EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the ___ day of November, 1997, between
Parent Holding Corp., a Delaware corporation with its executive offices at
000 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx (the "Company") and Xxxxxxx X.
Xxxxxxxx (the "Executive"). The Company and the Executive agree as follows:
1. Effective Date and Term.
The Company desires to secure the services of the Executive and the
Executive is willing to execute this Agreement with respect to his employment.
The employment of the Executive hereunder shall become effective at the
Effective Time under the Agreement of Plan of Merger (the "Merger Agreement")
dated as of September 1, 1997 among Doubletree Corporation, Promus Hotel
Corporation and Parent Holding Corp. (the "Effective Time"), and shall expire
on the fifth anniversary of the Effective Time (the "Initial Term"), subject
to the terms and conditions herein. The Initial Term shall be automatically
extended for an additional term of one (1) year on each anniversary of the
expiration of the Initial Term unless, no later than thirty (30) days prior
to the expiration of any term, either the Company or the Executive gives
written notice to the other that the term will not be extended, in which case
the Executive's employment hereunder shall terminate upon the expiration of
the then current term. This Agreement is effective upon its execution by the
parties hereto; PROVIDED, HOWEVER, that the obligation of the parties with
respect to the employment of the Executive shall only become operative upon
the occurrence of the Effective Time under the Merger Agreement. If the
Merger Agreement is abandoned or for any other reason the transactions
contemplated thereby are not consummated, this Agreement shall be null and
void and the parties shall have no further obligations hereunder.
2. Agreement of Employment.
The Company agrees to, and hereby does, employ the Executive, and the
Executive agrees to, and hereby does accept, employment by the Company, in a
full-time capacity, pursuant to the provisions of this Agreement and of the
By-laws of the Company and subject to the control of the Board of Directors
of the Company (the "Board"). The Executive shall, effective as of the
Effective Time, hold the position of Executive Vice President and Chief
Financial Officer of the Company. It is hereby understood that the foregoing
requirements regarding the Executive's position are subject to the Bylaws of
the Company, which require a vote of at least 75% of the members of the Board
to change such position.
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3. Executive's Obligations.
During the period of his service under this Agreement, the Executive
shall devote substantially all of his time and energies during business hours
to the supervision and conduct, faithfully and to the best of his ability, of
the business and affairs of the Company and to the furtherance of its
interests, and to such other duties as directed by the Board.
4. Compensation.
(a) The Company shall pay to Executive a salary at the rate of
$________ per year, in equal bi-weekly installments; PROVIDED, HOWEVER, that
the Human Resources Committee of the Board (the "Human Resources Committee")
shall in good faith review the salary of the Executive, on an annual basis,
with a view to consideration of appropriate merit increases in such salary.
In addition, during the term of this Agreement, the Executive shall be
entitled to participate in incentive compensation programs and to receive
employee benefits and perquisites at least as favorable to the Executive as
those provided to Executive as of the Effective Time, and as may be enhanced
for all senior officers. Such benefits include, but are not limited to (i)
the annual bonus plan for which senior executives of the Company are
generally eligible, (ii) awards under any stock option, restricted stock, or
equity based incentive compensation plan or arrangement maintained by the
Company for which senior executives of the Company are generally eligible,
(iii) all employee benefit plans, programs and arrangements of the Company
for which senior executives of the Company are generally eligible, and (iv)
all benefits and perquisites being provided to the Executive by Doubletree
Corporation immediately prior to the Effective Time. There will be no
diminution of the compensation, perquisites, or benefits set forth in this
Section 4 except as provided in this Agreement.
(b) The Company shall assume and honor, in accordance with their terms,
the obligations of Doubletree to the Executive under the Doubletree
Supplemental Executive Retirement Plan. Executive shall also be entitled to
the benefits under his Severance Agreement with Doubletree Corporation dated
November __, 1997, a copy of which is attached hereto as Exhibit A (the
"Severance Agreement"), which will continue in force subject to its terms and
conditions including the termination and amendment provisions thereof, and
which will affect the Company's obligations under this Agreement as described
in Section 9 hereof.
5. Termination Without Cause or Resignation for Good Reason.
5.01 The Executive shall be treated as having incurred a "Covered
Termination" hereunder if his employment is terminated (i) by the Company
other than for Cause (as defined in Section 10.01 hereof) or (ii) by the
Executive for Good Reason (as defined in Section 10.02 hereof). The
Executive shall not be treated as having incurred a Covered Termination if
his employment is terminated as a result of death or disability, as provided
in Sections 7 and 8 hereof, respectively. NOTE that, as provided in Section
9 hereof, if the Executive becomes entitled to termination payments under the
applicable provisions of his Severance Agreement, such provisions shall
supersede the following provisions of this Section 5.
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5.02 (a) The amount of the severance payment to be paid to the
Executive upon Covered Termination shall be the amount determined by
multiplying 3.00 times the sum of:
(1) the Executive's Annual Base Salary as in effect
immediately prior to the Date of Termination; PLUS,
(2) the Executive's Bonus Amount applicable for the
fiscal year in which the Date of Termination occurs; PLUS,
(3) a benefit allowance of 25% of the Executive's
Annual Base Salary as in effect immediately prior to the Date of Termination.
(b) In addition to the severance payment provided under
Paragraph 5.02(a) hereof, the Executive shall be entitled to the following
benefits and other rights in the event of his Covered Termination:
(1) Accrued Rights. The Executive shall be entitled
to the following payments and benefits in respect of accrued compensation
rights upon a Covered Termination, in addition to other rights provided under
this Agreement:
(i) payment of any accrued but unpaid Annual
Base Salary and annual bonus (for any completed fiscal year) through the Date
of Termination;
(ii) payment of a pro-rata portion of the
Bonus Amount for the fiscal year of the Company in which the Covered
Termination occurs, based on the number of days of such year prior to the
Date of Termination;
(iii) all benefits and rights accrued under
the employee benefit plans, fringe benefits programs and payroll practices of
the Company in accordance with their terms (including, without limitation,
employee pension, employee welfare, incentive bonus, stock incentive plans,
and any accrued vacation or sick pay time); and
(iv) payment of the Executive's benefits
pursuant to the terms of the Doubletree Hotels Corporation Supplemental
Executive Retirement Plan (the "SERP"), which, for the purposes thereof, the
Company acknowledges that the Proposed Merger shall constitute a "Change of
Control" (as defined therein), and which is attached as Exhibit B hereto.
(2) Outplacement Services. Upon the occurrence of a
Covered Termination, the Executive shall be provided, at the Company's sole
expense, with professional outplacement services consistent with the
Executive's duties or profession and of a type and level customary for
persons in his position, as selected by the Company, subject to reasonable
limitations established by the Company as to duration and dollar amounts.
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(3) Equity Rights.
Upon the occurrence of a Covered Termination, all
outstanding awards of stock options and restricted stock that have been
granted to the Executive shall continue to become vested following the Date
of Termination at the same times and on the same basis as if the Executive
had remained employed by the Company and, in the case of stock options, shall
remain exercisable following the vesting thereof until the expiration of the
original full term.
5.03 For purposes of this Agreement:
(a) "Annual Base Salary" shall mean the Executive's gross annual
salary before any deductions, exclusions or any deferrals or contributions
under any Company plan or program, but excluding bonuses, incentive
compensation, employee benefits or any other non-salary form of compensation
(determined without regard to any reduction in Annual Base Salary that
results in "Good Reason" termination).
(b) "Bonus Amount" shall mean the greater of (i) the dollar amount of
the annual bonus that would be payable to the Executive under the Company's
annual bonus plan applicable to the Executive, assuming payment at the
Executive's target level for the then-current full fiscal year (determined
without regard to any reduction in target bonus percentage that results in
"Good Reason" termination), or (ii) the dollar amount of the bonus paid or
payable to the Executive under the Company's annual bonus plan for the most
recently completed fiscal year under such plan. For the purposes hereof, the
"Bonus Amount" shall not include any special bonuses paid outside of the
Company's generally applicable annual bonus plan.
6. Termination For Cause or Resignation WITHOUT Good Reason.
6.01 The Board will have the right to terminate Executive at any time
from his then-current position for Cause (as defined in paragraph 10.01
herein).
6.02 If Executive is terminated for Cause or if he resigns his
position without Good Reason (including if he retires without Good Reason),
then (i) all of his rights and benefits under this Agreement shall thereupon
terminate and his employment shall be deemed terminated on the date of such
termination or resignation, (ii) he shall be entitled to all accrued rights,
payments and benefits vested or paid on or before such date under the
Company's plans and programs, but unvested stock options and unvested shares
of restricted stock, if any, will be forfeited.
7. Death.
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In the event of Executive's death during his employment under this
Agreement, his salary and all rights and benefits under this Agreement will
terminate, and his estate and beneficiary(ies) will receive the benefits they
are entitled to under the terms of the Company's benefit plans and programs
by reason of a participant's death during active employment and the
applicable rights and benefits under the Company's stock plans.
8. Disability.
In the event of Executive's disability during his employment under this
Agreement, he will be entitled to apply at his option for the Company's long
term disability benefits. If he is accepted for such benefits, then the
terms and provisions of the Company's benefit plans and programs that are
applicable in the event of such disability of an employee shall apply in lieu
of the salary and benefits under this Agreement. If Executive is disabled so
that he cannot perform his duties (as determined by the Human Resources
Committee), and if he does not apply for long term disability benefits or is
not accepted for such benefits, then the Board may terminate his duties under
this Agreement and, in such event, he will receive two years' salary
continuation together with all other benefits, and, during such period of
salary continuation, any stock options and restricted stock grants then in
existence will continue in force for vesting purposes. However, during such
period of salary continuation for disability, Executive will not be eligible
to participate in the annual bonus plan nor will he be eligible to receive
stock option or restricted stock grants or any other long-term incentive
awards except to the extent approved by the Human Resources Committee.
9. Severance Agreement.
Notwithstanding anything elsewhere in this Agreement to the contrary,
in the event that the Executive incurs a "Covered Termination" as defined in
his Severance Agreement within the time period specified therein, he will be
entitled to all the rights, payments and benefits provided under his
Severance Agreement in lieu of the rights and benefits that would otherwise
apply under this Agreement by virtue of such termination (except to the
extent specifically incorporated therein by reference to this Agreement). The
occurrence of a Covered Termination following the occurrence of more than
one Reorganization Event after the date hereof shall not entitle the
Executive to multiple severance payments under this Agreement and/or the
Severance Agreement.
10. Definitions of Cause and Good Reason.
10.01 Cause. Termination by the Company of the Executive's employment
for "Cause" shall mean termination as a result of:
(a) the Executive engaging in willful gross neglect of his duties with the
Company, or the Executive's fraud or dishonesty in connection with his
performance of duties to the Company, in either case which has a materially
detrimental effect on the business or operations of the Company; or
(b) the Executive's conviction by a court of competent jurisdiction of any
crime (or upon entering a plea of guilty or NOLO CONTENDERE to a charge of
any crime) constituting a felony.
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The Date of Termination for a termination for Cause shall be the date
specified by the Company; PROVIDED that Executive shall have received written
notice of such failure or misconduct and shall have continued to engage in
such failure or misconduct after 30 days following receipt of such notice
from the Board, which notice specifically identifies the manner in which the
Board believes that Executive has engaged in such failure or misconduct. For
purposes of this Paragraph, no act, or failure to act, on the Executive's
part shall be deemed "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause under Section 10.01(a) hereof unless and until there
shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held for such
purposes (after reasonable notice to the Executive and an opportunity for
him, together with his counsel, to be heard before the Board), finding that
in the good faith opinion of the Board the Executive was guilty of failure to
substantially perform his duties or of misconduct in accordance with the
first sentence of this paragraph, and of continuing such failure to
substantially perform his duties or misconduct as aforesaid after notice from
the Board, and specifying the particulars thereof in detail.
10.02 Good Reason. "Good Reason" shall mean, without Executive's
express written consent, the occurrence of any of the following
circumstances, unless, in the case of paragraphs (a), (b), (f), (g) of (h)
such circumstances are fully corrected prior to the date of termination
specified in the written notice given by Executive notifying the Company of
his resignation for Good Reason. Such notice must be given at least 30 days
in advance of the Date of Termination, and shall set forth in reasonable
detail the facts and circumstances claimed to provide the basis for the
termination. Such notice may be given at any time within two years following
the occurrence of the events that provide the basis for the termination, but
not later than the date that is 30 days prior to the expiration of the
then-current term of this Agreement.
(a) Any adverse change by the Company in the Executive's position or
title described in Section 2 hereof, whether or not any such change has been
approved by a vote of at least 75% of the members of the Board.
(b) The assignment to Executive of any duties inconsistent with his
status as Executive Vice President and Chief Financial Officer of the Company
or a substantial adverse alteration in the nature or status of his
responsibilities;
(c) A reduction by the Company in his annual base salary of $_______
or as the same may be increased from time to time pursuant to Section 4
hereof;
(d) The relocation of the Company's principal executive offices where
Executive is working to a location more than 50 miles from the location of
such offices on the date of this Agreement, or the Company's requiring
Executive to be based anywhere other than the location of the Company's
principal offices where Executive is working on the date of this Agreement
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except for required travel on the Company's business to an extent
substantially consistent with Executive's present business travel obligations;
(e) The failure by the Company, without Executive's consent, to pay to
him any portion of his current compensation, except pursuant to a
compensation deferral elected by the Executive, or to pay to Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company within thirty days of the date such
compensation is due;
(f) Except as permitted by this Agreement, the failure by the Company to
continue in effect any compensation plan (or substitute or alternative plan)
in which Executive is entitled to participate under Section 4 hereof which is
material to Executive's total compensation, including, but not limited to,
the Company's annual bonus plan and equity incentive plan, or the failure by
the Company to continue Executive's participation therein on a basis that is
materially as favorable both in terms of the amount of benefits provided and
the level of Executive's participation relative to other participants at
Executive's grade level;
(g) The failure by the Company to continue to provide Executive with
benefits substantially similar to those enjoyed by him under the Company's
pension and deferred compensation plans, if any, except as required by law,
and the life insurance, medical, health and accident, and disability plans in
which Executive is entitled to participate under Section 4 hereof, or the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive Executive of any material
fringe benefit enjoyed by Executive pursuant to Section 4 hereof, or the
failure by the Company to provide Executive with the number of paid vacation
days to which Executive is entitled;
(h) The failure by the Company to continue in effect and honor in
accordance with its terms the SERP as applied to the Executive; or
(i) The failure of the Company to obtain a satisfactory agreement from
any successor to assume and agree to perform this Agreement, as contemplated
in Section 18 hereof.
Executive's right to terminate his employment pursuant to this Agreement
for Good Reason shall not be affected by Executive's incapacity due to
physical or mental illness. Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason hereunder.
11. Excise Tax Reimbursement.
11.01 In the event it shall be determined that any payment or
distribution by the Company or any other person or entity to or for the
Executive's benefit, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, or whether prior to or
following the Covered Termination in connection with, or arising out of, the
Executive's employment with the Company or a Reorganization Event of the
Company (a "Payment") will be subject to the tax (the "Excise Tax") imposed
by section 4999 of the Code, the Company shall pay to the Executive at the
time specified in Section 12 below, an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Payments and any federal (and state and local)
income tax, employment tax
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and Excise Tax upon the payment provided for by this paragraph, shall be
equal to the amount of the Payments. For purposes of determining whether any
of the Payments will be subject to the Excise Tax and the amount of such
Excise Tax the following will apply:
(a) any payments or benefits received or to be received by the
Executive in connection with a Reorganization Event of the Company or his
termination of employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any person whose
actions result in a Reorganization Event of the Company or any person
affiliated with the Company or such person) shall be treated as "parachute
payments" within the meaning of section 280G(b)(2) of the Code, and all
"excess parachute payments" within the meaning of section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to the
Executive such other payments or benefits (in whole or in part) do not
constitute parachute payments, or such excess parachute payments (in whole or
in part) represent reasonable compensation for services actually rendered
within the meaning of section 280G(b)(4) of the Code in excess of the base
amount within the meaning of section 280G(b)(3) of the Code, or are otherwise
not subject to the Excise Tax; and
(b) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors in
accordance with proposed, temporary or final regulations under Sections
280G(d)(3) and (4) of the Code or, in the absence of such regulations, in
accordance with the principles of Section 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment, the Executive
shall be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is
to be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive's residence on the Date
of Termination, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes. In the event
that the amount of Excise Tax attributable to Payments is subsequently
determined to be less than the amount taken into account hereunder at the
time of termination of the Executive's employment, he shall repay to the
Company at the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to the
Excise Tax, employment tax and federal (and state and local) income tax
imposed on the Gross-Up Payment being repaid by the Executive if such
repayment results in a reduction in Excise Tax and/or a federal (and state
and local) income tax deduction) plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2) (B) of the Code. In the
event that the Excise Tax attributable to Payments is determined to exceed
the amount taken into account hereunder at the time of the termination of the
Executive's employment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional gross-up payment in respect of such
excess (plus any interest payable with respect to such excess) at the time
that the amount of such excess is finally determined.
12. Method of Payment.
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The payments provided for in Sections 5 and 11 hereof shall be made in
a cash lump-sum payment, net of any required tax withholding, upon the later
of (i) the fifth (5th) business day following the Date of Termination or (ii)
the expiration of the seven (7) day revocation period applicable under the
release of claims referred to in Section 13 hereof. Any payment required
under Sections 5 and 11 or any other provision of this Agreement that is not
made in a timely manner shall bear interest at a rate equal to one-hundred
twenty (120) percent of the monthly compounded applicable federal rate, as in
effect under Section 1274(d) of the Code for the month in which the payment
is required to be made.
13. Release of Claims.
As conditions of Executive's entitlement to the severance payments and
benefits provided by this Agreement, the Executive shall be required to execute
and honor the terms of a waiver and release of claims against the Company
substantially in the form attached hereto as Exhibit C (as may be modified
consistent with the purposes of such waiver and release to reflect changes in
law following the date hereof).
14. Executive Covenants.
14.01 General. The Executive and the Company understand and agree that
the purpose of the provisions of this Section 14 is to protect legitimate
business interests of the Company, as more fully described below, and is not
intended to impair or infringe upon the Executive's right to work, earn a
living, or acquire and possess property from the fruits of his labor. The
Executive hereby acknowledges that the post-employment restrictions set forth in
this Section 14 are reasonable and that they do not, and will not, unduly impair
his ability to earn a living after the termination of his employment with the
Company. Therefore, subject to the limitations of reasonableness imposed by law
upon restrictions set forth herein, the Executive shall be subject to the
restrictions set forth in this Section 14.
14.02 Definitions. The following capitalized terms used in this
Section 14 shall have the meanings assigned to them below, which definitions
shall apply to both the singular and the plural forms of such terms:
"Confidential Information" means any confidential or proprietary information
possessed by the Company without limitation, any confidential "know-how",
customer lists, details of client or consultant contracts, current and
anticipated customer requirements, pricing policies, price lists, market
studies, business plans, operational methods, marketing plans or strategies,
product development techniques or plans, computer software programs
(including object code and source code), data and documentation, data base
technologies, systems, structures and architectures, inventions and ideas,
past, current and planned research and development, compilations, devices,
methods, techniques, processes, financial information and data, business
acquisition plans, new personnel acquisition plans and any other information
that would constitute a trade secret under the common law or statutory law of
the State of Delaware.
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"Determination Date" means the date of termination of the Executive's
employment with the Company for any reason whatsoever or any earlier date
(during the Restricted Period) of an alleged breach of the Restrictive
Covenants by the Executive.
"Person" means any individual or any corporation, partnership, joint venture,
association or other entity or enterprise.
"Principal or Representative" means a principal, owner, partner, shareholder,
joint venturer, member, trustee, director, officer, manager, employee, agent,
representative or consultant.
"Protected Employees" means employees of the Company or its affiliated
companies who were employed by the Company or its affiliated companies at any
time within six (6) months prior to the Determination Date.
"Restricted Period" means the period of the Executive's employment by the
Company plus a period extending two (2) years from the date of termination of
employment.
"Restrictive Covenants" means the restrictive covenants contained in Section
14.03 hereof.
14.03 Restrictive Covenants.
(a) Restriction on Disclosure and Use of Confidential Information. The
Executive understands and agrees that the Confidential Information
constitutes a valuable asset of the Company and its affiliated entities, and
may not be converted to the Executive's own use. Accordingly, the Executive
hereby agrees that the Executive shall not, directly or indirectly, at any
time during the Restricted Period reveal, divulge or disclose to any Person
not expressly authorized by the Company any Confidential Information, and the
Executive shall not, directly or indirectly, at any time during the
Restricted Period use or make use of any Confidential Information in
connection with any business activity other than that of the Company. The
parties acknowledge and agree that this Agreement is not intended to, and
does not, alter either the Company's rights or the Executive's obligations
under any state or federal statutory or common law regarding trade secrets
and unfair trade practices.
(b) Nonsolicitation of Protected Employees. The Executive understands and
agrees that the relationship between the Company and each of its Protected
Employees constitutes a valuable asset of the Company and may not be
converted to the Executive's own use. Accordingly, the Executive hereby
agrees that during the Restricted Period the Executive shall not directly or
indirectly on the Executive's own behalf or as a Principal or Representative
of any Person solicit any Protected Employee to terminate his or her
employment with the Company.
(c) Noninterference with Company Opportunities. The Executive understands
and agrees that all hotel development opportunities with which he is involved
during his employment with the Company constitute valuable assets of the
Company and its affiliated entities, and may not be converted to the
Executive's own use. Accordingly, the Executive hereby agrees that during
the
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Restricted Period the Executive shall not directly or indirectly on the
Executive's own behalf or as a Principal or Representative of any Person,
interfere with, solicit, pursue, or in any way make use of any such hotel
development opportunities.
14.04 Exceptions from Disclosure Restrictions. Anything herein to the
contrary notwithstanding, the Executive shall not be restricted from
disclosing or using Confidential Information that: (a) is or becomes
generally available to the public other than as a result of an unauthorized
disclosure by the Executive or his agent; (b) becomes available to the
Executive in a manner that is not in contravention of applicable law from a
source (other than the Company or its affiliated entities or one of its or
their officers, employees, agents or representative) that is not bound by a
confidential relationship with the Company or its affiliated entities or by a
confidentiality or other similar agreement; (c) was known to the Executive on
a non-confidential basis and not in contravention of applicable law or a
confidentiality or other similar agreement before its disclosure to the
Executive by the Company or its affiliated entities or one of its or their
officers, employees, agents or representatives; or (d) is required to be
disclosed by law, court order or other legal process; PROVIDED, HOWEVER, that
in the event disclosure is required by law, court order or legal process, the
Executive shall provide the Company with prompt notice of such requirement so
that the Company may seek an appropriate protective order prior to any such
required disclosure by the Executive.
14.05 Enforcement of the Restrictive Covenants.
(a) Rights and Remedies upon Breach. In the event the Executive breaches,
or threatens to commit a breach of, any of the provisions of the Restrictive
Covenants, the Company shall have the right and remedy to enjoin,
preliminarily and permanently, the Executive from violating or threatening to
violate the Restrictive Covenants and to have the Restrictive Covenants
specifically enforced by any court of competent jurisdiction, it being agreed
that any breach or threatened breach of the Restrictive Covenants would cause
irreparable injury to the Company and that money damages would not provide an
adequate remedy to the Company. The rights referred to in the preceding
sentence shall be independent of any others and severally enforceable, and
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company at law or in equity.
(b) Severability of Covenants. The Executive acknowledges and agrees that
the Restrictive Covenants are reasonable and valid in time and space and in
all other respects. If any court determines that any Restrictive Covenants,
or any part thereof, is invalid or unenforceable, the remainder of the
Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
15. Cooperation in Future Matters.
The Executive hereby agrees that, for a period of three (3) years
following his Date of Termination, he shall cooperate with the Company's
reasonable requests relating to matters that pertain to the Executive's
employment by the Company, including, without limitation, providing
information or limited consultation as to such matters, participating in
legal proceedings,
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investigations or audits on behalf of the Company, or otherwise making
himself reasonably available to the Company for other related purposes. Any
such cooperation shall be performed at times scheduled taking into
consideration the Executive's other commitments, and the Executive shall be
compensated at a reasonable hourly or PER DIEM rate to be agreed by the
parties to the extent such cooperation is required on more than an occasional
and limited basis. The Executive shall not be required to perform such
cooperation to the extent it conflicts with any requirements of exclusivity
of service for another employer or otherwise, nor in any manner that in the
good faith belief of the Executive would conflict with his rights under or
ability to enforce this Agreement.
16. Indemnification.
(a) Following the Date of Termination, the Company agrees that it
will, indemnify and hold harmless the Executive, against any costs or
expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities or amounts paid in settlement incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or pertaining to
matters existing or occurring at or prior to the Date of Termination, whether
asserted or claimed prior to, at or after the Date of Termination, to the
fullest extent that the Company would have been permitted under Delaware law
and its certificate of incorporation or bylaws in effect on the date hereof
to indemnify the Executive (and the Company shall also advance expenses as
incurred to the fullest extent permitted under applicable law, provided the
Executive provides an undertaking to repay advances if it is ultimately
determined that the Executive is not entitled to indemnification).
(b) For a period of six years after the Date of Termination, the
Company shall maintain (to the extent available in the market) in effect a
director's and officer's liability insurance policy with coverage in amount
and scope at least as favorable as the Company's existing coverage on the
Date of Termination; provided that in no event shall the Company be required
to expend in the aggregate in excess of 200% of the annual premium paid by
the Company for such coverage as of the Date of Termination; and if such
premium would at any time exceed 200% of the such amount, then the Company
shall maintain insurance policies which provide the maximum and best coverage
available at an annual premium equal to 200% of such amount.
(c) The provisions of this Section 16 are intended to be an addition
to the rights otherwise available to the Executive by law, charter, statute,
bylaw or separate agreement between the Company and the Executive. The
Company shall continue to honor any indemnification agreement between the
Company and the Executive entered into prior to the Date of Termination in
accordance with the terms thereof.
17. Binding Arbitration and Legal Fees.
17.01 Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
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17.02 The Company shall pay all reasonable legal fees and expenses
incurred by the Executive in connection with any arbitration (or other
proceeding whether or not instituted by the Company or the Executive),
relating to the interpretation or enforcement of any provision of this
Agreement (including any action seeking to obtain or enforce any right or
benefit provided by this Agreement) or in connection with any tax audit or
proceeding relating to the application of Section 4999 of the Code to any
payment or benefit provided by the Company.
18. Assumption of Agreement on Merger, Consolidation or Sale of Assets.
The Company agrees that, until the termination of this Agreement as
above provided, it will not enter into any merger or consolidation with
another company in which the Company is not the surviving company, or sell or
dispose of all or substantially all of its assets, unless the company which
is to survive such merger or consolidation or the prospective purchaser of
such assets first makes a written agreement with the Executive either (1)
assuming the Company's financial obligations to the Executive under this
Agreement, or (2) making such other provision for the Executive as is
satisfactory to the Executive and approved by him in writing in lieu of
assuming the Company's financial obligations to him under this Agreement.
19. Assurances on Liquidation.
The Company agrees that, until the termination of this Agreement as
above provided, it will not voluntarily liquidate or dissolve without first
making a full settlement, or, at the discretion of the Executive, a written
agreement with the Executive satisfactory to and approved by him in writing,
in fulfillment of or in lieu of its obligations to him under this Agreement.
20. Amendments.
This Agreement may not be amended or modified orally, and no provision
hereof may be waived, except in a writing signed by the parties hereto.
21. Assignment.
21.01 Except as otherwise provided in paragraph 21.02, this Agreement
cannot be assigned by either party hereto except with the written consent of
the other. Any assignment of this Agreement by either party hereto shall not
relieve such party of its or his obligations hereunder.
21.02 The Company may elect to perform any or all of its obligations
under this Agreement through a wholly-owned subsidiary or other subsidiary,
and if the Company so elects, Executive will be an employee of such
wholly-owned subsidiary, or such other subsidiary. Notwithstanding any such
election, the Company's obligations to Executive under this Agreement will
continue in full force and effect as obligations of the Company, and the
Company shall retain primary liability for their performance.
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22. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
personal representatives and successors in interest of the Company.
23. Choice of Law.
This Agreement shall be governed by the law of the State of Tennessee
as to all matters, including, but not limited to, matters of validity,
construction, effect and performance.
24. Severability of Provisions.
In case any one or more of the provisions contained in this Agreement
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby, and this Agreement
shall be interpreted as if such invalid, illegal or unenforceable provision
were not contained herein.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Company
has caused this Agreement to be executed in its name and on its behalf and
its corporate seal to be hereunto affixed and attested by its corporate
officers thereunto duly authorized.
EXECUTIVE
___________________________________
Xxxxxxx X. Xxxxxxxx
(Corporate Seal) PARENT HOLDING CORP.
By:
ATTEST:
Secretary
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