EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into by
WINSTON HOTELS, INC., a North Carolina corporation (hereinafter the
"Corporation"), and XXXXXX X. XXXXX (hereinafter the "Employee").
The Corporation desires to employ Employee and Employee desires to
accept such employment on the terms set forth below.
In consideration of the mutual promises set forth below and other good
and valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the Corporation and Employee agree as follows:
1. EMPLOYMENT. The Corporation employs Employee and Employee accepts
employment on the terms and conditions set forth in this Agreement.
2. NATURE OF EMPLOYMENT.
Employee shall serve as the Chief Financial Officer and an
Executive Vice-President of the Corporation and shall have such responsibilities
and authority consistent with such positions as may be reasonably assigned to
him by the Board of Directors of the Corporation. Employee shall devote his full
time and attention and best efforts to perform successfully his duties and
advance the Corporation's interests. Employee shall abide by the Corporation's
policies, procedures, and practices as they may exist from time to time.
During this employment, Employee shall have no other employment of any
nature whatsoever without the prior consent of the Corporation; provided,
however, this Agreement shall not prohibit Employee from personally owning and
dealing in stocks, bonds, securities, real estate, commodities or other
investment properties for his own benefit.
3. COMPENSATION AND BENEFITS.
(a) Salary. Compensation for Employee's services under this
Agreement initially shall be Two Hundred Forty-Eight Thousand Dollars ($248,000)
per year, payable in accordance with the Corporation's reasonable policies,
procedures, and practices as they may exist from time to time. The Employee's
salary shall be reviewed annually by the Corporation's Board of Directors as of
December 31 and by February 15 of each year and may be changed in the Board's
reasonable discretion.
(b) Bonus. Employee shall be entitled to earn an annual bonus
of up to fifty percent (50%) of his annual salary with the specific amount to be
reviewed and determined annually by the Corporation's Board of Directors.
(c) Benefits. Employee may participate in any medical
insurance or other employee benefit plans and programs which may be made
available from time to time to other Corporation employees at Employee's level;
provided, however, that Employee's participation in such benefit plans and
programs is subject to the applicable terms, conditions, and eligibility
requirements of those plans and programs, some of which are within the plan
administrator's discretion, as they may exist from time to time.
(d) Expenses. Employee shall be reimbursed by the Corporation
for any reasonable expenses incurred by Employee on behalf of the Corporation or
in connection with Employee's performance of his
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duties hereunder. Such reimbursement shall be in accordance with the
Corporation's practices or policies as they may exist from time to time.
(e) Vacation. Employee shall be entitled to four (4) weeks of
vacation each year. Such vacation shall be taken in accordance with the
Corporation's policies and practices as they may exist from time to time.
4. TERM OF EMPLOYMENT. Unless terminated earlier as provided herein,
the original term of employment under this Agreement shall be for three (3)
years commencing on the date hereof. Upon the expiration of the original term of
employment or any subsequent term, this Agreement shall be automatically renewed
for an additional one (1) year period unless either party gives the other ninety
(90) days prior written notice of intent not to renew.
5. TERMINATION OF EMPLOYMENT.
(a) With Notice. Either the Corporation or Employee may
terminate this Agreement during the original or any extension term of employment
by giving ninety (90) days prior written notice to the other party. If the
Corporation terminates this Agreement with such notice, or gives a notice of
non-renewal pursuant to Section 4 of this Agreement, then Employee shall be
entitled to an amount equal to the sum of (i) the Employee's then current
monthly salary multiplied by 12 plus (ii) an accrued bonus amount equal to 50%
of the Employee's then current annual salary pro rated from the first day of the
calendar year in which such notice is given through and including the day and
date that the Employee leaves the employment of the Company, with said amount to
be paid in a lump sum upon the date of termination of this Agreement.
(b) Cause, Disability, or Death. The Corporation may terminate
Employee's employment immediately for
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"Disability," "Cause," or in the event of Employee's death. For purposes of this
Agreement, Disability shall mean a mental or physical condition, or both, that
substantially interferes with Employee's ability to perform satisfactorily his
usual duties for the Corporation for a period of more than six (6) consecutive
months upon the certificate of a qualified physician approved by the
Corporation. For purposes of this Agreement, Cause shall mean: (i) any act of
Employee's in connection with his employment and relating to the Corporation's
business, including but not limited to, gross negligence, which is materially
detrimental to the Corporation's interests; (ii) any act of willful misconduct,
unlawfulness or dishonesty by Employee in connection with his employment, which
is materially detrimental to the Corporation's interests; (iii) the Employee's
failure to (a) perform his job in a reasonably satisfactory manner following two
consecutive notice and cure periods as set forth below; or, (b) comply with the
Corporation's reasonable directions; or (iv) Employee's material breach of this
Agreement. Employee shall be given written notice and a thirty (30) day
opportunity to cure any deficiencies arising under Sections 5(b) (i), (iii) and
(iv) above.
In the event of termination for Cause, the Corporation's obligation to
compensate Employee ceases on the date of termination except as to the amounts
of salary due at that time. In the event of termination for Disability, the
Corporation shall pay Employee's then current annual salary (reduced by any
payments Employee receives from disability insurance) and any bonus to which he
may be entitled equal to 50% of the Employee's then current annual salary for a
period of one year from the date of termination. In the event of termination for
death, the
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Corporation shall pay Employee's estate any salary and prorated bonuses to which
he may be entitled as of the date of termination.
6. PROPRIETARY INFORMATION AND PROPERTY. Employee shall not, at any
time during or following employment with the Corporation, disclose or use,
except in the course of his employment with the Corporation or as may be
required by law, any confidential or proprietary information of the Corporation
received by Employee while employed hereunder, whether such information is in
Employee's memory or embodied in writing or other physical form.
Confidential or proprietary information is information which is not
generally available to the general public, or Corporation's competitors, or
ascertainable through common sense or general business knowledge; including, but
not limited to data, compilations, methods, financial data, financial plans,
business plans, product plans, lists of actual or potential customers, and
marketing information regarding executives and employees.
All records, files or other objects maintained by or under the control,
custody or possession of the Corporation or its agents in their capacity as
agents shall be and remain the Corporation's property. Upon termination of his
employment, Employee shall return to the Corporation all property (including,
but not limited to, equipment, records, files, documents, credit cards, and
keys) which he received in connection with his employment. At the Corporation's
request, Employee shall bring current all such records, files or documents
before returning them.
Upon notice of cessation of his employment with the Corporation,
Employee shall fully cooperate with the Corporation in winding up his pending
work and transferring his work to those individuals designated by the
Corporation.
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The terms and conditions of this Section 6 shall survive expiration or
termination of this Agreement or Employee's employment and shall not be affected
by any change or modification of this Agreement unless specific reference is
made to this Section 6.
7. CHANGE IN CONTROL.
(a) For purposes of this Agreement, "Change in Control" shall
mean:
(i) The acquisition by any entity or person, which
theretofore beneficially owned less than 50% of the
Corporation's common stock in a transaction or series of
transactions which results in such entity or person
beneficially owning 50% or more of the Corporation's common
stock or voting power, where beneficial ownership and the
percentages of shares outstanding are determined pursuant to
Sections 13(d) and (g) of the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder; or
(ii) The merger, share exchange, or consolidation of
the Corporation with one or more corporations in a transaction
or series of transactions where the common stock of the
Corporation is exchanged for less than 50% of the voting stock
of the resulting or surviving corporation, including, without
limitation, an exchange of the common stock of the Corporation
for cash; or
(iii) The sale, assignment, transfer, pledge,
hypothecation or other disposition of assets (except a pledge,
hypothecation or other similar disposition made at the time
the Corporation enters into a bona fide financing transaction
with a party which at the time of such transaction is not an
affiliate
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of the Corporation) of the Corporation having a value in
excess of 50% of the consolidated total assets of the
Corporation.
(iv) The individuals who, as of the date of this
Agreement, are members of the Board of Directors (the
"Incumbent Board"), cease for any reason to constitute at
least two-thirds of the members of the Board; provided,
however, that if the election, or nomination for election by
the Corporation's common stockholders of any new director was
approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board.
A Change in Control shall not include a transaction, or series of transactions,
whereby the Corporation becomes a subsidiary of a holding company if the
shareholders of the holding company are substantially the same as the
shareholders of the Corporation prior to such transaction or series of series of
transactions.
(b) After the occurrence of a Change in Control, Employee
shall be entitled to receive payments and benefits pursuant to Section 7 of this
Agreement in the following circumstances:
(i) If within one year after the occurrence of a
Change in Control, the Corporation (or any successor in
interest) terminates Employee's employment for reasons other
than Cause, Disability, or Death.
(ii) If within one year after the occurrence of a
Change in Control, the Employee terminates his employment with
the Corporation (or any successor in interest) for "Good
Reason."
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For purposes of this Agreement "Good Reason" shall mean the
occurrence after a Change in Control of any of the following
events or conditions:
(1) a change in the Employee's status,
titles, positions, or responsibilities (including
reporting responsibilities) which, in the Employee's
reasonable judgment represents an adverse change from
his status, titles, positions, or responsibilities in
effect immediately prior thereto; the assignment to
Employee of any duties or responsibilities which, in
the Employee's reasonable judgment, are inconsistent
with his status, titles, positions or
responsibilities; or any removal of Employee from or
failure to reappoint or re-elect him to any of such
positions, status, or titles, except in connection
with the termination of his employment for
Disability, Cause, or death, or by the Employee other
than for Good Reason;
(2) a reduction in the Employee's base
salary and/or any material adverse change in the
bonus program applicable to the Employee;
(3) the Corporation's requiring the Employee
to be based at any place outside a thirty (30) mile
radius from Raleigh, North Carolina, except for
reasonably required travel on the Corporation's
business which is not substantially greater than such
travel requirements prior to the Change in Control;
(4) the failure by the Corporation to
continue in effect any compensation, welfare, or
benefit plan in which Employee is participating at
the time of a Change in Control without substituting
plans providing
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Employee with substantially similar or greater
benefits, or the taking of any action by the
Corporation which would adversely affect Employee's
participation in or materially reduce Employee's
benefits under, any of such plans or deprive Employee
of any material fringe benefit enjoyed by Employee at
the time of the Change in Control;
(5) any purported termination of Employee's
employment for Cause or Disability without grounds
therefor;
(6) any breach by the Corporation of any
provision of this Agreement; or
(7) the failure of the Corporation to obtain
an agreement, satisfactory to the Employee, from any
successor or assign of the Corporation to assume and
agree to perform all of the provisions of this
Agreement; or,
(8) the principal executive offices of the
Corporation being located outside of a thirty (30)
mile radius of Raleigh, North Carolina.
(c) In the event that Employee's employment with the
Corporation terminates under any of the circumstances described above in this
Section 7, Employee shall be entitled to receive all of the following:
(i) all accrued compensation and any pro rata bonuses
to which he may be entitled and which Employee may have earned
up to the date of termination;
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(ii) a severance payment equal to three (3) times the
amount of the Employee's current annual compensation plus a
bonus equal to 50% of the Employee's then current annual
salary; provided, however, that in no case shall the amount
used for such annual compensation or bonus be less than those
amounts immediately prior to the Change in Control. The
severance payment shall be paid in a lump sum upon the date of
termination;
(iii) a continuation of benefits. The Corporation
shall maintain in full force and effect, for one (1) year
after the date of termination, all life insurance, health,
accidental death and dismemberment, and disability plans and
other benefit programs in which Employee is entitled to
participate immediately prior to the termination, provided
that Employee's continued participation is possible under the
general terms and provisions of such plans and programs.
Employee's continued participation in such plans and programs
shall be at no greater cost to Employee than the cost he bore
for such participation immediately prior to termination. If
Employee's participation in any such plan or program is
barred, the Corporation shall arrange upon comparable terms,
and at no greater cost to Employee than the cost he bore for
such plans and programs prior to termination, to provide
Employee with benefits substantially similar to, or greater
than, those which he is entitled to receive under any such
plan or program; and,
(iv) a lump sum payment (or otherwise as specified by
Employee to the extent permitted by the applicable plan) of
any and all amounts contributed to a Corporation pension or
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retirement plan which Employee is entitled to under the terms
of any such plan.
8. REMEDIES. Employee agrees that his breach or violation of Section 6
will result in immediate and irreparable harm to the Corporation for which legal
remedies would be inadequate. Therefore, in addition to any legal or other
relief to which the Corporation may be entitled, the Corporation may seek legal
and equitable relief, including but not limited to, preliminary and permanent
injunctive relief.
9. EMPLOYEE REPRESENTATION. Employee represents and warrants that his
employment and obligations under this Agreement will not breach any duty or
obligation he owes to another person or entity.
10. WAIVER OF BREACH. The Corporation's or Employee's waiver of any
breach of a provision of this Agreement shall not waive any subsequent breach by
the other party.
11. ENTIRE AGREEMENT. This Agreement including any exhibit or
attachment hereto: (i) supersedes all other understandings and agreements, oral
or written, between the parties with respect to the subject matter of this
Agreement including any exhibit or attachment hereto; and (ii) constitutes the
sole agreement between the parties with respect to this subject matter. Each
party acknowledges that: (i) no representations, inducements, promises or
agreements, oral or written, have been made by any party or by anyone acting on
behalf of any party, which are not embodied in this Agreement including any
exhibit or attachment hereto; and (ii) no agreement, statement or promise not
contained in this Agreement shall be valid. No change or modification of this
Agreement shall be valid or binding upon the parties unless such change or
modification is in writing and is signed by the parties.
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12. SEVERABILITY. If a court of competent jurisdiction holds that any
provision or sub-part thereof contained in this Agreement is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement.
13. PARTIES BOUND. The terms, provisions, covenants and agreements
contained in this Agreement shall apply to, be binding upon and inure to the
benefit of the Corporation's successors and assigns. Employee may not assign
this Agreement without the Corporation's prior written consent.
14. GOVERNING LAW. This Agreement and the employment relationship
created by it shall be governed by North Carolina law. The parties hereby
consent to exclusive jurisdiction in North Carolina for the purpose of any
litigation relating to this Agreement and agree that any litigation by or
involving them relating to this Agreement shall be conducted in the court of
Wake County or the federal court of the United States for the Eastern District
of North Carolina.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
day and year written below.
EMPLOYEE
/s/ Xxxxxx X. Xxxxx
1/2/03 --------------------------
------ Xxxxxx X. Xxxxx
Date
WINSTON HOTELS, INC.
/s/ Xxxxxx X. Xxxxxxx, III
1/2/03 --------------------------
------ Xxxxxx X. Xxxxxxx, III
Date
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