Exhibit 10.4
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is entered into as of and
shall be effective as of March 27, 2000 (the "Effective Date"), by and between
Wyndham International, Inc., a Delaware corporation ("Employer), and Xxxx X.
Xxxxxxxx ("Executive').
WHEREAS, Executive has previously entered into an Executive Employment
Agreement with Employer pursuant to which he has served as Chief Operating
Officer and President of Employer (the "Prior Agreement"); and
WHEREAS, Employer, acting by and through the Board of Directors of Employer
(the Board") now desires to employ Executive as the Chief Executive Officer and
President of Employer and in connection therewith desires to terminate the
Prior Agreement and supercede the Prior Agreement with this Agreement; and
WHEREAS, Executive, seeking to serve the best interests of Employer, is
agreeable to assuming the duties of this new position and is agreeable to
terminating the Prior Agreement and superceding the Prior Agreement with this
Agreement on the terms herein provided; and
WHEREAS, pursuant to the terms of the Prior Agreement, Employer (a) granted
Executive an option (the "1999 Stock Option") to purchase 1,100,000 shares of
Class A Common Stock of Employer pursuant to the terms of a Stock Option
Agreement (the "1999 Option Agreement"), (b) granted Executive 203,000 shares of
Class A Common Stock pursuant to the terms of a Restricted Unit Award Agreement
(the "Restricted Unit Award Agreement"), and entered into a No Personal
Liability Nonrecourse Promissory Note in the original principal amount of
$850,000 (the "1999 Note"); and
WHEREAS, in March 2000, Employer granted Executive an option (the "2000
Stock Option") to purchase 701,250 shares of Class A Common Stock of Employer
pursuant to the terms of a Stock Option Agreement (the "2000 Option Agreement");
and
WHEREAS, the terms and provisions of the 1999 Option Agreement, 2000 Option
Agreement, Restricted Unit Award Agreement and 1999 Note shall not be affected
by this Agreement except to the extent specifically set forth herein; and
WHEREAS, as an additional inducement to Executive to enter into this
Agreement, Employer shall, on the Effective Date enter into an indemnification
agreement with Executive in the form attached hereto as Exhibit A (the
Indemnification Agreement"); and
WHEREAS, as an additional inducement to Executive to enter into this
Agreement, Employer shall, as of the Effective Date, grant Executive an option
(the "New Stock Option" and together with the 1999 Stock Option and 2000 Stock
Option, the "Stock Options") to purchase 200,000 shares of Class A Common Stock
of Employer, as set forth in this Agreement and/or the Agreement attached hereto
as Exhibit B (the "New Option Agreement); and
WHEREAS, Executive is desirous of committing himself to serve Employer on
the terms herein provided,
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree that as of the
Effective Date the Prior Agreement (which does not include the 1999 Option
Agreement, the 2000 Option Agreement, the Restricted Unit Award Agreement and
the 1999 Note, each of which remains in full force and effect) shall be
terminated and superseded by this Agreement which provides as follows:
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1. Employment. The initial term of this Agreement shall extend from the
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Effective Date until the fifth anniversary of the Effective Date. On the third
anniversary of the Effective Date amid every odd-numbered calendar year
anniversary date thereafter (e.g., 2005, 2007 ...) the term of this Agreement
shall be automatically extended for an additional two (2) years unless either
party otherwise elects by notice in writing delivered to the other at least
ninety (90) days prior to the third anniversary or ninety (90) days prior to the
concerned odd-numbered calendar year anniversary date thereafter; provided,
however that this sentence shall not be deemed to reduce the five (5) year
initial term of this Agreement; provided, further, that if a Change in Control
(as hereinafter defined) occurs during the initial or extended term of this
Agreement, the term of this Agreement shall continue in effect for a period of
not less than eighteen (18) months beyond that month in which that Change in
Control occurred. The term of the Agreement shall be subject to termination only
as provided in paragraph 7. The term of this Agreement may be referred to herein
as the "Period of Employment."
2. Position and Duties. During the Period of Employment, Executive shall
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serve as Chief Executive Officer and President of Employer, reporting to the
Board; shall have supervision and control over and responsibility for the day-
to-day business and affairs of Employer; and shall have such other powers and
duties as may from time to time be prescribed by the Board, provided that such
duties are consistent with the normal and customary responsibilities of a Chief
Executive Officer and President. Should, commencing with the 2000 annual meeting
of stockholders of Employer and continuing throughout the Period of Employment,
Executive not be nominated to serve (or, if nominated, not be elected to serve)
as a director or member of the Board, then Executive may, as provided in
subparagraph 7(e), terminate his employment hereunder, which termination shall
be deemed to be for Good Reason,
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as defined in subparagraph 7(e). Except as provided otherwise herein, Executive
shall devote his full working time and working efforts to the business and
affairs of Employer. Notwithstanding the foregoing, Executive may serve on other
boards of directors or engage in religious, charitable, or other community
activities as long as such services and activities are disclosed to the Board
and do not materially interfere with Executive's performance of his duties as
provided in this Agreement.
3. Compensation and Related Matters.
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(a) Base Salary. Initially, Executive shall receive an annual minimum
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base salary ("Base Salary") equal to Six Hundred Twenty-Four Thousand Dollars
and No/100 Cents ($624,000.00). Thereafter, Executive's Base Salary shall be re-
determined at least thirty (30) days before each annual compensation
determination date established by Employer during the Period of Employment but
in any event no later than the first quarter of the applicable fiscal year (the
"Annual Compensation Determination Date") in an amount to be fixed by the Board,
but in no event shall such re-determined Base Salary be less than $624,000.00.
The Base Salary, as re-determined, is referred to herein as the "Adjusted Base
Salary." The Base Salary or, if applicable, the Adjusted Base Salary, shall be
payable in substantially equal bi-weekly installments.
(b) Incentive Compensation. In addition to Base Salary or, if
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applicable, Adjusted Base Salary, Executive shall be eligible to receive in each
fiscal year during the Period of Employment, on or about the Annual Compensation
Determination Date (or earlier as provided in Paragraph 8 and 9 of this
Agreement), cash incentive compensation (the "Incentive Compensation") in an
amount determined annually by the Compensation Committee of the Board based on
individual performance, "Employer EBITDA Achievement" (as hereinafter
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defined), and total return to shareholders. Incentive Compensation shall equal
from zero to three times the then current Base Salary or, if applicable.
Adjusted Base Salary. "Employer EBITDA Achievement" is the degree to which the
annual budget established by Employer for earnings before interest, taxes,
depreciation, and amortization is achieved. Notwithstanding the foregoing, the
Incentive Compensation shall equal at least one hundred fifty percent (150%) of
the Base Salary or, if applicable, Adjusted Base Salary for any year in which
Employer EBITDA Achievement is one hundred percent (100%) or more ("Target
Incentive Compensation").
"Pro Rata Incentive Compensation" shall be paid to Executive for any
termination. Pro Rata Incentive Compensation equals the Incentive Compensation
for the fiscal year of termination multiplied by a fraction, the numerator of
which is the number of days in the current fiscal year through Date of
Termination and the denominator is 365.
If, for the purpose of calculating Incentive Compensation or Pro Rata
Incentive Compensation, the Incentive Compensation cannot be determined by the
time required to be paid, Employer shall make a good faith estimate of this
amount, resolving all doubts in favor of Executive and, in calculating the Pro
Rata Incentive Compensation, such good faith estimate shall be based on an
amount Executive would have earned had he continued employment for the entire
fiscal year.
Executive will also participate in such other incentive compensation
plans, policies or practices as the Board shall determine.
(c) Expenses. Executive shall be entitled to receive prompt
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reimbursement for all reasonable expenses incurred by him (in accordance with
the policies and procedures then in effect and established by Employer for its
senior executive officers) in performing services
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hereunder during the Period of Employment, provided that Executive properly
accounts therefor in accordance with Employer policy.
(d) Country Club Entertainment Benefit. Employer shall, if Executive
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so requests, provide Executive with a country club membership at The Dallas
Country Club (or an equivalent club selected by Executive) and pay or reimburse
Executive for all charges for goods and services incurred relating to Employer's
business and for all membership costs and dues incurred with regard thereto by
or on behalf of Executive.
(e) Automobile Allowance. Employer shall provide Executive with a
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company car or allowance therefor, which car or allowance shall be for, or
sufficient for, a Lexus LS400 or equivalent selected by Executive.
(f) Air Travel Allowance. Executive, and, when requested by Executive,
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his spouse, shall be provided with or reimbursed for the cost of first-class
aircraft travel when Executive is traveling on Employer's business, as and when
Executive deems such travel to be required or convenient.
(g) Other Benefits. During the Period of Employment, Executive shall
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be entitled to continue to participate in or receive benefits under all of
Employer's Employee Benefit Plans in effect on the date hereof, or under plans
or arrangements that provide Executive with at least substantially equivalent
benefits to those provided under such Employee Benefit Plans. As used herein,
"Employee Benefit Plans" include, without limitation, each pension and
retirement plan, supplemental pension, retirement and deferred compensation
plan, savings and profit-sharing plan, stock ownership plan, stock purchase
plan, stock option plan, life insurance plan, medical insurance plan, disability
plan, and health and accident plan, or arrangement established and maintained by
Employer on the date hereof and enhancements thereof hereafter made. To
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the extent that the scope or nature of benefits described in this section are
determined based in whole or in part on the seniority or tenure of an employee's
service, Executive shall be deemed to have a tenure with Employer equal to the
actual time of Executive's service with Employer. During the Period of
Employment, Executive shall be entitled to participate in or receive benefits
under any of the Employee Benefit Plans or arrangements that may, in the future,
be made available by Employer to its executives and key management employees,
subject to and on a basis consistent with the terms, conditions, and overall
administration of such plans or arrangements. Nothing paid to Executive under
the Employee Benefit Plans presently in effect or any employee benefit plan or
arrangement that may be made available in the future shall be deemed to be in
lieu of compensation otherwise payable to Executive under subparagraphs 3(a) and
3(b) and elsewhere in this Agreement. Any payments or benefits payable to
Executive under a plan or arrangement referred to in this subparagraph 3(g) iii
respect of any calendar year during which Executive is employed by Employer for
less than the whole of such year shall, unless otherwise provided in such plan
or arrangement, be prorated in accordance with the number of days in such
calendar year during which he is so employed. Should any such payments or
benefits accrue on a fiscal (rather than calendar) year, then the proration in
the preceding sentence shall be on the basis of a fiscal year rather than
calendar year.
(h) Life Insurance. Employer shall pay the premiums on, and maintain,
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in effect throughout the Period of Employment, a life insurance policy on the
life of Executive in an amount of not less than $2,000,000.00. Executive shall
have the right to designate the beneficiary under such policy.
(i) Vacations. Executive shall be entitled to a minimum of twenty (20)
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days of paid vacation in each calendar year or such greater number of days as is
determined by
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Employer from time to time for its senior executive officers. Executive shall
also be entitled to all paid holidays given by Employer to its senior executive
officers. To the extent that the Scope or nature of benefits described in this
section are determined under the polities of Employer, based in whole or iii
part on the seniority or tenure of an employee's service, Executive shall be
deemed to have a tenure with Employer equal to the actual time of Executive's
service with Employer.
(j) Disability Insurance. Employer shall pay the premiums on, and
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maintain in effect throughout the Period of Employment, long-term disability
insurance providing for payment of benefits at rates not less than 60% of
Executive's Base Salary or, if applicable, hit Adjusted Base Salary.
(k) Employer Property Usage Policy. During the Period of Employment
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sad thereafter, unless Executive's employment by Employer terminates "For Cause"
as that turn 'a defined in subparagraph 7(c), Executive shall be provided with
rights and benefits comparable to the standard rights and benefits provided to
the Directors who are currently serving on the Board.
(l) Comparability. Notwithstanding anything to the contrary in the
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foregoing provisions of this paragraph 3, so long as Executive Serves as the
Chief Executive Officer of Employer, the sum of Executive's Base Salary or, if
applicable, Adjusted Base Salary, and Target Incentive Compensation shall in no
event be less than one hundred fifty percent (l50%) of the sum of the Salary
and Target Incentive Compensation paid to the next highest paid employee of the
Employer (other than the Chairman of the Board) and one hundred percent (100%)
of owl and all benefits under Employee Benefit Plans or otherwise awarded to any
other emplo9ee of Employer (other than the Chairman of the Board). All other
terms and provisions of this Agreement shall at all times be deemed amended to
the end that such terms and provision are at
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all times, and from time to time, at least as favorable to Executive as such
terms and provisions would be under any other employment agreement to which
Employer is a party (other than the employment agreement with the Chairman of
the Board).
4. Board Service. Executive agrees to serve as a director of Employer,
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if elected or appointed, provided he is forever indemnified for serving in such
capacities as set forth in the Indemnification Agreement which indemnity shall
survive the termination of the Indemnification Agreement and the termination of
this Agreement. Employer will provide appropriate Directors' and Officers'
Insurance naming Executive as a named insured with xxxxx of no less than that
provided to other officers and directors.
5. Unauthorized Disclosure.
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(a) Confidential Information. Executive acknowledges that in the con
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of his employment with Employer (and, if applicable, the predecessors of
Employer), he has been allowed to become, and will continue to be allowed to
become, acquainted with Employer's, business affairs, information, trade
secrets, and other matters that are of a proprietary or confidential nature,
such as business opportunities, price and cost information, finance, customer
information business plans, various sales techniques, manuals, letters,
notebooks, procedures, reports, products, processes, services, and other
confidential information and knowledge (collectively, the "Confidential
Information") concerning Employer's and its predecessors' business. Employer
agrees to provide, on an ongoing basis, such Confidential Information as
Employer deems necessary or desirable to aid Executive in the performance of his
duties. Executive understands and acknowledges that such Confidential
Information is confidential, and he agrees not to disclose such Confidential
Information to anyone outside Employer, except as he deems reasonably necessary
or appropriate in connection with performing his duties on behalf
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of Employer. Executive further agrees that he will not during employment and/or
at any time thereafter use such Confidential Information in competing, directly
or indirectly, with Employer. At such time as Executive shall cease to be
employed by Employer, he will immediately turn over to Employer all Confidential
Information, including papers, documents, writings, electronically stored
information, other property, and all copies of them provided to or created by
him during the course of his employment with Employer.
(b) Heirs. Successors, and Legal Representatives. The foregoing
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provisions of this paragraph 5 shall be binding upon Executive's heirs,
successors, and legal representatives. The provisions of this paragraph 5 shall
survive the termination of this Agreement for any reason.
6. Covenant Not to Compete. In consideration for the Stock Options, the
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Employer's promise to provide Confidential Information as set forth in Paragraph
5 above, and for Executive's employment by the Employer under the terms provided
in this Agreement, and as a means to aid in the performance and enforcement of
and preserve the rights of the Employer pursuant to the terms of the
Unauthorized Disclosure provisions of Paragraph 5, Executive agrees as follows:
(a) during the term of Executive's employment with the Employer and
for a period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not, directly or indirectly, as an
owner, director, principal, agent, officer, employee, partner, consultant,
servant, or otherwise, carry on, operate, manage, control, or become involved in
any manner with any business, operation, corporation, partnership, association,
agency, or other person or entity which is in the business of owning, operating,
managing or granting franchise fights with respect to the top ten branded hotel
companies, as
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defined by accepted industry consultants, such as PricewaterhouseCoopers, in any
city in which the Employer, or any subsidiary or affiliate of the Employer,
operates any facility during Executive's term of Employment; provided, however,
that the foregoing shall not prohibit Executive from owning up to one percent
(1%) of the outstanding stock of a publicly held company engaged in the
hospitality business or holding as a purely passive investor of less than a
controlling interest in any other entity. Notwithstanding the foregoing, after
Executive's employment with the Employer has terminated, upon receiving written
permission by the Board, Executive shall be permitted to engage in such
activities with respect to any other hotel, motel or lodging facility that shall
be determined in the sole discretion of the Board in faith to be immaterial to
the operations of the Employer, or any subsidiary or affiliate of the Employer,
in the area or territory in question.
(b) during the term of Executive's employment with the Employer and
for a period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not, directly or indirectly, either
for himself or for any other business, operation, corporation, partnership,
association, agency, or other person or entity, call upon, compete for, solicit,
divert, or take away, or attempt to divert or take away current or prospective
customers (including, without limitation, any hotel owner, lessor or lessee,
asset manager, trustee, consumer with whom the Employer, or any subsidiary or
affiliate of the Employer, (i) has an existing agreement or business
relationship; (ii) has had an agreement or business relationship within the two-
year period preceding the Executive's last day of employment with the Employer;
or (iii) has included as a prospect in its applicable pipeline) or any
subsidiary or affiliate of the Employer.
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(c) during the term of Executive's employment with the Employer and
for a period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any current or prospective employee of the Employer, or any subsidiary or
affiliate of the Employer (including, without limitation, any current or
prospective employee of the Employer within the six-month period preceding the
Executive's last day of employment with the Employer or within the 24-month
period of this covenant) to accept employment with Executive or with any
business, operation, corporation, partnership, association, agency, or other
person or entity with which Executive may be associated, and Executive will not
employ or cause any business, operation, corporation, partnership, association,
agency, or other person or entity with which Executive may be associated to
employ any current or prospective employee of the Employer, or any subsidiary or
affiliate of the Employer, without providing the Employer with ten (10) days'
prior written notice of such proposed employment.
(d) Executive agrees and acknowledges that the restrictions contained
in this noncompetition covenant are reasonable in scope and duration and are
necessary to protect the Employer's business interests and Confidential
Information after the Effective Date of this Agreement. If any provision of this
noncompetition covenant as applied to any party or to any circumstance is
adjudged by a court to be invalid or unenforceable, the same will no in way
affect any other circumstance or the validity or enforceability of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to delete
specific words or phrases, and in its reduced form, such provision shall then be
enforceable and
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shall be enforced. The parties agree and acknowledge that the breach of this
noncompetition covenant will cause irreparable damage to the Employer, and upon
breach of any provision of this noncompetition covenant, the Employer shall be
entitled to injunctive relief, specific performance, or other equitable relief;
provided, however, that this shall in no way limit any other remedies which the
Employer may have (including, without limitation, the right to seek monetary
damages).
(e) Should Executive violate the provisions of this Paragraph, then
in addition to all other rights and remedies available to the Employer at law or
in equity, the duration of this covenant shall automatically be extended for the
period of time from which Executive began such violation until he permanently
ceases such violation.
(f) Should, however, Employer fail to timely pay any sums or
otherwise fail to timely provide any benefit due and owing to Executive, his
family, or his estate within ten (10) days after Executive or a representative
or his family or estate notifies Employer in writing of a failure to timely pay
any such sums or timely provide any such benefits, the provisions of this
paragraph 6 shall no longer be binding and shall have no force or effect, unless
and until Executive is, after a full and final hearing, found to be in material
breach of this Agreement in an arbitrator's award made by an arbitrator
appointed under paragraph 17 of this Agreement.
7. Termination. Executive's employment hereunder may be terminated
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without any breach of this Agreement under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his
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death.
(b) Disability. Employer shall be entitled to terminate the
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Executive's employment because of the Executive's Disability during the Period
of Employment. "Disability" means that as a result of Executive's incapacity due
to physical or mental illness
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Executive shall have been absent from his duties hereunder on a full-time basis
for one hundred eighty (180) calendar days in the aggregate in any twelve (12)
month period (such period to not include, however, any time that Executive is on
leave of absence as authorized by this Agreement or Employer's leave policies).
A termination of the Executive's employment by Employer for Disability, shall
after the 180 calendar day period described above in this subparagraph 7(b), be
communicated to the Executive by written notice, and shall be effective on the
60th day after receipt of such notice by the Executive (the "Disability
Effective Date"), unless the Executive returns to full-time performance of the
Executive's duties before the Disability Effective Date.
(c) Termination by Employer For Cause. At any time during the Period
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of Employment, Employer may terminate Executive's employment hereunder for Cause
if such termination is approved by not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for such
purpose. For purposes of this Agreement "Cause" shall mean: (i) the willful and
continued failure of the Executive substantially to perform the Executive's
duties under this Agreement (other than as a result of physical or mental
illness or injury), after the Board delivers to the Executive a written demand
for substantial performance and such nonperformance has continued for more than
60 days following written notice of nonperformance from the Board that
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties (provided,
however, that Executive shall not be deemed to be in nonperformance if within
such 60-day time period following receipt by Executive of such notice he has
taken steps reasonably calculated to resolve such nonperformance); (ii) illegal
conduct or gross misconduct by the Executive, that has
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resulted in material injury to the reputation of Employer; or (iii) a material
breach by Executive of the covenants contained in paragraph 5 of this Agreement.
(d) Termination Without Cause. At any time during the Period of
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Employment, Employer may terminate Executive's employment hereunder without
(i.e., not for) Cause if such termination is approved by not less than a
majority of the entire membership of the Board at a meeting of the Board called
and held for such purpose. Further, any termination by Employer of Executive's
employment that is not otherwise governed by this paragraph 7 shall also be
deemed a termination without, or not for, Cause.
(e) Termination by Executive. At any time during the Period of
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Employment, Executive may terminate his employment hereunder for any reason,
including but not limited to "Good Reason" (as hereinafter defined). For
purposes of this Agreement "Good Reason" shall mean that Executive has complied
with the "Good Reason Process" (as hereinafter defined) following the occurrence
of any of the following events (referred to individually as a "Good Reason
Event" and collectively as "Good Reason Events"): (A) any substantial adverse
change, not consented to by Executive in a writing signed by him, in the nature
or scope of Executive's responsibilities, authorities, powers, functions, or
duties exercised by Executive immediately prior to the Effective Date, except as
provided in paragraph 11; (B) any removal, during the Period of Employment, of
Executive from, or any failure by management to nominate, or, if nominated, any
failure by the stockholders to re-elect Executive to, any of the positions
indicated in paragraph 2; (C) an involuntary reduction in Executive's Base
Salary or Adjusted Base Salary or Target Incentive Compensation; (D) a breach by
Employer of any of its other material obligations under this Agreement and the
failure of Employer to cure such breach within thirty days after written notice
thereof by Executive; (E) the relocation of Employer's primary
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offices at which Executive is principally employed to a location more than
thirty (30) miles from Executive's current offices, or the requirement by
Employer for Executive to be based anywhere other than Employer's primary
offices at such current location (or more than 30 miles therefrom) on an
extended basis, except for required travel on Employer's business to an extent
substantially consistent with Executive's current business travel obligations;
or (F) Employer gives notice of non-extension of the Period of Employment under
paragraph 1 of this Agreement. "Good Reason Process" shall mean that (i) the
Executive reasonably determines in good faith that a Good Reason Event has
occurred; (ii) Executive notifies Employer in writing of the occurrence of the
Good Reason Event; (iii) Executive cooperates in good faith with Employer's
efforts, for a period not more than thirty (30) days following such notice, to
modify Executive's employment situation in a manner acceptable to Executive and
Employer; and (iv) notwithstanding such efforts, one or more of the Good Reason
Events continues to exist for a period of more than thirty (30) days following
such notice and has not been modified in a manner acceptable to Executive.
(f) Notice of Termination. Except for termination as specified
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in subparagraph 7(a), any termination of Executive's employment by Employer or
any such termination by Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice that shall indicate the specific provision
in this Agreement relied upon.
(g) Date of Termination. "Date of Termination" shall mean: (A) if
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Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated on account of Disability under subparagraph
7(b) on the Disability Effective Date unless Executive returns to full-time
performance of Executive's duties before the
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Disability Effective Date; (C) if Executive's employment is terminated by
Employer under subparagraphs 7(c) or (d), thirty (30) days after the date on
which a Notice of Termination is given; and (D) if Executive's employment is
terminated by Executive under subparagraph 7(e), thirty (30) days after the date
on which a Notice of Termination is given.
8. Compensation Upon Termination or During Disability.
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(a) Death. If Executive's employment terminates by reason of
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his death, Employer shall, within thirty (30) days of death, pay in a lump sum
amount to such person as his estate shall designate in a notice filed with
Employer or, if no such person is designated, to Executive's estate, (i)
Executive's accrued and unpaid Base Salary or, if applicable, his Adjusted Base
Salary, through the date of his death, and (ii) any accrued and any unpaid
Incentive Compensation and Pro Rata Incentive Compensation. Upon such death, all
unvested stock options and stock-based grants shall immediately vest in
Executive's estate or other legal representatives and become exercisable, and
Executive's estate or other legal representatives shall have the remaining
option term to exercise the stock options. For a period of five (5) years
following the Date of Termination, Employer shall pay such health insurance
premiums as may be necessary to allow Executive's spouse and other dependents to
receive health insurance coverage substantially similar to the coverage they
received prior to the Date of Termination.
(b) Disability. During any period that Executive is unable to perform
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his duties hereunder as a result of incapacity due to physical or mental illness
or injury, Executive shall continue to receive his accrued and unpaid Base
Salary or, if applicable, his Adjusted Base Salary, and accrued and unpaid
Incentive Compensation payments under subparagraph 3(b), until and unless
Executive's employment is terminated due to Disability in accordance with
subparagraph 7(b) or until Executive terminates his employment in accordance
with
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subparagraph 7(e), whichever first occurs. In the event of termination due to
Disability Employer shall, within thirty (30) days of the Disability Effective
Date, pay in a lump sum amount to Executive (i) his accrued and unpaid Base
Salary or, if applicable, his Adjusted Base Salary through the Date of
Termination, plus (ii) any accrued and unpaid Incentive Compensation and Pro
Rata Incentive Compensation. Upon the Disability Effective Date, all unvested
stock options and stock-based grants shall immediately vest and become
exercisable and Executive shall have the remaining option term to exercise the
stock options. For a period of two (2) years following the Date of Termination,
Employer shall pay such health insurance premiums as may be necessary to allow
Executive and Executive's spouse and other dependents, to receive health
insurance coverage substantially similar to the coverage they received prior to
the Date of Termination. Upon termination due to death prior to the Disability
Effective Date, subparagraph 8(a) shall apply.
(c) By Executive Not for Good Reason. If Executive's employment is
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terminated by Executive other than for Good Reason as provided in subparagraph
7(e), then Employer shall, through the Date of Termination, pay Executive (i)
his accrued and unpaid Base Salary or, if applicable, his Adjusted Base Salary
at the rate in effect on the date Notice of Termination is given, and (ii) any
accrued, earned, and unpaid Incentive Compensation plus, (iii) such other
benefits as are available under any Employer policy or practice then in effect.
If Executive's employment is terminated by Executive other than for Good Reason
as provided in subparagraph 7(e), all unvested stock options are forfeited on
the Date of Termination and Executive shall have 90 days from the Date of
Termination to exercise any previously unexercised but then vested stock
options.
-18-
(d) By Executive for Good Reason by Employer Without Cause. If
------------------------------------------------------
Executive terminates his employment for Good Reason as provided in subparagraph
7(e) or if -Executive's employment is terminated by Employer without Cause as
provided in subparagraph 7(d), then Employer shall, through the Date of
Termination, pay Executive (i) his accrued ad unpaid Base Salary or, if
applicable, his Adjusted Base Salary at the rate in effect on the date Notice of
Termination is given, plus (ii) any accrued and unpaid Incentive Compensation
and Pro Rata Incentive Compensation. Upon the Date of Termination, all unvested
stock options and stock-based grants shall immediately vest and become
exercisable, and Executive shall have three (3) years from the Date of
Termination, or the remaining option term, if earlier, to exercise the stock
options. For a period of three (3) years following the Date of Termination,
Employer shall pay such health insurance premiums as may be necessary to allow
Executive and Executive's spouse and other dependents to receive health
insurance coverage substantially similar to coverage they received prior to the
Date of Termination. In addition, subject to signing by Executive of a general
release of claims in a form and manner satisfactory to the Executive and
Employer:
(1) Employer shall pay Executive, on the Date of Termination,
such additional amounts to which Executive may be entitled in accordance with
Employer's then current severance policies (the "Severance Amount"), provided
that, at a minimum, Executive shall be entitled to receive an amount in a lump
sum (the "Minimum Severance Amount) equal to the greater of (A) $3,000,000.00 or
(B) three (3) times the sum of the "Applicable Base Salary" plus the "Average
Incentive Compensation"
For purposes of this Agreement, "Applicable Base Salary" shall
mean the greater of (aa) $624,000.00, or, (bb) such of the following
alternatives as is applicable:
-19-
(aaa) prior to January 1, 2001, Executive's Base Salary, or if
applicable, Adjusted Base Salary for the fiscal year ending December 31, 2000;
or
(bbb) on or after January 1, 2001, the average of the annual Base
Salary and, if applicable, Adjusted Base Salary, payable to Executive for the
year of termination and the immediately preceding complete fiscal year which he
was employed by Employer. The fiscal year ending December 31, 2000, shall be
treated as a complete fiscal year.
For purposes of this Agreement, "Average Incentive Compensation" shall
mean such of the following alternatives as is applicable:
(aaaa) prior to January 1, 2001, Executive's Target Incentive
Compensation for the fiscal year ending December 31, 2000;
(bbbb) on or after January 1, 2001, and before January 1, 2002, the
sum of Executive's Incentive Compensation for the fiscal year ending December
31, 2000, and Executive's Target Incentive Compensation for the fiscal year
ending December 31, 2001, divided by two (2);
(cccc) on or after January 1, 2002, the total of the annual Incentive
Compensation payable to Executive for the two (2) immediately preceding complete
fiscal years divided by two (2). The fiscal year ending December 31, 2000, shall
be treated as a complete fiscal year.
The Applicable Base Salary and Average Incentive Compensation shall
each be determined as of the date of Notice of Termination or the Termination
Date, whichever is more favorable to Executive.
Notwithstanding the foregoing, in the event Executive terminates his
employment for Good Reason as provided in subparagraph 7(e), he shall be
entitled to the Severance Amount
-20-
or, if applicable, the Minimum Severance Amount only if he provides the Notice
of Termination provided for in subparagraph 7(f) within one hundred and twenty
(120) days after Executive has informed Employer in writing of the occurrence of
the Good Reason Event(s), on which his termination is based, pursuant to the
provisions of subparagraph 7(e).
Should Executive commence any new employment as an employee during the
twenty-four (24) months following the Date of Termination, then Employer shall
be entitled to offset against the remaining Severance Amount (1) 50% of the
lesser of (i) all Executive's Base Salary, or if applicable, Adjusted Base
Salary in effect at the Date of Termination or (ii) all sums paid to Executive
as base compensation for such new employment (but not as incentive or other
compensation) within the first twelve (12) months following the Date of
Termination; and (2) 25% of the lesser of (i) all Executive's Base Salary, or if
applicable, Adjusted Base Salary in effect at the Date of Termination or (ii)
all sums paid to Executive as base compensation for such new employer (but not
as incentive or other compensation) within the second twelve (12) months
following the Date of Termination. The provisions of the preceding sentence
shall not, however, apply to payments of the "Parachute Amount" (as herein
defined).
(2) In addition to any other benefits to which Executive may be
entitled in accordance with Employer's then existing severance plans, policies
or practices (for which Executive shall not be required to sign the above-
referenced general release of claims), Employer shall:
(aa) for a period of three (3) years commencing on the Date of
Termination, provide Executive, at Employer's expense, with an office and all
reasonable occupancy expenses associated therewith, and related telephone and
telefax facilities, and an
-21-
assistant at a location of Executive's choosing, provided that the office
facilities shall be comparable to Executive's office at Employer on the Date of
Termination; and
(bb) for a period of one (1) year commencing on the Date of
Termination, pay for the cost of executive outplacement services selected by
Executive for use in connection with obtaining alternate employment.
(e) For Cause. If Executive's employment is terminated by Employer
---------
for Cause as provided in subparagraph 7(c), then Employer shall, through the
Date of Termination, pay Executive his accrued and unpaid Base Salary or, if
applicable, his Adjusted Base Salary at the rate in effect on the date Notice of
Termination is given, plus his accrued, earned and unpaid Incentive
Compensation.
(f) Continuing Assistance. Regardless of the reason for the
---------------------
termination of Executive's employment, for a period of five (5) years beginning
on the Date of Termination or the end of the Period of Employment, Employer will
provide such reasonable assistance and support to Executive or his estate as he
or such estate shall reasonably require in connection with the preparation and
filing of tax returns, statements, and forms insofar as such returns,
statements, or forms relate to Executive's employment or other association with
Employer, or any of its predecessors or affiliates. At Employer's election, such
assistance and support shall be provided by either tax personnel from Employer
or certified public accountants selected and compensated by Employer.
(g) Payment Place and Due Date. All amounts due under this Agreement
--------------------------
to Executive or his estate by Employer following the Date of Termination or the
end of the Period of Employment shall be due and payable in Dallas County,
Texas. On or before the tenth (10/th/) day following such Date of Termination or
the date upon which the end of the Period of
-22-
Employment occurs, except as otherwise expressly set forth in this Agreement,
Employer shall (i) escrow all amounts due to Executive or his estate for the
severance amount or minimum severance amount whichever is applicable (the
"Escrowed Severance Payment"), and (ii) pay to Executive or his estate all other
amounts due to Executive or his estate. The Escrowed Severance Payment shall be
due and payable to Executive or his estate without notice or demand of any kind,
in thirty-six (36) equal monthly payments, with the first such payment being due
and payable thirty (30) days following the Date of Termination or the end of the
Period of Employment, provided however:
(aa) that in the event a payment of Escrowed Severance Payment
is for any reason not paid within 10 days after Executive notifies Employer in
writing of a failure to timely make such payment, then, in that event, without
further notice or demand of any kind the entire unpaid balance of the Escrowed
Severance Payment shall at once become due and payable in full to Executive or
his estate, unless, prior to that time, Executive shall, after full and final
hearing, be found to be in material breach of this Agreement by an arbitrator
appointed under paragraph 18 of this Agreement; and
(bb) advances of the payments of the Escrowed Severance Payment
shall, if Executive so requests, be made to Executive to the extent income taxes
on unpaid payments are reasonably determined by Executive to be due, with such
advances to be proportionately offset against all unpaid future payments.
If Executive so elects at any time, the unpaid balance of the Escrowed
Severance Payment shall be paid over by Employer to an independent third party
escrow keeper, to be held pursuant to written arrangements mutually acceptable
to Employer and Executive providing for
-23-
timely payment to Executive of the payments due therefrom, whereupon such
escrowed finds shall no longer be an asset of the Employer.
(h) Other Obligations. The foregoing subparagraphs 8(a) through 8(g)
-----------------
shall not adversely affect or alter Executive's rights (or the rights of his
estate, spouse or other dependents) under any Employee Benefit Plan or other
plans of Employer, except to the extent otherwise expressly provided therein or
in any agreement or other instrument attendant thereto.
9. Parachute Payment. The provisions of this paragraph 9 set forth the
-----------------
terms of an agreement reached between Executive and Employer regarding
Executive's rights and obligations upon the occurrence of a "Change in Control"
(as hereinafter defined) of Employer. These provisions are intended to assure
and encourage in advance Executive's continued attention and dedication to his
assigned duties and his objectivity during the pendency and after the occurrence
of any such Change in Control. These provisions shall apply in lien of, and
expressly supersede, the provisions of subparagraph 8(d)(1) if Executive's
employment is terminated or Notice of Termination is given ninety (90) days'
prior to or within eighteen (18) months after the occurrence of an event
constituting a Change in Control.
(a) Escrow. Within fifteen (15) days after the occurrence of the
------
first event constituting a Change in Control (irrespective of whether Executive
has actual knowledge of such event), Employer shall place immediately negotiable
finds in escrow in an amount equal to the Five Million Dollars ($5,000,000.00)
attributable to subparagraph 9(c), plus such additional amount as equals the
"Gross Up Payment" (as hereinafter defined) thereon. Such escrow shall be
conducted pursuant to written arrangements that are mutually acceptable to
Employer aid Executive providing for the timely payment to Executive of the
amounts held in such escrow in the event Executive becomes entitled thereto
under the applicable provisions of this Agreement
-24-
(the "Escrow Arrangement"). Further, the remaining portion of the "Parachute
Amount" (as hereinafter defined) shall also, within such fifteen (15) days after
the occurrence of the first event constituting a "Hostile Takeover" (as
hereinafter defined), be funded by Emp1oyer in immediately negotiable funds into
such escrow pursuant to such Escrow Arrangement. The Escrow Arrangement shall be
maintained until the earlier of (A) nineteen (19) months after the occurrence of
an event constituting a Change in Control or (B) the payment to Executive of all
sums escrowed.
(b) Change in Control. If, within 90 days prior to, or within
-----------------
eighteen (18) months after the occurrence of an event constituting a Change in
Control, Executive's employment is terminated or a Notice of Termination is
given for any reason other than (A) his death, (B) his Disability, or (C) by
Executive Without Good Reason, then such termination shall be deemed to be a
"Termination Due to Change in Control" (herein so called), in which event
Employer shall pay Executive, in a lump sum, on or prior to the tenth (10/th/)
day following the Executive's Date of Termination:
(1) an amount equal to the applicable Parachute Amount
(including any Gross Up Payment); and
(2) Executive's accrued and unpaid Base Salary or, if
applicable, his Adjusted Base Salary, through such Date of Termination; and
(3) accrued and unpaid Incentive Compensation and Pro Rata
Incentive Compensation.
(c) Stock Option Floor. Upon the occurrence of the first event
------------------
constituting a Change in Control, all stock options and other stock-based grants
to Executive by Employer shall, irrespective of any provisions of the 1999
Option Agreement, the 2000 Option Agreement
-25-
or the New Option Agreement, immediately and irrevocably vest and become
exercisable as of the date of such first event whereupon, at any time during the
Option Term as defined in the respective Option Agreement (but not to exceed
five (5) years after such event), Executive or his estate may by five (5) days'
advance written notice given to Employer, and irrespective of whether Executive
is then employed by Employer or then living, and solely at the election of
Executive or his estate, require Employer to:
(1) immediately purchase all Stock Options from Executive or his
estate in exchange for the sum of Five Million Dollars ($5,000,000.00) cash
delivered in immediately negotiable funds in Dallas County, Texas, to Executive
or his estate, or,
(2) allow Executive to exercise all or any part of such Stock
Options at the option prices therefor specified in the grant of the Stock
Options.
Employer shall also loan to Executive pursuant to the provisions of the Master
Note otherwise referenced and described in this Agreement all funds due by
Executive for income taxes (federal, state, or local), including but not limited
to on capital gains as well as on ordinary income, by reason of the provisions
of the existence of any of the provisions of this subparagraph 9(c) or the
carrying out of all or any part of such provisions. Taxes for purposes of the
above computation shall be computed at the highest marginal rate, of federal
income taxation for the tax year for which such taxes are or will be due, and
state and local taxes at the highest marginal rate at the end of such year, net
of the maximum reduction (if any) in federal income taxes that could be
obtained from the deduction of deductible state and local taxes.
(d) Gross Up Payment.
----------------
(1) Excess Parachute Payment. If Executive incurs the tax (the
------------------------
"Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986 (the
"Code") on
-26-
"Excess Parachute Payments" within the meaning of Section 280G(b)(1) of the
Code, Employer will pay to Executive an amount (the "Gross Up Payment") such
that the net amount retained by Executive, after deduction of any Excise Tax on
both the Excess Parachute Payment and any federal, state and local income tax
(together with penalties and interest) as well as the Excise Tax upon the
payment provided for by this subparagraph 9(d)(1), will be equal to the
Parachute Amount.
(2) Applicable Rates. For purposes of determining the amount of
----------------
the Gross Up Payment, 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 Gross Up Payment is to be made and state and local income taxes at the
highest marginal rates of taxation in the state and locality where taxes thereon
are lawfully due, net of the maximum reduction (if any) in federal income taxes
that could be obtained from deduction of deductible state and local taxes.
(3) Determination of Gross Up Payment Amount. The determination
----------------------------------------
of whether the Excise Tax is payable and the amount thereof will be based upon
the opinion of tax counsel selected by Executive and approved by Employer, which
approval will not be unreasonably withheld or delayed. If such opinion is not
finally accepted by the Internal Revenue Service (or state and local taxing
authorities), then appropriate adjustments to the Excise Tax will be computed
and additional Gross Up Payments will be made in the manner provided by this
subparagraph (d).
(4) Payment. Employer will pay the estimated amount of the Gross
-------
Up Payment in cash to Executive at the time specified in this Agreement.
Executive and Employer agree to reasonably cooperate in the determination of the
actual amount of the Gross Up Payment. Further, Executive and Employer agree to
make such adjustments to the estimated
-27-
amount of the Gross Up Payment as may be necessary to equal the actual amount of
the Gross Up Payment, which in the case of Executive will refer to refunds of
prior overpayments by Employer and in the case of Employer will refer to
additional payments to Executive to make up for prior underpayments.
(e) Definitions. For purposes of this paragraph 9, the following
-----------
terms shall have the following meanings:
"Change in Control" shall mean any of the following:
-----------------
(1) the acquisition by any individual, entity, or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (the "Acquiring
Person"), other than Employer, or any of its Subsidiaries or any Investor or
Excluded Group, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of the combined voting power
or economic interests of the then outstanding voting securities of Employer
entitled to vote generally in the election of directors; provided however, that
any transfer from any Investor or Excluded Group will not result in a Change in
Control if such transfer was part of a series of related transactions the effect
of which, absent the transfer to such Acquiring Person by the Investor or
Excluded Group, would not have resulted in the acquisition by such Acquiring
Person of 35% or more of the combined voting power or economic interests of the
then outstanding voting securities; or
(2) during any period of 12 consecutive months after June 30, 1999,
the individuals who at the beginning of any such 12-month period constituted a
majority of the Class A Directors and Class C Directors (the "Incumbent Non-
Investor Majority") cease for any reason to constitute at least a majority of
such Class A Directors and Class C Directors; provided that (i) any individual
becoming a director whose election, or nomination for election by
-28-
Employer's stockholders, was approved by a vote of the stockholders having the
right to designate such director and (ii) any director whose election to the
Board or whose nomination for election by the stockholders of Employer was
approved by the requisite vote of directors entitled to vote on such election or
nomination in accordance with the Restated Certificate of Incorporation of
Employer, shall, in each such case, be considered as though such individual were
a member of the Incumbent Non-Investor Majority, but excluding, as a member of
the Incumbent Non-Investor Majority, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of Employer (as such terms are
used in Rule 14a-ll of Regulation 14A promulgated under the Exchange Act) and
further excluding any person who is an affiliate or associate of an Acquiring
Person having or proposing to acquire beneficial ownership of 25% or more of the
combined voting power of the then outstanding voting securities of Employer
entitled to vote generally in the election of directors; or
(3) the approval by the stockholders of Employer of a
reorganization, merger or consolidation, in each case, with respect to which all
or substantially all of the individuals and entities who were the respective
beneficial owners of the voting securities of Employer immediately prior to such
reorganization, merger, or consolidation do not, following such reorganization,
merger, or consolidation, beneficially own, directly or indirectly, more than
57.5% of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of Employer resulting
from such reorganization, merger, or consolidation; or
(4) the sale or other disposition of assets representing 50% or
more of the assets of Employer in one transaction or series of related
transactions; or
-29-
(5) a "Fundamental Change in Business" a hereinafter defined.
Except as otherwise specified herein, defined terms used in the definition of
"Change in Control" shall have the same meaning as set forth in the Certificate
of Designation of Series B Convertible Preferred Stock of Wyndham International,
Inc.
"Employer" shall mean not only Wyndham International, Inc., but
--------
also its successors by merger or otherwise.
"Fundamental Change in Business" shall mean that Employer, at any
------------------------------
time, no longer earns at least fifty percent (50%) of its gross revenues from
hotel, or hotel-related businesses.
"Hostile Takeover" shall mean any Change in Control which at any
----------------
time is declared by at least a majority of the Board, directly or indirectly, to
be hostile or not in the best interests of Employer, or in which an attempt is
made (irrespective of whether successful) to wrest control away from the
incumbent management of Employer, or with respect to which the Board makes any
effort to resist.
"Parachute Amount" shall mean an amount equal to (i) the greater
----------------
of $3,000,000,00 or the Severance Amount or, if applicable, the Minimum
Severance Amount provided for in subparagraph 8(d)(i), plus (ii) any amount
computed by reference to subparagraphs 9(c) or 9(d) of this Agreement or
otherwise which are deemed to be a "Parachute Payment" within the meaning of
Section 280G(b)(2) of the Code.
10. Notice. For purposes of this Agreement, notices and all other
------
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as
follows:
-30-
if to the Executive:
At his home address as shown
in Employer's personnel records;
if to Employer:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn.: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11. Tag Along and Piggyback Rights. Employer shall make best efforts to
------------------------------
allow Executive an equitable opportunity to participate to the extent of any
shares of stock he may then own in Employer or any affiliate of or successor to
Employer (or have the right to own by the exercise of then vested options held
by Executive) in any shelf offering, secondary offering, follow-up offering. Any
resulting costs for the registration of such shares of Executive shall be paid
by Employer. Further, if at any time or times from and after the date hereof
during the Period of Employment, Employer intends to file a registration
statement for the registration of common stock with a governmental body
permitting the registration of registrable stock, then Employer shall notify
Executive at least thirty (30) days prior to each such filing of such intention
to file such a registration statement. Such notice shall state the amount and
type of securities proposed to be registered thereby, the underwriters involved,
if any, and whether such underwriting is to be distributed on a firm commitment
or best efforts basis. Upon the written request of Executive given within 20
days after receipt of any such notice stating the number of shares of
registrable stock to be disposed of by the Executive and the intended method of
disposition, Employer will use its best efforts to cause the aggregate of the
registrable stock designated by Executive to be included in such registration so
as to permit the disposition (in
-31-
accordance with the methods specified by Executive) of the registrable stock so
registered subject to the following:
(a) If the proposed registration involves an underwritten offering
of common stock, whether or not for sale for the account of Employer, to be
distributed (on a best efforts or firm commitment basis) by or through one or
more underwriters, and the managing underwriter of such underwritten offering
shall advise Employer in writing that, in its opinion, the registration of all
or a specified portion of registrable stock concurrently with the common stock
will adversely affect the distribution of such common stock by such
underwriters, then Employer may require, by written notice to Executive that the
distribution of all or a specified portion of the registrable stock be excluded
from such registration;
(b) Employer may in its discretion withdraw any registration
statement filed pursuant to this subparagraph subsequent to its filing and prior
to its effective date without liability to the Executive; and
(c) If the Series B preferred shareholders of Employer restrict the
registration of common shares of Employer held by other holders of common shares
of Employer then, in that event, they may also so restrict to the same extent
the registration rights hereunder of Executive.
Employer shall, and hereby does, indemnify and hold harmless, to the extent
permitted by law, Executive against all losses, claims, damages, liabilities,
and expenses resulting from any untrue or misleading statement or alleged untrue
or misleading statement of a material fact contained in any registration
statement or prospectus (preliminary or otherwise), whether or not such untrue
or misleading statement or alleged untrue or misleading statement is caused by
Executive's negligence, except in so far as such losses, claims, damages,
liabilities, or expenses
-32-
are caused by any untrue statement intentionally furnished or made by Executive.
The foregoing indemnity is in addition to, and does not limit, Executive's right
to indemnity, or actual indemnity provided by Employer, pursuant to the
Indemnification Agreement, any Directors' and Officers' insurance provided to
Executive under paragraph 4 of this Agreement, or any other agreement or
insurance
12. Master Note. Attached hereto as Exhibit C is a non-negotiable and
-----------
unsecured Master Note executed by Executive and payable to Employer. Without
further action, all loans hereafter made by Employer to Executive pursuant to
the provisions of this Agreement shall be deemed to have been made pursuant to
the provisions of the Master Note dated as of the date the funds are advanced
for concerned loans and in the original principal amount equal to the amount of
such funding and due and payable four (4) years from the date of the concerned
advance.
13. Miscellaneous. No provisions of this Agreement may be modified,
-------------
waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing and signed by Executive and such officer of Employer as may be
specifically designated by the Board. No waiver by either party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this Agreement. The validity,
interpretation, construction, and performance of the Agreement shall be governed
by the laws of the State of Texas (without regard to principles of conflicts of
laws) and, where applicable, the laws of the United States.
-33-
14. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. The invalid portion of this Agreement, if any, shall be modified by any
court having jurisdiction to the extent necessary to render such portion
enforceable.
15. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. No Mitigation. In no event shall the Executive be obligated to seek
-------------
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and such
amounts shall not be reduced, regardless of whether the Executive obtains other
employment, except strictly as provided in subparagraph 8(d)(i) of this
Agreement.
17. Arbitration; Other Disputes. In the event of any dispute or
---------------------------
controversy arising under or in connection with this Agreement, the parties
shall first promptly try in good faith to settle such dispute or controversy by
mediation under the applicable rules of the American Arbitration Association
before resorting to arbitration. In the event such dispute or controversy
remains unresolved in whole or in part for a period of thirty (30) days after it
arises, the parties will settle any remaining dispute or controversy exclusively
by arbitration in Dallas, Texas in accordance with the rules of the American
Arbitration Association then in effect. Judgement may be entered on the
arbitrator's award in any court having jurisdiction. All administration fees and
arbitration fees shall be paid solely by Employer. Notwithstanding the above,
Employer shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent
-34-
any continuation of any violation of paragraph 5 or 6 hereof. The prevailing
party may recover attorneys' fees in any dispute or controversy arising under or
in connection with this Agreement. Should a dispute occur concerning Executive's
mental or physical capacity as described in subparagraphs 7(b) or 8(b), a doctor
selected by Executive and a doctor selected by Employer shall be entitled to
examine Executive. If the opinion of Employer's doctor and Executive's doctor
conflict, Employer's doctor and Executive's doctor shall together agree upon a
third doctor, whose opinion shall be binding. Any amount to which Executive is
entitled under this Agreement (including any disputed amount) which is not paid
when due shall bear interest from the date due but not paid at a rate equal to
the lesser of eighteen percent (18%) per annum or the maximum lawful rate.
18. Third-Party Agreements and Rights. Executive represents to Employer
---------------------------------
that upon Executive's execution of this Agreement, Executive's employment with
Employer, and the performance of Executive's proposed duties for Employer, will
not violate any obligations Executive may have to any employer prior to
Employer, and Executive will not bring to the premises of Employer any copies of
other tangible embodiments of non-public information belonging to or obtained
from any such previous employment prior to that with Employer.
19. Legal Fees. Employer agrees to pay all legal fees incurred by the
----------
Executive in connection with the negotiation and preparation of this Agreement,
up to a maximum of sixty thousand dollars ($60,000.00).
20. Litigation and Regulatory Cooperation. During and after Executive's
-------------------------------------
employment, Executive shall reasonably cooperate with Employer in the defense or
prosecution of any claims or actions now in existence or that may be brought in
the future against or on behalf of Employer that relate to events or occurrences
that transpired while Executive was
-35-
employed by Employer; provided, however, that such cooperation shall not
materially and adversely affect Executive or expose Executive to an increased
probability of civil or criminal litigation. Executive's cooperation in
connection with such claims or actions shall include, but not be limited to,
being available to meet with counsel to prepare for discovery or trial and to
act as a witness on behalf of Employer at mutually convenient times. During and
after Executive's employment, Executive also shall cooperate fully with Employer
in connection with any investigation or review by any federal, state, or local
regulatory authority as any such investigation or review relates, to events or
occurrences that transpired while Executive was employed by Employer. Employer
shall also provide Executive with compensation on an hourly basis calculated at
his final Annual Base Salary, or if applicable, Annual Adjusted Base Salary
divided by 2000 hours for requested litigation and regulatory cooperation that
occurs after his termination of employment, and shall reimburse Executive for
all costs and expenses incurred in connection with his performance under this
paragraph 20, including, but not limited to, reasonable attorneys' fees and
costs.
21. Conflicts. In the event of any conflict between the provisions of
---------
this Agreement and the 1999 Option Agreement, the 2000 Option Agreement, the New
Option Agreement or any other option granted heretofore or hereafter made, or
any agreement between Executive ad Employer heretofore executed, this Agreement
shall govern and rule supreme.
22. Note Prepayment. Executive shall, at the time of receipt of same, pay
---------------
to Employer as payment on the Master Note (but not on the 1999 Note) to the
extent such Master Note is unpaid, twenty-five percent (25%) of the after tax
Incentive Compensation and a total of fifty percent (50%) of any after tax gain
received as the result of the exercise and sale of any Stock Options provided to
Executive under the 1999 Option Agreement, the 2000 Option
-36-
Agreement or the New Option Agreement. For purposes of this paragraph, Executive
will be deemed to pay federal income taxes at the highest marginal rate of
federal taxation in the applicable calendar year and state and local taxes at
the highest marginal rates of taxation in the state and locality where taxes
thereon are lawfully due, net of the maximum reduction (if any) in federal
income taxes that could be obtained from deduction of deductible state and local
taxes.
23. Effective Date. This Agreement is effective March 27, 2000.
--------------
IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year above written.
WYNDHAM INTERNATIONAL, INC.
By: ________________________
Its:_______________________
_______________________
Xxxx X. Xxxxxxxx
-37-
Exhibit A
---------
INDEMNIFICATION AGREEMENT
This Indemnification Agreement made and entered into as of this 27/th/ day
of March, 2000 ("Agreement"), by and between Wyndham International, Inc., a
Delaware corporation (the "Company," which term shall include, where
appropriate, any Entity (as hereinafter defined)controlled directly or
indirectly by the Company) and Xxxx X. Xxxxxxxx ("Indemnitee"):
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors and/or officers the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors and/or
officers to litigation risks and expenses, and the limitations on the
availability of directors and officers liability insurance have made it
increasingly difficult for the Company to attract and retain such persons;
WHEREAS, the Company's by-laws require it to indemnify its directors and/or
officers to the fullest extent permitted by law and permit it to make other
indemnification arrangements and agreements; and
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of any such by-laws or any change in the ownership of the
Company or the composition of its Board of Directors):
NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Definitions.
(a) "Corporate Status" describes the status of a person who is
serving or has served (i) as a director or officer of the Company, (ii) in
any capacity with respect to any employee benefit plan of the Company, or
(iii) as a director, partner, trustee, officer, employee, or agent of any
other Entity at the request of the Company. For purposes of subsection
(iii) of this Section 1(a), an officer or director of the Company who is
serving or has served as a director, partner, trustee, officer, employee or
agent of a Subsidiary shall be deemed to be serving at the request of the
Company.
(b) "Entity" shall mean any corporation, partnership, limited
liability company, joint venture, trust, foundation, association,
organization or other legal entity.
(c) "Expenses" shall mean all fees, costs and expenses incurred in
connection with any Proceeding (as defined below), including, without
limitation, attorneys' fee, disbursements and retainers (including, without
limitation, any such fees, disbursements and retainers incurred by
Indemnitee pursuant to Sections 10 and 11(c) of this
1
Agreement), fees and disbursements of expert witnesses, private
investigators and professional advisors (including, without limitation,
accountants and investment bankers), court costs, transcript costs, fees of
experts, travel expenses, duplicating, printing and binding costs,
telephone and fax transmission charges, postage, delivery services,
secretarial services, and other disbursements and expenses.
(d) "Indemnifiable Expenses," "Indemnifiable Liabilities" and
"Indemnifiable Amounts" shall have the meanings ascribed to those terms in
Section 3(a) below.
(e) "Liabilities" shall mean judgments, damages, liabilities,
losses, penalties, excise taxes, fines and amounts paid in settlement.
(f) "Proceeding" shall mean any threatened, pending or completed
claim, action, suit, arbitration, alternate dispute resolution process,
investigation, administrative hearing, appeal, or any other proceeding,
whether civil, criminal, administrative, arbitrative or investigative,
whether formal or informal, including a proceeding initiated by Indemnitee
pursuant to Section 10 of this Agreement to enforce Indemnitee's rights
hereunder.
(g) "Subsidiary" shall mean any corporation, partnership, limited
liability company, joint venture, trust or other Entity of which the
Company owns (either directly or through or together with another
Subsidiary of the Company) either (i) a general partner, managing member or
other similar interest or (ii) (A) 50% or more of the voting power of the
voting capital equity interests of such corporation, partnership, limited
liability company, joint venture or other Entity, or (B) 50% or more of the
outstanding voting capital stock or other voting equity interests of such
corporation, partnership, limited liability company, joint venture or other
Entity.
2. Services of Indemnitee. In consideration of the Company's covenants
and commitments hereunder, Indemnitee agrees to serve or continue to serve as a
Director and/or Officer of the Company. However, this Agreement shall not impose
any obligation on Indemnitee or the Company to continue Indemnitee's service to
the Company beyond any period otherwise required by law or by other agreements
or commitments of the parties, if any.
3. Agreement to Indemnify. The Company agrees to indemnify Indemnitee as
follows:
(a) Subject to the exceptions contained in Section 4(a) below, if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding (other than an action by or in the right of the Company) by
reason of Indemnitee's Corporate Status, Indemnitee shall be indemnified by
the Company against all Expenses and Liabilities incurred or paid by
Indemnitee in connection with such Proceeding (referred to herein as
"Indemnifiable Expenses" and "Indemnifiable Liabilities," respectively, and
collectively as "Indemnifiable Amounts").
(b) Subject to the exceptions contained in Section 4(b) below, if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding by or in the right of the Company to procure a judgment in its
favor by reason of Indemnitee's Corporate
2
Status, Indemnitee shall be indemnified by the Company against all
Indemnifiable Expenses.
4. Exceptions to Indemnification. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:
(a) If indemnification is requested under Section 3(a) and it has
been adjudicated finally by a court of competent jurisdiction that, in
connection with the subject of the Proceeding out of which the claim for
indemnification has arisen, Indemnitee failed to act (i) in good faith and
(ii) in a manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, or, with respect to any criminal action
or proceeding, Indemnitee had reasonable cause to believe that Indemnitee's
conduct was unlawful, Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.
(b) If indemnification is requested under Section 3(b) and:
(i) it has been adjudicated finally by a court of competent
jurisdiction that, in connection with the subject of the Proceeding
out of which the claim for indemnification has arisen, Indemnitee
failed to act (A) in good faith and (B) in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of
the Company, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder; or
(ii) it has been adjudicated finally by a court of competent
jurisdiction that Indemnitee is liable to the Company with respect to
any claim, issue or matter involved in the Proceeding out of which the
claim for indemnification has arisen, including, without limitation, a
claim that Indemnitee received an improper personal benefit, no
Indemnifiable Expenses shall be paid with respect to such claim, issue
or matter unless the Court of Chancery or another court in which such
Proceeding was brought shall determine upon application that, despite
the adjudication of liability, but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnity
for such Indemnifiable Expenses which such court shall deem proper.
5. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Amounts for
which Indemnitee seeks payment under Section 3 of this Agreement and a short
description of the basis for the claim. The Company shall pay such Indemnifiable
Amounts to Indemnitee within twenty (20) calendar days of receipt of the
request. At the request of the Company, Indemnitee shall furnish such
documentation and information as are reasonably available to Indemnitee and
necessary to establish that Indemnitee is entitled to indemnification hereunder.
6. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified
3
against all Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf
in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall
indemnify Indemnitee against all Expenses reasonably incurred by Indemnitee or
on Indemnitee's behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Agreement the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or matter.
7. Effect of Certain Resolutions. Neither the settlement or termination
of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal action or proceeding, had reasonable cause to
believe that Indemnitee's action was unlawful.
8. Agreement to Advance Expenses; Conditions. The Company shall pay
Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with
any Proceeding, including a Proceeding by or in the right of the Company, in
advance of the final disposition of such Proceeding. To the extent required by
Delaware law, Indemnitee hereby undertakes to repay the amount of Indemnifiable
Expenses paid to Indemnitee if it is finally determined by a court of competent
jurisdiction that Indemnitee is not entitled under this Agreement to
indemnification with respect to such Expenses. This undertaking is an unlimited
general obligation of Indemnitee.
9. Procedure for Advance Payment of Expenses. Indemnitee shall submit the
Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no
later than twenty (20) calendar days after the Company's receipt of such
request.
10. Remedies of Indemnitee.
(a) Right to Petition Court. In the event that Indemnitee makes a
----------------- -----
request for payment of Indemnifiable Amounts under Sections 3 and 5 above
or a request for an advancement of Indemnifiable Expenses under Sections 8
and 9 above and the Company fails to make such payment or advancement in a
timely manner pursuant to the terms of this Agreement, Indemnitee may
petition the Court of Chancery to enforce the Company's obligations under
this Agreement.
(b) Burden of Proof. In any judicial proceeding brought under Section
---------------
10(a) above, the Company shall have the burden of proving that Indemnitee
is not entitled to payment of Indemnifiable Amounts hereunder.
4
(c) Expenses. The Company agrees to reimburse Indemnitee in full for any
--------
Expenses incurred by Indemnitee in connection with investigating, preparing for,
litigating, defending or settling any action brought by Indemnitee under Section
10(a) above, or in connection with any claim or counterclaim brought by the
Company in connection therewith.
(d) Validity of Agreement. The Company shall be precluded from asserting
---------------------
in any Proceeding, including, without limitation, an action under Section 10(a)
above that the provisions of this Agreement are not valid, binding and
enforceable or that there is insufficient consideration for this Agreement and
shall stipulate in court that the Company is bound by all the provisions of this
Agreement.
(e) Failure to Act Not a Defense. The failure of the Company (including
----------------------------
its Board of Directors or any committee thereof, independent legal counsel, or
stockholders) to make a determination concerning the permissibility of the
payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses
under this Agreement shall not be a defense in any action brought under Section
10(a) above, and shall not create a presumption that such payment or advancement
is not permissible.
11. Defense of the Underlying Proceeding.
(a) Notice by Indemnitee. Indemnitee agrees to notify the Company promptly
--------------------
upon being served with any summons, citation, subpoena, complaint, indictment,
information, or other document relating to any Proceeding which may result in
the payment of Indemnifiable Amounts or the advancement of Indemnifiable
Expenses hereunder provided, however, that the failure to give any such notice
shall not disqualify Indemnitee from the right to receive payments of
Indemnifiable Amounts or advancements of Indemnifiable Expenses unless the
Company's ability to defend in such Proceeding is materially and adversely
prejudiced thereby.
(b) Defense by Company. Subject to the provisions of the last sentence of
------------------
this Section 11(b) and of Section 11(c) below, the Company shall have the right
to defend Indemnitee in any Proceeding which may give rise to the payment of
Indemnifiable Amounts hereunder; provided, however that the Company shall notify
Indemnitee of any such decision to defend within ten (10) days of receipt of
notice of any such Proceeding under Section 11(a) above. The Company shall not,
without the prior written consent of Indemnitee, consent to the entry of any
judgment against Indemnitee or enter into any settlement or compromise which (i)
includes an admission of fault of Indemnitee or (ii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all liability in
respect of such Proceeding, which release shall be in form and substance
reasonably satisfactory to Indemnitee. This Section 11(b) shall not apply to a
Proceeding brought by Indemnitee under Section 10(a) above or pursuant to
Section 19 below.
(c) Indemnitee's Right to Counsel. Notwithstanding the provisions of
-----------------------------
Section 11(b) above, if in a Proceeding to which Indemnitee is a party by reason
of Indemnitee's Corporate Status, Indemnitee reasonably concludes that he may
have separate defenses or counterclaims to assert with respect to any issue
which may not be
5
consistent with the position of other defendants in such Proceeding, or if
the Company fails to assume the defense of such proceeding in a timely
manner, Indemnitee shall be entitled to be represented by separate legal
counsel of Indemnitee's choice at the expense of the Company. In addition,
if the Company fails to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes any
action to declare this Agreement void or unenforceable, or institutes any
action, suit or proceeding to deny or to recover from Indemnitee the
benefits intended to be provided to Indemnitee hereunder, Indemnitee shall
have the right to retain counsel of Indemnitee's choice, at the expense of
the Company, to represent Indemnitee in connection with any such matter.
12. Representations and Warranties of the Company. The Company hereby
represents and warrants to Indemnitee as follows:
(a) Authority. The Company has all necessary power and authority to
---------
enter into, and be bound by the terms of, this Agreement, and the
execution, delivery and performance of the undertakings contemplated by
this Agreement have been duly authorized by the Company.
(b) Enforceability. This Agreement, when executed and delivered by
--------------
the Company in accordance with the provisions hereof, shall be a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the enforcement of creditors' rights generally.
13. Insurance. The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with a reputable insurance company
providing the Indemnitee with coverage for losses from wrongful acts, and to
ensure the Company's performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's officers and directors. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, or if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit. The Company
shall promptly notify Indemnitee of any good faith determination not to provide
such coverage.
14. Contract Rights Not Exclusive. The rights to payment of Indemnifiable
Amounts and advancement of Indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's by-laws or certificate
of incorporation, or any other agreement, vote of stockholders or directors (or
a committee of directors), or otherwise, both as to action in
6
Indemnitee's official capacity and as to action in any other capacity as a
result of Indemnitee's serving as a director of the Company.
15. Successors. This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation or otherwise by operation of law)
and (b) binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee. This Agreement
shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.
16. Subrogation. In the event of any payment of Indemnifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.
17. Change in Law. To the extent that a change in Delaware law (whether by
statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the by-laws of the
Company and this Agreement Indemnitee shall be entitled to such broader
indemnification and advancements, and this Agreement shall be deemed to be
amended to such extent.
18. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.
19. Indemnitee as Plaintiff. Except as provided in Section 10(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless the
Company has consented to the initiation of such Proceeding. This Section shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.
20. Modifications and Waiver. Except as provided in Section 17 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.
7
21. General Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:
(i) if to Indemnitee, to:
At his home address as shown
on the signature page to this Agreement;
(ii) If to the Company, to:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: General Counsel
or to such other address as may have been furnished in the same manner by any
party to the others.
22. Governing Law. This Agreement shall be governed by and construed and
enforced under the laws of Delaware without giving effect to the provisions
thereof relating to conflicts of law.
23. Consent to Jurisdiction. The Company hereby irrevocably and
unconditionally consents to the jurisdiction of the courts of the State of
Delaware and the United States District Court for the District of Delaware. The
Company hereby irrevocably and unconditionally waives any objection to the
laying of venue of any Proceeding arising out of or relating to this Agreement
in the courts of the State of Delaware or the United States District Court for
the District of Delaware, and hereby irrevocably and unconditionally waives and
agrees not to plead or claim that any such Proceeding brought in any such court
has been brought in an inconvenient forum.
[END OF TEXT]
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
WYNDHAM INTERNATIONAL, INC.
By:____________________________
Its:________________________
INDEMNITEE
_______________________________
Print Name: Xxxx X. Xxxxxxxx
Address: [Address]
9
Exhibit B
---------
WYNDHAM INTERNATIONAL, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Dated as of Xxxxx 00, 0000
Xxxxxxx International, Inc., a corporation organized under the laws of
Delaware (to "Company"), hereby grants to Xxxx X. Xxxxxxxx, an Employee of the
Company (the "Optionee"), as of March 27, 2000 (the "Date of Grant"), a non-
qualified option (the "Option") to purchase from the Company 200,000 shares of
Class A common stock of the Company ("Shares"), at the price of $2.00 per Share,
subject to the terms and conditions set forth below. Such grant is pursuant to
the Wyndham International, Inc. 1997 Incentive Plan (the "Plan") and is made as
an inducement to Optionee to enter into the Employment Agreement between
Optionee and the Company of even date herewith (the "Employment Agreement").
1. Option Subject to Acceptance of Option Agreement and Employment Agreement.
-------------------------------------------------------------------------
The Option may not be exercised unless the Optionee accepts this Option
Agreement and the Employment Agreement by executing both the Option
Agreement and the Employment Agreement and returning such original
execution copies to the Company.
2. Time and Manner of Exercise of Option.
-------------------------------------
(a) Maximum Term of Option. The Expiration Date of this Option is the date
----------------------
that is ten years from the Date of Grant. This Option may not be
exercised on or after the Expiration Date.
(b) Vesting Schedule. No portion of this Option may be exercised until
----------------
such portion shall have vested. Except as set forth in Section 3 of
this Agreement, this Option shall be vested and exercisable with
respect to the following number of Shares on the dates indicated
below:
========================================================
Vesting Schedule
Additional Number of
Shares Exercisable Vesting Date
========================================================
40,000 1 year after Date of Grant
--------------------------------------------------------
40,000 2 years after Date of Grant
--------------------------------------------------------
40,000 3 years after Date of Grant
--------------------------------------------------------
40,000 4 years after Date of Grant
--------------------------------------------------------
40,000 5 years after Date of Grant
========================================================
Notwithstanding the foregoing, if the Company achieves 100% of its
internal
budgeted EBITDA for 2000, then the following vesting schedule shall instead
apply and the Option shall be vested and exercisable with respect to the
following number of Shares on the dates indicated below:
===================================================
Alternative Vesting Schedule
===================================================
Number of
Shares Exercisable Vesting Date
---------------------------------------------------
50,000 (25%) 1 year after Date of Grant
---------------------------------------------------
50,000 (25%) 2 year after Date of Grant
---------------------------------------------------
50,000 (25%) 3 year after Date of Grant
---------------------------------------------------
50,000 (25%) 4 year after Date of Grant
---------------------------------------------------
In the event of a Change in Control during the Period of Employment (each
as defined in the Employment Agreement), any unvested portions of this
Option shall fully vest and become exercisable on the date of the Change in
Control. Furthermore, any unvested portions of this Option shall fully vest
and become exercisable on the date the Optionee's employment with the
Company is terminated by the Company without Cause (as defined in the
Employment Agreement) or by the Optionee for Good Reason (as defined in the
Employment Agreement) or on the date the Optionee's employment is
terminated due to death or Disability (as defined in the Employment
Agreement).
A partial exercise of this Option shall not affect Optionee's right to
exercise this Option with respect to the remaining Shares.
(c) Method of Exercise of Option. Subject to the limitations set forth in this
----------------------------
Agreement, the Option may be exercised by the Optionee (1) by giving
written notice to the Company specifying the number of whole Shares to be
purchased and accompanied by payment of the Option price in full (or
arrangement made for such payment to the Company's satisfaction) either (i)
in cash or cash equivalent acceptable to the Committee, (ii) in previously
owned whole Shares (which the Optionee has held for at least six months
prior to the delivery of such Shares or which the Optionee purchased on the
open market and for which the Optionee has good title, free and clear of
all liens and encumbrances) having a Fair Market Value, determined as of
the date of exercise, equal to the aggregate purchase price payable
pursuant U, to Option by reason of such exercise, (iii) in cash or a check
payable and acceptable to the Company by a broker-dealer acceptable to the
Company to whom the Optionee has submitted an irrevocable notice of
exercise or (iv) a combination of two or more of the foregoing, and (2) by
executing such documents as the Company may reasonably request. Any
fraction of a Share which would be required to pay such purchase price
shall be disregarded and the remaining amount due shall be paid in cash by
the Optionee.
2
The delivery of certificates representing the Shares subject to the
Option will be contingent upon the Company's receipt from Optionee of
(1) full payment of the Option price, as set forth above, and (2) any
agreement, statement or other evidence that the Company may require to
satisfy itself that the issuance of Shares to be purchased pursuant to
the exercise of the Option and the subsequent resale of Shares will be
in compliance with applicable laws and regulations.
3. Exercise After Termination of Employment. If the Optionee's employment by
----------------------------------------
the Company or an Affiliate is terminated, the period within which to
exercise the Option may be subject to earlier termination as set forth
below. Any transfer of employment from the Company to any Affiliate of the
Company shall not be deemed to be a termination of employment for purposes
of this Agreement.
(a) Termination Due to Death. If the Optionee's employment terminates by
------------------------
reason of death, the Option held by the Optionee shall vest and become
exercisable as set forth in Section 2(b). The Optionee's legal
representative or legatee may exercise the Option to the extent
exercisable in accordance with this Section 3(a) until the Expiration
Date.
(b) Termination Due to Disability. Optionee's employment terminates by
-----------------------------
reason of Disability (as defined in the Employment Agreement), the
Option held by the Optionee shall vest and become exercisable as set
forth in Section 2(b). The Optionee may exercise the Option to the
extent exercisable in accordance with this Section 3(b) until the
Expiration Date.
(c) Termination without Cause or for Good Reason. If the Optionee's
--------------------------------------------
employment is terminated by the Company without Cause (as defined in
the Employment Agreement) or the Optionee resigns from the Company for
Good Reason (as defined in the Employment Agreement), the Option held
by the Optionee shall vest and become exercisable as set forth in
Section 2(b). The Optionee may exercise the Option, to the extent
exercisable in accordance with this Section 3(c), for a period of
three years from the date of termination or until the Expiration Date,
if earlier. Any portion of the Option that is not exercisable at the
end of 24 months following termination of employment shall terminate
immediately upon termination of employment and be of no further force
or effect.
Notwithstanding the foregoing, if Optionee breaches any of the
provisions contained in Paragraph 4 or 5 of the Employment Agreement,
(i) any portion of the Option that vested or will vest by virtue of
this Section 3(c) shall immediately terminate and be of no force and
effect, and (ii) to the extent any portion of the Option that vested
by virtue of this Section 3(c) has been exercised, Optionee shall be
required to disgorge to the Company the difference between the Fair
Market Value per Share on the date of exercise and the Option price
per Share, multiplied by the number of Shares acquired by Optionee.
3
(d) Termination for Cause. If the Optionee's employment is terminated for
---------------------
Cause (as defined in the Employment Agreement), the Option held by the
Optionee shall terminate immediately upon termination of employment
and be of no further force and effect.
(e) Other Termination. If the Optionee's employment terminates for any
-----------------
reason not covered in Subsections (a), (b), (c) or (d) of this Section
3, the Option held by the Optionee may be exercised, to the extent
exercisable on the date of termination pursuant to the Vesting
Schedule in Section 2(b), for a period of three (3) months from the
date of termination or until the Expiration Date, if earlier. Any
portion of the Option that is not exercisable at such time shall
terminate immediately upon termination of employment and be of no
further force or effect.
4. Incorporation of Plan. Notwithstanding anything herein to the contrary,
---------------------
this Option shall be subject to and governed by all the terms and
conditions of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified
herein. All references herein to the Plan shall mean the Plan in effect as
of the date hereof. In the event of any conflict between the provisions in
the Plan and the provisions in this Agreement, the provisions of the Plan
shall govern.
5. Additional Terms and Conditions of Option.
-----------------------------------------
(a) Nontransferability of Option. This Agreement is personal to the
----------------------------
Optionee, is non-assignable and is not transferable in any manner,
by operation of law or otherwise, other than by will or the laws of
descent and distribution. This Option is exercisable, during the
Optionee's lifetime, only by the Optionee, and thereafter only by the
Optionee's legal representative or legatee.
(b) Delivery of Certificates. Upon the exercise of the Option, in whole or
------------------------
in part, the Company shall deliver or cause to be delivered one or
more certificates representing the number of Shares purchased against
full payment therefor. The Company shall pay all original issue or
transfer taxes and all fees and expenses incident to such delivery.
(c) Option Confers No Rights as Stockholder. The Optionee shall not be
---------------------------------------
entitled to any privileges of ownership with respect to Shares subject
to the Option unless and until purchased and delivered upon the
exercise of the Option, in whole or in part, and the Optionee becomes
a stockholder of record with respect to such delivered Shares; and the
Optionee shall not be considered a stockholder of the Company with
respect to any such Shares not so purchased and delivered.
(d) Decisions of Committee. The Committee shall have the right to resolve
----------------------
all questions which may arise in connection with the Option or its
exercise. Any interpretation, determination or other action made or
taken by the Committee regarding this Agreement shall be final,
binding and conclusive.
4
(e) Reservation of Shares. The Company shall at all times prior to the
---------------------
expiration or termination of the Option reserve or cause to be
reserved and keep or cause to be kept available, either in its
treasury or out of its authorized but unissued shares of common stock,
the full number of shares of common stock of the Company subject to
the Option from time to time.
(f) Change in Capital Structure. The terms of this Option shall be
---------------------------
adjusted as the Committee determines is equitably required in the
event the Company effects one or more stock dividends, stock split-
ups, subdivisions or consolidations of shares or other similar changes
in capitalization.
(g) Fractional Shares. Fractional shares shall not be issuable hereunder,
-----------------
and when any provision hereof may entitle Optionee to a fractional
share such fraction shall be disregarded.
6. Tax Withholding. The Optionee shall, not later than the date as of which
---------------
the exercise of this Option becomes a taxable event for Federal income tax
purposes, pay to the Company or make arrangements satisfactory to the
Committee for payment of any Federal, state, at local taxes required by law
to be withheld on account of such taxable event. Subject to the approval of
the Committee, the Optionee may elect to have the minimum tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company
to withhold from Shares to be issued, or (ii) transferring to the Company a
number of previously owned whole Shares (which the Optionee has held for at
least six months prior to the delivery of such Shares or which the Optionee
purchased on the open market and for which the Optionee has good title,
free and clear of all liens and encumbrances) having an aggregate Fair
Market Value, determined as of the date of exercise, that would satisfy the
minimum withholding amount due.
7. Miscellaneous Provisions.
------------------------
(a) Designation as Non-Qualified Stock Option. The Option is hereby
-----------------------------------------
designated as not constituting an "incentive stock option" within the
meaning of Section 422 of the Code. This Agreement shall be
interpreted and treated consistently with such designation.
(b) Successors. This Agreement shall be binding upon and inure to the
----------
benefit of any successor or successors of the Company and any person
or persons who shall, upon the death of the Optionee, acquire any
rights hereunder in accordance with this Agreement or the Plan.
(c) 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
Optionee, to his or her address on the books of the Company (or to
such other address as the Company or the Optionee may give to the
other for purposes of notice hereunder).
5
All notices, requests or other communications provided for in this
Agreement shall be made in writing either (a) by personal delivery to
the party entitled thereto, (b) by facsimile with confirmation of
receipt, (c) by mailing in the United States mail to the last known
address of the party entitled thereto or (d) by express courier
service. The notice, request or other communication shall be deemed to
be received upon personal delivery, upon confirmation of receipt of
facsimile transmission or upon receipt by the party entitled thereto
if by United States mail or express courier service; provided,
however, that if a notice, request or other communication in not
received during regular business hours, it shall be deemed to be
received on the next succeeding business day of the Company.
(d) Governing Law. This Agreement and all determinations made and actions
-------------
taken pursuant hereto and thereto, to the extent not governed by the
laws of the United States, shall be governed by the laws of the State
of Delaware and construed in accordance therewith without giving
effect to principles of conflicts of laws.
(e) Counterparts. This Agreement may be executed in two counterparts, each
------------
of which shall be deemed an original and both of which together shall
constitute one and the same instrument.
(f) Further Assurances. The Company and the Optionee shall execute and
------------------
deliver such further instruments and take such additional action as
each party may reasonably request to effect, consummate, confirm or
evidence the grant of the Option to the Optionee, and they shall each
execute such documents as may be reasonably necessary to assist each
other in preserving or perfecting their respective rights in the
Option.
(g) No Right to Continued Employment. This Agreement does not confer upon
--------------------------------
Optionee any right to continue in the employ of the Company or an
Affiliate, nor shall it interfere in any way with the right of the
Company or an Affiliate to terminate such employment at any time.
8. Duplicate Agreement. Optionee and the Company acknowledge that they may
-------------------
have previously executed an Option Agreement in the form of this Option
Agreement but without this Section 8, and that such previously executed
Option Agreement has been lost (the "Lost Option Agreement"). This Option
Agreement is being executed in lieu of the Lost Option Agreement. Employee
agrees to indemnify, defend and hold harmless the Company, its successors
and assigns, and its shareholders from any and all damages arising,
directly or indirectly, out of the execution of this Option Agreement in
lieu of the Lost Option Agreement and to deliver or cause to be delivered
to the Company the Lost Option Agreement for cancellation whenever and as
soon as it is found.
6
WYNDHAM INTERNATIONAL, INC.
By: _______________________________
Title: _______________________________
Accepted this 27/th/ day of March, 2000.
Optionee Name: Xxxx X. Xxxxxxxx
Signature: _____________________________
7
Exhibit C
---------
MASTER NOTE
-----------
Dallas, Texas
FOR VALUE RECEIVED, XXXX X. XXXXXXXX (referred to herein as the "Maker"),
promises to pay to WYNDHAM INTERNATIONAL. INC., a Delaware corporation (referred
to herein as the "Payee"), or its assigns, the sum determined pursuant to the
Employment Agreement hereinafter described, together with interest on the unpaid
principal balance as set forth below.
1. Certain Definitions. The following items, when used in this Note,
-------------------
shall have the meanings assigned to them below:
(a) Stated Rate. Until March 27, 2005, the term "Stated Rate" means
------------
the rate of six percent (6%) per annum, compounded annually, and thereafter, the
term "Stated Rate" means the interest rate as the same may be adjusted from time
to time, paid by Payee during the term of this Note pursuant to the revolving
line of credit of the Payee as it may exist from time to time.
(b) Maximum Rate. The term "Maximum Rate" shall mean, on any day, the
-------------
highest nonusurious rate of interest (if any) permitted by applicable law on
such day. For purposes of Tex. Rev. Civ. Stat. Xxx. Art. 5069-1.04(b), as it may
from time to time be amended, the "applicable rate ceiling" shall be the
"indicated rate" ceiling from time to time in effect as limited by Art 5069-
1.04(b); provided, however, that to the extent permitted by applicable law,
Payee reserves the right to change the "applicable rate ceiling" from time to
tutu by further notice and disclosure to Maker; and, provided farther, that the
"highest nonusurious, rate of interest permitted by applicable law" for purposes
of this Note shall not be limited to the applicable rate ceiling under
Art. 5069-1.04 if federal laws or other state laws now or hereafter in effect
and applicable to this Note (and the interest contracted for, charged and
collected hereunder) shall permit a higher rate of interest.
(c) Employment Agreement. The term "Employment Agreement" shall mean
--------------------
the Executive Employment Agreement dated as of March 27, 2000, between Maker and
Payee.
2. Interest Rate. The unpaid principal balance from the date hereof until
-------------
maturity shall bear interest at a rate per annum equal to the lesser of the
Stated Rate or the Maximum Rate. Interest on the unpaid principal balance hereof
shall be calculated at a daily rate equal to 1/365th of the rate per annum
herein provided, and shall be charged and collected on the actual number of days
elapsed. After maturity, unpaid principal and, to the extent permitted by law,
interest on this Note shall bear interest at a rate equal to the lesser of (i)
four (4) percentage points over the Stated Rate or (ii) the Maximum Rate.
1
3. Payment of Principal and Interest. The entire principal balance an
---------------------------------
accrued interest on this Note shall become due and payable on the earlier of (i)
the fourth anniversary of the date of the concerned principal advance, or (ii)
thirty (30) days after "Date of Termination" (as defined in the Employment
Agreement) of Maker's employment with Payee in the event Maker's employment with
Payee is terminated for "Cause" (as such term is defined ii subparagraph 7(c) of
the Employment Agreement) or not for "Good Reason" (as such term is defined in
subparagraph 7(e) of the Employment Agreement). Maker shall also be required to
make prepayments on this Note in the amounts and in the manner required by
paragraph 22 of the Employment Agreement.
4. Events of Default.
-----------------
(a) The occurrence of any one or more of the following events shall
be deemed an event of default hereunder ("Event of Default"):
(i) The failure of Maker to make any payment on this Note when
the same becomes due and payable and such failure continues for ten
(10) days after notice of such failure to pay is received by Maker
from Payee; or
(ii) Maker shall commence any case, proceeding or other action
seeking reorganization, arrangement or adjustment of his debts under
any bankruptcy, insolvency or reorganization law, or seek the
appointment of a receiver, trustee or custodian for Maker or for all
of his property; or
(iii) Any case, proceeding or other action shall be commenced
against Maker seeking reorganization, arrangement or adjustment of his
debts under any bankruptcy, insolvency or reorganization law or
seeking the appointment of a receiver, custodian or trustee for Maker
or for all or substantially all of his property, and such case,
proceeding or other action remains undismissed for a period of sixty
(60) days after commencement thereof.
(b) Upon the occurrence of an Event of Default hereunder, Payee, at
its option, may declare the entire unpaid principal balance and accrued interest
on this Note to be immediately due and payable without notice of any kind to
Maker and without any other presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived by Maker, and may, at its option,
exercise any other right or remedy existing at law or in equity. Failure to
exercise any such right or remedy shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default.
5. Voluntary Prepayment. Maker shall have the right and privilege from
--------------------
time to time to prepay in whole or in part this Note without premium or penalty.
All such prepayments shall be first applied to all then accrued interest and
then to principal, and the accrual of interest shall immediately cease on any
principal amount so prepaid.
6. Waiver. Maker waives demand, presentment for payment, notice of
------
nonpayment, protest and notice of protest and agrees to any substitution,
subordination or release of any parties primarily or secondarily liable hereon.
No waiver by Payee of any of its rights or remedies hereunder or under any other
document evidencing or securing this Note or otherwise
2
shall be considered a waiver of any other subsequent right to remedy of Payee;
and no delay or omission in the exercise or enforcement by Payee of any rights
or remedies shall be construed as a waiver of any right or remedy of Payee.
7. Attorney's Fees. If this Note is not paid pursuant to the terms
---------------
hereof and is placed in the hands of an attorney for collection, or if it is
collected through bankruptcy or any other court proceeding after maturity, then
Payee shall be entitled to reasonable attorneys' fees for collection.
8. Limitation on Agreements. It is the intention of Maker and Payee to
------------------------
comply with applicable usury laws. In furtherance thereof, Maker and Payee
stipulate and agree that, notwithstanding any provision contained in this Note,
or in any other agreement between Maker and Payee, Payee shall never be entitled
to receive, collect or apply as interest on this Note, any amount in excess of
the Maximum Rate, and, in the event Payee ever receives, collects or applies as
interest any such excess, such amount that would be excessive interest shall be
deemed to be a partial prepayment of principal and treated hereunder as such,
and if the principal amount of the Note is paid in full, any remaining excess
shall forthwith be paid to Maker. In determining whether the interest paid or
payable, under any specific contingency, exceeds the Maximum Rate, Maker and
Payee shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payments (other than payments hereunder) as an
expense, fee or premium rather than as interest (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate, allocate and
spread in equal parts the total amount of interest throughout the entire
contemplated term of this Note so that the interest rate is uniform throughout
such term.
9. Governing Law and Venue. This Note is being executed and delivered and
-----------------------
is intended to be performed in the State of Texas. This Note shall be construed
as to both validity and performance and enforced in accordance with and governed
by the laws of the State of Texas.
10. Notices. All notices or other communications required or permitted
-------
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by certified or registered mail, postage prepaid,
with return receipt requested, addressed to Maker to Payee as follows:
If to Payee to:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
If to Maker to:
Xxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxx #00X
0
Xxxxxx, Xxxxx 00000
or such other address as shall be furnished in writing by Maker or Payee to the
other, it accordance with the above provisions, and such notice or communication
shall be deemed to have been given as of the date so delivered in the case of
personal delivery or three (3) days after deposit in the mail in the case of
certified or registered mail.
11. Arbitration. Maker and Payee agree that any claim, controversy or
-----------
dispute arising out of or relating to this Note that cannot be amicably settled
shall be referred to binding arbitration as hereinafter provided. If arbitration
is required to resolve a dispute between Maker and Payee, Payee will notify the
American Arbitration Association ("AAA") and request AAA to select one person to
act as the arbitrator for resolution of this dispute, The selected arbitrator
will establish the rule for arbitration of the dispute and such rules will be
binding upon all parties to the arbitration proceeding. The arbitrator may use
the rules of the AAA for commercial arbitration but is encouraged to adopt such
rules as the arbitrator deems appropriate to accomplish the arbitration in the
quickest and least expensive manner possible. Accordingly, the arbitrator may
(i) dispense with any formal rules of evidence and allow hearsay testimony so as
to limit the number of witnesses required, (ii) minimize discovery procedures as
the arbitrator deems appropriate, (iii) act upon his understanding or
interpretation of the law on any issue without the obligation to research such
issue or accept or act upon briefs of the issue prepared by any party, (iv)
limit the time for presentation of any party's case as well as the amount of
information or number of witnesses to be presented in connection with any
hearing, (v) prevent any party from allowing an attorney to present or argue the
party's case before the arbitrator in any hearing, and (vi) impose any other
rules which the arbitrator believes appropriate to effect a resolution of the
dispute as quickly and inexpensively as possible. The arbitration shall take
place in Dallas, Texas. The arbitrator will have the exclusive authority to
determine and award costs of arbitration and the cost incurred by any party for
attorneys, advisors and consultants. Any award made by the arbitrator shall be
binding on Maker, Payee and all parties to the arbitration and shall be
enforceable to the fullest extent of the law.
12. Master Note. This Note is to the extent specified in the
-----------
Employment Agreement intended to document certain principal advances which may
hereafter be made under the Employment Agreement by Payee to Maker. This Note
shall for purposes of each separate principal advance be deemed dated as of the
date of the concerned advance.
MAKER
___________________________________________
XXXX X. XXXXXXXX
4
