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Exhibit 10.1
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT is entered into this 10th day of November,
1998, by and between SERVICO, INC. ("Company") and XXXXX XXXXXXXXXX
("Xxxxxxxxxx").
WHEREAS, Xxxxxxxxxx is employed by the Company pursuant to that certain
Employment Agreement dated May 14, 1993 and pursuant to such agreement serves as
President and Chief Operating Officer of the Company; and
WHEREAS, Xxxxxxxxxx and the Company desire to terminate Xxxxxxxxxx'x
employment by the Company and to set forth their agreement with respect to such
termination and certain other matters.
NOW, THEREFORE, in consideration of the agreements and covenants
hereinafter set forth, the parties agree as follows:
1. TERMINATION OF EMPLOYMENT. Effective as of November 13th, 1998 (the
"Severance Date"), the employment of Xxxxxxxxxx by the Company will terminate
and Xxxxxxxxxx shall not have any further rights, whether to employment,
compensation or benefits, except as provided in this Agreement.
2. SEVERANCE COMPENSATION
(a) SEVERANCE PAY. The Company shall pay to Xxxxxxxxxx an aggregate
severance pay equal to $1,282,500.00 payable in two (2) equal installments on or
before November 13, 1998 and April 1, 1999, net of applicable withholding taxes
("Severance Pay").
(b) HEALTH INSURANCE BENEFITS. For a period of one (1) year after the
Severance Date, Xxxxxxxxxx shall be entitled to continue to participate, at the
Company's expense, in the Company's health insurance program. Such benefit will
be in full satisfaction of any rights which Xxxxxxxxxx may have to health
insurance continuation under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended ("COBRA"). Benefits otherwise receivable by Xxxxxxxxxx
pursuant to this Subparagraph (b) shall be reduced to the extent comparable
benefits are actually received by Xxxxxxxxxx from a subsequent employer during
the period during which the Company is required to provide such benefits, and
Xxxxxxxxxx shall report any such benefits actually received by him to the
Company.
(c) OTHER BENEFITS. Provided that there are no adverse tax
consequences, the Company shall continue coverage for Xxxxxxxxxx, on the same
terms and conditions as would be applicable if Xxxxxxxxxx were an active
employee, under the Company's life insurance, group disability benefits and
similar welfare benefit plans for
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a period of one (1) year. Benefits otherwise receivable by Xxxxxxxxxx pursuant
to this Subparagraph (c) shall be reduced to the extent comparable benefits are
actually received by Xxxxxxxxxx from a subsequent employer during the period
during which the Company is required to provide such benefits, and Xxxxxxxxxx
shall report any such benefits actually received by him to the Company. In the
event that adverse tax consequences would result from the continuation of
benefits under this Subparagraph (c), the Company may pay to Xxxxxxxxxx an
amount equal to the annual cost to the Company (based on premium rates) of
providing such coverage; provided, however, that such amount shall be reduced to
the extent comparable benefits are actually received by Xxxxxxxxxx from a
subsequent comployer during the period during which the Company is required to
provide such benefits, and Xxxxxxxxxx shall report any such benefits actually
received by him to the Company. The payments provided for in this Subparagraph
(c) shall be made not later than the thirtieth (30th) day following the
Severance Date. At the time that payments are made under this Subparagraph (c),
the Company shall provide Xxxxxxxxxx with a written statement setting forth the
manner in which such payments were calculated and the basis for such
calculations.
3. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(a) Xxxxxxxxxx acknowledges that he holds currently exercisable stock
options to purchase 423,500 shares of the Company's Common Stock which were
granted to him pursuant to the Company's Stock Option Plan and 100,000 stock
appreciation rights. To the extent any stock options or stock appreciation
rights are not vested, they will continue to vest at the same time they would
have vested had Xxxxxxxxxx remained an employee of the Company. A schedule of
such options and the exercise prices thereof are listed on Schedule A.
(b) The parties acknowledge and agree that when the Company completes
its merger with Lodgian, Inc., employees of the Company will cause Lodgian, Inc.
to issue to Xxxxxxxxxx stock options and stock appreciation rights in equal
amounts to Xxxxxxxxxx under the same terms and conditions of the stock option
plan of the Company and the stock appreciation rights of the Company.
4. RESTRICTIVE COVENANTS
(a) CONFIDENTIALITY. Xxxxxxxxxx agrees not to directly or indirectly
disclose to any person or entity, or cause or authorize, directly or indirectly,
any person or entity, to use any proprietary or confidential business
information of the Company, except as required by law. This paragraph shall not
apply, however, to any information that is already in the public domain or
becomes available to the public through any act or failure to take action by
Xxxxxxxxxx.
(b) NON-SOLICITATION. Xxxxxxxxxx agrees that he will not, for a period
of one (1) year following the Severance Date, directly or indirectly, on behalf
of himself
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or any other person or entity, offer employment to, or in any manner solicit the
services of Xxxxx Xxxxxxx, Xxxx Xxxxxx or Xxx Xxxxx during the one year period.
(c) NON-DISPARAGEMENT AND FUTURE CONDUCT. Xxxxxxxxxx agrees that he
will not knowingly engage in any activity which is inimical, contrary or harmful
to the interests of the Company and shall not make any statements about or
relating to the Company, its officers, directors, shareholders, agents,
independent contractors, or counsel which are disparaging or likely to cause
embarrassment.
(d) COOPERATION WITH THE COMPANY. In consideration for Xxxxxxxxxx'x
agreement to fully cooperate with respect to any reasonable request from the
Company on an ongoing basis, the Company shall provide to Xxxxxxxxxx the rights
and benefits set forth in this Agreement.
5. GENERAL RELEASES.
(a) Xxxxxxxxxx hereby releases, discharges and acquits the Company and
its subsidiaries, affiliates, representatives, agents, employees, officers,
directors, shareholders, counsel, assigns and successors (collectively referred
to as "Releasees"), of and from all claims, demands, sums of money, actions,
rights, causes of action, obligations and liabilities which Xxxxxxxxxx has
against the Releasees relating to or arising out of the Employment Agreement or
Xxxxxxxxxx'x employment by the Company, including, but not limited to, wrongful
discharge, breach of contract, tort, the Civil Rights Act, Age Discrimination in
Employment Act, Employee Retirement Income Security Act or any other federal,
state or local legislation or common law relating to employment or
discrimination in employment or otherwise; provided, however, that nothing
contained herein shall release the Company from its obligation to Xxxxxxxxxx
pursuant to this Agreement, including any right he may have to corporate
indemnification.
(b) The Company hereby releases, discharges, and acquits Xxxxxxxxxx of
and from all claims, demands, sums of money, actions, rights, causes of action,
obligations and liabilities which the Company has or which the Company or any
successor or assign of the Company may have against Xxxxxxxxxx relating to,
arising out of or concerning Xxxxxxxxxx'x negligent conduct, if any, in
connection with or concerning the Employment Agreement or his employment with
the Company; provided, however, that nothing herein shall release, discharge or
acquit Xxxxxxxxxx from any such claims, demands, sums of money, actions, rights,
causes of action, obligations or liabilities relating to, arising out of or
concerning Xxxxxxxxxx'x conduct which rises to a level more culpable than
negligence, including, but not limited to, intentional misconduct or gross
negligence.
6. INDEMNITY OBLIGATION. The indemnity obligation of the Company to
Xxxxxxxxxx, as an officer and director of the Company, shall continue in
accordance with the terms and conditions of Article IX of the Company's Articles
of Incorporation and Article VII
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of the Company's Bylaws with respect to actions taken or allegedly taken
including, but not limited to, alleged acts, whether intentional or negligent,
and whether active, passive or vicarious in nature, on or prior to the Severance
Date notwithstanding the termination of Xxxxxxxxxx'x employment to the extent
permitted by law and the Company will take no action to diminish or reduce
Xxxxxxxxxx'x right to indemnification thereunder. If the Company and Lodgian,
Inc. implement their merger, the Company will cause Lodgian, Inc. to assume
Company's indeminity obligations and insurance obligations contained in this
paragraph and in the Articles of Incorporation and Bylaws referenced herein.
7. ADVICE OF COUNSEL. Xxxxxxxxxx represents and warrants that he has
independently consulted with legal counsel and financial or other advisors of
his choice with respect to this Agreement, that he has entered into this
agreement of his own free will, that he and such counsel have reviewed this
Agreement, and that Xxxxxxxxxx has been informed by such counsel that the terms
and provisions of this Agreement and the restrictive covenants contained herein
are reasonable, enforceable and proper in duration, scope and effect
8. MISCELLANEOUS.
(a) Each party will bear its own costs and expenses in connection with
the preparation, negotiation and execution of this Agreement; provided, however,
that the Company will reimburse Xxxxxxxxxx for the attorneys' fees actually and
reasonably incurred by him in connection therewith up to a maximum of $5,000.00
(b) This Agrement contains the entire understanding and agreement of
the parties relating to the subject matter hereof and supersedes all prior
communications, commitments and understandings, and this Severance Agreement may
not be amended or modified except in a writing signed by both parties hereto.
(c) This Agreement shall be governed by the laws of the State of
Florida without regard to the conflicts of laws principles thereunder.
(d) This Agreement may be executed in counterparts, each of which shall
be considered an original but which shall constitute one and the same agreement.
(e) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, assigns, heirs,
beneficiaries, estates, executors, personal representatives and legatees.
(f) Any notice herein required or permitted to be given to be effective
shall be given in writing and may be personally delivered (including delivery by
private courier services) or by telex, facisimile or telecopy, charges prepaid,
to the party entitled thereto addressed as set forth below (or to such other
address as may be specified by a party in accordance with this subsection), and
shall be deemed to be duly given or made when delivered by hand, unless such day
is not a business day in which case such delivery shall be deemed to be made or
given as of the next succeeding business day or, in the case of telex,
facisimile or telecopy, when sent, so long as it was
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received during normal business hours on a business day and otherwise such
delivery shall be deemed to be made or given as of the next succeeding
business day:
To: Xxxxx Xxxxxxxxxx
0000X Xxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, XX 00000
with a copy to:
Wicker, Smith, Tutan, O'Hara, XxXxx, Xxxxxx & Ford, P.A.
0xx Xxxxx Xxxxx Xxxxx Xxxxxxxx
0000 Xxxxxx Xxxxxx (S.W. 28th Terrace)
Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
To: Servico, Inc.
0000 Xxxxxxxxx Xxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: President
with a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Block, Esq.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY
SERVICO, INC.
/s/
---------------------------------------
Acting Chairman
/s/ Xxxxx Xxxxxxxxxx
---------------------------------------
XXXXX XXXXXXXXXX
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SCHEDULE A
Xxxxx Xxxxxxxxxx
SHARES OF UNEXERCISED
DATE OF GRANT GRANTED XXXXX XXXXX EXERCISED OPTIONS
------------- --------- ----------- --------- ------------
8/5/92 100,000 $4.00 45,000 55,000
5/14/93 50,000 4.00 0 50,000
5/26/95 5,000 9.50 0 5,000
1/12/96 13,500 10.75 0 13,500
8/27/97 300,000 16.75 0 300,000
STOCK APPRECIATION RIGHTS
*8/27/97 100,000 16.75 0 100,000
