Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On June 9, 2020, Red Lion Hotels Corporation announced that John J. Russell,
Jr., who has been serving as the Company's interim Chief Executive Officer since
December 3, 2019, has been appointed as the Company's Chief Executive Officer,
effective June 8, 2020.
Prior to joining Red Lion in December 2019, Mr. Russell served as President and
COO of Sentry Hospitality from October 2017, a management company for hotels,
resorts, conference centers, and private residence clubs. From March 2016 to
July 2017, Mr. Russell was the Senior Vice President, Guest Experience,
Education and Development, at the Georgia Aquarium, and from January 2012
through February 2016, Mr. Russell served as the President of Sentry Hospitality
and Sentry Companies. Mr. Russell also recently served as Senior Advisor for
Ocean Visions, Inc., a 501(c)(3) organization that funds and launches companies
that find solutions to problems with oceans, its sources and animals within, to
improve the health of our water sources for future generations. Over the past 40
years, Mr. Russell has held numerous executive positions with hospitality
companies, including ITT Sheraton, Days Inn of America, Carlson Companies,
Benchmark Hospitality, HFS, Cendant, RCI, Yesawich, Pepperdine, Brown and
Russell (Partner), NYLO Hotels, MODO Hotels and CampusBrands. Mr. Russell is
also a past Chairman of the American Hotel and Lodging Association and President
of the Hospitality Sales marketing Association International. There are no
arrangements or understandings between Mr. Russell and any other persons
pursuant to which he was selected as an officer and he has no direct or indirect
material interest in any transaction required to be disclosed pursuant to Item
404(a) of Regulation S-K.
In connection with Mr. Russell's appointment as Chief Executive Officer, we have
entered into an amended and restated letter agreement with Mr. Russell under
which he will be employed by us on an at-will basis, and which contains the
following terms regarding his compensation: Mr. Russell is entitled to an annual
base salary of $400,000, and he is eligible to participate in our short term and
long term incentive plans in which executive officers may participate, and his
short term bonus target is set at 100% of base salary. As interim Chief
Executive Officer, Mr. Russell was eligible to receive a bonus of up to
$35,000.00 for each 90 days of employment if certain performance criteria set by
the Compensation Committee of the Company's Board of Directors was met. For the
second quarter ending June 30, 2020, the Compensation Committee has approved a
bonus of $25,000, which was payable to Mr. Russell upon the execution of his
amended and restated letter agreement. Effective June 8, 2020, Mr. Russell
received a one-time grant of $150,000 in restricted stock units (RSUs), which
will vest 25% on each of the four anniversaries of issuance. Mr. Russell will be
eligible to participate in the employee benefits programs that are available to
any newly hired executive officer, as well as other benefits that are
subsequently added for executive officers for which he is qualified as a named
executive officer of the Company. Mr. Russell is also entitled to certain
severance benefits if his employment is terminated by the Company. If the
Company terminates Mr. Russell 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. Russell's employment, and there is a constructive termination
of his employment without cause within twelve months after such change of
control, then: (i) Mr. Russell will receive a lump-sum severance payment equal
to his annual base salary for the year in which the termination occurs;
(ii) RLHC will accelerate vesting on any portion of any equity grant previously
made to Mr. Russell under the Company's 2015 Stock Incentive Plan, or any
successor plan, that would otherwise have vested within 12 months of the date of
the constructive termination; and (iii) all restrictions on vested restricted
stock or restricted stock units previously granted to Mr. Russell 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. Russell 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. Russell involving fraud, theft, embezzlement or
dishonesty affecting the company; or (iii) Mr. Russell's conviction of (or a
plea of nolo contendere to) an offense that is a felony in the jurisdiction
involved.
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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. Russell's employment without cause or if Mr. Russell 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), or (iii) he is required to relocate
from his present residence as a condition of continuing employment.
Item 7.01. Regulation FD Disclosure.
A copy of the June 9, 2020 press release announcing the appointment of
Mr. Russell is furnished as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
The following exhibits are included with this Current Report on Form 8-K:
Exhibit
No. Description
99.1 Press Release dated June 9, 2020
104 Cover Page Interactive Data File (embedded within Inline XBRL document)
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