EXHIBIT 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
AS AMENDED AND RESTATED
This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is
made as of the 19th day of April, 1999, between Wyndham International, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxx, Xx. ("Executive").
WHEREAS, Executive is currently employed by the Company in a senior
executive capacity;
WHEREAS, the Company desires to continue to employ Executive and Executive
desires to continue to be employed by the Company;
WHEREAS, the Company and Executive desire to amend and restate Executive's
existing Executive Employment Agreement with the Company to make certain changes
therein and to eliminate the requirement of an escrow arrangement upon a Change
in Control of the Company;
WHEREAS, the Company and Executive acknowledge that regardless of the
provisions of Paragraph 8 of this amended and restated Agreement, upon the
closing of the Securities Purchase Agreement by and among Patriot American
Hospitality, Inc., Wyndham International, Inc., Patriot American Hospitality,
L.P. and the Investors named therein, all options and other stock-based awards
granted to Executive prior to the date of this Agreement shall immediately
accelerate and become exercisable or non-forfeitable as of such date;
WHEREAS, as an additional inducement to Executive to enter into this
amended and restated Agreement, the Company shall, on the Commencement Date (as
hereinafter defined), grant Executive an option to purchase a certain number of
Paired Shares of common stock of the Company and of common stock of Patriot
American Hospitality, Inc. as set forth in the agreement attached hereto as
Exhibit A (the "Option") and to enter into a new promissory note attached hereto
as Exhibit B (the "Note"); and
WHEREAS, Executive is desirous of committing to serve the Company on the
terms herein provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Employment. The term of this Agreement shall extend from the date hereof
(the "Commencement Date") until the third anniversary of the Commencement Date;
provided, however, that the term of this Agreement shall automatically be
extended for one additional year on the third anniversary of the Commencement
Date and each anniversary thereafter unless, not less than 90 days prior to each
such date, either party shall have given notice to the other that it does not
wish to extend this Agreement; provided, further, that if a Change in Control
occurs during the original or extended term of this Agreement, the term of this
Agreement shall continue in effect for a period of not less than eighteen (18)
months beyond the month in which the
Change in Control occurred. The term of this Agreement shall be subject to
termination as provided in Paragraph 6 and may be referred to herein as the
"Period of Employment."
2. Position and Duties. During the Period of Employment, Executive shall serve
as an Executive Vice President of the Company, shall have supervision and
control over and responsibility for the day-to-day business and affairs of those
functions and operations of the Company and shall have such other powers and
duties as may from time to time be prescribed by the Chairman of the Board of
the Company (the "Chairman") or the Chief Executive Officer of the Company (the
"CEO") or other executive authorized by the Chairman or CEO, provided that such
duties are consistent with Executive's position or other positions that he may
hold from time to time. Executive shall devote his full working time and efforts
to the business and affairs of the Company. Notwithstanding the foregoing,
Executive may serve on other boards of directors, with the approval of the
Chairman or CEO, or engage in religious, charitable or other community
activities as long as such services and activities are disclosed to the Chairman
or CEO and do not materially interfere with Executive's performance of his
duties to the Company as provided in this Agreement.
3. Compensation and Related Matters.
(a) Base Salary and Incentive Compensation. Executive's initial annual
base salary ("Base Salary") shall be $315,000.00. Executive's Base Salary shall
be redetermined at least thirty (30) days before each annual compensation
determination date established by the Company during the Period of Employment in
an amount to be fixed by the Board of Directors of the Company or a Committee
thereof or a duly authorized officer (the "Board"). The Base Salary, as
redetermined, may be referred to herein as "Adjusted Base Salary." The Base
Salary or Adjusted Base Salary shall be payable in substantially equal bi-weekly
installments and shall in no way limit or reduce the obligations of the Company
hereunder. In addition to Base Salary or Adjusted Base Salary, Executive shall
be eligible to receive cash incentive compensation as determined by the Board
from time to time, and shall also be eligible to participate in such incentive
compensation plans as the Board shall determine from time to time for employees
of the same status within the hierarchy of the Company.
(b) Expenses. Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by him (in accordance with the policies and
procedures then in effect and established by the Company for its senior
executive officers) in performing services hereunder during the Period of
Employment, provided that Executive properly accounts therefor in accordance
with Company policy.
(c) Other Benefits. During the Period of Employment, Executive shall be
entitled to continue to participate in or receive benefits under all of the
Company's Employee Benefit Plans in effect on the date hereof, or under plans or
arrangements that provide Executive with at least substantially equivalent
benefits to those provided under such Employee Benefit Plans. As used herein,
"Employee Benefit Plans" include, without limitation, each pension and
retirement plan; supplemental pension, retirement and deferred compensation
plan; savings and profit-sharing plan; stock ownership plan; stock purchase
plan; stock option plan; life insurance plan; medical
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insurance plan; disability plan; and health and accident plan or arrangement
established and maintained by the Company on the date hereof for employees of
the same status within the hierarchy of the Company. To the extent that the
scope or nature of benefits described in this section are determined under the
policies of the Company based in whole or in part on the seniority or tenure of
an employee's service, Executive shall be deemed to have a tenure with the
Company equal to the actual time of Executive's service with Company. During the
Period of Employment, Executive shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement which may, in the
future, be made available by the Company to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plan or arrangement. Any payments or benefits
payable to Executive under a plan or arrangement referred to in this
Subparagraph 3(c) in respect of any calendar year during which Executive is
employed by the Company for less than the whole of such year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which he is so
employed. Should any such payments or benefits accrue on a fiscal (rather than
calendar) year, then the proration in the preceding sentence shall be on the
basis of a fiscal year rather than calendar year.
(d) Life Insurance. The Company shall pay the premiums on, and maintain
in effect throughout the Period of Employment, a life insurance policy on the
life of Executive in an amount not less than the amount of Executive's then
current Base Salary or Adjusted Base Salary. Executive shall have the right to
designate the beneficiary under such policy.
(e) Vacations. Executive shall be entitled to the number of paid vacation
days in each calendar year determined by the Company from time to time for
executives at the same level as Executive. Executive shall also be entitled to
all paid holidays given by the Company to its executives. To the extent that the
scope or nature of benefits described in this section are determined under the
policies of the Company based in whole or in part on the seniority or tenure of
an employee's service, Executive shall be deemed to have a tenure with the
Company equal to the actual time of Executive's service with Company.
(f) Disability Insurance. The Company shall pay the premiums on, and
maintain in effect through the Period of Employment, long-term disability
insurance providing for payment of benefits at rates not less than sixty percent
(60%) of Executive's current Base Salary or Adjusted Base Salary.
(g) Tax Loan. Upon the maturity of the Note, if Executive is still
employed by the Company, the Company shall provide Executive with a loan (the
"Tax Loan") in an amount sufficient to enable Executive to pay taxes due upon
the maturity of the Note. The Tax Loan shall (i) be personal recourse, (ii)
have a term of four (4) years, (iii) bear interest at the Company's revolver
interest rate, and (iv) require Executive to prepay with fifty percent (50%) of
the net after-tax proceeds of the sale of any shares of stock of the Company
acquired through option exercises and with twenty-five percent (25%) of the net
after-tax amount of any bonus payment from the Company.
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4. Unauthorized Disclosure.
(a) Confidential Information. Executive acknowledges that in the course
of his employment with the Company (and, if applicable, its predecessors), he
has been allowed to become, and will continue to be allowed to become,
acquainted with the Company's business affairs, information, trade secrets, and
other matters which are of a proprietary or confidential nature, including but
not limited to the Company's and its predecessors' operations, business
opportunities, price and cost information, finance, customer information,
business plans, various sales techniques, manuals, letters, notebooks,
procedures, reports, products, processes, services, and other confidential
information and knowledge (collectively the "Confidential Information")
concerning the Company's and its predecessors' business. The Company agrees to
provide on an ongoing basis such Confidential Information as the Company deems
necessary or desirable to aid Executive in the performance of his duties.
Executive understands and acknowledges that such Confidential Information is
confidential, and he agrees not to disclose such Confidential Information to
anyone outside the Company except to the extent that (i) Executive deems such
disclosure or use reasonably necessary or appropriate in connection with
performing his duties on behalf of the Company, (ii) Executive is required by
order of a court of competent jurisdiction (by subpoena or similar process) to
disclose or discuss any Confidential Information, provided that in such case,
Executive shall promptly inform the Company of such event, shall cooperate with
the Company in attempting to obtain a protective order or to otherwise restrict
such disclosure, and shall only disclose Confidential Information to the minimum
extent necessary to comply with any such court order; (iii) such Confidential
Information becomes generally known to and available for use by the hotel and
hospitality industry (the "Hotel Industry"), other than as a result of any
action or inaction by Executive; or (iv) such information has been rightfully
received by a member of the Hotel Industry or has been published in a form
generally available to the Hotel Industry prior to the date Executive proposes
to disclose or use such information. Executive further agrees that he will not
during employment and/or at any time thereafter use such Confidential
Information in competing, directly or indirectly, with the Company. At such time
as Executive shall cease to be employed by the Company, he will immediately turn
over to the Company all Confidential Information, including papers, documents,
writings, electronically stored information, other property, and all copies of
them provided to or created by him during the course of his employment with the
Company.
(b) Heirs, successors, and legal representatives. The foregoing
provisions of this Paragraph 4 shall be binding upon Executive's heirs,
successors, and legal representatives. The provisions of this Paragraph 4 shall
survive the termination of this Agreement for any reason.
5. Covenant Not to Compete. In consideration for the Option and the Loan and
for Executive's employment by the Company under the terms provided in this
Agreement and as a means to aid in the performance and enforcement of the terms
of the Unauthorized Disclosure provisions of Paragraph 4, Executive agrees that
(a) during the term of Executive's employment with the Company and for a
period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not, directly or indirectly, as an
owner, director, principal, agent, officer,
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employee, partner, consultant, servant, or otherwise, carry on, operate, manage,
control, or become involved in any manner with any business, operation,
corporation, partnership, association, agency, or other person or entity which
is in the business of owning, operating, managing or granting franchise rights
with respect to hotels, motels or other lodging facilities in any area or
territory in which the Company conducts operations; provided, however, that the
foregoing shall not prohibit Executive from owning up to one percent (1%) of the
outstanding stock of a publicly held company engaged in the hospitality
business. Notwithstanding the foregoing, Executive shall be permitted to engage
in such activities with respect to any other hotel, motel or lodging facility
that would be immaterial to the operations of the Company in the area or
territory in question. Immateriality, for purposes of the foregoing sentence,
shall be determined in the sole discretion of the Board in good faith.
(b) during the term of Executive's employment with the Company and for a
period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not, directly or indirectly, either
for himself or for any other business, operation, corporation, partnership,
association, agency, or other person or entity, call upon, compete for, solicit,
divert, or take away, or attempt to divert or take away any of the customers
(including, without limitation, any hotel owner, lessor or lessee, asset
manager, trustee, consumer with whom the Company from time to time (i) has an
existing agreement or business relationship; or (ii) has included as a prospect
in its applicable pipeline) or vendors of the Company in any of the areas or
territories in which the Company conducts operations if such action has the
intent or effect of interfering with the Company's relationship with the vendor
or customer.
(c) during the term of Executive's employment with the Company and for a
period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any present or future employee of the Company to accept employment with
Executive or with any business, operation, corporation, partnership,
association, agency, or other person or entity with which Executive may be
associated, and Executive will not employ or cause any business, operation,
corporation, partnership, association, agency, or other person or entity with
which Executive may be associated to employ any present or future employee of
the Company without providing the Company with ten (10) days' prior written
notice of such proposed employment.
Should Executive violate the provisions of this Paragraph, then in addition
to all other rights and remedies available to the Company at law or in equity,
the duration of this covenant shall automatically be extended for the period of
time from which Executive began such violation until he permanently ceases such
violation.
6. Termination. Executive's employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his
death.
(b) Disability. If, as a result of Executive's incapacity due to physical
or mental illness, Executive shall have been absent from his duties hereunder on
a full-time basis for one
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hundred eighty (180) calendar days in the aggregate in any twelve (12) month
period, the Company may terminate Executive's employment hereunder.
(c) Termination by Company For Cause. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder for Cause
if such termination is approved by not less than a majority of the Board of
Directors of the Company at a meeting of such Board of Directors called and held
for such purpose. For purposes of this Agreement "Cause" shall mean: (A)
conduct by Executive constituting a material act of willful misconduct in
connection with the performance of his duties, including, without limitation,
misappropriation of funds or property of the Company or any of its affiliates
other than the occasional, customary and de minimis use of Company property for
personal purposes; (B) criminal or civil conviction of Executive, a plea of nolo
contendere by Executive or conduct by Executive that would reasonably be
expected to result in material injury to the reputation of the Company if he
were retained in his position with the Company, including, without limitation,
conviction of a felony involving moral turpitude; (C) continued, willful and
deliberate non-performance by Executive of his duties hereunder (other than by
reason of Executive's physical or mental illness, incapacity or disability) and
such non-performance has continued for more than thirty (30) days following
written notice of such non-performance from the Board; (D) a breach by Executive
of any of the provisions contained in Paragraphs 4 and 5 of this Agreement; or
(E) a violation by Executive of the Company's employment policies and such
violation has continued following written notice of such violation from the
Board.
(d) Termination Without Cause. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder without
Cause if such termination is approved by a majority of the Board at a meeting of
the Board called and held for such purpose. Any termination by the Company of
Executive's employment under this Agreement which does not constitute a
termination for Cause under Subparagraph 6(c) or result from the death or
disability of the Executive under Subparagraph 6(a) or (b) shall be deemed a
termination without Cause. If the Company provides notice to the Executive
under Paragraph 1 that it does not wish to extend the Period of Employment, such
action shall be deemed a termination without Cause.
(e) Termination by Executive. At any time during the Period of
Employment, Executive may terminate his employment hereunder for any reason,
including but not limited to Good Reason. If Executive provides notice to the
Company under Paragraph 1 that he does not wish to extend the Period of
Employment, such action shall be deemed a voluntary termination by Executive and
one without Good Reason. For purposes of this Agreement, "Good Reason" shall
mean that Executive has complied with the "Good Reason Process" (hereinafter
defined) following the occurrence of any of the following events: (A) a
substantial diminution or other substantive adverse change, not consented to by
Executive, in the nature or scope of Executive's responsibilities, authorities,
powers, functions or duties, other than a change in Executive's position or
reporting relationship; (B) any removal, during the Period of Employment, from
Executive of his title of Executive Vice President; (C) an involuntary reduction
in Executive's Base Salary or Adjusted Base Salary or involuntary reduction in
cash incentive compensation plan (but not reduction in incentive compensation
appropriate for level of performance) except for across-the-board salary
reductions similarly affecting all or substantially all management
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employees; (D) a breach by the Company of any of its other material obligations
under this Agreement and the failure of the Company to cure such breach within
thirty (30) days after written notice thereof by Executive; (E) the involuntary
relocation of the Company's offices at which Executive is principally employed
or the involuntary relocation of the offices of Executive's primary workgroup to
a location more than thirty (30) miles from such offices (other than a
relocation in either event to Dallas, Texas), or the requirement by the Company
for Executive to be based anywhere other than the Company's offices at such
location or in Dallas, Texas on an extended basis, except for required travel on
the Company's business to an extent substantially consistent with Executive's
business travel obligations; or (F) the requirement that Executive report to a
person who is below the level of an Executive Vice President. "Good Reason
Process" shall mean that (i) the Executive reasonably determines in good faith
that a "Good Reason" event has occurred; (ii) Executive notifies the Company in
writing of the occurrence of the Good Reason event; (iii) Executive cooperates
in good faith with the Company's efforts, for a period not less than ninety (90)
days following such notice, to modify Executive's employment situation in a
manner acceptable to Executive and Company; and (iv) notwithstanding such
efforts, one or more of the Good Reason events continues to exist and has not
been modified in a manner acceptable to Executive. If the Company cures the Good
Reason event during the ninety (90) day period, Good Reason shall be deemed not
to have occurred.
(f) Notice of Termination. Except for termination as specified in
Subparagraph 6(a), any termination of Executive's employment by the Company or
any such termination by Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.
(g) Date of Termination. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated on account of disability under Subparagraph
6(b) or by the Company for Cause under Subparagraph 6(c), the date on which
Notice of Termination is given; (C) if Executive's employment is terminated by
the Company under Subparagraph 6(d), sixty (60) days after the date on which a
Notice of Termination is given; and (D) if Executive's employment is terminated
by Executive under Subparagraph 6(e), thirty (30) days after the date on which a
Notice of Termination is given.
7. Compensation Upon Termination or During Disability.
(a) If Executive's employment terminates by reason of his death, the
Company shall, within ninety (90) days of death, pay in a lump sum amount to
such person as Executive shall designate in a notice filed with the Company or,
if no such person is designated, to Executive's estate, Executive's accrued and
unpaid Base Salary or, if applicable, his Adjusted Base Salary, to the date of
his death, plus his accrued and unpaid incentive compensation, if any, under
Subparagraph 3(a). For a period of one (1) year following the Date of
Termination, the Company shall pay such health insurance premiums as may be
necessary to allow Executive's spouse and dependents to receive health insurance
coverage substantially similar to coverage they received prior to the Date of
Termination. In addition to the foregoing, any payments to which
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Executive's spouse, beneficiaries, or estate may be entitled under any employee
benefit plan shall also be paid in accordance with the terms of such plan or
arrangement. Such payments, in the aggregate, shall fully discharge the
Company's obligations hereunder.
(b) During any period that Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, Executive
shall continue to receive his accrued and unpaid Base Salary or, if applicable,
his Adjusted Base Salary and accrued and unpaid incentive compensation payments,
if any, under Subparagraph 3(a), until Executive's employment is terminated due
to disability in accordance with Subparagraph 6(b) or until Executive terminates
his employment in accordance with Subparagraph 6(e), whichever first occurs. For
a period of one (1) year following the Date of Termination, the Company shall
pay such health insurance premiums as may be necessary to allow Executive,
Executive's spouse and dependents to receive health insurance coverage
substantially similar to coverage they received prior to the Date of
Termination. Upon termination due to death prior to the termination first to
occur as specified in the preceding sentence, Subparagraph 7(a) shall apply.
(c) If Executive's employment is terminated by Executive other than for
Good Reason as provided in Subparagraph 6(e), then the Company shall, through
the Date of Termination, pay Executive his accrued and unpaid Base Salary or, if
applicable, his Adjusted Base Salary at the rate in effect at the time Notice of
Termination is given. Thereafter, the Company shall have no further obligations
to Executive except as otherwise expressly provided under this Agreement,
provided any such termination shall not adversely affect or alter Executive's
rights under any employee benefit plan of the Company in which Executive, at the
Date of Termination, has a vested interest, unless otherwise provided in such
employee benefit plan or any agreement or other instrument attendant thereto.
(d) If Executive terminates his employment for Good Reason as provided in
Subparagraph 6(e) or if Executive's employment is terminated by the Company
without Cause as provided in Subparagraph 6(d), then the Company shall, through
the Date of Termination, pay Executive his accrued and unpaid Base Salary or, if
applicable, his Adjusted Base Salary at the rate in effect at the time Notice of
Termination is given and his accrued and unpaid incentive compensation, if any,
under Subparagraph 3(a). In addition, subject to signing by Executive of a
general release of claims in a form and manner satisfactory to the Company,
(i) the Company shall continue Executive's compensation at a rate
equal to the sum of Executive's Average Base Salary and his Average
Incentive Compensation payable for the remaining length of the Period of
Employment after the Date of Termination (the "Severance Amount"), but in
no event for fewer than twenty-four (24) months. The Severance Amount
shall be paid out in substantially equal bi-weekly installments, in
arrears; provided, however, that in the event Executive commences any
employment during such period, the Company shall be entitled to set-off
against the remaining Severance Amount seventy-five percent (75%) of the
amount of any cash compensation received by Executive from the new
employer. From time to time, Executive may be asked to certify to the
Company that he has not accepted employment with a new employer (including,
without limitation, contract and consulting agreements).
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For purposes of this Agreement, "Average Base Salary" shall mean the
average of the annual Base Salary or, if applicable, Adjusted Base Salary
received by Executive for each of the three (3) immediately preceding
fiscal years or such fewer number of complete fiscal years as Executive may
have been employed by the Company. For purposes of this Agreement, "Average
Incentive Compensation" shall mean the average of the annual incentive
compensation under Subparagraph 3(a) received by Executive for the three
(3) immediately preceding fiscal years or such fewer number of complete
fiscal years as Executive may have been employed by the Company. In no
event shall "Average Incentive Compensation" include any sign-on bonus,
retention bonus or any other special bonus. Notwithstanding the foregoing,
if the Executive breaches any of the provisions contained in Paragraphs 4
and 5 of this Agreement, all payments of the Severance Amount shall
immediately cease. Notwithstanding the foregoing, in the event Executive
terminates his employment for Good Reason as provided in Subparagraph 6(e),
he shall be entitled to the Severance Amount only if he provides the Notice
of Termination provided for in Subparagraph 6(f) within thirty (30) days
after the occurrence of the event or events which constitute such Good
Reason as specified in clauses (A), (B), (C), (D) (E) and (F) of
Subparagraph 6(e);
(ii) in addition to any other benefits to which Executive may be
entitled in accordance with the Company's then existing severance policies,
the Company shall, for a period of one (1) year commencing on the Date of
Termination, pay such health insurance premiums as may be necessary to
allow Executive, Executive's spouse and dependents to continue to receive
health insurance coverage substantially similar to the coverage they
received prior to his termination of employment.
(e) If Executive's employment is terminated by the Company for Cause as
provided in Subparagraph 6(c), then the Company shall, through the Date of
Termination, pay Executive his accrued and unpaid Base Salary or, if applicable,
his Adjusted Base Salary at the rate in effect at the time Notice of Termination
is given. Thereafter, the Company shall have no further obligations to
Executive except as otherwise expressly provided under this Agreement, provided
any such termination shall not adversely affect or alter Executive's rights
under any employee benefit plan of the Company in which Executive, at the Date
of Termination, has a vested interest, unless otherwise provided in such
employee benefit plan or any agreement or other instrument attendant thereto.
(f) Regardless of the reason for termination, for a period of five (5)
years beginning on the Date of Termination, the Company will provide such
reasonable assistance and support to Executive as he shall reasonably require in
connection with the preparation and filing of tax returns, statements and forms
insofar as such returns, statements or forms relate to Executive's association
with the Company or any of its predecessors or affiliates. At the Company's
election, such assistance and support shall be provided by either tax personnel
from the Company or certified public accountants selected and compensated by the
Company.
(g) Nothing contained in the foregoing Subparagraphs 7(a) through 7(f)
shall be construed so as to affect Executive's rights or the Company's
obligations relating to agreements or benefits which are unrelated to
termination of employment.
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8. Change in Control Payment. The provisions of this Paragraph 8 set forth
certain terms of an agreement reached between Executive and the Company
regarding Executive's rights and obligations upon the occurrence of a Change in
Control of the Company. These provisions are intended to assure and encourage
in advance Executive's continued attention and dedication to his assigned duties
and his objectivity during the pendency and after the occurrence of any such
event. These provisions shall apply in lieu of, and expressly supersede, the
provisions of Subparagraph 7(d)(i) regarding severance pay upon a termination of
employment, if such termination of employment occurs within eighteen (18) months
after the occurrence of the first event constituting a Change of Control;
provided that such first event occurs during the Period of Employment. These
provisions shall terminate and be of no further force or effect beginning
eighteen (18) months after the occurrence of a Change of Control.
(a) Change in Control.
(i) If within eighteen (18) months after the occurrence of the
first event constituting a Change in Control, Executive's employment is
terminated by the Company without Cause as provided in Subparagraph 6(d) or
Executive terminates his employment for Good Reason as provided in
Subparagraph 6(e), then the Company shall pay Executive the Severance
Amount as provided in Subparagraph 7(d)(i) in substantially bi-weekly
installments, in arrears, over twenty-four (24) months. Notwithstanding the
foregoing, if the Executive breaches any of the provisions contained in
Paragraphs 4 and 5 of this Agreement, all payments of the Severance Amount
shall immediately cease; and
(ii) Within fifteen (15) days after Executive becomes entitled to
receive the Severance Amount under (i) above, the Company shall place funds
in an amount equal to the estimated Severance Amount in escrow, pursuant to
arrangements that are mutually acceptable to the Company and Executive (the
"Escrow Arrangement"). The Escrow Arrangement shall be maintained until
the final installment payment of the Severance Amount has been made;
(iii) Notwithstanding anything to the contrary in any applicable
option agreement or stock-based award agreement, if Executive terminates
his employment for Good Reason as provided in Subparagraph 6(e) or if
Executive's employment is terminated by the Company without Cause as
provided in Subparagraph 6(d) within eighteen (18) months of a Change in
Control, all stock options and other stock-based awards granted to
Executive by the Company shall immediately accelerate and become
exercisable or non-forfeitable as of the Date of Termination, and Executive
shall have 360 days to exercise all his stock options. Executive shall
also be entitled to any other rights and benefits with respect to stock-
related awards, to the extent and upon the terms provided in the employee
stock option or incentive plan or any agreement or other instrument
attendant thereto pursuant to which such options or awards were granted;
and
(iv) The Company shall, for a period of one (1) year commencing on
the Date of Termination, pay such health insurance premiums as may be
necessary to allow
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Executive, Executive's spouse and dependents to continue to receive health
insurance coverage substantially similar to the coverage they received
prior to his termination of employment.
(b) Gross Up Payment.
(i) Excess Parachute Payment. If Executive incurs the tax (the
"Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986
(the "Code") on "excess parachute payments" within the meaning of Section
280G(b)(1) of the Code, the Company will pay to Executive an amount (the
"Gross Up Payment") such that the net amount retained by Executive, after
deduction of any Excise Tax on the excess parachute payment and any
federal, state and local income taxes and employment taxes (together with
penalties and interest) and Excise Tax upon the payment provided for by
this Subparagraph 8(c)(i), will be equal to the Severance Amount.
(ii) Applicable Rates. For purposes of determining the amount of the
Gross Up Payment, Executive will 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 rates of taxation in the state and locality
of Executive's residence on the date of Executive's Termination, net of the
maximum reduction in federal income taxes that could be obtained from
deduction of such state and local taxes.
(iii) Determination of Gross Up Payment Amount. The determination of
whether the Excise Tax is payable and the amount thereof will be based upon
the opinion of tax counsel selected by Executive and approved by the
Company, which approval will not be unreasonably withheld. If such opinion
is not finally accepted by the Internal Revenue Service (or state and local
taxing authorities), then appropriate adjustments to the Excise Tax will be
computed and additional Gross Up Payments will be made in the manner
provided by this Subparagraph (c).
(iv) Time For Payment. The Company will pay the estimated amount of
the Gross Up Payment in cash to Executive at such time or times when the
Excise Tax is due. Executive and the Company agree to reasonably cooperate
in the determination of the actual amount of the Gross Up Payment.
Further, Executive and the Company agree to make such adjustments to the
estimated amount of the Gross Up Payment as may be necessary to equal the
actual amount of the Gross Up Payment, which in the case of Executive will
refer to refunds of prior overpayments and in the case of the Company will
refer to makeup of prior underpayments.
(c) Definitions. For purposes of this Paragraph 8, the following terms
shall have the following meanings:
"Change in Control" shall mean any of the following:
11
(a) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (the
"Acquiring Person"), other than the Company, or any of its Subsidiaries or
any Investor or Excluded Group, of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
combined voting power or economic interests of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors; provided, however, that any transfer from any Investor or
Excluded Group will not result in a Change in Control if such transfer was
part of a series of related transactions the effect of which, absent the
transfer to such Acquiring Person by the Investor or Excluded Group, would
not have resulted in the acquisition by such Acquiring Person of 35% or
more of the combined voting power or economic interests of the then
outstanding voting securities; or
(b) during any period of 12 consecutive months after the Issuance
Date, the individuals who at the beginning of any such 12-month period
constituted a majority of the Class A Directors and Class C Directors (the
"Incumbent Non-Investor Majority") cease for any reason to constitute at
least a majority of such Class A Directors and Class C Directors; provided
that (i) any individual becoming a director whose election, or nomination
for election by the Company's stockholders, was approved by a vote of the
stockholders having the right to designate such director and (ii) any
director whose election to the Board or whose nomination for election by
the stockholders of the Company was approved by the requisite vote of
directors entitled to vote on such election or nomination in accordance
with the Restated Certificate of Incorporation of the Company, shall, in
each such case, be considered as though such individual were a member of
the Incumbent Non-Investor Majority, but excluding, as a member of the
Incumbent Non-Investor Majority, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) and further excluding any person who is an affiliate or
associate of an Acquiring Person having or proposing to acquire beneficial
ownership of 25% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors; or
(c) the approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who were the
respective beneficial owners of the voting securities of the Company
immediately prior to such reorganization, merger or consolidation do not,
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 57.5% of the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors of the Company resulting from such reorganization,
merger or consolidation; or
(d) the sale or other disposition of assets representing 50% or
more of the assets of the Company in one transaction or series of related
transactions .
12
All defined terms used in the definition of "Change in Control" shall have
the same meaning as set forth in the Form of Certificate of Designation of
Series B Convertible Preferred Stock of Wyndham International, Inc.
"Company" shall mean not only Wyndham International, Inc., but also
its successors by merger or otherwise.
9. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
if to the Executive:
At his home address as shown
in the Company's personnel records;
if to the Company:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Senior Vice President of Human Resources and General
Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
10. Miscellaneous. No provisions of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the State of Texas (without regard to principles of
conflicts of laws).
11. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. The invalid portion of this Agreement, if any, shall be modified by any
court having jurisdiction to the extent necessary to render such portion
enforceable.
13
12. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
13. Arbitration; Other Disputes. In the event of any dispute or controversy
arising under or in connection with this Agreement, the parties shall first
promptly try in good faith to settle such dispute or controversy by mediation
under the applicable rules of the American Arbitration Association before
resorting to arbitration. In the event such dispute or controversy remains
unresolved in whole or in part for a period of thirty (30) days after it arises,
the parties will settle any remaining dispute or controversy exclusively by
arbitration in Dallas, Texas, 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. Notwithstanding the above,
the Company shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any continuation of any violation of
Paragraph 4 or 5 hereof. Furthermore, should a dispute occur concerning
Executive's mental or physical capacity as described in Subparagraph 6(b), 6(c)
or 7(b), a doctor selected by Executive and a doctor selected by the Company
shall be entitled to examine Executive. If the opinion of the Company's doctor
and Executive's doctor conflict, the Company's doctor and Executive's doctor
shall together agree upon a third doctor, whose opinion shall be binding. Any
amount to which Executive is entitled under this Agreement (including any
disputed amount), which is not paid when due, shall bear interest at a rate
equal to the lesser of eighteen percent (18%) per annum or the maximum lawful
rate.
14. Third-Party Agreements and Rights. Executive represents to the Company
that Executive's execution of this Agreement, Executive's employment with the
Company and the performance of Executive's proposed duties for the Company will
not violate any obligations Executive may have to any employer or other party,
and Executive will not bring to the premises of the Company any copies or other
tangible embodiments of non-public information belonging to or obtained from any
such previous employment or other party.
15. Litigation and Regulatory Cooperation. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect Executive or expose Executive to an increased probability of civil or
criminal litigation. Executive's cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after Executive's
employment, Executive also shall cooperate fully with the Company in connection
with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences
that transpired while Executive was employed by the Company. The Company shall
also provide Executive with compensation on an hourly basis (to be derived from
the sum of his Base Compensation or, if applicable, Adjusted
14
Base Salary and Average Incentive Compensation) for requested litigation and
regulatory cooperation that occurs after his termination of employment, and
reimburse Executive for all costs and expenses incurred in connection with his
performance under this Paragraph 15, including, but not limited to, reasonable
attorneys' fees and costs.
16. Gender Neutral. Wherever used herein, a pronoun in the masculine gender
shall be considered as including the feminine gender unless the context clearly
indicates otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on
the date and year first above written.
WYNDHAM INTERNATIONAL, INC.
By:
-----------------------------------------
Its: Chairman and Chief Executive Officer
-----------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
15
Exhibit A
WYNDHAM INTERNATIONAL, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Dated as of April 19 , 1999
Wyndham International, Inc., a corporation organized under the laws of
Delaware (the "Company"), hereby grants to Xxxxxxx X. Xxxxxx, Xx., an Employee
of the Company (the "Optionee"), as of April 19, 1999 (the "Date of Grant"), a
non-qualified option (the "Option") to purchase from the Company 400,000 Paired
Shares, at the price of $5.00 per Paired Share, subject to the terms and
conditions set forth below. Such grant is pursuant to the Wyndham International,
Inc. 1997 Incentive Plan (the "Plan") and is made as an inducement to Optionee
to enter into the Employment Agreement between Optionee and the Company of even
date herewith (the "Employment Agreement").
1. Option Subject to Acceptance of Option Agreement and Employment Agreement.
The Option may not be exercised unless the Optionee accepts this Option
Agreement and the Employment Agreement by executing both the Option
Agreement and the Employment Agreement and returning such original execution
copies to the Company.
2. Time and Manner of Exercise of Option.
a. Maximum Term of Option. The Expiration Date of this Option is the date
that is ten years from the Date of Grant. This Option may not be
exercised on or after the Expiration Date.
b. Vesting Schedule. No portion of this Option may be exercised until
such portion shall have vested. Except as set forth in Section 3 of
this Agreement, this Option shall be vested and exercisable with
respect to the following number of Paired Shares on the date indicated
below provided that Optionee remains employed by the Company on such
date:
============================================================
Vesting Schedule A
============================================================
Number of Paired
Shares Exercisable Vesting Date
------------------------------------------------------------
400,000 (100%) February 13, 2009
============================================================
Notwithstanding the foregoing, upon the closing (the "Closing") of the
Securities Purchase Agreement (the "Securities Purchase Agreement") by
and among Patriot American Hospitality, Inc., Wyndham International,
Inc., Patriot American Hospitality Partnership, L.P. and the Investors
named therein dated as of February 28, 1999, as amended from time to
time, the foregoing vesting schedule shall not apply and except as set
forth in Section 3 of this Agreement, this Option shall be vested and
exercisable with respect to the following number
of Paired Shares on the dates indicated below provided that Optionee
remains employed by the Company on such dates:
=============================================================
Vesting Schedule B
=============================================================
Number of Paired
Shares Exercisable Vesting Date
-------------------------------------------------------------
80,000 (20%) 1 year after Date of Grant
-------------------------------------------------------------
80,000 (20%) 2 years after Date of Grant
-------------------------------------------------------------
80,000 (20%) 3 years after Date of Grant
-------------------------------------------------------------
80,000 (20%) 4 years after Date of Grant
-------------------------------------------------------------
80,000 (20%) 5 years after Date of Grant
-------------------------------------------------------------
In the event of a Change in Control of the Company (as defined in the
Employment Agreement), if within 18 months of such Change in Control, the
Optionee's employment with the Company is terminated by the Company without
Cause (as defined in the Employment Agreement) or for Good Reason (as
defined in the Employment Agreement)), any unvested portions of this Option
shall fully vest and become exercisable. Notwithstanding the foregoing, the
purchase of securities by the Investors pursuant to the Securities Purchase
Agreement shall not be deemed to be a Change in Control.
A partial exercise of this Option shall not affect Optionee's right to
exercise this Option with respect to the remaining Paired Shares.
c. Method of Exercise of Option. Subject to the limitations set forth in this
Agreement, the Option may be exercised by the Optionee (1) by giving written
notice to the Company specifying the number of whole Paired Shares to be
purchased and accompanied by payment of the Option price in full (or
arrangement made for such payment to the Company 's satisfaction) either (i)
in cash or cash equivalent acceptable to the Committee, (ii) in previously
owned Paired Shares (which the Optionee has held for at least six months
prior to the delivery of such Paired Shares or which the Optionee purchased
on the open market and for which the Optionee has good title, free and clear
of all liens and encumbrances) having a Fair Market Value, determined as of
the date of exercise, equal to the aggregate purchase price payable pursuant
to the Option by reason of such exercise, (iii) in cash or a check payable
and acceptable to the Company by a broker-dealer acceptable to the Company
to whom the Optionee has submitted an irrevocable notice of exercise or (iv)
a combination of two or more of the foregoing, and (2) by executing such
documents as the Company may reasonably request. Any fraction of a Paired
Share which would be
2
required to pay such purchase price shall be disregarded and the
remaining amount due shall be paid in cash by the Optionee.
The delivery of certificates representing the Paired Shares subject to
the Option will be contingent upon the Company's receipt from Optionee
of (1) full payment of the Option price, as set forth above, and (2)
any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Paired Shares to be
purchased pursuant to the exercise of the Option and the subsequent
resale of Paired Shares will be in compliance with applicable laws and
regulations.
3. Exercise After Termination of Employment. If the Optionee's employment by
the Company or an Affiliate is terminated, the period within which to
exercise the Option may be subject to earlier termination as set forth
below. The Board's determination of the reason for termination of the
Optionee's employment shall be conclusive and binding on the Optionee and
his or her legal representatives or legatees. Any transfer of employment
from the Company to any Affiliate of the Company shall not be deemed to be a
termination of employment for purposes of this Agreement.
a. Termination Due to Death. If, on or after the Closing, the Optionee's
employment terminates by reason of death, the Option held by the
Optionee shall vest and become exercisable in accordance with the
Vesting Schedule B as set forth in Section 2(b), plus an additional
number of Paired Shares that would have vested on the next vesting
anniversary date. The Optionee's legal representative or legatee may
exercise the Option to the extent exercisable in accordance with this
Section 3(a), for a period of 360 days from the date of death or until
the Expiration Date, if earlier. Any portion of the Option that is not
exercisable at the time of death shall terminate immediately and be of
no further force or effect.
Notwithstanding the foregoing, if the Optionee's employment terminates
by reason of death on or after the Date of Grant but before the
Closing, the Option held by the Optionee shall vest and become
exercisable in accordance with Vesting Schedule A as set forth in
Section 2(b).
b. Termination Due to Disability. If, on or after the Closing, the
Optionee's employment terminates by reason of incapacity due to
physical or mental illness which resulted in his or her absence from
his or her duties with the Company on a full-time basis for 180
calendar days in the aggregate in any 12-month period, the Option held
by the Optionee shall vest and become exercisable in accordance with
the Vesting Schedule B as set forth in Section 2(b), plus an additional
number of Paired Shares that would have vested on the next vesting
anniversary date. The Optionee may exercise the Option to the extent
exercisable in accordance with this Section 3(b), for a period of 360
days from the date of
3
termination of employment or until the Expiration Date, if earlier. Any
portion of the Option that is not exercisable upon termination of employment
shall terminate immediately and be of no further force or effect.
Notwithstanding the foregoing, if, on or after the Date of Grant but before
the Closing, the Optionee's employment terminates by reason of incapacity
due to physical or mental illness which resulted in his or her absence from
his or her duties with the Company on a full-time basis for 180 calendar
days in the aggregate in any 12-month period, the Option held by the
Optionee shall vest and become exercisable in accordance with Vesting
Schedule A as set forth in Section 2(b).
c. Termination without Cause or for Good Reason. If, on or after the Closing,
the Optionee's employment is terminated by the Company without Cause (as
defined in the Employment Agreement) or the Optionee resigns from the
Company for Good Reason (as defined in the Employment Agreement), the Option
held by the Optionee shall continue to vest and become exercisable in
accordance with the Vesting Schedule B as set forth in Section 2(b) for an
additional 24 months. The Optionee may exercise the Option, to the extent
exercisable in accordance, with this Section 3(c), for a period of 360 days
after the end of the 24-month period or until the Expiration Date, if
earlier. Any portion of the Option that is not exercisable at the end of 24
months following termination of employment shall terminate immediately and
be of no further force or effect.
Notwithstanding the foregoing, if Optionee breaches any of the provisions
contained in Paragraph 4 or 5 of the Employment Agreement, (i) any portion
of the Option that vested or will vest by virtue of this Section 3(c) shall
immediately terminate and be of no force and effect, and (ii) to the extent
any portion of the Option that vested by virtue of this Section 3(c) has
been exercised, Optionee shall be required to disgorge to the Company the
difference between the fair market value per Paired Share on the date of
exercise and the Option price per Paired Share, multiplied by the number of
Paired Shares acquired by Optionee.
Furthermore, notwithstanding the foregoing, if the Optionee's employment is
terminated by the Company without Cause (as defined in the Employment
Agreement) or the Optionee resigns from the Company for Good Reason (as
defined in the Employment Agreement) on or after the Date of Grant but
before the Closing or a Change in Control, the Option held by the Optionee
shall vest and become exercisable in accordance with Vesting Schedule A as
set forth in Section 2(b).
4
d. Termination for Cause. If the Optionee's employment is terminated for
Cause (as defined in the Employment Agreement), the Option held by the
Optionee shall terminate immediately and be of no further force and
effect.
e. Other Termination. If the Optionee's employment terminates for any
reason not covered in Subsections (a), (b), (c) or (d) of this Section
3, the Option held by the Optionee may be exercised, to the extent
exercisable on the date of termination pursuant to the applicable
vesting schedule in Section 2(b), for a period of three (3) months
from the date of termination or until the Expiration Date, if earlier.
Any portion of the Option that is not exercisable at such time shall
terminate immediately and be of no further force or effect.
4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this
Option shall be subject to and governed by all the terms and conditions of
the Plan. Capitalized terms in this Agreement shall have the meaning
specified in the Plan, unless a different meaning is specified herein. All
references herein to the Plan shall mean the Plan in effect as of the date
hereof. In the event of any conflict between the provisions in the Plan and
the provisions in this Agreement, the provisions of the Plan shall govern.
5. Additional Terms and Conditions of Option.
a. Nontransferability of Option. This Agreement is personal to the
Optionee, is non-assignable and is not transferable in any manner, by
operation of law or otherwise, other than by will or the laws of
descent and distribution. This Option is exercisable, during the
Optionee's lifetime, only by the Optionee, and thereafter only by the
Optionee's legal representative or legatee.
b. Delivery of Certificates. Upon the exercise of the Option, in whole or
in part, the Company shall deliver or cause to be delivered one or
more certificates representing the number of Paired Shares purchased
against full payment therefor. The Company shall pay all original
issue or transfer taxes and all fees and expenses incident to such
delivery.
c. Option Confers No Rights as Stockholder. The Optionee shall not be
entitled to any privileges of ownership with respect to Paired Shares
subject to the Option unless and until purchased and delivered upon
the exercise of the Option, in whole or in part, and the Optionee
becomes a stockholder of record with respect to such delivered Paired
Shares; and the Optionee shall not be considered a stockholder of the
Company with respect to any such Paired Shares not so purchased and
delivered.
d. Decisions of Committee. The Committee shall have the right to resolve
all questions which may arise in connection with the Option or its
exercise. Any
5
interpretation, determination or other action made or taken by the
Committee regarding this Agreement shall be final, binding and
conclusive.
e. Reservation of Paired Shares. The Company shall at all times prior to
the expiration or termination of the Option reserve or cause to be
reserved and keep or cause to be kept available, either in its
treasury or out of its authorized but unissued shares of common stock,
the full number of shares of common stock of the Company subject to
the Option from time to time. In addition, pursuant to Section 2(c) of
the Pairing Agreement, the Company shall request Patriot American
Hospitality, Inc. to issue the number of shares of common stock of
Patriot American Hospitality, Inc. subject to the Option so that the
Optionee shall receive Paired Shares upon exercise of the Option.
f. Change in Capital Structure. The terms of this Option shall be
adjusted as the Committee determines is equitably required in the
event the Company effects one or more stock dividends, stock split-
ups, subdivisions or consolidations of shares or other similar changes
in capitalization.
g. Fractional Shares. Fractional shares shall not be issuable hereunder,
and when any provision hereof may entitle Optionee to a fractional
share such fraction shall be disregarded.
6. Tax Withholding. The Optionee shall, not later than the date as of which the
exercise of this Option becomes a taxable event for Federal income tax
purposes, pay to the Company or make arrangements satisfactory to the
Committee for payment of any Federal, state, and local taxes required by law
to be withheld on account of such taxable event. Subject to the approval of
the Committee, the Optionee may elect to have such tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from Paired Shares to be issued, or (ii) transferring to the
Company a number of previously owned whole Paired Shares (which the Optionee
has held for at least six months prior to the delivery of such Paired Shares
or which the Optionee purchased on the open market and for which the
Optionee has good title, free and clear of all liens and encumbrances)
having an aggregate Fair Market Value, determined as of the date of
exercise, that would satisfy the withholding amount due.
7. Miscellaneous Provisions.
a. Designation as Non-qualified Stock Option. The Option is hereby
designated as not constituting an "incentive stock option" within the
meaning of section 422 of the Code. This Agreement shall be
interpreted and treated consistently with such designation.
b. Successors. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and any person
or persons who
6
shall, upon the death of the Optionee, acquire any rights hereunder in
accordance with this Agreement or the Plan.
c. Notices. All notices, requests or other communications provided for in
this Agreement shall be made, if to the Company, to the Secretary of
the Company at the Company's principal executive office, and if to the
Optionee, to his or her address on the books of the Company (or to
such other address as the Company or the Optionee may give to the
other for purposes of notice hereunder).
All notices, requests or other communications provided for in this
Agreement shall be made in writing either (a) by personal delivery to
the party entitled thereto, (b) by facsimile with confirmation of
receipt, (c) by mailing in the United States mail to the last known
address of the party entitled thereto or (d) by express courier
service. The notice, request or other communication shall be deemed to
be received upon personal delivery, upon confirmation of receipt of
facsimile transmission or upon receipt by the party entitled thereto
if by United States mail or express courier service; provided,
however, that if a notice, request or other communication in not
received during regular business hours, it shall be deemed to be
received on the next succeeding business day of the Company.
d. Governing Law. This Agreement and all determinations made and actions
taken pursuant hereto and thereto, to the extent not governed by the
laws of the United States, shall be governed by the laws of the State
of Delaware and construed in accordance therewith without giving
effect to principles of conflicts of laws.
e. Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original and both of which together shall
constitute one and the same instrument.
f. Further Assurances. The Company and the Optionee shall execute and
deliver such further instruments and take such additional action as
each party may reasonably request to effect, consummate, confirm or
evidence the grant of the Option to the Optionee, and they shall each
execute such documents as may be reasonably necessary to assist each
other in preserving or perfecting their respective rights in the
Option.
g. No Right to Continued Employment. This Agreement does not confer upon
Optionee any right to continue in the employ of the Company or an
Affiliate,
7
nor shall it interfere in any way with the right of the Company or an
Affiliate to terminate such employment at any time.
WYNDHAM INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXXXXXX
-----------------------------
Title: Chairman and CEO
--------------------------
Accepted this ____ day of __________, 1999.
/s/ XXXXXXX X. XXXXXX, XX.
-----------------------------------
Xxxxxxx X. Xxxxxx, Xx.
"Optionee"
8
Exhibit B
NO PERSONAL LIABILITY NONRECOURSE PROMISSORY NOTE
Dallas, Texas
$2,163,455.00 April 19, 1999
FOR VALUE RECEIVED, XXXXXXX X. XXXXXX, XX. (referred to herein as the
"Maker"), promises to pay to WYNDHAM INTERNATIONAL, INC. , a Delaware
corporation (referred to herein as the "Payee"), or its assigns, the sum of TWO
MILLION ONE HUNDRED SIXTY-THREE THOUSAND FOUR HUNDRED FIFTY-FIVE DOLLARS AND NO
CENTS ($2,163,455.00), together with interest on the unpaid principal balance
as set forth below.
1. Certain Definitions. The following terms, when used in this Note,
shall have the meanings assigned to them below:
(a) Collateral. The term "Collateral" shall mean 69,356 paired shares
of the common stock, $.01 par value, of Wyndham International, Inc. and Patriot
American Hospitality, Inc. (the "Shares") and all dividends, distributions and
payments in respect of the Shares ("Proceeds").
(b) Fixed Rate. The term "Fixed Rate" means the rate of six percent
(6%) per annum, compounded annually.
(c) Market Value. The term "Market Value," when used with reference
to Shares as of any date, shall mean the average of the closing sale prices for
a Share, on the principal national securities exchange on which the Shares are
listed, for each trading day during the 90-day period immediately preceding the
date in question.
(d) Maximum Rate. The term "Maximum Rate" shall mean, on any day, the
highest nonusurious rate of interest (if any) permitted by applicable law on
such day. For purposes of Tex. Rev. Civ. Stat. Xxx. Art. 5069-1.04(b), as it
may from time to time be amended, the "applicable rate ceiling" shall be the
"indicated rate" ceiling from time to time in effect as limited by Art.
5069-1.04(b); provided, however, that to the extent permitted by applicable law,
Payee reserves the right to change the "applicable rate ceiling" from time to
time by further notice and disclosure to Maker; and, provided further, that the
"highest nonusurious rate of interest permitted by applicable law" for purposes
of this Note shall not be limited to the applicable rate ceiling under Art.
5069-1.04 if federal laws or other state laws now or hereafter in effect and
applicable to this Note (and the interest contracted for, charged and collected
hereunder) shall permit a higher rate of interest.
2. Interest Rate. The unpaid principal balance from the date hereof until
maturity shall bear interest at a rate per annum equal to the lesser of the
Fixed Rate or the Maximum Rate. Interest on the unpaid principal balance hereof
shall be calculated at a daily rate equal to 1/365th of the rate per annum
herein provided, and shall be charged and collected on the actual number of days
elapsed. After maturity, unpaid principal and, to the extent permitted by law,
interest on this Note shall bear interest at a rate equal to the lesser of four
(4) percentage points over the Fixed Rate, or the Maximum Rate.
3. Payment of Principal and Interest. The entire principal balance and
accrued interest on this Note shall become due and payable on the earlier of
April 19, 2002, or ten (10) days after Maker's termination of employment with
Payee.
4. Mandatory Prepayment. Prior to maturity, all Proceeds to which Maker is
entitled in respect of the Shares shall be applied, at the time Maker is
entitled to receive such Proceeds, to payment of this Note, with such payments
to be applied first to accrued interest and then to the outstanding principal
balance of this Note. By execution of this Note, Maker hereby irrevocably
authorizes and hereby grants to Payee a special power of attorney irrevocably
making, constituting and appointing Payee, with unrestricted power of
substitution and resubstitution, as the attorney-in-fact for Maker, with power
and authority to apply the payments referred to in this Paragraph in accordance
with the provisions hereof and to execute, acknowledge and deliver any and all
such documents and instruments as may be necessary or appropriate to carry out
the provisions of this Paragraph 4.
5. Events of Default.
(a) The occurrence of any one or more of the following events shall be
deemed an event of default hereunder ("Event of Default"):
(i) The failure of Maker to make any payment on this Note when
the same becomes due and payable and such failure continues for ten
(10) days after notice of such failure to pay is received by Maker
from Payee; or
(ii) Maker shall commence any case , proceeding or other action
seeking reorganization, arrangement or adjustment of its debts under
any bankruptcy, insolvency or reorganization law, or seek the
appointment of a receiver, trustee or custodian for Maker or for all
of its property; or
(iii) Any case, proceeding or other action shall be commenced
against Maker seeking reorganization, arrangement or adjustment of its
debts under any bankruptcy, insolvency or reorganization law or
seeking the appointment of a receiver, custodian or trustee for Maker
or for all or substantially all of its property, and such case,
proceeding or other action remains undismissed for a period of sixty
(60) days after commencement thereof; or
(iv) The dissolution or liquidation of Maker.
(b) Upon the occurrence of an Event of Default hereunder, Payee, at
its option, may declare the entire unpaid principal balance and accrued interest
on this Note to be immediately due and payable without notice of any kind to
Maker and without any other
2
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by Maker, and may, at its option, exercise any other right or
remedy existing at law or in equity. Failure to exercise any such right or
remedy shall not constitute a waiver of the right to exercise the same in the
event of any subsequent default.
(c) Upon the occurrence of an Event of Default hereunder, Payee shall
purchase the Collateral from Maker for an amount equal to the Market Value of
the Collateral, or the entire principal balance and accrued interest due on the
Note, whichever is higher. Such payment shall be applied towards the repayment
of the outstanding amount of the Note. If the Market Value of the Collateral
exceeds the outstanding amount of the Note, the excess Collateral remaining
after full satisfaction of the Note shall be returned to Maker without offset of
any kind and free and clear of all liens, claims or encumbrances in favor of
Payee.
6. Voluntary Prepayment. Maker shall have the right and privilege from
time to time to prepay in whole or in part the unpaid principal of this Note
without premium or penalty, provided that the accrued interest on the amount
prepaid is likewise paid, and the accrual of interest shall immediately cease on
any amount so prepaid.
7. Waiver. Maker waives demand, presentment for payment, notice of
nonpayment, protest and notice of protest and agrees to any substitution,
subordination or release of any parties primarily or secondarily liable hereon.
No waiver by Payee of any of its rights or remedies hereunder or under any other
document evidencing or securing this Note or otherwise shall be considered a
waiver of any other subsequent right or remedy of Payee; and no delay or
omission in the exercise or enforcement by Payee of any rights or remedies shall
be construed as a waiver of any right or remedy of Payee.
8. Attorneys' Fees. If this Note is not paid pursuant to the terms
hereof and is placed in the hands of an attorney for collection, or if it is
collected through bankruptcy or any other court proceeding after maturity, then
Payee shall be entitled to reasonable attorneys' fees for collection.
9. Limitation on Agreements. It is the intention of Maker and Payee to
comply with applicable usury laws. In furtherance thereof, Maker and Payee
stipulate and agree that, notwithstanding any provision contained in this Note,
or in any other agreement between Maker and Payee, Payee shall never be entitled
to receive, collect or apply as interest on this Note, any amount in excess of
the Maximum Rate, and, in the event Payee ever receives, collects or applies as
interest any such excess, such amount that would be excessive interest shall be
deemed to be a partial prepayment of principal and treated hereunder as such,
and, if the principal amount of the Note is paid in full, any remaining excess
shall forthwith be paid to Maker. In determining whether the interest paid or
payable, under any specific contingency, exceeds the Maximum Rate, Maker and
Payee shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payments (other than payments hereunder) as an
expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate, allocate and
spread in equal parts the total amount
3
of interest throughout the entire contemplated term of this Note so that the
interest rate is uniform throughout such term.
10. Pledge and Grant of Security Interest. Maker hereby pledges and grants
to Payee a security interest in the Collateral, and in connection therewith,
Payee shall have all of the rights of a secured party under Chapter 9 of the
Texas Uniform Commercial Code. Maker agrees to execute and deliver such other
documents as may be reasonably necessary to confirm, evidence or perfect such
pledge and security interest. Payee currently holds certificates representing
all Shares currently constituting the Collateral. Unless and until an Event of
Default shall have occurred and be continuing, Maker shall be entitled to vote
all or any part of the Shares constituting the Collateral and to execute
consents and waivers in respect thereof, all with the same force and effect as
if this Note did not exist.
11. Nature of Obligation; Limitation on Liability. The principal amount
of this Note represents the unpaid principal balance and accrued interest as of
December 31, 1998 on that certain Promissory Note dated March 20, 1996 from
Maker to Wyndham Finance Limited Partnership in the original principal amount of
$1,839,006.00 on which no payments have been made as of the date hereof and
which is also secured by the Collateral. This Note is an amendment in its
entirety of such March 20, 1996 Note. Maker agrees that all existing security
interest in the Collateral existing immediately prior to the execution hereof
shall continue to exist and shall secure this Note. THIS NOTE SHALL BE
NONRECOURSE TO MAKER AND MAKER SHALL HAVE NO PERSONAL LIABILITY FOR THE PAYMENT
HEREOF, AND PAYEE SHALL PROCEED SOLELY AGAINST THE COLLATERAL UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT UNDER THIS NOTE.
12. Governing Law and Venue. This Note is being executed and delivered and
is intended to be performed in the State of Texas. This Note shall be construed
as to both validity and performance and enforced in accordance with and governed
by the laws of the State of Texas.
13. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by certified or registered mail, postage prepaid,
with return receipt requested, addressed to Maker or Payee as follows:
If to Payee to:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
4
If to Maker to:
Xxxxxxx X. Xxxxxx, Xx. at address on file with the Payee
or such other address as shall be furnished in writing by Maker or Payee to the
other, in accordance with the above provisions, and such notice or communication
shall be deemed to have been given as of the date so delivered in the case of
personal delivery or three (3) days after deposit in the mail in the case of
certified or registered mail.
14. Arbitration. Maker and Payee agree that any claim, controversy or
dispute arising out of or relating to this Note that cannot be amicably settled
shall be referred to binding arbitration as hereinafter provided. If arbitration
is required to resolve a dispute between Maker and Payee, Payee will notify the
American Arbitration Association ("AAA") and request AAA to select one person to
act as the arbitrator for resolution of this dispute. The selected arbitrator
will establish the rules for arbitration of the dispute and such rules will be
binding upon all parties to the arbitration proceeding. The arbitrator may use
the rules of the AAA for commercial arbitration but is encouraged to adopt such
rules as the arbitrator deems appropriate to accomplish the arbitration in the
quickest and least expensive manner possible. Accordingly, the arbitrator may
(i) dispense with any formal rules of evidence and allow hearsay testimony so as
to limit the number of witnesses required, (ii) minimize discovery procedures as
the arbitrator deems appropriate, (iii) act upon his understanding or
interpretation of the law on any issue without the obligation to research such
issue or accept or act upon briefs of the issue prepared by any party, (iv)
limit the time for presentation of any party's case as well as the amount of
information or number of witnesses to be presented in connection with any
hearing, (v) prevent any party from allowing an attorney to present or argue the
party's case before the arbitrator in any hearing, and (iv) impose any other
rules which the arbitrator believes appropriate to effect a resolution of the
dispute as quickly and inexpensively as possible. The arbitration shall take
place in Dallas, Texas. The arbitrator will have the exclusive authority to
determine and award costs of arbitration and the cost incurred by any party for
attorneys, advisors and consultants. Any award made by the arbitrator shall be
binding on Maker, Payee and all parties to the arbitration and shall be
enforceable to the fullest extent of the law.
5
15. Tax Matters. Maker acknowledges that Maker has not relied on any
advice from Payee with regard to the tax treatment of the Note.
MAKER
/s/ XXXXXXX X. XXXXXX, XX.
----------------------------
Xxxxxxx X. Xxxxxx, Xx.
6
NO PERSONAL LIABILITY NONRECOURSE PROMISSORY NOTE
Dallas, Texas
$2,163,455.00 April 19, 1999
FOR VALUE RECEIVED, XXXXXXX X. XXXXXX, XX. (referred to herein as the
"Maker"), promises to pay to WYNDHAM INTERNATIONAL, INC., a Delaware corporation
(referred to herein as the "Payee"), or its assigns, the sum of TWO MILLION ONE
HUNDRED SIXTY-THREE THOUSAND FOUR HUNDRED FIFTY-FIVE DOLLARS AND NO CENTS
($2,163,455.00), together with interest on the unpaid principal balance as set
forth below.
1. Certain Definitions. The following terms, when used in this Note,
shall have the meanings assigned to them below:
(a) Collateral. The term "Collateral" shall mean 69,356 paired shares
of the common stock, $.01 par value, of Wyndham International, Inc. and Patriot
American Hospitality, Inc. (the "Shares") and all dividends, distributions and
payments in respect of the Shares ("Proceeds").
(b) Fixed Rate. The term "Fixed Rate" means the rate of six percent
(6%) per annum, compounded annually.
(c) Market Value. The term "Market Value, " when used with reference
to Shares as of any date, shall mean the average of the closing sale prices for
a Share, on the principal national securities exchange on which the Shares are
listed, for each trading day during the 90-day period immediately preceding the
date in question.
(d) Maximum Rate. The term "Maximum Rate" shall mean, on any day, the
highest nonusurious rate of interest (if any) permitted by applicable law on
such day. For purposes of Tex. Rev. Civ. Stat. Xxx. Art. 5069-1.04(b), as it
may from time to time be amended, the "applicable rate ceiling" shall be the
"indicated rate" ceiling from time to time in effect as limited by Art.
5069-1.04(b); provided, however, that to the extent permitted by applicable law,
Payee reserves the right to change the "applicable rate ceiling" from time to
time by further notice and disclosure to Maker; and, provided further, that the
"highest nonusurious rate of interest permitted by applicable law" for purposes
of this Note shall not be limited to the applicable rate ceiling under Art.
5069-1.04 if federal laws or other state laws now or hereafter in effect and
applicable to this Note (and the interest contracted for, charged and collected
hereunder) shall permit a higher rate of interest.
2. Interest Rate. The unpaid principal balance from the date hereof until
maturity shall bear interest at a rate per annum equal to the lesser of the
Fixed Rate or the Maximum Rate. Interest on the unpaid principal balance hereof
shall be calculated at a daily rate equal to 1/365th of the rate per annum
herein provided, and shall be charged and collected on the actual number of days
elapsed. After maturity, unpaid principal and, to the extent permitted by law,
interest on this Note shall bear interest at a rate equal to the lesser of four
(4) percentage points over the Fixed Rate, or the Maximum Rate.
3. Payment of Principal and Interest. The entire principal balance and
accrued interest on this Note shall become due and payable on the earlier of
April 19, 2002, or ten (10) days after Maker's termination of employment with
Payee.
4. Mandatory Prepayment. Prior to maturity, all Proceeds to which Maker
is entitled in respect of the Shares shall be applied, at the time Maker is
entitled to receive such Proceeds, to payment of this Note, with such payments
to be applied first to accrued interest and then to the outstanding principal
balance of this Note. By execution of this Note, Maker hereby irrevocably
authorizes and hereby grants to Payee a special power of attorney irrevocably
making, constituting and appointing Payee, with unrestricted power of
substitution and resubstitution, as the attorney-in-fact for Maker, with power
and authority to apply the payments referred to in this Paragraph in accordance
with the provisions hereof and to execute, acknowledge and deliver any and all
such documents and instruments as may be necessary or appropriate to carry out
the provisions of this Paragraph 4.
5. Events of Default.
(a) The occurrence of any one or more of the following events shall be
deemed an event of default hereunder ("Event of Default"):
(i) The failure of Maker to make any payment on this Note when
the same becomes due and payable and such failure continues for ten
(10) days after notice of such failure to pay is received by Maker
from Payee; or
(ii) Maker shall commence any case, proceeding or other action
seeking reorganization, arrangement or adjustment of its debts under
any bankruptcy, insolvency or reorganization law, or seek the
appointment of a receiver, trustee or custodian for Maker or for all
of its property; or
(iii) Any case, proceeding or other action shall be commenced
against Maker seeking reorganization, arrangement or adjustment of its
debts under any bankruptcy, insolvency or reorganization law or
seeking the appointment of a receiver, custodian or trustee for Maker
or for all or substantially all of its property, and such case,
proceeding or other action remains undismissed for a period of sixty
(60) days after commencement thereof; or
(iv) The dissolution or liquidation of Maker.
(b) Upon the occurrence of an Event of Default hereunder, Payee, at
its option, may declare the entire unpaid principal balance and accrued interest
on this Note to be immediately due and payable without notice of any kind to
Maker and without any other
2
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by Maker, and may, at its option, exercise any other right or
remedy existing at law or in equity. Failure to exercise any such right or
remedy shall not constitute a waiver of the right to exercise the same in the
event of any subsequent default.
(c) Upon the occurrence of an Event of Default hereunder, Payee shall
purchase the Collateral from Maker for an amount equal to the Market Value of
the Collateral, or the entire principal balance and accrued interest due on the
Note, whichever is higher. Such payment shall be applied towards the repayment
of the outstanding amount of the Note. If the Market Value of the Collateral
exceeds the outstanding amount of the Note, the excess Collateral remaining
after full satisfaction of the Note shall be returned to Maker without offset of
any kind and free andclear of all liens, claims or encumbrances in favor of
Payee.
6. Voluntary Prepayment. Maker shall have the right and privilege from
time to time to prepay in whole or in part the unpaid principal of this Note
without premium or penalty, provided that the accrued interest on the amount
prepaid is likewise paid, and the accrual of interest shall immediately cease on
any amount so prepaid.
7. Waiver. Maker waives demand, presentment for payment, notice of
nonpayment, protest and notice of protest and agrees to any substitution,
subordination or release of any parties primarily or secondarily liable hereon.
No waiver by Payee of any of its rights or remedies hereunder or under any other
document evidencing or securing this Note or otherwise shall be considered a
waiver of any other subsequent right or remedy of Payee; and no delay or
omission in the exercise or enforcement by Payee of any rights or remedies shall
be construed as a waiver of any right or remedy of Payee.
8. Attorneys' Fees. If this Note is not paid pursuant to the terms
hereof and is placed in the hands of an attorney for collection, or if it is
collected through bankruptcy or any other court proceeding after maturity, then
Payee shall be entitled to reasonable attorneys' fees for collection.
9. Limitation on Agreements. It is the intention of Maker and Payee to
comply with applicable usury laws. In furtherance thereof, Maker and Payee
stipulate and agree that, notwithstanding any provision contained in this Note,
or in any other agreement between Maker and Payee, Payee shall never be entitled
to receive, collect or apply as interest on this Note, any amount in excess of
the Maximum Rate, and, in the event Payee ever receives, collects or applies as
interest any such excess, such amount that would be excessive interest shall be
deemed to be a partial prepayment of principal and treated hereunder as such,
and, if the principal amount of the Note is paid in full, any remaining excess
shall forthwith be paid to Maker. In determining whether the interest paid or
payable, under any specific contingency, exceeds the Maximum Rate, Maker and
Payee shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payments (other than payments hereunder) as an
expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate, allocate and
spread in equal parts the total amount
3
of interest throughout the entire contemplated term of this Note so that the
interest rate is uniform throughout such term.
10. Pledge and Grant of Security Interest. Maker hereby pledges and grants
to Payee a security interest in the Collateral, and in connection therewith,
Payee shall have all of the rights of a secured party under Chapter 9 of the
Texas Uniform Commercial Code. Maker agrees to execute and deliver such other
documents as may be reasonably necessary to confirm, evidence or perfect such
pledge and security interest. Payee currently holds certificates representing
all Shares currently constituting the Collateral. Unless and until an Event of
Default shall have occurred and be continuing, Maker shall be entitled to vote
all or any part of the Shares constituting the Collateral and to execute
consents and waivers in respect thereof, all with the same force and effect as
if this Note did not exist.
11. Nature of Obligation; Limitation on Liability. The principal amount
of this Note represents the unpaid principal balance and accrued interest as
of December 31, 1998 on that certain Promissory Note dated March 20, 1996 from
Maker to Wyndham Finance Limited Partnership in the original principal amount
of $1,839,006.00 on which no payments have been made as of the date hereof and
which is also secured by the Collateral. This Note is an amendment in its
entirety of such March 20, 1996 Note. Maker agrees that all existing security
interest in the Collateral existing immediately prior to the execution hereof
shall continue to exist and shall secure this Note. THIS NOTE SHALL BE
NONRECOURSE TO MAKER AND MAKER SHALL HAVE NO PERSONAL LIABILITY FOR THE PAYMENT
HEREOF, AND PAYEE SHALL PROCEED SOLELY AGAINST THE COLLATERAL UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT UNDER THIS NOTE.
12. Governing Law and Venue. This Note is being executed and delivered and
is intended to be performed in the State of Texas. This Note shall be construed
as to both validity and performance and enforced in accordance with and governed
by the laws of the State of Texas.
13. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by certified or registered mail, postage prepaid,
with return receipt requested, addressed to Maker or Payee as follows:
If to Payee to:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
If to Maker to:
Xxxxxxx X. Xxxxxx, Xx. at address on file with the Payee
or such other address as shall be furnished in writing by Maker or Payee to the
other, in accordance with the above provisions, and such notice or communication
shall be deemed to have been given as of the date so delivered in the case of
personal delivery or three (3) days after deposit in the mail in the case of
certified or registered mail.
14. Arbitration. Maker and Payee agree that any claim, controversy or
dispute arising out of or relating to this Note that cannot be amicably settled
shall be referred to binding arbitration as hereinafter provided. If arbitration
is required to resolve a dispute between Maker and Payee, Payee will notify the
American Arbitration Association ("AAA") and request AAA to select one person to
act as the arbitrator for resolution of this dispute. The selected arbitrator
will establish the rules for arbitration of the dispute and such rules will be
binding upon all parties to the arbitration proceeding. The arbitrator may use
the rules of the AAA for commercial arbitration but is encouraged to adopt such
rules as the arbitrator deems appropriate to accomplish the arbitration in the
quickest and least expensive manner possible. Accordingly, the arbitrator may
(i) dispense with any formal rules of evidence and allow hearsay testimony so as
to limit the number of witnesses required, (ii) minimize discovery procedures as
the arbitrator deems appropriate, (iii) act upon his understanding or
interpretation of the law on any issue without the obligation to research such
issue or accept or act upon briefs of the issue prepared by any party, (iv)
limit the time for presentation of any party's case as well as the amount of
information or number of witnesses tO be presented in connection with any
hearing, (v) prevent any party from allowing an attorney to present or argue the
party's case before the arbitrator in any hearing, and (iv) impose any other
rules which the arbitrator believes appropriate to effect a resolution of the
dispute as quickly and inexpensively as possible. The arbitration shall take
place in Dallas, Texas. The arbitrator will have the exclusive authority to
determine and award costs of arbitration and the cost incurred by any party for
attorneys, advisors and consultants. Any award made by the arbitrator shall be
binding on Maker, Payee and all parties to the arbitration and shall be
enforceable to the fullest extent of the law.
5
15. Tax Matters. Maker acknowledges that Maker has not relied on any
advice from Payee with regard to the tax treatment of the Note.
MAKER
/s/ XXXXXXX X. XXXXXX, XX.
-----------------------------------
Xxxxxxx X. Xxxxxx, Xx.
6
