There are no arrangements or understandings between Mr. Troup and any other persons to which he was selected as an officer and he has no direct or indirect material interest in any transaction required to be disclosed to Item 404(a) of Regulation S-K.

We have entered into a letter agreement with Mr, Troup under which he will be employed by us on an at-will basis, and which contains the following terms regarding his compensation: Mr. Troup is entitled to an annual base salary of $300,000, and will receive a $100,000 bonus upon his promotion to CFO, which will be repaid to the Company if Mr. Troup voluntarily terminates his employment before the earlier of the 12 month anniversary of his appointment as CFO or a change of control. Mr. Troup is eligible to participate in our Variable Pay Plan, or other bonus plan in which executive vice presidents may participate, with an initial target bonus for 2020 equal to 60% of his base salary. Effective April 1, 2020, Mr. Troup will receive a one-time grant of 88,000 restricted stock units (RSUs) (the “Initial RSU Grant”). The Initial RSU grant will vest 25% on each of the four anniversaries of issuance. Mr. Troup will be eligible to participate in the employee benefits programs that are available to any newly hired executive vice president, as well as other benefits that are subsequently added for executive vice presidents for which he is qualified as a named executive officer of the Company. Mr. Troup is also entitled to certain severance benefits if his employment is terminated by the company. If the Company terminates Mr. Troup at any time without cause, he will be entitled to receive a severance payment equal to one-half of his annual base salary for the year in which the termination occurs. If the Company experiences a change of control during Mr. Troup’s employment, and there is a constructive termination of his employment without cause within twelve months after such change of control, then: (i) Mr. Troup will receive a lump-sum severance payment equal to his annual base salary for the year in which the termination occurs plus an amount equal to the prorated value of his target annual bonus for the year in which the termination occurs; (ii) RLHC will accelerate vesting on any portion of any equity grant previously made to Mr. Troup under our 2015 Stock Incentive Plan, or any successor plan, that would otherwise have vested after the date of the constructive termination; and (iii) all restrictions on restricted stock or restricted stock units previously granted to Mr. Troup will terminate, and the company shall issue all common stock underlying any such awards (other than performance based shares where performance has not been met, and the award agreement does not authorize such acceleration).

The term “cause” means (i) Mr. Troup’s willful and intentional failure or refusal to perform or observe any of his material duties, responsibilities or obligations, after notice and opportunity to cure; (ii) any willful and intentional act by Mr. Troup involving fraud, theft, embezzlement or dishonesty affecting the company; or (iii) Mr. Troup’s conviction of (or a plea of nolo contendere to) an offense that is a felony in the jurisdiction involved.

The term “change of control” means the occurrence of any one of the following events: any merger or consolidation involving the acquisition of 50% or more of the combined voting power of the company’s outstanding securities by a “person” or “group” (as those terms are defined in Sections 13(d) and 14(d) of the Exchange Act of 1934), adoption of a sale or liquidation plan of substantially all of the company’s assets or other similar transaction or series of transactions, or the acquisition of 50% or more of the combined voting power of the company’s outstanding securities by a person or group.

A “constructive termination” will be deemed to occur if we terminate Mr. Troup’s employment without cause or if Mr. Troup voluntarily elects to terminate his employment within thirty days after any of the following events occur without his consent: (i) there is a significant reduction in the overall scope of his duties, authorities and responsibilities, or (ii) there is a reduction of more than 20% of his base salary or target bonus (other than any such reduction consistent with a general reduction of pay across the company’s or its successor’s executive staff as a group, as an economic or strategic measure due to poor financial performance).

Mr. Paul Moerner, our Senior Director, Technical Accounting & Reporting, has been promoted by the Board of Directors to Senior Vice President and Chief Accounting Officer, effective April 1, 2020.

Mr. Moerner has been our Senior Director, Technical Accounting & Reporting, since October 31, 2018. Prior to joining the Company, Mr. Moerner held progressive roles including Senior Manager of Technical Accounting and Director of Technical Accounting and SEC Reporting for Westmoreland Coal Company (WCC) from July 2016 through October 2018. At WCC he was responsible for the remediation of numerous control deficiencies, oversight of technical accounting, and SEC reporting. From 2008 through 2016, Mr. Moerner worked in the audit practice for KPMG LLP progressing to the role of Senior Manager prior to his departure. While gaining experience in multiple industries, the majority of his client time was spent in financial services. Mr. Moerner holds a Master of Professional Accounting degree from the University of Texas at Austin and a Bachelor of Science degree in Accounting from the University of North Carolina at Asheville.

There are no arrangements or understandings between Mr. Moerner and any other persons to which he was selected as an officer and he has no direct or indirect material interest in any transaction required to be disclosed to Item 404(a) of Regulation S-K.

We have entered into a letter agreement with Mr, Moerner under which he will be employed by us on an at-will basis, and which contains the following terms regarding his compensation: Mr. Moerner is entitled to an annual base salary of $200,000. Mr. Moerner is eligible to participate in our Variable Pay Plan (“VPP”), or other bonus plan in which senior vice presidents may participate, with an initial target bonus for 2020 equal to 40% of his base salary. Mr. Moerner is also entitled to certain severance benefits if his employment is terminated by the company. If the Company terminates Mr. Moerner at any time without cause, he will be entitled to receive a severance payment equal to one-half of his annual base salary for the year in which the termination occurs. The term “cause” means (i) Mr. Moerner’s willful and intentional failure or refusal to perform or observe any of his material duties, responsibilities or obligations, after notice and opportunity to cure; (ii) any willful and intentional act by Mr. Moerner involving fraud, theft, embezzlement or dishonesty affecting the company; or (iii) Mr. Moerner’s conviction of (or a plea of nolo contendere to) an offense that is a felony in the jurisdiction involved.

In connection with certain cost saving measures the Company has enacted in response to the COVID-19 pandemic, the Company has temporarily reduced the annual base salaries of executive officers John Russell, Harry Sladich, Gary Sims and Nate Troup by 25%, and the annual base salary for Chief Accounting Officer Paul Moerner by 20%. In connection with this temporary reduction, the Company plans to enter into amendments to the employment agreements for Paul Moerner, Nate Troup, Harry Sladich and Gary Sims to provide clarification regarding the calculation of severance payments upon termination of the executive without cause, or as a result of a change in control. The amendments will clarify that temporary reductions in the executives’ salaries approved by the Company as part of its response to the COVID-19 crisis will not be taken into account in determining severance payments based upon an executive’s annual base salary.

A copy of the April 2, 2020 press release detailing the Company’s changes in management, reductions in force and other cost savings is furnished as Exhibit 99.1 to this report.

Investor Call

RLH Corporation will host a conference call on Monday, April 6 at 9:00 AM Eastern Time, to discuss details regarding its organizational changes and cost reductions for interested investors, analysts and portfolio managers. To participate in the conference call, dial the following number 10 minutes prior to the scheduled time: (877) 407-8289. International callers should dial (201) 689-8341.

This conference call will also be webcast live on www.rlhco.com in the Investor Relations section of the website. To listen to the live call, please go to the RLH Corporation website at least 15 minutes prior to the start of the call

to register and to download and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available at approximately 11:00 AM Eastern Time on April 6 through midnight April 20, 2020 at (877) 660-6853 or (International) (201) 612-7415, using access code 13698294. The replay will also be available shortly after the call on the RLH Corporation website. A copy of the investor slides detailing the Company’s organization changes and cost reductions is furnished as Exhibit 99.2 to this report.

The information included in this Item 7.01 shall not be deemed “filed” for the purposes of, or otherwise subject to, the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act made after the date hereof, the information contained in this Item 7.01 shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Forward Looking Statements

This current report on Form 8-K contains forward-looking statements within the meaning of federal securities law, including statements concerning plans, objectives, goals, strategies, projections of future events or performance and underlying assumptions (many of which are based, in turn, upon further assumptions), and including statements concerning operational and financial impacts of the COVID-19 pandemic. The forward-looking statements in this press release are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Such risks and uncertainties include, among others, risks associated with pandemics, contagious diseases or health epidemics, including the effects of the COVID-19 pandemic; restructuring or organizational changes; our asset light model; relationships with our franchisees and properties; competitive conditions in the lodging industry; economic cycles and general economic conditions; changes in future demand and supply for hotel rooms; international conflicts and conditions; impact of government regulations; ability to obtain financing; changes in energy, healthcare, insurance and other operating expenses; ability to sell non-core assets; dependency upon the ability and experience of executive officers and ability to retain or replace such officers as well as other risks and uncertainties discussed in the Company’s annual report on Form 10-K for the year ended December 31, 2019, and in other documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements contained herein speak only to the date of this press release. The Company undertakes no obligation to update or revise any forward-looking statements except as required by law.

(d) Exhibits:

The following exhibits are included with this Current Report on Form 8-K:

Red Lion Hotels CORP Exhibit
EX-99.1 2 d909950dex991.htm EX-99.1 EX-99.1 Exhibit 99.1   RLH CORPORATION ANNOUNCES ORGANIZATIONAL CHANGES IMPLEMENTS REDUCTION IN FORCE AND OTHER COST SAVINGS PROVIDES OPERATIONAL UPDATE RELATED TO COVID-19 Company to Hold Investor Conference Call April 6,…
To view the full exhibit click here

About RED LION HOTELS CORPORATION (NYSE:RLH)

Red Lion Hotels Corporation (RLHC) is a hospitality and leisure company. The Company is engaged in the franchising, management and ownership of hotels under the brands, including Hotel RL, Red Lion Hotel, Red Lion Inn & Suites, GuestHouse and Settle Inn & Suites (collectively the RLHC Brands). The RLHC brands represent upscale, midscale and economy hotels. The Company’s segments include company operated hotel segment, franchised hotels segment, entertainment segment and other. The hotels segment is engaged in guest room rentals, and food and beverage operations at its operated hotels. The franchised hotels segment is engaged in licensing its brands to franchisees. It offers various programs, which include its reservation system, guest loyalty program, national and regional sales, revenue management tools, quality inspections, advertising and brand standards. The entertainment segment consists of its WestCoast Entertainment and TicketsWest operations.