SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): September 30, 2009
LASALLE HOTEL PROPERTIES
(Exact name of registrant specified in its charter)
Maryland | 1-14045 | 36-4219376 | ||
(State of Incorporation) | (Commission File Number) |
(IRS Employer Identification No.) |
3 Bethesda Metro Center
Suite 1200
Bethesda, Maryland 20814
(Address of principal executive offices, zip code)
Registrants telephone number, including area code: (301) 941-1500
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)) |
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On September 30, 2009, the board of trustees of LaSalle Hotel Properties (NYSE:LHO) appointed Alfred L. Young as Executive Vice President and Chief Operating Officer, effective when he joins the company on or before November 3, 2009. From 2000 until mid-2007, Mr. Young, 41, worked for the company initially as an Asset Manager and later as Vice President of Acquisitions. Since leaving the company in 2007 and until his appointment as Chief Operating Officer, Mr. Young was Managing Director Hospitality for Caribbean Property Group, or CPG. CPG is a diversified real estate company with a focus on investing in hotels, commercial office, and retail properties throughout Central America and the Caribbean. CPG and Goldman Sachs Whitehall Street Real Estate Fund run the Caribbean Real Estate Opportunity Fund that was formed to invest in the greater Caribbean region and Central America. Mr. Young received an MBA from George Mason University and a B.S. from Shepherd University.
Compensation
In connection with Mr. Youngs appointment as Executive Vice President and Chief Operating Officer, the board of trustees approved the following cash compensation for Mr. Young effective as of his first day of employment with the company:
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an annual base salary of $275,000; |
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an annual cash incentive target bonus of $200,000 ($100,000 of which is guaranteed for 2009 and will be paid in 2010 as is the Companys practice with annual cash incentive awards); and |
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a relocation payment of $200,000. |
The annual cash incentive bonus will be paid in accordance with the companys customary practices as more fully described in the companys proxy statement filed with the Securities and Exchange Commission, or the Commission, on March 11, 2009. The relocation payment will be paid within 10 days of his start date at the company.
The board also approved the following time-based equity awards in connection with Mr. Youngs appointment:
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an award of restricted shares equivalent to $175,000; and |
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a special, one-time award of restricted shares equivalent to $400,000. |
The number of shares awarded will be determined by dividing the cash equivalent of each award by the closing price of the companys common shares on the date before Mr. Youngs start date at the Company. Each award will vest approximately one-third on January 1, 2011, 2012 and 2013. Mr. Young will be entitled to receive dividends as declared and paid on the shares and to vote the shares from the date of grant.
In addition, the board also approved an award of performance-based restricted shares to Mr. Young equivalent to $175,000 with the following terms:
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The target number of shares awarded will be determined by dividing $175,000 by the closing price of the companys common shares on the date before Mr. Youngs start date at the company. |
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The actual amount of the award will be determined on January 1, 2013 and will depend on the total return of the companys common shares over a three-year period beginning with the closing price of the companys common shares on December 31, 2009, and ending with the closing price of the companys common shares on December 31, 2012. Mr. Young may actually receive as few as zero shares and as many as twice the target shares. |
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Forty percent of the award will be based on the companys total return (as defined below) compared to the total return of the companies in the NAREIT Equity Index. Forty percent of the award will be based on the companys total return compared to the total return of companies in a designated peer group of the company and included in the NAREIT Equity Index. The final twenty percent of the award will be based on the amount of the companys total return compared to a board-established total return goal. |
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Total return is as calculated by the NAREIT Equity Index and is the increase in the market price of a companys common shares plus dividends declared thereon and assuming such dividends are reinvested. |
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After the actual amount of the award is determined (or earned) on January 1, 2013, the earned shares will be issued and outstanding but a portion will be subject to further vesting. Approximately one-third of the earned amount will vest immediately on January 1, 2013, and the remaining two-thirds will vest in equal amounts on January 1, 2014, and January 1, 2015. |
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Dividends will be deemed to have accrued on all of the earned shares, including those shares subject to further vesting, from December 31, 2009, until the determination date, January 1, 2013. Such accrued dividends will be paid to the awardee on or about January 1, 2013. Thereafter, the awardee is entitled to receive dividends as declared and paid on the earned shares and to vote the shares, including those shares subject to further vesting. |
Mr. Youngs equity awards will vest under certain circumstances and on terms similar to the companys other executive officers as described in the companys proxy statement filed with the Commission on March 11, 2009, which description under Severance Agreements, Equity Award Vesting and Other Termination PoliciesVesting of Long-Term Equity Incentive Awards, is hereby incorporated by reference thereto.
Severance Agreement
The company will enter into a severance agreement with Mr. Young effective as of his start date at the company to provide benefits in the event his employment is terminated in certain circumstances. The terms of his severance agreement are substantially similar to those of the severance agreement of the companys Chief Financial Officer, Hans S. Weger, as described in the companys proxy statement filed with the Commission on March 11, 2009, which description under Severance Agreements, Equity Award Vesting and Other Termination Policies
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Severance AgreementsSeverance Agreements of Messrs. Barnello and Weger, is hereby incorporated by reference thereto. Notwithstanding the above-referenced disclosure that is incorporated by reference, prior to April 2013 the target amount of Mr. Youngs cash incentive bonus will be used for the calculation of any lump sum cash payment required to be calculated for him pursuant to his severance agreement for any period in which an actual payment has not occurred.
As a condition of any severance payment and related benefits described above, the company expects that Mr. Young will agree to a general release of any and all claims relating to his employment. In addition, the company expects that he will agree, for a one-year period, not to solicit, hire or recruit employees or trustees of the company either directly or indirectly for his own account or for another party.
Indemnification Agreement
The company will enter into an indemnification agreement with Mr. Young effective as of his start date at the company that will require indemnification to the fullest extent now or hereafter permitted by Maryland law, as amended from time to time. The terms of his indemnification agreement are substantially similar to those of the indemnification agreements between the company and each of its other executive officers as described on a current report on Form 8-K filed with the Commission and dated November 5, 2008 and incorporated herein by reference thereto.
Other Benefits
The company will also reimburse Mr. Youngs reasonable relocation expenses. In addition, Mr. Young, as the companys other executive officers, will be entitled to health, dental, life and disability insurance benefits, participation in the companys 401(k) plan and other company benefits available to all company employees.
The company expects that on or prior to his first day of employment with the company, Mr. Young will execute agreements memorializing the terms described herein with respect to his equity awards, severance terms and indemnification rights and obligations.
At Will Arrangement
The employment relationship with Mr. Young and the company is on an at-will basis.
Item 7.01 | Regulation FD Disclosure. |
Pursuant to a press release on October 6, 2009, the company announced the appointment of Alfred L. Young as Executive Vice President and Chief Operating Officer of the company. A copy of the press release is furnished as an exhibit to this report and is incorporated by reference herein.
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Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
The following exhibits are included with this report.
Exhibit Number |
Description |
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10.1 |
Offer letter to Alfred L. Young | |
99.1 |
Press release dated October 6, 2009, issued by LaSalle Hotel Properties |
The information contained in the press release attached as Exhibit 99.1 to this report shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Furthermore, the information contained in the press release attached as Exhibit 99.1 to this report shall not be deemed to be incorporated by reference in the filings of the registrant under the Securities Act of 1933.
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Forward Looking Statements
This current report on Form 8-K and any exhibits to this report may contain certain 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. The company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the companys future plans, strategies and expectations, are generally identifiable by use of the words believe, expect, intend, anticipate, estimate, project or similar expressions. Forward-looking statements in this report and its accompanying exhibits include, among others, statements about Mr. Youngs expected start date with the company and the terms and conditions of his compensation package, severance terms and indemnification rights and obligations. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the companys control and which could materially affect actual results, performances or achievements.
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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 thereunto duly authorized.
LASALLE HOTEL PROPERTIES |
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By: |
/ S / H ANS S. W EGER |
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Hans S. Weger | ||
Executive Vice President, Chief Financial Officer, Secretary and Treasurer |
Dated: Octobter 6, 2009
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EXHIBIT INDEX
Exhibit Number |
Description |
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10.1 | Offer letter to Alfred L. Young | |
99.1 | Press release dated October 6, 2009, issued by LaSalle Hotel Properties |
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Exhibit 10.1
September 29, 2009
VIA Email
Mr. Al Young, Jr.
Dear Al:
This letter will serve to confirm our offer of an employment opportunity with LaSalle Hotel Properties as Chief Operating Officer, beginning no later than November 3, 2009.
You will report to the President and Chief Executive Officer of the company and will have the duties and responsibilities as will be determined by the President and Chief Executive Officer.
For calendar year 2009 and 2010, your base salary will be $275,000 per year, payable semi-monthly on the 15th and last day of the month. You will also be eligible to receive a bonus in the target amount of $200,000 per year. Your base salary and any target bonus will be payable in accordance with the companys pay practices, including subject to legally required or authorized payroll deductions and applicable tax withholdings.
Payment of your target bonus will be based upon an evaluation of your individual performance against specific objective and subjective standards by us and the compensation committee of our board of trustees. These performance evaluations will occur throughout the year on an on-going basis. Your performance against these objectives may lead to receiving more than, or less than, your scheduled target bonus, and this determination will be based on your individual efforts and performance. Bonus payments will also vary in a year based upon the firms results compared to the years business plan, the firms performance against its peers and our collective performance against managements business objectives. All of these criteria, individual and collective, may change from year to year, as determined by the compensation committee.
It is our policy to pay bonuses annually (i.e., bonuses are earned and payable only to those individuals who are employees at the time bonuses are paid). For 2009, you will receive a guaranteed bonus in the amount of $100,000 which will be payable in the first quarter of 2010. Subject to the terms of the severance agreement referenced below, if you leave the company for any reason during your first evaluation period, or during future evaluation years, there will be no pro rata payment of the bonus or other compensation.
Mr. Al Young, Jr.
September 29, 2009
Page 2
In addition, as part of a long-term compensation plan, you will receive the following restricted share grants after your acceptance of this offer:
1. | Time-Based Restricted Share Grant A grant of restricted stock valued at $175,000, which will vest one-third on 1/1/11, one-third on 1/1/12 and the remaining 1/3 on 1/1/13. You will receive dividends on said shares as dividends are paid on the companys common shares. |
2. | Performance-Based Restricted Share Grant A performance-based restricted share grant valued at the target amount of $175,000. Performance measurement period would be from 12/31/09 to 12/31/12. One-third will vest on 1/1/13, one-third on 1/1/14 and the remaining one-third on 1/1/15. Dividends will be paid in January 2013 for shares earned during the performance period and will also be paid on earned but unvested shares when dividends are paid on the companys common shares. |
3. | One-time Special Restricted Share Grant A one-time special time-based restricted share grant in the amount of $400,000. One-third will vest on 1/1/11, one-third on 1/1/12 and the remaining one-third on 1/1/13. You will receive dividends on said share as dividends are paid on the companys common shares. |
4. | One-time Relocation Bonus A one-time relocation bonus in the amount of $200,000 to be paid within 10 days after your commencement. |
The actual number of shares or target shares for each award will be determined based on the closing price of the companys common share the day prior to your start date. In addition, the above awards would be made, and be subject in all respects to the terms and conditions of, written award agreements, copies of which are attached.
We also will pay for the reasonable costs of your relocation from Westfield, NJ to the Bethesda metro area. A summary of reimbursable costs is attached for your review. In the event you decide to leave LaSalle Hotel Properties within one year from your start date, then you must repay the amount of relocation reimbursement.
In addition to your direct compensation, you will be eligible to receive other benefits of employment as an officer with our firm. Among them are:
1. | Severance Agreement, a form of which agreement is attached. |
Mr. Al Young, Jr.
September 29, 2009
Page 3
2. | Indemnification Agreement, a form of which agreement is attached. |
3. | Coverage under the companys health and life insurance program, which is currently placed with Capital Care. This will take place the day you start your employment with the company. The health, dental and life insurance package premiums are paid by the company. Detailed information on the insurance program will be provided to you when you fill out the necessary applications. |
4. | Participation in the firms Savings and Retirement Plan, which begins after you meet certain eligibility requirements. Under this 401(k) Plan, an employee may elect to contribute both pretax and after-tax earnings through payroll deduction each year. The company provides a matching contribution of 100% on the first 4% of pretax funds saved by the employee after the employee meets additional eligibility requirements. All employee and company contributions are 100% vested immediately. Additional details will be provided upon acceptance of this offer. |
5. | Eligibility in LaSalle Hotel Properties Employee Rate Program. |
Employment with the company is not for a fixed period of time as your employment will be at will. This means either the company or you may terminate your employment at any time for any reason.
This letter describes in full the offer that has been extended to you and supersedes any previous oral or written offer that may have been made. This letter will be governed and construed in accordance with the laws of the State of Maryland. This letter may be amended or modified only with the written consent of you and the Companys board of trustees.
Mr. Al Young, Jr.
September 29, 2009
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Please indicate your acceptance of this offer by signing the enclosed copy of this letter and returning it to me no later than September 30, 2009. We are looking forward to your new association with our company and feel confident that our future efforts together will be satisfying and rewarding.
Very truly yours,
/s/ Michael D. Barnello |
Michael D. Barnello |
President and Chief Executive Officer |
LA SALLE HOTEL PROPERTIES |
Accepted by: |
/s/ Alfred E. Young |
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Date: |
September 30, 2009 |
Exhibit 99.1
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3 Bethesda Metro Center, Suite 1200, Bethesda, MD 20814
PH 301.941.1500, FX 301.941.1553 www.lasallehotels.com |
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News Release
ALFRED L. YOUNG APPOINTED CHIEF OPERATING OFFICER FOR LASALLE
HOTEL PROPERTIES
BETHESDA, MD, October 6, 2009 LaSalle Hotel Properties (NYSE: LHO) today announced that Mr. Alfred L. Young has been appointed Executive Vice President and Chief Operating Officer effective November 3, 2009. Mr. Young is currently the Managing Director-Hospitality for Caribbean Property Group. Prior to joining Caribbean Property Group, Mr. Young was employed by LaSalle Hotel Properties from 2000-2007 serving in both asset management and acquisition roles.
We are very pleased and excited to have Al returning to LaSalle, said Mr. Michael D. Barnello, President and Chief Executive Officer for LaSalle Hotel Properties. He brings a vast amount of hospitality industry experience, particularly in the asset management and acquisitions arenas. The Board believes Als tremendous knowledge of the industry, the Companys strategies and its culture made him the ideal person to help LaSalle Hotel Properties continue to be a leader in the hospitality industry.
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Additional Contacts:
Hans Weger, Chief Financial Officer, LaSalle Hotel Properties 301/941-1500
For additional information or to receive press releases via e-mail, please visit our website at
www.lasallehotels.com