EXHIBIT 10.29
RELEASE AGREEMENT
This Release Agreement (the "Release Agreement"), by and between Lodgian, Inc.
(the "Company")(1) and Xxxxxx X. Xxxxxx ("You" or "Your")(collectively, the
"Parties") is effective as of January 31, 2005 (the "Effective Date").
WHEREAS, You are currently employed as Executive Vice President and Chief
Financial Officer of the Company;
WHEREAS, You and the Company are parties to the Executive Employment
Agreement dated May 10, 2004 (the "Employment Agreement");
WHEREAS, on the Effective Date, You wish to resign as the Executive Vice
President and Chief Financial Officer of the Company;
WHEREAS, on the Effective Date, You and the Company wish to terminate the
Employment Agreement;
WHEREAS, the Company has agreed to continue to employ You beginning on the
Effective date through March 31, 2005 (the "Term") in exchange for Your
compliance with the terms of this Release Agreement; and
WHEREAS, the Parties desire to enter into this Release Agreement for the
purpose of resolving and setting forth the terms upon which the Employment
Agreement is being terminated.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, it is agreed:
1. Consideration. Provided that You satisfy the conditions of this Release
Agreement, the Company will (i) continue to employ You through the Term, (ii)
pay You through the Term (as set forth in Section 2 below), and (iii) provide to
You the separation benefits stated below (as set forth in Section 5 below). The
Company's obligations set forth in (i) - (iii) in the preceding sentence shall
be conditioned upon Your satisfactory completion of Your transition duties (as
set forth in Section 3 below) and Your compliance with all restrictive covenants
and post-termination obligations to which You are subject, including, but not
limited to, the restrictive covenants contained in this Release Agreement. Any
material breach by You of this Release Agreement or any obligations to which You
are subject shall constitute a breach of this Release Agreement, and all of the
Company's obligations under this Release Agreement, including, but not limited
to, the obligation to (i) employ You, (ii) pay You through the Term, and (iii)
provide the separation benefits stated below, shall immediately cease.
2. Compensation. During the Term, the Company shall pay You a base salary
of $4,209.12 per week (the "Base Salary").
The Base Salary is subject to applicable withholdings, including taxes and
Social Security. You shall be paid in accordance with the Company's normal
payroll practices. During the Term, You
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(1) The term "Company" includes the company's parents, subsidiaries, affiliates
and all related companies, as well as their respective officers, directors,
shareholders, employees, agents and any other representatives, any employee
benefits plan of the Company, and any fiduciary of those plans.
Page 1 of 6
will continue to participate in all benefit plans as shall be in effect for all
employees of the Company from time to time, subject to the terms and conditions
of such plans and programs; provided, however, You shall not be entitled to
receive any incentive compensation, commissions, bonuses, or time off benefits
(except as set forth below). During the Term, You shall accrue personal days in
accordance with Company policy, but You will not accrue any additional vacation
time. During the Term, You shall be entitled to use accrued personal, sick (in
the event of legitimate illness) and vacation days (collectively "Time Off
Days"). After the Company's 2004 fiscal year 10K is filed, You shall be
permitted to take at least five (5) Time Off Days. Except for Time Off Days due
to illness, all Time Off Days must be approved in writing in advance by the
Company's Chief Executive Officer. Such approval shall not be unreasonably
withheld.
3. Transition Duties. During the Term, You shall perform such duties and
responsibilities as are assigned to you by the Company's Chief Executive Officer
and/or Chief Financial Officer ("CFO") and You shall abide by the reasonable
directions of such officers. During the Term, Your primary duty shall be to
assist the CFO in completing the implementation of the internal control
provisions of the Xxxxxxxx-Xxxxx Act and the filing of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2004. In addition,
Your duties shall also include, but not be limited to: (i) fully disclosing to
the CFO all business activities in which You were involved during Your
employment with the Company, including the status of projects that are not
completed as of the Effective Date, and (ii) providing to the CFO all reports
concerning the projects and business activities in which You were involved
during Your employment with the Company, (iii) being available to answer any
questions that the Company may have concerning Your business activities during
Your employment with the Company, and (iv) other duties as assigned to You by
the Company's Chief Executive Officer and/or CFO. You agree to perform such
duties faithfully, diligently, and industriously, and agree to use Your best
efforts to complete such duties to the satisfaction of the Company. You shall
report to work at the Company, 0000 Xxxxxxxxx Xx., Xxxxx 000, Xxxxxxx, Xxxxxxx
00000, to fulfill Your duties under this Section 3 on a Full-Time Basis (as
defined below) through the Term; provided, however, the Company may ask You, at
any time and for any reason, (i) not to report to work, and/or (ii) not to
perform any additional duties, including, but not limited to, the duties
described in this Section 3. For purposes of the preceding sentence only,
"Full-Time Basis" shall mean working during time periods approximating the
Company's normal business hours of 8:30 a.m. to 5:30 p.m. You shall cooperate
with the Company as set forth in this Section during the Term as is reasonably
necessary to affect a smooth transition of Your duties. The transition duties
contemplated by this Section shall be reasonably related to accounting and
finance responsibilities commensurate with an executive-level position at a
public company.
4. Resignation as Officer of Company. You will, at the same time You
execute this Release Agreement, resign as (i) Executive Vice President and Chief
Financial Officer of the Company, and (ii) an officer of each of the Company's
subsidiaries in which You serve as Treasurer, by executing the resignation
letter attached to this Agreement as Exhibit A.
5. Separation Benefits. In accordance with and as more fully set forth in
the Separation and Release Agreement attached as Exhibit B (the "Separation
Agreement"), the Company shall provide the separation benefits described in
Section A(1) of the Separation Agreement (the "Separation Benefits"). The
Company shall pay You the Separation Benefits provided that You:
(a) satisfactorily complete Your transition duties (as set forth in
Section 3 above);
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(b) on March 31, 2005, execute the Separation Agreement; and
(c) comply with all obligations to the Company to which You are subject,
including, but not limited to, all restrictive covenants and
post-termination obligations contained in this Release Agreement.
6. Release. In exchange for the consideration stated above, You release
and discharge the Company from any claim or liability, whether known or unknown,
arising out of any event, act or omission occurring on or before the day You
sign this Release Agreement, including, but not limited to, claims arising out
of Your employment or the Employment Agreement, claims arising by virtue of Your
status as an officer of the Company, claims for breach of contract, tort,
employment discrimination, retaliation, or harassment, as well as any other
statutory or common law claims, at law or in equity, recognized under any
federal, state, or local law. You also release any claims for unpaid back pay,
sick pay, vacation pay, expenses, bonuses, claims to stock options, claims to
the vesting of stock options, commissions, attorneys' fees, or any other
compensation.
You agree that You are not entitled to any additional payment or benefits from
the Company, except as set forth in this Release Agreement. You also acknowledge
and agree that the Employment Agreement has terminated and is of no further
force or effect as of the Effective Date.
Notwithstanding anything to the contrary in this Section 6, the Parties
acknowledge and agree that (a) this Release Agreement does not waive Your right
to (i) claim or receive indemnification as an officer of the Company under any
applicable state laws, the Company's Articles of Incorporation, or the Company's
By-laws, or (ii) claim or receive insurance coverage or be defended under any
officers insurance coverage which applies to officers of the Company and which
applies to You in Your capacity as a former Executive Vice President and Chief
Financial Officer of the Company; and (b) You do not waive any claims arising
under this Release Agreement.
7. Restrictive Covenants. You acknowledge that the restrictions contained
in this Section 7 are reasonable and necessary to protect the legitimate
business interests of the Company, and will not impair or infringe upon Your
right to work or earn a living after Your employment with the Company ends.(2)
A. Trade Secrets and Confidential Information. You represent and
warrant that: (i) You are not subject to any legal or contractual duty or
agreement that would prevent or prohibit You from performing the duties
contemplated by this Release Agreement or otherwise complying with this Release
Agreement, and (ii) You are not in breach of any legal or contractual duty or
agreement, including any agreement concerning trade secrets or confidential
information owned by any other party.
You agree that You will not: (i) use, disclose, or reverse engineer
the Trade Secrets or the Confidential Information for any purpose other than the
Company's Business, except as authorized in writing by the Company; (ii) during
Your employment with the Company, use, disclose, or reverse engineer (a) any
confidential information or trade secrets of any former employer or third party,
or (b) any works of authorship developed in whole or in part by You during any
former employment or for any other party, unless authorized in writing by the
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(2) Unless otherwise indicated, all capitalized terms used in this Section 7 are
defined in sub-section 7(E).
Page 3 of 6
former employer or third party; or (iii) upon Your resignation or termination
(a) retain Trade Secrets or Confidential Information, including any copies
existing in any form (including electronic form), which are in Your possession
or control, or (b) destroy, delete, or alter the Trade Secrets or Confidential
Information without the Company's written consent.
The obligations under this sub-section 7(A) shall: (i) with
regard to the Trade Secrets, remain in effect as long as the information
constitutes a trade secret under applicable law, and (ii) with regard to the
Confidential Information, remain in effect during the Restricted Period. The
confidentiality, property, and proprietary rights protections available in this
Release Agreement are in addition to, and not exclusive of, any and all other
rights to which the Company is entitled under federal and state law, including,
but not limited to, rights provided under copyright laws, trade secret and
confidential information laws, and laws concerning fiduciary duties.
B. Non-Solicitation of Customers. During the Restricted Period, You
will not, directly or indirectly, solicit any Customer of the Company for the
purpose of providing any goods or services competitive with the Business. The
restrictions set forth in this sub-section 7(B) apply only to the Customers with
whom You had Contact.
C. Non-Recruit of Employees. During the Restricted Period, You will
not, directly or indirectly, solicit, recruit or induce any Employee to (a)
terminate his or her employment relationship with the Company or (b) work for
any other person or entity engaged in the Business.
D. Non-Competition. During the Non-Competition Restricted Period,
You will not, on Your own behalf or on behalf of any person or entity engaged in
the Business, engage in or perform within the Territory any of the activities
which You performed, or which are substantially similar to those which You
performed, as Executive Vice President and Chief Financial Officer of the
Company. Nothing in this sub-section 7(D) or this Release Agreement shall be
construed to prohibit You from performing activities which You did not perform
for the Company.
E. Definitions. Unless otherwise indicated, the capitalized terms in
this sub-section 7 shall be defined as follows:
(i) "Business" shall mean the business of owning and operating
hotels including, but not limited to, full-service hotels which have food and
beverage operations and meeting spaces.
(ii) "Confidential Information" means (a) information of the
Company, to the extent not considered a Trade Secret under applicable law, that
(i) relates to the business of the Company, (ii) possesses an element of value
to the Company, (iii) is not generally known to the Company's competitors, and
(iv) would damage the Company if disclosed, and (b) information of any third
party provided to the Company which the Company is obligated to treat as
confidential. Confidential Information includes, but is not limited to, (i)
future business plans, (ii) the composition, description, schematic or design of
products, future products or equipment of the Company, (iii) communication
systems, audio systems, system designs and related documentation, (iv)
advertising or marketing plans, (v) information regarding independent
contractors, employees, clients and customers of the Company, and (vi)
information concerning the Company's financial structure and methods and
procedures of operation. Confidential Information shall not include any
information that (i) is or becomes generally available to the
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public other than as a result of an unauthorized disclosure, (ii) has been
independently developed and disclosed by others without violating this Agreement
or the legal rights of any party, or (iii) otherwise enters the public domain
through lawful means.
(iii) "Contact" means any interaction between You and a Customer
which (i) takes place in an effort to establish, maintain, and/or further a
business relationship on behalf of the Company and (ii) occurs during the last
year of Your employment with the Company (or during Your employment if employed
less than a year).
(iv) "Customer" means any person or entity to whom the Company has
sold its products or services, or solicited to sell its products or services.
(v) "Employee" means any person who (i) is employed by the Company
at the time Your employment with the Company ends, or (ii) is employed by the
Company during the Restricted Period.
(vi) "Non-Competition Restricted Period" means the time period
during Your employment with the Company, and for six (6) months after Your
employment with the Company ends.
(vii) "Restricted Period" means the time period during Your
employment with the Company, and for two (2) years after Your employment with
the Company ends.
(viii) "Territory" means the fifteen (15) mile radius surrounding
the Company's corporate office at 0000 Xxxxxxxxx Xx., Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000.
(ix) "Trade Secrets" means information of the Company, and its
licensors, suppliers, clients and customers, without regard to form, including,
but not limited to, technical or nontechnical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, or a list of actual or potential
customers or suppliers which is not commonly known by or available to the public
and which information (i) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
8. Independent Enforcement. The covenants contained in Section 7 of this
Release Agreement shall be construed as agreements independent of any other
agreements or any other provision in this Release Agreement, and the existence
of any claim or cause of action by You against the Company, whether predicated
on this Release Agreement or otherwise, regardless of who was at fault and
regardless of any claims that either You or the Company may have against the
other, shall not constitute a defense to the enforcement by the Company of the
covenants contained in Section 7 of this Release Agreement. The Company shall
not be barred from enforcing the restrictive covenants contained in Section 7 of
this Release Agreement by reason of any breach of any other part of this Release
Agreement or any other agreement with You.
9. Entire Agreement. This Release Agreement, including Exhibits A and B
which are incorporated by reference, constitutes the entire agreement between
the Parties. This Release Agreement supersedes any prior communications,
agreements or understandings, whether oral or written, between the Parties
arising out of or relating to Your employment,
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including, but not limited to, the Employment Agreement. You acknowledge that
the restrictive covenants contained in Section 7 of this Release Agreement
supersede any restrictive covenants entered into between the Parties. Other than
the terms of this Release Agreement, no other representation, promise or
agreement has been made with You to cause You to sign this Release Agreement.
10. No Admission of Liability. This Release Agreement is not an admission
of liability by the Company. The Company denies any liability whatsoever. The
Company enters into this Release Agreement to reach a mutual agreement
concerning Your employment with the Company up to and including the day You sign
this Release Agreement.
11. Severability. The provisions of this Release Agreement are severable.
If any provision is determined to be invalid, illegal, or unenforceable, in
whole or in part, the remaining provisions and any partially enforceable
provisions shall remain in full force and effect.
12. Attorneys' Fees. In the event of litigation relating to this Release
Agreement, the prevailing party shall be entitled to recover attorneys' fees and
costs of litigation, in addition to all other remedies available at law or in
equity.
13. Governing Law. The laws of the State of Georgia shall govern this
Release Agreement. If Georgia's conflict of law rules would apply another
state's laws, the Parties agree that Georgia law shall still govern.
14. Consent to Jurisdiction. You agree that any claim arising out of or
relating to this Release Agreement shall be brought in a state or federal court
of competent jurisdiction in Georgia. You consent to the personal jurisdiction
of the state and/or federal courts located in Georgia. You waive (i) any
objection to jurisdiction or venue, or (ii) any defense claiming lack of
jurisdiction or improper venue, in any action brought in such courts.
15. Successors and Assigns. This Release Agreement, including Exhibits A
and B, shall be assignable to, and shall inure to the benefit of, the Company's
successors and assigns, including, without limitation, successors through
merger, name change, consolidation, or sale of a majority of the Company's stock
or assets, and shall be binding upon You and Your heirs and assigns.
16. Voluntary Agreement. You acknowledge the validity of this Release
Agreement and represent that You have the legal capacity to enter into this
Release Agreement. You acknowledge that You have carefully read this Release
Agreement, know and understand the terms and conditions, including its final and
binding effect, and sign it voluntarily.
IN WITNESS WHEREOF, the Parties hereto have executed this Release
Agreement as of the Effective Date.
LODGIAN, INC. XXXXXX X. XXXXXX
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxx
------------------- --------------------
Title: SVP & General Counsel Date: January 31, 2005
Date: January 31, 2005
Page 6 of 6
EXHIBIT A
[EXHIBIT A LOCATED ON NEXT PAGE]
January 31, 2005
W. Xxxxxx Xxxxxxxxxx
President and Chief Executive Officer
Lodgian, Inc.
0000 Xxxxxxxxx Xx.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Re: Resignation from Lodgian, Inc. and its subsidiaries
Dear Xxx:
Effective as of January 31, 2005, I resign (i) as Executive Vice President
and Chief Financial Officer of Lodgian, Inc., and (ii) as Treasurer from each of
the entities listed in Attachment 1.
Sincerely,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Page 1 of 6
ATTACHMENT 1
ENTITY STATE OF INC.
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1075 Hospitality, LP GA
12801 NWF Beverage Management, Inc. TX
Albany Hotel, Inc. FL
AMIOP Acquisition General Partner SPE Corp. DE
Apico Hills. Inc. PA
Apico Inns of Greentree, Inc. PA
Apico Inns of Pennsylvania, Inc. PA
Apico Inns of Pittsburgh, Inc. PA
Apico Management Corp. PA
Atlanta-Boston Holdings, LLC GA
Atlanta-Boston Lodging, LLC GA
Atlanta-Boston SPE, Inc. GA
Atlanta-Hillsboro Lodging, LLC GA
Atlanta-Rio Rancho Beverage Management, Inc. NM
Brecksville Hospitality, Inc. OH
Brecksville Hospitality, LP OH
Brunswick Motel Enterprises, Inc. GA
Columbus Hospitality Assocates, LP FL
Council of Unit Owners of Silver Spring Plaza
Condominium MD
Courtyard Club AR
Dedham Lodging Assocates I, LP GA
Dedham Lodging SPE, Inc. DE
Dothan Hospitality 3053, Inc. AL
Dothan Hospitality 3071, Inc. AL
East Washington Hospitality, LP FL
European Ventures, Inc. FL
Fayetteville Motel Enterprises, Inc. NC
Fort Xxxxx Hospitality Associates II, LP FL
Fourth Street Hospitality, Inc. IA
Gadsden Hospitality, Inc. AL
Georgia-California Beverage Corp. GA
Great Southern Mining Co., Inc. AL
Harrisburg Motel Enterprises, Inc. PA
Heartlands Garden Grille, Inc. KS
Hilton Head Motel Enterprises, Inc. SC
Impac Development & Construction, LLC GA
Impac Holdings III, LLC GA
Impac Hotel Group Mezzanine, LLC DE
Impac Hotel Group, Inc. FL
Impac Hotel Group, LLC GA
Impac Hotel Management, LLC GA
Impac Hotels Development, Inc. DE
Impac Hotels I, LLC GA
Page 2 of 6
Impac Hotels II, LLC GA
Impac Hotels III, LLC GA
Impac Hotels Member SPE, Inc. DE
Impac Spe #1, Inc. GA
Impac Spe #2, Inc. GA
Impac SPE #3, Inc. GA
Impac SPE #4, Inc. GA
Impac SPE #5, Inc. GA
Impac SPE #6, Inc. GA
Island Motel Enterprises, Inc. GA
KDS Corporation NV
Xxxxxx Motel Enterprises, Inc. IN
Lafayette Beverage Management, Inc. XX
Xxxxxxxx Hospitality Associates, LP KS
Little Rock Beverage Management, Inc. AR
Little Rock Lodging Associates I, LP GA
Lodgian Abeline Beverage Corp. TX
Lodgian Acquisition, LLC GA
Lodgian AMI, Inc. MD
Lodgian Anaheim, Inc. CA
Lodgian Augusta LLC DE
Lodgian Austin Beverage Corp. TX
Lodgian Bridgeport LLC DE
Lodgian Cincinnati LLC DE
Lodgian Coconut Grove LLC DE
Lodgian Coconut Grove, Inc. DE
Lodgian Coconut Grove, LLC GA
Lodgian Colchester LLC DE
Lodgian Dallas Beverage Corp. TX
Lodgian Denver LLC DE
Lodgian Fairmont LLC DE
Lodgian Financing Corp. DE
Lodgian Financing Mezzanine, LLC DE
Lodgian Xxxxxxxx LLC DE
Lodgian Florida, Inc. FL
Lodgian Fort Xxxxxxxx LLC DE
Lodgian Hamburg LLC DE
Lodgian Hotel Acquisition, LLC GA
Lodgian Hotels Fixed I, LLC DE
Lodgian Hotels Fixed II, LLC MD
Lodgian Hotels Fixed III, LLC DE
Lodgian Hotels Fixed IV GP, Inc. DE
Lodgian Hotels Fixed IV, LP TX
Lodgian Hotels Floating, LLC DE
Lodgian Hotels, Inc. DE
Lodgian Xxxxxxx LLC DE
Lodgian Lafayette LLC DE
Lodgian Lancaster North, Inc. PA
Page 3 of 6
Lodgian Little Rock SPE, Inc. DE
Lodgian Management Corp. DE
Lodgian Market Center Beverage Corp. TX
Lodgian Memphis LLC DE
Lodgian Memphis Property Owner, LLC DE
Lodgian Merrimack LLC DE
Lodgian Mezzanine Fixed, LLC DE
Lodgian Mezzanine Floating, LLC DE
Lodgian Mezzanine Springing Member, Inc. DE
Lodgian Morgantown LLC DE
Lodgian Mortgage Springing Member, Inc. DE
Lodgian Mount Laurel, Inc. NJ
Lodgian North Miami LLC DE
Lodgian Ontario, Inc. CA
Lodgian Pinehurst Holdings, LLC GA
Lodgian Pinehurst, LLC GA
Lodgian Richmond SPE, Inc. GA
Lodgian Richmond, LLC GA
Lodgian Syracuse LLC DE
Lodgian Tulsa LLC DE
Lodgian York Market Street, Inc. PA
Macon Hotel Associates LLC MA
Macon Hotel Associates Manager, Inc. GA
Manhattan Hospitality Associates, LP KS
XxXxxxxx Motel, Inc. PA
Melbourne Hospitality Associates, LP FL
Minneapolis Motel Enterprises, Inc. MN
Moon Airport Motel, Inc. PA
New Orleans Airport Motel Associates, LP FL
New Orleans Airport Motel Enterprises, Inc. LA
NH Motel Enterprises, Inc. MI
Palm Beach Motel Enterprises, Inc. FL
Penmoco, Inc. MI
Prime-American Realty Corp. CT
Raleigh Downtown Enterprises, Inc. NC
Raleigh Motel Enterprises, Inc. NC
REPL, Inc. AK
Royce Holding Corp. DE
Royce Hotel Corporation DE
Royce Management Corp of Georgia GA
Royce Management Corp of Morristown NJ
Royce Management Corp. FL
Saginaw Hospitality, LP MI
Second Fayetteville Motel Enterprises, Inc. NC
Second Palm Beach Motel Enterprises, Inc. FL
Servico Acquisition Corp. FL
Servico Austin, Inc. TX
Servico Cedar Rapids, Inc. IA
Page 4 of 6
Servico Centre Associates, Ltd. FL
Servico Centre Condominium Association, Inc. FL
Servico Colesville, Inc. MD
Servico Columbia II, Inc. MD
Servico Columbia, Inc. MD
Servico Columbus, Inc. FL
Servico Concord, Inc. CA
Servico Council Bluffs, Inc. IA
Servico East Washington, Inc. FL
Servico Flagstaff, Inc. AZ
Servico Fort Xxxxx XX, Inc. FL
Servico Fort Xxxxx, Inc. FL
Servico Frisco, Inc. CO
Servico Grand Island, Inc. NY
Servico Hilton Head, Inc. SC
Servico Hospitality, Inc. FL
Servico Hotels I, Inc. FL
Servico Hotels II, Inc. FL
Servico Hotels III, Inc. FL
Servico Hotels IV, Inc. FL
Servico Houston, Inc. TX
Servico Jamestown, Inc. NY
Servico Lansing, Inc. MI
Servico Xxxxxxxx XX, Inc. KS
Servico Xxxxxxxx, Inc. KS
Servico Lending, Inc. FL
Servico Management Corporation FL
Servico Management Corporation TX
Servico Manhattan II, Inc. KS
Servico Manhattan, Inc. KS
Servico Market Center, Inc. TX
Servico Maryland, Inc. MD
Servico Melbourne, Inc. FL
Servico Metairie, Inc. LA
Servico New York, Inc. NY
Servico Niagara Falls, Inc. NY
Servico Northwoods, Inc. FL
Servico Omaha Central, Inc. NE
Servico Omaha, Inc. NE
Servico Operations Corporation FL
Servico Operations Mezzanine, LLC DE
Servico Palm Beach General Partner SPE, Inc. DE
Servico Pensacola 7200, Inc. DE
Servico Pensacola 7330, Inc. DE
Servico Pensacola, Inc. DE
Servico Rolling Xxxxxxx, Inc. Illinois
Servico Roseville, Inc. MN
Servico Saginaw, Inc. MI
Page 5 of 6
Servico Silver Springs, Inc. FL
Servico Summerville, Inc. SC
Servico Tucson, Inc. AZ
Servico West Des Moines, Inc. IA
Servico West Palm Beach, Inc. FL
Servico Wichita, Inc. KS
Servico Windsor, Inc. FL
Servico Winter Haven, Inc. FL
Servico Worcester, Inc. FL
Servico, Inc. FL
Xxxxxx Motel Enterprises, Inc. PA
SHC of Delaware, Inc. DE
Sheffield Motel Enterprises, Inc. AL
Sioux City Hospitality, LP IA
Sixteen Hotels, Inc. MD
SMC Management Corp of Ft. Xxxxx IN
SMC Management Corp of Indianapolis IN
South Carolina Interstate Motel Enterprises SC
Southfield Hotel Group II, LP MI
Stevens Creek Hospitality, Inc. GA
Tyler Motel Associates, Inc. TX
W.V.B.M., Inc. WV
Washington Motel Enterprises, Inc. PA
Wilpen, Inc. PA
Worcester Hospitality Associates, LP FL
Page 6 of 6
EXHIBIT B
[EXHIBIT B LOCATED ON NEXT PAGE]
SEPARATION AND RELEASE AGREEMENT
March 31, 2005
Xxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Re: Your resignation from Lodgian, Inc.
Dear Xxxxxx:
This letter will confirm that you and Lodgian, Inc. (the "Company")(1) have
agreed to the separation of your employment effective March 31, 2005 (the
"Separation Date"). This separation and release agreement (the "Separation
Agreement") sets forth the terms under which your employment with the Company is
ending. We desire to resolve any and all issues relating to your employment and
the conclusion of your employment with the Company amicably and on mutually
satisfactory terms. Specifically, you ("You" or "Your") and the Company
(collectively, the "Parties") agree:
A. SEPARATION TERMS
1. Separation Benefits. Provided that You satisfy the conditions of this
Separation Agreement, the Company will:
(a) Separation Payment. On the eighth day after You return an executed
version of this Agreement to the Company's General Counsel, pay You
a lump sum payment of $109,437.12; provided, however, if in
connection with Deloitte & Touche's ("Deloitte") year-end audit of
the financial statements of the Company and Deloitte's attestation
of management's assertions regarding the effectiveness of the
Company's internal control over financial reporting, as required by
Section 404 of The Sarbanes Oxley Act of 2002, Deloitte renders a
"clean" audit opinion for Fiscal Year 2004 and an unqualified
attestation report for Fiscal Year 2004, as determined in the sole
discretion of the Company's Board of Directors, then the lump sum
payment the Company will pay to You will be increased from
$109,437.12 to $164,155.68;
(b) Paid Vacation. Pay You $16,836.48 as payment of Your accrued, unused
vacation less the amount of vacation You use during the Term (as
defined in the Release Agreement dated January 31, 2005 (the
"Release Agreement"));
(c) Payment of COBRA Premiums. Pay Your COBRA premium for family
coverage under the Company's major medical group health plan on a
monthly basis through May 31, 2006;
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(1) The term "Company" includes the company's parents, subsidiaries, affiliates
and all related companies, as well as their respective officers, directors,
shareholders, employees, agents and any other representatives, any employee
benefits plan of the Company, and any fiduciary of those plans.
Page 1 of 4
(d) Attorney's Fees. Pay You a lump sum payment up to $5,000 for
attorney's fees You incurred directly relating to this Separation
Agreement (the "Attorney's Fees"); provided, however, You must first
provide the General Counsel with an invoice of Your Attorney's Fees
(the "Invoice"). The Company will not pay You for any Invoice which
is submitted to the Company after April 30, 2005;
(e) Accelerated Vesting. Accelerate the vesting of Your options to
acquire shares of the Company's common stock (the "Options") granted
to You pursuant to the Stock Option Grant Certificates dated
September 5, 2003, October 13, 2003, and June 25, 2004 (collectively
the "Certificates"). As a result, You will be vested in an
additional 35,832 shares, resulting in a total vesting of 42,499
shares as of the Separation Date. Except as provided in this
provision, the Options will continue to be governed by the Company's
Amended and Restated Stock Incentive Plan and the Certificates. Your
right to exercise the Options shall terminate thirty (30) days
following the Separation Date; and
(f) Non-Compete Waiver. Waive Section 7(D) of the Release Agreement.
The separation benefits stated above will be subject to applicable withholdings,
including taxes and Social Security. Because You are no longer employed, Your
rights to any particular employee benefit will be governed by applicable law and
the terms and provisions of the Company's various employee benefit plans and
arrangements. You acknowledge that Your Separation Date will be the date used in
determining benefits under all Company employee benefit plans. The Company's
obligations listed in sub-sections A(1)(a) - A(1)(f) above shall terminate
immediately upon any breach by You of the Release Agreement and/or the
Separation Agreement.
2. Release. In exchange for the separation benefits stated above, You release
and discharge the Company from any claim or liability, whether known or unknown,
arising out of any event, act or omission occurring on or before the day You
sign this Separation Agreement, including, but not limited to, claims arising
out of Your employment or the cessation of Your employment, claims arising out
of the Release Agreement, claims arising by virtue of Your status as an officer
of the Company, claims for breach of contract, tort, employment discrimination,
retaliation, or harassment, as well as any other statutory or common law claims,
at law or in equity, recognized under any federal, state, or local law. You also
release any claims for unpaid back pay, sick pay, vacation pay, expenses,
bonuses, claims to stock options, claims to the vesting of stock options,
commissions, attorneys' fees, or any other compensation.
You acknowledge and agree that You are not entitled to any additional payment or
benefits from the Company, except as set forth in this Separation Agreement. You
further acknowledge and agree that You have suffered no harassment, retaliation,
employment discrimination, or work-related injury or illness.
Notwithstanding anything to the contrary in this Section A(2), the Parties
acknowledge and agree that (a) this Separation Agreement does not waive Your
right to (i) claim or receive indemnification as an officer of the Company under
any applicable state laws, the Company's Articles of Incorporation, or the
Company's By-laws, or (ii) claim or receive insurance coverage or be defended
under any officers insurance coverage which applies to officers of the Company
and which applies to You in Your capacity as a former Executive Vice President
and Chief Financial Officer of the Company; and (b) You do not waive any claims
arising under this Separation Agreement.
Page 2 of 4
B. YOUR ONGOING OBLIGATIONS
1. Return of Company Property. You will, on the Separation Date, return to the
Company all of the Company's property, including, but not limited to, keys,
passcards, credit cards, customer lists, rolodexes, tapes, software, laptop
computer, computer files, marketing and sales materials, and any other record,
document or piece of equipment belonging to the Company. You will not retain any
copies of the Company's property, including any copies existing in electronic
form, which are in Your possession or control. You acknowledge that You have not
and will not destroy, delete, or alter any Company property without the
Company's consent.
2. References. In response to a written reference request authorized by You, the
Company will provide a reference letter which discloses Your dates of
employment, job titles, and which states that it is the Company's policy not to
disclose any additional information. You must direct all reference requests to
Xxx Xxxxx, General Counsel, at Lodgian, Inc., 0000 Xxxxxxxxx Xx., Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000, or his successor.
3. Future Employment. You agree that the Company has no obligation to consider
You for employment should You apply in the future.
C. GENERAL PROVISIONS
1. No Admission of Liability. This Separation Agreement is not an admission of
liability by the Company. The Company denies any liability whatsoever. The
Company enters into this Separation Agreement to reach a mutual agreement
concerning Your separation from the Company.
2. Attorneys' Fees. In the event of litigation relating to this Separation
Agreement, the prevailing party shall be entitled to recover attorneys' fees and
costs of litigation, in addition to all other remedies available at law or in
equity.
3. Waiver. The Company's failure to enforce any provision of this Separation
Agreement shall not act as a waiver of that or any other provision. The
Company's waiver of any breach of this Separation Agreement shall not act as a
waiver of any other breach.
4. Severability. The provisions of this Separation Agreement are severable. If
any provision is determined to be invalid, illegal, or unenforceable, in whole
or in part, the remaining provisions and any partially enforceable provisions
shall remain in full force and effect.
5. Governing Law. The laws of the State of Georgia shall govern this Separation
Agreement. If Georgia's conflict of law rules would apply another state's laws,
the Parties agree that Georgia law shall still govern.
6. Entire Agreement. This Separation Agreement, including the Release Agreement
which is incorporated by reference, constitutes the entire agreement between the
Parties. You acknowledge that Your post-termination obligations contained in
Section 7 of the Release Agreement are valid, enforceable and reasonably
necessary to protect the legitimate business interests of the Company, and You
agree to abide by such obligations. Except as set forth in this Section, this
Separation Agreement supersedes any prior communications, agreements or
understandings, whether oral or written, between the Parties arising out of or
relating to Your employment and the termination of that employment. Other than
the terms of this Separation
Page 3 of 4
Agreement, no other representation, promise or agreement has been made with You
to cause You to sign this Separation Agreement.
7. Amendments. This Separation Agreement may not be amended or modified except
in writing signed by both Parties.
8. Consent to Jurisdiction. You agree that any claim arising out of or relating
to this Separation Agreement shall be brought in a state or federal court of
competent jurisdiction in Georgia. You consent to the personal jurisdiction of
the state and/or federal courts located in Georgia. You waive (i) any objection
to jurisdiction or venue, or (ii) any defense claiming lack of jurisdiction or
improper venue, in any action brought in such courts.
9. Successors and Assigns. This Separation Agreement shall be assignable to, and
shall inure to the benefit of, the Company's successors and assigns, including,
without limitation, successors through merger, name change, consolidation, or
sale of a majority of the Company's stock or assets, and shall be binding upon
You and Your heirs and assigns.
10. Voluntary Agreement. You acknowledge the validity of this Separation
Agreement and represent that You have the legal capacity to enter into this
Separation Agreement. You acknowledge that You have carefully read this
Separation Agreement, know and understand the terms and conditions, including
its final and binding effect, and sign it voluntarily.
If the terms set forth in this Separation Agreement are acceptable, please sign
below and return the signed original to me on or before April 21, 2005. If the
Company does not receive a signed original on or before the above-stated date,
then this offer shall be revoked and You shall not be entitled to the separation
benefits stated above.
Sincerely,
Xxx Xxxxx
General Counsel
I acknowledge the validity of this Separation Agreement and represent that I
have the legal capacity to enter into this Separation Agreement. I have
carefully read the Separation Agreement, know and understand the terms and
conditions, including its final and binding effect, and sign it voluntarily.
_______________________ _______________________
Xxxxxx X. Xxxxxx Date
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