AMENDED EMPLOYMENT AGREEMENT
Exhibit
10.6
AMENDED
EMPLOYMENT AGREEMENT
THIS
AGREEMENT,
effective May 7, 2007, is by and between HERSHA HOSPITALITY TRUST, a Maryland
real estate investment trust (the Company), and XXXX X. XXXX (the
“Executive”).
WITNESSETH:
WHEREAS,
the Company and the Executive
entered into an Employment Agreement effective as of January 1, 2005 (the
“Prior
Agreement”); and
WHEREAS,
the Company and the Executive
desire to amend the Prior Agreement in certain respects and otherwise continue
the terms and conditions of the Prior Agreement as set forth
herein;
NOW,
THEREFORE, in consideration of the
premises and mutual obligations hereinafter set forth the parties agree as
follows:
1. Employment. The
Company shall employ the Executive, and the Executive agrees to be so employed,
as the Chairman of the Company’s Board of Trustees on the terms set forth
herein.
2. Term. The
term (the "Term") of the Executive’s employment hereunder shall commence on May
7, 2007 and unless earlier terminated in accordance with the terms hereof,
shall
expire on December 31, 2008, if written notice of non-renewal is given not
later than July 3, 2008 by either party to the other party, and if no such
notice is given, this Agreement shall continue until terminated by either
party
upon not less than one hundred eighty (180) days’ prior notice to the other
party setting forth the effective date of termination (which may be given
as
early as July 4, 2008). Notwithstanding the foregoing,
termination of this Agreement and any termination of the Executive’s employment
hereunder shall be subject to the provisions of Sections 9, 10 and 11 of
this
Agreement.
3. Services. The
Executive shall devote such amount of his time and attention to the Company’s
affairs as are necessary to perform his duties to the Company as determined
by
the Company's Board of Directors (the "Board"). The Executive shall
have authority and responsibility with respect to the day-to-day operations
and
management of the Company and Hersha Hospitality Limited Partnership (the
"Partnership"), for which the Company currently serves as sole general partner,
and the Company’s other subsidiaries ("Subsidiary") (collectively "Affiliates"),
as well as implementation of the long range growth strategy of the Company
and
Affiliates consistent with direction from the Board.
4. Compensation.
(a) During
the Term, the Company shall pay the Executive for his services an initial
annual
base salary of one hundred fifty thousand dollars ($150,000.00), to be paid
in
accordance with the Company’s regular payroll procedures, subject to any
increases approved by the Board.
(b) In
addition to the base salary, the Executive may be entitled to receive other
incentive compensation, including but not limited to, grants of stock options
or
shares of stock of the Company, which awards shall be made (if at all) in
consideration of and as an incentive for services performed solely for the
Company, in accordance with rules and criteria established by the Compensation
Committee and approved by the Board. Such criteria may include, but
not be limited to, the growth in the Company’s net income per share, funds from
operations per share or other performance goals.
5. [Intentionally
Left Blank]
6. Expenses. The
Company recognizes that the Executive will have to incur certain out-of-pocket
expenses, including but not limited to travel expenses, related to his services
and the Company’s business and the Company agrees to reimburse the Executive for
all reasonable expenses necessarily incurred by him in the performance of
his
duties upon presentation of a voucher or documentation indicating the amount
and
business purposes of any such expenses and in accordance with applicable
rules
of the Internal Revenue Service. The documentation and expense
reimbursement payment must be completed no later than March 15 of the calendar
year following the calendar year in which the Executive incurred the
expense.
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7. [Intentionally
Left Blank]
8. Definitions. For
purposes of this Agreement, the following terms shall have the following
definitions:
(a) "Voluntary
Termination" means, subject to the provisions of Section 11 hereof, the
Executive’s voluntary termination of his employment hereunder, which may be
effected by the Executive giving the Board not less than sixty (60) days’ prior
written notice of the Executive’s desire to terminate his employment as of a
specified date or the Executive’s failure to provide the services described in
Section 3 hereof for a period greater than four consecutive weeks by reason
of
the Executive’s voluntary refusal to perform such services as determined by the
Board. Notwithstanding the foregoing, if the Executive gives notice
of Voluntary Termination and, prior to the expiration of the notice period,
the
Executive voluntarily refuses or fails to provide the services described
in
Section 3 hereof for a period greater than two consecutive weeks, the Company
may, in its discretion, accelerate the Voluntary Termination effective the
date
on which the Executive so ceases to carry out his duties as determined by
the
Board. For purposes of this Section 8, voluntary refusal to perform
services shall not include taking vacation otherwise permitted, the Executive’s
failure to perform services on account of his illness or the illness of a
member
of his immediate family (provided such illness is adequately substantiated
at
the reasonable request of the Company), or any other absence from service
with
the written consent of the Board. A Voluntary Termination shall not
include the Executive’s resignation with Good Reason following a Change in
Control (as defined below).
(b) "Termination
Without Cause" means the termination of the Executive’s employment by the
Company for any reason other than Voluntary Termination or Termination With
Cause.
(c) "Termination
With Cause" means the termination of the Executive’s employment by
act of the Board for any of the following reasons:
(i) the
Executive’s conviction of a felony;
(ii) the
Executive’s theft, embezzlement, misappropriation of or intentional and
malicious infliction of damage to the Company’s (or its subsidiaries’) property
or business opportunity;
(iii) the
Executive’s breach of the covenants in Section 12 hereof;
(iv) the
Executive’s neglect of his duties or responsibilities hereunder or his failure
or refusal to follow any written direction of the Board or any duly constituted
committee thereof, which failure continues for a period of twenty (20) calendar
days after Company provides Employee written notice (other than as a result
of
the Executive’s physical or mental inability to perform the services described
in Section 3 above, which is addressed in Section 10 below); and
(v) the
Executive’s abuse of alcohol, drugs or other substances, or his engaging in
other deviant personal activities in a manner that, in the reasonable judgment
of the Board, adversely affects the reputation, goodwill or business position
of
the Company.
9. Voluntary
Termination; Termination With Cause. If
(i) the Executive shall cease being an employee of the Company on account
of a
Voluntary Termination or (ii) there shall be a Termination With Cause, the
Executive shall not be entitled to any compensation after the effective date
of
such Voluntary Termination or Termination With Cause (except base salary
and
vacation accrued but unpaid on the effective date of such event). In
the event of a Voluntary Termination (which shall not include the Executive’s
resignation for Good Reason following a Change in Control as defined by
Paragraph 11), or Termination With Cause, the Executive shall continue to
be
subject to the covenants contained in Section 12 hereof.
10. Death
or Disability; Termination Without
Cause.
(a) Upon
(i) the death of the Executive, or (ii) Disability of the Executive, this
Agreement shall terminate and the Company shall continue to pay the Executive
or
his heirs, devisees, executors, legatees or personal representatives, as
appropriate, the payments of the Executive’s base salary then in effect through
the month following the month in which such event occurs plus vacation accrued
but unpaid as of the termination date. For purposes hereof, a
"Disability" means the Executive's becoming permanently disabled within the
meaning of the Company's long-term disability plan then in effect for, or
applicable to, the Executive. If the Company does not provide any
such benefit, then at the request of the Company, the Executive shall promptly
make himself available for an examination by a physician selected by the
Company
who is board certified in a practice area selected by the Company, and to
follow
the recommendation of such physician regarding further examination and
testing. The issue to be presented to the physician for determination
is whether the Executive suffers from a mental or physical incapacity which
materially inhibits or prevents him from carrying out the duties of his
full-time employment as described herein, and, if so, whether such condition
is
more likely than not to exist for a period in excess of one hundred twenty
(120)
days. The Executive intends for the Company to be treated as
Executive would be with respect to his rights regarding the use and disclosure
of his individually identifiable health information or other medical
records. This release authority applies to any information governed
by the Health Insurance Portability and Accountability Act of 1996 (a/k/a
HIPAA), 42 USC 1320d and 45 CFR 160-164 and authorizes: any
physician, health-care professional, dentist, health plan, hospital, clinic,
laboratory, pharmacy or other covered health-care provider, any insurance
company and the Medical Information Bureau Inc. or other health-care
clearinghouse that has provided treatment or services to him, or that has
paid
for or is seeking payment from him for such services, to give, disclose and
release to the Company, without restriction, all of his individually
identifiable health information and medical records regarding any past, present
or future medical or mental health condition, including all information relating
to the diagnosis and treatment of HIV/AIDS, sexually transmitted diseases,
mental illness, and drug or alcohol abuse.
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(b) Upon
a Termination Without Cause, the non-recruitment restrictions contained in
Section 13(a)(iii) shall apply, except for a Termination Without Cause during
the 12-month period following a Change of Control (as defined
below). In all other respects, upon a Termination Without Cause
(other than a Termination Without Cause during the 12 month period following
a
Change of Control (as defined below), which shall be governed by the provisions
of Section 11 below) this Agreement shall terminate and, subject to Section
12
below, the Company shall make a lump sum payment to the Executive
within ten (10) days after Termination Without Cause equal to the sum of
the
Executive’s accrued but unused vacation to the date of termination plus the
amount of the Executive’s monthly base salary then in effect for the lesser of
12 months or the number of months (including a fractional month) remaining
in
the Term.
11. Change
of Control Compensation.
(a) Compensation. Subject
to Section 11(e) below, in the event of a Termination Without Cause or the
Executive’s resignation for Good Reason (as defined below) within 12 months
following a Change of Control (as defined below), the Company shall (i) fully
vest the Executive in any outstanding share awards and stock options that
have
not previously vested or become exercisable, (ii) pay the Executive any base
salary and expenses reimbursable to the Executive by the Company, each through
the date of the termination, (iii) pay a benefit (the “Change of Control Bonus”)
equal to two (2) times the sum of (x) the Executive’s then annual base
salary, (y) the maximum annual bonus that the Executive could earn for
the year that includes the date of termination (or if no maximum bonus amount
has been set, the Executive’s target bonus for that year) and (z) the
fair market value (determined as of the date of the Change of Control (as
defined below)) of the share award(s) received by the Executive for the year
that includes the date of termination (or if no share awards were made in
that
year, the next preceding year in which the Executive received a share award)
and
(iv) pay the insurance benefit described below. Subject to Section 12
below, the base salary, expense reimbursement and Change of Control Bonus
shall
be paid in one lump sum within ten days after the Executive’s Termination
Without Cause of the Executive’s resignation for Good Reason. In
addition, the Company shall cause the Executive’s insurance benefits, as in
effect immediately prior to the termination, to remain in effect for eighteen
(18) months following the date of termination upon the same terms,
and at the same cost to the Executive, as in effect immediately prior to
termination. The Executive shall also receive payment of accrued but
unused vacation to the date of termination.
(b) A
"Change of Control", for purposes of this Agreement, shall be deemed to
have occurred if, at any time during the Term, any of the following events
occurs:
(i) any
"person", as that term is used in Section 13(d) and Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), becomes,
is
discovered to be, or files a report on Schedule 13D or 14D-1 (or any successor
schedule, form or report) disclosing that such person is, a beneficial owner
(as
defined in Rule 13d-3 under the Exchange Act or any successor rule or
regulation), directly or indirectly, of securities of the Company representing
20% or more of the combined voting power of the Company’s then outstanding
securities entitled to vote generally in the election of
directors;
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(ii) individuals
who, as of the election to the Board of Directors of the Company, without
the
recommendation or approval of the incumbent Board of Directors constituting
a
majority of the numbers of directors of Company then in office;
(iii) the
Company is merged, consolidated or reorganized into or with another corporation
or other legal person, or securities of the Company are exchanged for securities
of another corporation or other legal person, and immediately after such
merger,
consolidation, reorganization or exchange less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held, directly or indirectly, in the
aggregate by the holders of securities entitled to vote generally in the
election of directors of the Company immediately prior to such
transaction;
(iv) the
Company in any transaction or series of related transactions, sells all or
substantially all of its assets to any other corporation or other legal person
and less than a majority of the combined voting power of the then-outstanding
securities of such corporation or person immediately after such sale or sales
are held, directly or indirectly, in the aggregate by the holders of securities
entitled to vote generally in the election of directors of the Company
immediately prior to such sale;
(v) the
Company and its affiliates shall sell or transfer of (in a single transaction
or
series of related transactions) to a non-affiliate business operations or
assets
that generated at least two-thirds of the consolidated revenues (determined
on
the basis of the Company’s four most recently completed fiscal quarters for
which reports have been filed under the Exchange Act) of the Company and
its
subsidiaries immediately prior thereto;
(vi) the
Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K
(or
any successor, form or report or item therein) that a change in control of
the
Company has occurred; or
(vii) any
other transaction or series of related transactions occur that have
substantially the effect of the transactions specified in any of the preceding
clauses in this sentence.
(c) Certain
Transactions. Notwithstanding the provisions of Section 11(b)(i)
or 11(b)(vi) hereof, unless otherwise determined in a specific case by majority
vote of the Board of Directors of the Company, a Change of Control shall
not be
deemed to have occurred for purposes of this Agreement solely because (i)
the
Company, (ii) an entity in which the Company directly or indirectly beneficially
owns 20% or more of the voting securities or (iii) any Company-sponsored
employee stock ownership plan, or any other employee benefit plan of the
Company, either files or becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule
14A
(or any successor schedule, form or report or item thereon) under the Exchange
Act, disclosing beneficial ownership by it of shares of stock of the Company,
or
because the Company reports that a Change of Control of the Company has or
may
have occurred or will or may occur in the future by reason of such beneficial
ownership.
(d) Good
Reason. "Good Reason," for purposes of this Agreement, shall be
deemed to mean any of the following:
(i) a
change in the Executive’s position or responsibilities (including reporting
responsibilities) which materially diminishes the Executive’s position or
responsibilities as in effect immediately prior to a Change of Control; the
assignment to the Executive of any duties or responsibilities which are
materially inconsistent with such position or responsibilities; or any removal
of the Executive from or failure to reappoint or reelect the Executive to
any of
such positions, except in connection with a Termination with Cause as defined
in
Section 8(c) as a result of the Executive’s death or Disability, or by Voluntary
Termination;
(ii) a
reduction (unless performance justified) in the Executive’s base salary bonus
arrangement as in effect on the date hereof or as the same may be increased
from
time to time;
(iii) the
Company’s requiring the Executive to be based at any place other than a location
within a thirty-mile radius of Harrisburg, Pennsylvania or Philadelphia,
Pennsylvania, except for reasonably required travel on the Company’s business
which is not materially greater than such travel requirements prior to the
Change of Control;
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(iv) the
failure by the Company to continue to provide the Executive with compensation
and benefits provided for under this agreement or benefits substantially
similar
to those provided to the Executive under any of the employee benefit plans
in
which the Executive is or becomes a participant, or the taking of any action
by
the Company which would directly or indirectly materially reduce any of such
benefits or deprive the Executive of any material fringe benefit enjoyed
by the
Executive at the time of the Change of Control;
(v) any
material breach by the Company of any provision of this Agreement;
or
(vi) the
failure of the Company to obtain a satisfactory agreement from any successor
or
assign of the Company to assume and agree to perform this
Agreement.
(e) Limitation
on Benefits.
(i) The
benefits that the Executive may be entitled to receive under this Agreement
and
other benefits that the Executive is entitled to receive under other plans,
agreements and arrangements (which, together with the benefits provided under
this Agreement, are referred to as “Payments”), may constitute Parachute
Payments that are subject to Sections 280G and 4999 of the Internal Revenue
Code
of 1986 (the “Code”). As provided in this Section 11(e), the
Parachute Payments will be reduced if, and only to the extent that, a reduction
will allow the Executive to receive a greater Net After Tax Amount than the
Executive would receive absent a reduction.
(ii) The
Accounting Firm will first determine the amount of any Parachute Payments
that
are payable to the Executive. The Accounting Firm also will determine
the Net After Tax Amount attributable to the Executive’s total Parachute
Payments.
(iii) The
Accounting Firm will next determine the largest amount of Payments that may
be
made to the Executive without subjecting the Participant to tax under Section
4999 of the Code (the “Capped Payments”). Thereafter, the Accounting
Firm will determine the Net After Tax Amount attributable to the Capped
Payments.
(iv) The
Executive will receive the total Parachute Payments or the Capped Payments,
whichever provides the Executive with the higher Net After Tax
Amount. If the Executive will receive the Capped Payments, the total
Parachute Payments will be adjusted by first reducing the amount of any noncash
benefits under this Agreement or any other plan, agreement or arrangement
(with
the source of the reduction to be directed by the Executive) and then by
reducing the amount of any cash benefits under this Agreement or any other
plan,
agreement or arrangement (with the source of the reduction to be directed
by the
Executive). The Accounting Firm will notify the Executive and the
Company if it determines that the Parachute Payments must be reduced to the
Capped Payments and will send the Executive and the Company a copy of its
detailed calculations supporting that determination.
(v) As
a result of the uncertainty in the application of Sections 280G and 4999
of the
Code at the time that the Accounting Firm makes its determinations under
this
Section 11(e), it is possible that amounts will have been paid or distributed
to
the Executive that should not have been paid or distributed under this Section
11(e) (“Overpayments”), or that additional amounts should be paid or distributed
to the Executive under this Section 11(e) (“Underpayments”). If the
Accounting Firm determines, based on either the assertion of a deficiency
by the
Internal Revenue Service against the Company or the Executive, which assertion
the Accounting Firm believes has a high probability of success or controlling
precedent or substantial authority, that an Overpayment has been made, that
Overpayment will be treated for all purposes as a loan ab initio that
the Executive must repay to the Company together with interest at the applicable
Federal rate under Section 7872 of the Code; provided, however, that no loan
will be deemed to have been made and no amount will be payable by the Executive
to the Company unless, and then only to the extent that, the deemed loan
and
payment would either reduce the amount on which the Executive is subject
to tax
under Section 4999 of the Code or generate a refund of tax imposed
thereunder. If the Accounting Firm determines, based upon controlling
precedent or substantial authority, that an Underpayment has occurred, the
Accounting Firm will notify the Executive and the Company of that determination
and the amount of that Underpayment will be paid to the Executive promptly
by
the Company.
(vi) For
purposes of this Section 11(e), the term “Accounting Firm” means the independent
accounting firm engaged by the Company immediately before the Control Change
Date. For purposes of this Section 11(e), the term “Net After Tax
Amount” means the amount of any Parachute Payments or Capped Payments, as
applicable, net of taxes imposed under Sections 1, 3101(b) and 4999 of the
Code
and any State or local income taxes applicable to the Executive on the date
of
payment. The determination of the Net After Tax Amount shall be made
using the highest combined effective rate imposed by the foregoing taxes
on
income of the same character as the Parachute Payments or Capped Payments,
as
applicable, in effect on the date of payment. For purposes of this
Section 11(e), the term “Parachute Payment” means a payment that is described in
Section 280G(b)(2) of the Code, determined in accordance with the regulations
promulgated or proposed thereunder.
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12. Section
409A. The Company and the Executive intend that the
benefits and payments provided under this Agreement shall be exempt from
the
requirements of Section 409A of the Code (“Section
409A”). Notwithstanding that intent, if the Company determines that
any benefit or payment under this Agreement is, or may reasonably be expected
to
be, subject to Section 409A, then such benefit shall be provided and such
payment shall be made in a manner that complies with Section 409A and the
regulations and other guidance issued pursuant to Section 409A. By
way of example, if the Company determines that the Change of Control Bonus
is
subject to Section 409A and that the Executive is a “specified employee” (as
defined for purposes of Section 409A), then the payment of the Change of
Control
Bonus shall be postponed until the first day of the seventh month beginning
after the Executive’s termination. If any cash payment under this
Agreement is postponed on account of the application of Section 409A, then
such
payment shall accrue interest at the applicable federal rate provided for
in
Section 7872(f)(2)(A) of the Code from the date that the payment is due under
this Agreement (but for the requirements of Section 409A) until the date
of
payment.
13. Protection
of Confidential Information; Noncompetition;
Non-Recruitment
(a) Covenant. The
Executive acknowledges that his employment by the Company, will, throughout
the
Term, bring him into close contact with many confidential affairs of the
company, including, without limitation, information about ownership of the
company, customer lists, costs, profits, markets, sales, key personnel, pricing
polices, and other business affairs and methods and other information not
readily available to the public, and plans for future
development. The Executive further acknowledges that the services to
be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. In recognition of the
foregoing, Executive covenants and agrees:
(i) the
Executive shall use all reasonable efforts to protect the confidential matters
of the Company and shall keep secret all such confidential matters, including
without limitation, the terms and provisions of this Agreement, and shall
not
intentionally disclose such matters to anyone outside of the Company except
as
required in the performance of his duties under this Agreement, either during
or
after the Term, except with the Company’s written consent, provided
that: (1) Executive shall have no such obligation to the extent such
matters are or become publicly known other than as a result of Executive’s
breach of his obligations hereunder; (2) Executive may, after giving prompt
written notice to the Company to the extent practicable under the circumstances,
disclose such matters to the extent required by applicable laws or governmental
regulations or judicial or regulatory proceedings; and (3) Executive may
disclose the terms and provisions of this Agreement to his spouse and legal
tax
and financial advisors, provided however, they agree in writing to be bound
by
the confidentiality provisions hereof;
(ii) The
Executive shall deliver promptly to the Company on termination of his employment
by the Company, or at any other time the Company may so request, at the
Company’s expense, all memoranda, notes, records, reports and other documents,
and all copies thereof relating to the Company’s business, which Executive
obtained while employed, or otherwise serving or acting on behalf of, the
Company and which he may then possess or have under his control other than
publicly available documents or documents related to the terms and conditions
of
Executive employment;
(iii) Non-Recruitment. Independent
of the foregoing provisions, the Executive agrees that, during the term of
the
Executive’s employment by the Company and for a period of twelve (12) months
thereafter, except for a Termination without Cause during the 12 month period
following a Change of Control or a Voluntary Termination for Good Reason
during
the 12 month period following a Change of Control, the Executive shall not,
without the prior written consent of the Company: (1) directly or
indirectly, cause any person engaged or employed by the Company or any of
its
subsidiaries, (whether part-time or full-time and whether as an officer,
employee, consultant, agent, adviser or independent contractor) to voluntarily
leave the employ of or engagement with, the Company or any of its subsidiaries
or to cease providing services to or on behalf of the Company or any of its
subsidiaries, or (2) in any manner seek to engage or employ any such person
(whether or not for compensation) as an officer, employee, consultant, agent,
adviser or independent contractor for any person other than the Company or
any
of its subsidiaries (other than legal or accounting advisors).
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(b) Noncompete. The
Executive expressly covenants and agrees that he will not directly or
indirectly, without the prior written consent of the Board, at any time while
employed by the Company and for a period of one year (plus the length of
time
that Executive is in violation of this provision) following the date of that
Executive’s employment terminates (1) for cause (as defined in Section 8(c)) or
(2) for voluntary termination (as defined by Section 8(a)), other than for
Good
Reason following a Change in Control (as defined in Section 11), enter into
or
engage generally in direct or indirect competition with the Company either
as an
individual on his own or as a partner or joint venture, or as a director,
officer, shareholder, employee or agent for any person nor render any services
to any person or entity that competes with the Company or any
Affiliate. For the purposes of this Section, the Executive or any
person or entity shall be deemed to "compete" with the Company or any Affiliate
if the Executive personally engages, owns or provides services to any entity
engaged in the ownership or management of hospitality units located in the
United States east of the Mississippi including but not limited to Ashford
Hospitality Trust, Inc., Xxxxxx Lodging Company, Equity Inns, Inc., Highland
Hospitality Corp., Innkeepers USA Trust, LaSalle Hotel Properties and Winston
Hotels, Inc.
(c) Specific
Remedy — Injunctive Relief. The parties agree that the
restrictions outlined in Sections 13(a) and (b) are reasonable and necessary
protections of the immediate interests of the Company and that the Company
would
not have entered into this Agreement without receiving additional consideration
offered by Executive and binding himself to these restrictions. In
addition to such other rights and remedies as the Company may have at equity
or
in law with respect to any breach of this Agreement, if Executive commits
a
breach of any of the provisions of Section 13(a) or 13(b), the Company shall
have the right and remedy to have such provision specifically enforced by
any
Court having equity jurisdiction, it being acknowledged and agreed that any
such
breach or threatened breach will cause irreparable injury to the Company
and
that monetary damages will not provide an adequate remedy to the
Company. In the event that, notwithstanding the foregoing, a
restriction or any portion thereof, contained in Section 13(a) or 13(b) is
deemed to be unreasonable by a court of competent jurisdiction, Executive
and
the Company agree that such restriction, or portion thereof, shall be modified
in order to make it reasonable and shall be enforceable
accordingly.
(d) Consideration. The
parties acknowledge the requirement that the currently employed Executive
be
provided good and valuable consideration for providing the restrictions set
forth in Section 13(a) and 13(b). Therefore, in consideration of the
foregoing restrictions, the Company shall allow the Executive to participate
in
the Company’s long-term incentive program, the terms of which shall be
separately specified and incorporated by reference herein.
14. Notices. All
notices or deliveries authorized or required pursuant to this Agreement shall
be
deemed to have been given when in writing and personally delivered or when
deposited in the U.S. mail, certified, return receipt requested, postage
prepaid, addressed to the parties at the following addresses or to such other
addresses as either may designate in writing to the other party:
| To the Company: | Hersha Hospitality Trust | ||
|
00
Xxxxxx Xxxxx
|
|||
|
Xxxxxxxxxx,
XX 00000
|
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|
To
the Executive:
|
Xxxx
X. Xxxx
|
||
15. Entire
Agreement; Prior Agreement. This
Agreement contains the entire understanding between the parties hereto with
respect to the subject matter hereof and shall not be modified in any manner
except by instrument in writing signed, by or on behalf of the parties hereto;
provided, however, that any amendment or termination of the covenant of
noncompetition in Section 13 must be approved by a majority of the directors
of
the Company other than the Executive, if the Executive is then a director
of the
Company. This Agreement shall be binding upon and inure to the
benefit of the heirs, successors and assigns of the parties
hereto. This Agreement supersedes and replaces the Prior Agreement
and the Prior Agreement shall have no further force or effect after the
execution of this Agreement.
16. Arbitration.
(a) All
disputes (except for those arising pursuant to Section 13) arising out of,
relating to or concerning this Agreement, the breach of this Agreement, the
employment of Executive, or the termination of Executive's employment shall
be
resolved pursuant to this Section 16. This includes all claims or
disputes whether arising in tort or contract and whether arising under statute
or common law, including Title VII, the ADA, the ADEA, and all other federal
and
state employment statutes. Any such dispute will be resolved by
arbitration held in Harrisburg, Pennsylvania under the Employment Dispute
rules
of the American Arbitration Association. This agreement to arbitrate
will be specifically enforceable.
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(b) Executive
and Company agree that he or it must file any arbitration with the AAA and
serve
on the other party within sixty (60) days after the date on which the dispute
arose.
(c) Subject
to Section 16(e) below, each party shall bear its own expenses for arbitration,
including attorney and witness fees and expenses, except that the fee of
the
arbitrator shall be borne solely by the Company.
(d) Upon
a request for arbitration under this Agreement, the parties shall confer
with
each other for the purpose of attempting to select a single independent
arbitrator. In the event that the parties cannot agree to the
selection of an arbitrator within thirty days of notice of arbitration, three
(3) individuals shall serve as arbitrators in accordance with the Expedited
Procedures of the Commercial Arbitration Rules of the American Arbitration
Association. One of the arbitrators shall be selected by Executive
and another by Company. The two arbitrators so selected shall select
a third arbitrator. The finding of a majority of the arbitrators
shall be final and binding on the parties. The agreement to arbitrate
shall be specifically enforceable under applicable law in any court having
jurisdiction.
(e) The
prevailing party in connection with such arbitration shall be entitled to
recover from the other party reasonable sums as attorney fees and expenses
in
connection with such action, except that the fee of the arbitrator shall
be
borne solely by the Company regardless of outcome.
(f) The
arbitrators will have no authority to extend, modify, or suspend any of the
terms of this Agreement. The arbitrators will make the award in
writing and shall accompany it with an opinion discussing the evidence and
setting forth the reasons for the award. The decision of the
arbitrators within the scope of the submission will be final and binding
on both
parties, and any right to judicial action on any matter subject to arbitration
hereunder is waived (unless otherwise required by applicable law), except
suit
to enforce this arbitration award and any rights to vacate or modify the
arbitration award in accordance with the Uniform Arbitration Act as enacted
in
Pennsylvania. The arbitrators shall have authority to award all
relief provided for by such relevant laws at issue. If the rules of
the AAA differ from those of this Section, the provisions of this Agreement
will
control.
17. Applicable
Law. Except to the extent pre-empted by
federal law, this Agreement shall be construed in accordance with the laws
of
the Commonwealth of Pennsylvania without regard to internal conflict of law
principles and any litigation or legal action concerning this Agreement,
not
otherwise waived or subject to arbitration, shall be brought before a state
or
federal court of competent jurisdiction in Harrisburg,
Pennsylvania.
18. Assignment. The
Executive acknowledges that his services are unique and
personal. Accordingly, the Executive may not assign his rights or
delegate his duties or obligations under this Agreement. The
Company’s rights and obligations under this Agreement shall inure to the benefit
of and shall be binding upon the Company’s successors and assigns.
19. Headings. Headings
in this Agreement are for convenience only and shall not be used to interpret
or
construe its provisions.
8
IN
WITNESS WHEREOF, the Parties hereto
have executed this Employment Agreement as of the date first set forth
above.
|
BY:
|
/s/ Xxxxxxx X. Xxxxx | ||
|
Xxxxxxx
X. Xxxxx, Lead Trustee
|
|||
|
Board
of Trustees
|
|||
|
EXECUTIVE
|
|||
| /s/ Xxxx X. Xxxx | |||
| Xxxx X. Xxxx | |||
9
