CHATHAM LODGING TRUST (NYSE:CLDT) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On February 16, 2017, the Board of Trustees (the Board) of
Chatham Lodging Trust (the Company) approved, as recommended by
the Compensation Committee of the Board (the Compensation
Committee), compensatory arrangements in which the executive
officers of the Company will participate. The arrangements
include compensation for 2016 and 2017 and are described in
further detail below.
Chatham Lodging Trust (the Company) approved, as recommended by
the Compensation Committee of the Board (the Compensation
Committee), compensatory arrangements in which the executive
officers of the Company will participate. The arrangements
include compensation for 2016 and 2017 and are described in
further detail below.
Cash Bonus Compensation for 2016
Upon the recommendations of the Compensation Committee, the Board
approved payment of cash bonuses to each of the Companys four
named executive officers (each, an NEO and collectively, the
NEOs) for performance in 2016. Despite the fact that revenue per
available room (RevPAR) was unchanged from 2016, the Company was
able to increase its adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA) and adjusted
funds from operations (Adjusted FFO) over 2016. Additionally, the
Companys leverage was reduced as a result of the net cash flow
generated in 2016. Lastly, each NEOs individual performance was
assessed and considered. The Company did not meet its original
net income, Adjusted EBITDA and Adjusted FFO expectations for
2016 and accordingly, each NEO did not earn their targeted bonus
amount for 2016. Based on this information, the Board awarded to
each of these executives a cash bonus for 2016 as follows:
approved payment of cash bonuses to each of the Companys four
named executive officers (each, an NEO and collectively, the
NEOs) for performance in 2016. Despite the fact that revenue per
available room (RevPAR) was unchanged from 2016, the Company was
able to increase its adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA) and adjusted
funds from operations (Adjusted FFO) over 2016. Additionally, the
Companys leverage was reduced as a result of the net cash flow
generated in 2016. Lastly, each NEOs individual performance was
assessed and considered. The Company did not meet its original
net income, Adjusted EBITDA and Adjusted FFO expectations for
2016 and accordingly, each NEO did not earn their targeted bonus
amount for 2016. Based on this information, the Board awarded to
each of these executives a cash bonus for 2016 as follows:
|
Jeffrey H. Fisher, the Companys Chairman, President and
Chief Executive Officer, received $850,000. |
|||
|
Dennis M. Craven, the Companys Executive Vice President
and Chief Operating Officer, received $337,500. |
|||
|
Peter Willis, the Companys Executive Vice President and
Chief Investment Officer, received $250,000. |
|||
|
Jeremy Wegner, the Companys Senior Vice President and
Chief Financial Officer, received $256,500. |
|||
2017 Compensation
The key elements of the Companys 2017 compensation program are
base salary, annual cash incentive awards, including cash
bonuses, time-based restricted share incentive awards and
performance-based equity incentive awards, to the Companys Equity
Incentive Plan. The following disclosure describes the material
terms of the elements>and, where applicable, the awards and
target awards which have been approved by the Compensation
Committee for the Companys four>NEOs. The structure and
amounts are based, in large part, on the recommendations of a
third-party compensation consultant, retained by the Compensation
Committee, who reviewed and analyzed the compensation levels and
programs of peer companies.
base salary, annual cash incentive awards, including cash
bonuses, time-based restricted share incentive awards and
performance-based equity incentive awards, to the Companys Equity
Incentive Plan. The following disclosure describes the material
terms of the elements>and, where applicable, the awards and
target awards which have been approved by the Compensation
Committee for the Companys four>NEOs. The structure and
amounts are based, in large part, on the recommendations of a
third-party compensation consultant, retained by the Compensation
Committee, who reviewed and analyzed the compensation levels and
programs of peer companies.
Base Salary and Annual Cash Incentive Awards
The Board approved, as recommended by the Compensation Committee,
no changes to each NEOs 2016 base salary so the base salary for
2017 for each of the NEOs is:
no changes to each NEOs 2016 base salary so the base salary for
2017 for each of the NEOs is:
|
Name
|
2017 Base Salary
|
|
Jeff Fisher
|
$600,000
|
|
Dennis Craven
|
$375,000
|
|
Peter Willis
|
$345,000
|
|
Jeremy Wegner
|
$285,000
|
For each NEO, any cash bonus awards for 2017 will be determined
to the following components: 50% will be tied to pre-established
corporate objectives, 25% based on the achievement of
pre-established individual goals and the remaining 25% will be at
the discretion of the Compensation Committee and the Board
to the following components: 50% will be tied to pre-established
corporate objectives, 25% based on the achievement of
pre-established individual goals and the remaining 25% will be at
the discretion of the Compensation Committee and the Board
Equity Incentive Awards
For 2017, the Board, upon the recommendation of the Compensation
Committee, approved grants of long-term incentive plan units
(LTIP Units) of the Companys operating partnership, Chatham
Lodging LP (the Operating Partnership), 40% of which are
time-based awards (the 2017 Time-Based LTIP Unit Award) and 60%
of which are performance-based awards (the 2017 Performance-Based
LTIP Unit Award). The grants are being made to award agreements
that provide for time-based vesting (the LTIP Unit Time-Based
Vesting Agreement) or performance-based vesting (the LTIP Unit
Performance-Based Vesting Agreement).
Committee, approved grants of long-term incentive plan units
(LTIP Units) of the Companys operating partnership, Chatham
Lodging LP (the Operating Partnership), 40% of which are
time-based awards (the 2017 Time-Based LTIP Unit Award) and 60%
of which are performance-based awards (the 2017 Performance-Based
LTIP Unit Award). The grants are being made to award agreements
that provide for time-based vesting (the LTIP Unit Time-Based
Vesting Agreement) or performance-based vesting (the LTIP Unit
Performance-Based Vesting Agreement).
Time-Based Equity Incentive Awards
The 2017 Time-Based LTIP Unit Awards will be issued March 1,
2017, and will vest ratably on March 1, 2018, March 1, 2019 and
March 1, 2020 (provided that the recipient remains employed by
the Company through the applicable vesting date, subject to
acceleration of vesting in the event of the recipients death,
disability, termination without cause or resignation with good
reason, or in the event of a change of control of the Company).
Prior to vesting, a holder will be entitled to receive
distributions on the LTIP Units that comprise the 2017 Time-Based
LTIP Unit Awards. The following table sets forth the grant date
fair value of LTIP units granted to each NEO under the 2017
Time-Based LTIP Unit Awards:
2017, and will vest ratably on March 1, 2018, March 1, 2019 and
March 1, 2020 (provided that the recipient remains employed by
the Company through the applicable vesting date, subject to
acceleration of vesting in the event of the recipients death,
disability, termination without cause or resignation with good
reason, or in the event of a change of control of the Company).
Prior to vesting, a holder will be entitled to receive
distributions on the LTIP Units that comprise the 2017 Time-Based
LTIP Unit Awards. The following table sets forth the grant date
fair value of LTIP units granted to each NEO under the 2017
Time-Based LTIP Unit Awards:
|
Name
|
Number of Time-Based LTIP Units Awards
|
Grant Date Fair Value
|
|
Jeff Fisher
|
TBD
|
$880,000
|
|
Dennis Craven
|
TBD
|
$400,000
|
|
Peter Willis
|
TBD
|
$140,000
|
|
Jeremy Wegner
|
TBD
|
$166,000
|
The number of 2017 Time-Based LTIP Unit Awards issued to each NEO
will be the grant date fair value shown above divided by the
closing price of the Companys common shares on the NYSE on
February 28, 2017.
will be the grant date fair value shown above divided by the
closing price of the Companys common shares on the NYSE on
February 28, 2017.
Performance-Based Equity Incentive Awards
The 2017 Performance-Based LTIP Unit Awards are comprised of
Class A Performance LTIP Units of the Operating Partnership
(Class A Performance LTIP Units) that may vest only if and to the
extent that (i) the Company achieves certain long-term
performance criteria established by the Compensation Committee
and (ii) the recipient remains employed by the Company through
the vesting date, subject to acceleration of vesting in the event
of the recipients death, disability, termination without cause or
resignation with good reason, or in the event of a change of
control of the Company. Prior to vesting, a holder will not be
entitled to vote on any matters but will be entitled to receive
10% of distributions made as and when the Operating Partnership
makes such distributions. To the extent any of the Class A
Performance LTIP Units become vested, the Operating Partnership
will pay to the holder on the vesting date an amount equal to the
aggregate amount of distributions that would have been received
on such vested Class A Performance LTIP Unit since the grant date
minus the aggregate amount of distributions received to the 10%
distribution.
Class A Performance LTIP Units of the Operating Partnership
(Class A Performance LTIP Units) that may vest only if and to the
extent that (i) the Company achieves certain long-term
performance criteria established by the Compensation Committee
and (ii) the recipient remains employed by the Company through
the vesting date, subject to acceleration of vesting in the event
of the recipients death, disability, termination without cause or
resignation with good reason, or in the event of a change of
control of the Company. Prior to vesting, a holder will not be
entitled to vote on any matters but will be entitled to receive
10% of distributions made as and when the Operating Partnership
makes such distributions. To the extent any of the Class A
Performance LTIP Units become vested, the Operating Partnership
will pay to the holder on the vesting date an amount equal to the
aggregate amount of distributions that would have been received
on such vested Class A Performance LTIP Unit since the grant date
minus the aggregate amount of distributions received to the 10%
distribution.
The 2017 Performance-Based LTIP Unit Awards may be earned based
on the Companys relative total shareholder return (TSR)
performance for the three-year period beginning on March 1, 2017
and ending on February 28, 2020. The 2017 Performance-Based LTIP
Unit Awards, if earned, will be paid out between 50% and 150% of
target value as follows:
on the Companys relative total shareholder return (TSR)
performance for the three-year period beginning on March 1, 2017
and ending on February 28, 2020. The 2017 Performance-Based LTIP
Unit Awards, if earned, will be paid out between 50% and 150% of
target value as follows:
|
Relative TSR Hurdles (Percentile)
|
Payout Percentage
|
|
|
Threshold
|
25th
|
50%
|
|
Target
|
50th
|
50%
|
|
Maximum
|
75th
|
150%
|
Payouts at performance levels in between the hurdles will be
calculated by straight-line interpolation. The TSR hurdles are
based on the Companys performance relative to the average TSR for
the companies included in the SNL US Hotel REIT Index. TSR will
be calculated to include share price appreciation plus dividends
assuming the reinvestment of dividends as calculated by a
third-party such as SNL Financial.
calculated by straight-line interpolation. The TSR hurdles are
based on the Companys performance relative to the average TSR for
the companies included in the SNL US Hotel REIT Index. TSR will
be calculated to include share price appreciation plus dividends
assuming the reinvestment of dividends as calculated by a
third-party such as SNL Financial.
The following table sets forth the value of LTIP units that will
be granted to each NEO under the 2017 Performance-Based LTIP Unit
Awards. The number of 2017 Performance-Based LTIP Unit Awards
issued to each NEO will be the grant date fair value shown below
divided by the closing price of the Companys common shares on the
NYSE on February 28, 2017:
be granted to each NEO under the 2017 Performance-Based LTIP Unit
Awards. The number of 2017 Performance-Based LTIP Unit Awards
issued to each NEO will be the grant date fair value shown below
divided by the closing price of the Companys common shares on the
NYSE on February 28, 2017:
|
Name
|
Number of Performance-Based LTIP Units Awards
|
Grant Date Fair Value
|
|
Jeff Fisher
|
TBD
|
$1,320,000
|
|
Dennis Craven
|
TBD
|
$600,000
|
|
Peter Willis
|
TBD
|
$210,000
|
|
Jeremy Wegner
|
TBD
|
$249,000
|
To the extent the 2017 Performance-Based LTIP Unit
Awards>vest, the Company will estimate the aggregate
compensation cost to be recognized over the service period
determined as of the grant date under FASB ASC Topic 718,
excluding the effect of estimated forfeitures, and will calculate
the value at the grant date based on the probable outcome of the
performance conditions.
Awards>vest, the Company will estimate the aggregate
compensation cost to be recognized over the service period
determined as of the grant date under FASB ASC Topic 718,
excluding the effect of estimated forfeitures, and will calculate
the value at the grant date based on the probable outcome of the
performance conditions.
Item 8.01 Other Events.
On February 23, 2017, the Company issued a press release
announcing (1) that the Board has set the date for the 2017
annual meeting of shareholders for May 18, 2017 at 9:00 a.m. EDT
with a record date of March 17, 2017 and (2) that the Board
approved certain revisions to the Companys Corporate Governance
Guidelines. A copy of such press release is filed as Exhibit 99.1
to this report.
announcing (1) that the Board has set the date for the 2017
annual meeting of shareholders for May 18, 2017 at 9:00 a.m. EDT
with a record date of March 17, 2017 and (2) that the Board
approved certain revisions to the Companys Corporate Governance
Guidelines. A copy of such press release is filed as Exhibit 99.1
to this report.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press release dated February 23, 2017
|
About CHATHAM LODGING TRUST (NYSE:CLDT)
Chatham Lodging Trust is a real estate investment trust (REIT) organized to invest primarily in premium-branded upscale extended-stay and select-service hotels. The Company’s assets are held by, and all of its operations are conducted through Chatham Lodging, L.P (Operating Partnership). The Operating Partnership and its subsidiaries lease the Company’s hotels. It owns approximately 40 hotels with over 5,680 (unaudited) rooms. Its hotels include upscale extended-stay hotels that operate under the Residence Inn by Marriott brand (over 10 hotels) and Homewood Suites by Hilton brand (approximately nine hotels), as well as premium-branded select-service hotels that operate under the Courtyard by Marriott brand (over four hotels), the Hampton Inn or Hampton Inn and Suites by Hilton brand (over three hotels), the SpringHill Suites by Marriott brand (approximately two hotels), the Hilton Garden Inn by Hilton brand (over two hotels) and the Hyatt Place brand (approximately two hotels). CHATHAM LODGING TRUST (NYSE:CLDT) Recent Trading Information
CHATHAM LODGING TRUST (NYSE:CLDT) closed its last trading session 00.00 at 20.38 with 498,991 shares trading hands.
