Item 5.02.Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 4, 2021, the Compensation Committee (the “Committee”) of the Board of Directors of Sunstone Hotel Investors, Inc. (the “Company”) adopted the Company’s Incentive Bonus Plan (the “Bonus Plan”), under which participating employees of the Company, including the Company’s named executive officers, will be eligible to earn incentive payments in cash based on the achievement of performance goals.
The Bonus Plan will be administered by the Committee, which will determine the participants in the Bonus Plan. Incentive payments under the Bonus Plan will be made in cash, and are intended to be paid based on the achievement of corporate and individual performance objectives determined by the Committee. In order to be eligible to receive an incentive payment under the Bonus Plan, participants in the Bonus Plan must be employed at the time of payment, except as otherwise provided in a written employment agreement or as otherwise determined by the Committee.
The performance objectives may be determined with reference to (but not limited by) the following criteria; each may be based by reference to the Company’s performance or the performance of a subsidiary, division, business segment or business unit of the Company or a subsidiary, or based upon performance relative to the performance of other companies: net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross or net sales or revenue or sales or revenue growth (calculated by total, by hotel, occupied room or available room); net income (either before or after taxes, interest or amortization and depreciation) or adjusted net income (either before or after taxes, interest or amortization and depreciation); profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); funds from operations or adjusted funds from operations; book value (including ratios compared to book value); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on stockholders’ equity; total stockholder return (absolute and relative); return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development (including renovations and repositionings), investment, regulatory, commercial, or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; employee satisfaction; recruitment and maintenance of personnel; supervision of litigation and other legal matters; strategic partnerships and transactions; portfolio composition; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition and disposition activity; investment sourcing activity; human capital management (including diversity and inclusion); environmental, social or governance initiatives and reporting; investor relations initiatives; and marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease.
The Committee may amend, suspend or terminate the Bonus Plan at any time.
The foregoing description of the Bonus Plan is a summary only and does not describe all terms and conditions of the Bonus Plan. The description is subject to and qualified in its entirety by the terms of the Bonus Plan, a copy of which is filed as Exhibit 10.1 to this Form 8-K, and is incorporated by reference herein.