Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, is dated effective as of November 22, 2004
("Effective Date") by and between WestCoast Hospitality Corporation, a
Washington corporation (the "Company"), and Xxxxxx Xxxxxxx (the "Executive").
The Company desires to employ the Executive in the capacities of Executive Vice
President, Chief Investment Officer, and the Executive desires to be so
employed, on the terms and subject to the conditions set forth in this agreement
(the "Agreement");
Now, therefore, in consideration of the mutual covenants set forth herein and
other good and valuable consideration the parties hereto hereby agree as
follows:
1. EMPLOYMENT; TERM.
The Company employs the Executive, and the Executive agrees to be employed
by the Company, upon the terms and subject to the conditions set forth herein,
for a term commencing on the Effective Date and terminating on December 31, 2006
unless terminated earlier in accordance with Section 5 of this Agreement;
provided, that such term shall automatically be extended from time to time for
additional periods of one calendar year from the date on which it would
otherwise expire unless the Executive, on one hand, or the Company, on the
other, gives notice to the other party or parties not less than 120 days prior
to such date that it elects to permit the term of this Agreement to expire
without extension on such date. (The initial term of this Agreement as the same
may be extended in accordance with the terms of this Agreement is hereinafter
referred to as the "Term").
2. POSITIONS; CONDUCT.
(a) During the Term, the Executive will hold the title and office of, and
serve in the position of, Executive Vice President, Chief Investment Officer of
the Company. In the event of a vacancy in the Company's Chief Financial Officer
position, the Company may, at its option and for no additional compensation,
appoint Executive the Company's Chief Financial Officer. Such position shall be
in addition to other Company positions Executive may then occupy. Executive
agrees to accept such appointment and serve the Company in such capacity if so
appointed. The Executive shall report to the Chief Executive Officer of the
Company and shall perform such specific duties and services (including service
as an officer, director or equivalent position of any direct or indirect
subsidiary without additional compensation) as the Company shall reasonably
request consistent with the Executive's positions.
(b) During the Term, the Executive agrees to devote his full business time and
attention to the business and affairs of the Company and to faithfully and
diligently perform, to the best of his ability, all of his duties and
responsibilities hereunder. Nothing in this Agreement shall preclude the
Executive from devoting reasonable time and attention to the following (the
"Exempted Activities"): (i) serving, with the approval of the Chief Executive
Officer of the Company, as an officer, director, trustee or member of any
organization, (ii) engaging in charitable and community activities and (iii)
managing his personal investments and affairs. In no event shall the Exempted
Activities involve any material conflict of interest with the interests of the
Company or, individually or collectively, interfere materially with the
performance by the Executive of his duties and responsibilities under this
Agreement.
(c) The Executive's office and place of rendering his services under this
Agreement shall be in the principal executive offices of the Company. During the
Term, the Company shall provide the Executive with executive office space, and
administrative and secretarial assistance and other support services consistent
with his positions and with his duties and responsibilities hereunder.
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3. BOARD OF DIRECTORS; COMMITTEES.
It is understood that the right to elect directors of the Company is by
law vested in the stockholders and directors of the Company, and it is mutually
contemplated that service on the Board of Directors of the Company or any of its
subsidiaries or on any respective committee of the Board of Directors of the
Company or any of its subsidiaries is not a condition of this Agreement.
4. SALARY; ADDITIONAL COMPENSATION; PERQUISITES AND BENEFITS.
(a) During the Term, the Company will pay the Executive a base salary at an
annual rate of not less than $225,000 per annum, subject to annual review by the
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") and in the discretion of such Committee, increased
from time to time. Once increased, such base salary may not be decreased. Such
salary shall be paid in periodic installments in accordance with the Company's
standard practice, but not less frequently than semi-monthly.
(b) During the Term, Executive shall be eligible to receive a cash bonus
("Bonus") as follows: Executive shall participate in such annual Bonus plans or
programs as may be adopted by the Company's Compensation Committee (collectively
with any of its successors in authority, the "Committee") from time to time for
senior executives, provided, however, that conditioned upon attainment of target
performance measure requirements based on one or more performance measures as
may be determined by the Committee, the target Bonus for each calendar year
subsequent to 2004 during the Term for which Executive shall be eligible shall
be 40% of Executive's base salary (partial years pro rated).
(c) The Company shall award to Executive 18,535 shares of restricted stock
units under the Company's 1998 Stock Incentive Plan (the "Equity Incentive
Plan") (or successor plan) to be issued as follows:
(i) Upon or as soon as practicable after the Effective Date, 3,707 shares of
restricted common stock in the Company;
(ii) On or as soon as practical after the first, second, third and fourth
anniversaries of the Effective Date, provided that Executive remains employed in
the position or positions contemplated in this Agreement on each such
anniversary of the Effective Date, an annual award of 3,707 shares of restricted
common stock in the Company; and
(iii) The restricted common stock in the Company awarded pursuant to Sections
4(c)(i) and (ii) above shall be fully vested upon issuance. Executive shall be
entitled to no further issuances of restricted common stock of the Company if
Executive is not employed by the Company in the positions contemplated in this
Agreement on of the first, second, third or fourth anniversaries of the
Effective Date. Executive acknowledges and agrees that restricted common stock
of the Company may be subject to various restrictions under the Company's Equity
Incentive Plan, and under state and federal law and regulations promulgated
thereunder. Executive acknowledges receipt of a copy of the Equity Incentive
Plan.
(d) The Company shall grant options ("Options") under the Company's Equity
Incentive Plan (or successor plan) to Executive as follows:
(i) Upon the Effective Date, Options to purchase 80,000 shares of common stock
of the Company. Such Options shall have an exercise price per share equal to the
closing market price for the Company's common stock (as measured by reference to
the New York Stock Exchange) on the trading day immediately prior to the
Effective Date. Provided that Executive remains employed by the Company in the
positions contemplated by this Agreement on the fourth anniversary of the
Effective Date, 40,000 of the Options, less any Options that vest pursuant to
the following provisions of this paragraph, will vest on such date. Provided
that Executive remains employed by the Company in the positions contemplated by
this Agreement on the fifth anniversary of the Effective Date, the remaining
40,000 of such
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Options will vest on such date. Notwithstanding any vesting schedule set forth
in this Agreement, at any time after the second anniversary of the Effective
Date and prior to the fourth anniversary of the Effective Date, (a) 20,000 of
the Options to be issued pursuant to this Section 4(d)(i)will vest on the 60th
consecutive trading day the market price of the common stock of the Company (as
measured by reference to the then applicable exchange) closes with a value that
is at least twice the exercise price of such Options, and (b) 40,000 of the
Options issued pursuant to this Section 4(d)(i), less any such options that may
have previously vested pursuant to Section 4(d)(i)(a) above, will vest on the
60th consecutive trading day the market price of the common stock of the Company
(as measured by reference to the then applicable exchange) closes with a value
that is at least three times the exercise price of such Options.
(ii) Any subsequent issuances of Options shall be subject to the discretion of
the Committee, including the Committee's discretion with respect to the number,
terms and conditions of any such Options.
(e) Nothing in the foregoing provisions of this Section 4 shall be deemed to
prevent the Board in its sole discretion from awarding any additional or other
amounts of cash, restricted stock or Options or other equity based awards in
respect of any whole or partial year during the Term.
(f) The Company will reimburse the Executive, in accordance with its standard
policies from time to time in effect, for all out-of-pocket business expenses as
may be incurred by the Executive in the performance of his duties under this
Agreement.
(g) The Executive shall be entitled to vacation time to be credited and taken
in accordance with the Company's policy from time to time in effect for senior
executives, which in any event shall not be less than a total of four weeks per
calendar year.
(h) The Company shall indemnify the Executive to the fullest extent permitted
under the law of the State of Washington.
5. TERMINATION
(a) The Term will terminate upon the Executive's death or, upon notice by the
Company or the Executive to the other, in the case of a determination of the
Executive's Disability. As used herein the term "Disability" means the
Executive's inability to perform his duties and responsibilities under this
Agreement for a period of more than 120 consecutive days, or for more than 180
days, whether or not continuous, during any 365-day period, due to physical or
mental incapacity or impairment. A determination of Disability will be made by a
physician satisfactory to both the Executive and the Company; provided that if
they cannot agree as to a physician, then each shall select a physician and
these two together shall select a third physician whose determination of
Disability shall be binding on the Executive and the Company. Should the
Executive become incapacitated, his employment shall continue and all base and
other compensation due the Executive hereunder shall continue to be paid through
the date upon which the Executive's employment is terminated for Disability in
accordance with this section.
(b) The Term may be terminated by the Company upon notice to the Executive upon
the occurrence of any event constituting "Cause" as defined herein.
(c) The Term may be terminated by the Executive upon notice to the Company
within six months of the occurrence of any event constituting "Good Reason" as
defined herein.
6. SEVERANCE.
(a) If the Term is terminated by the Company for Cause, the Company will pay
to the Executive an aggregate amount equal to the Executive's accrued and unpaid
base salary through the date of such termination, additional salary payments in
lieu of the Executive's accrued and unused vacation time, unreimbursed business
expenses, unreimbursed medical, dental and other employee benefit expenses in
accordance with the applicable plans, and any and all other benefits provided
under the terms of applicable employee plans to terminated employees (the
"Standard Termination Payments").
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(b) If the Term is terminated upon the Executive's death or Disability, the
Company and the Subsidiary will pay to the Executive's estate or the Executive,
as the case may be, the Standard Termination Payments and all death or
disability payments or other employee benefits under their employee benefit
plans.
(c) Subject to Section 6(d), if the Company terminates the Executive's
employment under this Agreement without Cause other than by reason of his death
or Disability or if the Executive terminates his employment hereunder for Good
Reason, the Company shall (i) pay the Executive the Standard Termination
Payments, (ii) pay the Executive a lump sum payment equal to the twice the
Executive's total cash compensation for the previous fiscal year (but not less
than twice $225,000) and (iii) continue in effect the Executive's benefits with
respect to life, health and insurance plans or their equivalent for two years.
Such payments and the obligations set forth below in Section 6(e) shall be the
Company's only obligations to Executive in such a case. The Company shall incur
no further liability for such a termination.
(d) If the Term is not extended pursuant to the proviso to Section 1 as a
result of the Company giving notice thereunder that it elects to permit the term
of this Agreement to expire without extension, the Company shall (i) pay the
Executive the Standard Termination Payments, (ii) pay the Executive a lump sum
payment equal to twice the Executive's total cash compensation for the previous
fiscal year (but not less than twice $225,000) and (iii) continue in effect the
Executive's benefits with respect to life, health and insurance plans or their
equivalent for two years. Such payments and the obligations set forth below in
Section 6(e) shall be the Company's only obligations to Executive in such a
case. The Company shall incur no further liability for such a termination.
(e) If the Company terminates the Executive's employment under this Agreement
without Cause other than by reason of his death or Disability, or if the Term is
not extended as a result of the Company giving notice that it elects to permit
the term of this Agreement to expire without extension, or if the Executive
terminates his employment hereunder for Good Reason pursuant to Section 5(c):
all stock options granted to the Executive shall immediately vest and be
exercisable and any stock grant to the Executive shall immediately vest, all
Company imposed restrictions on restricted stock issued to the Executive shall
be terminated and all restricted stock awarded to Executive but not yet issued
shall be promptly issued to Executive.
(f) As used herein, the term "Cause" means: (i) the Executive's willful and
intentional failure or refusal to perform or observe any of his material duties,
responsibilities or obligations set forth in this Agreement, if such breach is
not cured within 30 days after notice thereof to the Executive by the Company,
which notice shall state that such conduct shall, without cure, constitute Cause
and makes specific reference to this Section 6(g); (ii) any willful and
intentional act of the Executive involving fraud, theft, embezzlement or
dishonesty affecting the Company; or (iii) the Executive's conviction of (or a
plea of nolo contendere to) an offense which is a felony in the jurisdiction
involved.
(g) As used herein, the term "Good Reason" means the occurrence of any of the
following, without the prior written consent of the Executive: (i) assignment to
the Executive of duties materially inconsistent with the Executive's positions
and responsibilities as described in Section 2(a) hereof,; (ii) the removal of
the Executive from the positions as described in Section 2(a); (iii) any
material breach of this Agreement by the Company which is continuing; or (iv) a
Change in Control; provided that a Change of Control shall only constitute Good
Reason if, within 18 months after such Change of Control: (a) the Company
changes its headquarters office location to a location more than 40 miles from
the city limits of Spokane, Washington, (b) the Company changes Executive's job
titles, or (c) Executive experiences a significant diminution in his duties or
responsibilities or compensation compared to prior to the Change in Control,
other than in connection with the termination of the Executive's employment for
Cause, Disability or as a result of the Executive's death or by the Executive
other than for Good Reason. Notwithstanding anything to the contrary in this
Section 6(g), the Executive shall not be deemed to have Good Reason unless the
Executive gives the Company written notice that the specified conduct or event
has occurred giving rise to Executive having Good Reason, and the Company fails
to cure such conduct or event within thirty (30) days after the receipt of such
notice.
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(h) As used herein, the term "Change of Control" means the occurrence of any
one of the following events: (i) the majority of the Board of Directors of the
Company consists of individuals other than Incumbent Members, which shall mean
the members of the Company's Board of Directors on the Effective Date; provided
that any person becoming a director subsequent to the Effective Date whose
election or nomination for election was supported by the Executive or a majority
of the directors who then comprised the Incumbent Directors shall be considered
an Incumbent Director; (ii) the Company adopts a plan of liquidation providing
for the distribution of all or substantially all of the assets of the Company on
a consolidated basis; (iii) the Company sells all or substantially all of its
assets on a consolidated basis in a single transaction or series of
transactions; or (iv) the Company ceases to act as the general partner of
WestCoast Hospitality Limited Partnership, provided, however, the foregoing
shall not apply if substantially all of the assets of the partnership are
transferred to and owned by the Company or its Affiliates. As used herein, an
Affiliate of a person or other entity means a person or other entity that
directly or indirectly controls, is controlled by or is under common control
with the person or other entity specified (including without limitation any
investment entity managed by the person or other entity specified or a person or
entity that directly or indirectly controls, is controlled by or under common
control with the person or other entity specified).
(i) The amounts required to be paid and the benefits required to be made
available to the Executive under this Section 6 are absolute. Under no
circumstances shall the Executive, upon the termination of his employment
hereunder, be required to seek alternative employment and, in the event that the
Executive does secure other employment, no compensation or other benefits
received in respect of such employment shall be set-off or in any other way
limit or reduce the obligations of the Company and the Subsidiary under this
Section 6.
(j) If Executive is not employed with the Company at any time prior to the
date which is six months after the Effective Date, Executive agrees to refund to
the Company 100% of any relocation expenses for which the Company has previously
reimbursed Executive. Thereafter, if Executive is not employed with the Company
at any time prior to the one year anniversary of the Effective Date, Executive
agrees to refund to the Company 50% of any relocation expenses for which the
Company has previously reimbursed Executive. Thereafter, if Executive is not
employed with the Company at any time prior to the two year anniversary of the
Effective Date, Executive agrees to refund to the Company 25% of any relocation
expenses for which the Company has previously reimbursed Executive.
Notwithstanding anything to the contrary in this Section, Executive shall have
no obligation to refund the Company any of its relocation reimbursement costs if
the Company terminates the Executive's employment under this Agreement without
Cause, or by reason of the Executive's death or Disability, or if the Executive
terminates his employment under this Agreement for Good Reason.
7. CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges that the Company and its subsidiaries or
affiliated ventures ("Company Affiliates") own and have developed and compile,
and will in the future own, develop and compile certain Confidential Information
and that during the course of his rendering services to the Company Confidential
Information has and will be disclosed to the Executive by the Company and its
Affiliates. The Executive hereby agrees that, during the Term (except as
required to conduct the business of the Company) and thereafter, he will not in
any way use or disclose, furnish or make accessible to anyone, directly or
indirectly, any Confidential Information of the Company or its Affiliates.
(b) As used herein, the term "Confidential Information" means any trade
secrets, confidential or proprietary information, or other knowledge, know-how,
information, documents or materials, owned, developed or possessed by a Company
Affiliate pertaining to its businesses the confidentiality of which such company
takes reasonable measures to protect, including, but not limited to, trade
secrets, techniques, know-how (including designs, plans, procedures, processes
and research records), software, computer programs, innovations, discoveries,
improvements, research, developments, test results, reports, specifications,
data, formats, marketing data and business plans and strategies, business
opportunities, guest
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lists, vendor terms, agreements and other forms of documents, expansion plans,
budgets, projections, and salary, staffing and employment information.
Notwithstanding the foregoing, Confidential Information shall not in any event
include information which (i) was generally known or generally available to the
public prior to its disclosure to the Executive, (ii) becomes generally known or
generally available to the public subsequent to its disclosure to the Executive
through no wrongful act of the Executive, (iii) is or becomes available to the
Executive from sources other than the Company Affiliates which sources are not
known to the Executive to be under any duty of confidentiality with respect
thereto or (iv) the Executive is required to disclose by applicable law or
regulation or by order of any court or federal, state or local regulatory or
administrative body (provided that the Executive provides the Company with prior
notice of the contemplated disclosure and reasonably cooperates with the
Company, at the Company's sole expense, in seeking a protective order or other
appropriate protection of such information).
8. RESTRICTIVE COVENANTS.
(a) The Executive agrees that during his employment hereunder and for a period
of twelve months thereafter the Executive will not, directly or indirectly,
engage or participate or make any financial investments in (other than ownership
of up to 5% of the aggregate of any class of securities of any corporation if
such securities are listed on a national stock exchange or under section 12(g)
of the Securities Exchange Act of 1934) or become employed by, or act as an
agent or principal of, or render advisory or other management services to or
for, any Competing Business. As used herein the term "Competing Business" means
any business which includes hotel ownership, hotel management, hotel services or
hotel franchising and has a headquarters in Washington, Oregon, Idaho, Montana,
Utah or Northern California, defined as the area from San Jose, California north
to California's border with Oregon.
(b) The Executive agrees that during his employment hereunder and for a period
of twenty-four months thereafter he will not solicit, raid, entice or induce any
person that then is or at any time during the twelve-month period prior to the
end of the Term was an employee of the Company or a Company Affiliate (other
than a person whose employment with such Company Affiliate has been terminated
by such Company Affiliate), to become employed by any person, firm or
corporation.
9. SPECIFIC PERFORMANCE.
(a) The Executive acknowledges that the services to be rendered by him
hereunder are of a special, unique, extraordinary and personal character and
that the Company Affiliates would sustain irreparable harm in the event of a
violation by the Executive of Section 7 or 8 hereof. Therefore, in addition to
any other remedies available, the Company shall be entitled to specific
enforcement and/or an injunction from any court of competent jurisdiction
restraining the Executive from committing or continuing any such violation of
this Agreement without proving actual damages or posting a bond or other
security. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages.
(b) If any of the restrictions on activities of the Executive contained in
Sections 7 or 8 shall for any reason be held by a court of competent
jurisdiction to be excessively broad as to duration, geographical scope or
activity of subject, such restrictions shall be construed so as thereafter to be
limited or reduced to be enforceable to the maximum extent compatible with the
applicable law as it shall then appear; it being understood that by the
execution of this Agreement the parties hereto regard such restrictions as
reasonable and compatible with their respective rights.
(c) Notwithstanding anything in this Agreement to the contrary, in the event
that the Company fails to make any payment of any amounts or provide any of the
benefits to the Executive when due as called for under Section 6 of this
Agreement and such failure shall continue for twenty (20) days after notice
thereof from the Executive, all restrictions on the activities of the Executive
under Sections 7 and 8 shall be immediately and permanently terminated.
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10. WITHHOLDING.
The parties agree that all payments to be made to the Executive by the Company
pursuant to the Agreement shall be subject to all applicable withholding
obligations of such company.
11. NOTICES.
All notices required or permitted hereunder shall be in writing and shall be
deemed given and received when delivered personally, four days after being
mailed if sent by registered or certified mail, postage pre-paid, or by one day
after delivery if sent by air courier (for next-day delivery) with evidence of
receipt thereof or by facsimile with receipt confirmed by the addressee. Such
notices shall be addressed respectively:
IF TO THE EXECUTIVE, to:
Xxxxxx Xxxxxxx
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000
IF TO THE COMPANY, to:
WestCoast Hospitality Corporation
000 X. Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
With copy to:
WestCoast Hospitality Corporation
000 X. Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn. Corporate Counsel
or to any other address of which such party may have given notice to the other
parties in the manner specified above.
12. MISCELLANEOUS.
(a) This Agreement is a personal contract calling for the provision of unique
services by the Executive, and the Executive's rights and obligations hereunder
may not be sold, transferred, assigned, pledged or hypothecated by the
Executive. The rights and obligations of the Company hereunder will be binding
upon and run in favor of their respective successors and assigns.
(b) This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Washington.
(c) Any controversy arising out of or relating to this Agreement or any breach
hereof shall be settled by arbitration in Spokane, Washington by a single
neutral arbitrator who shall be a retired federal or state court judge in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and judgment upon any award rendered may be entered in any court
having jurisdiction thereof, except in the event of a controversy relating to
any alleged violation by the Executive of Section 7 or 8 hereof, the Company and
the Subsidiary shall be entitled to seek injunctive relief from a court of
competent jurisdiction without the requirement to seek arbitration. In addition
to all other relief, the substantially prevailing party in any arbitration or
court action shall be entitled to their reasonable attorney fees and costs
incurred by reason of the controversy (including any appellate review and
bankruptcy or enforcement proceedings).
(d) The headings of the various sections of this Agreement are for convenience
of reference only and shall not define or limit any of the terms or provisions
hereof.
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(e) The provisions of this Agreement which by their terms call for performance
subsequent to the expiration or termination of the Term shall survive such
expiration or termination.
(f) Upon the Effective Date, this Agreement supersedes any existing employment
agreements between the Employee and the Company and any of its Affiliates all of
which shall be terminated upon the Commencement Date of this Agreement.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE
EFFECTIVE DATE FIRST ABOVE WRITTEN.
EXECUTIVE: COMPANY:
WESTCOAST HOSPITALITY CORPORATION
/s/ Xxxxxx Xxxxxxx By /s/ Xxxxxx Xxxxxx
--------------------------- --------------------------------------------
Xxxxxx Xxxxxxx Xxxxxx Xxxxxx, President and Chief Executive
Officer
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