EXECUTIVE EMPLOYMENT
AGREEMENT
This EXECUTIVE
EMPLOYMENT AGREEMENT is dated effective as of June 5, 2008
(“Effective Date”) by and between Red Lion Hotels
Corporation, a Washington corporation (the “Company”),
and George H. Schweitzer (the “Executive”).
The Company
desires to employ the Executive in the capacity of Senior Vice
President, Hotel Operations, and the Executive desires to be so
employed, on the terms and subject to the conditions set forth in
this agreement (the “Agreement”).
Now, therefore,
in consideration of the mutual covenants set forth herein and other
good and valuable consideration, the parties hereto hereby agree as
follows:
(a) The
Company employs the Executive, and the Executive agrees to be
employed by the Company, upon the terms and subject to the
conditions set forth herein, for a term commencing on the Effective
Date and terminating on December 31, 2008 unless terminated
earlier in accordance with Section 5 of this Agreement;
provided, that, subject to earlier termination in accordance with
Section 1(b) or Section 5 of this Agreement, such term shall
automatically be extended from time to time for additional periods
of one calendar year from the date on which it would otherwise
expire unless the Executive, on one hand, or the Company, on the
other, gives notice to the other party not less than 120 days
prior to such date that he or it elects to permit the term of this
Agreement to expire without extension on such date. The initial
term of this Agreement as the same may be extended in accordance
with the terms of this Agreement is hereinafter referred to as the
“Term”.
(b) Notwithstanding anything to the
contrary in this Agreement, the Agreement shall automatically
terminate and the Term shall expire on May 31, 2012 (the
“Expiration Date”), and no notice or action shall be
required by the Company or the Executive for such termination and
expiration to be effective.
(a) During
the Term, the Executive will hold the title and office of, and
serve in the position of, Senior Vice President, Hotel Operations
of the Company, or such other position to which the Company in its
discretion may appoint Executive from time to time. The Executive
shall report to the Chief Executive Officer of the Company and
shall perform such specific duties and services (including service
as an officer, director or equivalent position of any direct or
indirect subsidiary without additional compensation) as the Company
shall reasonably request consistent with the Executive’s
position.
(b) During
the Term, the Executive agrees to devote his full business time and
attention to the business and affairs of the Company and to
faithfully and diligently perform, to the best of his ability, all
of his duties and responsibilities hereunder. Nothing in this
Agreement shall preclude the Executive from devoting reasonable
time and attention to the following (the “Exempted
Activities”): (i) serving as an officer, director,
trustee or member of any organization, (ii) engaging in charitable
and community activities and (iii) managing his personal
investments and affairs. In no event shall the Exempted Activities
involve any material conflict of interest with the interests of the
Company or, individually or collectively, interfere materially with
the performance by the Executive of his duties and responsibilities
under this Agreement.
George Schweitzer Executive
Employment Agreement Page 1
(c) The
Executive’s office and place of rendering his services under
this Agreement shall be in the principal executive offices of the
Company. During the Term, the Company shall provide the Executive
with executive office space, and administrative and secretarial
assistance and other support services consistent with his positions
and with his duties and responsibilities hereunder.
3. Board of
Directors; Committees.
It
is understood that the right to elect directors of the Company is
by law vested in the stockholders and directors of the Company, and
it is mutually contemplated that service on the board of directors
of the Company (the “Board”) or any of the
Company’s subsidiaries, or on any committee of the Board or
the board of directors of any of the Company’s subsidiaries,
is not a condition of this Agreement.
4. Salary;
Additional Compensation; Perquisites and Benefits.
(a) During
the Term, the Company will pay the Executive a base salary at an
annual rate of not less than $210,000 per annum, subject to annual
review by the Compensation Committee of the Board (the
“Committee”) and, in the discretion of the Committee,
to increase from time to time. Once increased, such base salary may
not be decreased. Such salary shall be paid in periodic
installments in accordance with the Company’s standard
practice, but not less frequently than semi-monthly.
(b) During
the Term, Executive shall participate in the Company’s
Executive Officers Variable Pay Plan dated effective
January 1, 2005 and any successor or replacement bonus plans
as may be adopted by the Committee from time to time for senior
executives of the Company (the “VPP”). If Executive
achieves the target performance goals determined under the VPP by
the Committee for any calendar year, he shall be entitled to a
bonus for that year equal to at least 30% of his base salary for
that year (with any partial year pro rated).
(c) The
Board or the Committee in its sole discretion may award any
additional or other amounts of cash, restricted stock or options or
other equity based awards in respect of any whole or partial year
during the Term.
(d) The
Company will reimburse the Executive, in accordance with its
standard policies from time to time in effect, for all
out-of-pocket business expenses as may be incurred by the Executive
in the performance of his duties under this Agreement.
(e) The
Executive shall be entitled to vacation time to be credited and
taken in accordance with the Company’s policy from time to
time in effect for senior executives, which in any event shall not
be less than a total of four weeks per calendar year.
(f) The
Company shall indemnify the Executive to the fullest extent
permitted under the law of the State of Washington.
(a) The
Term will terminate automatically on the Expiration Date or upon
the Executive’s death and, in the case of a determination of
the Executive’s Disability, will terminate upon notice by the
Company or the Executive to the other. As used herein the term
“Disability” means the Executive’s inability to
perform his duties and responsibilities under this Agreement for a
period of more than 120 consecutive days, or for more than
180 days, whether or not consecutive, during any 365-day
period, due to physical or mental incapacity or impairment. A
determination of Disability will be made by a physician
satisfactory to both the Executive and the Company; provided that
if they cannot agree as to a physician, then each shall select a
physician and these two together shall select a third physician
whose determination of Disability shall be
George Schweitzer Executive
Employment Agreement Page 2
binding on the
Executive and the Company. Should the Executive become
incapacitated, his employment shall continue and all base salary
and other compensation due the Executive hereunder shall continue
to be paid through the date upon which the Executive’s
employment is terminated for Disability in accordance with this
section.
(b) The
Term may be terminated by the Company upon notice to the Executive
with or without “Cause” as defined herein.
(c) The
Term shall terminate automatically and without any further notice
or action upon the Executive’s resignation or retirement from
the Company, with or without Good Reason (as defined below), or if
the Term is not extended pursuant to the proviso to Section 1(a) as
a result of the Executive or the Company giving notice thereunder
that it elects to permit the Term to expire without
extension.
(a) If the
Term terminates for any reason, the Company will pay to the
Executive an aggregate amount equal to the Executive’s
accrued and unpaid base salary through the date of such
termination, additional salary payments in lieu of the
Executive’s accrued and unused vacation time, unreimbursed
business expenses, unreimbursed medical, dental and other employee
benefit expenses in accordance with the applicable plans, and any
and all other benefits available to the Executive or
Executive’s estate under then-existing Company benefit plans
or policies, including if applicable death or Disability benefits,
provided for (the “Standard Termination Payments”).
Except as expressly provided below, payment of the Standard
Termination Payments shall be the Company’s only obligation
to Executive, and the Company shall incur no further liability, in
connection with such termination.
(b) If the
Term is terminated upon the Executive’s death or Disability,
the Company will pay to the Executive’s estate or the
Executive, as the case may be (i) the Standard Termination
Payments, (ii) a lump sum payment, if applicable, equal to the
Executive’s earned but unpaid bonus under the VPP for the
prior fiscal year, and (iii) a lump sum payment equal to the
Executive’s target bonus under the VPP for the fiscal year in
which the death or Disability occurs prorated for the portion of
the year elapsed at the time of the termination. Such payments
shall be the Company’s only obligations to Executive in such
a case. The Company shall incur no further liability for such a
termination.
(c) If the
Company terminates the Executive’s employment under this
Agreement without Cause other than by reason of his death or
Disability, or if the Term is not extended pursuant to the proviso
to Section 1(a) as a result of the Company giving notice thereunder
that it elects to permit the Term to expire without extension, or
if the Executive terminates his employment hereunder within six
months of any event constituting Good Reason, the Company will
(i) pay the Executive the Standard Termination Payments,
(ii) pay the Executive a lump sum payment equal to the
Executive’s earned but unpaid bonus under the VPP for the
prior fiscal year, (iii) pay the Executive a lump sum payment
equal to the Executive’s target bonus under the VPP for the
fiscal year in which the termination occurs prorated for the
portion of the year elapsed at the time of the termination,
(iv) pay the Executive a lump sum payment equal to the
Executive’s total cash compensation for the previous fiscal
year (but not less than $210,000), and (v) continue in effect
the Executive’s benefits with respect to life, health and
insurance plans or their equivalent for one year. Such payments and
the obligations set forth below in Section 6(d) shall be the
Company’s only obligations to Executive in such a case. The
Company shall incur no further liability for such a
termination.
(d) If the
Company terminates the Executive’s employment under this
Agreement without Cause other than by reason of his Disability, or
if the Term is not extended pursuant to the proviso to
Section 1(a) as a result of the Company giving notice
thereunder that it elects to permit the Term to expire without
extension, or if there is a Change of Control (as defined below),
or if the Executive terminates his employment hereunder within six
months of any event constituting Good Reason, then, except for
those stock options that have a strike price that is more than 10%
greater than the closing price of the Company’s common stock
on the date of such termination, expiration or Change of Control,
all stock options granted to t
|
