RED LION
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
July 1, 1989
(As Amended Through Amendment No. 3)
Red Lion Hotels, Inc.
a Delaware corporation
4001 Main Street
PO Box 1027
Vancouver, WA 98666 Company
TABLE OF CONTENTS
Page
1. Purposes; Administration; Plan Year. . . . . . 1
2. Eligibility; Participation . . . . . . . . . . 1
3. Contributions. . . . . . . . . . . . . . . . . 2
4. Participants' Accounts . . . . . . . . . . . . 4
5. Time and Manner of Payment . . . . . . . . . . 5
6. Vesting. . . . . . . . . . . . . . . . . . . . 6
7. Withdrawals. . . . . . . . . . . . . . . . . . 7
8. Amendment; Termination . . . . . . . . . . . . 7
9. Claims Procedure . . . . . . . . . . . . . . . 8
10. General Provisions . . . . . . . . . . . . . . 9
11. Effective Date . . . . . . . . . . . . . . . . 10
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RED LION
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
July 1, 1989
(As Amended Through Amendment No. 3)
Red Lion Hotels, Inc.
a Delaware corporation
4001 Main Street
PO Box 1027
Vancouver, WA 98666 Company
1. Purposes; Administration; Plan Year
1.1 The Company adopts this plan to provide retirement
benefits to eligible employees in addition to the benefits
provided by the Employee Retirement Savings Plan (the "Savings
Plan"), the Company's tax qualified profit sharing plan, which
includes a qualified cash or deferred arrangement under section
401(k) of the Internal Revenue Code. If the Company sells
substantially all of its assets and the buyer assumes all of the
Company's obligations under this plan, the Company shall be
released from those obligations.
1.2 The plan shall be administered by an Administrative
Committee (the "Committee") of one or more persons appointed by
the managing general partner of the Company. The Committee shall
interpret the plan, determine eligibility and the amount of
benefits, maintain records, determine earnings rates and
generally be responsible for seeing that the purposes of the plan
are accomplished. The Committee may delegate all or part of its
administrative duties to others.
1.3 The plan year shall be the calendar year starting
January 1 and ending December 31, except the period from July 1,
1989 to December 31, 1989 shall be an initial short plan year.
2. Eligibility; Participation
2.1 Subject to 2.2, an employee shall participate as
follows:
(a) Participation in elective deferrals
under 3.1 shall commence with the first pay
period after hire, subject to enrollment
procedures of the Committee.
(b) Participation in Company contributions
under 3.3 shall commence on the entry date the
employee becomes eligible for participation in
the Company's Employee Retirement Savings Plan.
If the entry date is not a January 1, the
contribution in 3.3(a) shall be based on
compensation payable from the entry date to the
end of the plan year in excess of the
contribution and benefit base for a full year.
2.2 A management employee of the Company shall be
eligible to participate in the plan for any plan year for which
the employee is a highly compensated employee as defined for
purposes of discrimination testing in the Savings Plan. Upon
first becoming eligible, an employee shall enroll for
participation by completing a Statement of Participation on a
form provided by the Committee.
2.3 A person having an Account under the plan shall be
referred to as a participant. A participant who loses
eligibility for a plan year as a result of not being a highly
compensated employee for such year under the Savings Plan shall
continue to have an Account in the plan, but no contributions
shall be made under Section 3 for such year.
3. Contributions
3.1 Subject to 3.4, for each plan year, a portion of a
participant's salary and bonus for the year shall be deferred as
follows. For the period after hire before the participant is
eligible to make elective contributions under the Savings Plan,
the amount deferred shall be a percentage of compensation elected
by the participant, up to the maximum percentage allowed by the
Savings Plan. For the period after the participant is eligible
under the Savings Plan, the amount deferred shall be the excess
(if any) for the plan year of (a) over (b) below:
(a) The participant's elective
contributions under the Savings Plan based on
the percentage of compensation elected by the
participant up to the maximum percentage allowed
by the Savings Plan.
(b) The amount of elective contributions
actually allowed for the participant under the
Savings Plan for the year after application of
the annual dollar limit on elective deferrals,
the $150,000 limit on qualified plan
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compensation, the actual deferral percentage
test, and the limit on annual additions.
3.2 Amounts deferred under 3.1 shall be credited to the
participant's Deferral Account.
3.3 Subject to 3.4 and 3.5, for each plan year the
Company shall contribute the following amounts for each
participant:
(a) 6 percent of the participant's
compensation for the year in excess of the
contribution and benefit base determined under
section 230 of the Social Security Act.
"Compensation" means the compensation from which
elective contributions may be made under the
Savings Plan, before reduction for such elective
contributions, deferrals under this plan or
amounts elected under a flexible benefits plan.
Compensation in excess of the $150,000 limit on
qualified plan compensation shall be counted for
this purpose.
(b) The excess (if any) of (1) over (2)
below:
(1) The participant's matching
contributions under the Savings Plan
based on the participant's elective
contributions under 3.1(a) before
reduction under 3.1(b) and after any
reduction in the rate of matching as a
result of the 4-percent-of-eligible-
payroll limit on matching contributions
provided under the Savings Plan.
(2) The amount of matching
contributions actually allowed for the
participant under the Savings Plan for the
year after application of the annual dollar
limit on elective deferrals, the actual
deferral percentage test, the contribution
percentage test and the limit on annual
additions.
3.4 If an excess deferral or excess matching
contribution under the Savings Plan is distributed to a
participant under sections 4.04-6 or 4.04-7 of the Savings Plan,
or any successor provision, the participant shall repay the
amount received, including any earnings, to the Company. The
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Company shall treat such amount as a deferral contribution under
this Plan and shall reduce the taxable income reported to the
participant by the same amount.
3.5 No contribution under 3.3 shall be made in any plan
year in which the participant does not elect any elective
contribution under the Savings Plan.
3.6 Company contributions under 3.3 shall be credited
to the participant's Company Account.
4. Participants' Accounts
4.1 The Committee shall keep the following Accounts for
each participant:
(a) A Deferral Account.
(b) A Company Account.
4.2 The Committee shall credit to a participant's
Company Account the contribution provided by 3.3(a) as of a date
not later than the last day of the plan year.
4.3 The Committee shall credit to a participant's
Deferral Account the deferrals under 3.1 at the time which, but
for the limitations imposed by law, the deferrals would have been
credited to the participant's account under the Savings Plan.
4.4 The Committee shall credit to a participant's
Company Account the contributions under 3.3(b) at the time which,
but for the limitations imposed by law, the contribution would
have been credited to the participant's account under the Savings
Plan.
4.5 As of each regular or special valuation date under
the Savings Plan, the Committee shall credit earnings or losses
to each participant's Accounts. The Committee shall establish
within the trust described in 10.4 one or more pooled investment
funds (collectively, the "SERP Funds"), and the following shall
apply:
(a) The Committee shall define the
objectives for the SERP Funds, may establish new
funds, combine two or more funds or change the
objectives of an existing fund.
(b) When there are two or more SERP Funds
offered, allocation of the Accounts of each
participant among the funds shall be controlled
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by the participant in minimum increments
established by the Committee. If no allocation
is made, the Committee shall determine the SERP
Funds into which contributions shall be
deposited.
(c) The Committee shall inform all
participants about the SERP Funds and the
objectives of each. The SERP Funds shall be
valued as of each valuation date under the
Savings Plan.
(d) Except as provided above, the
provisions 10.02 of the Savings Plan relating to
amounts, timing, and notice requirements for
allocations shall apply with respect to
allocations by the participant under this plan.
(e) The SERP Funds shall be valued as of
each regular or special valuation date under the
Savings Plan.
5. Time and Manner of Payment
5.1 The vested amount of a participant's Accounts shall
be paid in one of the following ways as selected under 5.2:
(a) In a lump sum within 30 days after the
Benefit Date.
(b) In substantially equal monthly
installments over 5 years, beginning within 30
days after the Benefit Date.
(c) In substantially equal monthly
installments over 10 years, beginning within 30
days after the Benefit Date.
5.2 The Benefit Date shall be the earliest of the
following:
(a) The date the participant ceases to be
employed by the Company, other than in a direct
transfer to employment with an entity designated
by the Committee as an affiliate of the Company.
(b) The date the participant dies.
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(c) The date the participant becomes
disabled as determined under the terms of the
Savings Plan.
5.3 In the participant's Statement of Participation, the
participant shall select the form of payment under 5.1. A
participant's selection shall be irrevocable for deferrals and
Company contributions credited to the participant's Accounts
while the selection is in effect and any earnings credited
thereto. A participant may change the form of payment by written
notice to the Committee. Such a change shall be effective on the
first day of the plan year beginning after the Committee receives
notice of the change. A change of payment form shall apply only
to deferrals and Company contributions, and earnings credited
thereto, after the change becomes effective.
5.4 The Company shall withhold from any payments any
income tax or other amounts as required by law. If FICA tax is
due on deferrals or Company contributions, the participant's
share of FICA shall be withheld from other compensation payable
to the participant.
5.5 On the death of a participant, payments under 5.1
shall be made to the participant's beneficiary at the same time
the payments would have been made to the participant. The
participant's beneficiary shall be determined under the terms of
the Savings Plan as in effect at the date of death, regardless
of whether the participant ceases to be a participant in the
Savings Plan.
5.6 If a beneficiary is receiving payments under 5.5 and
dies before the payments are completed, the remaining payments
shall be made to the beneficiary's estate.
6. Vesting
6.1 A participant's Deferral Account shall be fully
vested at all times.
6.2 A participant's Company Account shall be vested in
the same percentage as the participant's matching contributions
under the Savings Plan, except as follows. The Company Account
shall be fully vested if a Change of Control Event under 6.3
occurs.
6.3 A "Change of Control Event" means any one of the
following, except the corporate reorganization of July 1995 shall
not be a Change of Control Event:
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(a) The sale of all or substantially all
of the assets of the Company;
(b) The sale of 50% or more of the
Partnership interests in the Company, whether by
sale, merger or other disposition;
(c) The liquidation or dissolution of the
Company;
(d) Any other sale or disposition of the
assets or Partnership interests of the Company
(whether any of such Partnership interests are
now outstanding) resulting in a change in control
of the policies, procedures and operation of the
Company.
7. Withdrawals
7.1 A participant may withdraw vested amounts from the
participant's Accounts to the extent approved by the Committee
because of financial hardship as defined in the Savings Plan.
The withdrawal shall be limited to the amount reasonably
necessary to meet the financial hardship. The vested amounts in
the participant's Accounts under this plan shall be exhausted
first, before hardship withdrawals are allowed under the Savings
Plan.
7.2 The withdrawal date shall be fixed by the Committee
after application by the participant under procedures fixed by
the Committee. The application shall include a signed statement
of the facts causing financial hardship and any other facts
required by the Committee. The Committee may require a minimum
advance notice, may limit the amount and frequency of
withdrawals, and may delay payment of an approved withdrawal to
permit a special valuation, to permit liquidation of necessary
assets or for other pertinent reasons. Accounts shall be
adjusted as of the last regular or special valuation date on or
before the withdrawal.
8. Amendment; Termination
8.1 The Company may amend the plan at any time by notice
to the participants. An amendment may be retroactive within the
plan year in which notice is given. An amendment may not reduce
the balance in the participants' Accounts as of the date notice
of the amendment is given to participants. An amendment may not
change the terms in 4.5 under which earnings or losses are
determined. No amendment may accelerate the time of payment of
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benefits to persons participating in the plan at the time of the
amendment.
8.2 If the Savings Plan is terminated, this plan shall
terminate as of the same date. If all the assets of the Savings
Plan are then distributed to its participants, all the Accounts
under this plan shall be distributed in a lump sum to the
participants at the same time.
8.3 The Company may terminate this plan effective the
first day of any plan year after notice to the participants. On
termination, all Accounts under this plan shall be distributed
in a lump sum to participants.
8.4 If the Internal Revenue Service issues a final
ruling that the amount of any participant's Account will be
subject to current income tax to the participant, all amounts to
which the ruling is applicable shall be paid within 30 days to
the participant.
9. Claims Procedure
9.1 Any person claiming a benefit, requesting
an interpretation or ruling under the plan, or requesting
information under the plan shall present the request in writing
to the Committee, which shall respond in writing as soon as
practicable.
9.2 If the claim or request is denied, the written
notice of denial shall state:
(a) The reasons for denial, with specific
reference to the plan provisions on which the
denial is based.
(b) A description of any additional
material or information required and an
explanation of why it is necessary.
(c) An explanation of the plan's claim
review procedure.
9.3 Any person whose claim or request is denied or who
has not received a response within 30 days may request review by
notice in writing to the Committee. The original decision shall
be reviewed by the Committee which may, but shall not be required
to, grant the claimant a hearing. On review, whether or not
there is a hearing, the claimant may have representation, examine
pertinent documents and submit issues and comments in writing.
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9.4 The decision on review ordinarily shall be made
within 60 days. If an extension of time is required for a
hearing or other special circumstances, the claimant shall be so
notified and the time limit shall be 120 days. The decision
shall be in writing and shall state the reasons and the relevant
plan provisions. All decisions on review shall be final and bind
all parties concerned.
10. General Provisions
10.1 Any notice under this plan shall be in writing and
shall be effective when actually delivered, or, if mailed, when
deposited postage prepaid. Mail shall be directed to the Company
at the address stated in this plan, to the participant at the
address stated in the Statement of Participation, or to such
other address as a party may specify by notice to the other
parties. Notices to the Committee shall be sent to the Company's
address.
10.2 The rights of a participant under this plan are
personal. Except for the limited provisions of 5.5, no inter-
est of a participant or any beneficiary or representative of a
participant may be directly or indirectly transferred, encum-
bered, seized by legal process or in any other way subjected to
the claims of any creditor.
10.3 Except as provided in 10.4, the rights of the
participants and beneficiaries under this plan shall be an
unfunded, unsecured promise of the Company to make future
payments.
10.4 The Company shall establish a trust with a
financial institution for payment of benefits under the plan,
which shall be a grantor trust for tax purposes. The trust shall
provide that any assets contributed to the Trustee shall be used
exclusively for payment of benefits under this plan except in the
event the Company becomes insolvent, in which case the trust fund
shall be held for payment of the Company's obligations to its
general creditors.
10.5 Following termination of employment, a participant
shall not be an employee of the Company for any purpose and
payments under section 5 shall not constitute salary or wages.
A participant shall receive such payments as retirement benefits,
not as compensation for performance of any substantial services.
10.6 The plan shall not be a contract of employment
between the Company and any employee. No employee may object to
amendment or termination of the plan. The plan shall not prevent
the Company from discharging any employee at any time.
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10.7 The Committee may decide that because of the mental
or physical condition of a person entitled to payments, or
because of other relevant factors, it is in the person's best
interest to make payments to others for the benefit of the person
entitled to payment. In that event the Committee may in its
discretion direct that payments be made as follows:
(a) To a parent or spouse or a child of
legal age.
(b) To a legal guardian.
(c) To one furnishing maintenance, support,
or hospitalization.
10.8 This plan shall be construed according to the laws
of Washington except as preempted by federal law.
10.9 The Company may elect to pay any administrative
fees or expenses and may allocate the cost among adopting
Employers. Otherwise the expenses and fees shall be paid from
the trust fund.
11. Effective Date
This plan shall be effective July 1, 1989.
RED LION
By J.H. BEST, JR.
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Executed: January 22, 1990
AMENDMENT NO. 1 EXECUTED AS FOLLOWS EFFECTIVE JANUARY 1, 1994:
RED LION
By BETH A. UGORETZ
--------------------------------------
Executed: February 16, 1994
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AMENDMENT NO. 2 EXECUTED AS FOLLOWS EFFECTIVE IN PART JANUARY 1,
1995 AND IN PART JANUARY 1, 1994:
RED LION
By BETH A. UGORETZ
--------------------------------------
Executed: July 26, 1995
AMENDMENT NO. 3 EXECUTED AS FOLLOWS EFFECTIVE OCTOBER 1, 1995:
RED LION
By BETH A. UGORETZ
--------------------------------------
Executed: September 18, 1995
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