exv10w2






Exhibit 10.2




EXECUTIVE EMPLOYMENT AGREEMENT




This EXECUTIVE EMPLOYMENT AGREEMENT is dated effective as of June 5, 2008 (“Effective Date”) by and
between Red Lion Hotels Corporation, a Washington corporation (the “Company”), and Anthony F.
Dombrowik (the “Executive”), and is intended to replace and supersede that certain Executive
Employment Agreement between the Company and the Executive dated April 12, 2007.



The Company desires to employ the Executive in the capacity of Senior Vice President, Chief
Financial Officer, and the Executive desires to be so employed, on the terms and subject to the
conditions set forth in this agreement (the “Agreement”).



Now, therefore, in consideration of the mutual covenants set forth herein and other good and
valuable consideration, the parties hereto hereby agree as follows:



1. Employment; Term.




(a) The Company employs the Executive, and the Executive agrees to be employed by the Company, upon
the terms and subject to the conditions set forth herein, for a term commencing on the Effective
Date and terminating on December 31, 2008 unless terminated earlier in accordance with Section 5 of
this Agreement; provided, that, subject to earlier termination in accordance with Section 1(b) or
Section 5 of this Agreement, such term shall automatically be extended from time to time for
additional periods of one calendar year from the date on which it would otherwise expire unless the
Executive, on one hand, or the Company, on the other, gives notice to the other party not less than
120 days prior to such date that he or it elects to permit the term of this Agreement to expire
without extension on such date. The initial term of this Agreement as the same may be extended in
accordance with the terms of this Agreement is hereinafter referred to as the “Term”.



(b) Notwithstanding anything to the contrary in this Agreement, the Agreement shall automatically
terminate and the Term shall expire on May 31, 2012 (the “Expiration Date”), and no notice or
action shall be required by the Company or the Executive for such termination and expiration to be
effective.



2. Positions; Conduct.




(a) During the Term, the Executive will hold the title and office of, and serve in the position of,
Senior Vice President, Chief Financial Officer of the Company. The Executive shall report to the
Chief Executive Officer of the Company and shall perform such specific duties and services
(including service as an officer, director or equivalent position of any direct or indirect
subsidiary without additional compensation) as the Company shall reasonably request consistent with
the Executive’s position.



(b) During the Term, the Executive agrees to devote his full business time and attention to the
business and affairs of the Company and to faithfully and diligently perform, to the best of his
ability, all of his duties and responsibilities hereunder. Nothing in this Agreement shall
preclude the Executive from devoting reasonable time and attention to the following (the “Exempted
Activities”): (i) serving as an officer, director, trustee or member of any organization, (ii)
engaging in charitable and community activities and (iii) managing his personal investments and
affairs. In no event shall the Exempted Activities involve any material conflict of interest with
the interests of the Company or, individually or collectively, interfere materially with the
performance by the Executive of his duties and responsibilities under this Agreement.



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(c) The Executive’s office and place of rendering his services under this Agreement shall be in the
principal executive offices of the Company. During the Term, the Company shall provide the
Executive with executive office space, and administrative and secretarial assistance and other
support services consistent with his positions and with his duties and responsibilities hereunder.



3. Board of Directors; Committees.




          It is understood that the right to elect directors of the Company is by law vested in the
stockholders and directors of the Company, and it is mutually contemplated that service on the
board of directors of the Company (the “Board”) or any of the Company’s subsidiaries, or on any
committee of the Board or the board of directors of any of the Company’s subsidiaries, is not a
condition of this Agreement.




4. Salary; Additional Compensation; Perquisites and Benefits.




(a) During the Term, the Company will pay the Executive a base salary at an annual rate of not less
than $175,000 per annum, subject to annual review by the Compensation Committee of the Board (the
“Committee”) and, in the discretion of the Committee, to increase from time to time. Once
increased, such base salary may not be decreased. Such salary shall be paid in periodic
installments in accordance with the Company’s standard practice, but not less frequently than
semi-monthly.



(b) During the Term, Executive shall participate in the Company’s Executive Officers Variable Pay
Plan dated effective January 1, 2005 and any successor or replacement bonus plans as may be adopted
by the Committee from time to time for senior executives of the Company (the “VPP”). If Executive
achieves the target performance goals determined under the VPP by the Committee for any calendar
year, he shall be entitled to a bonus for that year equal to at least 30% of his base salary for
that year (with any partial year pro rated).



(c) The Board or the Committee in its sole discretion may award any additional or other amounts of
cash, restricted stock or options or other equity based awards in respect of any whole or partial
year during the Term.



(d) The Company will reimburse the Executive, in accordance with its standard policies from time to
time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the
performance of his duties under this Agreement.



(e) The Executive shall be entitled to vacation time to be credited and taken in accordance with
the Company’s policy from time to time in effect for senior executives, which in any event shall
not be less than a total of four weeks per calendar year.



(f) The Company shall indemnify the Executive to the fullest extent permitted under the law of the
State of Washington.



5. Termination




(a) The Term will terminate automatically on the Expiration Date or upon the Executive’s death and,
in the case of a determination of the Executive’s Disability, will terminate upon notice by the
Company or the Executive to the other. As used herein the term “Disability” means the Executive’s
inability to perform his duties and responsibilities under this Agreement for a period of more than
120 consecutive days, or for more than 180 days, whether or not consecutive, during any 365-day
period, due to physical or mental incapacity or impairment. A determination of Disability will be
made by a physician satisfactory to both the Executive and the Company; provided that if they
cannot agree as to a physician, then each shall select a physician and these two together shall
select a third physician whose determination of Disability shall be



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binding on the Executive and the Company. Should the Executive become incapacitated, his
employment shall continue and all base salary and other compensation due the Executive hereunder
shall continue to be paid through the date upon which the Executive’s employment is terminated for
Disability in accordance with this section.



(b) The Term may be terminated by the Company upon notice to the Executive with or without “Cause”
as defined herein.



(c) The Term shall terminate automatically and without any further notice or action upon the
Executive’s resignation or retirement from the Company, with or without Good Reason (as defined
below), or if the Term is not extended pursuant to the proviso to Section 1(a) as a result of the
Executive or the Company giving notice thereunder that it elects to permit the Term to expire
without extension.



6. Severance.




(a) If the Term terminates for any reason, the Company will pay to the Executive an aggregate
amount equal to the Executive’s accrued and unpaid base salary through the date of such
termination, additional salary payments in lieu of the Executive’s accrued and unused vacation
time, unreimbursed business expenses, unreimbursed medical, dental and other employee benefit
expenses in accordance with the applicable plans, and any and all other benefits available to the
Executive or Executive’s estate under then-existing Company benefit plans or policies, including if
applicable death or Disability benefits, provided for (the “Standard Termination Payments”). Except
as expressly provided below, payment of the Standard Termination Payments shall be the Company’s
only obligation to Executive, and the Company shall incur no further liability, in connection with
such termination.



(b) If the Term is terminated upon the Executive’s death or Disability, the Company will pay to the
Executive’s estate or the Executive, as the case may be (i) the Standard Termination Payments, (ii)
a lump sum payment, if applicable, equal to the Executive’s earned but unpaid bonus under the VPP
for the prior fiscal year, and (iii) a lump sum payment equal to the Executive’s target bonus under
the VPP for the fiscal year in which the death or Disability occurs prorated for the portion of the
year elapsed at the time of the termination. Such payments shall be the Company’s only obligations
to Executive in such a case. The Company shall incur no further liability for such a termination.



(c) If the Company terminates the Executive’s employment under this Agreement without Cause other
than by reason of his death or Disability, or if the Term is not extended pursuant to the proviso
to Section 1(a) as a result of the Company giving notice thereunder that it elects to permit the
Term to expire without extension, or if the Executive terminates his employment hereunder within
six months of any event constituting Good Reason, the Company will (i) pay the Executive the
Standard Termination Payments, (ii) pay the Executive a lump sum payment equal to the Executive’s
earned but unpaid bonus under the VPP for the prior fiscal year, (iii) pay the Executive a lump sum
payment equal to the Executive’s target bonus under the VPP for the fiscal year in which the
termination occurs prorated for the portion of the year elapsed at the time of the termination,
(iv) pay the Executive a lump sum payment equal to the Executive’s total cash compensation for the
previous fiscal year (but not less than $175,000), and (v) continue in effect the Executive’s
benefits with respect to life, health and insurance plans or their equivalent for one year. Such
payments and the obligations set forth below in Section 6(d) shall be the Company’s only
obligations to Executive in such a case. The Company shall incur no further liability for such a
termination.



(d) If the Company terminates the Executive’s employment under this Agreement without Cause other
than by reason of his Disability, or if the Term is not extended pursuant to the proviso to
Section 1(a) as a result of the Company giving notice thereunder that it elects to permit the Term
to expire without extension, or if there is a Change of Control (as defined below), or if the
Executive terminates his employment hereunder within six months of any event constituting Good
Reason, then, except for those stock options that have a strike price that is more than 10% greater
than the closing price of the Company’s common stock on the date of such termination, expiration or
Change of Control, all stock options granted to the
Executive shall



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immediately vest and be exercisable and any stock grant to the Executive shall
immediately vest, all Company imposed restrictions on restricted stock issued to the Executive
shall be terminated and all restricted stock awarded to Executive but not yet issued shall be
promptly issued to Executive.



(e) As used herein, the term “Cause” means: (i) the Executive’s willful and intentional failure or
refusal to perform or observe any of his material duties, responsibilities or obligations set forth
in this Agreement, if such breach is not cured within 30 days after notice thereof to the Executive
by the Company, which notice shall state that such conduct shall, without cure, constitute Cause
and makes specific reference to this Section 6(e); (ii) any willful and intentional act of the
Executive involving fraud, theft, embezzlement or dishonesty affecting the Company; or (iii) the
Executive’s conviction of (or a plea of nolo contendere to) an offense which is a felony in the
jurisdiction involved.



(f) As used herein, the term “Good Reason” means the occurrence of any of the following, without
the prior written consent of the Executive: (i) assignment to the Executive of duties materially
inconsistent with the Executive’s position and responsibilities described in Section 2(a) hereof,;
(ii) the removal of the Executive from the position described in Section 2(a); (iii) any material
breach of this Agreement by the Company which is continuing; or (iv) a Change of Control; provided
that a Change of Control shall only constitute Good Reason if, within 12 months after such Change
of Control: (a) the Company changes its headquarters office location to a location more than 40
miles from the city limits of Spokane, Washington, (b) the Company changes Executive’s job title,
or (c) Executive experiences a significant diminution in his duties or responsibilities or
compensation compared to prior to the Change of Control, other than in connection with the
termination of the Executive’s employment by the Company for Cause, by the Executive without Good
Reason, or as a result of the Executive’s death or Disability. Notwithstanding anything to the
contrary in this Section 6(f), the Executive shall not be deemed to have Good Reason unless the
Executive gives the Company written notice that the specified conduct or event has occurred giving
rise to Executive having Good Reason, and the Company fails to cure such conduct or event within
thirty (30) days after the receipt of such notice.



(g) As used herein, the term “Change of Control” means the occurrence of any one of the following
events: (i) the majority of the Board consists of individuals other than “Incumbent Directors”,
which shall mean the members of the Board of Directors on the Effective Date and any other persons
becoming directors subsequent to the Effective Date whose election or nomination for election was
supported by the Executive or a majority of the directors who then comprised the Incumbent
Directors; (ii) the Company adopts a plan of liquidation providing for the distribution of all or
substantially all of the assets of the Company on a consolidated basis; or (iii) the Company sells
all or substantially all of its assets on a consolidated basis in a single transaction or series of
transactions.



(h) The amounts required to be paid and the benefits required to be made available to the Executive
under this Section 6 are absolute. Under no circumstances shall the Executive, upon the
termination of his employment hereunder, be required to seek alternative employment and, in the
event that the Executive does secure other employment, no compensation or other benefits received
in respect of such employment shall be set-off or in any other way limit or reduce the obligations
of the Company under this Section 6.



(i) The amounts required to be paid to the Executive under this Section 6, together with any
Gross-Up Payment required to be paid to the Executive under Section 10(b), shall be paid to the
Executive as soon as practicable following the occurrence of the event that entitles the Executive
to such payments; provided, however, if the Executive at the time of his separation from service
with the Company is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the
Internal Revenue Code of 1986, as amended (the “Code”), then such amounts shall instead be paid,
and any lapse of restrictions on restricted stock awards or the issuance of common stock subject to
restricted stock under Section 6(d) shall occur, six months after his separation from service to
the extent necessary so that none of such amounts will be subject to the additional income tax
provided for in Section 409A(a)(1)(B)(i) of the Code.



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7. Confidential Information.




(a) The Executive acknowledges that the Company and its Affiliates (as defined below) own and have
developed and compiled, and will in the future own, develop and compile certain Confidential
Information and that during the course of his rendering services to the Company Confidential
Information has and will be disclosed to the Executive by the Company and its Affiliates. The
Executive hereby agrees that, during the Term (except as required to conduct the business of the
Company) and thereafter, he will not in any way use or disclose, furnish or make accessible to
anyone, directly or indirectly, any Confidential Information of the Company or its Affiliates. As
used herein, an “Affiliate” of a person or other entity means a person or other entity that
directly or indirectly controls, is controlled by or is under common control with the person or
other entity specified (including without limitation any investment entity managed by the person or
other entity specified or a person or entity that directly or indirectly controls, is controlled by
or under common control with the person or other entity specified).



(b) As used herein, the term “Confidential Information” means any trade secrets, confidential or
proprietary information, or other knowledge, know-how, information, documents or materials, owned,
developed or possessed by the Company or one of its Affiliates pertaining to its businesses the
confidentiality of which such company takes reasonable measures to protect, including, but not
limited to, trade secrets, techniques, know-how (including designs, plans, procedures, processes
and research records), software, computer programs, innovations, discoveries, improvements,
research, developments, test results, reports, specifications, data, formats, marketing data and
business plans and strategies, business opportunities, guest lists, vendor terms, agreements and
other forms of documents, expansion plans, budgets, projections, and salary, staffing and
employment information. Notwithstanding the foregoing, Confidential Information shall not in any
event include information which (i) was generally known or generally available to the public prior
to its disclosure to the Executive, (ii) becomes generally known or generally available to the
public subsequent to its disclosure to the Executive through no wrongful act of the Executive,
(iii) is or becomes available to the Executive from sources other than the Company or its
Affiliates which sources are not known to the Executive to be under any duty of confidentiality
with respect thereto or (iv) the Executive is required to disclose by applicable law or regulation
or by order of any court or federal, state or local regulatory or administrative body (provided
that the Executive provides the Company with prior notice of the contemplated disclosure and
reasonably cooperates with the Company, at the Company’s sole expense, in seeking a protective
order or other appropriate protection of such information).



8. Restrictive Covenants.




(a) The Executive agrees that during his employment hereunder and for a period of twelve months
thereafter the Executive will not, directly or indirectly, engage or participate or make any
financial investments in (other than ownership of up to 5% of the aggregate of any class of
securities of any corporation if such securities are listed on a national stock exchange or
registered under section 12(g) of the Securities Exchange Act of 1934) or become employed by, or
act as an agent or principal of, or render advisory or other management services to or for, any
Competing Business. As used herein the term “Competing Business” means any business which includes
hotel ownership, hotel management, hotel services or hotel franchising and has a headquarters in
Washington, Oregon, Idaho, Montana, Utah or Northern California, defined as the area from San Jose,
California north to California’s border with Oregon.



(b) The Executive agrees that during his employment hereunder and for a period of twenty-four
months thereafter he will not solicit, raid, entice or induce any person that then is or at any
time during the twelve-month period prior to the end of the Term was an employee of the Company or
any of its Affiliates (other than a person whose employment with the Company or such Affiliate has
been terminated by the Company or such Affiliate), to become employed by any person, firm or
corporation.



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9. Specific Performance.




(a) The Executive acknowledges that the services to be rendered by him hereunder are of a special,
unique, extraordinary and personal character and that the Company would sustain irreparable harm in
the event of a violation by the Executive of Section 7 or 8 hereof. Therefore, in addition to any
other remedies available, the Company shall be entitled to specific enforcement and/or an
injunction from any court of competent jurisdiction restraining the Executive from committing or
continuing any such violation of this Agreement without proving actual damages or posting a bond or
other security. Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened breach, including the recovery of
damages.



(b) If any of the restrictions on activities of the Executive contained in Sections 7 or 8 shall
for any reason be held by a court of competent jurisdiction to be excessively broad as to duration,
geographical scope or activity of subject, such restrictions shall be construed so as thereafter to
be limited or reduced to be enforceable to the maximum extent compatible with the applicable law as
it shall then appear; it being understood that by the execution of this Agreement the parties
hereto regard such restrictions as reasonable and compatible with their respective rights.



(c) Notwithstanding anything in this Agreement to the contrary, in the event that the Company fails
to make any payment of any amounts or provide any of the benefits to the Executive when due as
called for under Section 6 of this Agreement and such failure shall continue for twenty (20) days
after notice thereof from the Executive, all restrictions on the activities of the Executive under
Sections 7 and 8 shall be immediately and permanently terminated.



10. Withholding; Additional Payments.




(a) The parties agree that all payments to be made to the Executive by the Company pursuant to the
Agreement shall be subject to all applicable withholding obligations.



(b) The parties intend that the severance payments and other compensation provided for herein are
reasonable compensation for Executive’s services to the Company and shall not constitute “excess
parachute payments” within the meaning of Section 280G(b)(1) of the Code. In the event the parties
determine that the severance benefits or any other benefits or payments to which Executive is
entitled pursuant to this Agreement or otherwise (collectively, the “Total Benefits”), will be
subject to the excise tax imposed pursuant to Section 4999 of the Code (“Excise Tax”), the Company
shall pay to Executive an additional amount (the “Gross-Up Payment”) such that the net amount
retained by Executive, after deduction of any Excise Tax on the Total Benefits and any federal,
state and local income taxes, Excise Tax, and FICA and Medicare withholding taxes upon the payment
provided for by this Section, will be equal to the Total Benefits.



For purposes of this Section, Executive will be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the Excise Tax is (or would
be) payable and state and local income taxes at the highest marginal rate of taxation in the state
and locality of Executive’s residence on the date of termination of Executive’s employment with the
Company, net of the reduction in federal income taxes that could be obtained from deduction of such
state and local taxes (calculated by assuming that any reduction under Section 68 of the Code in
the amount of itemized deductions allowable to Executive applies first to reduce the amount of such
state and local income taxes that would otherwise be deductible by Executive).



In the event that the Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of Executive’s employment, Executive shall repay to
the Company, at the time the amount of such reduction in Excise Tax is fully determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare
withholding taxes imposed on



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 the Gross-
Up Payment being repaid by Executive to the extent that such repayment results in a reduction in
Excise Tax, FICA and Medicare withholding taxes and/or a federal, state or local income tax
deduction) plus interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder at the time of the termination of Executive’s employment (including by
reason of any payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment to Executive in respect of
such excess (plus any interest, penalties or additions payable by Executive with respect to such
excess) at the time that the amount of such excess is finally determined.



The parties’ obligations under this Section shall survive termination of this Agreement.



11. Notices.



All notices required or permitted hereunder shall be in writing and shall be deemed given and
received when delivered personally, four days after being mailed if sent by registered or certified
mail, postage pre-paid, or by one day after delivery if sent by air courier (for next-day delivery)
with evidence of receipt thereof or by facsimile with receipt confirmed by the addressee. Such
notices shall be addressed respectively:


If to the Executive, to:

Anthony Dombrowik

2313 Brookfield Lane

Spokane, WA 99223



If to the Company, to:

Red Lion Hotels Corporation

201 W. North River Drive

Spokane, WA 99201

Attn: Chief Executive Officer



With copy (which shall not constitute notice) to:

Red Lion Hotels Corporation

201 W. North River Drive

Spokane, WA 99201

Attn: General Counsel




or to any other address of which such party may have given notice to the other parties in the
manner specified above.



12. Miscellaneous.




(a) This Agreement is a personal contract calling for the provision of unique services by the
Executive, and the Executive’s rights and obligations hereunder may not be sold, transferred,
assigned, pledged or hypothecated by the Executive. The rights and obligations of the Company
hereunder will be binding upon and run in favor of its successors and assigns.



(b) This Agreement shall be governed by and construed and enforced in accordance with the internal
laws of the State of Washington.



(c) Any controversy arising out of or relating to this Agreement or any breach hereof shall be
settled by arbitration in Spokane, Washington by a single neutral arbitrator who shall be a retired
federal or state court judge in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and judgment upon any award rendered may be entered in any court having
jurisdiction thereof, except in



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the event of a controversy relating to any alleged violation by the
Executive of Section 7 or 8 hereof, the
Company shall be entitled to seek injunctive relief from a court of competent jurisdiction without
the requirement to seek arbitration. In addition to all other relief, the substantially prevailing
party in any arbitration or court action shall be entitled to his or its reasonable attorney fees
and costs incurred by reason of the controversy (including any appellate review and bankruptcy or
enforcement proceedings).



(d) The headings of the various sections of this Agreement are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.



(e) The provisions of this Agreement which by their terms call for performance subsequent to the
expiration or termination of the Term shall survive such expiration or termination.



IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date first
above written.



	 	 	 
	EXECUTIVE:

	 	COMPANY:
	 
	 	 
	 

	 	RED LION HOTELS CORPORATION
	 
	 	 
	                                     
   

	 	By
                                        
                    
	Anthony F. Dombrowik

	 	     Anupam Narayan, President and
	 

	 	     Chief Executive Officer







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