act. Audit
      fees also include fees for services performed by PWC that are closely
      related to the audit and in many cases could only be provided by our
      independent auditors. Such services include the issuance of comfort
      letters and consents related to our registration statements and capital
      raising activities, assistance with and review of other documents filed
      with the SEC and accounting advice on completed transactions.(b)
    
    Audit
      Related Fees — Consist of services related to audits of properties
      acquired, due diligence services related to contemplated property
      acquisitions and accounting consultations.(c)
    
    Tax
      Fees — Consist of services related to corporate tax compliance,
      including review of corporate tax returns, review of the tax treatments
      for certain expenses and tax due diligence relating to acquisitions.(d)
    
    All
      Other Fees — There were no other professional services rendered by
      PWC during the years ended December 31, 2004 and 2003.
 
  14
  **Pre-Approval
Policies and Procedures**
 
 It is our
policy and the policy of our Audit Committee that audit related services and
non-audit related services, which are provided by our independent accountants
falling into the categories below, do not require advance written approval by
our Audit Committee unless they exceed $25,000 for individual engagements. Once
individually insignificant assignments, which otherwise do not require written
approval, exceed $150,000 during any fiscal year we must obtain prior written
approval from our Audit Committee for subsequent assignments. Any services that
fall outside the categories listed below, regardless of the cost, must be
approved in writing by our Audit Committee prior to work commencing on the
engagement. Our Audit Committee, our independent accountants, and we understand
that in order to maintain our independence from PWC, certain types of advisory
and consulting services may not be provided to us by PWC. We generally limit the
non-audit related services we receive from our independent accountants to the
following:
 1. Advisory services in connection with ongoing accounting and
      reporting issues including the implementation of new GAAP and SEC
      requirements;2. Advisory services regarding accounting treatment in connection
      with property acquisitions;3. Advisory services in connection with corporate transactions
      (investments, merger transactions, etc.) which are limited to the review
      and evaluation of accounting systems and practices of target companies;4. Advisory and review services in connection with the filing of our
      registration statements with the SEC including Forms S-3, Forms S-11,
      amendments, pro forma financial statements, consents, other agreed upon
      procedures, etc.;5. Tax return preparation services;6. Advisory services in connection with ongoing corporate and state
      income tax issues; and7. Advisory services regarding prospective tax issues in connection
      with property acquisitions and other corporate transactions.
 
 During
the fiscal years ended December 31, 2004 and December 31, 2003, all audit,
audit-related and tax services performed by our independent accountants which
required pre-approval, as defined in our Audit Committee’s policies and
procedures, were pre-approved. Services other than audit, review, or attest
services, which did not require pre-approval pursuant to those policies were
brought to the attention of the Audit Committee and approved prior to the
completion of our annual audit by the Chairman of our Audit Committee in
accordance with SEC rules and regulations.
  15
  **SIGNATURES**
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, on the 29th day of April,
2005.
 
 CNL
      HOTELS & RESORTS, INC.By:
    /s/
      Thomas J. Hutchison IIITHOMAS
      J. HUTCHISON IIIChief
      Executive Officer and Director
 
  16
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
 **Signature**
    
    **Title**
    
    **Date**/s/
      James M. Seneff, Jr.
      _______________________
      James
      M. Seneff, Jr.
    
    Chairman
      of the Board
    
    April
      29, 2005/s/
      Robert A. Bourne
      _______________________
      Robert
      A. Bourne
    
    Vice
      Chairman of the Board
    
    April
      29, 2005/s/
      John A. Griswold
      _______________________
      John
      A. Griswold
    
    President,
      Chief Operating
      Officer
      and Director
    
    April
      29, 2005/s/
      Craig M. McAllaster
      _______________________
      Craig
      M. McAllaster
    
    Director
    
    April
      29, 2005/s/
      Robert E. Parsons, Jr.
      _______________________
      Robert
      E. Parsons, Jr.
    
    Director
    
    April
      29, 2005/s/
      James Douglas Holladay
      _______________________
      James
      Douglas Holladay
    
    Director
    
    April
      29, 2005/s/
      Jack Kemp
      _______________________
      Jack
      Kemp
    
    Director
    
    April
      29, 2005/s/
      Dianna Morgan
      _______________________
      Dianna
      Morgan
    
    Director
    
    April
      29, 2005/s/
      Thomas J. Hutchison III
      ______________________
      Thomas
      J. Hutchison III
    
    Chief
      Executive Officer and Director
      (Principal
      Executive Officer)
    
    April
      29, 2005/s/
      C. Brian Strickland
      ______________________
      C.
      Brian Strickland
    
    Executive
      Vice President, Chief Financial Officer, Secretary and Treasurer
      (Principal
      Financial Officer)
    
    April
      29, 2005/s/
      Mark E. Patten
      _____________________
      Mark
      E. Patten
    
    Senior
      Vice President and Chief Accounting Officer
      (Principal
      Accounting Officer)
    
    April
      29, 2005
 
 
 17