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EXHIBIT 10.3
EMPLOYMENT CONTRACT
AGREEMENT, dated this 16th day of December , 1993, between Signature
Inns, Inc., hereinafter referred to as the "Employer", and Xxxx X. Xxxxxx ,
hereinafter referred to as the "Employee".
1. Employment. The Employer hereby employs the Employee and the
Employee hereby accepts employment upon the terms and conditions hereinafter set
forth.
2. Term. The employment hereunder shall commence on Dec. 16, 1993, and
shall continue for two (2) years, unless previously terminated pursuant to the
provisions hereinafter contained. At the expiration date of the initial two (2)
year term of this Agreement, the Agreement shall be subject to automatic renewal
for additional terms of one (1) year each, unless either party delivers notice
of termination to the other party no later than thirty (30) days prior to the
first day of the applicable renewal term.
3. Salary and Bonus. For all services rendered by the Employee under
this Agreement, Employer shall pay the Employee annualized base compensation of
Eighty Two Thousand Five Hundred Dollars ($ 82,500 ) (less all ordinary
employment tax deductions) payable in equal installments every two weeks of
employment. Employee's performance and salary shall be reviewed annually by
Employer's Board of Directors. Employee's salary shall be subject to increase at
the discretion of the Employer's Board of Directors. In addition thereto,
Employee also shall be eligible to
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receive bonuses, if any, including but not limited to, the Executive Incentive
Compensation Program (EICP), in such amounts and on such terms as the Board of
Directors of the Employer shall determine in its sole discretion, but with the
understanding that the EICP bonus is earned and accrued monthly.
4. Duties. The Employee is engaged as Vice President Finance & Chief
Financial Officer of the Employer. The general duties of the position are set
forth in either or both the Employer By-laws or the "Schedule of Employee
Duties" which is attached hereto as Exhibit "A" and by this reference made a
part hereof. The precise duties and services of the Employee may be extended or
curtailed, from time to time, at the direction of the Board of Directors of the
Employer. The Employee's duties shall be reasonably related to those ordinarily
performed by a person employed in such a job position.
5. Extent of Services. The Employee shall devote all of his/her
professional time, efforts, skill and ability to the business of the Employer,
and shall not, during the term of this Agreement, be engaged in any other
business activity, whether or not such business activity is pursued for gain,
profit or other pecuniary advantage, unless any such other business activity is
disclosed to and approved by the Board of Directors of the Employer. Nor shall
this paragraph 5 be construed as preventing the Employee from investing his/her
assets in such form or manner as will not require any services on the part of
the Employee in the
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operation of the affairs of the companies in which such investments
are made.
6. Expenses and Limitation of Authority. Employer shall reimburse the
Employee for all reasonable out-of-pocket expenses incurred by Employee directly
for and on behalf of Employer upon the presentation by the Employee, from time
to time, of an itemized account of such expenditures. Employee shall not have
the authority to monetarily obligate the Employer without the prior written
approval of the Employer. Employee shall not have any authority to change the
terms of employment, including but not limited to compensation, of any employee
of Employer, without the prior written approval of the Employer. Employee agrees
to indemnify and hold Employer harmless as to any and all disputes, actions, or
claims, including all costs and attorney's fees, asserted against Employer,
arising from Employee's willful misconduct.
7. Fringe Benefits. Employee shall be entitled to all fringe benefits
given other employees of Employer of equal rank or compensation as set forth in
the manual of standard company policies. Employee understands and agrees that
all benefits are subject to change from time to time at the sole discretion of
the Board of Directors of Employer to the extent permitted by law. All corporate
employees are eligible for participation in the Corporate Stock Option Plan.
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8. Restrictive Covenant. For a period of time equal to the term of
employment most recently in effect under Paragraph 2 of this Agreement, after
termination of employment for just cause by Employer or resignation without just
cause by Employee, Employee agrees:
(1) not to compete with Employer or any of its franchisees or
affiliated partnerships as an officer, director, partner, employee, or
individually, by directly or indirectly assisting in the operation of a hotel or
motel within a five (5) mile radius of any Signature Inn in operation at the
time of the termination of employment;
(2) not to attempt to hire, engage or employ, or solicit, contact or
communicate with, for the purpose of hiring, employing or engaging any person
who is then an employee or commissioned agent of the Employer (or of a franchise
or affiliated partnership) or who was such an employee at any time within the
twelve-month period immediately prior thereto.
The Employee acknowledges that the restricted period of time and
geographic region specified are reasonable in view of the nature of the business
in which the Employer is engaged and the Employee's knowledge of the Employer's
operations. If the scope of any stated restriction is too broad to permit
enforcement of such restriction to its full extent, then such restriction shall
be enforced to the maximum extent permitted by law. Employee hereby agrees that
regardless of the actual date employment commences,
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this covenant is supported by consideration consisting of continued employment,
and refusal to abide by this covenant constitutes just cause for termination.
9. Acknowledgement. Employee recognizes that Employer's business
involves all aspects of hotel/motel operation. Employee acknowledges that:
a. Employer's services and system are highly specialized items;
b. Employer has a proprietary interest in the documents and
information regarding its methods of development, customers,
computer software, sales, pricing, costs, and the specialized
requirements of Employer's operation; and
c. Such information is highly confidential and possesses a commercial
value from not being generally known.
10. Employer Trade Secret Information. Employee hereby understands and
agrees that Employee will, at all times, conform his/her conduct to the
requirements of the Indiana Trade Secrets Act, I.C. Section 24-2-3-1, et seq., a
copy of which is attached hereto as Exhibit "B" and by this reference made a
part hereof. Employee will not misappropriate (e.g., use or disclose to any
third party) any trade secret of Employer. Employee recognizes that the
penalties for a trade secret violation include disgorgement of profits, payment
of royalties, compensatory damages, punitive damages, and attorney's fees.
Employee understands that he/she may ask Employer to render an opinion as to
whether the Employer considers certain knowledge to be a trade secret, if such a
question should arise. Employee understands that upon termination
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of employment with the Employer for any reason, Employee will continue to be
prohibited at any time thereafter from misappropriating any trade secret of
Employer.
11. Confidential/Proprietary Information of Employer. Employee agrees
that during the period of employment by the Employer, and for a period of twelve
(12) months following termination of employment, for any reason, Employee will
not disclose, cause to be disclosed, or otherwise allow to be disclosed, any
confidential/proprietary information of the Employer that, while not a "trade
secret" under the Indiana Trade Secrets Act, possesses independent economic
value to the Employer from not being generally known by other persons who can
obtain economic value from its disclosure or use. Employee understands that
he/she can ask Employer to render an opinion as to whether the Employer
considers certain knowledge or information to be confidential/proprietary
information, if such a question should arise.
12. Employee Work Product. Employee agrees that any invention,
enhancement, process, method, design and any other creation (hereinafter
"Product") that Employee may develop, invent, discover, conceive or originate,
along or in conjunction with any other person during business hours or on behalf
of the Employer, during the term of the Employee's employment, and for a period
of twelve (12) months thereafter, that relates to the business of Employer now
or hereafter carried on by it, or to the use of any
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product involved therein, shall be the exclusive property of the Employer.
Employee understands and agrees that in partial consideration of Employee's
employment for the compensation received, and for continued employment, all such
products shall be the exclusive property of the Employer and thus subject to
patent, copyright, registration or other legal protective custody by the
Employer.
Employer shall have the authority and this instrument shall operate:
(1) to give the Employer authority to execute, sell and deliver as the act of
the Employee, any license agreement, contract, assignment or other instrument in
writing that may be necessary or proper; (2) to convey to Employer the entire
right, title and interest in and to any such product. Employee further agrees to
hold Employer and its assigns harmless by reason of Employer's acts pursuant to
this paragraph. Employee further agrees that, during the term of his/her
employment and any time thereafter, Employee shall cooperate with the Employer
and its counsel in the prosecution and/or defense of any litigation which may
arise in connection with any product referred to in this paragraph.
13. Return of Property. Employee agrees to return all property of
Employer, including, but not limited to equipment, prices, specifications,
programs and any other proprietary data or objects acquired through Employee's
employment with the Employer, as well as any and all copies of such items,
within seven (7) days
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upon the termination of employment, whether said termination be with or without
just cause.
14. Injunction. In the event of breach of any provisions of this
Agreement, Employer shall be entitled to seek damages if determinable but it is
hereby agreed that any such remedy at law is inadequate as to a breach of
paragraphs 8, 10, 11, 12, or 13 of this Agreement, and thus, Employer shall also
be entitled to injunctive relief. Such a breach shall cause the applicable
restrictive time period stated herein to be extended to run from the date of
full compliance with any court-ordered injunction. Employer also shall be
entitled to reasonable attorney's fees incurred in the enforcement of all such
relief. The remedies herein provided shall be cumulative and no single remedy
shall be construed as exclusive of any other or of any remedy provided at law.
Failure of Employer to exercise any remedy at any time shall not operate as a
waiver of the right of Employer to exercise any remedy for the same or
subsequent breach at any time thereafter.
15. Termination. Employment may be terminated as follows:
a. By mutual agreement of the parties upon such terms as may be agreed
to by the parties;
b. For just cause. The Employer may terminate the Employee's
employment hereunder for just cause. For purposes of this Agreement
the Employer shall have "just cause" to terminate the Employee's
employment hereunder upon conviction of a felony, or continued
willful or grossly negligent failure by the Employee to
substantially perform his duties hereunder (other than any failure
resulting from Employee's incapacity due to physical or mental
illness). In the event of termination
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for just cause, employee shall not be entitled to any severance
pay.
c. Without just cause/resignation with just cause. The Employer may
terminate Employee's employment without just cause upon forty-five
(45) days prior written notice to Employee. Termination of
Employee's employment for any reason, other than specified as for
just cause (as defined in paragraph 15. b. of this Agreement),
shall constitute termination of this Agreement "without just
cause." In addition, any material breach of this Agreement by
Employer, unless cured by Employer within forty-five (45) days
after written notice from Employee, shall constitute grounds for
resignation with just cause. This shall include the situation where
Employee determines in good faith that his status or
responsibilities with the Employer has or have diminished
subsequent to a change in control as defined in paragraph 25, and
Employee has given notice to the Employer of his resignation for
this reason within two (2) years after such change in control. In
the event of termination without just cause, or resignation,
Employee, if requested by the Employer, shall continue to render
his services during the forty-five (45) day notice period, and
shall be paid his regular compensation up to the date of cessation
of service. After completion of such service, to the extent
required by this Agreement, the Employer shall make a lump sum
severance payment equal to regular compensation as defined in
paragraph 15. e., within thirty (30) days of the last day of
employment. If Employee resigns without just cause, or is
terminated with just cause, Employee will not be entitled to
severance pay.
d. Death or Disability. In the event of the death of the Employee
during the term of this Agreement, the Agreement shall terminate as
of that date without bonus or severance pay. In the event Employee
becomes disabled and cannot continue to perform his/her duties, the
Employee shall be treated in conformity with the manual of standard
company policies then in effect. Employee shall also retain all
rights under COBRA.
e. Regular Compensation. For purposes of this paragraph 15, for the
initial term of employment under this Agreement, regular
compensation shall be understood to mean two (2) times the base
annual compensation for the prior year, excluding any bonus. For
any renewal periods after the initial two years of employment under
this Agreement, regular compensation shall be understood to include
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annual base compensation plus any annual bonus received by Employee
during the most recent year prior to termination, plus one year of
continued health insurance coverage. It is understood that any notice
period shall count toward calculation of whether the Employee has
worked a full term under the Agreement.
Provided, however, that upon termination of employment, notwithstanding
any other provisions contained herein to the contrary, the provisions of
paragraphs 8 through 14, 22, and 23 shall continue in full force and effect for
the period of time therein stated.
16. Notices. Any notices required or permitted to be given under this
Agreement shall be in writing, and sent by certified mail to the last known
residential address in the case of the Employee, or to its principal office in
the case of the Employer.
17. Assignment. The rights and obligations of the Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Employer. The contract cannot be assigned by the Employer
without the written consent of the Employee. This Agreement shall also be
binding upon the heirs and executor or administrator of Employee.
18. Integration. This instrument contains the entire agreement of the
parties. It may not be changed orally but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
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19. Severability. Should any clause of this Agreement be
found void by a court of law, that fact shall not impair the remainder of this
Agreement.
20. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Indiana.
21. Warranty. Employee hereby warrants and represents as follows:
a. That the execution of this Agreement and the discharge of
Employee's obligations hereunder will not breach or conflict with
any other contract, agreement, or understanding between Employee
and any other party or parties;
b. Employee has ideas, information and know-how relating to the type
of business conducted by Employer, and Employee's disclosure of
such ideas, information and know-how to Employer will not conflict
with or violate the rights of any third party or parties.
22. Arbitration. In the event of any dispute over the terms of this
Agreement, excluding any violation of the provisions of paragraphs 8 through 14,
the parties agree to arbitrate such dispute pursuant to the rules and procedures
of the American Arbitration Association.
23. Attorney's Fees. If any party to this Agreement breaches any of the
terms of this Agreement, then that party shall pay to the non-breaching party
all of the non-breaching party's costs and expenses, including attorney's fees,
incurred by that party in enforcing the terms of this Agreement.
24. Construction of Agreement. The parties hereby confirm and agree
that this Agreement is the result of negotiation and
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compromise, and that in interpreting this Agreement neither party shall be
considered to be the drafter of the document, and that the language should not
be strictly construed against either party. Instead, the language of the
Agreement should be interpreted consistent with the ordinary and reasonable
meaning of the words used.
25. Change in Control. For purposes of this Agreement, a "change in
control" shall be deemed to have occurred if and when:
a. Any person or group of persons acting in concert shall have
acquired ownership of or the right to vote or to direct the voting
of shares of capital stock of the Employer representing 15% or more
of the total voting power of the Employer, or
b. The Employer shall have merged into or consolidated with another
corporation, or merged another corporation into the Employer, on a
basis whereby less than 50% of the total voting power of the
surviving corporation is represented by shares held by former
shareholders of the Employer prior to such merger or consolidation,
or
c. The Employer shall have sold substantially all of its assets to
another corporation or other entity or person.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day, month and year first above written.
SIGNATURE INNS, INC.
By: /s/ Xxxx X. Xxxxxxxxx - President
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EMPLOYER
/s/ Xxxx X. Xxxxxx
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EMPLOYEE
Affirmed: April 14, 1995
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EXHIBIT A
JOB DESCRIPTION
JOB TITLE
Exempt
Vice President of Finance/Chief Financial Officer
GENERAL RESPONSIBILITIES
Responsible for the Financial Operations and functions of the corporation and
affiliated entities.
SPECIFIC DUTIES
1. Financing Negotiations
Expand and maintain banking relationships (including investment bankers)
Restructuring, workouts, fefinancing existing property debt
Evaluate acquisition opportunities
Structuring corporate financing alternatives/debt & equity
2. Transaction negotiations related to finance, legal, insurance, leases, case
investments
3. Assist CEO with strategic planning
4. Responsible for the ongoing functions of the General Accounting Department
Supervise Controller and Treasurer
Financial reporting
Tax planning and compliance
Computer information systems
Independent audits: corporation and partnerships
Cash management system
5. Develop a strong team of persons responsible for the Company's financial
operations
6. Develop and maintain strong business relationships with leaders of the
community, attorneys, accountants, consultants and vendors related to
financial functions
7. Develop and maintain business relationships with hospitality industry groups
related to financial functions
8. Manage investor communications - stockholders and limited partners
9. Chairman of the Finance Committee
10. Member of Executive Committee, Franchise Committee, Refurbishing Committee,
Investment Committee, Automation Committee, Human Resource Committee and
Strategic Planning Team
11. Reports to Chief Executive Officer
The above duties may be supplemented occasionally with additional duties
related to company objectives.
