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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 23, 2009 (December 22, 2009)
PEBBLEBROOK HOTEL TRUST
(Exact name of Registrant as specified in its charter)
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Maryland
(State or Other Jurisdiction
of Incorporation or Organization)
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001-34571
(Commission File Number)
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27-1055421
(I.R.S. Employer Identification No.) |
10319 Westlake Drive, Suite 112
Bethesda, MD 20817
(Address of principal executive offices) (Zip code)
(301) 765-6045
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02 |
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Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers. |
On December 22, 2009,
Pebblebrook Hotel Trust (the Company) announced that it has appointed
Thomas C. Fisher as its new Executive Vice President and Chief Investment Officer. Mr. Fisher is
expected to join the Company on January 11, 2010 and will lead the Companys property acquisition
and investment activities. Mr. Fisher was previously Managing Director Americas for Jones Lang
LaSalle Hotels. Mr. Fisher joined Jones Lang LaSalle in 1996 and served in a variety of roles,
most recently as its Managing Director-Americas. Prior to joining Jones Lang LaSalle Hotels, Mr.
Fisher worked with The Harlan Company, an investment banking boutique in New York City, and the
Prudential Realty Group. Mr. Fisher holds a BS with Distinction from The School of Hotel
Administration at Cornell University.
Mr. Fishers initial annual base salary will be $250,000, subject to annual escalation at the
discretion of the Compensation Committee of the Companys board of trustees. Mr. Fisher will have
a target bonus for 2010 of $200,000 which will be guaranteed, but which could increase based on
bonus criteria to be determined by the Compensation Committee. Mr. Fishers target bonus will be
subject to escalation at the discretion of the Compensation Committee.
Effective on the
starting date of his employment with the Company, Mr. Fisher will receive an
award of $1,000,000 of long term incentive plan units (LTIP units) in the Companys operating
partnership. The LTIP units will vest ratably on each of the first five anniversaries of the date
of grant, provided that Mr. Fisher remains employed by the Company on each vesting date. The LTIP
units, whether vested or unvested, will receive the same per-unit distributions as common units of
the Companys operating partnership, which distributions generally will equal per-share
distributions on the Companys common shares.
LTIP units are a
special class of partnership interests in the Companys operating
partnership. Each LTIP unit awarded is deemed equivalent to an award of one common share under the
Companys 2009 Equity Incentive Plan, reducing availability for other equity awards on a
one-for-one basis. The Company will not receive a tax deduction for the value of the LTIP units.
Initially, LTIP units will not have full parity with operating partnership units with respect to
liquidating distributions. Under the terms of the LTIP units, the operating partnership will
revalue its assets upon the occurrence of certain specified events, and any increase in valuation
from the time of grant until such event will be allocated first to the holders of LTIP units to
equalize the capital accounts of such holders with the capital accounts of operating partnership
unit holders. Upon equalization of the capital accounts of the holders of LTIP units with the other
holders of operating partnership units, the LTIP units will achieve full parity with operating
partnership units for all purposes, including with respect to liquidating distributions. If such
parity is reached, vested LTIP units may be converted into an equal number of operating partnership
units at any time, and thereafter enjoy all the rights of operating partnership units, including
exchange rights which includes the right to redeem the operating partnership units for common
shares or cash, at the Companys option. However, there are circumstances under which such parity
would not be reached. Until and unless such parity is reached, the value that Mr. Fisher will
realize for his LTIP units will be less than the value of an equal number of the Companys common
shares.
In addition, Mr. Fisher is expected to receive a restricted share award of $300,000 of
restricted common shares that is expected to be approved at the first meeting of the Companys
board of trustees pursuant to the Companys 2009 Equity Incentive Plan
as part of the Companys
2010 compensation program. These restricted shares will vest ratably on each of the first three
anniversaries of the date of grant, provided that Mr. Fisher remains employed by the Company on
each vesting date. Prior to vesting, all restricted shares will be entitled to receive dividends
paid on Company common shares and will be entitled to vote.
Mr. Fisher
will enter into a Change in Control Severance Agreement with the Company, the form
of which is filed as an exhibit to this Report on Form 8-K, and the general terms of which are
described below.
Mr. Fisher will receive health, medical and dental benefits similar to those available to
other executive officers of the Company and will be eligible to participate in any 401(k) program
established by the Company on the same terms as other Company executive officers. In addition, the
Company will pay or reimburse Mr. Fisher for reasonable costs of relocation, brokerage costs on the
sale of his current home and other miscellaneous costs. The
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Company
will also pay Mr. Fisher up to
$250,000 in connection with the sale of his home if the sale proceeds are less than a threshold
amount.
Severance Agreement
Effective upon commencement of his employment, Mr. Fisher will enter into a
Change in Control
Severance Agreement to provide benefits in the event his employment is terminated in certain
circumstances. The Compensation Committee will review the terms of the severance agreement
annually. As described in more detail below, because Mr. Fishers severance payment
will be calculated based on from his annual base salary and other annual incentive compensation, the Company
expects that the effect on severance payments will be one of the factors considered by the
Compensation Committee when annually reviewing Mr. Fishers total compensation and severance
agreement terms.
The severance agreement will become effective upon Mr. Fishers commencement of employment
with the Company and will have an initial term of three years; provided, however, that the term is
automatically extended for an additional year on each anniversary date of the effective date of the
severance agreement beginning on the third anniversary of the effective date of the severance
agreement unless, not less than six months prior to the termination of the then-existing term, the
Companys board of trustees provides notice to Mr. Fisher of its intent not to extend the term
further. Mr. Fisher may terminate his agreement prior to the expiration of the term as described
below.
Termination in Connection with a Change in Control
Upon 30 days prior written
notice to the Company, Mr. Fisher may terminate his employment for
good reason. The agreement provides that upon the termination of Mr. Fisher either by the Company
without cause within one year of a change in control of the Company or by Mr. Fisher for good
reason, Mr. Fisher will be entitled to the following severance payments and benefits:
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a lump sum cash payment equal to the sum of his annual base salary,
annual cash incentive bonus and accrued vacation time earned but not
paid to the date of termination; |
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a lump sum cash payment equal to the product of two times the sum of
(x) his then-current annual base salary plus (y) the greater of (i)
the bonus most recently paid to him and (ii) the average of the annual
cash incentive bonuses paid to him with respect to the three most
recent fiscal years ending before the date of termination; |
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a lump sum cash payment equal to two times the annual premium or cost
(including amounts paid by him) for his health, dental, disability and
life insurance benefits; and |
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such other or additional benefits, if any, as are provided under
applicable plans, programs and/or arrangements of the Company. |
Termination without Cause
If Mr. Fisher is terminated without cause and not in connection with or within one year of a
change in control of the Company, he will be entitled to the following severance payments and
benefits:
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a lump sum cash payment equal to the sum of his annual base salary,
annual cash incentive bonus and accrued vacation time earned but not
paid to the date of termination; |
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a lump sum cash payment equal to the sum of (x) his then-current
annual base salary, plus (y) the greater of (i) the bonus most
recently paid to him and (ii) the average of the annual cash incentive
bonuses paid to him with respect to the three most recent fiscal years
ending before the date of termination; |
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a lump sum cash payment equal to the annual premium or cost (including
amounts paid by him) for his health, dental, disability and life
insurance benefits; and |
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such other or additional benefits, if any, as are provided under
applicable plans, programs and/or arrangements of the Company. |
Termination without Good Reason
If Mr. Fisher voluntarily terminates his employment without good reason, he will be entitled
to the following severance payments and benefits:
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a lump sum cash payment equal to the sum of his annual base salary and
accrued vacation time earned but not paid to the date of termination;
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such other or additional benefits, if any, as are provided under
applicable plans, programs and/or arrangements of the Company. |
Vesting of Long-Term Equity Incentive Awards
The terms of the time-based LTIP unit award agreement granted to Mr. Fisher will provide that:
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Upon a change in control of the Company, the unvested units vest.
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Upon termination of Mr. Fishers employment with the Company without
cause, the unvested units vest.
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Upon termination of Mr. Fishers employment with the Company because
of his death or disability, the unvested units vest.
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Upon termination of Mr. Fishers employment with the Company for
cause, the unvested units are forfeited.
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The time-based LTIP unit award agreements do not provide, in the absence of a change in
control of the Company, for accelerated vesting of the unvested LTIP units in the event
Mr. Fisher terminates his employment with the Company, for any reason other than death, disability
or, under certain conditions, retirement.
For purposes
of the time-based LTIP unit award agreements, the definitions of cause, good
reason and change in control are similar but not identical to the definitions contained in Mr.
Fishers severance agreement with the Company. For example, the definition of good reason for
purposes of the award agreement does not include any requirement of a change in control. In
addition, the definition of change in control for purposes of the award agreements includes
mergers and consolidations where the outstanding securities of the Company represent less than 75%
of the combined voting power of the Company or surviving entity after the merger or consolidation
and includes a sale of substantially all of the Companys assets to an entity in which the
Companys shareholders own less than 75% of the combined voting power in substantially the same
proportions as their ownership in the Company before the sale.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. |
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Description |
10.1
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Form of Change in Control Severance Agreement between Pebblebrook Hotel Trust
and Thomas C. Fisher |
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10.2
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Form of LTIP Unit Vesting Agreement
(incorporated by reference to Exhibit 10.7
to the Companys
Registration Statement on Form S-11 (File
No. 333-162412).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PEBBLEBROOK HOTEL TRUST
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Date: December 22, 2009 |
By: |
/s/ Jon E. Bortz
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Jon E. Bortz |
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President and Chief Executive Officer |
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