Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
As previously disclosed, on November 6, 2021, CorePoint Lodging Inc., a Maryland
corporation (the "Company" or "CorePoint"), entered into an Agreement and Plan
of Merger (the "Merger Agreement") with Cavalier Acquisition JV LP, a Delaware
limited partnership ("Parent") and Cavalier Acquisition Owner LP, a Delaware
limited partnership and wholly owned subsidiary of Parent (the "Merger Sub")
pursuant to which the Company will merge with and into the Merger Sub, with the
Merger Sub continuing as the surviving corporation (the "Merger").
On December 7, 2021, the compensation committee of the board of directors of the
Company (the "Compensation Committee") recommended to the board of directors of
the Company (the "Board"), and on December 8, 2021, the Board approved, certain
tax-planning actions to mitigate adverse tax consequences of Section 280G and
Section 4999 of the Internal Revenue Code of 1986 (as amended) that could arise
in connection with the transactions contemplated by the Merger Agreement.
Specifically, the compensation committee recommended to the Board, and the Board
approved, among other things, the accelerated vesting and settlement of the
performance-based restricted stock units ("PSUs"), which were granted to each of
Keith Cline (President and Chief Executive Officer), Mark Chloupek (Executive
Vice President, Secretary and General Counsel), Howard Garfield (Chief
Accounting Officer, Treasurer and Senior VP) and Dan Swanstrom (Executive Vice
President and Chief Financial Officer) (collectively, the "Covered Executives")
under the Company's Omnibus Incentive Plan on March 25, 2020 (such PSUs, the
"2020 PSUs"), together with any applicable unpaid dividend equivalent amounts,
with such vesting determined based on achievement of maximum performance. The
number of 2020 PSUs to be accelerated and settled (at maximum performance) for
each of the Covered Executives is as follows: 824,610 for Keith Cline, 247,384
for Mark Chloupek, 92,357 for Howard Garfield, and 247,384 for Dan Swanstrom.
The accelerated settlement of the 2020 PSUs is contingent upon each Covered
Executive's execution of a repayment agreement that requires the executive to
repay the accelerated compensation amounts if the executive voluntarily resigns
prior to the earlier of the closing of the Merger and the originally scheduled
vesting or settlement date (as applicable).
Subject to execution of the repayment agreements, the 2020 PSUs will be
accelerated, paid and settled (as applicable) prior to the closing of the
Merger.
FORWARD-LOOKING STATEMENTS
This Form 8-K contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements
often contain words such as "assume," "will," "anticipate," "believe,"
"predict," "project," "potential," "contemplate," "plan," "forecast,"
"estimate," "expect," "intend," "is targeting," "may," "should," "would,"
"could," "goal," "seek," "hope," "aim," "continue" and other similar words or
expressions or the negative thereof or other variations thereon. Forward-looking
statements are made based upon management's current expectations and beliefs and
are not guarantees of future performance. Such forward-looking statements
involve numerous assumptions, risks and uncertainties that may cause actual
results to differ materially from those expressed or implied in any such
statements. Our actual business, financial condition or results of operations
may differ materially from those suggested by forward-looking statements as a
result of risks and uncertainties which include, among others: completion of the
proposed transaction is subject to various risks and uncertainties related to,
among other things, its terms, timing, structure, benefits, costs and
completion; required approvals to complete the proposed transaction by our
stockholders and the receipt of certain regulatory approvals, to the extent
required, and the timing and conditions for such approvals; the stock price of
the Company prior to the consummation of the proposed transaction; and the
satisfaction of the closing conditions to the proposed transaction; business,
financial and operating risks inherent to the lodging industry; macroeconomic
and other factors beyond our control, including without limitation the effects
of the ongoing COVID-19 pandemic or other pandemics or outbreaks of contagious
disease; the geographic concentration of our hotels; our inability to compete
effectively; our concentration in the La Quinta brand; our dependence on the
performance of LQ Management L.L.C. and other third-party hotel managers and
franchisors; covenants in our hotel management and franchise agreements that
limit or restrict the sale of our hotels; risks posed by our disposition
activities, including our ability to contract with qualified buyers and the risk
that purchasers may not have the access to capital or meet other requirements;
risks resulting from significant investments in real estate; cyber threats and
the risk of data breaches or disruptions of technology information systems; the
growth of internet reservation channels; disruptions to the functioning or
transition of the reservation systems, accounting systems or other technology
programs for our hotels, and other technology programs and system upgrades; and
our substantial indebtedness, including restrictions imposed on our ability to
access our cash. Additional risks and uncertainties include, among others, those
risks and uncertainties described under "Risk Factors" in our Annual Report on
Form 10-K for the year ended December 31, 2020, as such factors may be updated
or superseded from time to time in our periodic filings with the Securities and
Exchange Commission (SEC). You are urged to carefully consider all such factors
and we note that the COVID-19 pandemic may have the effect of heightening many
of the risks and uncertainties described. Although it is believed that the
expectations reflected in such forward-looking statements are reasonable and are
expressed in good
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faith, such expectations may not prove to be correct and persons reading this
communication are therefore cautioned not to place undue reliance on these
forward-looking statements, which speak only to expectations as of the date of
this communication. We undertake no obligation to publicly update or review any
forward-looking statement, whether as a result of new information, future
developments or otherwise, except as required by law. If we make any future
public statements or disclosures which modify or impact any of the
forward-looking statements contained in or accompanying this Form 8-K, such
statements or disclosures will be deemed to modify or supersede such statements
in this Form 8-K.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication does not constitute an offer to buy or sell or the
solicitation of an offer to buy or sell any securities or a solicitation of any
vote or approval. This communication relates to a proposed acquisition of
CorePoint by Cavalier Acquisition JV LP. In connection with this proposed
acquisition, CorePoint plans to file one or more proxy statements or other
documents with the SEC. This communication is not a substitute for any proxy
statement or other document that CorePoint may file with the SEC in connection
with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF COREPOINT
LODGING INC. ARE URGED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS THAT MAY
BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Any definitive proxy
statement(s) (if and when available) will be mailed to stockholders of
CorePoint. Investors and security holders will be able to obtain free copies of
these documents (if and when available) and other documents filed with the SEC
by CorePoint through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by CorePoint will be available free
of charge on CorePoint's internet website at www.corepoint.com or upon written
request to: Investor Relations, CorePoint Lodging Inc., 125 E. John Carpenter
Freeway, Suite 1650, Irving, Texas 75062 or by telephone at (214) 501-5535.
Participants in Solicitation
CorePoint, its directors and certain of its executive officers may be considered
participants in the solicitation of proxies in connection with the proposed
transaction. Information about the directors and executive officers of CorePoint
is set forth in its proxy statement for its 2021 annual meeting of stockholders,
which was filed with the SEC on April 14, 2021.
Additional information regarding the participants in the proxy solicitation and
a description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement and other relevant materials
to be filed with the SEC when they become available. These documents can be
obtained free of charge from the sources indicated above.
CorePoint Lodging Inc.
125 E. John Carpenter Freeway, Suite 1650
Irving, Texas 75062
Tel. (972) 893-3199
www.corepoint.com
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