RED LION HOTELS CORPORATION (NYSE:RLH) 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.

(a) On June18, 2018, Red Lion Hotels Corporation (“RLH Corporation”) received the resignation of Mr.Enrico Marini Fichera from our Board of Directors. Mr.Marini Fichera was appointed as a director to the terms of an Investor Agreement dated June15, 2015 (the “Investor Agreement”) with HNA RLH Investments LLC (the “Shareholder”) and its affiliate, HNA Investment Management LLC (“Manager”), in connection with the Shareholder’s purchase on that date of 2,987,343 shares of RLH Corporation common stock. As previously announced, on June12, 2018 the Manager sold the Shareholder’s entire holding of RLH Corporation common stock to Coliseum Capital Partners, L.P., a Delaware limited partnership and Blackwell Partners, LLC—Series A, a Delaware limited liability company. In connection with this sale, and to the terms of the Investor Agreement, Mr.Marini Fichera submitted his resignation. There were no disagreements between RLH Corporation and Mr.Marini Fichera with respect to his resignation. RLH Corporation wishes to thank Mr.Marini Fichera for his service.

(c) On June18, 2018, RLH Corporation announced the promotion of Paul Sacco to Executive Vice President, President of Global Development. Mr.Sacco joined RLH Corporation in September 2017 as its Chief Development Officer. Prior to joining RLH Corporation, he served as President and Chief Development Officer at TPG Hotels and Resorts from 2013-2017, and also held senior development roles at Pyramid Hotel Group and Starwood Hotels& Resorts Worldwide.

There are no arrangements or understandings between Mr.Sacco 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.

Mr.Sacco is employed by RLH Corporation on an at-will basis. In his new role of Executive Vice President, President of Global Development, Mr.Sacco is entitled to an annual base salary of $375,000, and is eligible to participate in our executive officer bonus plan, with an initial target bonus for 2018 equal to 50% of his base salary, prorated for the portion of the year he is employed as Executive Vice President, President of Global Development, and a target bonus for 2019 equal to 80% of his base salary. Mr.Sacco is also eligible to receive in 2019 an annual grant of equity under our 2015 Stock Incentive Plan in the discretion of our Compensation Committee. Such equity grant would be equal in value to 80% of Mr.Sacco’s annual base salary, a portion of which would be in the form of restricted stock units (RSUs) that will vest annually in equal tranches of 25% on each of the four anniversaries of the grant date, and the balance of which would be issued in the form of performance stock units (“PSUs”) that will vest in accordance with performance metrics to be determined by the Compensation Committee in its sole discretion and consistent with the terms and conditions of PSUs issued to the Company’s other executive officers. In addition, upon his promotion Mr.Sacco received a one-time grant of 88,000 RSUs which vest on the four anniversary of issuance. Any such vested RSUs shall be settled exclusively in the common stock of the Company. The existing commission plan in which Mr.Sacco participates will remain in effect through December31, 2018, and is capped at a commission payment of $150,000.

A copy of the June18, 2018 press release announcing the promotion of Mr.Sacco is included as Exhibit 99.1 to this report. Exhibit99.1 shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of the registrant under the Securities Act of 1933 or the Exchange Act.

(e) On June18, 2018, the Compensation Committee of our Board of Directors approved the 2018 RLHC Executive Officers Bonus Plan (the “Plan”). The Plan provides for potential bonuses for our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and our Executive Vice Presidents. The target and maximum bonuses under the Plan (“Target Bonuses”) are as follows:

Bonuses under the Plan will be based on the following three performance goals:

(1) A company goal based on target Adjusted EBITDA for 2018 (“Target Adjusted EBITDA”);

(2) A company goal based on sales of company-owned hotels (“Hotel Sales”)

(3) One or more department or individual goals based on applicable division or department performance such as gross operating profit; revenues from group business; RevPar growth; increase in RevPar index; improvement in customer service competitive quality index; associate engagement; and addition of franchised and managed hotels to RLHC’s system of hotels and other goals that advance department or company strategic goals and/or personal development.

The department and individual goals are established by the CEO and Compensation Committee.

To determine bonuses under the Plan, the EBITDA goal will be weighted 50%, the Hotel Sales goal 30% and the department/individual goals 20%. No bonus will be payable under the Plan unless the ratio (“EBITDA Goal Achievement”) of (i)our actual adjusted EBITDA for 2018, to (ii)Targeted Adjusted EBITDA exceeds 90%, unless by discretion of the Compensation Committee.

An executive must be employed by us at the time of payment in order to receive a payout. All payments under the Plan are subject to previous approval by the Compensation Committee. Bonuses payable under the Plan are subject to the Company’s clawback policy. Bonuses otherwise payable under the Plan may be deferred, partially paid or withheld in their entirety if the Compensation Committee determines that to be in the best interests of our company.

A copy of the Plan is included as Exhibit 10.1 to this report. The foregoing is a summary of the Plan. In the event of any difference between this summary and the actual terms of the Plan, the terms of the Plan will control.

(d) Exhibits.

Red Lion Hotels CORP Exhibit
EX-10.1 2 d621252dex101.htm EX-10.1 EX-10.1 Exhibit 10.1     2018 RLHC Executive Officers Bonus Plan Purpose RLHC is committed to compensating employees through comprehensive and competitive pay packages that include base salary,…
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.