1
EXHIBIT 10.17
AGREEMENT
This Agreement ("Agreement") dated this _____ day of _________________,
1996 between Choice Hotels Holdings, Inc. (to be renamed Choice Hotels
International, Inc.) ("Employer"), a Delaware corporation with principal offices
at 00000 Xxxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxxxx 00000, and Xxxxxxx Xxxxxx, Xx.
("Employee"), sets forth the terms and conditions governing the employment
relationship between Employee and Employer.
1. Employment. During the term of this Agreement, as hereinafter
defined, Choice hereby employs Employee as Executive Chairman. Employee hereby
accepts such employment upon the terms and conditions hereinafter set forth and
agrees to faithfully and to the best of his ability perform such duties as may
be from time to time assigned by Employer, its Board of Directors or its
designees, such duties to be rendered at the principal office of Employer or at
such other place or places as Employer shall require. Employee also agrees to
perform his duties in accordance with policies established by Employer's Board
of Directors, which may be changed from time to time.
2. Term. Subject to the provisions for termination hereinafter
provided, the term of this Agreement shall begin on October __, 1996 (the
"Effective Date") and shall terminate three (3) years thereafter. Upon
expiration of said period, the parties may extend the term if they mutually
agree to do so. Notwithstanding the aforesaid term, either party may terminate
this Agreement upon thirty days' written notice to the other on the first and
second anniversaries of the Effective Date.
3. Compensation. For all services rendered by Employee under this
Agreement during the term thereof, Employer shall pay Employee the following
compensation:
(a) Salary. A base salary of One Hundred Sixty-Four Thousand
Eighty Eight Dollars ($164,088) per annum payable in
accordance with Employer's standard payroll practices from
time to time in effect. Such salary shall be reviewed from
time to time by the Employer's Compensation Committee and may
be increased at the discretion of Employer.
(b) Incentive Bonus. Employee shall have the opportunity to
earn up to a maximum of Sixty Percent (60%) per annum of the
base salary set forth in subparagraph 3(a) above in Employer's
bonus plans as adopted from time to time by Employer's Board
of Directors.
(c) Automobile. Employer shall provide Employee with allowance
for automobile expenses of $2,925 per year.
1
2
(d) Club Membership. Employer shall provide Employee with an
appropriate corporate membership at a dining and/or
recreational club for the purpose of business entertainment.
(e) Stock Options. Employee shall be eligible to receive
options under the Choice Hotels International , Inc. Long Term
Incentive Plan, or similar plan, to purchase common shares of
the Employer in accordance with the policy of the Board of
Directors as in effect from time to time.
(f) Other Benefits. Employee shall, when eligible, be entitled
to participate in all other fringe benefits accorded
headquarters employees by Employer as are in effect from time
to time.
4. Extent of Services. Employee shall devote twenty-five percent (25%)
of his professional time, attention, and energies to the business of Employer,
and shall not during the term of this Agreement be engaged in any other business
activity whether or not such business activity is pursued for gain, profit, or
other pecuniary advantage except for Employee's services as the Chairman and
Chief Executive Officer of Manor Care, Inc. ("Manor Care"), for which he shall
devote seventy-five percent (75%) of his professional time; but the foregoing
shall not be construed as preventing Employee from investing his assets in the
securities of public companies, or the securities of private companies or
limited partnerships outside the healthcare and lodging industries. Employee
warrants and represents that he has no contracts or obligations to others which
would materially inhibit the performance of his services under this Agreement.
5. Disclosure and Use of Information. Employee recognizes and
acknowledges that Employer's and affiliates' present and prospective clients,
franchises, management contracts, acquisitions and personnel, as they may exist
from time to time, are valuable, special and unique assets of Employer's
business. Throughout the term of this Agreement and for a period of two (2)
years after its termination or expiration for whatever cause or reason except as
required by applicable law, Employee shall not directly or indirectly, or cause
others to, make use of or disclose to others any information relating to the
business of Employer that has not otherwise been made public, including but not
limited to Employer's present or prospective clients, franchises, management
contracts or acquisitions. In the event of an actual or threatened breach by
Employee of the provisions of this paragraph, Employer shall be entitled to
injunctive relief restraining Employee from committing such breach or threatened
breach. Nothing herein stated shall be construed as preventing Employer from
pursuing any other remedies available to Employer for such breach or threatened
breach, including the recovery of damages from Employee.
6. Notices. Any notice, request or demand required or permitted to be
given under this Agreement shall be in writing, and shall be delivered
personally to the recipient or sent by certified or registered mail to his
residence in the case of Employee, or to its principal office in the case of the
Employer.
2
3
7. Elective Positions. Nothing contained in this Agreement is intended
to nor shall be construed to abrogate, limit or affect the powers, rights and
privileges of the Board of Directors or stockholders to remove Employee from the
positions set forth in paragraph 1, with or without just cause, during the term
of this Agreement or to elect someone other than Employee to those positions, as
provided by law and the By-Laws of Employer; provided, however, that if Employee
is so removed without cause, it is expressly understood and agreed, in the event
any one or combination of the foregoing occurs, Employee's rights under this
Agreement shall in no way be prejudiced, and Employee shall be entitled to
receive compensation referred to in paragraph above, except ungranted stock
options, provided that he is ready, willing and able to perform the duties and
responsibilities set forth above. Notwithstanding the foregoing, the election or
appointment of Employee to a different executive position shall not be
considered removal hereunder. Employee upon removal shall be entitled to pursue
other employment, and Employer shall be entitled to receive as offset and
thereby reduce its payment, the amount received by Employee from any other
active employment (other than the moneys received by Employee from Manor Care as
contemplated in paragraph 4 above). As a condition to Employee receiving his
compensation from Employer, Employee agrees to furnish Employer annually with
full information regarding such other employment and to permit verification of
his employment records and Federal income tax returns by an independent attorney
or accountant. Employer shall receive credit for unemployment insurance
benefits, social security insurance or like amounts actually received by
Employee.
8. Waiver of Breach. The waiver of either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
9. Assignment. The rights and obligations of Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer. The obligations of Employee hereunder may not be
assigned or delegated.
10. Termination of Agreement. This Agreement shall terminate upon the
following events and conditions:
(a) Upon expiration of its term;
(b) For just cause, including but not limited to refusal to
carry out duties and instructions relative to the position,
dishonesty, violation of this Agreement, and any willful acts
or omissions inimical to or contrary to policies of Employer
not arbitrarily applied in the case of Employee. In the event
of termination by Employer for just cause, vested but
unexercised options granted during the term of this Agreement
shall be forfeited as a result thereof, as of the date of
notice. In the event of a willful breach of this Agreement by
Employee, Employer shall have the right to purchase from
Employee, at the price paid by Employee, such of its Common
Stock as has been acquired by Employee by exercise of a stock
option granted during the term of this Agreement if such
exercise is within six (6) months prior to termination of this
Agreement as a result of such breach.
3
4
Employee shall be entitled to fourteen (14) days advance
written notice of termination, except where the basis for
termination constitutes conduct on the part of Employee
involving dishonesty or bad faith, in which case the
termination shall be effective upon the sending of notice.
(c) Subject to state and federal laws, if Employee is unable
to perform the essential functions of the services described
herein, Employer shall have the right to terminate this
Agreement by written notice to Employee. In the event of such
termination, all non-vested obligations of Employer to
Employee pursuant to this Agreement shall terminate.
(d) In the event of Employee's death during the term of this
Agreement, the Agreement shall terminate as of the date
thereof.
11. Entire Agreement. This instrument contains the entire agreement of
the parties. It may be changed only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought. This Agreement shall be governed by the laws of the
State of Maryland, and any litigation shall be conducted in the State of
Maryland.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
Employer:
CHOICE HOTELS HOLDINGS, INC.
(to be renamed Choice Hotels International, Inc.)
By: ______________________________
Title:____________________________
Employee:
__________________________________
Xxxxxxx Xxxxxx, Xx.
4
