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Exhibit 10.7
EMPLOYMENT AGREEMENT
between
STARWOOD LODGING TRUST
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Employment Agreement ("Agreement") dated as of June 30, 1997, between
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (the "Executive") and Starwood Lodging Trust, a Maryland
real estate investment trust (the "Company"), with its principal office at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Executive has served as Chairman and Chief Executive
Officer of the Company since December 1994 and currently serves as such;
WHEREAS, the Company desires to continue the services of Executive as
its Chairman and Chief Executive Officer and to enter into an agreement
embodying the terms of such continuing relationship; and
WHEREAS, Executive is willing to accept such continued employment upon
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the Executive and the Company hereby agree as follows:
ARTICLE I
Employment and Term
Section 1.01 Position; Responsibilities. (a) The Company hereby employs
and continues the employment of Executive as its Chairman and Chief Executive
Officer ("CEO") upon the terms and conditions hereinafter set forth.
(b) As CEO, Executive shall at all times be the senior-most officer of
the Company, with the duties, responsibilities and authority customarily
associated with such position and consistent with such duties, responsibilities
and authority as has heretofore been his as CEO. Such duties include authority
and responsibility for acquisitions, divestitures, finance and investor
relations, subject to policies adopted by the Board of Trustees of the Company
(the "Board"). Executive shall perform such other additional duties and
services of senior executive nature, consistent with his position, as may be
requested of him from time to time by the Board. Executive shall report directly
and solely to the Board.
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Section 1.02 Performance of Duties; Other Commitments and Activities.
(a) Executive shall at all times endeavor to duly and faithfully perform all of
his duties hereunder to the best of his abilities.
(b) Executive shall devote such time and effort as may be necessary and
appropriate from time to time in the circumstances for the proper discharge of
his duties and obligations under this Agreement. The Company acknowledges that
Executive is involved in other business endeavors including with Starwood
Capital Group L.L.C. ("SCG") and as a consequence performs multiple executive
roles. Subject to the Executive's duties and obligations to the Company as set
forth in this Section 1.02(b), and subject to non-competition agreement between
the Company and Executive and between the Company and SCG, the Company consents
to the continuation of Executive's additional business endeavors and multiple
executive roles.
(c) Executive's base of operations under this Agreement shall continue
to be Greenwich, CT, although Executive may, at his election, render his
services from other locations. Executive shall not be required to relocate or
render services, on other than a temporary basis, outside of such town.
Section 1.03 Term. Executive's term of employment under this Agreement
(the "Term") shall commence on the date hereof (the "Commencement Date") and
shall expire on August 31, 1999, unless extended or sooner terminated as herein
provided. In the event the Company and Executive have not, by August 1, 1999,
agreed to an extension of Executive's employment by the Company, the Executive
shall, for purposes of Section 2.04 hereof and for all other purposes set forth
in this Agreement, be deemed to have terminated for "Good Reason" on August 31,
1999.
Section 1.04 Representation and Warranty of Executive. Executive hereby
represents and warrants to the Company that he is not aware of any presently
existing fact, circumstance or event (including, but without limitation, any
health condition or legal constraint) which would preclude or restrict him from
providing to the Company the services contemplated by this Agreement, or which
would give rise to any breach of any term or provision hereof, or which could
otherwise result in the termination of his employment hereunder for Cause or
Good Reason (as such terms are hereinafter defined).
Section 1.05 Representation and Warranty of Company. The Company hereby
represents and warrants to Executive that (i) it is not aware of any fact,
circumstance or event which would give rise to any breach of any term or
provision of this Agreement or any agreement covering any Existing Awards (as
hereinafter defined), or which would form the basis for any claim or allegation
that (A) Executive's employment hereunder could be terminated for Cause or Good
Reason hereunder, or (B) the rights of Executive under any Existing Award should
be in whole or any part limited, forfeited or otherwise restricted; and (ii) it
has received all authorizations and has taken all actions, necessary or
appropriate for the
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due execution, delivery and performance of this Agreement, all Existing Awards,
and all Plan Agreements (as hereinafter defined), including all amendments
thereto effected by this Agreement.
ARTICLE II
Compensation
Section 2.01 General. The Company shall compensate Executive for all of
his services under this Agreement, as set forth herein.
Section 2.02 Basic Compensation. Executive's minimum annual salary
("Base Salary") shall continue at the rate of $250,000 and shall be payable in
bi-weekly or other installments in accordance with the Company's normal payment
schedule for senior management (not less frequently than monthly). The Base
Salary shall be subject to annual review commencing at the end of 1997 and at
the end of each year thereafter during the Term, and may be increased (but not
decreased) for subsequent years. Executive's Base Salary shall at all times be
no less than the salary of any other executive of the Company or any executive
of Starwood Lodging Corporation (the "Corporation").
Section 2.03 Incentive Compensation. In addition to the Base Salary,
the Company shall pay to the Executive as incentive compensation ("Incentive
Compensation") in respect of each fiscal year (or portion thereof) of the
Company, an amount determined in accordance with any bonus or short term
incentive compensation program (which may be based upon achieving certain
specified performance criteria) which may be established by the Board either for
the Executive or for senior management generally. Executive's Incentive
Compensation shall at all times be no less than the incentive compensation
awarded to any other executive of the Company or any executive of the
Corporation.
All Incentive Compensation earned under this Section 2.03 shall be
payable as soon as reasonably practicable, but in no event later than 120 days
after the end of the relevant fiscal year of the Company.
Section 2.04 Equity Incentive and Other Benefit Programs. (a) Executive
has previously been granted certain options, warrants, restricted stock and
performance awards (collectively, the "Existing Awards"), summarized on the
attached Exhibit A, under the Starwood Lodging Trust 1995 Long-Term Incentive
Plan (amended and restated as of August 12, 1996) (the "LTIP"), which were
approved by the shareholders of the Company at the annual meeting of
shareholders held December 30, 1996 (as well as certain options which were
granted under the Starwood Lodging Trust 1995 Share Option Plan, prior to the
amendment and restatement as of August 12, 1996) (the "Pre-Existing Awards"),
all of which grants and awards are hereby confirmed as having been duly and
validly authorized and issued, and being in full force and effect as of the date
of execution of this Agreement.
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Nothing in this Agreement shall be deemed to modify or otherwise affect any of
the terms or provisions (including, but without limitation, any contingencies)
of any Pre-Existing Awards.
(b) Notwithstanding any provision to the contrary contained in any
agreement(s) (each, a "Plan Agreement") covering the relevant grant of Existing
Awards, the following terms shall apply with respect to such grants (the
relevant provisions of this Agreement constituting an amendment to the relevant
Plan Agreement(s) to the extent necessary to effectuate the same): (i) with
respect to the Three Year Option and the Five Year Option noted on Exhibit A,
together with the Performance Awards relating thereto (collectively, the "Recent
Options"), (A) termination for Cause and for Good Reason shall be as set forth
in and subject to this Agreement and (B) in the event the Executive's employment
by the Company shall terminate for any reason other than (1) termination by the
Company for Cause, or (2) termination by the Executive without Good Reason (any
such termination specified in this clause (B), a "Non-Cause Termination"), all
unvested portions of the Recent Options shall thereupon immediately vest in
full, free of restrictions (except that Executive may not exercise or sell with
respect to such unvested portions for a period of one-year from the date of
Termination if the reason for such Termination shall have been the failure of
the Company and Executive to agree to an extension of Executive's employment by
the Company by August 1, 1999), and the Recent Options shall remain exercisable
until the third anniversary of the date of such termination; (ii) with respect
to the remainder of the Existing Awards and all Pre-Existing Awards, in the
event of any Non-Cause Termination, all unvested portions of such Awards shall
thereupon immediately vest in full, free of restrictions (except that Employee
may not exercise or sell with respect to such unvested portions for a period of
one-year from the date of Termination if the reason for such Termination shall
have been the failure of the Company and Executive to agree to an extension of
Executive's employment by the Company by August 1, 1999), and shall remain
exercisable for the period provided by the terms of such Awards but no less than
a period ending three years from the date of termination of employment
hereunder; and (iii) no unvested portion of any Existing Award shall be subject
to forfeiture or restriction under any circumstance other than in the event of a
termination for Cause, or, in the case of the Recent Options, by Executive
without Good Reason. Executive shall be eligible for grants in the future of
additional Paired Options, Paired Shares and Performance Awards under the LTIP
(any such future grants, collectively, "Subsequent Awards"). All Paired Shares
included in or underlying any Existing Awards or Pre-Existing Awards will be
subject to applicable resale and other restrictions as set forth in the Plan
Agreement(s). The Company shall use its best efforts to file and keep effective
a registration statement on Form S-8 with the Securities and Exchange Commission
covering such Paired Shares.
(c) The Executive shall be entitled to participate in the LTIP, any
successor plan and all employee benefit plans, including retirement programs, if
any, group health care plans, and all fringe benefit plans, of the Company. Such
plans shall at all times be comparable to those made available to the
senior-most management of the Corporation and the Executive
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shall be entitled to participate in such on a basis and to an extent that is no
less favorable to the Executive than is made available to any other executive of
the Company or the Corporation.
Section 2.05 Expense Reimbursements. The Company shall reimburse the
Executive for all proper expenses incurred by him in the performance of his
duties hereunder in accordance with the policies and procedures of the Company
as in effect from time to time.
Section 2.06 Withholding. The Base Salary and all other payments to the
Executive for his services to the Company shall be subject to all withholding
and deductions required by federal, state or other law (including those
authorized by the Executive but not otherwise required by law), including but
not limited to state, federal and local income taxes, unemployment tax, Medicare
and FICA, together with such deductions as Executive may from time to time
specifically authorize under any employee benefit program which may be adopted
by the Company for the benefit of its senior executives or Executive.
ARTICLE III
Termination of Employment
Section 3.01 Termination. (a) Executive's employment hereunder shall be
terminable by either party with or without Cause and with or without notice
except as otherwise provided herein, but with the effect set forth herein.
(b) Executive shall give the Company at least 30 days' advance written
notice prior to any termination by Executive other than for Good Reason. The
Company shall give Executive at least 30 days' advance written notice prior to
any termination of Executive without Cause.
(c) Executive may resign and terminate his employment hereunder for
Good Reason (which shall also be deemed a termination by the Company other than
for Cause), subject, however, to prior delivery to the Company of a Preliminary
Notice of Good Reason and the failure of the Company to remedy the same within
the cure period provided below. For purposes of this Agreement, "Good Reason"
means (i) the failure to elect and continue Executive as CEO or Chairman of the
Company or to nominate Executive for re-election as a member of the Board
(unless a Cause Termination Notice (as hereinafter defined) shall theretofore
have been given to Executive); (ii) the failure to assign Executive duties,
authorities, responsibilities and reporting requirements consistent with his
position and otherwise as set forth herein, or if the scope of any of
Executive's material duties or responsibilities as CEO of the Company is reduced
or expanded to a significant degree without Executive's prior consent, except
for any reduction in duties and responsibilities due to Executive's illness or
disability or temporary suspensions of duties and responsibilities pending
results of any Board commissioned investigation as to potential Cause for
termination of Executive's employment and except if a Cause Termination Notice
shall theretofore have been
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given to Executive; (iii) a reduction in or a substantial delay in the payment
of Executive's compensation or benefits from those required to be provided in
accordance with the provisions of this Agreement, including under or in
connection with any Existing Award or Pre-Existing Award; (iv) a requirement by
the Company or the Board, without Executive's prior consent, that Executive be
based outside of Greenwich, Connecticut, other than on travel reasonably
required to carry out Executive's obligations under the Agreement; (v) the
failure of the Company to indemnify Executive (including the prompt advancement
of expenses), or to maintain directors' and officers' liability insurance
coverage for Executive, in accordance with the provisions of Section 5.12; (vi)
the Company's purported termination of the Executive's employment for Cause
other than in accordance with the requirements of this Agreement; (vii) a Change
of Control, as such term is defined and used in the LTIP, shall have occurred
(unless a Cause Termination Notice shall theretofore have been given to
Executive); or (viii) any other breach by the Company of any provision of this
Agreement; provided, that in the event Good Reason is based on clause (ii),
(iii), (iv), (v) or (viii) above, (a) "Good Reason" shall not include acts which
are cured by the Company within 30 days from receipt by the Company of a written
notice from Executive (a "Preliminary Notice of Good Reason") identifying in
reasonable detail the act or acts constituting Good Reason, (b) Good Reason
shall not exist unless the Preliminary Notice of Good Reason shall have been
given by Executive within 60 days after learning of the act, failure or event
(or, in the case of a series of related acts, failures or events, within 120
days of the first such act, failure or event) which Executive alleges
constitutes Good Reason hereunder, (c) if the Company has failed to cure as
provided above, Good Reason shall not exist unless Executive shall have given
notice of termination hereunder for Good Reason within 60 days from delivery of
the Preliminary Notice of Good Reason (which termination shall be effective 30
days from the giving of such notice), and (d) if the Company has commenced an
expedited arbitration in the manner prescribed below within 15 days after
receipt of the Executive's notice of termination called for under the
immediately preceding clause (c), such termination shall be effective as a
termination of employment and shall be deemed a termination by Executive for
Good Reason unless and until the Arbitrator shall have determined otherwise. If
the Company has timely commenced such an arbitration proceeding, in the manner
prescribed below, no payments shall be due Executive under Section 3.02 (i) or
(ii) hereof until the conclusion of the arbitration proceeding or further
proceeding contemplated by Section 5.04 hereof and only if an award is rendered
by the Arbitrator in favor of Executive. Notwithstanding the foregoing, if the
Company fails to file a demand for arbitration with the American Arbitration
Association ("AAA") and pay the requisite fees pursuant to Rule 4 of the AAA's
National Rules for the Resolution of Employment Disputes effective June 1, 1996
(the "National Rules") within 30 days after receipt of notice of termination
from the Executive, and diligently pursue such proceeding in accordance with the
procedures set forth in Section 5.04 hereof, Executive's termination of
employment from the Company shall be conclusively presumed to have been for Good
Reason.
(d) The Company shall have the right to terminate Executive's
employment hereunder for Cause. For purposes hereof, "Cause" shall be defined as
Executive's having (a) been convicted of a criminal offense constituting a
felony, (b) committed one or more acts or omissions
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constituting fraud or wilful misconduct, including such acts or omissions which
constitute a breach of his fiduciary duties under Maryland laws as an officer of
the Company or member of the Board, or (c) failed, after written warning from
the Board specifying in reasonable detail the breach(es) complained of, to
substantially perform his duties under this Agreement (excluding, however, any
failure to meet any performance targets), except where such failure results from
Executive's incapacity due to physical or mental illness.
Notwithstanding the foregoing, termination by the Company for Cause
shall not be effective until and unless each of the following provisions shall
have been complied with: (i) notice of intention to terminate for Cause, the
giving of which shall have been authorized by a vote of not less than 50% of all
disinterested Trustees then in office, which shall include a written statement
of the particular acts or circumstances which are the basis for the termination
for Cause and provide a reasonable period (not less than 30 days) to cure (a
"Preliminary Cause Notice"), shall have been given to Executive by the Board
within sixty days after the Company first learns of the act, failure or event
constituting Cause; and (ii) Executive shall not have cured the acts or
circumstances complained of within the cure period; and (iii) the Board shall
have called an in personam meeting of the Board, at which termination of
Executive is an agenda item, and shall have provided Executive with not less
than 20 days' notice thereof; and (iv) Executive shall have been afforded the
opportunity, accompanied by counsel, to provide written materials to the
Trustees in advance of such meeting and, if he so desires, to personally address
the Trustees at such meeting; and (v) the Board shall have provided, within
three business days after such meeting, a written notice of termination for
Cause, stating that, based upon the evidence it has received and reviewed, and
specifying in reasonable detail the acts and circumstances complained of, it has
voted by a vote of at least a majority of all of the disinterested Trustees then
in office to terminate Executive for Cause (such a notice, a "Cause Termination
Notice"), which such Notice shall be effective on the sixteenth day after
receipt thereof by Executive, subject to the provisions hereof; provided that if
Executive has commenced an expedited arbitration in the manner prescribed below
within 15 days after his receipt of the Cause Termination Notice, disputing the
Company's right under this Agreement to so terminate for Cause, Executive shall
not be deemed to have been terminated for Cause unless and until the Arbitrator
shall thereafter have determined that the Executive was properly terminated for
Cause in accordance with the provisions hereof; and provided, further that the
Company may suspend the Executive (a) with pay, at any time after any indictment
of Executive for a criminal offense constituting a felony or after the giving of
the Preliminary Cause Notice, and (b) without pay, at any time after the giving
of the Cause Termination Notice, except that any payments not so made shall be
made within three business days after the Arbitrator shall have made a
determination that Executive was terminated other than in compliance with the
foregoing provisions relating to termination for Cause. If Executive or his
representative fails to file a demand for arbitration with the AAA and pay the
requisite fees pursuant to Rule 4 of the National Rules within 30 days of his
receipt of a Cause Termination Notice from the Board, and diligently pursue such
proceeding in accordance with the procedures set forth in Section 5.04 hereof,
such termination shall, for purposes of Section 3.02 hereof, be conclusively
presumed to have been for Cause, it being understood and agreed
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that any decision of the Arbitrator that Executive has been terminated hereunder
for Cause, or any failure of Executive to contest the Company's allegations of
Cause hereunder (by failing to file and/or prosecute a demand for arbitration or
otherwise), is not intended to, and shall not, have any effect or bearing
whatsoever on any Pre-Existing Award, and the parties specifically agree and
undertake that, notwithstanding anything to the contrary, no finding of any
Arbitrator pursuant hereto that Executive was properly terminated for Cause
under this Agreement shall be binding upon or admissible in any court or other
proceeding in which any Pre-Existing Awards are at issue.
If the Arbitrator declines to rule that the Executive was terminated
for Cause, Executive shall be treated as having been terminated without Cause
and Executive shall have the rights provided under Section 3.02 below and
provided elsewhere in this Agreement with respect to a termination without
Cause.
For all purposes of this Agreement, "Good Reason" and "Cause" shall
have the applicable defined meaning as set forth above in this Section 3.01.
No termination of Executive's employment shall require that Executive
resign any other position (including as Trustee or Chairman) he may then be
holding with the Company; provided, however, that (i) if Executive's employment
hereunder is terminated for Cause under the above provisions, Executive shall
resign forthwith from all positions he may then be holding with the Company, if
requested to do so by the Board, and (ii) if Executive terminates his employment
hereunder other than for Good Reason, Executive shall resign forthwith from all
such positions, if requested to do so by the Board, except for any position to
which he has been elected by the shareholders of the Company (such as Trustee).
Section 3.02 Severance Package. In the event the Executive's employment
under this Agreement is terminated by the Company other than for Cause (and a
termination due to the Executive's death or permanent disability shall be
treated for purposes of this Agreement as a termination by the Company other
than for Cause) or is terminated by the Executive for Good Reason, then, as and
for a severance package ("Severance Package"),
(i) Executive shall, subject only to the delays permitted by Section
3.01 for arbitration, receive (A) an amount, which shall be payable in one lump
sum as soon as practicable, but in any event within 30 days of the date of
determination that Executive's termination is (x) other than for Cause, or (y)
for Good Reason as applicable, equal to two years of Base Salary based on the
Base Salary then in effect; provided, however, that the foregoing payment shall
be increased if and to the extent any other executive of the Company or any
executive of the Corporation shall become entitled upon his or her termination
of employment to a greater amount or measurement of payment as part of his or
her severance package, and (B) Company paid medical insurance benefits available
to other senior executives of the Company during the 12-month period subsequent
to termination of employment, all
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costs of which shall be paid by the Company (and thereafter all COBRA rights
available to the Executive shall be paid by the Executive); and
(ii) All Pre-Existing Awards and Existing Awards shall, notwithstanding
any provision to the contrary contained in any Plan Agreement(s) covering the
same (the relevant provisions of this Agreement constituting an amendment to the
relevant Plan Agreement(s) to the extent necessary to effectuate the same),
immediately vest in full (with all Performance Periods with respect to all
Pre-Existing and Existing Awards terminating on the effective date of
Executive's termination of employment and all relevant Performance Measures
being computed through such date), with preservation of all of Executive's
rights relating to all Existing Awards and under the relevant agreements
granting or otherwise governing same for the full terms thereof, and, following
timely exercise of any such Awards, Executive shall receive title to the shares
issued upon exercise or otherwise in respect thereof free and clear of any lien,
claim or encumbrance by, through or under the Company.
If a corporate transaction which would constitute a Change of Control
event under the LTIP is agreed to during the pendency of an arbitration
hereunder, the Company will include appropriate provisions which will enable the
Executive to participate in such Change of Control event as if the arbitration
were resolved favorably to the Executive, but subject to such a favorable
resolution.
The parties agree that the foregoing shall be the Executive's sole and
exclusive monetary remedy under this Agreement by reason of termination by the
Executive for Good Reason or by the Company other than for Cause, it being
agreed that as his actual damages under this Agreement would be difficult to
measure or quantify and would be impracticable to determine, such amount shall
constitute liquidated damages under this Agreement for the Executive by reason
of such termination by Executive for Good Reason, or by reason of any
termination by the Company other than for Cause hereunder. Such payments shall
not be reduced or limited by amounts Executive might earn or be able to earn
from other employment or ventures. The parties agree that the Company shall have
no recourse whatsoever to any monetary remedy by reason of Executive's
termination of employment, other than for reimbursement of actual out-of-pocket
damages actually suffered and incurred by the Company as a direct result of
Executive's termination for Cause hereunder (excluding the costs of identifying
and/or hiring any replacement for Executive, or any attorney's fees or costs of
investigation, which shall be borne solely by the Company), all of which are
hereby waived; provided, however, that the foregoing limitation shall not apply
to any claims the Company may have against Executive relating to tortious
conduct by Executive which causes damage to the Company.
Section 3.03 Rights on Termination for Cause or Without Good Reason. No
Severance Package shall be due or owing to the Executive in the event that the
Company shall duly terminate the Executive's employment for Cause or in the
event that the Executive shall terminate his employment with the Company for
reasons other than Good Reason (it being
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understood and agreed that the provisions hereof relating to Existing or
Pre-Existing Awards, including those set out in Section 2.04, shall not be
affected thereby); provided, however that Executive shall in all events be paid
all accrued but unpaid Base Salary, awarded but unpaid Incentive Compensation,
and other benefits through the date of termination. In addition, in the event
that the Company shall terminate the Executive's employment for Cause or in the
event that the Executive shall terminate his employment with the Company for
reasons other than Good Reason, then except as provided in Section 2.04 above or
in the following two sentences, all unvested Recent Options, unvested
Performance Awards and unvested restricted Paired Shares then held by Executive
shall automatically be forfeited (subject, however, to any contrary provisions
in the relevant Plan Agreements, as amended through the date of termination,
relating to such Recent Options, Awards or Paired Shares, or any contrary
determination of the Board in its sole discretion). No forfeiture of unvested
Recent Options, Performance Awards or unvested restricted Paired Shares required
hereby shall occur or be effective until 15 days after the later of (i) the
conclusion of any arbitration proceeding or further proceeding contemplated by
Section 3.01 hereof, or (ii) if no arbitration proceeding is commenced, until
the time for commencing such a proceeding has lapsed, or (iii) with respect to
Pre-Existing Awards, the determination by a court of competent jurisdiction that
cause, as such term is defined and used in the relevant Plan Agreement(s)
covering the grants of the Pre-Existing Awards, has occurred (the latest of such
three dates being referred to herein as the "Forfeiture Date"), but, except as
otherwise provided in Section 2.04 above or in the relevant Plan Agreement(s)
governing the terms thereof, no additional service-based or time-based vesting
shall occur with respect to any such Recent Options, Performance Awards or
Paired Shares following the date Executive's employment is deemed terminated
under Section 3.01. It is expressly agreed that Executive may exercise vested
options and other Existing and Pre-Existing Awards, and receive a settlement of
vested Performance Awards, at any time prior to the Forfeiture Date. In all
other respects, the terms of the grant of any such options or award of any such
Paired Shares shall govern.
ARTICLE IV
Confidential Information; Inducing Company Employees
Section 4.01 Confidential Information. Except in the course of his
employment with the Company, or as he may be required pursuant to any law or
court order or similar process, the Executive shall not at any time either
during or after his termination of employment hereunder, directly or indirectly
disclose or use any secret, proprietary, confidential information or data of the
Company or the Corporation, or any of their respective subsidiaries or
affiliates; provided, however, that after the expiration of 18 months from such
termination of employment, the Company's sole remedy shall be to seek and
procure appropriate equitable remedies. In the event of any dispute between the
Executive and the Company or between the Executive or the Company and others,
the Executive shall cooperate with the Company as to redaction or other
protective measures with respect to any unnecessary public disclosure of any
such confidential information or proprietary data.
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Section 4.02 Inducing of Company Employees. Except in the course of his
employment with the Company, or with the prior written approval of the Board,
Executive shall not at any time through the 12 month period after his
termination of employment hereunder, in any way directly or indirectly hire,
attempt to hire, or cause to be hired any person or persons who to Executive's
best knowledge was employed at any time during the period commencing six months
prior to such termination by the Company, the Corporation, or their respective
subsidiaries or SLT Realty Limited Partnership or SLC Operating Limited
Partnership.
ARTICLE V
Miscellaneous
Section 5.01 Notices. All notices, requests or other communications
provided for in this Agreement shall be made, if to the Company, to the
Secretary of the Company at the Company's principal executive office, and if to
the Executive, to his address on the books of the Company (or to such other
address as the Company or Executive may give to the other for purposes of notice
hereunder).
Copies of all notices given to Executive shall be sent to:
▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Copies of all notices given to the Company shall be sent to:
Sidley & Austin
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
All notices, requests or other communications required or permitted by
this Agreement shall be made in writing either (a) by personal delivery to the
party entitled thereto, (b) by mailing via certified mail, postage prepaid,
return receipt requested, in the United States mails to the last known address
of the party entitled thereto, or (c) by reputable overnight courier service.
The notice, request or other communication shall be deemed to be received upon
actual receipt by the party entitled thereto; provided, however, that if a
notice, request or other communication is not received during regular business
hours, it shall be deemed to be received on the next succeeding business day of
the Company.
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Section 5.02 Assignment and Succession. The rights and obligations of
the Company under this Agreement may not be assigned in whole or any part except
in the case of a consolidation or merger with, or a transfer of all or
substantially all of the assets of the Company to, another entity acceptable to
Executive, which not later than 15 days prior to the consummation of such
combination transaction expressly assumes in a writing satisfactory in form and
substance to Executive all of the Company's obligations to Executive hereunder,
under all Existing and Pre-Existing Awards and any Subsequent Awards and
otherwise. No such assignment shall limit or restrict Executive's right to
terminate this Agreement for Good Reason, which right shall remain absolute.
Executive's rights and obligations hereunder are personal and may not be
assigned; provided, however that in the event of the termination of the
Executive's employment due to the Executive's death or permanent disability, the
Executive's legal representative shall have the right to receive the Severance
Package as more particularly set forth in Section 3.02 above. This Agreement
shall inure to the benefit of and be enforceable by Executive's heirs,
beneficiaries and/or legal representatives.
Section 5.03 Headings. The Article, Section, paragraph and subparagraph
headings are for convenience of reference only and shall not define or limit the
provisions hereof.
Section 5.04 Arbitration. In the event of any controversy, dispute or
claim arising out of or related to this Agreement or the Executive's employment
by the Company, the parties shall negotiate in good faith in an attempt to reach
a mutually acceptable settlement of such dispute. If negotiations in good faith
do not result in a settlement of any such controversy, dispute or claim, it
shall, except as otherwise provided for herein be finally settled by expedited
arbitration conducted by a single arbitrator selected as hereinafter provided
(the "Arbitrator") in accordance with the National Rules, subject to the
following (the parties hereby agreeing that, notwithstanding the provisions of
Rule 1 of the National Rules, in the event that there is a conflict between the
provisions of the National Rules and the provisions of this Agreement, the
provisions of this Agreement shall control):
(a) The Arbitrator shall be determined from a list of names of five
impartial arbitrators each of whom shall be an attorney experienced in
arbitration matters concerning executive employment disputes, supplied by the
AAA chosen by Executive and the Company each in turn striking a name from the
list until one name remains (with the Company being the first to strike a name).
(b) The expenses of the arbitration shall be borne equally by each
party; and each party shall bear its own legal fees and expenses, except that
the prevailing party shall be awarded his or its reasonable attorney's fees and
expenses with respect to such dispute.
(c) The Arbitrator shall determine whether and to what extent any party
shall be entitled to damages under this Agreement; provided that no party shall
be entitled to punitive or consequential damages (including, in the case of the
Company, any claim for alleged lost
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profits or other damages that would have been avoided had Executive remained an
employee), and each party waives all such rights if any.
(d) The Arbitrator shall not have the power to add to nor modify any of
the terms or conditions of this Agreement. The Arbitrator's decision shall not
go beyond what is necessary for the interpretation and application of the
provision(s) of this Agreement in respect of the issue before the Arbitrator.
The Arbitrator shall not substitute his or her judgment for that of the parties
in the exercise of rights granted or retained by this Agreement. The
Arbitrator's award or other permitted remedy, if any, and the decision shall be
based upon the issue as drafted and submitted by the respective parties and the
relevant and competent evidence adduced at the hearing.
(e) The Arbitrator shall have the authority to award any remedy or
relief (including provisional remedies and relief) that a court of competent
jurisdiction could order or grant. The Arbitrator's written decision shall be
rendered within sixty days of the closing of the hearing. The decision reached
by the Arbitrator shall be final and binding upon the parties as to the matter
in dispute. To the extent that the relief or remedy granted by the Arbitrator is
relief or remedy on which a court could enter judgment, a judgment upon the
award rendered by the Arbitrator shall be entered in any court having
jurisdiction thereof (unless in the case of an award of damages, the full amount
of the award is paid within 10 days of its determination by the Arbitrator).
Otherwise, the award shall be binding on the parties in connection with their
continuing performance of this Agreement and, except as otherwise provided
herein with respect to Existing Grants, in any subsequent arbitral or judicial
proceedings between the parties.
(f) The arbitration shall take place in New York, New York or Chicago,
Illinois, as elected by the party commencing arbitration.
(g) The arbitration proceeding and all filing, testimony, documents and
information relating to or presented during the arbitration proceeding shall be
disclosed exclusively for the purpose of facilitating the arbitration process
and in any court proceeding relating to the arbitration, and for no other
purpose, and shall be deemed to be information subject to the confidentiality
provisions of this Agreement.
(h) The parties shall continue performing their respective obligations
under this Agreement notwithstanding the existence of a dispute while the
dispute is being resolved unless and until such obligations are terminated or
expire in accordance with the provisions hereof.
(i) The parties may obtain a pre-hearing exchange of information
including depositions, interrogatories, production of documents, exchange of
summaries of testimony or exchange of statements of position, and the Arbitrator
shall limit such disclosure to avoid unnecessary burden to the parties and shall
schedule promptly all discovery and other
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procedural steps and otherwise assume case management initiative and control to
effect an efficient and expeditious resolution of the dispute. At any oral
hearing of evidence in connection with an arbitration proceeding, each party and
its counsel shall have the right to examine its witness and to cross-examine the
witnesses of the other party. No testimony of any witness, or any evidence,
shall be introduced by affidavit, except as the parties otherwise agree in
writing.
(j) Notwithstanding the dispute resolution procedures contained in this
Section 5.04, either party may apply to any court sitting in the County, City
and State of New York (i) to enforce this agreement to arbitrate, (ii) to seek
provisional injunctive relief so as to maintain the status quo until the
arbitration award is rendered or the dispute is otherwise resolved, (iii) to
confirm any arbitration award, or (iv) to challenge or vacate any final
judgment, award or decision of the Arbitrator that does not comport with the
express provisions of this Section 5.04.
Section 5.05 Invalidity. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect under any law, the
validity, legality or enforceability of the remaining provisions hereof shall
not in any way be affected or impaired.
Section 5.06 Waivers. No omission or delay by either party hereto in
exercising any right, power or privilege hereunder shall impair such right,
power or privilege, nor shall any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof, or the exercise of
any other right, power or privilege.
Section 5.07 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 5.08 Entire Agreement. Except as otherwise provided or referred
to herein, this Agreement contains the entire understanding of the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof. This Agreement may not be amended, except by a written instrument
hereafter signed by each of the parties hereto.
Section 5.09 Interpretation. The parties hereto acknowledge and agree
that each party and its or his counsel reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its drafting. Accordingly,
(i) the rules of construction to the effect that any ambiguities are resolved
against the drafting party shall not be employed in the interpretation of this
Agreement, and (ii) the terms and provisions of this Agreement shall be
construed fairly as to all parties hereto and not in favor of or against any
party regardless of which party was generally responsible for the preparation of
this Agreement. Except where the context requires otherwise, all references
herein to Sections, paragraphs and clauses shall be deemed to be reference to
Sections, paragraphs and clauses of this Agreement. The words "include",
"including" and "includes" shall be deemed in each case to be followed by the
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phrase "without limitation". The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Section 5.10 Governing Law. This Agreement and the performance hereof
shall be construed and governed in accordance with the internal laws of the
State of New York without reference to principles of conflict of laws.
Section 5.11 Indemnification. In addition to any additional benefits
provided under applicable state law, as a Trustee and officer of the Company,
the Executive shall be entitled to the benefits of: (a) those provisions of the
Declaration of Trust of the Company, as amended, and of the Trustees Regulations
of the Company, as amended, which provide for indemnification of officers and
Trustees of the Company (and no such provision shall be amended in any way to
limit or reduce the extent of indemnification available to Executive as a
Trustee or officer of the Company), (b) the Indemnification Agreement between
the Company and Executive dated as of June 8, 1995, as amended through the date
hereof (the "Indemnification Agreement").
The rights of Executive under such indemnification obligations shall
survive the termination of this Agreement and be applicable for so long as the
Executive may be subject to any claim, demand, liability, cost or expense, which
the indemnification obligations referred to in this Section are intended to
protect and indemnify him against.
The Company shall, at no cost to the Executive, use its best efforts to
at all times include the Executive during the term of Executive's employment
hereunder and for so long thereafter as Executive may be subject to any such
claim, as an insured under any directors' and officers' liability insurance
policy maintained by the Company, which policy shall provide such coverage in
such amounts as the Board shall deem appropriate for coverage of all Trustees
and officers of the Company.
Section 5.12 Disclaimer. The name "Starwood Lodging Trust" is the
designation of a Maryland real estate investment trust and its Trustees (as
Trustees but not personally) under a Declaration of Trust dated August 25, 1969,
as amended and restated, and all persons dealing with Starwood Lodging Trust
must look solely to Starwood Lodging Trust's property for the enforcement of any
claims against Starwood Lodging Trust, as the Trustees, officers, agents and
security holders of Starwood Lodging Trust assume no personal obligations of
Starwood
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Lodging Trust, and their respective property shall not be subject to claims of
any person relating to such obligation.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officer and the Executive has signed this Agreement as of
the day and year first above written.
STARWOOD LODGING TRUST
By:
----------------------------
Name:
--------------------------
Its:
---------------------------
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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EXHIBIT A
to
EMPLOYMENT AGREEMENT
between
STARWOOD LODGING TRUST
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
DATED AS OF JUNE 30, 1997
Existing Awards:
1. Award as of February 21, 1996 of 30,000 Paired Shares in the
form of warrants vesting over a one year period;
2. Paired Option to purchase 975,000 Paired Shares vesting over
the three year period August 12, 1996 to August 12, 1999;
3. Paired Option to purchase 450,000 Paired Shares vesting over
the five year period August 12, 1996 to August 12, 2001;
4. Performance Awards relating to all Paired Shares underlying
the above Paired Options granted to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇.
Pre-Existing Awards:
1. Paired Option to purchase 616,500 Paired Shares granted June
29, 1995.
2. Paired Option to purchase 9,000 Paired Shares granted June 29,
1995.
3. Paired Option to purchase 120,000 Paired Shares granted April
30, 1996.
4. Paired Option to purchase 9,000 Paired Shares granted June 30,
1996.
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