UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.        )

 

 

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

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☐		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Pursuant to §240.14a-12

COREPOINT LODGING INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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April 12, 2019

Dear Stockholder:

Please join us for CorePoint Lodging Inc.’s Annual Meeting of Stockholders on Thursday, May 16, 2019, at 10:00 a.m., Central Time, at La Quinta Inn & Suites DFW Airport South/Irving, 4105 West Airport Freeway, Irving, Texas 75062.

Attached to this letter are a Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the meeting. This Proxy Statement and the enclosed proxy card and annual report are first being sent to stockholders on or about April 12, 2019. We urge you to read the accompanying materials regarding the matters to be voted on at the meeting and to submit your voting instructions by proxy.

Whether or not you plan to attend the meeting, your vote is important to us. You may vote your shares by proxy on the Internet, by telephone or by completing, signing and promptly returning a proxy card, or you may vote in person at the Annual Meeting. We encourage you to vote by Internet, by telephone or by proxy card even if you plan to attend the Annual Meeting. By doing so, you will ensure that your shares are represented and voted at the Annual Meeting.

Thank you for your continued support of CorePoint Lodging Inc.

 

Sincerely,
Mitesh B. Shah		Keith A. Cline
Chairman of the Board of Directors		President and Chief Executive Officer

COREPOINT LODGING INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

TIME		10:00 a.m., Central Time, on Thursday, May 16, 2019
PLACE		La Quinta Inn & Suites DFW Airport South/Irving 4105 West Airport Freeway Irving, Texas 75062
ITEMS OF BUSINESS		1.  To elect the director nominees listed in the Proxy Statement.
		2.  To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2019.
		3.  To consider such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof.
RECORD DATE		You may vote at the Annual Meeting if you were a stockholder of record at the close of business on March 25, 2019.
VOTING BY PROXY		To ensure your shares are voted, you may vote your shares over the Internet, by telephone or by completing, signing and mailing the enclosed proxy card. Voting procedures are described on the following page and on the proxy card.

 

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on

Thursday, May 16, 2019: This Proxy Statement and our Annual Report are available free of charge at the Investors section of our website (www.corepoint.com) under “Financial Information”.

PROXY VOTING METHODS

If at the close of business on March 25, 2019, you were a stockholder of record or held shares through a broker or bank, you may vote your shares by proxy at the Annual Meeting. If you were a stockholder of record, you may vote your shares over the Internet, by telephone or by mail, or you may vote in person at the Annual Meeting. You may also revoke your proxies at the times and in the manners described in the General Information section of this Proxy Statement. For shares held through a broker, bank or other nominee, you may submit voting instructions to your broker, bank or other nominee. Please refer to information from your broker, bank or other nominee on how to submit voting instructions.

If you are a stockholder of record, your Internet, telephone or mail vote must be received by 11:59 p.m., Eastern Time, on May 15, 2019 to be counted. If you hold shares through a broker, bank or other nominee, please refer to information from your bank, broker or nominee for voting instructions.

To vote by proxy if you are a stockholder of record:

BY INTERNET

 

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Go to the website www.proxyvote.com and follow the instructions, 24 hours a day, seven days a week.

 

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You will need the 16-digit number included on your proxy card to obtain your records and to create an electronic voting instruction form.

BY TELEPHONE

 

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From a touch-tone telephone, dial 1-800-690-6903 and follow the recorded instructions, 24 hours a day, seven days a week.

 

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You will need the 16-digit number included on your proxy card in order to vote by telephone.

BY MAIL

 

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Mark your selections on the proxy card.

 

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Date and sign your name exactly as it appears on your proxy card.

 

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Mail the proxy card in the enclosed postage-paid envelope provided to you.

YOUR VOTE IS IMPORTANT TO US. THANK YOU FOR VOTING.

Table of Contents

 

GENERAL INFORMATION			1
PROPOSAL NO. 1—ELECTION OF DIRECTORS			5
Nominees for Election to the Board of Directors in 2019			5
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS			10
Director Independence and Independence Determinations			10
Director Nomination Process			11
Board Structure			13
Executive Sessions			13
Communications with the Board			13
Board Committees and Meetings			14
Committee Charters and Corporate Governance Guidelines			17
Code of Conduct & Business Ethics			17
Oversight of Risk Management			17
Executive Officers of the Company			18
PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			19
Audit and Non-Audit Fees			19
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm			20
REPORT OF THE AUDIT COMMITTEE			21
EXECUTIVE AND DIRECTOR COMPENSATION			22
Summary Compensation Table			23
Narrative to Summary Compensation Table			24
Outstanding Equity Awards at 2018 Fiscal Year-End			31
Potential Payments upon Termination or Change in Control			32
Director Compensation in Fiscal 2018			35
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			38
OWNERSHIP OF SECURITIES			39
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			42
TRANSACTIONS WITH RELATED PERSONS			42
STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING			48
HOUSEHOLDING OF PROXY MATERIALS			49
OTHER BUSINESS			50

 

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COREPOINT LODGING INC.

909 Hidden Ridge, Suite 600

Irving, Texas 75038

Telephone: (214) 492-6600

PROXY STATEMENT

Annual Meeting of Stockholders

May 16, 2019

GENERAL INFORMATION

Why am I being provided with these materials?

This proxy statement and the enclosed proxy card and annual report are first being sent to stockholders on or about April 12, 2019. We have delivered these proxy materials to you in connection with the solicitation by the Board of Directors (the “Board” or “Board of Directors”) of CorePoint Lodging Inc. (“we,” “our,” “us” and the “Company”) of proxies to be voted at our Annual Meeting of Stockholders to be held on May 16, 2019 (the “Annual Meeting”), and at any postponements or adjournments of the Annual Meeting. You are invited to attend the Annual Meeting and vote your shares in person.

What am I voting on?

There are two proposals scheduled to be voted on at the Annual Meeting:

 

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Proposal No. 1: Election of the director nominees listed in this Proxy Statement.

 

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Proposal No. 2: Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2019.

Who is entitled to vote?

Stockholders as of the close of business on March 25, 2019 (the “Record Date”) may vote at the Annual Meeting. As of that date, there were 59,548,291 shares of common stock outstanding. You have one vote for each share of common stock held by you as of the Record Date, including shares:

 

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Held directly in your name as “stockholder of record” (also referred to as “registered stockholder”); and

 

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Held for you in an account with a broker, bank or other nominee (shares held in “street name”)—Street name holders generally cannot vote their shares directly and instead must instruct the brokerage firm, bank or nominee how to vote their shares.

What constitutes a quorum?

The presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter constitutes a quorum. Abstentions and “broker non-votes” are counted as present for purposes of determining a quorum.

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

 

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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?

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 L.P. (“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 2019 (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.

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 2019.

 

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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.

Internet and telephone voting facilities will close at 11:59 p.m., Eastern Time, on May 15, 2019, 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 15, 2019.

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.

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 DFW Airport South/Irving at 1-972-252-6546.

 

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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 15, 2019;

 

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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 15, 2019;

 

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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 15, 2019; or

 

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attending the Annual Meeting and voting in person.

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.

 

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PROPOSAL NO. 1—ELECTION OF DIRECTORS

The number of directors that comprise our Board of Directors is currently set at eleven. Upon the recommendation of the Nominating and Corporate Governance Committee, our Board of Directors has considered and nominated each of the following nominees for a one-year term expiring at the 2020 Annual Meeting of Stockholders or until his or her successor is duly elected and qualified: James R. Abrahamson, Glenn Alba, Jean M. Birch, Alan J. Bowers, Keith A. Cline, Giovanni Cutaia, Alice E. Gould, B. Anthony Isaac, Brian Kim, David Loeb and Mitesh B. Shah. Action will be taken at the Annual Meeting for the election of these nominees. All 11 nominees currently serve on the Board.

Unless otherwise instructed, the persons named in the form of proxy card (the “proxyholders”) included with this Proxy Statement intend to vote the proxies held by them “FOR” the election of the director nominees. All of the nominees have indicated that they will be willing and able to serve as directors. If any of these nominees ceases to be a candidate for election by the time of the Annual Meeting (a contingency which the Board does not expect to occur), such proxies may be voted by the proxyholders in accordance with the recommendation of the Board.

Nominees for Election to the Board of Directors in 2019

The following information describes the offices held, other business directorships and the term of service of each director nominee.

 

Name		Age		Principal Occupation and Other Information
Keith A. Cline		49		Keith A. Cline has served as a Director of the Company since May 2017 and as the President and Chief Executive Officer of the Company since the Company’s spin-off from La Quinta Holdings Inc. (“LQH Parent”). Mr. Cline previously served as the President and Chief Executive Officer of LQH Parent since February 18, 2016, after serving as LQH Parent’s Interim President and Chief Executive Officer since September 15, 2015. Mr. Cline previously served on the LQH Parent board since September 2015. From January 2013 until November 2015, Mr. Cline was LQH Parent’s Executive Vice President and Chief Financial Officer. From 2011 to 2013, prior to joining LQH, Mr. Cline was Chief Administrative Officer and Chief Financial Officer at Charming Charlie, Inc. and, from 2006 to 2011, Mr. Cline was Senior Vice President of Finance at Express, Inc. Mr. Cline began his career at Arthur Andersen & Company and held financial leadership roles at The J.M. Smucker Company, FedEx Custom Critical and Limited Brands. Mr. Cline is a summa cum laude graduate of the University of Akron with a B.S. in Accounting and a M.B.A. in Finance.
James R. Abrahamson		63		James R. Abrahamson has served as a Director of the Company since April 2018. Mr. Abrahamson previously served on the LQH Parent board since November 2015. Mr. Abrahamson is currently the Chairman of Interstate Hotels & Resorts and previously also served as Interstate’s Chief Executive Officer until March 22, 2017. Prior to joining Interstate in 2011, Mr. Abrahamson held senior leadership positions with InterContinental Hotels Group (“IHG”), Hyatt Corporation, Marcus Corporation and Hilton Worldwide. At IHG, where he served from 2009 to 2011, he was President of the Americas division, and at Hyatt, which he joined in 2004, he was Head of Development for the Americas division. At Marcus, where he served from 2000 to 2004, Mr. Abrahamson led the Baymont Inns and Suites and Woodfield Suites hotels division consisting of approximately 200

 

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Name		Age		Principal Occupation and Other Information
				properties, both owned and franchised. At Hilton, where he served from 1988 to 2000, Mr. Abrahamson oversaw the Americas region franchise and management contract development for all Hilton brands, and he launched the Hilton Garden Inn brand. Mr. Abrahamson currently serves as an independent director on the board and is a member of the audit committee of BrightView Holdings Inc. and also serves as non-executive chairman of the board of Vici Properties Inc. Mr. Abrahamson previously served on the board, and served as board chair in 2015 and 2016, of American Hotel and Lodging Association and previously served on the board, and served as board chair in 2013 and 2014, of U.S. Travel Association. He holds a degree in Business Administration from the University of Minnesota.
Glenn Alba		47		Glenn Alba has served as a Director of the Company since April 2018. Mr. Alba previously served on the LQH Parent board since 2013 and on the boards of directors of certain of LQH Parent’s predecessor entities since 2006. Mr. Alba is the Founder and President of Opterra Capital, a real estate investment sponsor and operating partner, capital markets advisor and asset manager with significant experience in all sectors of commercial real estate. Mr. Alba was previously a Managing Director in the Real Estate Group of Blackstone based in New York until July 2017. At Blackstone, which Mr. Alba joined in 1997, he was involved in the asset management of a broad range of Blackstone’s real estate investments in the U.S. and Europe including office, hotel, multi-family and industrial assets. While based in the London office from 2001 to 2004, Mr. Alba managed a diverse set of assets in London, Paris and other cities in France as well as portfolio investments across Germany. More recently, Mr. Alba was primarily involved in the hotel sector with management responsibility for various full-service and limited service hotels in the LXR Luxury Resorts portfolio and for us as well as global portfolio management duties. Mr. Alba received a B.S. in Accounting from Villanova University. Mr. Alba currently serves as a member of the President’s Advisory Council and the Real Estate Advisory Council at Villanova University.
Jean M. Birch		59		Jean M. Birch has served as a Director of the Company since September 2018. Ms. Birch served as President and Chief Executive Officer of Papa Murphy’s Holdings, Inc., an operator and franchisor of a take and bake pizza brand, from December 2016 until July 2017. Prior to that, from 2009 to 2012, Ms. Birch served as President of IHOP Restaurants, Inc., a division of DineEquity, Inc., where she repositioned and focused IHOP’s brand and launched a new marketing campaign and innovative culinary strategy to include health and wellness. Ms. Birch served as President of Romano’s Macaroni Grill from January 2005 to August 2007 and President of Corner Bakery Café from August 2003 to December 2004, both divisions of Brinker International, Inc. From 1991 to 2003, Ms. Birch held various roles with YUM! Brands, Inc., a global quick service restaurant company, including VP, Operations for Taco Bell, Inc. and Senior Director, Concept Development for Pizza Hut, Inc. Ms. Birch has also served as the Chief Executive Officer and President of Birch Company, LLC, a small consulting practice, since 2007. She currently serves as chair of the board of directors of Papa Murphy’s Inc. and on the board of directors of Forrester Research. Ms. Birch previously served on the boards of directors of Darden Restaurants, Inc. from 2014 to 2016 and Cosi, Inc. from 2013 to 2016. Ms. Birch holds a B.A. from the University of Arizona and an Executive MBA from Southern Methodist University.

 

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Name		Age		Principal Occupation and Other Information
Alan J. Bowers		64		Alan J. Bowers has served as a Director of the Company since April 2018. Mr. Bowers previously served on the LQH Parent board since February 2014 and on the boards of directors of certain of LQH Parent’s predecessor entities since 2013. Mr. Bowers most recently served as President, Chief Executive Officer and a board member of Cape Success, LLC from 2001 to 2004 and of Marketsource Corporation from 2000 to 2001. From 1995 to 1999, Mr. Bowers served as President, Chief Executive Officer and a board member of MBL Life Assurance Corporation. Mr. Bowers held various positions, including Audit and Area Managing Partner, at Coopers & Lybrand, L.L.P. where he worked from 1978 to 1995 and also worked at Laventhol & Horwath, CPAs from 1976 to 1978. Mr. Bowers also serves on the boards of directors of Ocwen Financial Corporation and Walker & Dunlop, Inc. and previously served on the board of American Achievement Corp. Mr. Bowers holds a B.S. in Accounting, from Montclair State University and an M.B.A., Finance and Economics, from St. John’s University and is a Certified Public Accountant in New Jersey.
Giovanni Cutaia		46		Giovanni Cutaia has served as a Director of the Company since April 2018. Mr. Cutaia previously served on the LQH Parent board since November 2014. Mr. Cutaia is a Senior Managing Director and Global Head of Asset Management in the Real Estate Group of Blackstone. Prior to joining Blackstone in 2014, Mr. Cutaia was at Lone Star Funds where he was a Senior Managing Director and Co-Head of Commercial Real Estate Investments Americas from 2009 to 2014. Prior to Lone Star, Mr. Cutaia spent over 12 years at Goldman Sachs in its Real Estate Principal Investments Area as a Managing Director in its New York and London offices. Mr. Cutaia received a B.A. from Colgate University and an M.B.A. from the Tuck School of Business at Dartmouth College.
Alice E. Gould		57		Alice E. Gould has served as a Director of the Company since September 2018. Ms. Gould most recently led the Private Investments team at DUMAC, Inc., a professionally staffed investment office controlled by Duke University that manages over $18 billion of endowment and other Duke-related assets. While at DUMAC from 2004 until 2018, she led and oversaw investments in real estate, energy, venture capital and leveraged buyouts. Prior to joining DUMAC, Ms. Gould was a management consultant assisting senior executives in the technology, pharmaceutical, media and financial industries with strategic initiatives. She also worked for ten years at IBM where she managed product development, marketing and business planning. Ms. Gould holds a B.S. in Engineering from Duke University and an MBA from the Fuqua School of Business at Duke University.
B. Anthony Isaac		66		B. Anthony Isaac has served as a Director of the Company since April 2018. Mr. Isaac is Managing Director of TMI Shore Partnership L.P., acting as an advisor and investor to several venture funds and early stage companies. Before joining TMI Shore in May 2015, Mr. Isaac served as Senior Vice President, Select Development & Strategy for Hyatt Hotels Corp., where he worked on the integration of LodgeWorks Corp. and managed corporate/franchise development of Hyatt’s Select Service Platform. From 2000 to its acquisition by Hyatt in 2011, Mr. Isaac was President of LodgeWorks. Prior to joining LodgeWorks, Mr. Isaac held leadership roles in a variety of hospitality companies including Summerfield Hotel Corporation, The

 

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Name		Age		Principal Occupation and Other Information
				Residence Inn Company and Marriott Corporation. Mr. Isaac previously served on the board of Westar Energy, where he also was Chair of the Finance Committee, and was Chairman of the Board for the Via Christi Health System. Currently, he serves on the board of Evergy, the successor to Westar Energy and is Chair of the Finance Committee and a member of the Compensation Committee. Additionally, he is a member of the board of advisors for Thayer Ventures, a hospitality venture capital fund. Mr. Isaac received a B.S. in civil engineering from the Massachusetts Institute of Technology and an M.B.A. from Harvard Business School.
Brian Kim		39		Brian Kim has served as a Director of the Company since April 2018. Mr. Kim previously served on the LQH Parent board since November 2014. Mr. Kim is a Managing Director in the Real Estate Group of Blackstone. Since joining Blackstone in 2008, Mr. Kim has played a key role in a number of Blackstone’s investments including the take private and subsequent sale of Strategic Hotels & Resorts, the acquisition of Peter Cooper Village / Stuyvesant Town and the creation of BRE Select Hotels Corp, Blackstone’s select service hotel platform. Prior to joining Blackstone, Mr. Kim worked at Apollo Real Estate Advisors, Max Capital Management Corp. and Credit Suisse First Boston. Mr. Kim has served as a board member, Chief Financial Officer, Vice President and Managing Director of BRE Select Hotels Corp since May 2013 and as Head of Acquisition and Capital Markets of Blackstone Real Estate Income Trust, Inc. since January 2017. Mr. Kim received an AB in Biology from Harvard College where he graduated with honors.
David Loeb		58		David Loeb has served as a Director of the Company April 2018. Mr. Loeb is Founder and Managing Director of Dirigo Consulting LLC, which advises hotel and real estate businesses, including hotel REITs, on strategy and capital markets execution. From 2006 to 2017, Mr. Loeb was a Senior Research Analyst, Managing Director covering real estate for Robert W. Baird & Co., where he specialized in lodging and office companies. Mr. Loeb has specialized in real estate for over twenty years, as he published research on the lodging industry beginning in 1994. Prior to joining Baird, Mr. Loeb was Managing Director in Real Estate Research at Freidman Billings Ramsey and a Vice President, Research Analyst with Credit Lyonnais Securities, The Chicago Corporation and Oppenheimer & Co., Inc. Mr. Loeb received a B.A. in psychology and sociology from Brandeis University and an M.B.A. in finance and accounting from the Olin School of Business at Washington University in St. Louis.

 

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Name		Age		Principal Occupation and Other Information
Mitesh B. Shah		49		Mitesh B. Shah has served as a Director and as Chairperson of the Company since April 2018. Mr. Shah previously served on the LQH Parent board since February 2014, as Chairperson of the LQH parent board since November 2014 and on the boards of directors of certain of LQH Parent’s predecessor entities since 2013. Mr. Shah currently serves as Chief Executive Officer and Senior Managing Principal of Noble Investment Group, which he founded in 1993 and which specializes in making opportunistic investments in the lodging and hospitality real estate sector. Mr. Shah is a member of the franchise and owners board for Hyatt Hotels Corporation and is a member of the Industry Real Estate Finance Advisory Council of the American Hotel and Lodging Association. Mr. Shah is serving his third term as a member of the Board of Trustees of Wake Forest University. In addition, he is an executive committee member of Woodward Academy. Mr. Shah holds a Bachelor of Arts in Economics from Wake Forest University.

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF

EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.

 

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THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS

Our Board of Directors manages or directs our business and affairs, as provided by Maryland law, and conducts its business through meetings of the Board of Directors and four standing committees: the Audit Committee; the Compensation Committee; the Nominating and Corporate Governance Committee; and the Capital Committee.

On May 30, 2018, we were spun off from La Quinta Holdings Inc. as part of a plan approved by LQH Parent’s board of directors to spin off its hotel ownership business into an independent, publicly traded company prior to the merger of LQH Parent with a wholly-owned subsidiary of Wyndham Worldwide Corporation. In connection with the spin-off, LQH Parent distributed to its stockholders all of the approximately 59.0 million then-outstanding shares of our common stock, par value $0.01 per share.

We have structured our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. Notable features of our corporate governance include:

 

•

our Board of Directors is not classified and each of our directors is subject to re-election annually;

 

•

under our Corporate Governance Guidelines, directors (other than directors designated pursuant to the stockholders’ agreement) who fail to receive a majority of the votes cast in uncontested elections will be required to submit their resignation to our Board of Directors;

 

•

we have fully independent Audit, Compensation and Nominating and Corporate Governance Committees and our independent directors meet regularly in executive sessions without the presence of our corporate officers or non-independent directors;

 

•

we do not have a stockholder rights plan, and if our Board of Directors were ever to adopt a stockholder rights plan in the future without prior stockholder approval, our Board of Directors would either submit the plan to stockholders for ratification or cause the rights plan to expire within one year;

 

•

we have opted out of the Maryland business combination and control share acquisition statutes, and in the future cannot opt in without stockholder approval; and

 

•

we have implemented a range of other corporate governance best practices.

The stockholders agreement described under “Transactions with Related Persons—Stockholders Agreement” provides that Blackstone has the right to nominate to our Board of Directors a number of designees approximately equal to the percentage of voting power of all shares of our capital stock entitled to vote generally in the election of directors as collectively beneficially owned by Blackstone. Currently, we have two directors on our Board who are current employees of Blackstone and who were recommended by Blackstone as director nominees pursuant to the stockholders agreement (Messrs. Cutaia and Kim), and we have one director on our Board who is a retired employee of Blackstone (Mr. Alba). The provisions of the stockholders agreement regarding the nomination of directors will remain in effect until Blackstone is no longer entitled to nominate a director to our Board of Directors, unless Blackstone requests that they terminate at an earlier date.

Director Independence and Independence Determinations

Under our Corporate Governance Guidelines and NYSE rules, a director is not independent unless our Board of Directors affirmatively determines that he or she does not have a direct or indirect material relationship with us or any of our subsidiaries.

Our Corporate Governance Guidelines define independence in accordance with the independence definition in the current NYSE corporate governance rules for listed companies. Our Corporate Governance Guidelines require our Board of Directors to review the independence of all directors at least annually.

 

10

In the event a director has a relationship with the Company that is relevant to his or her independence and is not addressed by the objective tests set forth in the NYSE independence definition, our Board of Directors will determine, considering all relevant facts and circumstances, whether such relationship is material.

Our Board of Directors has affirmatively determined that each of Messrs. Abrahamson, Bowers, Cutaia, Isaac, Kim, Loeb and Shah and Mses. Birch and Gould is independent under the guidelines for director independence set forth in the Corporate Governance Guidelines and under all applicable NYSE guidelines, including with respect to committee membership. Our Board also has determined that each of Messrs. Abrahamson, Bowers, Loeb and Shah and Ms. Birch is “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that each of Messrs. Abrahamson, Bowers, Cutaia and Shah and Ms. Gould is “independent” for purposes of Section 10C(a)(3) of the Exchange Act. In making its independence determinations, our Board of Directors considered and reviewed all information known to it (including information identified through annual directors’ questionnaires).

Director Nomination Process

The Nominating and Corporate Governance Committee weighs the characteristics, experience, independence and skills of potential candidates for election to the Board and recommends nominees for director to the Board for election. In considering candidates for the Board, the Nominating and Corporate Governance Committee also assesses the size, composition and combined expertise of the Board. As the application of these factors involves the exercise of judgment, the Nominating and Corporate Governance Committee does not have a standard set of fixed qualifications that is applicable to all director candidates, although the Nominating and Corporate Governance Committee does at a minimum assess each candidate’s strength of character, judgment, industry knowledge or experience, his or her ability to work collegially with the other members of the Board and his or her ability to satisfy any applicable legal requirements or listing standards. In addition, although the Board considers diversity of viewpoints, background and experiences, the Board does not have a formal diversity policy. In identifying prospective director candidates, the Nominating and Corporate Governance Committee may seek referrals from other members of the Board, management, stockholders and other sources, including third party recommendations. The Nominating and Corporate Governance Committee also may, but need not, retain a search firm in order to assist it in identifying candidates to serve as directors of the Company. In 2018, the Company paid fees to a third-party search firm to identify potential candidates for election to our Board. The Nominating and Corporate Governance Committee utilizes the same criteria for evaluating candidates regardless of the source of the referral. When considering director candidates, the Nominating and Corporate Governance Committee seeks individuals with backgrounds and qualities that, when combined with those of our incumbent directors, provide a blend of skills and experience to further enhance the Board’s effectiveness.

In recommending that, or determining whether, members of the Board should stand for re-election, the Nominating and Corporate Governance Committee also may assess the contributions of incumbent directors in the context of the Board evaluation process and other perceived needs of the Board.

In addition to the process described above, the Nominating and Corporate Governance Committee also nominates a number of individuals designated by Blackstone as required under the provisions of the stockholders agreement described under “Transactions With Related Persons—Stockholders Agreement.” Each of Messrs. Cutaia and Kim were recommended by Blackstone as director nominees pursuant to the stockholders agreement.

Messrs. Abrahamson, Alba, Bowers, Cline, Isaac, Loeb and Shah were recommended for election to our Board by LQH Parent. Mses. Birch and Gould were identified by a third-party search firm and evaluated and recommended for election to our Board by our non-management directors.

When considering whether the nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of our business and

 

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structure, the Board focused primarily on the information discussed in each board member’s biographical information set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. In particular, the members of our Board of Directors considered the following important characteristics:

 

•

Mr. Abrahamson—his significant executive management experience in the hospitality industry, including his experience in hotel management.

 

•

Mr. Alba—his prior affiliation with Blackstone, his significant experience in working with companies controlled by private equity sponsors, particularly in the real estate industry, his experience in working with the management of various other companies owned by Blackstone’s funds, including in the hospitality industry, his experience with real estate investing and his extensive financial background.

 

•

Ms. Birch—her executive management experience and her franchising experience, as well as her marketing experience.

 

•

Mr. Bowers—his experience in accounting and executive management, including his substantial experience on the audit committees of private and public companies alike.

 

•

Mr. Cline—his extensive financial background. Furthermore, we also considered how his additional role as our President and Chief Executive Officer would bring management perspective to board deliberations and provide valuable information about the status of our day-to-day operations.

 

•

Mr. Cutaia—his affiliation with Blackstone, his significant experience in working with companies in the real estate industry, his experience involving oversight of real estate assets, his experience with real estate investing and his extensive financial background.

 

•

Ms. Gould—her significant experience in marketing, business planning, and strategy as well as her asset management experience.

 

•

Mr. Isaac— his significant executive management experience in the hospitality industry, including his experience in managing corporate/franchise development.

 

•

Mr. Kim—his affiliation with Blackstone, his significant experience in working with companies in the real estate industry, his experience with real estate management and investing and his extensive financial background.

 

•

Mr. Loeb—his experience advising real estate businesses, including hotel REITs, on strategy and capital markets execution and his significant experience in real estate, including as an analyst covering real estate.

 

•

Mr. Shah—his experience with investing in the lodging and hospitality real estate sector and his significant experience in the hospitality industry, including with respect to franchising.

This process resulted in the Board’s nomination of the incumbent directors named in this Proxy Statement and proposed for election by you at the upcoming Annual Meeting.

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. Any recommendation submitted to the Secretary of the Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include information that would be required under the rules of the U.S. Securities and Exchange Commission (the “SEC”) to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of the Secretary, CorePoint Lodging Inc., at 909 Hidden Ridge, Suite 600, Irving, Texas 75038 through and including May 31, 2019 and at 125 East John Carpenter Freeway, 16th Floor, Irving, Texas 75062 after May 31, 2019. All recommendations for nomination received by the Secretary that satisfy our Bylaw requirements relating to

 

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director nominations will be presented to the Nominating and Corporate Governance Committee for its consideration. Stockholders also must satisfy the notification, timeliness, consent and information requirements set forth in our Bylaws. These requirements are also described under “Stockholder Proposals for the 2020 Annual Meeting.”

Board Structure

Our Board of Directors is led by Mr. Shah, our Chairperson. The Chief Executive Officer position is separate from the Chairperson position. We believe that the separation of the Chairperson and Chief Executive Officer positions is appropriate corporate governance for us at this time. Accordingly, Mr. Shah serves as Chairperson, while Mr. Cline serves as our Chief Executive Officer and President. Our Board of Directors believes this structure best encourages the free and open dialogue of competing views and provides for strong checks and balances. Additionally, Mr. Shah’s attention to Board of Directors and committee matters allows Mr. Cline to focus more specifically on overseeing the Company’s day-to-day operations, as well as strategic opportunities and planning.

Executive Sessions

Executive sessions, which are meetings of the non-management members of the Board, are regularly scheduled throughout the year. In addition, at least once a year, the independent directors meet in a private session that excludes management and any non-independent directors. Our Chairperson, Mr. Shah, presides at the executive sessions.

Communications with the Board

As described in our Corporate Governance Guidelines, stockholders and other interested parties who wish to communicate with a member or members of our Board of Directors, including the chairperson of our Board of Directors and each of the Audit, Compensation or Nominating and Corporate Governance Committees or with the non-management or independent directors as a group, may do so by addressing such communications or concerns to the General Counsel of the Company, at 909 Hidden Ridge, Suite 600, Irving, Texas 75038 through and including May 31, 2019 and at 125 East John Carpenter Freeway, 16th Floor, Irving, Texas 75062 after May 31, 2019, who will forward such communication to the appropriate party.

 

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Board Committees and Meetings

The following table summarizes the current membership of each of the Board’s Committees and the number of meetings held by each committee during the year ended December 31, 2018.

 

		Audit Committee		Compensation Committee		Nominating and Corporate Governance Committee		Capital Committee
James R. Abrahamson		X		Chair
Glenn Alba								Chair
Jean M. Birch		X				X
Alan J. Bowers		Chair		X		X
Giovanni Cutaia				X				X
Alice E. Gould				X		X
B. Anthony Isaac						Chair		X
Brian Kim						X
David Loeb		X						X
Mitesh B. Shah		X		X				X
Number of meetings held in 2018:		2		3		1		2

All directors are expected to attend all meetings of the Board, meetings of the committees of which they are members and the annual meeting of stockholders. During the year ended December 31, 2018, the Board held seven meetings. In 2018, all of our directors attended at least 75% of the meetings of the Board and committees during the time in which he or she served as a member of the Board or such committee.

Audit Committee

Our Audit Committee consists of Messrs. Abrahamson, Bowers, Loeb and Shah and Ms. Birch, with Mr. Bowers serving as chair. All members of the Audit Committee have been determined to be “independent,” consistent with our Audit Committee charter, Corporate Governance Guidelines and the NYSE listing standards applicable to boards of directors in general and audit committees in particular. Our Board of Directors also has determined that each of the members of the Audit Committee is “financially literate” within the meaning of the listing standards of the NYSE. In addition, our Board of Directors has determined that Alan J. Bowers qualifies as an audit committee financial expert as defined by applicable SEC regulations.

The duties and responsibilities of the Audit Committee are set forth in its charter, which may be found at www.corepoint.com under Investors: Corporate Governance: Governance Documents: Charter of the Audit Committee of the Board of Directors, and include oversight of the following:

 

•

the adequacy and integrity of our financial statements and our financial reporting and disclosure practices;

 

•

the soundness of our system of internal controls regarding finance and accounting compliance;

 

•

the annual independent audit of our financial statements;

 

•

the independent registered public accounting firm’s qualifications and independence;

 

•

the engagement of the independent registered public accounting firm;

 

•

the performance of our internal audit function and independent registered public accounting firm; and

 

•

our compliance with legal and regulatory requirements in connection with the foregoing.

 

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The Audit Committee also prepares the report of the committee required by the rules and regulations of the SEC to be included in our annual proxy statement.

With respect to our reporting and disclosure matters, the responsibilities and duties of the Audit Committee include reviewing and discussing with management and the independent registered public accounting firm our annual audited financial statements and quarterly financial statements prior to inclusion in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or other public filings in accordance with applicable rules and regulations of the SEC.

The charter of the Audit Committee permits the committee to delegate any or all of its authority to one or more subcommittees. In addition, the Audit Committee has the authority under its charter to engage independent counsel and other advisors as it deems necessary or advisable.

Compensation Committee

Our Compensation Committee consists of Messrs. Abrahamson, Bowers, Cutaia and Shah and Ms. Gould, with Mr. Abrahamson serving as chair. Each of Messrs. Abrahamson, Bowers, Cutaia and Shah and Ms. Gould has been determined to be “independent” as defined by our Corporate Governance Guidelines and the NYSE listing standards applicable to boards of directors in general and compensation committees in particular.

The duties and responsibilities of the Compensation Committee are set forth in its charter, which may be found at www.corepoint.com under Investors: Corporate Governance: Governance Documents: Charter of the Compensation Committee of the Board of Directors, and include the following:

 

•

the establishment, maintenance and administration of compensation and benefit policies designed to attract, motivate and retain personnel with the requisite skills and abilities to contribute to the long-term success of the Company;

 

•

oversight of the goals, objectives and compensation of our Chief Executive Officer, including evaluating the performance of the Chief Executive Officer in light of those goals;

 

•

oversight of the compensation of our other executives and non-management directors; and

 

•

our compliance with the compensation rules, regulations and guidelines promulgated by the NYSE, the SEC and other laws, as applicable.

The charter of the Compensation Committee permits the committee to delegate any or all of its authority to one or more subcommittees and to delegate to one or more of our officers the authority to make awards to team members other than any Section 16 officer under our incentive compensation or other equity-based plan, subject to compliance with the plan and the laws of our state of jurisdiction. In addition, the Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable.

Prior to our spin-off from La Quinta Holdings Inc. the Board did not have a compensation committee and the compensation committee of LQH Parent made executive compensation determinations. In connection with the spin-off, the Board established a Compensation Committee and since the completion of the spin-off our Compensation Committee has been responsible for making all executive compensation determinations.

Prior to the spin-off, Mr. Cline generally participated in discussions and deliberations with the compensation committee of LQH Parent regarding compensation determinations for our executive officers. Since the spin-off, Mr. Cline has worked closely with the Compensation Committee in managing the executive compensation program and attends some meetings of the Compensation Committee. He does not participate in the determination of his own compensation.

 

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In connection with the spin-off, the Compensation Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”) to advise the Compensation Committee with respect to executive officer compensation, including executive and non-employee director compensation programs, individual compensation levels, the peer companies used to assess compensation levels and marketplace trends in executive compensation. FW Cook does not provide any services to the Company other than advising on executive officer compensation. In February 2019, the Compensation Committee determined that FW Cook is independent from management and that FW Cook’s work has not raised any conflicts of interest.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee consists of Messrs. Bowers, Isaac and Kim and Mses. Birch and Gould, with Mr. Isaac serving as chair. Each of Messrs. Bowers, Isaac and Kim and Mses. Birch and Gould has been determined to be “independent” as defined by our Corporate Governance Guidelines and the NYSE listing standards.

The duties and responsibilities of the Nominating and Corporate Governance Committee are set forth in its charter, which may be found at www.corepoint.com under Investors: Corporate Governance: Governance Documents: Charter of the Nominating and Corporate Governance Committee of the Board of Directors, and include the following:

 

•

advise our Board of Directors concerning the appropriate composition and qualifications of our Board of Directors and its committees;

 

•

identify individuals qualified to become board members;

 

•

recommend to the Board the persons to be nominated by the Board for election as directors at any meeting of stockholders;

 

•

recommend to the Board the members of the board to serve on the various committees of the Board;

 

•

develop and recommend to the Board a set of corporate governance principles and assist the Board in complying with them; and

 

•

oversee the evaluation of the Board, the Board’s committees and management.

The charter of the Nominating and Corporate Governance Committee permits the committee to delegate any or all of its authority to one or more subcommittees. In addition, the Nominating and Corporate Governance Committee has the authority under its charter to retain outside counsel or other experts as it deems necessary or advisable.

Capital Committee

Our Capital Committee consists of Messrs. Alba, Cutaia, Isaac, Loeb and Shah, with Mr. Alba serving as chair. The purpose and responsibilities of the Capital Committee are set forth in its charter, which may be found at www.corepoint.com under Investors: Corporate Governance: Governance Documents: Charter of the Capital Committee of the Board of Directors, and include providing assistance to the Board of Directors with respect to the oversight of:

 

•

investments in or dispositions of real estate assets proposed by the Company’s management;

 

•

capital deployment to owned real estate assets;

 

•

the performance and valuations of the Company’s real estate assets and real estate investment portfolios; and

 

•

periodic review of the Company’s real estate investment policies, strategies, programs and procedures.

The charter of the Capital Committee permits the committee to delegate any or all of its authority to one or more subcommittees consisting of one or more non-management members.

 

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Committee Charters and Corporate Governance Guidelines

Our commitment to good corporate governance is reflected in our Corporate Governance Guidelines, which describe our Board’s views and policies on a wide range of governance topics. These Corporate Governance Guidelines are reviewed from time to time by our Nominating and Corporate Governance Committee and, to the extent deemed appropriate in light of emerging practices, revised accordingly, upon recommendation to and approval by our Board of Directors.

Our Corporate Governance Guidelines, Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Capital Committee charters, and other corporate governance information are available on our website at www.corepoint.com under Investors: Corporate Governance. Any stockholder also may request them in print, without charge, by contacting the Secretary of CorePoint Lodging Inc., at 909 Hidden Ridge, Suite 600, Irving, Texas 75038 through and including May 31, 2019 and at 125 East John Carpenter Freeway, 16th Floor, Irving, Texas 75062 after May 31, 2019.

Code of Conduct & Business Ethics

We maintain a Code of Conduct & Business Ethics that is applicable to all of our directors, officers and employees, including our Chairman, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and other senior officers. The Code of Conduct & Business Ethics sets forth our policies and expectations on a number of topics, including conflicts of interest, corporate opportunities, confidentiality, compliance with laws (including insider trading laws), use of our assets and business conduct and fair dealing. This Code of Conduct & Business Ethics also satisfies the requirements for a code of ethics, as defined by Item 406 of Regulation S-K promulgated by the SEC. The Code of Conduct & Business Ethics may be found on our website at www.corepoint.com under Investors: Corporate Governance: Governance Documents: Code of Conduct & Business Ethics.

We will disclose within four business days any substantive changes in or waivers of the Code of Business Conduct & Ethics granted to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website as set forth above rather than by filing a Form 8-K. In the case of a waiver for an executive officer or a director, the required disclosure also will be made available on our website within four business days of the date of such waiver.

Oversight of Risk Management

The Board has extensive involvement in the oversight of risk management related to us and our business. The Board accomplishes this oversight both directly and through its Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, each of which assists the Board in overseeing a part of our overall risk management and regularly reports to the Board. The Audit Committee represents the Board by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls, our compliance with legal and regulatory requirements and our enterprise risk management program. Through its regular meetings with management, including the finance, legal and internal audit functions, the Audit Committee reviews and discusses all significant areas of our business and summarizes for the Board all areas of risk (including cyber risk) and the appropriate mitigating factors. The Compensation Committee considers, and discusses with management, management’s assessment of certain risks, including whether any risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us. The Nominating and Corporate Governance Committee oversees and evaluates programs and risks associated with Board organization, membership and structure, succession planning and corporate governance. In addition, our Board receives periodic detailed operating performance reviews from management.

 

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Executive Officers of the Company

Set forth below is certain information regarding each of our current executive officers other than Mr. Cline, whose biographical information is presented under “Nominees for Election to the Board of Directors in 2019.”

 

Name		Age		Principal Occupation and Other Information
John W. Cantele		58		John W. Cantele has served as the Company’s Executive Vice President and Chief Operating Officer since its spin-off from LQH Parent. Mr. Cantele previously served as LQH Parent’s Executive Vice President and Chief Operating Officer since April 25, 2016. Prior to joining LQH, Mr. Cantele was most recently Global Head, Select Hotels at the Hyatt Hotel Corporation, where he had served since 2011. In his role as Global Head, Select Hotels, Mr. Cantele managed Hyatt’s owned select service hotels, oversaw Hyatt’s franchised hotels operating under the Hyatt House, Hyatt Place and Summerfield Suites brands and was responsible for corporate operations, sales, revenue management and product design. At Hyatt, he also served in the roles of Senior VP, Select Hotels and Senior VP, Hyatt Summerfield Suites/Hyatt House. Prior to that, from 2000 to 2011, Mr. Cantele served as Senior VP of Operations/Partner at LodgeWorks Hotel Corporation. Beginning in 1988, Mr. Cantele served first as General Manager/Director of Sales, Multi-Property and then as VP of Operations of Summerfield Suites Hotels. He remained with Summerfield Suites Hotels through its acquisition by Wyndham International, Inc., where he continued in the role of VP of Operations from 1998 to 2000. Mr. Cantele graduated from the University of Wisconsin at Stout with a B.S. in hospitality management.
Mark M. Chloupek		47		Mark M. Chloupek has served as the Company’s Executive Vice President, Secretary and General Counsel since its spin-off from LQH Parent. Mr. Chloupek previously served as Executive Vice President and General Counsel of LQH Parent since 2006 and was named Secretary in 2013. Prior to joining LQH, from 1999 through 2006, Mr. Chloupek served as Vice President and Senior Vice President and Chief Counsel of Operations for Wyndham International, Inc. Prior to joining Wyndham, from 1996 to 1999, Mr. Chloupek worked for Locke Lord LLP (formerly Locke Purnell Rain Harrell—a professional corporation). Additionally, Mr. Chloupek currently serves on the board of the Dallas Chapter of the Juvenile Diabetes Research Foundation and formerly served on the board of The Texas General Counsel Forum. Mr. Chloupek received a B.A. in economics from the College of William and Mary, where he graduated Phi Beta Kappa and summa cum laude, and received a J.D. from the University of Virginia School of Law.
Daniel E. Swanstrom II		42		Daniel E. Swanstrom II has served as the Company’s Executive Vice President and Chief Financial Officer since its spin-off from LQH Parent. Mr. Swanstrom previously served as Executive Vice President and Chief Financial Officer of Monogram Residential Trust, Inc., a publicly traded multifamily real estate investment trust, from 2015 to 2017. Prior to Monogram, Mr. Swanstrom worked at Morgan Stanley from 2006 to 2015 and served in a variety of capacities, most recently as Executive Director in the Real Estate Investment Banking Division from 2013 to 2015. From 2002 to 2004, Mr. Swanstrom was at AEW Capital Management, a real estate investment manager, most recently as an Assistant Vice President. From 1999 to 2002, Mr. Swanstrom was in the Assurance and Advisory Services Group at Deloitte & Touche LLP, most recently as senior accountant. Mr. Swanstrom received a B.S. in Accounting from Boston College and an M.B.A. from the University of North Carolina at Chapel Hill. Mr. Swanstrom is also a certified public accountant (inactive).

 

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PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Audit Committee has selected Deloitte & Touche LLP to serve as our independent registered public accounting firm for 2019.

Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Deloitte & Touche LLP to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm. If our stockholders fail to ratify the selection, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.

A representative of Deloitte & Touche LLP is expected to be present at the Annual Meeting. The representative will also have the opportunity to make a statement if he or she desires to do so, and the representative is expected to be available to respond to appropriate questions.

The shares represented by your proxy will be voted “FOR” the ratification of the selection of Deloitte & Touche LLP unless you specify otherwise.

Audit and Non-Audit Fees

In connection with the audit of the 2018 financial statements, we entered into an agreement with Deloitte & Touche LLP which sets forth the terms by which Deloitte & Touche LLP will perform audit services for the Company.

The following table presents fees for professional services rendered by our independent registered public accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte & Touche”) for the audits of our annual consolidated financial statements for the years ended December 31, 2018 and 2017:

 

		2018				2017
Audit fees(1)		$	1,380,000			$	—
Audit-related fees(2)			937,000				1,680,000
Tax fees(3)			268,000				706,000
All other fees			—				—
Total:		$	2,585,000			$	2,386,000

 

(1)

Includes the aggregate fees recognized in each of the last two fiscal years for professional services rendered for the audit of the Company’s annual financial statements and the reviews of financial statements. The fees are for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2)	Includes fees billed in each of the last two fiscal years for services performed that are related to the Company’s SEC filings (including costs relating to the Company’s spin-off from LQH Parent in May 2018) and other research and consultation services.

(3)	Includes the aggregate fees recognized in each of the last two fiscal years for professional services rendered for tax compliance, tax advice and tax planning.

All of the services shown in this table were pre-approved by the Audit Committee (or, prior to the spin-off, by LQH Parent’s audit committee). The Audit Committee considered whether providing the non-audit services shown in this table was compatible with maintaining Deloitte & Touche’s independence and concluded that it was.

 

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Pre-Approval Policy for Services of Independent Registered Public Accounting Firm

Consistent with SEC policies regarding auditor independence and the Audit Committee’s charter, the Audit Committee has responsibility for engaging, setting compensation for and reviewing the performance of the independent registered public accounting firm. In exercising this responsibility, the Audit Committee has established procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm and, subject to the next sentence, pre-approves all audit and permitted non-audit services provided by any independent registered public accounting firm prior to each engagement. As part of such procedures, the Audit Committee has delegated to its chair the authority to review and pre-approve any such services in between the Audit Committee’s regular meetings. Any such pre-approval will be subsequently considered and ratified by the Audit Committee at the next regularly scheduled meeting.

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING

FIRM FOR 2019.

 

20

REPORT OF THE AUDIT COMMITTEE

The Audit Committee operates pursuant to a charter which is reviewed annually by the Audit Committee. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this Proxy Statement under “The Board of Directors and Certain Governance Matters—Board Committees and Meetings—Audit Committee.” Under the Audit Committee charter, our management is responsible for the preparation, presentation and integrity of our financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America.

In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements of the Company with management and with the independent registered public accounting firm. The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301 “Communications with Audit Committees.” In addition, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence.

Based upon the review and discussions described in the preceding paragraph, the Audit Committee recommended to the Board that the audited financial statements of the Company be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC.

Submitted by the Audit Committee of the Company’s Board of Directors:

James Abrahamson

Jean M. Birch

Alan J. Bowers, Chair

David Loeb

Mitesh B. Shah

 

21

EXECUTIVE AND DIRECTOR COMPENSATION

Emerging Growth Company Status

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012. As a result, we are permitted to and rely on exemptions from certain disclosure requirements that are applicable to other companies that are not emerging growth companies. Accordingly, we have included compensation information for only our principal executive officer and our two next most highly compensated executive officers serving at fiscal year-end and have not included a compensation discussion and analysis of our executive compensation programs or tabular compensation information other than the Summary Compensation Table and the Outstanding Equity Awards table. In addition, for so long as we are an emerging growth company, we will not be required to submit certain executive compensation matters to our stockholders for advisory votes, such as “say-on-pay” and “say-on-frequency” of say-on-pay votes.

We will remain an emerging growth company until the earliest to occur of: (i) December 31, 2023; (ii) the last day of the fiscal year during which our annual gross revenues are $1.07 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which we become a “large accelerated filer,” which means that we have been public for at least 12 months, have filed at least one annual report and the market value of our voting and non-voting common equity held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.

Executive Compensation

On May 30, 2018, we were spun off from La Quinta Holdings Inc. (“LQH” and, exclusive of its subsidiaries, “LQH Parent”) as part of a plan approved by LQH Parent’s board of directors to spin off its hotel ownership business into an independent, publicly traded company prior to the merger of LQH Parent with a wholly-owned subsidiary of Wyndham Worldwide Corporation (“Wyndham”). As part of LQH, we were not historically a separate division or managed as a separate business. Therefore, we did not have any of our own executive officers prior to our spin-off from LQH as LQH Parent’s executive officers operated the combined business.

Each of our President and Chief Executive Officer, Keith A. Cline; our Executive Vice President and Chief Operating Officer, John W. Cantele; and our Executive Vice President, Secretary and General Counsel, Mark M. Chloupek, whom we refer to collectively as the “Named Executive Officers” or “NEOs”, was employed by LQH Parent prior to the spin-off on May 30, 2018. Accordingly, the compensation presented prior to May 30, 2018 is their compensation by LQH Parent. We have also presented the terms of their compensation by us, which became effective upon the spin-off, below, along with the terms of our executive compensation programs that became effective upon the spin-off. In addition, in connection with the spin-off, we formed a compensation committee (the “Compensation Committee”) that has been responsible for our executive compensation programs following the spin-off. For additional information regarding the Compensation Committee, see “The Board of Directors and Certain Governance Matters—Board Committees and Meetings—Compensation Committee.”

 

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Summary Compensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of the NEOs for their service for the fiscal years indicated. Prior to May 30, 2018, such amounts were paid by LQH for service to LQH Parent. Beginning May 30, 2018, such amounts were paid by us for service to us.

 

Name and principal position		Year				Salary ($)(1)				Bonus ($)(2)				Stock Awards ($)(3)				Non-Equity Incentive Plan Compensation ($)(4)				All Other Compensation ($)(5)				Total ($)
Keith A. Cline			2018				824,881				937,500				6,859,064				942,835				13,503				9,577,783
President and Chief Executive Officer			2017				768,555				—				4,159,607				800,233				16,440				5,744,835
John W. Cantele			2018				528,565				445,313				3,000,016				604,147				19,200				4,597,241
Executive Vice President and Chief Operating Officer			2017				491,493				—				1,300,847				578,408				13,609				2,384,357
Mark M. Chloupek			2018				427,122				456,250				2,523,845				488,200				10,946				3,906,363
Executive Vice President, Secretary and General Counsel			2017				393,863				—				1,203,585				467,400				24,297				2,089,145

 

(1)

The base salaries of the NEOs were increased by LQH Parent on February 26, 2018 as follows: in the case of Mr. Cline, from $772,500 to $795,675; in the case of Mr. Cantele, from $495,000 to $509,850; and in the case of Mr. Chloupek, from $400,000 to $412,000. The amounts included in this column include 2018 salary paid by LQH prior to the spin-off to the NEOs in the following amounts: Mr. Cline; $319,934; Mr. Cantele: $205,006; and Mr. Chloupek: $165,661.

(2)	Amounts in this column represent the cash amounts earned in respect of retention awards granted to the NEOs by LQH Parent in 2017. See “Narrative to Summary Compensation Table—LQH 2017 Retention Awards.”

(3)

Represents the aggregate grant date fair value of stock awards granted during fiscal 2018, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“Topic 718”), without taking into account estimated forfeitures. The fiscal 2018 stock awards consist of the grants of restricted stock awards issued under the CorePoint Lodging Inc. 2018 Omnibus Incentive Plan (the “Omnibus Incentive Plan”). Terms of the fiscal 2018 stock awards are summarized in the “Narrative to Summary Compensation Table” below. The assumptions made when calculating the amounts are found in Note 15: “Equity-Based Compensation” to our audited consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “2018 10-K”). In addition, in connection with the spin-off, performance share units granted to the NEOs in 2016 and 2017 (“LQ PSUs”) by LQH Parent were converted into shares of restricted stock of LQH Parent immediately prior to the spin-off as described below under “Narrative to Summary Compensation Table—Treatment of Outstanding LQH Parent Awards in Connection with the Spin-Off—Conversion of Outstanding LQ PSUs in Connection with the Spin-Off.” There was incremental fair value associated with the modification of certain of the LQ PSU awards. In accordance with SEC requirements, the amounts shown in this column for fiscal 2018 include the incremental fair values, calculated in accordance with Topic 718, with respect to the LQ PSU awards so modified as follows: as to Mr. Cline, $109,014 relating to the LQ PSUs granted to him in 2016; and as to Mr. Chloupek, $23,785 relating to the LQ PSUs granted to him in 2016.

(4)	Amounts in this column for fiscal 2018 include the amounts earned under the 2018 Cash Bonus Plan (as defined below) and the LQH Parent 2018 Cash Bonus Plan (as defined below). See “Narrative to Summary Compensation Table—2018 Annual Cash Incentive Compensation.”

(5)

All other compensation for fiscal 2018 includes 401(k) matching contributions of $13,503 for Mr. Cline, $19,200 for Mr. Cantele and $6,626 for Mr. Chloupek, of which $11,000, $8,200 and $6,626, respectively, was contributed by LQH Parent. In addition, for Messrs. Cline and Chloupek, perquisites and other personal benefits included an employer-paid executive physical.

 

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Narrative to Summary Compensation Table

Employment Agreements

In connection with his appointment as President and Chief Executive Officer of LQH Parent, LQH Parent entered into an offer letter, dated February 18, 2016, with Mr. Cline (the “La Quinta Cline Offer Letter”). In connection with his appointment as Executive Vice President and Chief Operating Officer of LQH Parent, LQH Parent entered into an offer letter, dated April 13, 2016, with Mr. Cantele (the “La Quinta Cantele Offer Letter”).

LQH Parent also entered into an employment agreement, dated as of August 20, 2003, as amended August 17, 2005, with Mr. Chloupek.

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 “CorePoint Cline 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 “CorePoint Cantele Offer Letter”), effective as of the spin-off. We also approved new compensation terms, effective as of the spin-off, for Mr. Chloupek, whose employment agreement we assumed 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

La Quinta Cline Offer Letter. In connection with his appointment as President and Chief Executive Officer of LQH Parent in February 2016, the compensation committee and the board of directors of LQH Parent, after consultation with Meridian Compensation Partners, LLC, the LQH Parent compensation committee’s independent compensation consultant, approved the following compensation arrangement, reflected in the La Quinta Cline Offer Letter, for Mr. Cline: (i) an annual base salary of $750,000, subject to increase (but not decrease) which base salary was increased to $795,675 as of February 26,2018; (ii) an annual cash bonus opportunity equal to 100% of his base salary, with the actual bonus amount based upon achievement of Company and individual performance targets established by the compensation committee of LQH Parent for the fiscal year to which the bonus related; and (iii) eligibility to receive annual grants under LQH Parent’s long-term incentive program in amounts and in a form determined by the compensation committee of LQH Parent.

CorePoint Cline Offer Letter. In connection with his appointment as President and Chief Executive Officer of the Company, we entered into the CorePoint Cline Offer Letter with Mr. Cline, effective as of the spin-off. The CorePoint 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 our 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. See “—2018 Equity Awards” below. The CorePoint Cline Offer Letter also provides that Mr. Cline will participate in the CorePoint Lodging Inc. Executive Severance Plan (the “CorePoint Executive Severance Plan”), in accordance with its terms.

 

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Mr. Cantele

La Quinta Cantele Offer Letter. In connection with his appointment as Executive Vice President and Chief Operating Officer of LQH Parent, LQH Parent entered into the La Quinta Cantele Offer Letter with Mr. Cantele. The La Quinta Cantele Offer Letter provided that Mr. Cantele was to be LQH Parent’s Executive Vice President and Chief Operating Officer with the following compensation and benefits: (i) an annual base salary of $475,000, subject to increase (but not decrease), which base salary was increased to $509,850 as of February 28, 2018; (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 the compensation committee of LQH Parent for the fiscal year to which the bonus related; and (iii) eligibility to receive annual grants under LQH Parent’s long-term incentive program in amounts and in a form determined by the compensation committee of LQH Parent.

CorePoint Cantele Offer Letter. In connection with his appointment as Executive Vice President and Chief Operating Officer of the Company, we entered into the CorePoint Cantele Offer Letter with Mr. Cantele, effective as of the spin-off. The CorePoint Cantele Offer Letter provides that Mr. Cantele is 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 will 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. See “—2018 Equity Awards” below. The CorePoint Cantele Offer Letter also provides that Mr. Cantele will participate in the CorePoint Executive Severance Plan, in accordance with its terms.

Mr. Chloupek

Employment Agreement. 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 of LQH Parent, 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 LQH Parent or Mr. Chloupek elects not to extend the term. We assumed Mr. Chloupek’s employment agreement upon consummation of the spin-off.

CorePoint Compensation. In connection with his appointment as Executive Vice President, Secretary and General Counsel of the Company, on April 12, 2018, our Board of Directors approved the following compensation and benefits terms for Mr. Chloupek, effective as of the spin-off: (i) an annual base salary of $412,000; (ii) an annual bonus opportunity with a target amount equal to 100% of his base salary; (iii) grants under our Omnibus Incentive Plan for the 2018 fiscal year with a target value of $900,000; (iv) a one-time grant of restricted stock with a grant date value equal to $800,000, 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 $800,000, 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. Chloupek effective on the day following the consummation of the spin-off. See “—2018 Equity Awards” below.

 

25

2018 Equity Awards

As provided in the CorePoint Cline Offer Letter and the CorePoint Cantele Offer Letter and in accordance with the compensation we approved for Mr. Chloupek, at the time of our spin-off from LQH in May 2018 we granted to each of the NEOs the following awards under the Omnibus Incentive Plan: (1) a restricted stock award that vests in three equal annual installments beginning on December 15, 2018, subject to the NEO’s continued employment on each vesting date (the “Annual RSA”); (2) a restricted stock award that vests on the third anniversary of the date of grant, subject to the NEO’s continued employment on the vesting date (the “Three-Year Cliff-Vesting RSA”); and (3) a restricted stock award that vests on the fourth anniversary of the date of grant, subject to the NEO’s continued employment on the vesting date (the “Four-Year Cliff-Vesting RSA”).

The table below sets forth the total value on the grant date of the restricted stock awards granted to the NEOs in May 2018, as well as the value on the grant date of each type of restricted stock award.

 

						Annual RSA								Three-Year Cliff- Vesting RSA								Four-Year Cliff- Vesting RSA
Name		Total Value				Value				Number of Shares				Value				Number of Shares				Value				Number of Shares
Keith A. Cline		$	6,750,000			$	3,000,000				107,566			$	1,875,000				67,229			$	1,875,000				67,229
John W. Cantele		$	3,000,000			$	900,000				32,270			$	1,050,000				37,648			$	1,050,000				37,648
Mark M. Chloupek		$	2,500,000			$	900,000				32,270			$	800,000				28,685			$	800,000				28,685

Treatment of Outstanding LQH Parent Awards in Connection with the Spin-Off

Treatment of Outstanding LQ RSAs in Connection with the Spin-Off. At the spin-off, each holder of a restricted stock award of LQH Parent (an “LQ RSA”), including the NEOs, received a number of restricted shares of our common stock (each, an “RSA”) calculated by multiplying (i) the number of shares of restricted stock of LQH Parent subject to each grant by (ii) the distribution ratio, rounded up to the nearest whole share. We refer to such restricted shares of our common stock as “Substitute RSAs.” The Substitute RSAs are subject to the same terms and conditions from and following the spin-off as the terms and conditions applicable to the corresponding LQ RSAs immediately prior to the spin-off and will vest subject to the NEO’s continued employment with us on the applicable vesting date. The vesting terms of the Substitute RSAs upon termination or a change in control are summarized below in “Potential Payments Upon Termination or Change in Control.”

Conversion of Outstanding LQ PSUs in Connection with the Spin-Off. In connection with the spin-off, LQH Parent entered into an Employee Matters Agreement with us (the “EMA”), which among other items, provided for the conversion of LQ PSUs into shares of restricted stock of LQH Parent immediately prior to the spin-off. The EMA generally provided that outstanding LQ PSUs would be converted into shares of restricted stock of LQH Parent based on deemed satisfaction of applicable performance criteria at the greater of target or actual performance levels in respect of applicable performance periods that had ended on or prior to the end of the fiscal quarter that ended immediately prior to the fiscal quarter in which the spin-off occurred (i.e., the portion of the applicable performance period representing the number of fiscal quarters that had elapsed since the commencement of the applicable performance period), and based on deemed satisfaction of applicable performance criteria at target performance levels in respect of performance periods that had not ended prior to such fiscal quarter. Shares of restricted stock of LQH Parent received in connection with the conversion of LQ PSUs entitled the holders, including the NEOs, to receive a number of Substitute RSAs as described above, each of which continue to be subject to vesting based on the NEO’s continued employment with us through the end of the applicable performance period to which such LQ PSUs related. The vesting terms of the Substitute RSAs upon an executive’s termination or a change in control are summarized in “Potential Payments Upon Termination or Change in Control” below.

LQ PSUs which were granted in 2016, other than LQ PSUs granted to Mr. Cantele in 2016, were converted to shares of restricted stock of LQH Parent based on deemed satisfaction of the applicable performance criteria at target levels and LQ PSUs that were granted in 2017, as well as those granted to Mr. Cantele in 2016, were

 

26

converted to shares of restricted stock of LQH Parent based on deemed satisfaction of the applicable performance criteria at actual performance levels. The incremental fair value associated with the conversion of the LQ PSUs granted in 2016 based on deemed satisfaction of the applicable performance criteria at target levels is reflected in the “Stock Awards” column of the “Summary Compensation Table.”

2018 Annual Cash Incentive Compensation

Our 2018 annual cash incentive plan. Our annual cash incentive compensation plan for the year ended December 31, 2018 (the “2018 Cash Bonus Plan”) compensated and rewarded successful achievement of short-term strategic priorities that are closely aligned with our long-term goals. Pursuant to the terms of the 2018 Cash Bonus Plan, each NEO was eligible to receive a cash bonus based on the Company’s performance, as determined by the Compensation Committee in its discretion following the end of the performance period, against strategic priorities including with respect to the Company’s (1) property portfolio, (2) investment strategy, (3) property repositioning and hurricane impacted hotels initiatives, (4) capital structure, and (5) engagement with stockholders. The Compensation Committee selected performance criteria designed to be challenging but reasonably achievable and retained discretion to modify the performance criteria and determine their weightings.

Payments to the NEOs under the 2018 Cash Bonus Plan, expressed as a percentage of an NEO’s base salary, as prorated to reflect the number of days in 2018 from and including the day we were spun off from LQH, could range from 0% for below threshold performance, to 50% for threshold performance, to 100% for target performance, and to a maximum of 150% for significantly above target performance, subject to an NEO’s continued employment with the Company or a subsidiary of the Company on the payment date. It was expected, however, that payments under the 2018 Cash Bonus Plan would reflect target performance except in the case of significant outperformance or significant underperformance.

Actual amounts paid under the 2018 Cash Bonus Plan were calculated by multiplying each NEO’s prorated base salary by his target bonus percentage to determine such NEO’s target bonus potential. Such target bonus potential was then multiplied by a combined achievement factor based on the Committee’s assessment of the Company’s performance against each of the strategic priorities. The Compensation Committee determined that the Company achieved target performance with respect to each of the strategic priorities resulting in a combined achievement factor of 100%. Based on the performance achieved, each of the NEOs earned an annual bonus for 2018 under the 2018 Cash Bonus Plan as follows, which amounts are reflected in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table”:

 

Name		2018 prorated base salary				Target bonus as a percentage of prorated base salary				Target bonus potential				Achievement factor as a percentage of target				2018 annual bonus
Keith A. Cline		$	468,685				100	%		$	468,685				100	%		$	468,685
John W. Cantele		$	300,323				100	%		$	300,323				100	%		$	300,323
Mark M. Chloupek		$	242,685				100	%		$	242,685				100	%		$	242,685

LQH Parent’s annual cash incentive plan. Our NEOs also received annual cash incentive awards under LQH Parent’s annual cash incentive plan for the year ended December 31, 2018 (the “LQH Parent 2018 Cash Bonus Plan”). The LQH Parent Cash Bonus Plan was designed to compensate and reward successful achievement of short term financial and strategic goals that were closely aligned with the long-term goals of LQH. For Mr. Cline, the performance of LQH against financial and strategic goals composed 100% of his total award opportunity and for Messrs. Cantele and Chloupek the performance of LQH against financial and strategic goals composed 80% of the total award opportunity and individual strategic objectives composed 20% of the total award opportunity. For each of the NEOs, the threshold, target and maximum annual bonus opportunity for the year ended December 31, 2018, expressed as a percentage of such NEO’s base salary, was as follows: 50%, 100% and 150%, respectively.

 

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The LQH strategic and financial goals were based on (1) the completion of the spin-off of CorePoint from LQH (the “Spin-Off Metric”), (2) the completion of the merger (the “Merger”) of LQH Parent with a wholly-owned subsidiary of Wyndham (the “Merger Metric”) and (3) Adjusted EBITDA (defined as LQH Parent’s net (loss) income (exclusive of non-controlling interests) before interest expense, income tax expense (benefit), and depreciation and amortization, further adjusted to exclude certain items, including, but not limited to: gains, losses, and expenses in connection with: (i) asset dispositions; (ii) debt modifications/retirements; (iii) non-cash impairment charges; (iv) discontinued operations; (v) equity-based compensation and (vi) other items, as may be further adjusted for other unusual items as determined by LQH Parent’s compensation committee)) (the “Adjusted EBITDA Metric”). For Mr. Cline, the Spin-Off Metric and the Merger Metric each composed 40% of the total award opportunity and the Adjusted EBITDA metric 20% of the total award opportunity. For Messrs. Cantele and Chloupek, the Spin-Off Metric and the Merger Metric each composed 30% of the total award opportunity and the Adjusted EBITDA metric and individual strategic objectives each composed 20% of the total award opportunity. The Spin-Off Metric and the Merger Metric were chosen because they represented key strategic objectives of LQH and the Adjusted EBITDA Metric was chosen because it was a key indicator of LQH’s profitability. The following table sets for the threshold, target and maximum amounts for each of the LQH strategic and financial goals, as well as the payout percentages for each category.

 

Threshold

Target

Maximum

Spin-Off Metric

n/a

n/a

Completion

Merger Metric

n/a

n/a

Completion

Adjusted EBITDA Metric

$

296.4 million

$

312 million

$

327.6 million

Payout Percentage of Target

50

%

100

%

150

%

To the extent that actual performance fell between the applicable threshold, target or maximum levels for the Adjusted EBITDA Metric, payouts would be determined using linear interpolation.

As discussed above, 20% of the total award opportunity for Messrs. Cantele and Chloupek was based on their individual performance relative to individual performance criteria. For Mr. Cantele, such individual criteria included goals relating to the development of job descriptions for certain positions with LQH, the development, in consultation with a food and beverage consultant, of a food and beverage bar program at certain of LQH’s hotels, and the completion of a comprehensive review of each of 53 hotels that LQH had identified for renovation and repositioning. For Mr. Chloupek, such individual criteria included goals related to the treatment of environmental vulnerabilities, the closure of certain claims within a certain timeframe, employee health insurance and supporting the execution of the spin-off of CorePoint from LQH.

Pursuant to the EMA, LQH Parent calculated a deemed earned bonus amount for each employee of LQH Parent who received an award under the LQH Parent 2018 Cash Bonus Plan, including the NEOs, assuming that the performance period ended as of the effective time of the Merger. The achievement of performance against the applicable metrics was calculated on an adjusted basis based on the relation of the portion of the performance period that had elapsed prior to the effective time of the Merger to the full performance period, and payouts were prorated on the same basis.

The following table shows the adjusted results based on LQH Parent’s actual performance as of the effective time of the Merger and the associated payout percentages with respect to each LQH strategic and financial metric.

 

		Spin-Off Metric				Merger Metric				Adjusted EBITDA Metric
Actual Performance, as adjusted			Complete				Complete			$	323 million
Payout Percentage			150	%			150	%			124.97	%

In addition, each of Messrs. Cantele and Chloupek achieved all of their individual goals as the maximum performance level.

 

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Actual amounts paid under the LQH Parent 2018 Cash Bonus Plan were then calculated by multiplying each NEO’s base salary in effect as of March 19, 2018 by his target bonus percentage. For Mr. Cline, the target bonus potential was then multiplied by a combined achievement factor based on the weighted average of the Spin-Off Metric payout percentage, the Merger Metric payout percentage and the Adjusted EBITDA Metric payout percentage and, for Messrs. Cantele and Chloupek, the target bonus potential was then multiplied by a combined achievement factor based on the weighted average of the Spin-Off Metric payout percentage, the Merger Metric payout percentage, the Adjusted EBITDA Metric payout percentage and the individual strategic objective payout percentage. The resulting amount was then prorated as described above. Based on the performance achieved, each of the NEOs earned a bonus for 2018 under the LQH Parent 2018 Cash Bonus Plan as follows, which amounts are reflected in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table”:

 

Name		2018 LQH base salary				Target bonus as a percentage of LQH base salary				Target bonus potential				Achievement factor as a percentage of target				Proration Factor				2018 LQH Parent annual bonus
Keith A. Cline		$	795,675				100	%		$	795,675				144.99	%			41.1	%		$	474,150
John W. Cantele		$	509,850				100	%		$	509,850				144.99	%			41.1	%		$	303,824
Mark M. Chloupek		$	412,000				100	%		$	412,000				144.99	%			41.1	%		$	245,514

LQH 2017 Retention Awards

To encourage and reward the continued focus and energy of certain employees, including the NEOs, on making objective business decisions that were in the best interests of LQH Parent and its stockholders as it pursued the spin-off, on January 17, 2017, the board of directors of LQH Parent adopted and approved the La Quinta Holdings Inc. Retention Bonus Plan (the “2017 Retention Plan”), which provided for the payment of awards to specified eligible employees, including the NEOs, upon the occurrence of a specified date or event.

Under the 2017 Retention Plan, the NEOs were granted awards with the following values: $1,875,000 for Mr. Cline; $890,625 for Mr. Cantele; and $912,500 for Mr. Chloupek. These retention awards were payable 50% in cash and 50% in shares of restricted stock of LQH Parent. The shares of restricted stock of LQH Parent were granted pursuant to the Amended and Restated La Quinta Holdings Inc. 2014 Omnibus Incentive Plan (the “La Quinta Incentive Plan”) on January 23, 2017, and the number of shares of restricted stock of LQH Parent granted was equal to the value of the award payable in shares of restricted stock of LQH Parent divided by the per share fair value of LQH Parent’s common stock on January 17, 2017.

The cash portion of a retention award was payable, and the shares of restricted stock of LQH Parent vested, on the earliest to occur of the following, subject, in each case, to the NEO’s continued employment with LQH Parent through such date: (i) April 17, 2018; (ii) the date that is six months from the consummation of a significant corporate event (as defined in the 2017 Retention Plan); (iii) the date of an NEO’s termination of employment (x) by LQH Parent without cause (as defined in the 2017 Retention Plan) at any time following January 17, 2017 or (y) by the NEO with good reason (as defined in the 2017 Retention Plan) within the six months prior to, or on or following, a significant corporate event; or (iv) the date of a change in control (as defined in the 2017 Retention Plan). The cash portion of each NEO’s award under the 2017 Retention Plan became payable, and the equity portion vested, on April 17, 2018. The cash portion of the NEOs’ awards are reflected in the “Bonus” column of the “Summary Compensation Table.”

Other Benefits and Perquisites

LQH Parent’s executives, including the NEOs, were eligible for specified benefits, such as group health, dental and disability insurance and employer-paid basic life insurance premiums. These benefits were intended to provide competitive and adequate protection in case of sickness, disability or death. In addition, LQH Parent generally provided specified perquisites to the NEOs, when determined to be necessary and appropriate, including employer-paid executive physical examinations and car allowances.

 

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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 by LQH Parent and us is reflected in the “All Other Compensation” column of the “Summary Compensation Table” and the accompanying footnote.

Retirement Benefits

LQH Parent maintained a tax-qualified 401(k) plan in which all of LQH Parent’s corporate employees, including the NEOs, were eligible to participate and under which LQH Parent matched 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 the 401(k) plan was 4% of the employee’s eligible earnings. All matching contributions by LQH Parent were always fully vested.

On March 26, 2018, the general partner of CorePoint OP, a subsidiary of CorePoint, adopted (which adoption was subsequently ratified by our Board of Directors on April 12, 2018) the CorePoint 401(k) Plan, a tax-qualified 401(k) plan in which all of CorePoint’s employees, including the NEOs, are eligible to participate and under which CorePoint 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 the CorePoint 401(k) Plan is 4% of the employee’s eligible earnings. All matching contributions by CorePoint are always fully vested.

 

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Outstanding Equity Awards at 2018 Fiscal Year-End

The following table sets forth information regarding outstanding equity awards made to the NEOs as of December 31, 2018.

 

		Stock Awards
Name		Number of shares or units of stock that have not vested (#)(1)				Market value of shares or units of stock that have not vested ($)(2)
Keith A. Cline			335,966				4,115,584
John W. Cantele			127,618				1,563,321
Mark M. Chloupek			115,759				1,418,048

 

(1)	Number of shares includes accrued dividend equivalent rights (“DERs”) which will vest upon the same schedule and under the same terms as the restricted stock grants to which they relate. Consists of the following outstanding restricted stock awards, including the following number of DERs:

 

Name

Award

Grant Date

Number (including DERs)

DERs

Vesting

Mr. Cline

Annual RSA

5/31/2018

72,790

1,080

Ratably on December 15, 2019 and December 15, 2020

Three-Year Cliff-Vesting RSA

5/31/2018

68,243

1,014

In full on May 31, 2021

Four-Year Cliff-Vesting RSA

5/31/2018

68,243

1,014

In full on May 31, 2022

Substitute RSA – Annual LQ RSA

5/30/2018

18,646

277

In full on December 31, 2019

Substitute RSA – LQ PSU

5/30/2018

60,610

900

In full on December 31, 2019

Substitute RSA – 2016 Retention LQ RSA

5/30/2018

47,434

705

In full on February 18, 2019

Mr. Cantele

Annual RSA

5/31/2018

21,837

324

Ratably on December 15, 2019 and December 15, 2020

Three-Year Cliff-Vesting RSA

5/31/2018

38,216

568

In full on May 31, 2021

Four-Year Cliff-Vesting RSA

5/31/2018

38,216

568

In full on May 31, 2022

Substitute RSA – Annual LQ RSA

5/30/2018

4,972

74

In full on December 31, 2019

Substitute RSA – LQ PSU

5/30/2018

16,163

240

In full on December 31, 2019

Substitute RSA – 2016 Retention LQ RSA

5/30/2018

8,214

123

In full on April 25, 2019

Mr. Chloupek

Annual RSA

5/31/2018

21,837

324

Ratably on December 15, 2019 and December 15, 2020

Three-Year Cliff-Vesting RSA

5/31/2018

29,118

433

In full on May 31, 2021

Four-Year Cliff-Vesting RSA

5/31/2018

29,118

433

In full on May 31, 2022

Substitute RSA – Annual LQ RSA

5/30/2018

4,351

65

In full on December 31, 2019

Substitute RSA – LQ PSU

5/30/2018

14,144

211

In full on December 31, 2019

Substitute RSA – 2016 Retention LQ RSA

5/30/2018

17,191

256

In full on March 15, 2019

 

(2)	Values determined based on December 31, 2018 closing market price of our common stock of $12.25 per share.

 

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Potential Payments upon Termination or Change in Control

CorePoint 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 CorePoint Executive Severance Plan. The CorePoint 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 CorePoint 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 CorePoint 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 CorePoint 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 CorePoint Executive Severance Plan provides for the following payments and benefits to the NEOs:

 

•

a lump-sum pro-rata bonus for the year of termination, based on actual performance;

 

•

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. Cantele and Chloupek and 2.0 for Mr. Cline);

 

•

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. Cantele and Chloupek and 24 months for Mr. Cline; and

 

•

payment of, or reimbursement for, up to $10,000 in outplacement services within the three-year period following such termination (the “outplacement benefit”).

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 CorePoint Executive Severance Plan), in addition to certain accrued obligations, the CorePoint Executive Severance Plan provides for the following payments and benefits to the NEOs:

 

•

a lump-sum pro-rata bonus for the year of termination, based on target performance;

 

•

the cash severance amount times the multiplier applicable to such executive (which is 2.0 for Messrs. Cantele and Chloupek and 3.0 for Mr. Cline);

 

•

the welfare benefit for a period of 24 months for Messrs. Cantele and Chloupek and 36 months for Mr. Cline; and

 

•

the outplacement benefit.

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 CorePoint 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 CorePoint 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.

 

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In addition, the CorePoint 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 CorePoint Executive Severance Plan provides that if any payments and/or benefits due to a participant (including any NEO) under the CorePoint 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 CorePoint 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 CorePoint Executive Severance Plan only to the extent that any amounts due and payable under the CorePoint Executive Severance Plan are greater than and in addition to the amount due and payable to Mr. Chloupek under his employment agreement.

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.

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.

 

33

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.

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.

Substitute Award – Annual LQ RSAs. Under the terms of the Substitute RSAs issued in respect of Annual LQ 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 Substitute RSAs issued in respect of Annual LQ RSAs 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 Substitute RSAs issued in respect of Annual LQ RSAs will immediately vest. If the executive’s employment terminates for any reason other than as described above, all unvested Substitute RSAs issued in respect of Annual LQ RSAs will be forfeited.

Substitute Award – LQ PSUs. Under the terms of the Substitute RSAs issued in respect of LQ PSUs, 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) or a change in control occurs, all unvested Substitute RSAs issued in respect of LQ PSUs will immediately vest. If the executive’s employment terminates for any reason other than as described above, all unvested Substitute RSAs issued in respect of LQ PSUs will be forfeited.

 

34

Substitute Award – 2016 Retention LQ RSAs. Under the terms of the Substitute RSAs issued in respect of 2016 retention LQ RSAs, upon a termination of an executive’s employment without cause, an executive’s termination of his or her employment with good reason, or termination due to the executive’s death or disability, or a change in control occurs, all unvested Substitute RSAs issued in respect of 2016 retention LQ RSAs will immediately vest. If the executive’s employment terminates for any reason other than as described above, all unvested Substitute RSAs issued in respect of 2016 retention LQ RSAs will be forfeited.

Director Compensation in Fiscal 2018

The table below sets forth information regarding non-employee director compensation for the fiscal year ended December 31, 2018.

 

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)(1)				All Other Compensation ($)				Total ($)
James R. Abrahamson			41,154				100,005				—				141,159
Glenn Alba (2)			42,883				100,005				30,278				173,166
Jean M. Birch (3)			19,783				71,518				—				91,300
Alan J. Bowers			49,973				100,005				—				149,978
Giovanni Cutaia			—				—				—				—
Alice E. Gould (3)			19,783				71,518				—				91,300
B. Anthony Isaac			44,544				100,005				—				144,549
Brian Kim			—				—				—				—
David Loeb			44,544				100,005				—				144,549
Mitesh B. Shah			52,912				148,290				—				201,202

 

(1)

Represents the aggregate grant date fair value of restricted stock granted during 2018 computed in accordance with Topic 718 without taking into account estimated forfeitures. The assumptions used in the valuation are discussed in Note 15: “Equity-Based Compensation” to our Consolidated Financial Statements in Part II, Item 8 of our 2018 10-K. The aggregate number of shares of restricted stock (including DERs which will vest upon the same schedule and under the same terms as the restricted stock grants to which they relate) outstanding as of December 31, 2018 for our non-employee directors was as follows: 2,546 shares for Mr. Abrahamson (including 39 DERs), 2,546 shares for Mr. Alba (including 39 DERs), 3,572 shares for Ms. Birch (including 42 DERs), 2,546 shares for Mr. Bowers (including 39 DERs), 3,572 shares for Ms. Gould (including 42 DERs), 2,546 shares for Mr. Isaac (including 39 DERs), 2,546 shares for Mr. Loeb (including 39 DERs) and 3,820 shares for Mr. Shah (including 59 DERs). The aggregate number of restricted stock units (including DERs which will vest upon the same schedule and under the same terms as the restricted stock unit grants to which they relate) outstanding as of December 31, 2018 for our non-employee directors was as follows: 3,843 restricted stock units for Mr. Abrahamson (including 59 DERs), 1,173 restricted stock units for Mr. Alba (including 18 DERs), 3,843 restricted stock units for Mr. Bowers (including 59 DERs) and 5,765 restricted stock units for Mr. Shah (including 88 DERs).

 

(2)	The amount shown in the “All Other Compensation” column for Mr. Alba represents the amount earned by him in 2018 pursuant to the consulting agreement we entered into with him in September 2018. See “—Consulting Agreement—Mr. Alba.”

 

(3)	Mses. Birch and Gould were elected to our board of directors on September 11, 2018.

Board and Committee Fees in 2018

Prior to the spin-off, as part of LQH, we were not historically a separate division or managed as a separate business and members of our Board of Directors received no compensation for their service. Following the spin-off, neither our employees nor those affiliated with Blackstone who serve on our Board of Directors or on

 

35

committees thereof receive separate compensation for such services. Our Board of Directors approved the following compensation for our independent directors (other than those directors affiliated with Blackstone), effective upon completion of the spin-off:

 

•

an annual cash retainer of $60,000, payable quarterly;

 

•

an additional annual cash retainer, payable quarterly, for serving on committees of the board of directors or as the chairperson of specified committees of the board of directors, as follows:

 

•

members (other than the chairperson of the Audit Committee, the Compensation Committee and the Capital Committee) of the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Capital Committee (each as defined herein) (including the chairperson of the Nominating and Corporate Governance Committee) will receive an additional $5,000 annually for serving on more than one committee;

 

•

the chairperson of the Compensation Committee will receive an additional annual cash retainer, payable quarterly, of $10,000;

 

•

the chairperson of the Audit Committee will receive an additional annual cash retainer, payable quarterly, of $25,000; and

 

•

the chairperson of the Capital Committee will receive an additional annual cash retainer, payable quarterly, of $25,000;

 

•

an annual equity award having a fair market value of $100,000 payable annually in restricted stock which vests over three years in equal installments from the date of grant;

 

•

an additional annual cash retainer, payable quarterly, of $25,000 and an additional annual equity award having a fair market value of $50,000 for any outside director who serves as chairperson of the Board of Directors; and

 

•

reimbursement for reasonable travel and related expenses associated with attendance at board of directors or committee meetings.

In July 2018, we granted to each of Messrs. Abrahamson, Alba, Bowers, Isaac and Loeb 3,761 shares of restricted stock and we granted to Mr. Shah, the chairman of our Board of Directors, 5,642 shares of restricted stock. The shares of restricted stock vest in three equal annual installments, with the first one-third vesting on July 9, 2018, the second one-third vesting on July 9, 2019 and the remainder vesting on July 9, 2020, subject to the director’s continued service through the applicable vesting date. In September 2018, we granted to each of Mses. Birch and Gould 3,530 shares of restricted stock which vest in three equal annual installments, with the first one-third vesting on September 11, 2019, the second one-third vesting on September 11, 2020 and the remainder vesting on September 11, 2021, subject to the director’s continued service through the applicable vesting date.

Treatment of Outstanding LQ Restricted Stock Units in Connection with the Spin-Off

At the time of the spin-off, certain of our directors, including Messrs. Abrahamson, Alba, Bowers and Shah, held outstanding restricted stock units of LQH Parent that were granted to them for their service to LQH Parent. At the spin-off, each holder of a restricted stock unit award of LQH Parent (an “LQ RSU”) received a number of our restricted stock units (each, an “RSU”) calculated by multiplying (i) the number of restricted stock units of LQH Parent subject to each grant by (ii) the distribution ratio, rounded up to the nearest whole share. The RSUs are subject to the same terms and conditions from and following the spin-off as the terms and conditions applicable to the corresponding LQ RSUs immediately prior to the spin-off and will vest subject to continued service to us. A director’s RSUs will fully vest in the event such director is terminated as a result of his death or Disability (as that term is defined in the Omnibus Incentive Plan) or upon a Change in Control (as that term is defined in the Omnibus Incentive Plan).

 

36

Consulting Agreement—Mr. Alba

On September 11, 2018, we entered into a consulting agreement (the “Consulting Agreement”) with Mr. Alba. Pursuant to the terms of the Consulting Agreement, Mr. Alba will provide assistance with developing, reviewing and refining the Company’s real estate and capital deployment policies, strategies and programs, together with providing advice and assistance on such other matters relating to the Company’s business as may be mutually agreed from time to time and will receive an annual cash consulting fee of $100,000, payable in equal monthly installments. The Consulting Agreement provides for an initial one-year consulting term that extends automatically for additional one-year periods, unless the Company or Mr. Alba elects not to extend the term. The Consulting Agreement contains an indefinite covenant not to disclose confidential information.

Director Compensation in 2019

On March 21, 2019, our Board approved the following compensation for our independent directors (other than those directors affiliated with Blackstone), effective May 16, 2019:

 

•

An annual cash retainer of $65,000, payable quarterly;

 

•

An additional annual cash retainer, payable quarterly, for serving as a chairperson of specified committees of the Board, as follows:

 

•

The chairperson of each of the Audit Committee and the Capital Committee shall receive an additional $25,000 annually;

 

•

The chairperson of each of the Compensation Committee and the Nominating and Corporate Governance Committee shall receive an additional $10,000 annually;

 

•

(a) For each eligible director other than an outside director who serves as chairperson of the Board, an annual equity award having a fair market value equal to $100,000 and (b) for an outside director who serves as chairperson of the Board, an annual equity award having a fair market value equal to $150,000, in each case payable in shares of restricted stock that vest on the earlier of the anniversary of the grant date and the annual meeting of stockholders occurring in the year following the year in which the grant date occurs;

 

•

an additional annual cash retainer of $25,000, payable quarterly, for any outside director who serves as chairperson of the Board; and

 

•

reimbursement for reasonable travel and related expenses associated with attendance at Board or committee meetings.

 

37

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of our Compensation Committee during 2018 included James Abrahamson, Alan J. Bowers, Giovanni Cutaia, Alice E. Gould and Mitesh B. Shah. None of the members of our Compensation Committee during 2018 has at any time been one of our executive officers or employees. None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.

 

38

OWNERSHIP OF SECURITIES

The following table sets forth information regarding the beneficial ownership of shares of our common stock as of March 25, 2019 by (1) each person known to us to beneficially own more than 5% of our outstanding common stock, (2) each of our directors and named executive officers and (3) all of our directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC.

 

Name		Amount and Nature of Beneficial Ownership				Percent of Common Stock Outstanding
Principal Stockholder:
Blackstone(1)			17,586,538				29.5	%
The Vanguard Group(2)			4,923,728				8.3	%
JPMorgan Chase(3)			3,370,210				5.7	%
FMR LLC(4)			8,887,452				14.9	%
Blackrock, Inc.(5)			3,132,905				5.3	%
Directors and Named Executive Officers:
Keith A. Cline(6)			541,931				*
John W. Cantele(7)			183,848				*
Mark M. Chloupek(8)			190,727				*
James R. Abrahamson			9,538				*
Glenn Alba			4,428				*
Jean M. Birch			3,630				*
Alan J. Bowers			14,665				*
Giovanni Cutaia(9)			—				—
Alice E. Gould			3,630				*
B. Anthony Isaac			3,841				*
Brian Kim(9)			—				—
David Loeb			3,841				*
Mitesh B. Shah			18,164				*
Directors and executive officers as a group (14 persons)(10)			1,053,074				1.8	%

 

*	Less than 1%

(1)

Beneficial ownership information is based on Company common stock ownership information contained in the Schedule 13D filed with the SEC on June 11, 2018 by Blackstone on behalf of itself and affiliated entities. Reflects shares of our common stock directly held by BRE/LQJV-NQ L.L.C., BRE/Prime Mezz 2 L.L.C., Blackstone Real Estate Partners IV L.P., Blackstone Real Estate Partners IV.F L.P., Blackstone Real Estate Partners IV.TE.2 L.P., Blackstone Real Estate Partners (DC) IV.TE.1 L.P., Blackstone Real Estate Partners (DC) IV.TE.2 L.P., Blackstone Real Estate Partners (DC) IV.TE.3-A L.P., Blackstone Real Estate Holdings IV L.P., Blackstone Real Estate Partners V L.P., Blackstone Real Estate Partners V.F L.P., Blackstone Real Estate Partners V.TE.1 L.P., Blackstone Real Estate Partners V.TE.2 L.P., Blackstone Real Estate Partners (AIV) V L.P., and Blackstone Real Estate Holdings V L.P. (together, the “Blackstone Funds”). Each of the Blackstone Funds may act as a selling stockholder. The managing members of BRE/ LQJV-NQ L.L.C. are Blackstone Real Estate Partners IV L.P. and Blackstone Real Estate Partners V L.P. The managing member of BRE/Prime Mezz 2 L.L.C. is BRE/Prime Mezz 3-A L.L.C. The managing member of BRE/Prime Mezz 3-A L.L.C. is BRE/Prime Holdings L.L.C. The managing member of BRE/ Prime Holdings L.L.C. is WIH Hotels L.L.C. The managing member of WIH Hotels L.L.C. is Blackstone Real Estate Partners IV L.P.

 

The general partner of each of Blackstone Real Estate Partners IV L.P., Blackstone Real Estate Partners IV.F L.P., Blackstone Real Estate Partners IV.TE.2 L.P., Blackstone Real Estate Partners (DC) IV.TE.1 L.P., Blackstone Real Estate Partners (DC) IV.TE.2 L.P. and Blackstone Real Estate Partners (DC) IV.TE.3-A L.P. is Blackstone Real Estate Associates IV L.P. The general partner of Blackstone Real

 

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Estate Associates IV L.P. is BREA IV L.L.C. The general partner of each of Blackstone Real Estate Partners V L.P., Blackstone Real Estate Partners V.F L.P., Blackstone Real Estate Partners V.TE.1 L.P., Blackstone Real Estate Partners V.TE.2 L.P., and Blackstone Real Estate Partners (AIV) V L.P. is Blackstone Real Estate Associates V L.P. The general partner of Blackstone Real Estate Associates V L.P. is BREA V L.L.C.

 

The general partner of Blackstone Real Estate Holdings V L.P. is BREP V Side-by-Side GP L.L.C. The general partner of Blackstone Real Estate Holdings IV L.P. is BREP IV Side-by-Side GP L.L.C.

 

The sole member of each of BREP IV Side-by-Side GP L.L.C. and BREP V Side-by-Side GP L.L.C. and managing member of each of BREA IV L.L.C. and BREA V L.L.C. is Blackstone Holdings II L.P. The general partner of Blackstone Holdings II L.P. is Blackstone Holdings I/II GP Inc. The sole stockholder of Blackstone Holdings I/II GP Inc. is The Blackstone Group L.P. The general partner of The Blackstone Group L.P. is Blackstone Group Management L.L.C. Blackstone Group Management L.L.C. is wholly-owned by Blackstone’s senior managing directors and controlled by its founder, Stephen A. Schwarzman. Each of the Blackstone entities described in this footnote and Mr. Schwarzman may be deemed to beneficially own the shares directly or indirectly controlled by it or him, but each (other than the Blackstone Funds to the extent of their direct holdings) disclaims beneficial ownership of such shares.

 

The address of each of Mr. Schwarzman and each of the other entities listed in this footnote is c/o The Blackstone Group L.P., 345 Park Avenue, New York, New York 10154.

(2)

Beneficial ownership information is based on information contained in the Amendment No. 1 Schedule 13G filed on February 11, 2019 on behalf of The Vanguard Group and its wholly-owned subsidiaries, Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd. According to the schedule, included in the shares of our common stock listed above as beneficially owned by The Vanguard Group are 39,248 shares over which The Vanguard Group has sole voting power, 5,992 shares over which The Vanguard Group has shared voting power, 4,882,145 shares over which The Vanguard Group has sole dispositive power and 41,583 shares over which The Vanguard Group has shared dispositive power.

 

The address of the principal business office of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.

 

(3)

Beneficial ownership information is based on information contained in the Schedule 13G filed on January 9, 2019 on behalf of JPMorgan Chase & Co. and its wholly-owned subsidiaries, JPMorgan Chase Bank, National Association and J.P. Morgan Investment Management Inc. According to the schedule, included in the shares of our common stock listed above as beneficially owned by JPMorgan Chase & Co. are 3,229,531 shares over which JPMorgan Chase & Co. has sole voting power and 3,370,210 shares over which JPMorgan Chase & Co. has sole dispositive power.

 

The address of the principal business office of JPMorgan Chase & Co. is 270 Park Avenue, New York, New York 10017.

(4)

Beneficial ownership information is based on information contained in the Amendment No. 1 to Schedule 13G filed on February 13, 2019 on behalf of FMR LLC, Abigail P. Johnson, FIAM LLC and FMR Co. According to the schedule, included in the shares of our common stock listed above as beneficially owned by FMR LLC are 1,009,678 shares over which FMR LLC has sole voting power and 8,887,452 shares over with FMR LLC has sole dispositive power. According to the schedule, also included in the shares of our common stock listed above as beneficially owned by FMR LLC are shares of our common stock on behalf of other persons known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities.

 

The address of the principal business office of FMR LLS and Abigail P. Johnson is 245 Summer Street, Boston, Massachusetts 02210.

(5)	Beneficial ownership information is based on information contained in the Schedule 13G filed on February 8, 2019 on behalf of BlackRock, Inc., BlackRock Advisors, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock (Luxembourg)

 

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S.A., BlackRock Investment Management (Australia) Limited, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Asset Management Ireland Limited, BlackRock Institutional Trust Company, National Association, BlackRock Financial Management, Inc., BlackRock Asset Management Schweiz AG and BlackRock Investment Management, LLC. According to the schedule, included in the shares of our common stock listed above as beneficially owned by BlackRock, Inc. are 3,017,158 shares over which BlackRock, Inc. has sole voting power and 3,132,905 shares over which BlackRock, Inc. has sole dispositive power. According to the schedule, various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of such securities.

 

The address of the principal business office of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.

(6)	Includes 293,179 shares of unvested restricted stock.

(7)	Includes 129,674 shares of unvested restricted stock.

(8)	Includes 100,157 shares of unvested restricted stock.

(9)	Messrs. Cutaia and Kim are each employees of Blackstone, but each disclaims beneficial ownership of the shares beneficially owned by Blackstone.

(10)	Includes 612,602 shares of unvested restricted stock.

 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires executive officers and directors, a company’s chief accounting officer and persons who beneficially own more than 10% of a company’s common stock, to file initial reports of ownership and reports of changes in ownership with the SEC and the NYSE. Executive officers, directors, the chief accounting officer and beneficial owners with more than 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

Based solely on our review of copies of such reports and written representations from our executive officers, directors and Blackstone, we believe that our executive officers, directors and Blackstone complied with all Section 16(a) filing requirements during 2018, except that one Form 4 for John W. Cantele which had initially been timely filed on January 3, 2019, was amended and restated on January 17, 2019 to provide information inadvertently omitted from the original Form 4 due to an administrative error.

TRANSACTIONS WITH RELATED PERSONS

Our Board of Directors has adopted a written statement of policy regarding transactions with related persons, which we refer to as our “related person policy.” Our related person policy requires that information about any “related person transaction” (defined as any transaction that is anticipated would be reportable by us under Item 404(a) of Regulation S-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any “related person” (as defined in Item 404(a) of Regulation S-K) had or will have a direct or indirect material interest) proposed to be entered into by the Company must be reported to the Company’s General Counsel. The General Counsel will then promptly communicate that information to our Board of Directors or a duly authorized committee of our Board of Directors. Each related person transaction shall either be approved in advance, or ratified after consummation of the transaction, by our Board of Directors or a committee of our Board of Directors composed solely of independent directors who are disinterested. Our Board of Directors has designated the Audit Committee to serve as such committee. It is our policy that directors interested in a related person transaction will recuse themselves from any vote on a related person transaction in which they have an interest.

Our policy also contains a standing approval for transactions with and payments to or from La Quinta Parent (as defined below) pursuant to agreements that are in effect at the time of the spin-off and certain transactions with or related to Blackstone, including, without limitation: (1) transactions in which Blackstone may have a direct or indirect material interest entered into or in effect at the effective time of the spin-off; and (2) the purchase or sale of products or services involving a Blackstone portfolio company, provided that (a) the appropriate officers of the Company reasonably believe the transaction to be on market terms and the subject products or services are of a type generally made available to other customers of the subject Blackstone portfolio company or (b) the aggregate value involved in such purchase or sale is expected to be less than $10 million over five years.

Agreements with LQH Parent Related to the Spin-Off

Unless otherwise indicated or the context otherwise requires, references in this section to “LQH” refers to La Quinta Holdings Inc. and its consolidated subsidiaries and references to “LQH Parent” refer only to La Quinta Holdings Inc., exclusive of its subsidiaries, in each case before giving effect to our spin-off from LQH Parent, and references to “La Quinta” refers to La Quinta Holdings Inc. and its consolidated subsidiaries and references to “La Quinta Parent” refer only to La Quinta Holdings Inc., exclusive of its subsidiaries, in each case after giving effect to our spin-off from LQH Parent. This section of the proxy summarizes material agreements between us and LQH Parent that govern the ongoing relationship between us and La Quinta after our spin-off from LQH Parent and the merger of LQH Parent with a wholly-owned subsidiary of Wyndham Worldwide Corporation. These summaries are qualified in their entirety by reference to the full text of the applicable

 

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agreements, which have been filed as exhibits to our Annual Report on Form 10-K for the year ended December 31, 2018.

Following the spin-off and the merger, we and La Quinta operate independently. To govern certain ongoing relationships between us and La Quinta, we and LQH Parent have entered into agreements pursuant to which certain services and rights are provided, and we and La Quinta Parent indemnify each other against certain liabilities arising from our respective businesses. The following is a summary of the terms of the material agreements we have entered into with LQH Parent.

Separation and Distribution Agreement

On January 17, 2018, we and LQH Parent entered into a Separation and Distribution Agreement (the “Separation and Distribution Agreement”). The Separation and Distribution Agreement sets forth our agreements with LQH Parent regarding the principal actions to be taken in connection with the separation of our business from LQH’s management and franchise business, and our spin-off from LQH. It also sets forth other agreements that govern certain aspects of our relationship with La Quinta following the spin-off. In connection with the separation, the Separation and Distribution Agreement provides, among other things, for the transfer by LQH Parent to us of certain assets, and the assumption by us of certain liabilities, related to the Separated Real Estate Business (as defined therein).

Transfer of Assets and Assumption of Liabilities. The Separation and Distribution Agreement provides for those transfers of assets and assumptions of liabilities that are necessary in connection with our spin-off from LQH Parent so that each of La Quinta and the Company is allocated the assets necessary to operate its respective business and retains or assumes the liabilities allocated to it in accordance with the separation plan. The Separation and Distribution Agreement provides for the settlement or extinguishment of certain liabilities and other obligations between La Quinta and the Company. Except as otherwise provided in the Separation and Distribution Agreement or any ancillary agreement, we are responsible for any costs or expenses incurred by us following the distribution in connection with the transactions contemplated by the Separation and Distribution Agreement, including costs and expenses relating to legal counsel, financial advisors and accounting advisory work related to the distribution.

Further Assurances. To the extent that any transfers of assets or assumptions of liabilities contemplated by the Separation and Distribution Agreement were not consummated on or prior to the date of the distribution, the parties have agreed to cooperate to effect such transfers or assumptions as promptly as practicable following the date of the distribution. In the event that any such transfer of assets or assumption of liabilities was not consummated by the date of the distribution, from and after the date of the distribution, (i) the party retaining such assets must thereafter hold such assets in trust for the use and benefit of the party entitled thereto (at the expense of the party entitled thereto) and (ii) the party intended to assume such liabilities must pay or reimburse the party bearing such assumed liabilities for all amounts paid or incurred in connection with such assumed liabilities.

Representations and Warranties. In general, neither we nor LQH Parent have made any representations or warranties regarding any assets or liabilities transferred or assumed, any consents or approvals that may be required in connection with such transfers or assumptions, the value or freedom from any lien or other security interest of any assets transferred, the absence of any defenses relating to any claim of either party or the legal sufficiency of any conveyance documents, or any other matters. Except as expressly set forth in the Separation and Distribution Agreement or in any ancillary agreement, all assets will be transferred on an “as is,” “where is” basis.

Release of Claims and Indemnification. We and LQH Parent have agreed to broad releases pursuant to which we will each release each other and certain related persons specified in the Separation and Distribution Agreement from any liabilities existing or arising from any acts or events occurring or failing to occur or alleged

 

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to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the effective time of the distribution, including in connection with our plan of internal reorganization and all other activities to implement our plan of internal reorganization and the distribution. Further, we and LQH Parent have agreed that we will not, and will cause our respective subsidiaries not to, bring any action or claim against each other or each other’s subsidiaries in respect of any such liabilities. These releases are subject to certain exceptions set forth in the Separation and Distribution Agreement and the ancillary agreements.

The amount of indemnifiable losses subject to each party’s indemnification obligations are calculated (i) net of any insurance proceeds that actually reduce the amount of the indemnifiable loss (and net of the reasonable out-of-pocket costs in recovering such insurance proceeds), (ii) net of any proceeds received from a third party for indemnification for such liability that actually reduce the amount of the indemnifiable loss and (iii) net of any tax benefits actually realized in accordance with, and subject to, the principles set forth or referred to in the Tax Matters Agreement, and increased in accordance with, and subject to, the principles set forth in the Tax Matters Agreement. The Separation and Distribution Agreement also specifies procedures with respect to claims subject to indemnification and related matters. Indemnification with respect to taxes will be governed solely by the Tax Matters Agreement.

The Separation and Distribution Agreement provides for cross-indemnities that, except as otherwise provided in the Separation and Distribution Agreement, are principally designed to place financial responsibility for the obligations and liabilities of our business with us and the financial responsibility for the obligations and liabilities of La Quinta’s business with La Quinta. Specifically, except as otherwise specifically set forth in any provision of the Separation and Distribution Agreement, the Agreement and Plan of Merger, dated as of January 17, 2018 (the “Merger Agreement”) relating to the merger of LQH Parent with a wholly-owned subsidiary of Wyndham Worldwide Corporation or of any specified ancillary agreement, following the effective time of the distribution:

 

•

La Quinta Parent will and will cause its subsidiaries to indemnify, defend and hold harmless the Company, its subsidiaries and each of their respective affiliates (and the respective directors, officers, employees and agents and each of the heirs, executors, successors and assigns of any of the foregoing) from all indemnifiable losses of such indemnitees, arising out of, by reason of or otherwise in connection with (a) the La Quinta Parent retained liabilities or (b) any breach by La Quinta Parent of any provision of the Separation and Distribution Agreement or any ancillary agreement unless such ancillary agreement expressly provides for separate indemnification therein, in which case any such indemnification claims will be made thereunder; and

 

•

CorePoint Parent will and will cause its subsidiaries to indemnify, defend and hold harmless La Quinta Parent, its subsidiaries and each of their respective affiliates (and the respective directors, officers, employees and agents and each of the heirs, executors, successors and assigns of any of the foregoing) from all indemnifiable losses of such indemnitees, arising out of, by reason of or otherwise in connection with (a) the separated real estate liabilities or (b) any breach by CorePoint Parent of any provision of the Separation and Distribution Agreement or any ancillary agreement unless such ancillary agreement expressly provides for separate indemnification therein, in which case any such indemnification claims will be made thereunder.

Insurance. Following the spin-off, we generally are responsible for obtaining and maintaining our own insurance coverage.

Non-competition. For three years following the spin-off, we may not engage in (i) the management or franchising of hotels anywhere in the world, or (ii) any other lines of business or services forming part of the La Quinta Parent business as of the effective time of the distribution; provided, that, nothing will prohibit us from conducting the Separated Real Estate Business as contemplated by the Separation and Distribution Agreement, and nothing will prevent us and our affiliates from collectively being a passive owner of not more than 1% of the outstanding stock of any class of a corporation which is engaged in such business and which is publicly traded, so long as neither we nor our affiliates participates in the business of such corporation.

 

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Dispute Resolution. In the event of any dispute arising out of the Separation and Distribution Agreement, the general counsels of the disputing parties, and/or such other representatives as such parties designate, will negotiate to resolve any disputes among such parties. If the disputing parties are unable to resolve the dispute in this manner within a specified period of time, as set for in the Separation and Distribution Agreement, then unless agreed otherwise by such parties, the disputing parties will submit the dispute to mediation for an additional specified period of time, as set forth in the Separation and Distribution Agreement. If the disputing parties are unable to resolve the dispute in this manner, the dispute will be resolved through litigation in the Court of Chancery in the State of Delaware or if such court does not have subject matter jurisdiction, any other state or federal court located within the County of New Castle in the State of Delaware, or mutually-agreed arbitration.

Other Matters Governed by the Separation and Distribution Agreement. Other matters governed by the Separation and Distribution Agreement include access to financial and other information, intellectual property, confidentiality, access to and provision of records and treatment of outstanding guarantees and similar credit support.

Employee Matters Agreement

On January 17, 2018, we and LQH Parent entered into an Employee Matters Agreement that generally allocates liabilities and responsibilities relating to employee compensation and benefit plans and programs between LQH Parent and us (the “Employee Matters Agreement”). The Employee Matters Agreement, in conjunction with the Merger Agreement, provides for the treatment of LQH Parent’s outstanding equity-based compensation awards in connection with the spin-off. In addition, the Employee Matters Agreement sets forth the general principles relating to various employee matters, including with respect to the assignment of employees and the transfer of employees from LQH Parent to us, the assumption and retention of liabilities and related assets, workers’ compensation, and related matters. Generally, other than with respect to certain specified compensation and benefit plans and liabilities, (i) La Quinta Parent retains sponsorship of, and the liabilities relating to, LQH Parent compensation and benefit plans and is solely responsible for employee-related liabilities relating to current and former employees of LQH Parent, whether arising prior to or after the spin-off, and employee-related liabilities of our employees who were employees of LQH Parent prior to the spin-off, to the extent arising on or prior to the spin-off, and (ii) we assumed sponsorship of, and the liabilities relating to, compensation and benefit plans and agreements with respect to our employees and are solely responsible for employee-related liabilities relating to our employees, to the extent arising following the spin-off.

Tax Matters Agreement

On May 30, 2018, we entered into a Tax Matters Agreement with LQH Parent that governs the respective rights, responsibilities and obligations of La Quinta and us after the spin-off with respect to tax liabilities and benefits, tax attributes, tax returns, tax contests, and tax sharing regarding U.S. federal, state, local and foreign taxes (the “Tax Matters Agreement”). The Tax Matters Agreement also provides special rules for allocating tax liabilities resulting from the spin-off and related transactions.

Under the Tax Matters Agreement, La Quinta Parent generally provides an indemnity to us for pre-distribution taxes, provided, however, that we will be responsible for 50% of any taxes and losses attributable to any failure to comply with taxes imposed by the Affordable Care Act under Section 4980H of the Code by LQH Parent and/or its subsidiaries for the taxable years ending December 31, 2015 and December 31, 2016. We will also be responsible for any taxes and losses resulting from certain audits identified in the Tax Matters Agreement, including those described in “Part I. Item 1A—Risk Factors—Risks Related to Our Business and Industry—We are currently under audit by the Internal Revenue Service and may be required to pay additional taxes” in our Annual Report on Form 10-K for the year ended December 31, 2018.

The Tax Matters Agreement also provides that to the extent the income taxes (as computed on an estimated basis) due with respect to the spin-off and related transactions are (i) less than $240.0 million (the “Reserve

 

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Amount”), La Quinta Parent will pay to us an amount equal to the difference between the Reserve Amount and such estimated taxes, or (ii) greater than the Reserve Amount, we will pay to La Quinta Parent an amount equal to the difference between such estimated taxes and the Reserve Amount.

Transition Services Agreement

On May 30, 2018, we entered into a Transition Services Agreement with LQH Parent under which La Quinta Parent or one of its affiliates will provide us, and we or one of our affiliates will provide La Quinta, with certain services for a limited time to help ensure an orderly transition following the spin-off (the “Transition Services Agreement”). The services that La Quinta Parent and we agreed to provide to each other under the Transition Services Agreement include certain finance, information technology, human resources and compensation, facilities, financial reporting and accounting and other services. We will pay La Quinta Parent, and La Quinta Parent will pay us, for any such services received by us or La Quinta, as applicable, at agreed amounts as set forth in the Transition Services Agreement. In addition, from time to time during the term of the agreement, we and La Quinta Parent may mutually agree on additional services to be provided by La Quinta to us at pricing based on market rates that are reasonably agreed by the parties.

Management and Franchise Agreements with LQH

To qualify as a REIT, we do not directly or indirectly operate any of our hotels. We lease each of our hotels to our taxable REIT subsidiary lessees, which, in turn, engage La Quinta or another third-party manager to manage these hotels pursuant to management agreements.

The terms of the management and franchise agreements that we and La Quinta or another third-party manager have entered into in connection with the spin-off are described under “Part I. Item 1—Business—Our Principal Operating Agreements” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Preferred Stock

In connection with LQH’s internal reorganization prior to the spin-off, we issued 15,000 shares of Cumulative Redeemable Series A Preferred Stock, par value $0.01 per share (the “Series A preferred stock”), to La Quinta Intermediate Holdings, L.L.C., a wholly-owned subsidiary of LQH Parent. Such securities were issued in reliance on the exemption contained in Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving a public offering. La Quinta Intermediate Holdings, L.L.C. privately sold all of the Series A preferred stock to an unrelated third-party investor immediately prior to the completion of the spin-off.

The Series A preferred stock has an aggregate liquidation preference of $15 million, plus any accrued and unpaid dividends thereon. We pay a cash dividend on the Series A preferred stock equal to 13% per annum, payable quarterly. If either our leverage ratio exceeds 7.5 to 1.0 as of the last day of any fiscal quarter, or if an event of default occurs (or has occurred and has not been cured) with respect to the Series A preferred stock, we will be required to pay a cash dividend on the Series A preferred stock equal to 15% per annum. Our dividend rate on the Series A preferred stock will increase to 16.5% per annum if, at any time, we are both in breach of the leverage ratio covenant and an event of default occurs (or has occurred and has not been cured) with respect to the Series A preferred stock. The Series A preferred stock are senior to our common stock with respect to dividends and with respect to dissolution, liquidation or winding up of the Company.

Holders of Series A preferred stock generally have no voting rights. However, without the prior consent of the holders of a majority of the outstanding shares of Series A preferred stock, we are prohibited from (i) issuing any capital stock ranking senior to the Series A preferred stock, (ii) authorizing or issuing any additional shares of Series A preferred stock, (iii) amending our charter in any manner that would adversely affect the Series A preferred stock, or (iv) entering into, amending or altering any provision of any agreement in a manner that could reasonably be expected to be material and adverse to the Series A preferred stock. The holders of the Series A

 

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preferred stock also have exclusive voting rights on any amendment to our charter that would alter the contract rights of only the Series A preferred stock. If we are either (a) in arrears on the payment of dividends that were due on the Series A preferred stock on six or more quarterly dividend payment dates, whether or not such dates are consecutive, or (b) in default of our obligations to redeem the preferred stock on the tenth anniversary of its issuance or following a change of control, the preferred shareholders may designate a representative to attend meetings of our Board of Directors as a non-voting observer until all unpaid preferred stock dividends have either been paid or declared with an amount sufficient for payment set aside for payment, or the shares required to be redeemed have been redeemed, as applicable.

The Series A preferred stock is mandatorily redeemable by us upon the tenth anniversary of the date of issuance. Beginning on the seventh anniversary of the issuance of the Series A preferred stock, we may redeem the outstanding Series A preferred stock for an amount equal to its aggregate liquidation preference, plus any accrued but unpaid dividends. The holders of the Series A preferred stock may also require us to redeem the Series A preferred stock upon a change of control of the Company for an amount equal to its aggregate liquidation preference plus any accrued and unpaid dividends thereon (and a premium if the change of control occurs prior to the seventh anniversary of the issuance of the Series A preferred stock). Holders of Series A preferred stock have certain preemptive rights over issuances by us of any class or series of our stock ranking on parity with the Series A preferred stock.

Shares of the Series A preferred stock may not be transferred until the date that is six months after the date of issuance of the Series A preferred stock and then only in tranches having an aggregate liquidation value of at least $2.5 million.

Due to the fact that the preferred stock is mandatorily redeemable by us, it is classified as a liability on the audited consolidated balance sheet as of December 31, 2018 included in our Annual Report on Form 10-K for the year ended December 31, 2018. Dividends on these preferred shares are classified as interest expense in the audited consolidated statements of operations included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Stockholders Agreement

In connection with its initial public offering, LQH Parent entered into a stockholders agreement with Blackstone, which stockholders agreement was terminated effective as of the consummation of the merger. In connection with the spin-off, on May 30, 2018, we entered into a stockholders agreement (the “Stockholders Agreement”) with Blackstone that is substantially similar to Blackstone’s previous stockholders agreement with LQH Parent. Blackstone beneficially owns approximately 30% of our common stock. Our Board of Directors has granted an exception to Blackstone from the 9.8% ownership limit under our charter.

Under the Stockholders Agreement, we are required to nominate a number of individuals designated by Blackstone for election as our directors at any meeting of our stockholders, each a “Blackstone Director,” such that, upon the election of each such individual, and each other individual nominated by or at the direction of our Board of Directors or a duly-authorized committee of the board, as a director of our Company, the number of Blackstone Directors serving as directors of the Company will be equal to: (1) if Blackstone continues to beneficially own at least 30% of our common stock, the lowest whole number that is greater than 30% of the total number of directors comprising our Board of Directors; (2) if Blackstone continues to beneficially own at least 20% (but less than 30%) of our common stock, the lowest whole number that is greater than 20% of the total number of directors comprising our Board of Directors; and (3) if Blackstone continues to beneficially own at least 5% (but less than 20%) of our common stock, the lowest whole number that is greater than 10% of the total number of directors comprising our Board of Directors. For so long as the Stockholders Agreement remains in effect, Blackstone Directors may be removed only with the consent of Blackstone. In the case of a vacancy on our Board created by the death, disability, retirement or resignation of a Blackstone Director, the Stockholders Agreement require us to nominate an individual designated by Blackstone for election to fill the vacancy.

 

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The Stockholders Agreement will remain in effect until Blackstone is no longer entitled to nominate a Blackstone Director pursuant to the Stockholders Agreement, unless Blackstone requests that it terminate at an earlier date.

Registration Rights Agreement

In addition, in connection with its initial public offering, LQH Parent entered into a registration rights agreement with certain affiliates of Blackstone, which registration rights agreement was terminated effective as of the consummation of the merger. In connection with the spin-off, on May 30, 2018, we entered into a registration rights agreement (the “Registration Rights Agreement”) with Blackstone that is substantially similar to Blackstone’s previous registration rights agreement with LQH Parent. Under the Registration Rights Agreement, Blackstone has an unlimited number of “demand” registrations and customary “piggyback” registration rights. The Registration Rights Agreement also provides that we will pay certain expenses relating to such registrations and indemnify the registration rights holders against certain liabilities which may arise under the Securities Act.

CMBS Facility

In connection with the spin-off, we entered into a Loan Agreement (the “CMBS Loan Agreement”) with JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank”), as lender, pursuant to which certain of our wholly-owned subsidiaries borrowed an aggregate principal amount of $1.035 billion under a secured mortgage loan secured primarily by mortgages for 307 owned and ground leased hotels, an excess cash flow pledge for seven owned and ground leased hotels and other collateral customary for mortgage loans of this type (the “CMBS Facility”). Certain affiliates of Blackstone participate in such CMBS Facility on a non-controlling basis with respect to a portion thereof and, in exchange for such participation, received from the lender under the CMBS Loan Agreement a portion of the fees payable by us to such lender pursuant to the debt commitment letter we had entered into with such lender. Such affiliates also receive interest payments with respect to such participation.

Indemnification Agreements

We entered into indemnification agreements with our directors and executive officers that were effective upon completion of the spin-off. These agreements require us to indemnify these individuals to the fullest extent permitted by Maryland law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors or executive officers, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable.

There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING

If any stockholder wishes to propose a matter for consideration at our 2020 Annual Meeting of Stockholders (the “2020 Annual Meeting”), the proposal should be mailed by certified mail return receipt requested, to our Secretary, CorePoint Lodging Inc., at 909 Hidden Ridge, Suite 600, Irving, Texas 75038 through and including May 31, 2019 and at 125 East John Carpenter Freeway, 16th Floor, Irving, Texas 75062 after May 31, 2019. 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 2020 Annual Meeting, a proposal must be received by our Secretary on or before December 14, 2019. Failure to deliver a proposal in accordance with this procedure may result in it not being deemed timely received.

 

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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 2020 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 2020 Annual Meeting, such a proposal must be received on or after November 14, 2019, but not later than December 14, 2019. In the event that the date of the 2020 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 2020 Annual Meeting and not later than the close of business on the later of the 120th day prior to the 2020 Annual Meeting or the tenth day following the day on which public announcement of the date of the 2020 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., 909 Hidden Ridge, Suite 600, Irving, Texas 75038 or by phone at (972) 893-3199.

 

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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.

 

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, 2018, 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.

909 Hidden Ridge, Suite 600

Irving, Texas 75038

 

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COREPOINT LODGING INC. 909 HIDDEN RIDGE, SUITE 600 IRVING, TX 75038		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.   Vote by phone - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. 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.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

E66826-P21537		KEEP THIS PORTION FOR YOUR RECORDS

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DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

COREPOINT LODGING INC.

For All

Withhold All

For All Except

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Directors recommends you vote FOR all of the Director Nominees in Proposal 1, and FOR Proposal 2.

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☐

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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 2019.

☐

☐

☐

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 16, 2019:

The Notice of Annual Meeting, Proxy Statement and Annual Report are available at www.proxyvote.com.

 

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E66827-P21537

 

COREPOINT LODGING INC. Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting of Stockholders May 16, 2019 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 March 25, 2019, 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)