SUMMIT HOTEL PROPERTIES, INC. (NYSE:INN) 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.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On April 4, 2017, Summit Hotel Properties, Inc. (the Company)
announced the appointment, effective as of April 17, 2017, of
Jonathan P. Stanner as the Companys new Executive Vice President
and Chief Investment Officer. Mr. Stanner will report to Daniel
P. Hansen, the Companys Chairman, President and Chief Executive
Officer.
Prior to joining Summit, Mr. Stanner served as Chief Executive
Officer of Strategic Hotels Resorts, Inc., which was
publicly-traded until being sold to the Blackstone Real Estate
Partners VIII fund in 2015 in a high profile transaction valued
at approximately $6 billion. Mr. Stanner held increasingly senior
positions with Strategic Hotels Resorts since he joined the
company in 2005, including Director of Corporate Finance, Senior
Vice President – Capital Markets, Acquisitions and Treasurer and
Chief Financial Officer. Prior to joining Strategic Hotels
Resorts, Mr. Stanner was an investment banking analyst with Banc
of America Securities. Mr. Stanner earned a Bachelor of Science
in Management and a Master of Business Administration, both from
the Krannert School of Management at Purdue University.
On April 3, 2017, the Company and Mr. Stanner entered into an
employment agreement that will become effective on April 17,
2017. The material terms of the employment agreement are
summarized below, and such summary is qualified in its entirety
by the actual terms of the employment agreement, a copy of which
is attached to this Current Report on Form 8-K as Exhibit 10.1
and incorporated by reference herein.
The employment agreement has an initial term that will commence
on April 17, 2017 and will expire on May 27, 2018. The employment
agreement provides for automatic one-year extensions unless
either party provides at least 30 days notice of non-renewal.
The employment agreement requires Mr. Stanner to devote
substantially all of his business time, attention and effort to
the Companys affairs.
The employment agreement provides for:
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an annual base salary equal to $400,000, which is subject to increase on an annual basis at the discretion of the Board of Directors or its Compensation Committee; |
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for 2017, a cash bonus opportunity, which will be determined by the Compensation Committee in its discretion; |
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for each calendar year, except for 2017, eligibility for an annual cash performance bonus based on the satisfaction of performance goals and other requirements established by the Compensation Committee, which state the amount that will be earned on account of achieving a target level of performance (as established by the Compensation Committee) will not be less than 100% of Mr. Stanners then-current base salary; |
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eligibility to participate in the Companys 2011 Equity Incentive Plan as Amended and Restated Effective June 15, 2015 (Equity Plan), as well as other incentive, savings and retirement plans applicable generally to our senior executives; and |
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eligibility to participate in the Companys benefit plans in which other executive level employees are eligible to participate. |
The employment agreement provides that, in the event Mr. Stanners
employment ends on account of a termination without cause or a
voluntary termination for good reason (each as defined in the
employment agreement), Mr. Stanner will be entitled to the
following severance payments and benefits, subject to his
execution and non-revocation of a general release of claims:
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Mr. Stanner will be paid an amount equal to the product of the severance multiple (as defined below) and his then-current base salary; |
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Mr. Stanner will be paid an amount equal to the product of the severance multiple and his then target annual bonus; |
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Mr. Stanner will be paid a pro-rated bonus for the then-current fiscal year based on the annual bonus he earned for the fiscal year ended prior to his termination; |
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Mr. Stanner will be reimbursed for premiums paid for COBRA coverage for he and his eligible dependents for twelve months following termination; |
The severance multiple is one and one-half times if Mr. Stanners
employment ends upon a termination without cause before the date
of a control change date and a control change date does not occur
within 90 days after the date of termination or if Mr. Stanners
employment ends upon a voluntary termination with good reason
before a control change date. The severance multiple is two times
in the event Mr. Stanners employment ends upon a termination
without cause on or after the date of a control change date or
within the 90 day period preceding the date of a control change
date or if Mr. Stanners employment ends upon a voluntary
termination with good reason on or after the date of a control
change date.
The employment agreement does not provide an indemnification or
gross-up payment for the parachute payment excise tax under
Sections 280G and 4999 of the Internal Revenue Code. Instead, the
employment agreement provides that the severance and any other
payments or benefits that are treated as parachute payments under
the Internal Revenue Code will be reduced to the maximum amount
that can be paid without an excise tax liability. The parachute
payments will not be reduced, however, if Mr. Stanner will
receive greater after-tax benefits by receiving the total or
unreduced benefits (after taking into account any excise tax
liability payable by the executive).
The employment agreement also provides that in the event Mr.
Stanners employment is terminated for cause, voluntarily, upon
his death or disability or upon non-renewal of the employment
agreement, Mr. Stanner is entitled to receive standard
termination benefits, which consist of Mr. Stanners earned but
unpaid compensation up to the termination date and any benefits
due under the terms of the Companys employee benefit plans.
The employment agreement also contains standard confidentiality,
non-competition, non-solicitation and non-disparagement
covenants.
to the terms of the employment agreement, Mr. Stanner has
acknowledged and agreed that any incentive compensation, whether
payable in cash or equity (but excluding amounts that vest or
become payable solely on account of continued employment or
service) that is payable under the employment agreement or under
any other agreement or any plan or arrangement is subject to
recoupment or repayment if such action is required under
applicable law or the terms of any clawback policy that the
Company adopts in the future, provided such policy is in effect
on the date such incentive compensation or benefit was paid.
Additionally, in connection with Mr. Stanners joining the
Company, the Company and Mr. Stanner will enter into an
indemnification agreement in substantially the same form as the
Company has entered into with each of its currently serving
directors and executive officers.
In connection with the appointment, Mr. Stanner will receive a
time-based stock award of 20,215 shares of common stock issued
under the Companys Equity Plan with vesting over a three-year
period as follows: 25% of shares will vest on March 9, 2018; 25%
of the shares will vest on March 9, 2019; and 50% of the shares
will vest on March 9, 2020. Mr. Stanner will also receive a
performance-based stock award of 30,322 shares of common stock
issued under the Companys Equity Plan. The performance-based
shares may be earned under the same terms and conditions as those
performance-share awards granted to the Companys executive
officers as disclosed in the Companys Current Report on Form 8-K
filed on March 10, 2017.
| Item 7.01. | Regulation FD Disclosure |
On April 4, 2017, the Company issued a press release announcing
the appointment of Jonathan P. Stanner as the as the Companys new
Executive Vice President and Chief Investment Officer. A copy of
the press release is furnished as Exhibit 99.1 to this report.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 10.1 |
Employment Agreement, effective as of April 17, 2017, between Summit Hotel Properties, Inc. and Jonathan P. Stanner. |
| 99.1 | Press release issued on April 4, 2017. |
About SUMMIT HOTEL PROPERTIES, INC. (NYSE:INN)
Summit Hotel Properties, Inc. is a real estate investment trust (REIT). The Company is focused primarily on owning premium-branded, select-service hotels in the Upscale segment of the United States lodging industry. The Company’s portfolio consists of 81 hotels with over 10,957 guestrooms located in 23 states. The Company’s hotels are located in markets, such as business and corporate headquarters, retail centers, airports and tourist attractions. The Company’s portfolio is located in urban and suburban markets. Based on total number of guestrooms, approximately 86% of the Company’s portfolio is positioned in over 50 metropolitan statistical areas (MSAs), and approximately 95% is located within over 100 MSAs. Based on total number of guestrooms, approximately 99% of the Company’s hotels operate under franchise brands owned by Marriott International, Inc., Hilton Worldwide, InterContinental Hotels Group, and an affiliate of Hyatt Hotels Corporation. SUMMIT HOTEL PROPERTIES, INC. (NYSE:INN) Recent Trading Information
SUMMIT HOTEL PROPERTIES, INC. (NYSE:INN) closed its last trading session 00.00 at 15.60 with 688,505 shares trading hands.
