8-K

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

April 1, 2016 (March 28, 2016)

Date of Report (Date of earliest event reported)

RED LION HOTELS CORPORATION

(Exact Name of Registrant as Specified in Charter)

Washington	001-13957	91-1032187
(State or Other Jurisdiction of Incorporation)	(Commission file number)	(I.R.S. Employer Identification No.)

201 W. North River Drive

Suite 100

Spokane, Washington 99201

(Address of Principal Executive Offices, Zip Code)

(509) 459-6100

(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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ 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.

(e) On March 28, 2016, the Compensation Committee of our board of directors approved the following:

(i) The annual base salaries of certain executive officers were set, effective March 27, 2016, at the respective amounts shown in the following table:

Executive	Annual Base Salary
Gregory T. Mount	$	493,000
William J. Linehan		320,650
Thomas L. McKeirnan		279,273
Harry Sladich		254,426

(ii) The executive officers were granted restricted stock units (RSUs) under our 2015 Stock Incentive Plan (the “Stock Plan”) covering the number of shares of our common stock shown opposite their respective names in the following table:

Executive	Number of Shares of Common Stock Underlying RSUs
Gregory T. Mount		42,385
James A. Bell		22,176
William J. Linehan		23,462
Thomas L. McKeirnan		20,434
Harry Sladich		18,616

The RSUs will, subject to continued employment, vest 25% on each anniversary of the date of grant.

(iii) Gregory T. Mount was granted stock options under the Stock Plan to purchase 81,130 shares of our common stock at an exercise price of $8.20 per share, the closing price of our stock on March 28, 2016. One-fourth of the stock options will become exercisable on each of the first four anniversaries of that date, subject to Mr. Mount’s continued employment.

(iv) The 2016 RLHC Executive Officers Bonus Plan (the “Plan”) was approved. The Plan provides for potential bonuses for our President and Chief Executive Officer and our Executive Vice Presidents. The target bonuses under the Plan (“Target Bonuses”) are 75% of 2016 base salary for our President and Chief Executive Officer and 50% of 2016 base salary for each of the other executives.

Bonuses under the Plan will be based on the following three performance goals:

2

• Achievement of at least 90% of our 2016 budgeted adjusted earnings before interest, taxes, depreciation and amortization (“Budgeted Adjusted EBITDA”).

• Achievement of a departmental goal based on our 2016 earnings per share.

• Achievement of an individual goal that has been specified by the Compensation Committee for each executive. The individual goals are based on one or more of the following business criteria: gross operating profit; revenues from group business; RevPar growth; increase in RevPar index; development of tools to measure guest experience; and addition of franchised and managed hotels to our system of hotels.

To determine bonuses under the Plan, the EBITDA goal will be weighted 80% and each of the other two goals will be weighted 10%. No bonus will be payable under the Plan unless the ratio (“EBITDA Goal Achievement”) of (i) our actual adjusted EBITDA for 2016, to (ii) Budgeted Adjusted EBITDA exceeds 90%.

If the EBITDA Goal Achievement percentage is 150% or higher, an executive will be entitled to a payout equal to:

• twice his Target Bonus (“Maximum Payout”), if the executive achieves both his department and individual goals;

• 90% of the Maximum Payout, if the executive only achieves one of his department and individual goals; or

• 80% of the Maximum Payout, if the executive achieves neither his department nor his individual goal.

If the EBITDA Goal Achievement percentage is 100%, an executive will be entitled to a payout equal to:

• his Target Bonus, if the executive achieves both his department and individual goals;

• 90% of his Target Bonus, if the executive only achieves one of his department and individual goals; or

• 80% of his Target Bonus, if the executive achieves neither his department nor his individual goal.

The Plan specifies other payout amounts that will apply if the EBITDA Goal Achievement percentage is between 90% and 100% or between 100% and 150%.

An executive must be employed by us at the time of payment in order to receive a payout. All payments under the Plan are subject to previous approval by the Compensation Committee. Bonuses otherwise payable under the Plan may be deferred, partially paid or withheld in their entirety if the Compensation Committee determines that to be in the best interests of our company.

3

A copy of the Plan is included as Exhibit 10.1 to this report.

The foregoing is a summary of the matters approved by the Compensation Committee. In the event of any difference between this summary and the actual terms of the documents that implement these matters, the terms of those documents will control.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Exhibit
10.1	2016 RLHC Executive Officers Bonus Plan

4

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.

Dated: April 1, 2016	RED LION HOTELS CORPORATION
	By:	/s/ Thomas L. McKeirnan
		Thomas L. McKeirnan
		Executive Vice President, General Counsel and Secretary

5

EX-10.1

Exhibit 10.1

2016 RLHC Executive Officers Bonus Plan

Purpose

RLHC is committed to compensating employees through comprehensive and competitive pay packages that include base salary, bonus programs, incentive plans, competitive benefits plans, and reward and recognition programs. These programs are designed to motivate employees to exceed performance expectations in support of the company’s business objectives.

The Executive Officers Bonus Plan (“Plan”) provides the opportunity for annual bonus payments to the contributors who drive the successful attainment of company goals. The success of the company relies on many factors. Adjusted EBITDA is the main driver behind this plan, however; our success also depends on department and individual goals.

Plan Year

January 1, 2016 to December 31, 2016

Eligible Employees; Target Bonus and Maximum Bonus

Eligible Employees	Target Bonus		Maximum Bonus
Executive Vice President		50% of Base Salary		100% of Base Salary
Chief Executive Officer		75% of Base Salary		150% of Base Salary

An employee must hold one of the above positions at the beginning of the Plan Year in order to be eligible to participate in this Plan.

Plan Components

Whether a participant will receive a bonus under the Plan depends on the extent to which the following goals are achieved:

(1) A company goal based on budgeted Adjusted EBITDA for 2016 (“Budgeted Adjusted EBITDA”);

(2) A department goal based on RLHC’s 2016 earnings per share; and

(3) An individual goal based on one or more of the following business criteria: gross operating profit; revenues from group business; RevPar growth; increase in RevPar index; development of tools to measure guest experience; and addition of franchised and managed hotels to RLHC’s system of hotels.

The department and individual goals are established by the Compensation Committee.

Bonus Calculation

For purposes of calculating the bonuses, if any, due under this Plan, the company goal achievement (“EBITDA Goal Achievement”) will be the fraction (expressed as a percentage) determined by dividing (i) RLHC’s 2016 Adjusted EBITDA, as disclosed in the 2016 Form 10-K, by (ii) Budgeted Adjusted EBITDA. There will be no bonus payout to the participants unless this percentage exceeds 90%.

© 2016 Page 1

The EBITDA Goal Achievement percentage will determine the tentative payouts, if any, to which the participants are entitled, as set forth in or determined from the following table:

	EBITDA Goal Achievement			Target Multiplier(1)			Tentative EVP Payout: % of base salary			Tentative CEO Payout: % of base salary
Maximum		150	%		200	%		100	%		150	%
		140	%		180	%		90	%		135	%
		130	%		160	%		80	%		120	%
		120	%		140	%		70	%		105	%
		110	%		120	%		60	%		90
Target		100	%		100	%		50	%		75	%
		99	%		85	%		42.5	%		63.75	%
		98	%		70	%		35	%		52.5	%
		97	%		55	%		27.5	%		41.25	%
		96	%		40	%		20	%		30	%
Threshold 2		95	%		25	%		12.5	%		18.75	%
		94	%		20	%		10	%		15	%
		93	%		15	%		7.5	%		11.25	%
		92	%		10	%		5	%		7.5	%
		91	%		5	%		2.5	%		3.75	%
Threshold 1		90	%		0	%		0	%		0	%

(1) The Target Multiplier and tentative payout percentages will be linearly interpolated for EBITDA Goal Achievement percentages that are between two percentages shown in the table.

If a participant achieves both his department and individual goals, he will be entitled to a payout (“Full Payout”) equal to the percentage of base salary determined from the above table for the EBITDA Goal Achievement percentage. If the participant only achieves one of his department and individual goals, he will be entitled to 90% of the Full Payout. If the participant achieves neither his department nor his individual goal, he will be entitled to 80% of the Full Payout.

Clawback

A participant who receives a bonus under the Plan will be required to repay the bonus to RLHC to the extent required by (i) any “clawback” or recoupment policy adopted by RLHC to comply with the requirements of any applicable laws, rules or regulations, or (ii) any applicable law, rule or regulation that imposes mandatory recoupment.

Administration

The Director of Compensation and Benefits, SVP HR, and CFO will administer the Plan.

© 2016 Page 2

Calculation, Approval and Payment

As soon as the necessary information is available following the end of the Plan Year, the SVP, HR and the VP, Accounting will complete the bonus calculations for each participant and submit them to the CFO for review and approval. Once approved by the CFO, he will submit the bonus calculations to the Compensation Committee for final approval. Upon Compensation Committee approval, the CFO will provide the payment information to the VP, Accounting and SVP, HR for record keeping, who will in turn submit it to the payroll office for payments. Payments will be made to participants as soon as administratively possible following the end of the bonus period. Typically, payments are approved following the February Board meeting and paid as soon as practical thereafter. Calculations are based on the base salary of the participant on the last day of the Plan Year.

Effect of Change in Employment Status/Termination

Leaves of Absences: To the extent a participant qualifies for an approved leave of absence, that participant’s bonus will not be forfeited, but rather will be prorated. If the leave involves accrued paid leave, the bonus will be unaffected. If the leave involves unpaid leave, the bonus will be prorated based upon the actual number of days worked plus any paid leave as a proportion of the full Plan Year.

Terminations: Bonuses for this Plan are not earned or vested until they are approved by the Compensation Committee and paid. Any bonuses earned will be determined and paid on or before March 31, 2017. To encourage continued employment with RLHC, participants must be employed as of the date of payout in order to earn a bonus. Therefore, any participant whose employment terminates prior to the date of payout will not earn, vest in, or receive a bonus.

General Provisions

There is an overriding discretionary analysis of each participant’s eligibility to receive a bonus. Even though an individual might earn a bonus based on the terms of this Plan, a bonus can be adjusted down or not paid entirely in the sole discretion of the Compensation Committee Directors. Instances when this might occur include overall substandard work performance of the participant, including, but not limited to the below. For example, if a participant fails to follow company policy and procedures, exposes the company to legal liability, exhibits inappropriate behavior, withholds information, or does not adequately follow through on critical incidents, he or she may be disqualified from receiving a bonus. Other disqualifiers may include unacceptable performance against established performance objectives, unacceptable scores on internal audit processes (e.g., HR, Accounting, Risk Management, Internal Audit, Quality Assurance), or poor associate or customer satisfaction scores.

Notwithstanding anything to the contrary in this Plan, individual bonus payments may be deferred, partially paid or withheld in their entirety, at the sole discretion of the Compensation Committee, in consideration of the overall best interests of the company. RLHC reserves the right to cancel, change, modify or interpret any and all provisions of the Plan at any time without notice. Participation in the Plan does not create any entitlement to continued employment and does not alter the at-will status of participants. This Plan will be governed and construed in accordance with the laws of the state of Washington.

This Plan supersedes all previous plans in existence and any past written or verbal communication to any participant regarding the terms of any incentive plan.

© 2016 Page 3