Hilton Grand Vacations Inc. (NYSE:HGV) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Resignation of Michael D. Brown
On April14, 2017, Michael D. Brown informed Hilton Grand
Vacations Inc. (the Company) that he was resigning as the
Companys Executive Vice President and Chief Operating Officer
effective April17, 2017. Mr.Brown was one of the named executive
officers of the Company.
CEO Compensation Arrangement; Severance Agreements
with CEO and Other Executive Officers
Following the spin-off of the Company from Hilton Worldwide
Holdings Inc., the Compensation Committee of the Board of
Directors of the Company (the Committee) evaluated the
compensation, severance arrangements, change-in-control benefits
and/or other terms related to the employment of Mark D. Wang, the
Companys President and Chief Executive Officer, and other key
executive officers of the Company. After due consideration, on
April17, 2017, the Committee approved the following matters:
CEO Employment Letter
On April17, 2017, the Company entered into an employment letter
agreement (the Agreement) with Mr.Wang. to the Agreement, Mr.Wang
will continue to serve as the Companys President and Chief
Executive Officer and as an officer and/or director of one or
more of the Companys subsidiaries or other affiliates as directed
by the Companys Board of Directors (the Board). Either the
Company or Mr.Wang may terminate the employment arrangement at
any time, for any reason or no reason, with or without cause,
subject to a severance agreement described below. to the
Agreement, Mr.Wang will be paid an annual base salary of
$900,000, subject to upward adjustment from time to time by the
Committee. Mr.Wang is eligible to earn annual bonus awards (the
Annual Bonus) under the Companys annual cash bonus incentive plan
(the Bonus Plan) based upon the achievement of performance
targets established by the Committee. For 2017, Mr.Wangs target
annual bonus opportunity is 150% of his base salary, and his
maximum annual bonus opportunity is 300% of his base salary.
Commencing in 2018 and in future years, Mr.Wang will be eligible
to participate in the Bonus Plan at a level commensurate with
that of other Company senior executive officers. Mr.Wang is also
eligible to participate in any Company long-term incentive plan
or program, with any such awards being granted under the Hilton
Grand Vacations Inc. 2017 Omnibus Stock Incentive Plan or a
successor plan (the 2017 Plan), as well as the Companys Executive
Deferred Compensation Plan. The Company will also provide Mr.Wang
with benefits generally available to its other employees,
including health and welfare benefit and retirement plans.
Mr.Wang currently serves as a member of the Board, and it is
expected he will continue to be nominated to serve as a director,
subject to the fiduciary duties of the Board and the Nominating
and Corporate Governance Committee of the Board, and compliance
with applicable governance charters, guidelines, processes and
procedures of the Company. Additionally, Mr.Wang may join up to
two non-competing public and/or private corporation boards of
directors, subject to prior notice and approval by the Board.
The foregoing summary of the Agreement is not complete and is
qualified in its entirety by reference to the full text of the
Agreement, a copy of which is attached as Exhibit10.1 to this
Current Report on Form8-K and incorporated herein by reference.
Severance Agreements
On April17, 2017, the Company entered into a severance agreement
(each, a Severance Agreement) with each of Messrs. Wang, James E.
Mikolaichik, Executive Vice President and Chief Financial
Officer, Stan R. Soroka, Executive Vice President and Chief
Customer Officer, and Ms.BarbaraL. Hollkamp, Executive Vice
President and Chief Human Resources Officer (each an Executive
and collectively the Executives). Under the terms of each
Severance Agreement, if the Executive is terminated by the
Company without cause, or if the Executive terminates his or her
employment for good reason (each, a qualifying termination)
(including, but not limited to, a qualifying termination within
24 months after a change in control), then, he or she will be
eligible to receive a severance payment amount determined based
on the employees position and then-current base salary and target
bonus. In the case of Mr.Wang, his Severance Agreement includes
certain additional basis of good reason, including, without
limitation, Mr.Wang not being the most senior executive officer
of the Company, the failure to nominate him to the Board or his
removal from the Board. In addition, prior to any termination by
the Company for cause, Mr.Wang is entitled to receive prior
written notice and an opportunity to discuss the basis of such
finding by the Board prior to its vote to terminate him for
cause, as well as a cure period for certain types of cause.
Severance payments are conditioned upon the Executives execution
and non-revocation of a release of claims against the Company,
continued compliance with certain restrictive covenants for a
period of 24 months following termination, and compliance with
indefinite covenants covering confidentiality and
non-disparagement.
Under the terms of the Severance Agreements, upon a qualifying
termination, the Executives will be eligible to receive a
severance payment amount equal to the sum of (a) 2.5times his
annual base salary and his target bonus, in the case of Mr.Wang,
and (b) 2.0 times his or her annual base salary and his or her
target bonus, in the case of the other Executives. Severance
payments will be paid in periodic installments over 24 months,
subject to certain limitations, including partial payment of the
severance amount in a lump sum equal to the excess of the
severance payment over a separation pay limit (2 times the lesser
of the Executives annualized compensation for the year prior to
termination and the maximum compensation that may be taken into
account under a tax-qualified retirement plan under Section
401(a)(17) of the Internal Revenue Code of 1986, as amended, for
the year in which termination occurs. In addition, upon a
qualifying termination, each Executive will be entitled to
receive certain accrued and earned, but unpaid, remuneration due
to the Executive through the termination date, including, without
limitation, accrued salary, earned bonus, reimbursable expenses,
and accrued but unused vacation. Each Executive is also entitled
to certain continued health and welfare benefits following a
qualifying termination.
The Executives will also be entitled to the same level of
severance as described above upon a qualifying termination in
connection with a change in control, except that severance may be
reduced if doing so would result in the Executive realizing a
better after-tax result following the imposition of any
applicable parachute-tax provisions under Internal Revenue Code
Section4999.
Each Executives rights with respect to any equity awards granted
to him or her under the 2017 Plan, including, without limitation,
any accelerated vesting or similar benefits, will be determined
in accordance with the 2017 Plan and applicable award agreements.
However, in the case of Mr.Wang, in the event of a termination of
his employment due to a qualifying termination and a change in
control has not occurred, (i)any portion of any equity awards
granted to Mr.Wang under the 2017 Plan that would have vested
within 24 months from the termination date of a qualifying
termination, in accordance with the original terms of the
existing equity award agreements, will accelerate and vest
immediately as of such termination date; (ii)with respect to any
portion of the equity awards granted to Mr.Wang under the 2017
Plan that are stock options and that have vested in accordance
with their original terms or in accordance with the terms of
clause (i), Mr.Wang shall be entitled to exercise any vested
stock options
for a period ending on the earlier of (A)the expiration of the
original term of such applicable stock option or (B) 24 months
from such termination date; and (C)any restricted stock units or
other similar equity awards granted to Mr.Wang under the 2017
Plan that have vested in accordance with the terms of clause
(i)shall be paid within 70 days following such termination date
to the extent required by Section 409A of the Internal Revenue
Code of 1986, as amended. The foregoing provision applicable to
Mr.Wang will deem to amend any existing equity award agreements
applicable to him and will also be reflected in any future equity
award agreements that the Company enters into with Mr.Wang.
The foregoing summary of the Severance Agreements is not complete
and is qualified in its entirety by reference to the full text of
such agreements for each of the Executives, copies of which are
attached as Exhibit10.2 through 10.5 to this Current Report on
Form8-K and incorporated herein by reference.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit No. |
Description |
|
| Exhibit10.1 |
Employment Letter Agreement, dated April17, 2017, between Mark D. Wang and Hilton Grand Vacations Inc. |
|
| Exhibit 10.2 |
Severance Agreement, dated April17, 2017, between Mark D. Wang and Hilton Grand Vacations Inc. |
|
| Exhibit 10.3 |
Severance Agreement, dated April17, 2017, between James E. Mikolaichik and Hilton Grand Vacations Inc. |
|
| Exhibit 10.4 |
Severance Agreement, dated April17, 2017, between Stan R. Soroka and Hilton Grand Vacations Inc. |
|
| Exhibit 10.5 |
Severance Agreement, dated April17, 2017, between Barbara L. Hollkamp and Hilton Grand Vacations Inc. |
About Hilton Grand Vacations Inc. (NYSE:HGV)
Hilton Grand Vacations Inc. is a timeshare company that markets and sells vacation ownership intervals (VOIs), manages resorts in leisure and urban destinations, and operates a points-based vacation club. The Company operates its business across two segments: Real Estate Sales and Financing, and Resort Operations and Club Management. As of September 30, 2016, the Company had 46 resorts, representing 7,592 units, and approximately 265,000 Hilton Grand Vacations Club (the Club) members. Club members can exchange their Club points for stays at any resort or any property in the Hilton system of various brands across over 4,700 properties, as well as various vacation options, such as cruises and guided tours. VOI product allows customers to purchase a lifetime of vacations. The Company offers amenities, such as full kitchens, in-unit washers and dryers, spas and kids’ clubs along with beach-front locations. Hilton Grand Vacations Inc. (NYSE:HGV) Recent Trading Information
Hilton Grand Vacations Inc. (NYSE:HGV) closed its last trading session down -0.03 at 31.61 with 670,359 shares trading hands.