Exhibit 10.9
Supplemental Retirement Income Agreement
----------------------------------------
This Supplemental Retirement Income Agreement ("Agreement") by and between
Red Lion, a California Limited Partnership (the "Company"), and Xxxxx X. Xxxxxxx
("Executive") is entered into by the Company and Executive effective as of the
consummation of the offering to the public of the Common Stock (the "Offering")
of Red Lion Hotels, Inc..
The Company is owned by RLA-GP, Inc., a Delaware corporation, RLAC Corp.,
a Delaware corporation, KKR Associates, a Delaware limited partnership ("KKR
Delaware"), and Xxx X. XxXxxxxxx.
Executive is the Company's chief executive officer and has been employed by
the Company since September, 1991.
The Company is entering into this Agreement in order to provide Executive
with supplemental retirement income in consideration of the valuable service he
has provided to the Company.
It is hereby agreed that:
1. Certain Definitions.
-------------------
The following terms shall have the following meanings for all purposes of
this Agreement:
(a) "Accelerated Payment Date" -- the first to occur of (i) the Asset
Disposition Date, (ii) the fifth anniversary of the date of this Agreement or
(iii) 30 days after the date of Executive's death.
(b) "Asset Disposition Date" -- the first date upon which the Company shall
have sold, distributed or otherwise disposed of its interest in all or
substantially all of its assets, other than in connection with the contribution
of substantially all of its assets and business to Red Lion Hotels, Inc. and not
taking into account the Company's interest in any stock or other debt or equity
security of Red Lion Hotels, Inc.
(c) "Executive's Beneficiary" -- the person or persons identified by
Executive in the last written instrument making such an identification that
Executive may have delivered to the Company or, in the absence of any such
written instrument, Executive's estate.
(d) "Lump Sum Value of the Benefit" -- the present value of the
Supplemental Retirement Benefit determined as of the date upon which Executive
would attain fifty-five years of age, assuming 6% interest, compounded annually.
(e) "Red Lion Hotels, Inc." -- Red Lion Hotels, Inc., a Delaware
Corporation.
(f) "Supplemental Retirement Benefit" -- an annual retirement benefit of
$166,091 payable to Executive and Executive's Beneficiary as provided in this
Agreement for twenty-two (22) years, without additional interest.
2. Supplemental Retirement Benefit.
-------------------------------
The Company hereby agrees to pay Executive the Supplemental Retirement
Benefit, commencing on the date upon which Executive would attain fifty-five
(55) years of age. In the event of Executive's death before he has received full
payment of the Supplemental Retirement Benefit, the remaining payments with
respect to the Supplemental Retirement Benefit shall be made to Executive's
Beneficiary.
3. Accrual and Vesting of Supplemental Retirement Benefit.
------------------------------------------------------
Executive's interest in the Supplemental Retirement Benefit is fully
accrued and vested as of the date of this Agreement and shall not be subject to
forfeiture in any event.
4. Normal Form of Supplemental Retirement Benefit.
----------------------------------------------
Unless Executive elects otherwise pursuant to Section 5 of this
Agreement, the Supplemental Retirement Benefit shall be paid to Executive or
Executive's Beneficiary in twenty-two equal annual installments, commencing on
the date upon which Executive would attain fifty-five (55) years of age.
5. Executive's Elections.
---------------------
(a) Within ninety (90) days after the date of this Agreement,
Executive may elect, in writing, to be paid the Lump Sum Value of the Benefit,
in a lump sum payment and without actuarial reduction, upon the Accelerated
Payment Date.
(b) At any time after the date of this Agreement, in addition to the
election which Executive may make under Section 5(a) of this Agreement,
Executive may elect one time, in writing, to either revoke any election he has
made under Section 5(a) or to elect to be paid the Lump Sum Value of the Benefit
in a lump sum or in monthly, quarterly or annual installments over such period
of years as Executive may elect, commencing on any date after the Accelerated
Payment Date; provided, however, that any such election shall be made at least
90 days before the date upon which the payment of the Lump Sum Value of the
Benefit or the Supplemental Retirement Benefit, as the case may be, would
otherwise commence. If Executive elects to defer the commencement of the
receipt of the Lump Sum Value of the Benefit or the Supplemental Retirement
Benefit, as the case may be, to a date after the Accelerated Payment Date, the
Company shall credit interest on the unpaid amount of the Lump Sum Value of the
Benefit at the rate which Credit Lyonnais, New York Branch, establishes from
time to time as its reference rate for short term commercial loans in U.S.
dollars, as such rate may change from time to time, plus 1%, compounded
annually, from and after the Accelerated Payment Date.
2
6. Assumption by Red Lion, Inc.
----------------------------
The Company and Executive contemplate that the Company will assign this
Agreement to Red Lion, Inc. in connection with the formation of that corporation
and that Red Lion, Inc. will assume all of the Company's obligations under this
Agreement as of the date of such assignment. The Company and Executive agree
that upon any such assignment and assumption of this Agreement, the Company
shall have no further responsibilities or obligations under this Agreement.
7. General Provisions.
------------------
(a) The Company's obligations under this Agreement shall be unfunded
and unsecured, and nothing contained herein shall be construed to provide for
assets to be held in trust or escrow or any other form of segregation of the
Company's assets for the benefit of Executive, Executive's Beneficiary, or any
other person. To the extent that Executive (or Executive's Beneficiary) or any
other person have or acquires a right to receive benefits under this Agreement,
such rights shall be no greater than the right of an unsecured general creditor
of the Company.
(b) To the maximum extent permitted by law, no benefit or right to a
benefit of Executive or Executive's Beneficiary shall be subject to the debts,
contracts or engagements of Executive or Executive's Beneficiary, or shall be
taken in execution by levy, attachment or garnishment, nor shall Executive or
Executive's Beneficiary have any right to alienate, anticipate, commute, pledge,
encumber or assign any benefit or right to benefit hereunder.
(c) The Company shall have the right from time to time and at any
time to assign any of its rights or obligations hereunder to any person under
reasonable terms and circumstances, which will not prejudice Executive's rights
or reasonable expectations hereunder.
(d) This Agreement shall be binding upon and inure to the benefit of
the permitted successors and assigns of the parties hereto.
(e) Notwithstanding any contrary provision contained in this
Agreement, any payments to which Executive or Executive's Beneficiary may become
entitled hereunder shall be subject to the then applicable federal, state and
local income tax withholding obligations of the Company or any successor in
interest.
(f) No general partner (including the Managing General Partner of the
Company and any successor general partner) and no limited partner of the Company
shall have any personal liability for the performance of any of the Company's
obligations hereunder or with respect to any act or omission to act of the
Managing General Partner in connection with this Agreement. Any liability or
obligation of the Company arising hereunder shall be limited to and satisfied
only out of the assets of the Company.
3
(g) The terms of this Agreement may be amended, modified,
supplemented, or otherwise altered only by an agreement, in writing, executed by
the Company and Executive.
(h) This Agreement shall be governed by the laws of the State of
California.
IN WITNESS WHEREOF, the parties have executed this Agreement on July 26,
1995.
RED LION, A CALIFORNIA LIMITED PARTNERSHIP
By: RLA-GP, INC., a Delaware corporation
Its: General Partner
/s/ Xxxx X. Xxxxxxx
-------------------
Xxxx X. Xxxxxxx
Vice President
/s/ Xxxxx X. Xxxxxxx
---------------------
Xxxxx X. Xxxxxxx
4
