EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT, effective as of April 17, 2006 (the “Agreement”), by and between
INTERSTATE HOTELS & RESORTS, INC., a Delaware corporation (the “Company”), INTERSTATE MANAGEMENT
COMPANY, L.L.C., a Delaware limited liability company (the “LLC”) and any successor employer, and
XXXXX XXXXXXX (the “Executive”), an individual residing at .
WHEREAS, the Company and the LLC desire to employ the Executive in the capacity of Chief
Financial 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 and the LLC each hereby employ the Executive, and
the Executive agrees to be employed by the Company and the LLC, upon the terms and subject to the
conditions set forth herein, for a term of three (3) years, commencing on April 17, 2006 (the
“Commencement Date”), and ending on April 16, 2009 unless terminated earlier in accordance with
Section 4 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 the one hand, or the Company and the LLC, on the other, give notice
to the other party and parties 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 Chief Financial Officer of the Company and the LLC. The Executive shall undertake the
responsibilities and exercise the authority customarily performed, undertaken and exercised by
persons situated in a similar executive capacity, and shall perform such other specific duties and
services (including service as an officer, director or equivalent position of any direct or
indirect subsidiary without additional compensation) as they shall reasonably request consistent
with the Executive’s position.
(b) During the Term, the Executive agrees to devote his full business time and attention to
the business and affairs of the Company and the LLC 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 (i) serving,
with the approval of the Board, as a director, trustee or member of any committee of any
organization, (ii) engaging in charitable and community activities and (iii) managing his personal
investments and affairs; provided that such activities do not 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. Notwithstanding the foregoing and except as expressly provided herein, during the Term,
the Executive may not accept employment with any other individual or entity, or engage in any other
venture which is directly or indirectly in conflict or competition with the business of the Company
or the LLC.
(c) The Executive’s office and place of rendering his services under this Agreement shall be
in the principal executive offices of the Company which shall be in the Washington, D.C.
metropolitan area. Under no circumstances shall the Executive be required to relocate from the
Washington, D.C. metropolitan area or provide services under this Agreement in any other location
other than in connection with reasonable and customary business travel. During the Term, the
Company shall provide the Executive with executive office space, and administrative and secretarial
assistance and other
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support services consistent with his position as Chief Financial Officer and with his duties
and responsibilities hereunder.
3. Salary; Additional Compensation; Perquisites and Benefits.
(a) During the Term, the Company and the LLC will pay the Executive a base salary at an
aggregate annual rate of not less than $325,000 per annum, subject to annual review by the
Compensation Committee of the Board (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) For each fiscal year during the Term, the Executive will be eligible to receive a bonus
from the Company. The award and amount of such bonus shall be based upon the achievement of
predefined operating or performance goals and other criteria established by the Compensation
Committee, which goals shall give the Executive the opportunity to earn a cash bonus equal to an
amount between 0% and 125% of base salary.
(c) During the Term, the Executive will participate in all plans now existing or hereafter
adopted by the Company or the LLC for their management employees or the general benefit of their
employees, such as any pension, profit-sharing, deferred compensation plans, bonuses, stock option
or other incentive compensation plans, life and health insurance plans, or other insurance plans
and benefits on the same basis and subject to the same qualifications as other senior executive
officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion,
discontinue or eliminate any such plans.
(d) The Executive shall be eligible for stock option and restricted stock award grants from
time to time pursuant to the Company’s Incentive Plan in accordance with the terms thereof. All
such grants shall be at the discretion of the Board. Executive shall receive a separate option
agreement governing any such grants. The Executive shall be granted 25,000 restricted shares in
the Company on the Commencement Date and these shares will immediately vest and become
unrestricted. In addition, the Executive shall be granted 40,000 restricted shares in the Company
on the Commencement Date and these shares will vest equally on the first, second and third
anniversary of the date of grant as more fully described in a restricted stock agreement pursuant
to which the shares will be granted.
(e) The Company and the LLC 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. Executive will also be
reimbursed for certain reasonable relocation expenses expected to be approximately $75,000
including real estate costs to sell Executive’s home in Florida and moving fees in connection with
Executive’s move to the Washington, DC area at the beginning of his employment. Executive
acknowledges he already has a home in the Washington, DC area and will not need to incur costs
associated with finding a new residence.
(f) 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. Such vacation time shall not be
carried over year to year, and shall not be paid out upon termination of employment, or upon
expiration of this Agreement.
(g) The Company shall pay up to $7,500 annually toward the premium of a life insurance policy
with a death benefit payable to a beneficiary designated by the Executive in accordance with the
terms and conditions of such life insurance policy. The Company makes no representations or
warranties that the insurance benefits contained in the insurance policies supplied pursuant to
this section will be paid under any particular conditions, and the Company shall not be deemed a
guarantor of such benefits. Such benefits shall be payable in accordance with the terms of the
respective insurance policy.
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(h) To the fullest extent permitted by applicable law, the Executive shall be indemnified and
held harmless by the Company and the LLC against any and all judgments, penalties, fines, amounts
paid in settlement, and other reasonable expenses (including, without limitation, reasonable
attorneys’ fees and disbursements) actually incurred by the Executive in connection with any
threatened, pending or completed action, suit or proceeding (whether civil, criminal,
administrative, investigative or other) for any action or omission in his capacity as a director,
officer or employee of the Company or the LLC.
Indemnification under this Section 3(h) shall be in addition to, and not in substitution of,
any other indemnification by the Company or the LLC of its officers and directors. Expenses
incurred by the Executive in defending an action, suit or proceeding for which he claims the right
to be indemnified pursuant to this Section 3(h) shall be paid by the Company or the LLC, as the
case may be, in advance of the final disposition of such action, suit or proceeding upon the
Company’s or the LLC’s receipt of (x) a written affirmation by the Executive of his good faith
belief that the standard of conduct necessary for his indemnification hereunder and under the
provisions of applicable law has been met and (y) a written undertaking by or on behalf of the
Executive to repay the amount advanced if it shall ultimately be determined by a court that the
Executive engaged in conduct, including fraud, theft, misfeasance, or malfeasance against the
Company or the LLC, which precludes indemnification under the provisions of such applicable law.
Such written undertaking in clause (y) shall be accepted by the Company or the LLC, as the case may
be, without security therefor and without reference to the financial ability of the Executive to
make repayment thereunder. The Company and the LLC shall use commercially reasonable efforts to
maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance
policy, with a policy limit of at least $25,000,000, subject to customary exclusions, with respect
to claims made against officers and directors of the Company or the LLC; provided,
however, the Company or the LLC, as the case may be, shall be relieved of this obligation
to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the
Company or the LLC, it cannot be obtained at a reasonable cost.
4. Termination.
(a) The Term will terminate immediately upon the Executive’s death, Disability, or, upon
thirty (30) days’ prior written notice by the Company, in the case of a Determination of
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” shall occur when a physician,
reasonably satisfactory to both the Executive and the Company and paid for by the Company or the
LLC, finds that the Executive will likely be unable to perform his duties and responsibilities
under this Agreement for the above-specified period due to a physical or mental incapacity or
impairment. Such decision shall be final and binding on the Executive and the Company;
provided that if they cannot agree as to a physician, then each shall select and pay for a
physician and these two together shall select a third physician whose fee shall be borne equally by
the Executive and either the Company or the LLC and 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 or Determination of Disability in accordance with this section.
(b) The Term may be terminated by the Company upon notice to the Executive and with or without
“Cause” as defined herein.
(c) The Term may be terminated by the Executive upon notice to the Company and with or without
“Good Reason” as defined herein.
5. Severance.
(a) If the Term is terminated by the Company
for Cause,
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| (i) | the Company and the LLC will pay to the Executive an aggregate amount equal to the Executive’s accrued and unpaid base salary through the date of such termination; | ||
| (ii) | all unvested options and restricted shares will terminate immediately; and | ||
| (iii) | any vested options issued pursuant to the Company’s Incentive Plan and held by the Executive at termination, will expire ninety (90) days after the termination date. |
(b) If the Term is terminated by the Executive other than because of death, Disability or for
Good Reason,
| (i) | the Company and the LLC will pay to the Executive an aggregate amount equal to the Executive’s accrued and unpaid base salary through the date of such termination; | ||
| (ii) | all unvested options and restricted shares terminate immediately; and | ||
| (iii) | any vested options issued pursuant to the Company’s Incentive Plan and held by the Executive at termination, will expire ninety (90) days after the termination date. |
(c) If the Term is terminated upon the Executive’s death or Disability,
| (i) | the Company and the LLC will pay to the Executive’s estate or the Executive, as the case may be, a lump sum payment equal to the Executive’s base salary through the termination date, plus a pro rata portion of the Executive’s bonus for the fiscal year in which the termination occurred; | ||
| (ii) | the Company will make payments for one (1) year of all compensation otherwise payable to the Executive pursuant to this Agreement, including, but not limited to, base salary, bonus and welfare benefits; | ||
| (iii) | all of the Executive’s unvested stock options will immediately vest and such options, along with those previously vested and unexercised, will become exercisable for a period of one (1) year thereafter; and | ||
| (iv) | all of the Executive’s unvested restricted stock will immediately vest and all of the restricted stock of the Company held by the Executive shall become free from all contractual restrictions. |
(d) Subject to Section 5(e) hereof, if the Term is terminated by the Company without Cause or
other than by reason of Executive’s death or Disability, in addition to any other remedies
available, or if the Executive terminates the Term for Good Reason,
| (i) | the Company and the LLC shall pay the Executive a lump sum equal to one times the sum of (A) the Executive’s then annual base salary and (B) the amount of the Executive’s bonus for the preceding calendar year; |
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| (ii) | all of the Executive’s unvested stock options will immediately vest and such options, along with those previously vested and unexercised, will become exercisable for a period of one (1) year thereafter; | ||
| (iii) | all of the Executive’s unvested restricted stock will immediately vest and all of the restricted stock of the Company held by the Executive shall become free from all contractual restrictions; and | ||
| (iv) | the Company shall also continue in effect the Executive’s health and dental benefits (or similar health and dental benefits paid to senior executives) noted in Section 3(c) as follows: Upon Executive’s termination of employment, Executive shall be eligible for continued health insurance benefits under the federal law known as COBRA. Executive is required to timely elect COBRA in order to receive continued health insurance coverage under this Agreement. Upon Executive’s election of COBRA coverage and timely payment of applicable monthly COBRA premiums, Executive will receive health insurance coverage under COBRA up to the maximum period provided by law. The Company will reimburse Executive of the cost of such COBRA coverage until the earlier of (x) eighteen (18) months from the termination date or (y) the date on which the Executive obtains health insurance coverage from a subsequent employer. Executive acknowledges that if he does not timely elect COBRA coverage he will not receive continued health insurance benefits from the Company. Executive also acknowledges that he is responsible for any taxes due on payments from the Company in reimbursement for COBRA premium amounts. |
(e) If, within eighteen (18) months following a Change in Control, the Term is
terminated by the Executive for Good Reason or by the Company without Cause, in addition
to any other rights which the Executive may have under law or otherwise, the Executive
shall receive the same payments provided for under Section 5(d) hereof; provided,
that the amount of the multiplier described in clause (d)(i) of Section 5 hereof shall be
increased from one (1) to two (2) times.
(f) If at any time the Term is not extended pursuant to the proviso to Section 1 hereof 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 be deemed to have terminated the Executive’s
employment without Cause.
(g) 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;
provided, however, that the Company shall not be deemed to have Cause
pursuant to this clause (i) unless the Company gives the Executive written notice that the
specified conduct has occurred and making specific reference to this Section 5(g)(i) and
the Executive fails to cure the conduct within thirty (30) days after receipt of such
notice;
(ii) any willful and intentional act of the Executive involving malfeasance, fraud,
theft, misappropriation of funds, or embezzlement affecting the Company or the LLC;
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(iv) the Executive’s conviction of, or a plea of guilty or nolo contendere to, an
offense which is a felony;
(v) Executive’s material breach of this Agreement; or
(vi) Gross misconduct by Executive that is of such a serious or substantial nature
that a substantial likelihood exists that such misconduct would injure the reputation of
the Company if the Executive were to remain employed by the Company or LLC.
Termination of the Executive for Cause shall be communicated by a Notice of Termination. For
purposes of this Agreement, a “Notice of Termination” shall mean delivery to the Executive of a
copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire
membership of the Company’s Board at a meeting of the Board called and held for the purpose (after
reasonable notice to the Executive and reasonable opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board prior to such vote) of finding that in the good
faith opinion of the Board, the Executive was guilty of conduct constituting Cause and specifying
the particulars thereof in detail, including, with respect to any termination based upon conduct
described in clause (i) above that the Executive failed to cure such conduct during the thirty-day
period following the date on which the Company gave written notice of the conduct referred to in
such clause (i). For purposes of this Agreement, no such purported termination of the Executive’s
employment shall be effective without such Notice of Termination;
(h) 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 as described in Section 2(a) hereof, or any significant diminution in the
Executive’s duties or responsibilities, 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;
(ii) the change in the location of the Company’s principal executive offices or of the
Executive’s principal place of employment to a location outside the Washington, D.C.
metropolitan area;
(iii) any material breach of this Agreement by the Company or the LLC which is
continuing; or
(iv) a Change in Control; provided that a Change of Control shall only constitute Good
Reason if (i) the Company terminates the Executive within eighteen months following a
Change of Control or (ii) the Company changes the Executive’s job title, responsibilities
or decreases Executive’s compensation or Section 5(h)(ii) occurs within eighteen months
following a Change of Control and Executive within six months after such change (but not
later than eighteen months following the Change of Control) terminates the Term of this
Agreement;
provided, however, that the Executive shall not be deemed to have Good
Reason pursuant to clauses (h)(i) or (iii) above unless the Executive gives the Company
or the LLC, as the case may be, written notice that the specified conduct or event has
occurred and the Company or the LLC fails to cure such conduct or event within thirty
(30) days of the receipt of such notice.
(i) As used herein, the term “Change in Control” shall have the following meaning:
(i) the acquisition (other than from the Company) by any “Person” (as the term is used
for purposes of Sections 13(d) or 14(d) of the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty (30%)
percent or more of the combined voting power of the Company’s then outstanding voting
securities;
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(ii) the individuals who were members of the Board (the “Incumbent Board”) during the
previous twelve (12) month period, cease for any reason to constitute at least a majority
of the Board; provided, however, that if the election, or nomination for
election by the Company’s stockholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board;
(iii) approval by the stockholders of the Company of (a) merger or consolidation
involving the Company if the stockholders of the Company, immediately before such merger or
consolidation do not, as a result of such merger or consolidation, own, directly or
indirectly, more than fifty (50%) percent of the combined voting power of the then
outstanding voting securities of the corporation resulting from such merger or
consolidation in substantially the same proportion as their ownership of the combined
voting power of the voting securities of the Company outstanding immediately before such
merger or consolidation or (b) a complete liquidation or dissolution of the Company or an
agreement for the sale or other disposition of all or substantially all of the assets of
the Company; or
(iv) approval by the stockholders of the Company of any transaction (including without
limitation a “going private transaction”) involving the Company if the stockholders of the
Company, immediately before such transaction, do not as a result of such transaction, own
directly or indirectly, more than fifty (50%) percent of the combined voting power of the
then outstanding voting securities of the corporation resulting from such transaction in
substantially the same proportion as their ownership of the combined voting power of the
voting securities of the Company outstanding immediately before such transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur pursuant to
clause (i)(i) above solely because thirty (30%) percent or more of the combined voting power of the
Company’s then outstanding securities is acquired by (a) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained by the Company or any of its
subsidiaries or (b) any corporation which, immediately prior to such acquisition, is owned directly
or indirectly by the stockholders of the Company in the same proportion as their ownership of stock
in the Company immediately prior to such acquisition.
(j) The amounts required to be paid and the benefits required to be made available to the
Executive under this Section 5 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 under this Section 5.
(k) Notwithstanding the previous provisions, if payments made pursuant to this Section 5 are
considered “parachute payments” under Section 280G of the Internal Revenue Code of 1986, then the
sum of such parachute payments plus any other payments made by the Company to the Executive which
are considered parachute payments shall be limited to the greatest amount which may be paid to the
Executive under Section 280G without causing any loss of deduction to the Company under such
section; but only if, by reason of such reduction, the net after tax benefit of Executive shall
exceed the net after tax benefit if such reduction were not made. “Net after tax benefit” for
purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under
Section 5, plus (ii) all other payments and benefits which the Executive receives or is then
entitled to receive from the Company that would constitute a “parachute payment” which the meaning
of Section 280G of the Code, less (iii) the amount of federal income taxes payable with respect to
the foregoing (based upon the rate in effect for such years as set forth in the Code at the time
such payments and benefits are made and received), less (iv) the amount of excise taxes imposed
with respect to the payments and benefits described in (i) and (ii) above by Section 4999 of the
Code.
6. Cooperation with Company. Following the termination of the Executive’s employment
for any reason, Executive shall fully cooperate with the Company in all matters relating to the
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winding up of his pending work on behalf of the Company including, but not limited to, any
litigation in which the Company is involved and the orderly transfer of any such pending work to
other employees of the Company as may be designated by the Company. The Company agrees to
reimburse the Executive for any out-of-pocket expense he incurs in performing any work on behalf of
the Company following the termination of his employment.
7. Confidential Information.
(a) The Executive acknowledges that the Company and its subsidiaries or affiliated ventures
(“Company Affiliates”) own and have developed and compiled, and will in the future own, develop and
compile, certain Confidential Information and that during the course of his rendering services
hereunder Confidential Information will be disclosed to the Executive by the Company Affiliates.
The Executive hereby agrees that, during the Term and for a period of three years thereafter, he
will not use or disclose, furnish or make accessible to anyone, directly or indirectly, any
Confidential Information of the Company Affiliates. In particular, Executive covenants and agrees
that Executive shall not, directly or indirectly, communicate or divulge, or use for the benefit of
Executive or for any other person, or to the disadvantage of the Company, the Confidential
Information or any information in any way relating to the Confidential Information, without prior
written consent from the Company.
(b) As used herein, the term “Confidential Information” means any trade secrets, confidential
or proprietary information, or other knowledge, know-how, information, documents, materials, owned,
developed or possessed by a Company Affiliate pertaining to its businesses, including, but not
limited to, records, memoranda, computer files and disks, audio and video tapes, CD’s, and property
in any form containing information generally not known in the hospitality industry, including but
not limited to trade secrets, techniques, know-how (including designs, plans, procedures, processes
and research records), operations, market structure, formulas, data, programs, licenses, prices,
costs, software, computer programs, innovations, discoveries, improvements, research, developments,
test results, reports, specifications, data, formats, marketing data and business plans and
strategies, customer lists, client lists and client contact lists, 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).
(c) Upon demand by the Company and/or upon termination of employment with the Company for any
reason, Executive shall promptly deliver to the Company all property and materials, whether
written, descriptive, or maintained in some other form belonging to or relating to the Company, its
business affairs and those of its Affiliates, including all Confidential Information. If Executive
desires to retain copies of any forms or other materials developed by Executive during his
employment with the Company, he may request permission to do so from the Chief Executive Officer,
which permission shall not be unreasonably withheld.
(d) The Executive agrees that during his employment
hereunder and for a period of twelve (12) months thereafter he will not solicit or accept the
business of, or assist any other person to solicit or accept the business of, any persons or
entities who were customers of the Company, as of, or within one (1) year prior to, the Executive’s
termination of employment, for the purposes of providing products or services competitive with the
products or services of the Company or to cause such customers to reduce or end their business with
the Company.
(e) The Executive agrees that during his employment hereunder and for a period of twelve (12)
months thereafter he will not solicit, raid, entice or induce any person that then is or
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at any time during the twelve (12) month period prior to the end of the Term was an employee
in Executive’s department (other than a person whose employment with the Company has been
terminated by the Company), to become employed by any person, firm or corporation.
(f) The Executive shall make no statements disparaging the Company, any of its affiliates, any
of its officers, directors, or employees, or any of its business practices. The Company’s
directors and officers shall make no statements disparaging the Executive.
8. 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 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 Section 7 hereof
shall for any reason be held by a court of competent jurisdiction to be excessively broad, 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 5 of this Agreement and such failure shall continue for twenty (20)
days after written notice thereof from the Executive, all restrictions on the activities of the
Executive under Section 7 hereof shall be immediately and permanently terminated.
9. 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.
10. Notices. All notices required or permitted hereunder shall be in writing and
shall be deemed given and received when delivered personally, four (4) days after being mailed if
sent by registered or certified mail, postage pre-paid, or by one (1) 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: | ||||||
| Xxxxx Xxxxxxx | ||||||
| If to the Company or to the LLC, to: | ||||||
| Interstate Hotels & Resorts, Inc. | ||||||
| 0000 Xxxxx Xxxxxxx Xxxxx | ||||||
| Xxxxxxxxx, XX 00000 | ||||||
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| Attention: Legal Department | ||||||
or to any other address of which such party may have given notice to the other parties in the
manner specified above.
11. 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 and
the LLC hereunder will be binding upon and run in favor of their respective successors and assigns.
The Company will not be deemed to have breached this Agreement if any obligations of the Company
to make payments to the Executive are satisfied by the LLC.
(b) This Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of Delaware, without regard to conflict of laws principles.
(c) 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.
(d) 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.
(e) The Company and the LLC shall reimburse the Executive for all costs incurred by the
Executive in any proceeding for the successful enforcement of the terms of this Agreement,
including without limitation all costs of investigation and reasonable attorneys’ fees and expenses
incurred in the preparation of or in connection with such proceeding.
(f) This Agreement constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements and undertakings, both written and
oral, among the parties with respect to the subject matter hereof, all of which shall be terminated
on the Commencement Date. In addition, the parties hereto hereby waive all rights such party may
have under all other prior agreements and undertakings, both written and oral, among the parties
hereto.
11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date
first above written.
| EXECUTIVE: | ||||||
| /s/ XXXXX X. XXXXXXX | ||||||
| Xxxxx Xxxxxxx | ||||||
| COMPANY: | ||||||
| INTERSTATE HOTELS & RESORTS, INC. | ||||||
| By: | /s/ XXXXXX X. XXXXXX | |||||
| Name: Xxxxxx X. Xxxxxx | ||||||
| Title: Chief Executive Officer | ||||||
| LLC: | ||||||
| INTERSTATE MANAGEMENT COMPANY, LLC | ||||||
| By: Interstate Operating Company, L.P., a member | ||||||
| By: Interstate Hotels & Resorts, Inc., | ||||||
| its general partner | ||||||
| By: | /s/ XXXXXX X. XXXXXX | |||||
| Name: Xxxxxx X. Xxxxxx | ||||||
| Title: Chief Executive Officer | ||||||
