UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 5, 2019
APPLE HOSPITALITY REIT, INC.
(Exact name of registrant as specified in its charter)
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Virginia
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001-37389
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26-1379210
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification Number)
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814 East Main Street, Richmond, Virginia
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23219
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(Address of principal executive offices)
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(Zip Code)
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(804) 344-8121
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Shares, no par value
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APLE
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New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Apple Hospitality REIT, Inc. (which is referred to below as the “Company”) is filing this report in accordance with Items 5.02, 8.01 and 9.01 of Form 8-K.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Rachael Rothman, the Company’s Executive Vice President and Chief Financial Officer, resigned from all positions she held with the Company, effective December 6, 2019. Ms. Rothman’s resignation from the Company is not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. In connection with her separation, the Company and Ms. Rothman entered into a separation and general release agreement dated December 5, 2019 (“Separation Agreement”). Under the terms of the Separation Agreement, subject to Ms. Rothman not revoking the Separation Agreement during the seven-day revocation period beginning on the date she signed the Separation Agreement, Ms. Rothman will receive: (i) a payment of one year’s base salary and one year’s total target incentive compensation and (ii) payments that would have been earned and vested as of December 31, 2019 under the Company’s 2019 Executive Incentive Plan, which is expected to be determined in March 2020, in each case, less applicable taxes and withholdings. Pursuant to the Separation Agreement, effective December 6, 2019, Ms. Rothman also resigned from all of the offices, directorships, appointments and other positions she held with the Company’s subsidiaries and affiliates. The Separation Agreement provides a general release and waiver of claims against the Company, its subsidiaries, affiliates and employees from Ms. Rothman. The foregoing summary is not complete and is qualified in its entirety by reference to the copy of the Separation Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Effective with Ms. Rothman’s resignation on December 6, 2019, the Company’s Board of Directors appointed Bryan Peery, the Company’s Executive Vice President, Chief Accounting Officer and Treasurer, to the role of Executive Vice President, Chief Financial Officer and Treasurer, with no change in his compensation arrangements. Mr. Peery, age 55, previously served in this capacity from the Company’s inception in 2007 until June 30, 2019. In March of 2019, Mr. Peery informed the Company of his intention to retire from his positions with the Company in the first quarter of 2020, however Mr. Peery has agreed to remain with the Company, as necessary, beyond March of 2020 to provide for an orderly transition of his responsibilities. Additional information about Mr. Peery is available in the Company’s definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2019.
Item 8.01. Other Events.
On December 6, 2019, the Company issued a press release announcing Ms. Rothman’s resignation from the Company and the appointment of Bryan Peery as Executive Vice President and Chief Financial Officer of the Company. A copy of the press release is attached hereto as Exhibit 99.1 and the information set forth therein is incorporated herein by reference.
Forward Looking Statements
This Current Report on 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. Forward-looking statements are typically identified by use of statements that include phrases such as “may,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “target,” “goal,” “plan,” “should,” “will,” “predict,” “potential,” “outlook,” “strategy,” and similar expressions that convey the uncertainty of future events or outcomes. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the ability of the Company to effectively acquire and dispose of properties; the ability of the Company to implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions; adverse changes in the real estate and real estate capital markets; financing risks; litigation risks; regulatory proceedings or inquiries; and changes in laws or regulations or interpretations of current laws and regulations that impact the Company’s business, assets or classification as a real estate investment trust (“REIT”). Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this Form 8-K will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved. In addition, the Company’s qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code. Readers should carefully review the risk factors described in the Company’s filings with the Securities and Exchange Commission, including but not limited to, those discussed in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Any forward-looking statement that the Company makes speaks only as of the date of this Form 8-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors, as a result of new information, future events, or otherwise, except as required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Apple Hospitality REIT, Inc.
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By:
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/s/ Justin G. Knight
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Justin G. Knight
President and Chief Executive Officer
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December 6, 2019
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false
0001418121
0001418121
2019-12-05
2019-12-05
Exhibit 10.1
Rachael Rothman
1695 Wellesley Knoll
Keswick, Virginia 22947
Dear Rachael,
On behalf of Apple Fund Management, LLC, a Virginia limited liability company and its affiliates (the “Company”), I am presenting you with this letter agreement (this “Agreement”) in connection with your resignation from the Company.
1. Effective December 6, 2019 (“Separation Date”), you will resign from your position as Executive Vice President and Chief Financial Officer of Apple Hospitality REIT, Inc., as well as all of the offices, directorships, appointments, and other positions you hold with the Company and all of its parents, subsidiaries, and affiliates (collectively, “Affiliates”). You will continue to receive (or have received) your salary and benefits and other regular compensation through the Separation Date. You will receive your final paycheck in the gross amount of $7,292.00 on the next regular payday following the Separation Date. You acknowledge that, as of the date you sign this Agreement, you have been paid all compensation and benefits owed (other than your final paycheck if you have not yet received it), and that except as expressly provided in this Agreement, you are not entitled to any further compensation, monies, or other benefits as a result of your employment, including, for the avoidance of doubt, any compensation and benefits under the Executive Severance Pay Plan or the Executive Incentive Plan.
2. Additionally, if you sign and do not revoke this Agreement within the time period set forth below, the Company will provide or cause to be provided the following benefits to you: (i) a lump sum payment of $1,575,000 (which represents the sum of twelve (12) months of your base salary plus your targeted incentive compensation for one year), less applicable taxes and withholdings, which will be paid to you within sixty (60) days following the Separation Date and (ii) upon determination in March 2020, the Company will pay you a lump sum payment (less applicable taxes and withholdings) of the amount you would have earned and that would have vested, as of December 31, 2019, under the 2019 Executive Incentive Plan, however it will not include any portion of the incentive plan that would vest after December 31, 2019. You acknowledge that your entitlement to receive these benefits (the “Separation Benefits”) is subject to your execution and non-revocation of this Agreement within the time period set forth below, and that you are not entitled to the Separation Benefits absent your execution and non-revocation of this Agreement. You acknowledge that once you have received the Separation Benefits, you are not entitled to and will not seek any additional compensation for your service as an employee of the Company or any of its Affiliates.
3. In exchange for the Separation Benefits, you agree, on behalf of yourself and all others who could assert a claim on your behalf, to release the Company, its Affiliates, and each of their past, present, or future officers, directors, members, employees, agents, counsel, consultants, auditors, contractors, successors and assigns (the “Company Releasees”) from any and all claims, whether
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known or unknown, arising out of or in connection with any event occurring or existing on or before the date you sign this Agreement, including claims under federal, state, or local law, including claims relating to your employment, and including claims under the Age Discrimination in Employment Act (“ADEA”). You agree, without limiting the generality of the above release, not to file any claim or lawsuit seeking monetary recovery or other relief for you based on any claims that are lawfully released in this Agreement, and you represent and warrant that no such claims are pending. You also agree to assist the Company with transition of your responsibilities and to comply with other reasonable post-employment requests. Notwithstanding the foregoing, you are not releasing (a) any right to enforce this Agreement; (b) any claims for unemployment compensation, workers compensation benefits or other rights or claims that may not be released by this Agreement as a matter of law; or (c) any rights you may have to indemnification under the charter or bylaws of the Company or any coverage provided by the Company’s Directors and Officers insurance. You represent and understand that the foregoing is a GENERAL RELEASE. You agree that nothing in this Agreement may be construed as an admission of liability by the Company Releasees.
4. You acknowledge that during employment, you learned and came into contact with certain confidential and/or proprietary information and trade secrets of the Company and its Affiliates (collectively, “Confidential Information”). You acknowledge that Confidential Information may be in any form (tangible or intangible) and includes without limitation trade secrets, confidential personnel information, financial data, financial statements, long range or short range plans or projections, budgets, financing and credit-related information, business strategies and methods, costs, or other data and information concerning the Company, that the Company has not previously disclosed to the public, and any confidential information of others provided to the Company. You agree that Confidential Information is and shall remain the exclusive property of the Company or its Affiliates, and you shall not disclose to any person or entity, use for your own benefit, copy, or make notes of any Confidential Information, except as and only to the extent expressly authorized by an officer of the Company in writing. You agree to return and represent that you have returned to the Company, and are no longer in possession of, all information, property, and supplies belonging to the Company or its Affiliates, including all Confidential Information.
5. You further agree that you will not at any time disparage the Company or its Affiliates or their respective products, services, directors, officers, or employees.
6. Nothing in this Agreement prohibits either party from engaging in activities that may not be prohibited by private agreement, such as (1) filing a charge with or participating in an investigation by the U.S. Equal Employment Opportunity Commission or similar agency (but you may not recover remuneration for filing such a charge); (2) reporting possible violations of law to or participating in an investigation of a governmental agency or self-regulatory organization as a whistleblower or taking other actions protected under federal or state whistleblower law (including receiving a whistleblower award); or (3) making truthful statements in any legal or administrative proceeding, as required by a subpoena or similar process, or as required by law.
7. Pursuant to the ADEA, you acknowledge and understand that you (1) have read and understand this Agreement and sign it voluntarily and without coercion; (2) are being advised to consult an attorney prior to signing this Agreement and have had a full opportunity to do so; (3) have twenty-one (21) calendar days from the date you received this Agreement, December 23, 2019 will be 21 days, to consider, sign, and return the Agreement to Justin Knight at 814 East Main Street, Richmond, VA 23219, and if you sign before the end of the twenty-one (21) day period, you have done so
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voluntarily; and (4) have seven (7) calendar days after signing this Agreement to revoke it by providing written notice of revocation to Justin Knight at the above contact information no later than 11:59 p.m. on the seventh calendar day after you signed this Agreement. You further understand that if you revoke this Agreement, it is null and void and of no force or effect on either you or the Company. This Agreement is not effective or enforceable until after the seven (7) day period expires without revocation.
8. This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Virginia. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either party. It may be executed in counterparts, and electronic signatures will suffice as original signatures. This Agreement is the entire agreement between you and the Company as to its subject matter. You acknowledge that you are solely responsible for payment of taxes owed by you as a consequence of this Agreement. This Agreement is binding on and inures to the benefit of each party, and their respective successors, heirs, and assigns, provided that this Agreement may not be assigned by you without the Company’s written consent. You agree that in the event any portion of this Agreement (other than the general release in Paragraph 3 above) is adjudged invalid or enforceable, the remaining portions of this Agreement shall remain in full force and effect.
Rachael, I thank you for your service to the Company and wish you the best in your future endeavors.
Sincerely,
/s/ Justin Knight
Justin Knight
Accepted and Agreed
/s/ Rachael Rothman
Rachael Rothman
12/5/19
Date
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Apple Fund Management ● 814 East Main Street ● Richmond, Virginia 23219 ● 804-344-8121
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Exhibit 99.1
Apple Hospitality REIT Announces Executive Leadership Transition
RICHMOND, Va. (December 6, 2019) – Apple Hospitality REIT, Inc. (NYSE: APLE) (the “Company” or “Apple Hospitality”) today announced Rachael Rothman, Executive Vice President and Chief Financial Officer, has resigned from the Company effective December 6, 2019. The Company also announced that its Board of Directors appointed Bryan Peery, the Company’s Executive Vice President and Chief Accounting Officer, to fill the position. Mr. Peery previously served as the Company’s Executive Vice President and Chief Financial Officer from the Company’s inception in 2007 until June 30, 2019. In March of 2019, Mr. Peery informed the Company of his intention to retire from his positions with the Company in the first quarter of 2020; however, Mr. Peery has agreed to remain with the Company, as necessary, beyond March 2020 to provide for an orderly transition of his responsibilities. Ms. Rothman’s resignation from the Company is not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
About Apple Hospitality REIT, Inc.
Apple Hospitality REIT, Inc. (NYSE: APLE) is a publicly traded real estate investment trust (REIT) that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States. Apple Hospitality’s portfolio consists of 235 hotels with more than 30,000 guest rooms located in 87 markets throughout 34 states. Franchised with industry-leading brands, the Company’s portfolio comprises 108 Marriott-branded hotels, 125 Hilton-branded hotels, one Hyatt-branded hotel and one independent hotel. For more information, please visit www.applehospitalityreit.com.
Forward-Looking Statements Disclaimer
Certain statements contained in this press release other than historical facts may be considered forward-looking statements. These forward-looking statements are predictions and generally can be identified by use of statements that include phrases such as “may,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “target,” “goal,” “plan,” “should,” “will,” “predict,” “potential,” “outlook,” “strategy,” and similar expressions that convey the uncertainty of future events or outcomes. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Apple Hospitality to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the ability of Apple Hospitality to effectively acquire and dispose of properties; the ability of Apple Hospitality to implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions; adverse changes in the real estate and real estate capital markets; financing risks; litigation risks; regulatory proceedings or inquiries; and changes in laws or regulations or interpretations of current laws and regulations that impact Apple Hospitality’s business, assets or classification as a real estate investment trust. Although Apple Hospitality believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by Apple Hospitality or any other person that the results or conditions described in such statements or the objectives and plans of Apple Hospitality will be achieved. In addition, Apple Hospitality’s qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code. Readers should carefully review Apple Hospitality’s financial statements and the notes thereto, as well as the risk factors described in Apple Hospitality’s filings with the Securities and Exchange Commission, including, but not limited to, in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Any forward-looking statement that Apple Hospitality makes speaks only as of the date of such statement. Apple Hospitality undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors, as a result of new information, future events, or otherwise, except as required by law.
Contact:
Apple Hospitality REIT, Inc.
Kelly Clarke, Vice President, Investor Relations
804‐727‐6321
kclarke@applereit.com
For additional information or to receive press releases by email, visit www.applehospitalityreit.com.
