Annual Plan. On or before the date that is forty-five (45) days following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the remaining portion of the Fiscal Year in which the Commencement Date occurs and Owner and Manager shall cooperate to agree on the annual plan for the remainder of the Fiscal Year in which the Commencement Date occurs, which shall be the “Annual Plan” for such Fiscal Year. On or before December 1st of each year following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the next Fiscal Year. On or before December 15th of each year following the Commencement Date, Owner either shall accept the proposed Annual Plan submitted to Owner by Manager or shall submit to Manager a detailed list of Owner's objections or questions to the proposed Annual Plan ("Owner's Annual Plan Objections"). Within fifteen (15) days after Manager's receipt of Owner's Annual Plan Objections, Owner and Manager shall meet and discuss Owner's Annual Plan Objections with the goal of agreeing upon an Annual Plan for the subject Fiscal Year (the “Annual Plan”). Owner, as part of Owner's Annual Plan Objections, shall have the right to object to the entire proposed Annual Plan or to any specific item or items contained in the proposed Annual Plan. In the event Owner objects to the proposed Annual Plan or any specific item or items of expense in the proposed Annual Plan and Owner and Manager are unable to reach agreement thereon as provided above prior to commencement of the Fiscal Year in question, pending such agreement, the proposed Annual Plan or the specific item or items of expense (not revenue) in question shall be suspended and replaced for such period that the Annual Plan or such item(s) are in question by an amount equal to the lesser of (i) that proposed by Manager for such Fiscal Year, or (ii) if an objection to the entire Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in question, or (iii) if an objection to a specific item or items of expense in the Annual Plan, such item or items of expense for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of the Fiscal Year in question. (a) The Annual Operating Budget shall be prepared in accordance with the Uniform System of Accounts. The proposed Annual Operating Budget shall incorporate Manager's good faith reasonable estimates of the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual Operating Budget. Any revisions, substitutions or additions to the Annual Operating Budget must be approved by the Owner in writing. The proposed Annual Plan shall include for the ensuing Fiscal Year, the following proposed budgets and programs: A. A proposed operating budget (the “Proposed Operating Budget”) on a monthly and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take the form of a “bonus pool” stating an aggregate amount to be distributed among the Hotel Employees as appropriate, rather than separately setting forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue and expense levels to the previous Fiscal Year’s estimated and actual results, highlighting material changes for the upcoming Fiscal Year;
Appears in 4 contracts
Samples: Hotel Management Agreement (Procaccianti Hotel Reit, Inc.), Hotel Management Agreement (Procaccianti Hotel Reit, Inc.), Management Agreement (Procaccianti Hotel Reit, Inc.)
Annual Plan. On or before the date that is (a) At least forty-five (45) days following prior to the Commencement Datecommencement of each Operating Year (except the first Operating Year), Manager shall submit to Owner a proposed for Owner’s written approval the Annual Plan in for the following Operating Year. Manager shall submit an interim operating budget for the first Operating Year within thirty (30) days after the Effective Date, with such interim operating budget to include a cash forecast and Manager’s format estimate of the Gross Revenues and operating expenses of the Project for the remaining first Operating Year.
(b) Owner shall give its written approval or disapproval of the Annual Plan not later than thirty (30) days after its submission to Owner by Manager.
(c) If Owner does not approve or disapprove such Annual Plan within such thirty (30) day period, then Manager may deliver written notice to Owner (with a copy to Owner’s counsel as required by Section 13.10) stating that Owner shall be deemed to have approved the Annual Plan as submitted by Manager if it does not approve the Annual Plan within ten (10) days after the giving of such notice. If Owner does not approve or disapprove such Annual Plan within such ten (10)-day period, then Owner shall be deemed to have approved the Annual Plan as submitted by Manager. If Owner objects to all or any portion of such Annual Plan, then Owner shall notify Manager of the Fiscal Year reasons for its objections at the same time as it notifies Manager of its objection or as soon thereafter as reasonably practicable (and in which the Commencement Date occurs any event within fifteen (15) days thereafter), and Owner and Manager shall cooperate use their commercially reasonable efforts to agree on the annual plan for the remainder in respect of the Fiscal Year in items to which the Commencement Date occurs, which shall be the “Annual Plan” for such Fiscal YearOwner objects. On or before December 1st of each year following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the next Fiscal Year. On or before December 15th of each year following the Commencement Date, Owner either shall accept the proposed Annual Plan submitted to Owner by Manager or shall submit to Manager a detailed list of Owner's objections or questions to the proposed Annual Plan ("Owner's Annual Plan Objections"). Within fifteen (15) days after Manager's receipt of Owner's Annual Plan Objections, Should Owner and Manager shall meet and discuss Owner's Annual Plan Objections with the goal of agreeing upon an Annual Plan for the subject Fiscal Year (the “Annual Plan”). Owner, as part of Owner's Annual Plan Objections, shall have the right to object to the entire proposed Annual Plan or to any specific item or items contained in the proposed Annual Plan. In the event Owner objects to the proposed Annual Plan not reach agreement on all or any specific item or items portion of expense in the proposed Annual Plan and Owner and Manager are unable to reach agreement thereon as provided above prior to commencement of the Fiscal Year in question, pending such agreement, the proposed Annual Plan or the specific item or items of expense (not revenue) in question shall be suspended and replaced for such period that the Annual Plan or such item(s) are in question by an amount equal to the lesser of (i) that proposed by Manager for such Fiscal Year, or (ii) if an objection to the entire Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in question, or (iii) if an objection to a specific item or items of expense in the Annual Plan, such item or items of expense for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase pending agreement being reached, and in the CPI over the twelve (12) month period immediately preceding the start case of the Fiscal Year in question.
(a) The first Operating Year, during the period prior to submission of the Annual Operating Budget Plan, Manager shall be prepared operate the Project in accordance with the Uniform System Operating Standards and this Agreement and, if such disagreement relates to an Operating Year after the first Operating Year, at rates or levels of Accountsexpenditures comparable to those of the preceding Operating Year with suitable adjustments of rates and expenses for such items or portions thereof as dictated by inflationary factors, seasonality and the necessity of operating the Project in accordance with the Operating Standards and this Agreement. The foregoing procedure shall also apply to approval of proposed Annual Operating Budget shall incorporate Manager's good faith reasonable estimates of the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual Operating Budget. Any revisions, substitutions or additions revisions to the Annual Operating Budget must be approved by the Owner in writing. The proposed Annual Plan shall include for the ensuing Fiscal Year, the following proposed budgets and programs:pursuant to Section 6.1(d).
A. A proposed operating budget (the “Proposed Operating Budget”) on a monthly and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Manager shall monitor the Annual Plan throughout the Operating Expenses; Year. Should Manager consider it necessary to revise the Annual Plan during the course of the Operating Year, whether due to changed trading climate, unforeseen capital requirements or for any other reason. Manager shall submit such revisions to Owner for Owner’s approval, setting forth the reasons for the revisions.
(e) Manager will use commercially reasonable efforts to cause the Project to be operated in accordance with the Annual Plan. While the Annual Plan is an estimate only, Manager will prepare it using assumptions that Manager believes to be reasonable at the time of its preparation. The Project’s actual results may differ from the projected EBITDA; (f) proposed staff scheduling results, and compensation (includingManager does not guarantee, warrant or represent that the actual financial or other results will conform to the Annual Plan. Nevertheless, Manager shall not, without limitationOwner’s approval, any bonuses or incur discretionary expenses (meaning expenses other incentive compensation for Hotel Employees which may take than those that meet all of the form of a “bonus pool” stating an aggregate amount following criteria: (i) they are required to be distributed among incurred for the Hotel Employees operation of the Project in accordance with the Operating Standards, (ii) they are determined by a third party or Governmental Authority and (iii) they are not within the reasonable control of Manager, such as appropriateutilities and energy expenses, rather minimum wages under collective bargaining agreements, taxes and insurance premiums) in any full Operating Year that cause the total amount expended with respect to any expense category listed on Exhibit C for any full Operating Year to exceed the amount budgeted therefor in the applicable Annual Plan by more than separately setting forth incentive and/or bonus compensation for each Hotel Employee)three percent (3%) of such budgeted amount; (g) a narrative comparison of budgeted revenue and expense levels provided, however, that the foregoing shall not apply to expenses incurred to mitigate emergencies at the Project or to variable expenses to the previous Fiscal Year’s estimated extent of any increase in Gross Revenues with respect to which such expenses are variable. Notwithstanding any other provision in this Agreement, this Section qualifies any and actual resultsall references to the Annual Plan in this Agreement and any and all authority of Manager to incur, highlighting material changes for create, pay or receive reimbursement from Owner for, costs and expenses incurred in connection with the upcoming Fiscal Year;operation of the Project.
Appears in 2 contracts
Samples: Management Agreement (Capital Lodging), Management Agreement (Capital Lodging)
Annual Plan. (a) Operator shall operate the Hotel for the calendar year 2017 in accordance with the existing plan in place. A Proposed Annual Plan once approved by Lessee shall be the “Approved Annual Plan” for such Fiscal Year. On or before the date that is forty-five (45) days November 1st of each year following the Commencement Date, Manager Operator shall submit to Owner Lessee a proposed Proposed Annual Plan in Manager’s format for the remaining portion of the Fiscal Year in which the Commencement Date occurs and Owner and Manager shall cooperate to agree on the annual plan for the remainder of the Fiscal Year in which the Commencement Date occurs, which shall be the “Annual Plan” for such next Fiscal Year. On or before December 1st of each year following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the next Fiscal Year. On or before December 15th of each year following the Commencement Date, Owner Lessee either shall accept approve the proposed Proposed Annual Plan submitted to Owner Lessee by Manager Operator or shall submit to Manager Operator a detailed list of Owner's Lessee’s objections or questions to the proposed Proposed Annual Plan ("Owner's “Lessee’s Annual Plan Objections"”). Within fifteen seven (157) business days after Manager's Operator’s receipt of Owner's Lessee’s Annual Plan Objections, Owner Lessee and Manager Operator shall meet and discuss Owner's Lessee’s Annual Plan Objections with the goal of agreeing upon an Approved Annual Plan for the subject Fiscal Year (the “Annual Plan”)Year. OwnerLessee, as part of Owner's Lessee’s Annual Plan Objections, shall have the right to object to the entire proposed Proposed Annual Plan or to any specific item or items contained in the proposed Proposed Annual Plan. In the event Owner Lessee objects to the proposed Proposed Annual Plan or any specific item or items of expense in the proposed Proposed Annual Plan and Owner Lessee and Manager Operator are unable to reach agreement thereon as provided above prior to commencement of the Fiscal Year in question, pending such agreement, the proposed Proposed Annual Plan or the specific item or items of expense (not revenue) in question shall be suspended and replaced replaced, for such period that the Annual Plan or such item(s) are in question until Operator receives Lessee’s approval, by an amount equal to the lesser of (i) that proposed by Manager Operator for such Fiscal Year, or (ii) if an objection to the entire Proposed Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in questionquestion and RevPar increases based on the appropriate previous 12-month RevPar growth percentage for the sector in which the Hotel is included, as set forth in the Revenue Data Publication for revenue growth over the prior year’s actual amounts, or (iii) if an objection to a specific item or items of expense in the Annual Plan, such item or items of expense for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of the Fiscal Year in question.
(ab) As part of the Proposed Annual Plan, Operator shall provide to Lessee for Lessee’s review, a written schedule for the Hotel listing all executive and management employees to be employed “on-site” in the direct management of the Hotel including, but not limited to the positions of General Manager, Director of Sales, and Chief Engineer. These schedules shall include such employee’s title, job description, and the salary range including additional compensation or prerequisites such as lodging, meals, maintenance, moving expenses, bonus/incentive compensation and the like. In the event that any employee’s services are shared with (or subsidized through a sharing arrangement with) another hotel, the employee shall be identified together with a description of his/her responsibilities and the amount and source of any subsidy, together with a breakdown of the relative time expended with respect to the Hotel and each other hotel. If Lessee notifies Operator that Lessee does not believe that some or all the scheduled wages and salaries are reasonable and customary as required above, then Operator shall promptly provide to Lessee a wage and salary survey that supports the scheduled wages and salaries. No proposed amendment including changes in salary or other compensation shall be effective unless the salary or other compensation as changed is reasonable and customary.
(c) No later than October 1 of each year, Operator will prepare and submit (following discussions with Lessee) to Lessee an annual capital budget for each Fiscal Year for the Hotel (the “Proposed Capital Budget”). Notwithstanding the foregoing, for the Fiscal Year in which this Agreement is executed Operator shall manage the Hotel in accordance with the then existing Hotel capital budget, which is subject to Force Majeure. The Annual Proposed Capital Budget will set forth all projected Capital Improvements for such Fiscal Year, which budget shall also be month-to-month as well as annual. The Proposed Capital Budget will be subject to the approval of Lessee, in its sole and absolute discretion. The Proposed Capital Budget shall be prepared in accordance with the Uniform System of Accounts. When approved by Lessee, the Proposed Capital Budget, or such items as may be specifically approved by Lessee, shall become the “Approved Capital Budget”. Any revisions, substitutions or additions to the Approved Capital Budget must be approved by Lessee in writing. Lessee acknowledges that the Proposed Capital Budget is an estimate and cannot be finalized until the Operating Budget is finalized.
(d) No later than November 1 of each year, Operator shall prepare and submit (following discussions with Lessee) to Lessee an annual operating budget and business plan for the operation of the Hotel for the forthcoming Fiscal Year containing detailed projections of Gross Hotel Income and budgets of Operating Expenses (the “Proposed Operating Budget”). Notwithstanding the foregoing, for the Fiscal Year in which this Agreement is executed Operator shall manage the Hotel in accordance with the then existing operating budget. The Proposed and Approved Operating Budget shall be month-to-month as well as annual. The Proposed Operating Budget shall be prepared in accordance with the Uniform System of Accounts. The proposed Annual When approved by Lessee, the Proposed Operating Budget shall incorporate Manager's good faith reasonable estimates of become the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual “Approved Operating Budget”. Any revisions, substitutions or additions to the Annual Approved Operating Budget must be approved by the Owner Lessee in writing.
(e) The Proposed Operating Budget and the Proposed Capital Budget shall provide for operating, equipping and maintaining the Hotel in accordance with the Hotel Standards. Contemporaneously with the submission of the Proposed Capital Budget, Operator shall submit to Lessee monthly budgeted occupancy, average daily rate and RevPAR statistics for the Hotel. The Proposed Operating Budget and the monthly budgeted hotel operating statistics shall contain Operator’s reasonable good faith estimates of the amounts set forth therein. Operator shall provide Lessee, upon request, all details, information and assumptions used in preparing the Proposed Capital Budget and the Proposed Operating Budget. Lessee shall be responsible for implementing the Approved Capital Budget and may, in Lessee’s sole discretion, increase, decrease, delete or modify in any respect any capital expenditure in the Approved Capital Budget.
(f) The Proposed Marketing Plan shall contain advertising, sales and promotional plans prepared by Operator to be used in connection with the marketing of the Hotel. When approved by Lessee, the Proposed Marketing Plan shall be the Approved Marketing Plan. Any revision, substitution or additions to the Approved Marketing Plan must be approved by Lessee in writing. The proposed Annual Proposed Marketing Plan shall include be written with the goal of achieving Gross Hotel Income as submitted in the Proposed Operating Budget for the ensuing Fiscal Year or, if less than a full Fiscal Year, the period between the Commencement Date and the December 31 next following proposed the Commencement Date. Operator shall not use Lessee’s name in any advertising or promotional material without Lessee’s expressed prior written approval.
(g) The Proposed Management Plan shall contain (i) estimated contributions and distributions from or to Lessee; (ii) a leasing plan for the leasing of concessions and other space in the Hotel; (iii) plans and budgets for the disposition and programs:replacement of Hotel FF&E; and (iv) such management issues, proposals and projections or modifications as Operator may recommend for the efficient management of the Hotel including but not limited to proposals and assessments as to the Hotel’s position in the market, market opportunities, franchise affiliation and disposition strategies. When approved by Lessee, the Proposed Management Plan shall be the Approved Management Plan.
A. A proposed (h) Upon approval by Lessee of a Proposed Annual Plan, Operator shall use its good faith efforts to manage, operate and maintain the Hotel for the subsequent Fiscal Year in accordance with the Approved Annual Plan; provided, however, that Operator will not be deemed to be in default of its obligations under this Agreement to operate the Hotel (including without limitation, incurring expenses) in compliance with the Approved Annual Plan or Approved Operating Budget, in the event that Operator incurs and pays expenses (1) in a Major Account Category which do not cause the aggregate expenditures for such Major Account Category to exceed the budgeted amount by more than 10% for a given Fiscal Year, or together with all other expenses do not cause the aggregate expenditures for all items to exceed the Approved Operating Budget by more than 5% for a given Fiscal Year; (2) that are necessary for the continued operation of the Hotel and are not within the reasonable control of Operator (including, but not limited to, those for insurance, taxes, utility charges, fees and reimbursements due under the franchise agreement, and compliance with applicable laws and regulations), (3) that are immediately necessary on an emergency basis to protect the physical integrity or lawful operation of the Hotel or the health or safety of its occupants, and/or (4) that are commercially desirable to be incurred in order to obtain unbudgeted Hotel revenue in the ordinary course of operating the Hotel in accordance with the then current Approved Annual Plan, provided that such unbudgeted revenue is sufficient in Operator’s good faith and professional judgment to offset such expenses. Regardless of the foregoing provisions relating to certain expenditures beyond the Approved Annual Plan, Operator shall provide prompt notice to Lessee of such excess expenditures and Operator will provide explanations for all significant variances and programs put in place to correct or improve budget (deviations. Wherever phrases in this Agreement such as “in accordance with the “Proposed Approved Annual Plan or the Approved Operating Budget”, “in the Approved Operating Budget”, “in the then-current Approved Annual Plan”, or similar phrases are used or referred to in this Agreement, the variance provisions set forth in this Section 6.01(h) on a monthly shall be applied and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take the form of a “bonus pool” stating an aggregate amount deemed to be distributed among the Hotel Employees as appropriate, rather than separately setting included in such use or reference and Operator will not be in default of its obligations set forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue in this Agreement with respect to Operator incurring and expense levels to the previous Fiscal Year’s estimated and actual results, highlighting material changes for the upcoming Fiscal Year;paying expenses that are included in such variances.
Appears in 2 contracts
Samples: Hotel Management Agreement (Condor Hospitality Trust, Inc.), Hotel Management Agreement (Condor Hospitality Trust, Inc.)
Annual Plan. On or before the date that is (a) At least forty-five (45) days following prior to the Commencement Datecommencement of each Operating Year (except the first Operating Year), Manager shall submit to Owner a proposed for Owner’s written approval the Annual Plan in for the following Operating Year. Manager shall submit an interim operating budget for the first Operating Year within thirty (30) days after the Effective Date, with such interim operating budget to include a cash forecast and Manager’s format estimate of the Gross Revenues and operating expenses of the Project for the remaining first Operating Year.
(b) Owner shall give its written approval or disapproval of the Annual Plan not later than thirty (30) days after its submission to Owner by Manager.
(c) If Owner does not approve or disapprove such Annual Plan within such thirty (30) day period, then Manager may deliver written notice to Owner (with a copy to Owner’s counsel as required by Section 13.10) stating that Owner shall be deemed to have approved the Annual Plan as submitted by Manager if it does not approve the Annual Plan within ten (10) days after the giving of such notice. If Owner does not approve or disapprove such Annual Plan within such ten (10)-day period, then Owner shall be deemed to have approved the Annual Plan as submitted by Manager. If Owner objects to all or any portion of such Annual Plan, then Owner shall notify Manager of the Fiscal Year reasons for its objections at the same time as it notifies Manager of its objection or as soon thereafter as reasonably practicable (and in which the Commencement Date occurs any event within fifteen (15) days thereafter), and Owner and Manager shall cooperate use their commercially reasonable efforts to agree on the annual plan for the remainder in respect of the Fiscal Year in items to which Owner objects. Should Owner and Manager not reach agreement on all or any portion of the Commencement Date occurs, which shall be the “Annual Plan” , pending agreement being reached, and in the case of the first Operating Year, during the period prior to submission of the Annual Plan, Manager shall operate the Project in accordance with the Operating Standards and this Agreement and, if such disagreement relates to an Operating Year after the first Operating Year, at rates or levels of expenditures comparable to those of the preceding Operating Year with suitable adjustments of rates and expenses for such Fiscal items or portions thereof as dictated by inflationary factors, seasonality and the necessity of operating the Project in accordance with the Operating Standards and this Agreement. The foregoing procedure shall also apply to approval of proposed revisions to the Annual Plan pursuant to Section 6.1(d).
(d) Manager shall monitor the Annual Plan throughout the Operating Year. On Should Manager consider it necessary to revise the Annual Plan during the course of the Operating Year, whether due to changed trading climate, unforeseen capital requirements or before December 1st of each year following the Commencement Datefor any other reason, Manager shall submit such revisions to Owner a proposed Annual Plan in Managerfor Owner’s format approval, setting forth the reasons for the next Fiscal Year. On or before December 15th of each year following the Commencement Date, Owner either shall accept the proposed Annual Plan submitted to Owner by Manager or shall submit to Manager a detailed list of Owner's objections or questions to the proposed Annual Plan ("Owner's Annual Plan Objections"). Within fifteen (15) days after Manager's receipt of Owner's Annual Plan Objections, Owner and Manager shall meet and discuss Owner's Annual Plan Objections with the goal of agreeing upon an Annual Plan for the subject Fiscal Year (the “Annual Plan”). Owner, as part of Owner's Annual Plan Objections, shall have the right to object to the entire proposed Annual Plan or to any specific item or items contained in the proposed Annual Plan. In the event Owner objects to the proposed Annual Plan or any specific item or items of expense in the proposed Annual Plan and Owner and Manager are unable to reach agreement thereon as provided above prior to commencement of the Fiscal Year in question, pending such agreement, the proposed Annual Plan or the specific item or items of expense (not revenue) in question shall be suspended and replaced for such period that the Annual Plan or such item(s) are in question by an amount equal to the lesser of (i) that proposed by Manager for such Fiscal Year, or (ii) if an objection to the entire Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in question, or (iii) if an objection to a specific item or items of expense in the Annual Plan, such item or items of expense for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of the Fiscal Year in questionrevisions.
(ae) The Annual Operating Budget shall Manager will use commercially reasonable efforts to cause the Project to be prepared operated in accordance with the Uniform System Annual Plan. While the Annual Plan is an estimate only, Manager will prepare it using assumptions that Manager believes to be reasonable at the time of Accountsits preparation. The proposed Annual Operating Budget shall incorporate Manager's good faith reasonable estimates of Project’s actual results may differ from the items of revenue projected results, and expense contained therein and shall contain Manager does not guarantee, warrant or represent that the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual Operating Budget. Any revisions, substitutions actual financial or additions other results will conform to the Annual Plan. Nevertheless, Manager shall not, without Owner’s approval, incur discretionary expenses (meaning expenses other than those that meet all of the following criteria: (i) they are required to be incurred for the operation of the Project in accordance with the Operating Budget must be approved Standards, (ii) they are determined by a third party or Governmental Authority and (iii) they are not within the Owner reasonable control of Manager, such as utilities and energy expenses, minimum wages under collective bargaining agreements, taxes and insurance premiums) in writing. The proposed any full Operating Year that cause the total amount expended with respect to any expense category listed on Exhibit C for any full Operating Year to exceed the amount budgeted therefor in the applicable Annual Plan by more than three percent (3%) of such budgeted amount; provided, however, that the foregoing shall include for not apply to expenses incurred to mitigate emergencies at the ensuing Fiscal Year, the following proposed budgets and programs:
A. A proposed operating budget (the “Proposed Operating Budget”) on a monthly and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling and compensation (including, without limitation, any bonuses Project or other incentive compensation for Hotel Employees which may take the form of a “bonus pool” stating an aggregate amount to be distributed among the Hotel Employees as appropriate, rather than separately setting forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue and expense levels variable expenses to the previous Fiscal Year’s estimated extent of any increase in Gross Revenues with respect to which such expenses are variable. Notwithstanding any other provision in this Agreement, this Section qualifies any and actual resultsall references to the Annual Plan in this Agreement and any and all authority of Manager to incur, highlighting material changes for create, pay or receive reimbursement from Owner for, costs and expenses incurred in connection with the upcoming Fiscal Year;operation of the Project.
Appears in 2 contracts
Samples: Management Agreement (Capital Lodging), Management Agreement (Capital Lodging)
Annual Plan. On or before Concurrently with the date that is forty-five (45) days following the Commencement Dateexecution hereof, Manager Operator shall submit to Owner a proposed an Annual Plan in Manager’s format for the remaining portion of the Fiscal Year in which the Commencement Date occurs and Owner either shall accept the initial Annual Plan submitted to Owner as provided above or shall submit to Operator a detailed list of Owner’s objections or questions to the Annual Plan. Owner and Manager Operator shall cooperate meet and discuss Owner’s Annual Plan objections and shall coordinate expeditiously and in good faith to agree on the annual plan upon an Annual Plan for the remainder remaining portion of the Fiscal Year in which the Commencement Date occurs, which shall be the “Annual Plan” for such Fiscal Year. On or before December November 1st of each year following the Commencement Date, Manager Operator shall submit to Owner a proposed an Annual Plan in Manager’s format for the next Fiscal Year. On or before December 15th Year and within no more than thirty (30) days after receipt of each year following the Commencement DateAnnual Plan, Owner either shall accept the proposed Annual Plan submitted to Owner by Manager as provided above or shall submit to Manager Operator a detailed written list of Owner's ’s objections or questions to the proposed Annual Plan ("the “Owner's ’s Annual Plan Objections"”). Within fifteen seven (157) days after Manager's Operator’s receipt of Owner's ’s Annual Plan Objections, Owner and Manager Operator shall agree upon a date to meet and discuss Owner's ’s Annual Plan Objections with the goal of agreeing upon an Annual Plan for the subject Fiscal Year (Year. In the “Annual Plan”). event that Owner does not notify any Owner, as part of Owner's ’s Annual Plan ObjectionsObjections to Operator in writing within such 30-day period, shall have the right to object to the entire proposed Annual Plan or to any specific item or items contained in the proposed Annual Planshall be deemed approved by Owner as presented by Operator. In the event Owner objects to the proposed Annual Plan specific expense items or any specific item or items of expense categories in the proposed Annual Plan and Owner and Manager Operator are unable to reach agreement thereon as provided above prior to commencement of the Fiscal Year in question, pending such agreement, the proposed Annual Plan specific items or the specific item or items categories of expense (not revenue) in question shall be suspended and replaced for such period that the Annual Plan or such item(s) are in question of disagreement by an amount equal to the lesser of (i) that proposed by Manager for such Fiscal Year, or (ii) if an objection to the entire Annual Plan, the Actual Gross actual Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in question; provided, that with respect to a dispute pertaining to the first Fiscal Year, in accordance with the Annual Plan for such first Fiscal Year submitted by Operator to Owner. Notwithstanding anything to the contrary contained herein, Owner shall not have the right to withhold its approval with respect to the following aspects of the Annual Plan: (i) Operator’s projections of Gross Revenues or the components thereof; (ii) employee wages, compensation, and benefit programs to the extent applied on a system-wide basis to the other hotels managed by Operator, taking into account fluctuation for local market conditions; (iii) if an objection to a specific item the Centralized Services Charge, and (iv) costs over which Operator or items Operator have no control, including, without limitation, taxes and government impositions, Insurance Cost, utility rates, costs and expenses and expenditures required for compliance with Legal Requirements. The Annual Plan shall be comprised of expense in the Annual Plan, such item or items of expense for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of the Fiscal Year in questionOperating Budget and Capital Budget.
(a) The Annual Operating Budget shall be prepared in accordance with the Uniform System of Accounts. The proposed Annual Operating Budget shall incorporate Manager's Operator’s good faith reasonable estimates of the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year, as well as projected Reserves and Working Capital. When approved (or deemed approved) by OwnerOwner as provided herein, the proposed Annual Operating Budget shall be become the approved Annual Operating Budget. Any revisions, substitutions or additions to the Annual Operating Budget must be approved by the Owner in writing.
(b) The Capital Budget shall contain the proposed budget for FF&E Expenditures from the Reserve and the budget for Capital Improvements for the succeeding Fiscal Year. Operator shall submit good faith reasonable estimates for Capital Improvements and for FF&E Expenditures for such succeeding Fiscal Year. When approved (or deemed approved) by Owner as provided herein, the proposed Capital Budget shall become the approved Capital Budget.
(c) The proposed Parties acknowledge that: (i) the approved Annual Plan is an estimate only and Operator shall include for not be deemed to have made any representation, warranty or guarantee of any kind in connection with the ensuing Annual Plan; (ii) unforeseen circumstances during the course of the applicable Fiscal Year, Year may make adherence to the following proposed budgets approved Annual Plan impracticable or impossible; and programs:(iii) Operator may depart therefrom due to causes of the foregoing nature.
A. A proposed operating budget (the “Proposed Operating Budget”d) on a monthly and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: Operator may (a) projected incur variable expenses directly attributable to occupancy and average room rates by month broken down by room segmentor revenues above forecasted levels; (b) projected Total Operating Revenuespay all taxes, utilities, insurance premiums and charges provided for in contracts and leases entered into pursuant to this Agreement that are not within Operator’s ability to control; (c) proposed make any expenditures reasonably required on an emergency basis to avoid or mitigate damage to the Hotel room rates or injury to persons or property, provided that Operator notify Owner as promptly as reasonably possible; and charges for other services; (d) projected Gross make any expenditures necessary to comply with, or to cure or prevent any violation of Legal Requirements. In addition to, and without limiting the foregoing, Operator shall be permitted, in its discretion and without the approval of Owner, to deviate from the Approved Operating Expenses; Budget as follows: by up to ten percent (e10%) projected EBITDA; of the approved department expense line item, or by up to five percent (f5%) proposed staff scheduling and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take of the form of a “bonus pool” stating an aggregate amount to be distributed among total expenditures in the Hotel Employees as appropriate, rather than separately setting forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue and expense levels to the previous Fiscal Year’s estimated and actual results, highlighting Annual Operating Budget. If Operator determines that circumstances will result in material changes for between actual results and the upcoming Fiscal Year;approved Annual Plan during the course of the operating year, Operator shall, within thirty (30) days of such determination, notify Owner.
Appears in 2 contracts
Samples: Share Exchange Implementation Agreement, Share Exchange Implementation Agreement (Playa Hotels & Resorts N.V.)
Annual Plan. On or before (a) Within 30 days after the date that is forty-five (45) days following the Commencement Dateexecution of this Agreement, Manager Operator shall submit to Owner a proposed Annual Plan in Manager’s format for its approval the pro forma statements of the Hotel for the remaining portion initial period of 12 calendar months after the Fiscal Year in which Opening Date. Operator may submit revisions to the Commencement Date occurs pro forma statements to Owner from time to time for Owner's review and Owner and Manager shall cooperate to agree on the annual plan for the remainder of the Fiscal Year in which the Commencement Date occurs, which shall be the “Annual Plan” for such Fiscal Yearapproval. On or before December 1st of each year following the Commencement Date, Manager Operator shall submit to Owner a proposed Annual Plan in Manager’s format for its approval an annual business plan for the next Fiscal Year. On or before December 15th Hotel not later than 60 days prior to the Scheduled Opening Date (other than that portion of each year following the Commencement Date, Owner either annual business plan of the Hotel consisting of the annual marketing plan for the Hotel which shall accept the proposed Annual Plan be submitted to Owner by Manager or shall submit to Manager a detailed list for its approval 90 days before the Scheduled Opening Date), and thereafter at least 45 days before the beginning of Owner's objections or questions to the proposed Annual Plan ("Owner's Annual Plan Objections"). Within fifteen (15) days after Manager's receipt of Owner's Annual Plan Objections, Owner and Manager shall meet and discuss Owner's Annual Plan Objections with the goal of agreeing upon an Annual Plan for the subject each Fiscal Year (the “"Proposed Annual Plan”", which shall become the approved annual business plan and marketing plan for the Hotel (the "Annual Plan") once the same has been approved or deemed to have been approved in accordance with this Agreement). Owner, as part of Operator may submit revisions to the Annual Plan to Owner from time to time for Owner's review and approval.
(b) Owner shall notify Operator of its approval or its disapproval of the Proposed Annual Plan Objectionsor revisions to the Annual Plan not later than 30 days after receipt thereof. If no such notice is given by Owner within such 30 day period, then Owner shall be deemed to have approved of the Proposed Annual Plan or revisions to the Annual Plan. Owner shall have the right opportunity to object to meet personnel designated by Operator as appropriate during the entire proposed 30 day period. If Owner disapproves of all or any portion of the Proposed Annual Plan or to any specific item or items contained in the proposed Annual Plan. In the event Owner objects revisions to the proposed Annual Plan within such 30 day period, Owner shall furnish Operator at the time of notice of such disapproval with detailed reasons for its objections to the Proposed Annual Plan or any specific item or items of expense in revisions to the proposed Annual Plan and Owner and Manager are unable Operator shall attempt to reach agreement thereon as provided above prior to commencement agree in respect of the items to which Owner objects within 30 days after notice of disapproval has been given, and if such agreement is not reached within such 30 day period, then such Dispute shall, if requested by either Owner or Operator, be resolved by arbitration in accordance with the provisions of section 21.03(b); provided that pending the arbitration decision (i) in the case of the initial Proposed Annual Plan or revisions to the initial Annual Plan submitted by Operator to Owner, that initial Proposed Annual Plan and revisions to that initial Annual Plan submitted by Operator shall be deemed to be the approved Annual Plan for the initial Fiscal Year, and (ii) in the case of any subsequent Proposed Annual Plan or revisions to any subsequent Annual Plan submitted by Operator to Owner, that Proposed Annual Plan and revisions to that Annual Plan (to the extent they are not the subject of arbitration) and the Annual Plan and revisions to the Annual Plan for the preceding Fiscal Year (to the extent they address the matters subject to arbitration and irrespective of whether it is the Annual Plan and revisions to the Annual Plan submitted by Operator and approved by Owner for the preceding Fiscal Year in question, pending such agreement, the proposed Annual Plan accordance with this section 6.01 or the specific item or items of expense (not revenue) in question shall be suspended and replaced for such period that the Annual Plan or such item(s) are in question by an amount equal and revisions to the lesser Annual Plan deemed to have been the approved Annual Plan and revisions to the Annual Plan for the preceding Fiscal Year in accordance with this section 6.01) shall be deemed to be the approved Annual Plan for the current Fiscal Year; provided that each applicable item of the Annual Plan and revisions to the Annual Plan for the preceding Fiscal Year shall be increased proportionately to reflect any increase in the Consumer Price Index during such preceding Fiscal Year.
(c) Each Annual Plan shall include the following:
(i) that proposed by Manager for such Fiscal Yeara marketing plan, or which provides general sales and marketing philosophy and strategy covering both local and national sales, advertising and promotional activities, market analysis, advanced booking information, a marketing segmentation plan, pricing strategy, customer relations policy, credit card policy, complimentary rooms policy and a marketing budget;
(ii) if an objection annual forecast of operations, including projected occupancy rates and average daily room rates, estimated complimentary or discounted rooms to the entire Annual Planbe awarded by each of Owner and Operator, the Actual Gross Operating Expenses food, beverage and other sales, including, without limitation, estimated Deemed Complimentary Hotel Charges, departmental expenses, including all staffing and payroll expenses (including, without limitation, expenses relating to employee benefit plans, pension plans and profit sharing plans), advertising expenses and group service charges, general and administrative expenses, Deemed Complimentary Hotel Expenses, anticipated expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in questionrepairs, or renovation and maintenance and capital improvements, including, without limitation, Allocated Maintenance Charges, expenses for utility services, including, without limitation, Allocated Utility Charges, Taxes and insurance;
(iii) if a projected balance sheet, cash flow budget and source and use of funds statement;
(iv) a capital plan for expenditures on Furniture, Fixtures and Equipment and any other proposed capital improvements; and
(v) an objection analysis of or changes to a specific item or items of expense in the Annual Planall major operating licences, such item or items of expense for the immediately preceding Fiscal Year subject leases and contracts anticipated to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of be required during the Fiscal Year in question.
(a) The Annual Operating Budget shall be prepared in accordance with the Uniform System of Accounts. The proposed Annual Operating Budget shall incorporate Manager's good faith reasonable estimates of the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual Operating Budget. Any revisions, substitutions or additions to the Annual Operating Budget must be approved by the Owner in writing. The proposed Annual Plan shall include for the ensuing Fiscal Year, the following proposed budgets and programs:
A. A proposed operating budget (the “Proposed Operating Budget”) on a monthly and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take the form of a “bonus pool” stating an aggregate amount to be distributed among the Hotel Employees as appropriate, rather than separately setting forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue and expense levels to the previous Fiscal Year’s estimated and actual results, highlighting material changes for the upcoming Fiscal Year;
Appears in 1 contract
Samples: Hotel Management Agreement (Circus Circus Enterprises Inc)
Annual Plan. (a) A Proposed Annual Plan once approved by Lessee shall be the “Approved Annual Plan” for such Fiscal Year. On or before the date that is forty-five (45) days November 1st of each year following the Commencement Date, Manager Operator shall submit to Owner Lessee a proposed Proposed Annual Plan in Manager’s format for the remaining portion of the Fiscal Year in which the Commencement Date occurs and Owner and Manager shall cooperate to agree on the annual plan for the remainder of the Fiscal Year in which the Commencement Date occurs, which shall be the “Annual Plan” for such next Fiscal Year. On or before December 1st of each year following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the next Fiscal Year. On or before December 15th of each year following the Commencement Date, Owner Lessee either shall accept approve the proposed Proposed Annual Plan submitted to Owner Lessee by Manager Operator or shall submit to Manager Operator a detailed list of Owner's Lessee’s objections or questions to the proposed Proposed Annual Plan ("Owner's Lessee’s Annual Plan Objections"). Within fifteen seven (157) business days after Manager's Operator’s receipt of Owner's Lessee’s Annual Plan Objections, Owner Lessee and Manager Operator shall meet and discuss Owner's Lessee’s Annual Plan Objections with the goal of agreeing upon an Approved Annual Plan for the subject Fiscal Year (the “Annual Plan”)Year. OwnerLessee, as part of Owner's Lessee’s Annual Plan Objections, shall have the right to object to the entire proposed Proposed Annual Plan or to any specific item or items contained in the proposed Proposed Annual Plan. In the event Owner Lessee objects to the proposed Proposed Annual Plan or any specific item or items of expense in the proposed Proposed Annual Plan and Owner Lessee and Manager Operator are unable to reach agreement thereon as provided above prior to commencement of the Fiscal Year in question, pending such agreement, the proposed Proposed Annual Plan or the specific item or items of expense (not revenue) in question shall be suspended and replaced replaced, for such period that the Annual Plan or such item(s) are in question until Operator receives Lessee’s approval, by an amount equal to the lesser of (i) that proposed by Manager Operator for such Fiscal Year, or (ii) if an objection to the entire Proposed Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in questionquestion and RevPar increases based on the appropriate previous 12-month RevPar growth percentage for the sector in which the Hotel is included, as set forth in the Revenue Data Publication for revenue growth over the prior year’s actual amounts, or (iii) if an objection to a specific item or items of expense in the Annual Plan, such item or items of expense for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of the Fiscal Year in question.
(ab) The As part of the Proposed Annual Operating Budget Plan, Operator shall provide to Lessee for Lessee’s review, a written schedule for the Hotel listing all executive and management employees to be employed "on-site" in the direct management of the Hotel including, but not limited to the positions of General Manager, Director of Sales, and Chief Engineer. These schedules shall include such employee's title, job description, and the salary range including additional compensation or prerequisites such as lodging, meals, maintenance, moving expenses, bonus/incentive compensation and the like. In the event that any employee's services are shared with (or subsidized through a sharing arrangement with) another hotel, the employee shall be prepared in accordance identified together with the Uniform System of Accounts. The proposed Annual Operating Budget shall incorporate Manager's good faith reasonable estimates of the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual Operating Budget. Any revisions, substitutions or additions to the Annual Operating Budget must be approved by the Owner in writing. The proposed Annual Plan shall include for the ensuing Fiscal Year, the following proposed budgets and programs:
A. A proposed operating budget (the “Proposed Operating Budget”) on a monthly and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take the form of a “bonus pool” stating an aggregate amount to be distributed among the Hotel Employees as appropriate, rather than separately setting forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue and expense levels to the previous Fiscal Year’s estimated and actual results, highlighting material changes for the upcoming Fiscal Year;28
Appears in 1 contract
Samples: Hotel Management Agreement (Condor Hospitality Trust, Inc.)
Annual Plan. On or before the date that is forty-five (45) days following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the remaining portion of the Fiscal Year in which the Commencement Date occurs and Owner and Manager shall cooperate to agree on the annual plan for the remainder of the Fiscal Year in which the Commencement Date occurs, which shall be the “Annual Plan” for such Fiscal Year. On or before December 1st of each year following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the next Fiscal Year. On or before December 15th of each year following the Commencement Date, Owner either shall accept the proposed Annual Plan submitted to Owner by Manager or shall submit to Manager a detailed list of Owner's objections or questions to the proposed Annual Plan ("Owner's Annual Plan Objections"). Within fifteen (15) days after Manager's receipt of Owner's Annual Plan Objections, Owner and Manager shall meet and discuss Owner's Annual Plan Objections with the goal of agreeing upon an Annual Plan for the subject Fiscal Year (the “Annual Plan”). Owner, as part of Owner's Annual Plan Objections, shall have the right to object to the entire proposed Annual Plan or to any specific item or items contained in the proposed Annual Plan. In the event Owner objects to the proposed Annual Plan or any specific item or items of expense in the proposed Annual Plan and Owner and Manager are unable to reach agreement thereon as provided above prior to commencement of the Fiscal Year in question, pending such agreement, the proposed Annual Plan or the specific item or items of expense (not revenue) in question shall be suspended and replaced for such period that the Annual Plan or such item(s) are in question by an amount equal to the lesser of (i) that proposed by Manager for such Fiscal Year, or (ii) if an objection to the entire Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in question, or (iii) if an objection to a specific item or items of expense in the Annual Plan, such item or items of expense for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of the Fiscal Year in question.
(a) The Annual Operating Budget shall be prepared in accordance with the Uniform System of Accounts. The proposed Annual Operating Budget shall incorporate Manager's good faith reasonable estimates of the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual Operating Budget. Any revisions, substitutions or additions to the Annual Operating Budget must be approved by the Owner in writing. The proposed Annual Plan shall include for the ensuing Fiscal Year, the following proposed budgets and programs:
A. A proposed operating budget (the “Proposed Operating Budget”) on a monthly and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take the form of a “bonus pool” stating an aggregate amount to be distributed among the Hotel Employees as appropriate, rather than separately setting forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue and expense levels to the previous Fiscal Year’s estimated and actual results, highlighting material changes for the upcoming Fiscal Year;
Appears in 1 contract
Samples: Hotel Management Agreement (Procaccianti Hotel Reit, Inc.)
Annual Plan. On or before Manager and Owner will settle the Annual Plan for the Fiscal Year 2005 within thirty (30) days after the date that is forty-five of this Agreement. Not later than ninety (4590) days following prior to the Commencement Datecommencement of each subsequent Fiscal Year, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the remaining portion of the Fiscal Year in which the Commencement Date occurs and meet with Owner and Manager shall cooperate to agree on the present for Owner’s approval a preliminary proposed annual plan for the remainder of the such subsequent Fiscal Year in which the Commencement Date occurs, which shall be the “Annual Plan” for such Fiscal Year. On or before December 1st of each year following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the next Fiscal YearOperated Facilities. On or before December 15th of each year following the Commencement Date, Owner either shall accept review and approve the proposed Annual Plan submitted Plan, or specify objections to Owner by Manager or shall submit to Manager a detailed list of Owner's objections or questions to specific items in the proposed Annual Plan ("Owner's Annual Plan Objections"). Within Plan, within fifteen (15) days after Manager's of its receipt of Owner's the complete Annual Plan ObjectionsPlan. Not later than sixty (60) days prior to the commencement of such subsequent Fiscal Year, Owner and Manager shall meet with Owner and discuss present for Owner's Annual Plan Objections with the goal of agreeing upon an Annual Plan ’s approval a final proposed annual plan for the subject Operated Facilities for such subsequent Fiscal Year (the “Proposed Annual Plan”). Proposed Annual Plans shall include but not be limited to:
(a) an annual operating budget which shall set forth anticipated Total Revenues and Operating Expenses for the Operated Facilities;
(b) a Capital Improvements expenditure budget (the “Capital Improvements Budget”) for the upcoming Fiscal Year with a forecast for the subsequent two (2) Fiscal Years, including landlord improvements and major repairs and improvements to the Operated Facilities;
(c) a Leasing Program, as described in Section 3.5, above, which shall include Leasing Commission Fees;
(d) a cash flow projection, which will indicate the anticipated cash flow to be distributed to or required, by way of Working Capital, from the Owner;
(e) an estimate of recoverable Operating Expenses which will be charged to Tenants;
(f) a marketing plan for the leasing of vacant Operated Facilities and report to Owner on the Resort Marketing Program;
(g) an insurance review;
(h) a calculation of budgeted EBITDA for the Fiscal Year; and
(i) other components which Manager or Owner, as part of Owner's Annual Plan Objectionsacting reasonably, deems appropriate. Manager shall have make available to Owner all information which is reasonably required to assist in evaluating the right to object to the entire proposed Annual Plan or to any specific item or items contained in the proposed Proposed Annual Plan. In Manager shall be authorized to incur expenditures in accordance with the event Owner objects to the proposed Annual Plan or any specific item or approved by the Owner. Until the earlier of the date agreement is reached on all items of expense in the proposed Proposed Annual Plan and Owner and Manager are unable to reach the end of the first Fiscal Quarter of that Fiscal Year, the Proposed Annual Plan shall apply except for any items in dispute, which shall be governed by the Annual Plan for the previous Fiscal Year. If agreement thereon as provided above prior to commencement is still not reached on one or more items in the Proposed Annual Plan by the end of the first Fiscal Quarter of the Fiscal Year, then the Proposed Annual Plan, except for any items in dispute, will be in effect for the balance of the Fiscal Year and any items in question, pending such agreement, the proposed Annual Plan or the specific item or items of expense (not revenue) in question dispute shall be suspended and replaced submitted for such period that determination by arbitration. Notwithstanding the Annual Plan foregoing or such item(s) are in question by an amount equal anything else herein, Owner’s position with respect to the lesser of (i) that proposed by Capital Improvements Budget will be absolute and determinative and Manager for such Fiscal Year, or (ii) if an objection will not be entitled to the entire Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage increase in the CPI submit any dispute over the last twelve (12) month period immediately preceding the start of the Fiscal Year in question, or (iii) if an objection to a specific item or items of expense in the Annual Plan, such item or items of expense Capital Improvements Budget for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of the Fiscal Year in questiondetermination by arbitration.
(a) The Annual Operating Budget shall be prepared in accordance with the Uniform System of Accounts. The proposed Annual Operating Budget shall incorporate Manager's good faith reasonable estimates of the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual Operating Budget. Any revisions, substitutions or additions to the Annual Operating Budget must be approved by the Owner in writing. The proposed Annual Plan shall include for the ensuing Fiscal Year, the following proposed budgets and programs:
A. A proposed operating budget (the “Proposed Operating Budget”) on a monthly and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take the form of a “bonus pool” stating an aggregate amount to be distributed among the Hotel Employees as appropriate, rather than separately setting forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue and expense levels to the previous Fiscal Year’s estimated and actual results, highlighting material changes for the upcoming Fiscal Year;
Appears in 1 contract
Samples: Property Management Agreement (CNL Income Properties Inc)
Annual Plan. On or before the date that is forty-five (45) days following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the remaining portion of the Fiscal Year in which the Commencement Date occurs and Owner and Manager shall cooperate to agree on the annual plan for the remainder of the Fiscal Year in which the Commencement Date occurs, which shall be the “Annual Plan” for such Fiscal Year. On or before December November 1st of each year following the Commencement Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the next Fiscal Year. On or before December 15th 1st of each year following the Commencement Date, Owner either shall accept the proposed Annual Plan submitted to Owner by Manager or shall submit to Manager a detailed list of Owner's objections or questions to the proposed Annual Plan ("Owner's Annual Plan Objections"). Within fifteen (15) days after Manager's receipt of Owner's Annual Plan Objections, Owner and Manager shall meet and discuss Owner's Annual Plan Objections with the goal of agreeing upon an Annual Plan for the subject Fiscal Year (the “Annual Plan”)Year. Owner, as part of Owner's Annual Plan Objections, shall have the right to object to the entire proposed Annual Plan or to any specific item or items contained in the proposed Annual Plan. In the event Owner objects to the proposed Annual Plan or any specific item or items of expense in the proposed Annual Plan and Owner and Manager are unable to reach agreement thereon as provided above prior to commencement of the Fiscal Year in question, pending such agreement, agreement the proposed Annual Plan or Hotel will be operated in a manner reflecting the specific item or items of expense (not revenue) in question shall be suspended and replaced for such period that the Annual Plan or such item(s) are in question by an amount equal to the lesser of (i) that proposed by Manager for such prior Fiscal Year, or (ii) if an objection to the entire ’s Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year , subject to an adjustment equal to the percentage increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in question, or (iii) if an objection to question until a specific item or items of expense in the new Annual Plan, such item or items of expense for the immediately preceding Fiscal Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately preceding the start of the Fiscal Year in questionPlan is adopted. .
(a) The Annual Operating Budget shall be prepared in accordance with the Uniform System of Accounts. The proposed Annual Operating Budget shall incorporate Manager's good faith reasonable estimates of the items of revenue and expense contained therein and shall contain the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall be the approved Annual Operating Budget. Any revisions, substitutions or additions to the Annual Operating Budget must be approved by the Owner in writing. The As part of the budgeting process, Manager shall provide to Owner, with each proposed Annual Operating Budget, a complete list of all service and other contracts anticipated for the Fiscal Year which is the subject of the Annual Operating Budget or covering the Hotel and the payments or expenditures connected or anticipated therewith. So long as any service or other contracts fall within the following guidelines, Owner's approval thereof shall not be required, but Manager shall nevertheless promptly report to Owner the execution of (and provide Owner with a true and complete copy of) each such contract:
(i) The term of such contract shall be no longer than one (1) year; and
(ii) Each contract must be terminable by Owner or Manager without payment or penalty upon not more than thirty (30) days’ notice. In addition, Manager shall provide to Owner for Owner's review, a written schedule for the Hotel listing all executive and management employees to be employed "on-site" in the direct management of the Hotel including, but not limited to the positions, as applicable, of General Manager, Director of Sales, and Chief Engineer. These schedules shall include such employee's title or job description and the salary range including additional compensation or prerequisites such as lodging, meals, maintenance, moving expenses, bonus/incentive compensation and the like. In the event that any employee's services are shared with (or subsidized through a sharing arrangement with) another hotel, the employee shall be identified together with a description of his/her responsibilities and the amount and source of any subsidy, together with a breakdown of the relative time expended with respect to the Hotel and each other hotel. If Owner notifies Manager that Owner does not believe that some or all of the scheduled wages and salaries are reasonable and customary as required above, then Manager shall promptly provide to Owner a wage and salary survey that supports the scheduled wages and salaries. No proposed amendment including changes in salary or other compensation shall be effective unless the salary or other compensation as changed is reasonable and customary as required above.
(b) The Capital Budget shall be prepared in accordance with the Uniform System of Accounts. The Capital Budget shall contain the proposed budget for expenditures from the Reserve and the budget for expenditures for Capital Improvements and FF&E for the succeeding Fiscal Year for (i) additions to and substitutions, replacements and renewals of FF&E and (ii) certain non-routine repairs and maintenance to the Hotel which are normally capitalized under generally accepted accounting principles such as exterior and interior repainting, resurfacing building walls, floors, roof and parking areas, replacing folding walls and similar items, and shall contain an estimated capital plan for the then succeeding five (5) year period. Manager shall submit good faith reasonable estimates for Capital Improvements and for FF&E for the Fiscal Year following the Fiscal Year otherwise covered by the Annual Operating Budget. When approved by Owner, the Capital Budget, or such items as may be specifically approved by Owner, shall be collectively referred to in this Agreement as the “Approved Capital Budget”. Approval of the Capital Budget constitutes an authorization for Manager to expend money for Capital Improvements and for FF&E as provided in the Approved Capital Budget, unless the Owner's approval thereof specifically requires Manager to obtain additional approvals prior to commencing such work. Any revisions, substitutions or additions to the Approved Capital Budget must be approved by Owner in writing. Competitive bid rules outlined in Section 4.5 will be observed at all times by Manager for any purchases of Capital Improvements and/or FF&E.
(c) The Marketing Plan shall include contain advertising, sales and promotional plans prepared by Manager to be used in connection with the marketing of the Hotel. When approved by Owner, the proposed Marketing Plan shall be the approved Marketing Plan. Any revisions, substitutions or additions to the Marketing Plan must be approved by Owner in writing. The Marketing Plan shall be written with the goal of achieving Total Operating Revenues as submitted in the Annual Operating Budget for the ensuing Fiscal Year or, if less than a full Fiscal Year, the period between the Commencement Date and the December 31 next following the Commencement Date. Manager shall not use Owner's name in any advertising or promotional material without Owner's expressed prior written approval.
(d) The Management Plan shall contain (i) estimated contributions and distributions from or to Owner; (ii) a leasing plan for the leasing of concessions and other space in the Hotel; (iii) plans and budgets for the disposition and replacement of FF&E; and (iv) such management issues, proposals and projections or modifications as Manager may recommend for the efficient management of the Hotel including but not limited to proposals and assessments as to the Hotel's position in the market, market opportunities, franchise affiliation and disposition strategies. When approved by Owner, the proposed budgets Management Plan shall be the approved Management Plan.
(e) Upon approval by Owner of an Annual Plan, Manager shall use its good faith efforts to manage, operate and programs:
A. A proposed operating maintain a Hotel for the subsequent Fiscal Year in accordance with the applicable approved Annual Plan; provided, however, that Manager will not be deemed to be in default of its obligations under this Agreement to operate the Hotels (including without limitation, incurring expenses) in compliance with the Annual Plan or approved Annual Operating Budget in the event that Manager incurs and pays expenses (1) in a Major Account Category which do not cause the aggregate expenditures for such Major Account Category to exceed the budgeted amount by more than 10% for a given Accounting Period and/or Fiscal Year, or together with all other expenses do not cause the aggregate expenditures for all items to exceed the Annual Operating Budget by more than 5% for a given Accounting Period and/or Fiscal Year; (2) expenses for wages or benefits to comply with Legal Requirements, insurance, taxes, utility charges, fees and reimbursements due under the License Agreement, real estate taxes; (3) that are immediately necessary, in Manager’s good faith judgment, on an emergency basis to protect the physical integrity or lawful operation of a Hotel or the health or safety of its occupants, provided that Manager provides to Owner notice of such emergency expenditure, as soon as reasonably practicable; and/or (4) due to increases in occupancy or use of Hotel properties and services that exceed the occupancy and use projected in the Annual Operating Budget, based upon actual and forecasted reservations and bookings. Regardless of the foregoing provisions relating to certain expenditures beyond the Annual Plan, Manager shall provide prompt notice to Owner of such excess expenditures and Manager will provide explanations for all significant variances and programs put in place to correct or improve budget (deviations. Wherever phrases in this Agreement such as “in accordance with the “Proposed Annual Plan or the Annual Operating Budget”, “in the Annual Operating Budget”, “in the then-current Annual Plan”, or similar phrases are used or referred to in this Agreement, the variance provisions set forth in this Section 4.4(e) on a monthly shall be applied and yearly basis with detailed departmental schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take the form of a “bonus pool” stating an aggregate amount deemed to be distributed among the Hotel Employees as appropriate, rather than separately setting included in such use or reference and Manager will not be in default of its obligations set forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue in this Agreement with respect to Manager incurring and expense levels to the previous Fiscal Year’s estimated and actual results, highlighting material changes for the upcoming Fiscal Year;paying expenses that are included in such variances.
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Samples: Management Agreement
