What is a “broker non-vote”?
A broker non-vote occurs when shares held through a broker are not voted with respect to a proposal
because (1) the broker has not received voting instructions from the stockholder who beneficially owns the shares and (2) the broker lacks the authority to vote the shares at its discretion. Under current New York Stock Exchange
(“NYSE”) interpretations that govern broker non-votes, Proposal No. 1 is considered a non-routine matter, and a broker will lack the authority to vote
uninstructed shares at their discretion on such proposal. Proposal No. 2 is considered a discretionary matter, and a broker will be permitted to exercise its discretion to vote uninstructed shares on this proposal.
How many votes are required to approve each proposal?
For Proposal No. 1, under our Amended and Restated Bylaws (the “Bylaws”), directors are elected by a plurality vote, which means that
the director nominees with the greatest number of votes cast, even if less than a majority, will be elected. There is no cumulative voting.
Notwithstanding the foregoing, under our Corporate Governance Guidelines, a director nominee (other than any person nominated or designated
pursuant to the stockholders’ agreement between the Company and affiliates of The Blackstone Group Inc. (“Blackstone”)) who fails to receive a majority of the votes cast in an uncontested election is required to tender his or her
resignation from the Board. For purposes of this provision, our Corporate Governance Guidelines state that a “majority of votes cast” means that the number of votes cast “for” a director’s election exceeds the number of
votes “withheld” as to that director’s election (with “broker non-votes” not counted as a vote cast either “for” or “withheld” as to that director’s election).
The Nominating and Corporate Governance Committee will then make a recommendation to the Board as to whether to accept or reject the resignation, or whether other action should be taken. The Board is required to act on the proffered resignation,
taking into account the Nominating and Corporate Governance Committee’s recommendation, within 90 days following certification of the election results.
For Proposal No. 2, under our Bylaws, approval of the proposal requires a majority of the votes cast, and under Maryland law, abstentions
are not treated as “votes cast.”
It is important to note that the proposal to ratify the appointment of Deloitte &
Touche LLP as our independent registered public accounting firm for 2020 (Proposal No. 2) is non-binding and advisory. While the ratification of Deloitte & Touche LLP as our independent
registered public accounting firm is not required by our Bylaws or otherwise, if our stockholders fail to ratify the selection, we will consider it notice to the Board and the Audit Committee to consider the selection of a different firm.
How are votes counted?
With respect to
the election of directors (Proposal No. 1), you may vote “FOR” or “WITHHOLD” with respect to each nominee. Votes that are “withheld” will have the same effect as an abstention and will not count as a vote
“FOR” or “AGAINST” a director because directors are elected by plurality voting. Broker non-votes will have no effect on the outcome of Proposal No. 1.
With respect to the ratification of our independent registered public accounting firm (Proposal No. 2), you may vote “FOR,”
“AGAINST” or “ABSTAIN.” For Proposal No. 2, under Maryland law, abstentions will not affect the outcome.
If you
sign and submit your proxy card without voting instructions, your shares will be voted in accordance with the recommendation of the Board with respect to the Proposals and in accordance with the discretion of the holders of the proxy with respect to
any other matters that may be voted upon.
2
How does the Board recommend that I vote?
Our Board recommends that you vote your shares:
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“FOR” each of the director nominees set forth in this Proxy Statement.
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“FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent
registered public accounting firm for 2020.
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Who will count the vote?
Representatives of Broadridge Financial Solutions, Inc. will tabulate the votes and act as inspectors of election.
How do I vote my shares without attending the Annual Meeting?
If you are a stockholder of record, you may vote by authorizing a proxy to vote on your behalf at the Annual Meeting. Specifically, you may
authorize a proxy:
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By Internet—If you have Internet access, you may submit your proxy by going to
www.proxyvote.com and by following the instructions on how to complete an electronic proxy card. You will need the 16-digit number included on your proxy card in order to vote by Internet.
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By Telephone—If you have access to a touch-tone telephone, you may submit your proxy by dialing 1-800-690-6903 and by following the recorded instructions. You will need the 16-digit number
included on your proxy card in order to vote by telephone.
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By Mail—You may vote by mail by signing and dating the enclosed proxy card where indicated and by
mailing or otherwise returning the card in the postage-paid envelope provided to you. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee,
custodian, attorney or officer of a corporation), indicate your name and title or capacity.
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Internet and telephone
voting facilities will close at 11:59 p.m., Eastern Time, on May 20, 2020, for the voting of shares held by stockholders of record as of the Record Date. Proxy cards with respect to shares held of record must be received no later than
May 20, 2020.
If you hold your shares in street name, you may submit voting instructions to your broker, bank or other nominee.
In most instances, you will be able to do this over the Internet, by telephone or by mail. Please refer to information from your bank, broker or other nominee on how to submit voting instructions.
How do I vote my shares in person at the Annual Meeting?
If you are a stockholder of record and prefer to vote your shares at the Annual Meeting, you must bring proof of identification along with your
proof of stock ownership on the Record Date. If you hold your shares in street name, you may only vote shares at the Annual Meeting if you bring a signed proxy from the record holder (broker, bank or other nominee) giving you the right to vote the
shares, as well as proof of identification and proof of ownership.
Even if you plan to attend the Annual Meeting, we encourage you to
vote in advance by Internet, telephone or mail so that your vote will be counted even if you later decide not to attend the Annual Meeting.
How do I
attend the Annual Meeting?
In order to be admitted to the meeting, you will need to present (1) a form of personal
identification, and (2) proof of your stock ownership of CorePoint Lodging Inc. stock on the Record Date.
3
No cameras, recording equipment, electronic devices, large bags, briefcases or packages will
be permitted in the Annual Meeting.
For directions to the meeting, you may contact La Quinta Inn & Suites by Wyndham DFW Airport
South/Irving at (972) 252-6546.
What happens if a change to the Annual Meeting is necessary due to exigent
circumstances?
While we have every intention of holding the Annual Meeting as indicated in the “Notice of Annual Meeting of
Stockholders”, if exigent and unexpected circumstances such as a global health crisis such as the coronavirus disease 2019, or COVID-19, pandemic prevent the Company from holding the Annual Meeting as
planned, we may determine to change the location of the Annual Meeting or to switch to an alternative method of holding the meeting, such as a virtual meeting. If the Company needs to take such action on an exceptional basis, we plan on issuing a
press release notifying our stockholders of such development which will be posted on our website at www.corepoint.com in the “News” section. Any such decision by the Company has no impact on a stockholder’s ability to provide
their proxy by using the Internet or telephone or by completing, signing, dating and mailing their proxy card, each as explained in this proxy statement.
What does it mean if I receive more than one proxy card on or about the same time?
It generally means you hold shares registered in more than one account. To ensure that all your shares are voted, please sign and return each
proxy card or, if you vote by Internet or telephone, vote once for each proxy card you receive.
May I change my vote or revoke my proxy?
Yes. Whether you have voted by Internet, telephone or mail, if you are a stockholder of record, you may change your vote and revoke your proxy
by:
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sending a written statement to that effect to our Secretary, provided such statement is received no later than
May 20, 2020;
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voting by Internet or telephone at a later time than your previous vote and before the closing of those voting
facilities at 11:59 p.m., Eastern Time, on May 20, 2020;
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submitting a properly signed proxy card, which has a later date than your previous vote, and that is received no
later than May 20, 2020; or
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attending the Annual Meeting and voting in person.
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If you hold shares in street name, please refer to information from your bank, broker or other nominee on how to revoke or submit new voting
instructions.
Could other matters be decided at the Annual Meeting?
As of the date of this Proxy Statement, we do not know of any matters to be raised at the Annual Meeting other than those referred to in this
Proxy Statement. If other matters are properly presented at the Annual Meeting for consideration and you are a stockholder of record and have submitted a proxy card, the persons named in your proxy card will have the discretion to vote on those
matters for you.
Who will pay for the cost of this proxy solicitation?
We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees of the Company (for no
additional compensation) in person or by telephone, electronic transmission and facsimile transmission. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their
reasonable expenses.
4
Narrative to Summary Compensation Table
Employment Agreements
In April
2018, in connection with his appointment as President and Chief Executive Officer of the Company, we entered into an offer letter, dated April 13, 2018, with Mr. Cline (the “Cline Offer Letter”), effective as of the spin-off. In May 2018, in connection with his appointment as Executive Vice President and Chief Financial Officer of the Company, we entered into an offer letter, dated May 5, 2018, with Mr. Swanstrom (the
“Swanstrom Offer Letter”), effective as of the spin-off. In April 2018, in connection with his appointment as Executive Vice President and Chief Operating Officer of the Company, we entered into an
offer letter, dated April 13, 2018, with Mr. Cantele (the “Cantele Offer Letter”), effective as of the spin-off. In addition, we entered into a separation and release agreement, effective
as of May 15, 2019, with Mr. Cantele (the “Separation and Release Agreement”) in connection with his termination from the Company, which agreement is described below under “Potential Payments upon Termination of Change in
Control.” We also assumed Mr. Chloupek’s employment agreement with LQH Parent, dated as of August 20, 2003, as amended August 17, 2005, upon the consummation of the spin-off in
connection with his appointment as Executive Vice President, Secretary and General Counsel of the Company.
Mr. Cline
In connection with his appointment as President and Chief Executive Officer of the Company, we entered into the Cline Offer Letter with
Mr. Cline, effective as of the spin-off. The Cline Offer Letter provides that Mr. Cline is employed with the Company as our President and Chief Executive Officer with the following compensation and
benefits: (i) an annual base salary of $795,675, subject to increase (but not decrease); (ii) an annual bonus opportunity with a target amount equal to 100% of his base salary, with the actual bonus amount based upon achievement of Company and
individual performance targets established by our Compensation Committee for the fiscal year to which the bonus relates; (iii) eligibility to receive annual grants under our Omnibus Incentive Plan in amounts and in a form determined by the
compensation committee, provided that, for the 2018 fiscal year, Mr. Cline’s long-term incentive award would have a target value of $3 million; (iv) a one-time grant of restricted stock
with a grant date value equal to $1.875 million, and which vests on the third anniversary of the date of grant; and (v) a one-time grant of restricted stock with a grant date value equal to
$1.875 million, and which vests on the fourth anniversary of the date of grant. The 2018 annual long-term incentive award and both of the one-time restricted stock awards were granted to Mr. Cline
effective on the day following the consummation of the spin-off. The Cline Offer Letter also provides that Mr. Cline will participate in the CorePoint Lodging Inc. Executive Severance Plan (the
“Executive Severance Plan”), in accordance with its terms.
Mr. Swanstrom
In connection with his employment with the Company, we entered into the Swanstrom Offer Letter. The Swanstrom Offer Letter provides that
effective as of the spin-off, Mr. Swanstrom would be appointed Executive Vice President and Chief Financial Officer of the Company and provides him with the following compensation and benefits:
(i) an annual base salary of $475,000, subject to increase (but not decrease); (ii) an annual bonus opportunity with a target amount equal to 100% of his base salary, with the actual bonus amount based upon achievement of Company and individual
performance targets established by our compensation committee and our Chief Executive Officer for the fiscal year to which the bonus relates; (iii) a lump-sum cash signing bonus equal to $300,000, subject
to repayment upon certain terminations of employment prior to May 21, 2019; (iv) eligibility to receive annual grants under our Omnibus Incentive Plan in amounts and in a form determined by our compensation committee, provided that, for the
2018 fiscal year, Mr. Swanstrom’s long-term incentive award would have a target value of $900,000; (v) a one-time grant of restricted stock with a grant date value equal to $600,000, and which vests
on the third anniversary of the date of grant; and (vi) a one-time grant of restricted stock with a grant date value equal to $600,000, and which vests on the fourth anniversary of the date of grant.
24
The Swanstrom Offer Letter also provides that Mr. Swanstrom will participate in the Executive Severance Plan, in accordance with its terms. The 2018 annual long-term incentive award and both
of the one-time restricted stock awards were granted to Mr. Swanstrom effective on the day following the consummation of the spin-off.
Mr. Chloupek
Mr. Chloupek’s
employment agreement, dated as of August 20, 2003, as amended August 17, 2005, provides that he is to serve as Senior Vice President, is eligible to receive a base salary (which was increased to $412,000 as of February 26, 2018), and
is eligible to receive a cash incentive compensation award, which amounts shall be determined by the Compensation Committee. The employment agreement provides for an initial three-year employment term that extends automatically for additional one-year periods, unless we or Mr. Chloupek elects not to extend the term.
Mr. Cantele
In connection with his appointment as Executive Vice President and Chief Operating Officer of the Company, we entered into the Cantele Offer
Letter with Mr. Cantele, effective as of the spin-off. The Cantele Offer Letter provided that Mr. Cantele was employed with the Company as our Executive Vice President and Chief Operating Officer
with the following compensation and benefits: (i) an annual base salary of $509,850, subject to increase (but not decrease); (ii) an annual bonus opportunity with a target amount equal to 100% of his base salary, with the actual bonus amount
based upon achievement of Company and individual performance targets established by our Compensation Committee and our Chief Executive Officer for the fiscal year to which the bonus relates; (iii) eligibility to receive annual grants under our
Omnibus Incentive Plan in amounts and in a form determined by our Compensation Committee, provided that, for the 2018 fiscal year, Mr. Cantele’s long-term incentive award would have a target value of $900,000; (iv) a one-time grant of restricted stock with a grant date value equal to $1.05 million, and which vests on the third anniversary of the date of grant; and (v) a one-time
grant of restricted stock with a grant date value equal to $1.05 million, and which vests on the fourth anniversary of the date of grant. The 2018 annual long-term incentive award and both of the one-time
restricted stock awards were granted to Mr. Cantele effective on the day following the consummation of the spin-off. The Cantele Offer Letter also provided that Mr. Cantele would participate in the
Executive Severance Plan, in accordance with its terms.
Mr. Cantele ceased to serve as the Company’s Executive Vice President
and Chief Operating Officer and left the Company May 15, 2019. For a description of the terms of Mr. Cantele’s Separation and Release agreement, see “Potential Payments upon Termination or Change in Control” below.
2019 Equity Awards
In March 2019, the
Company granted annual long-term incentive awards (the “2019 LTI Awards”) to the NEOs composed of time-vesting restricted stock and PSUs pursuant to the Company’s Omnibus Incentive Plan. The table below sets forth the total target
value of the 2019 LTI Awards as well as the fair market value on the grant date of the time-vesting restricted stock awards and the target value of the PSUs, assuming that the target level of performance is achieved.
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Name
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Total Target Value
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Restricted Stock Value
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Target PSU Value
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Keith A. Cline
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$
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2,800,000
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$
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1,120,000
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$
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1,680,000
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Daniel E. Swanstrom II
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$
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900,000
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$
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360,000
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$
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540,000
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Mark M. Chloupek
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$
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900,000
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$
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360,000
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$
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540,000
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John W. Cantele
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$
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900,000
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$
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360,000
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$
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540,000
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In addition, Messrs. Swanstrom, Chloupek and Cantele were each
granted one-time PSU awards in the target amounts of $250,000, $100,000 and $100,000, respectively.
25
Time-vesting restricted stock awards. The time-vesting restricted stock awards
(“Annual RSAs”) vest in three equal annual installments beginning on December 15, 2019, subject to the NEO’s continued employment with the Company through each vesting date. The vesting terms of the Annual RSAs upon termination
or a change in control are summarized below in “Potential Payments upon Termination or Change in Control.”
PSUs. The
PSUs are divided into two equal tranches, one of which (“Tranche I”) vests based the Company’s total shareholder return relative to a peer group (“Relative TSR”) and one of which (“Tranche II”) vests based on the
Company’s absolute total shareholder return (“Absolute TSR”), in each case over specified performance periods. The performance period for 50% of each tranche begins on the grant date and ends on the second anniversary of the grant
date. The performance period for the other 50% of each tranche begins on the grant date and ends on the third anniversary of the grant date. The multiple performance periods for the 2019 PSUs are intended to provide an initial transition as the PSU
program ramps up. The 2020 PSU grants have a three-year performance period.
Absolute TSR is calculated as the appreciation in the price
per share of the Company’s common stock during the performance period (assuming dividends are reinvested), expressed as a percentage, and Relative TSR is based on the percentile rank of the Company’s Absolute TSR against the Absolute TSRs
of the peer companies set forth below, which companies are constituents of the SNL US Hotel REIT Index.
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PEER COMPANIES
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Apple Hospitality REIT
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Park Hotels & Resorts
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Ashford Hospitality Trust
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Pebblebrook Hotel Trust
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Braemar Hotels & Resorts
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RLJ Lodging Trust
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Chatham Lodging Trust
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Ryman Hospitality Properties
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Chesapeake Lodging Trust
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Service Properties Trust
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Condor Hospitality Trust
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Sotherly Hotels Inc.
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DiamondRock Hospitality Co.
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Summit Hotel Properties Inc.
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Hersha Hospitality Trust
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Sunstone Hotel Investors
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Host Hotels & Resorts
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Xenia Hotels & Resorts
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A constituent listed above will be removed from the Relative TSR comparison group if: (i) during the
applicable performance period, the company makes a public disclosure of its intent or agreement to enter into a merger or sale with another company, after which it will no longer be listed on a securities exchange; or (ii) it is not listed on a
securities exchange for the entire applicable performance period; provided, that a company that becomes subject to a proceeding as a debtor under the U.S. Bankruptcy Code during the applicable performance period will be included with TSR equal to
negative one hundred percent (-100%).
The actual number of PSUs that become vested based on each
performance measure is based on an achievement factor which, in each case, ranges from 0% of the target number of PSUs for below threshold performance to 50% of the target number of PSUs for threshold performance, to 100% of the target number of
PSUs for target performance, to 175% of the target number of PSUs for maximum performance. For actual performance between the specified threshold, target and maximum levels, the resulting payout percentage will be interpolated on a linear basis.
Notwithstanding the foregoing, if Absolute TSR is negative, the maximum payout with respect to Relative TSR PSUs is 100% of the target number of Relative TSR PSUs. Following the last day of the applicable performance period, the Compensation
Committee will calculate the payout with respect to each tranche and the PSUs do not vest until the Compensation Committee certifies in writing the extent to which the applicable performance conditions have been met.
The vesting terms of the PSUs upon termination or a change in control are summarized below in “Potential Payments upon Termination or
Change in Control.”
2019 Annual Cash Incentive Compensation
2019 Short Term Incentive Plan. In March 2019, the Company granted cash incentive awards to the NEOs under our Short Term Incentive Plan
for Section 16 Officers for the year ended December 31, 2019 (the
26
“STI Plan” and such awards, the “2019 STI Awards”). Our STI Plan compensated and rewarded successful achievement of short-term strategic priorities that were designed to
maximize the Company’s performance and drive shareholder value. The payments to the NEOs under the 2019 STI Awards were based on a combination of the financial performance of the Company (65% of the total award opportunity) and strategic
objectives (35% of the total award opportunity). For each performance component, payments to the NEOs under the 2019 STI Awards, expressed as a percentage of an NEO’s base salary, could range from 0% for below threshold performance, to 50% for
threshold performance, to 100% for target performance, and to a maximum of 200%, subject to an NEO’s continued employment with the Company or a subsidiary of the Company on the payment date.
The financial component of each NEO’s 2019 STI Award opportunity was based on Adjusted Funds from Operations (“AFFO”) per
share, where AFFO is defined as Funds from Operations (as defined by the National Association of Real Estate Investment Trusts) adjusted for certain items, such as stock-based compensation expense, noncash tax expense, amortization of debt issuance
costs, nonrecurring general and administrative expense and business interruption proceeds, as well as other items as the Compensation Committee determined were appropriate and consistent with the purpose and intent of the 2019 STI Awards.
Adjustments specific to the 2019 STI Plan included, among other things (a) inclusion of certain payments to the Company pursuant to the Wyndham Settlement (as defined in the Company’s Annual Report on Form 10-K for the year ended December 31,
2019), (b) adjustments for the impact of hotels sold during the year and (c) exclusion of the effect of the Company’s bonus accruals.
The strategic objective component of each executive’s 2019 STI Award opportunity was based on the number of hotels sold by the Company
during the 2019. For purposes of determining the number of hotels sold, if the Company entered into a definitive transaction agreement for the sale of a hotel prior to the end of the calendar year and the applicable deposit made in connection with
such sale was non-refundable, the sale of such hotel was included in the number of hotels sold during the performance period.
The following tables sets forth the threshold, target and maximum performance targets for each of the financial component and the strategic
objective component, as well as the payout percentage for each category.
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Threshold
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Target
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Maximum
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AFFO per share (weighted 65%)
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$
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1.78
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$
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2.00
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$
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2.26
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Number of Hotels Sold (weighted 35%)
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25
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35
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45
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Payout Percentage
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50
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%
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100
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%
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200
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%
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To the extent that actual performance fell between the specified threshold, target and maximum performance
levels for each of the financial performance and strategic objective metrics, the resulting payout percentage was determined using linear interpolation.
The following table shows the actual results based on the Company’s fiscal 2019 performance and the payout percentages with respect to
each of the financial component and the strategic objective component.
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AFFO per share
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Number of
Hotels Sold
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Actual Performance
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$
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2.05
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79
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Payout Percentage
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120.63
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%
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200
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%
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Actual amounts paid under the 2019 STI Awards to our NEOs other than Mr. Cantele were
calculated by multiplying the NEO’s base salary by his target bonus percentage and a weighted achievement factor based on the Company’s performance against the financial component targets and the strategic objective targets. Based on the
performance achieved, each of the NEOs other than Mr. Cantele earned an annual bonus for 2019 under the STI Plan as follows, which amounts are reflected in the “Non-Equity Incentive Plan
Compensation” column of the Summary Compensation Table:
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Name
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2019
base salary
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Target bonus as
a percentage of
base salary
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Target
bonus
potential
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Achievement
factor as a
percentage
of target
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2019
STI Plan
payout
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Keith A. Cline
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$
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795,675
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100
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%
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$
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795,675
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148.41
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%
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$
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1,180,841
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Daniel E. Swanstrom II
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$
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475,000
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100
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%
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$
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475,000
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148.41
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%
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$
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704,936
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Mark M. Chloupek
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$
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412,000
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100
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%
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$
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412,000
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148.41
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%
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$
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611,439
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In connection with his termination in May 2019, Mr. Cantele became entitled to receive a lump sum payment
of his STI Plan award, pro-rated for his months of service up to and including May 2019 and based on target performance, which amount ($212,438) is reflected in the “All Other Compensation” column of
the Summary Compensation Table.
Other Benefits and Perquisites
Our executives, including the NEOs, are eligible for specified benefits, such as group health, dental and disability insurance and
employer-paid basic life insurance premiums on the same basis as all other employees. In addition, we provide limited perquisites to the NEOs, when determined to be necessary and appropriate, including employer-paid executive physical examinations.
The value of perquisites and other personal benefits provided to the NEOs is reflected in the “All Other Compensation” column
of the “Summary Compensation Table” and the accompanying footnote.
Retirement Benefits
We maintain a tax-qualified 401(k) plan in which all of our employees, including the NEOs, are eligible
to participate and under which we will match each employee’s contributions dollar-for-dollar up to 3% of such employee’s eligible earnings and $0.50 for every
$1.00 for the next 2% of the employee’s eligible earnings. The maximum match available under our 401(k) Plan is 4% of the employee’s eligible earnings. All matching contributions by us are always fully vested.
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50% of the PSUs granted on March 26, 2019 will vest, if at all, based on the
Company’s achievement of the Relative TSR performance measure (“Tranche I”) and 50% of such PSUs will vest, if at all, based on the Company’s achievement of the Absolute TSR performance measure (“Tranche II”), in each
case over specified performance periods. The performance period for 50% of each tranche begins on March 26, 2019 and ends on March 26, 2021. The performance period for the other 50% of each tranche begins on March 26, 2019 and ends on
March 26, 2022. The terms of the PSUs are summarized in “Narrative to Summary Compensation Table—2019 Equity Awards” above. As of December 31, 2019, the achievement levels with respect to Absolute TSR and Relative TSR were
both below threshold. Accordingly, the number of Tranche I and Tranche II PSUs reported in the table reflect amounts based on threshold. The actual number of shares that will vest with respect to the PSUs is not yet determinable.
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In connection with his termination in May 2019, all of Mr. Cantele’s time-vesting restricted stock
awards either vested or were forfeited, however a prorated portion of Mr. Cantele’s PSUs remain outstanding and subject to continued vesting in accordance with the terms of the award agreement relating thereto.
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Potential Payments upon Termination or Change in Control
Executive Severance Plan
On April 2,
2018 our Board of Directors adopted (which adoption was subsequently ratified by our Board of Directors on April 12, 2018) the Executive Severance Plan. The Executive Severance Plan offers severance and change in control benefits for employees
of the Company at the level of Vice President and above, including the NEOs. The Executive Severance Plan provides for payment of severance and other benefits to eligible executives, including the NEOs, in the event of a termination of employment
with us without cause or for good reason (each as defined in the Executive Severance Plan) (a “covered termination”), or in the event of a termination of employment as a result of retirement, death, or disability (as such terms are defined
in the Executive Severance Plan), in each case, subject to the (i) executive’s execution and non-revocation of a general release of claims in our favor and (ii) continued compliance with the
executive’s confidentiality, non-interference and invention assignment obligations to us.
In
the event of a covered termination, in addition to certain accrued obligations, the Executive Severance Plan provides for the following payments and benefits to the NEOs:
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a lump-sum pro-rata bonus for the
year of termination, based on actual performance;
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a lump-sum payment equal to the sum of the executive’s
(x) annual base salary and (y) bonus based on target performance (the “cash severance amount”) times the multiplier applicable to such executive (which is 1.5 for Messrs. Swanstrom, Cantele and Chloupek and 2.0 for
Mr. Cline);
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continued health insurance coverage at substantially the same level as provided immediately prior to such
termination, at the same cost as generally provided to similarly situated active Company employees (the “welfare benefit”), for a period of 18 months for Messrs. Swanstrom, Cantele and Chloupek and 24 months for Mr. Cline; and
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payment of, or reimbursement for, up to $10,000 in outplacement services within the three-year period following
such termination (the “outplacement benefit”).
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Notwithstanding the foregoing, in the event such covered
termination occurs on or within the six-month period prior to, or within the two-year period following, the first to occur of (i) a change in control and
(ii) a significant corporate event (each as defined in the Executive Severance Plan), in addition to certain accrued obligations, the Executive Severance Plan provides for the following payments and benefits to the NEOs:
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a lump-sum pro-rata bonus for the
year of termination, based on target performance;
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the cash severance amount times the multiplier applicable to such executive (which is 2.0 for Messrs. Swanstrom,
Cantele and Chloupek and 3.0 for Mr. Cline);
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the welfare benefit for a period of 24 months for Messrs. Swanstrom, Cantele and Chloupek and 36 months for
Mr. Cline; and
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the outplacement benefit.
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In the event of a termination with us as a result of the executive’s death or disability, in addition to certain accrued obligations, the
Executive Severance Plan provides for the following payments and benefits to the NEOs: (i) a lump-sum bonus for the year of termination, based on target performance; and (ii) solely in the case of
the executive’s disability, the welfare benefit for a period of 12 months. In the event of a termination with us as a result of the executive’s retirement, in addition to certain accrued obligations, the Executive Severance Plan
provides for the payment of a lump-sum pro-rata bonus for the year of termination, based on actual performance, to eligible executives, which include the NEOs.
In addition, the Executive Severance Plan provides that, upon the first to occur of (i) a change in control and (ii) a significant
corporate event, any unvested and outstanding award granted to the NEOs under our Omnibus Incentive Plan that is not continued, converted, assumed or replaced in connection with such change in control or significant corporate event will fully vest;
provided, that, vesting for performance-based vesting awards (a) with market performance conditions will be based on actual performance and (b) with financial performance conditions will be based on target performance.
The Executive Severance Plan provides that if any payments and/or benefits due to a participant (including any NEO) under the Executive
Severance Plan and/or any other arrangements will constitute “excess parachute payments” (as defined in Section 280G (“Section 280G”) of the Internal Revenue Code of 1986, as amended (the “Code”)), we will
reduce the amount of payments under the Executive Severance Plan by the minimum amount necessary such that the present value of the participant’s “parachute payments” (as defined in Section 280G) is below 300% of such
participant’s “base amount” (as defined in Section 280G), calculated in accordance with the Treasury Regulations promulgated under Section 280G; provided, however, in no event will the amount of any severance payments be
reduced unless (a) the net after-tax amount of such payments and benefits as so reduced is greater than or equal to (b) the net after-tax amount of such
payments and benefits without such reduction.
While Mr. Chloupek’s employment agreement contains severance terms applicable to
him (as described below under “—Employment Agreement Provisions—Mr. Chloupek”), he is eligible to receive the above benefits under the Executive Severance Plan only to the extent that any amounts due and payable under the
Executive Severance Plan are greater than and in addition to the amount due and payable to Mr. Chloupek under his employment agreement.
Mr. Cantele was eligible to receive the above benefits in connection with his termination in May 2019, which benefits were reflected in
his Separation and Release Agreement, described below.
Employment Agreement Provisions—Mr. Chloupek
Pursuant to the terms of Mr. Chloupek’s employment agreement, upon a termination by us without “cause” or by
Mr. Chloupek for “good reason” (each as defined in such employment agreement), and subject to his signing a general release of claims and his continued compliance with the restrictive covenants described below, he is entitled to
severance payments in an amount equal to one and one-half times the sum of his average (A) annual base salary and (B) incentive compensation, in each case over the three immediately preceding fiscal
years, payable over the 18-month period after his date of termination of employment (the “Severance Amount”). In the event Mr. Chloupek commences any employment during the 12-month period following the date of his termination of employment, we are entitled to reduce his remaining Severance Amount by 50% of the amount of any cash compensation received by him during such period. In
addition, if Mr. Chloupek commences any employment during the six-month period following the first anniversary of his termination of employment, we are entitled to reduce his remaining Severance Amount by
25% of the amount of any cash compensation received by him during such period.
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In the event of Mr. Chloupek’s termination of employment without cause, for good
reason or due to death or disability, Mr. Chloupek is entitled to receive his prorated bonus in a lump sum payment at the rate of his bonus for the fiscal year of his termination. In the event that such termination of employment occurs within
the first six months of the year, his prorated bonus will not exceed 50% of the maximum bonus which he could have been paid in the year immediately preceding the year of his termination of employment. In addition, he (other than in the case of his
death), his spouse and his eligible dependents are entitled to receive continued healthcare coverage for one year following such termination.
If, within 12 months after a change in control, Mr. Chloupek’s employment is terminated without cause or for good reason, his
employment agreement provides for the payment of the Severance Amount over the 18-month period after the date of termination, however, we do not have the right to set off any amounts received by
Mr. Chloupek from a new employer if he commences employment within such 18 month-period. In the event Mr. Chloupek is terminated within 12 months following a change in control, he, his spouse and his eligible dependents are entitled to
receive continued healthcare coverage for one year following such termination.
Mr. Chloupek’s employment agreement provides for
reimbursement by us on a “grossed up” basis for all taxes incurred in connection with all payments or benefits provided to him upon a change in control that are determined by us to be subject to the excise tax imposed by Section 4999
of the Code in an amount equal to the lesser of (A) the aggregate amount of all excise tax payments on a “grossed up” basis, or (B) 1.25 times his then-current annual base salary.
Mr. Chloupek’s employment agreement contains restrictive covenants, including an indefinite covenant not to disclose confidential
information, and, during Mr. Chloupek’s employment and for the 18-month period following the termination of his employment, covenants related to
non-competition and non-solicitation of our employees and customers.
Separation and Release Agreement – Mr. Cantele
On May 13, 2019, the Company and Mr. Cantele entered into the Separation and Release Agreement. Pursuant to the Separation and
Release Agreement, Mr. Cantele became entitled to:
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subject to non-revocation of a general release and waiver of claims in
favor of the Company and continued compliance with the Non-Interference Agreement (as defined below), the following payments and benefits to which he was entitled pursuant to the Executive Severance Plan in
connection with a termination without cause within two years after the spin-off of the Company from LQH Parent, which was considered a change in control under the Executive Severance Plan:
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a lump sum cash severance payment equal to twice Mr. Cantele’s 2019 base salary and target bonus
($2,039,400), payable within 60 days of Mr. Cantele’s termination;
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a lump sum payment of his 2019 annual incentive bonus, pro-rated for the
months of service up to and including the month of termination and based on target performance ($212,437.50), paid concurrently with the payments of 2019 annual incentive bonuses to other similarly-situated employees;
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continued health insurance coverage at substantially the same level as provided immediately prior to such
termination, at the same cost as generally provided to similarly-situated active Company employees, for a period of 24 months following Mr. Cantele’s termination; and
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payment for or reimbursement of payment for outplacement services up to a maximum of $10,000 within a three-year
period following Mr. Cantele’s termination; and
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the following treatment with respect to his outstanding equity awards to which he was entitled pursuant to the
Omnibus Incentive Plan and the applicable award agreements in connection with a termination without cause:
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acceleration of the vesting of 123,442 shares of the Company’s common stock in respect of outstanding
restricted stock awards and corresponding dividend equivalent rights thereon, as applicable; and
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continued vesting of 3,552 performance-vesting restricted stock units pursuant to the terms of the applicable
award agreements.
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The Separation and Release Agreement also contains an agreement by Mr. Cantele that he will
remain subject to any restrictive covenants contained in any confidentiality, non-competition, non-solicitation,
non-disparagement or similar agreement entered into between him and the Company or its affiliates, including those covenants set forth in the Confidentiality,
Non-Interference and Invention Assignment Agreement he executed in connection with his participation in the Executive Severance Plan (such agreement, the
“Non-Interference Agreement”). The Non-Interference Agreement contains confidentiality, non-solicitation and non-disparagement covenants, each with a 24-month post-termination duration, and a non-competition covenant with a 12-month post-termination duration.
Treatment of Equity Awards
Annual RSAs. Under the terms of the Annual RSAs, upon termination of an executive’s employment by us without cause (as defined in
our Omnibus Incentive Plan) or by the executive for good reason (as defined in the applicable award agreement), in each case, prior to a change in control, the number of shares of restricted stock that would have vested on the next scheduled vesting
date following such termination will immediately vest. In addition, upon termination of an executive’s employment by us without cause or for good reason, in each case, on or following a change in control or upon termination of an
executive’s employment due to the executive’s death or disability (as defined in our Omnibus Incentive Plan) (regardless of whether prior to or on or following a change in control), all unvested shares of restricted stock under the Annual
RSA will immediately vest. If the executive’s employment terminates for any reason other than as described above, all unvested shares of restricted stock under the Annual RSA will be forfeited.
Four-Year Cliff-Vesting RSAs and Three-Year Cliff-Vesting RSAs. Under the terms of the Four-Year Cliff-Vesting RSAs and the Three-Year
Cliff Vesting RSAs, upon termination of an executive’s employment by us without cause (as defined in our Omnibus Incentive Plan), by the executive for good reason (as defined in the applicable award agreement) or as a result of such
executive’s death or disability (as defined in our Omnibus Incentive Plan) or if a change in control occurs, all unvested shares of restricted stock under the Four-Year Cliff-Vesting RSA and the Three-Year Cliff-Vesting RSA will immediately
vest. If the executive’s employment terminates for any reason other than as described above, all unvested shares of restricted stock under the Four-Year Cliff-Vesting RSA and the Three-Year Cliff-Vesting RSA will be forfeited.
PSUs. In the event of an NEO’s death or disability (as defined in our Omnibus Incentive Plan), the PSUs will become vested
assuming achievement of a 100% payout for the applicable tranche, and settled 60 days following such termination. In the event that prior to a change in control (as defined in our Omnibus Incentive Plan) an NEO undergoes a termination by the Company
without cause or by such NEO for good reason, subject to such NEO’s compliance during the applicable performance period with any restrictive covenant by which such NEO is bound in any agreement with the Company or its subsidiaries, with respect
to any PSUs for which the performance period has not been completed, a prorated portion of the PSUs will remain outstanding and eligible to vest based on actual performance on the last day of the applicable performance period, with such proration
based on the number of days the NEO was employed during the performance period relative to the total number of days of the performance period.
33
STOCKHOLDER PROPOSALS FOR THE 2021 ANNUAL MEETING
If any stockholder wishes to propose a matter for consideration at our 2021 Annual Meeting of Stockholders (the “2021 Annual
Meeting”), the proposal should be mailed by certified mail return receipt requested, to our Secretary, CorePoint Lodging Inc., at 125 East John Carpenter Freeway, Suite 1650, Irving, Texas 75062. To be eligible under the SEC’s stockholder
proposal rule (Rule 14a-8(e) of the Exchange Act) for inclusion in our proxy statement for the 2021 Annual Meeting, a proposal must be received by our Secretary on or before December 15, 2020. Failure to
deliver a proposal in accordance with this procedure may result in it not being deemed timely received.
In addition, our Bylaws permit
stockholders to nominate candidates for director and present other business for consideration at our annual meeting of stockholders. To make a director nomination or present other business for consideration at the 2021 Annual Meeting, you must
submit a timely notice in accordance with the procedures described in our Bylaws. To be timely, a stockholder’s notice must be delivered to the Secretary at the principal executive offices of our Company not less than 120 days nor more than 150
days prior to the first anniversary of the date the preceding year’s proxy statement is released to stockholders. Therefore, to be presented at our 2021 Annual Meeting, such a proposal must be received on or after November 15, 2020, but
not later than December 15, 2020. In the event that the date of the 2021 Annual Meeting is advanced or delayed by more than 30 days from the anniversary date of this year’s Annual Meeting of Stockholders, notice by the stockholder to be
timely must be so delivered not earlier than the 150th day prior to the 2021 Annual Meeting and not later than the close of business on the later of the 120th day prior to the 2021 Annual Meeting or the tenth day following the day on which public
announcement of the date of the 2021 Annual Meeting is first made. Any such proposal will be considered timely only if it is otherwise in compliance with the requirements set forth in our Bylaws.
HOUSEHOLDING OF PROXY MATERIALS
SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect
to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for
companies by reducing printing and mailing costs and helps the environment by conserving natural resources. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless
contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will generally continue until you are notified otherwise
or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish
to request that future deliveries be limited to a single copy, please notify your broker. You can also request prompt delivery of a copy of the proxy statement and annual report by contacting us in writing at CorePoint Lodging Inc., 125 East John
Carpenter Freeway, Suite 1650, Irving, Texas 75062 or by phone at (972) 893-3199.
43
OTHER BUSINESS
The Board does not know of any other matters to be brought before the meeting. If other matters are presented, the proxy holders have
discretionary authority to vote all proxies in accordance with their best judgment.
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By Order of the Board of Directors,
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Mark M. Chloupek
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Secretary
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We make available, free of charge on our website, all of our filings that are made electronically
with the SEC, including Forms 10-K, 10-Q and 8-K. To access these filings, go to our website
(www.corepoint.com) and click on “SEC Filings” under the “Investors” heading. Copies of our Annual Report on Form 10-K for the year ended December 31, 2019,
including financial statements and schedules thereto, filed with the SEC, are also available without charge to stockholders upon written request addressed to:
Secretary
CorePoint Lodging
Inc.
125 East John Carpenter Freeway, Suite 1650
Irving, Texas 75062
44
3 WAYS TO VOTE - 24 HOURS A DAY, 7 DAYS A WEEK Vote by Internet -
www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow
the instructions to obtain your records and to create an electronic voting instruction form. COREPOINT LODGING INC. Vote by phone - 1-800-690-6903 125 EAST JOHN CARPENTER FWY., SUITE 1650 Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M. IRVING, TX 75062 Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. Vote by mail Mark, sign and date your proxy card and return it in the
postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 so that it is received by the day before the meeting date. Electronic Delivery of future proxy materials If you would like to
reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please
follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. XXXX XXXX XXXX XXXX g TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS
FOLLOWS: E93679-P35985 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. COREPOINT LODGING INC. For Withhold For All To withhold authority to vote for any individual All All
Except nominee(s), mark For All Except and write the The Board of Directors recommends you vote FOR number(s) of the nominee(s) on the line below. all of the Director Nominees in Proposal 1, and FOR Proposal 2. ! ! ! 1. Election of Directors
Nominees: 01) James R. Abrahamson 07) Alice E. Gould 02) Glenn Alba 08) B. Anthony Isaac 03) Jean M. Birch 09) Brian Kim 04) Alan J. Bowers 10) David Loeb 05) Keith A. Cline 11) Mitesh B. Shah 06) Giovanni Cutaia For Against Abstain 2. To ratify the
appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for fiscal 2020. ! ! ! NOTE: In their discretion, the proxies are authorized to vote upon such other business as may properly come before the
meeting or at any adjournment or postponement thereof. For address changes, please check this box and write them on the back where ! indicated. Please indicate if you plan to attend this meeting. ! ! Yes No NOTE: Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney, executor, administrator, trustee or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full
corporate or partnership name by an authorized officer and indicate officer's name and title. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date3 WAYS TO VOTE - 24 HOURS A DAY, 7 DAYS A WEEK Vote by Internet - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions
to obtain your records and to create an electronic voting instruction form. COREPOINT LODGING INC. Vote by phone - 1-800-690-6903 125 EAST JOHN CARPENTER FWY., SUITE 1650 Use any touch-tone telephone to transmit your voting instructions up until
11:59 P.M. IRVING, TX 75062 Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. Vote by mail Mark, sign and date your proxy card and return it in the postage-paid envelope we
have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 so that it is received by the day before the meeting date. Electronic Delivery of future proxy materials If you would like to reduce the costs
incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the
instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. XXXX XXXX XXXX XXXX g TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E93679-P35985 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. COREPOINT LODGING INC. For Withhold For All To withhold authority to vote for any individual All All Except
nominee(s), mark For All Except and write the The Board of Directors recommends you vote FOR number(s) of the nominee(s) on the line below. all of the Director Nominees in Proposal 1, and FOR Proposal 2. ! ! ! 1. Election of Directors Nominees: 01)
James R. Abrahamson 07) Alice E. Gould 02) Glenn Alba 08) B. Anthony Isaac 03) Jean M. Birch 09) Brian Kim 04) Alan J. Bowers 10) David Loeb 05) Keith A. Cline 11) Mitesh B. Shah 06) Giovanni Cutaia For Against Abstain 2. To ratify the appointment
of Deloitte & Touche LLP as the Company's independent registered public accounting firm for fiscal 2020. ! ! ! NOTE: In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or at
any adjournment or postponement thereof. For address changes, please check this box and write them on the back where ! indicated. Please indicate if you plan to attend this meeting. ! ! Yes No NOTE: Please sign exactly as your name(s) appear(s)
hereon. When signing as attorney, executor, administrator, trustee or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or
partnership name by an authorized officer and indicate officer's name and title. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting To Be Held on May 21, 2020: Combined document containing the Notice of Annual Meeting, Proxy Statement and Annual Report is available at www.proxyvote.com. E93680-P35985 COREPOINT LODGING INC. Proxy Solicited on Behalf of the
Board of Directors for the Annual Meeting of Stockholders May 21, 2020 at 10:00 a.m. Central Time The undersigned hereby appoints Keith A. Cline, Daniel E. Swanstrom II and Mark M. Chloupek, and each of them, with power to act without the other and
with full power of substitution, as proxies and attorneys-in-fact, and hereby authorizes each of them to represent and vote, as provided on the other side, all the shares of CorePoint Lodging Inc. common stock held of record by the undersigned on
April 2, 2020, and further authorizes such proxies to vote, in their discretion, upon such other business as may properly come before the Annual Meeting of Stockholders or at any adjournment or postponement thereof with all powers which the
undersigned would possess if present at the Annual Meeting of Stockholders. THIS PROXY CARD, WHEN PROPERLY EXECUTED AND DELIVERED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS
PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES UNDER PROPOSAL 1 AND FOR PROPOSAL 2, AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR AT ANY ADJOURNMENT OR POSTPONEMENT
THEREOF. Address Changes: _______________________________________________________________________________ ________________________________________________________________________________________________________ (If you noted any address changes
above, please mark corresponding box on the reverse side.) (Continued and to be marked, dated and signed, on the other side)Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on May 21, 2020:
Combined document containing the Notice of Annual Meeting, Proxy Statement and Annual Report is available at www.proxyvote.com. E93680-P35985 COREPOINT LODGING INC. Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting of
Stockholders May 21, 2020 at 10:00 a.m. Central Time The undersigned hereby appoints Keith A. Cline, Daniel E. Swanstrom II and Mark M. Chloupek, and each of them, with power to act without the other and with full power of substitution, as proxies
and attorneys-in-fact, and hereby authorizes each of them to represent and vote, as provided on the other side, all the shares of CorePoint Lodging Inc. common stock held of record by the undersigned on April 2, 2020, and further authorizes such
proxies to vote, in their discretion, upon such other business as may properly come before the Annual Meeting of Stockholders or at any adjournment or postponement thereof with all powers which the undersigned would possess if present at the Annual
Meeting of Stockholders. THIS PROXY CARD, WHEN PROPERLY EXECUTED AND DELIVERED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL
NOMINEES UNDER PROPOSAL 1 AND FOR PROPOSAL 2, AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF. Address Changes:
_______________________________________________________________________________ ________________________________________________________________________________________________________ (If you noted any address changes above, please mark
corresponding box on the reverse side.) (Continued and to be marked, dated and signed, on the other side)