Executive Officers' Variable Pay Plan Effective January 1, 2012



 Exhibit 10.1 

March 27, 2012 
  





 
 RLH Corporate Office 
 Executive Officers’ Variable Pay Plan 
 Effective January 1,
2012 
 Plan Overview 
  

			
	Effective Date of
 Plan
	  	Begins January 1, 2012 and ends December 31, 2012
		
	Criteria for
 Measurement
	  	Measured results in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) determine each eligible associate’s bonus. Full target payout will only be accrued
and paid if the company achieves 100% of Target EBITDA (as adjusted for acquisitions, dispositions, major transactions and bonus accruals, and as approved by the Board) and all bank covenants are met. Adjustments to EBITDA will only be considered
and approved after the end of the year.
		
	Date of
 Eligibility
	  	Associates become eligible immediately after hire or transfer into an eligible position.
		
	Earnings
 Potential
	  	Varies by position. A target and a maximum bonus percentage (percentage of base pay) has been established for each position. Based on achievement of specific results, associates may
exceed the target payment and receive a higher percentage through a pool-sharing model, up to designated maximums by position.
		
	Frequency of
 Payments
	  	The Plan is based on annual measurements of results. Payments will be made to associates as soon as administratively possible following the end of the bonus period.
		
	Participant
 Eligibility
	  	President & CEO; Executive Vice Presidents; Senior Vice President, General Counsel. Eligible associates must be employed at the time of payout to receive the incentive
payout.








 PLAN DOCUMENT 
 Executive Officers’ Variable Pay Plan 
 Effective January 1,
2012 
 This RLH Executive Officers’ Variable Pay Plan (“the Plan”) applies to the President & CEO, Executive Vice
Presidents, and the Senior Vice President, General Counsel. The purpose of the Plan is to reward eligible associates for achievement of certain targeted levels of EBITDA. Measurement of results occurs at the end of each calendar year once financial
results have been finalized with earnings paid as soon as administratively possible thereafter. 
 Effective Date 

All provisions of the Plan are effective beginning January 1, 2012 and will continue until RLH communicates a change or cancellation of the Plan.
This Plan supersedes all previous bonus plans in existence and past written or verbal communication to any associate regarding the terms of any bonus plan. 
 Eligibility 
 An associate becomes eligible immediately upon
commencement (hire, promotion, or transfer) into a bonus-eligible position. Any bonus earned upon commencement into a bonus-eligible position through the end of that year (December 31st) will be prorated based upon the number of days in the position. 

Notwithstanding the above, to be eligible to receive any bonus payment, the associate must be employed by RLH at the time of payout. 

Targets and Maximums: 
 Each
position that is eligible to participate in the Plan has a Target Bonus and a Maximum Bonus: 
 Targets: 

 

	 	•	 	 President & CEO – 60% 


  

	 	•	 	 EVPs and SVP, General Counsel – 40% 


 Maximums: 
  

	 	•	 	 All eligible positions within this Plan have a Maximum Bonus potential of 100%. 



The percentage earned for the achievement of goals in each category will be applied to the participant’s base pay earned for the period
January 1, 2012 through December 31, 2012. 

  
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 Explanation of Core Criteria: 
 Criteria for the 2012 Executive Officers’ Variable Pay Plan is EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization. The actual EBITDA dollars for the period will be compared
to the Target EBITDA dollars for the same period. Target EBITDA is defined as that which is adjusted for acquisitions, dispositions, major transactions and bonus accruals, and as approved by the Board of Directors. Adjustments to EBITDA will only be
considered and approved after the end of the year. 
 In addition to the requirements and criteria noted within this document, the bonuses
are not accrued or paid if doing so would create a debt covenant violation. 
 The various EBITDA targets (Budgeted, Cliff and Target)
will be separately established by the Compensation Committee. Their accompanying payouts are as follows: 
  

			
	At Budgeted EBITDA:	  	No payout
	At Cliff EBITDA:	  	50% of Target Bonus
	At Target EBITDA:	  	Target Bonus

 Using a Target Bonus of 40% on a salary of $200,000 as the example: 

 

			
	At Budgeted EBITDA:	  	No payout
	At Cliff EBITDA:	  	$40,000 payout (20% of $200,000)
	At Target EBITDA:	  	$80,000 payout (40% of $200,000)

 Between cliff EBITDA and Target EBITDA, a straightline payout will occur from 50% of Target Bonus to Target Bonus:

  
 



 
 For every $1 earned in EBITDA beyond the Target EBITDA, $.50 will go into a pool. The pool will then be
distributed amongst all eligible participants, including participants that have met the requirements under this Plan, the Corporate Office Officers’ Plan and the Corporate Office Directors & Managers’ Plan. The weighting by
position is based on a position’s maximum bonus as a percent of the total of maximum bonuses of all other eligible participants. 

  
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 Calculation, Approval & Payment of Bonuses 

At the end of the period, all payouts will be subject to review, audit, and final approval. 

Payments will be made to associates as soon as administratively possible following the end of each bonus period. Typically, payouts
are approved following the February Board meeting and paid prior to March 15th. Payments may be made in either cash or stock at the Company’s sole discretion. 

Effect of Change in Employment Status/Termination 
 Transfers: An associate that transfers from a bonus-eligible position to another bonus-eligible position will receive pro-rated amounts for each position, based upon the criteria established
for each position and will not have a waiting period to be eligible. 
 Leaves of Absences: To the extent an associate qualifies
for an approved leave of absence, that associate’s bonus will not be forfeited, but rather will be prorated. If the leave involves accrued paid leave, the bonus will be unaffected. If the leave involves unpaid leave, your bonus will be prorated
based upon the actual number of days worked plus any paid leave as a proportion of the full bonus calculation period. 

Terminations: Participants must be employed at the time of payout of bonuses in order to be eligible for the payout. Any associate whose
employment terminates prior to this date forfeits all rights to any bonus payment. 
 General Provisions 

In situations where a bonus has been earned based on the plan criteria, a participant may be disqualified from receiving part or all of such bonus payment
at the discretion of RLH. Instances when this might occur include overall substandard work performance of the associate, failure to follow company policy and procedures, exposing the company to legal liability, inappropriate behavior, withholding
information, or inadequate follow-through on critical incidents. 
 Notwithstanding anything to the contrary in this policy, individual or
company-wide bonus payments may be deferred, partially paid or withheld in their entirety at the sole discretion of RLH in consideration of the overall best interests of the company. RLH reserves the right to cancel, change, modify or interpret any
and all provisions of the Plan at any time without notice. Participation in or eligibility for the Plan does not create any entitlement to employment or continued employment and does not alter the at-will status of employees. This Plan will be
governed and construed in accordance with the laws of the state of Washington. 

  
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