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 Xxxxxx X. Xxxxxxx (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 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 Chief Development Officer of the
Company.
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.
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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 Chief Executive Officer 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 Promus Hotel Corporation immediately prior to
the Effective Time including, but not limited to, the "rabbi trust" (provided
pursuant to the escrow agreement dated June 30, 1995, as amended (the "Escrow
Agreement")) which will continue in full force subject to its terms and
conditions and the obligations of which will be assumed or guaranteed by the
Company. There will be no diminution of the compensation, perquisites, or
benefits set forth in this Section 4 except as provided in this Agreement.
(b) Executive shall also be entitled to the benefits under his Severance
Agreement with Promus Hotel Corporation dated September 1, 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.
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,
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(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; and
(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).
(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.
(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 and exercisable
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.
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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.
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.
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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; provided, however
that he will also be entitled to the equity rights to the extent provided in
Section 5.02(b)(3) hereof and the benefits of the Escrow 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.
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
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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.
(b) The assignment to Executive of any duties inconsistent with his status
as Chief Development 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 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
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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; or
(h) 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 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
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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.
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.
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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 A (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.
"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
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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 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
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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, 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
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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.
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
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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.
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
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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.
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
___________________________________
Xxxxxx X. Xxxxxxx
(Corporate Seal) PARENT HOLDING CORP.
By:________________________________
ATTEST:___________________________
Secretary
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