TIER III
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "Agreement") is made as of this ____ day of
September, 1997, between DOUBLETREE CORPORATION (the "Company") and
____________________(the "Employee").
RECITALS
WHEREAS, the Company considers it essential to the best interest of its
stockholders to xxxxxx the continuous employment of key management personnel,
and believes that the possibility of a reorganization event of the Company
and the uncertainty and questions which it may raise among management may
result in the departure or distraction of management personnel to the
detriment of the Company and its stockholders; and
WHEREAS, the Board of Directors has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Employee, to
their assigned duties without distraction in the face of potentially
disturbing circumstances arising from the possibility of a reorganization
event of the Company;
NOW, THEREFORE, in consideration of the mutual premises set forth below
and for other good and valuable consideration, in order to induce the
Employee to remain in the employ of the Company, the Company agrees that the
Employee shall receive the severance benefits set forth in this agreement
("this Agreement") in the event his employment with the Company terminates
subsequent to a "Reorganization Event" of the Company under the circumstances
described below.
AGREEMENT
1. DEFINITIONS
The following terms used in this Agreement shall have the meanings given
below:
(a) "ANNUAL BASE SALARY" shall mean the Employee's gross annual salary
before any deductions, exclusions or any deferrals or contributions under any
Company plan or program, but excluding bonuses, incentive compensation,
employee benefits or any other non-salary form of compensation (determined
without regard to any reduction in Annual Base Salary that results in "Good
Reason" termination).
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(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "BONUS AMOUNT" shall mean the greater of (i) the dollar amount of
the annual bonus that would be payable to the Employee under the Company's
annual bonus plan applicable to the Employee, assuming payment at the
Employee's target level for the then-current full fiscal year (determined
without regard to any reduction in target bonus percentage that results in
"Good Reason" termination), or (ii) the dollar amount of the bonus paid or
payable to the Employee under the Company's annual bonus plan for the most
recently completed fiscal year under such plan. For the purposes hereof, the
"Bonus Amount" shall not include any special bonuses paid outside of the
Company's generally applicable annual bonus plan.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(e) "COMPANY" shall mean Doubletree Corporation, or any successor
corporation that assumes this Agreement under Section 13 hereof or otherwise
becomes bound by this Agreement.
(f) "COVERED TERMINATION" shall have the meaning given in Section 3
hereof.
(g) "DATE OF TERMINATION" shall mean the effective date of the Employee's
Covered Termination pursuant to Section 3 hereof.
(h) "DISABILITY" shall mean the absence of the Employee from the
full-time performance of his duties with the Company for six consecutive
months as a result of incapacity due to physical or mental illness, provided
the Company has given 30-day advance written notice to the Employee and he
has not returned to the full-time performance of his duties.
(i) "REORGANIZATION EVENT" shall mean the occurrence of any of the
following after the date hereof:
(i) any "person" (as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than
an employee benefit plan of the Company, or a trustee or other fiduciary
holding securities under an employee benefit plan of the Company, becomes a
"beneficial owner" (as defined in rule 13d-3 under the Exchange Act),
directly or indirectly, of 25% or more of the Company's then outstanding
voting securities carrying the right to vote in elections of persons to
the Board, regardless of comparative voting power of such voting
securities, and regardless of whether or not the Board shall have
approved such Reorganization Event; PROVIDED, HOWEVER, that an acquisition
after the date hereof by the General Electric Pension Trust or its
affiliates, by Xxxxxxx Xxxxxx, or by Xxxxx Xxxxxxxxx of 25% or more of the
Company's then-outstanding securities shall not be deemed a
"Reorganization Event" of the Company; or
(ii) during any period of two (2) consecutive years (not including any period
prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board (the "Incumbent Board")
and any other new director (other than a director designated by a
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person who shall have entered into an agreement with the Company to effect a
transaction described in clauses (i) or (iii) of this subsection) whose
election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved (each such new director being considered a member of the
"Incumbent Board"), cease for any reason to constitute a majority thereof; or
(iii) the holders of securities of the Company entitled to vote thereon
approve of the following:
(A) a merger or consolidation of the Company with any other corporation
regardless of which entity is the surviving company, other than a
merger or consolidation which would result in the voting securities
of the Company carrying the right to vote in elections of persons
to the Board outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 66 2/3% of
the Company's then-outstanding voting securities carrying the right
to vote in elections of persons to the Board or such securities of
such surviving entity outstanding immediately after such merger or
consolidation, or
(B) a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the
Company's assets.
Notwithstanding the definition of "Reorganization Event" of the Company as
set forth in this Agreement, the Board shall have full and final authority,
which shall be exercised in its discretion, to determine conclusively whether a
Reorganization Event of the Company has occurred, and the date of the
occurrence of such Reorganization Event and any incidental matters relating
thereto, with respect to a transaction or series of transactions which have
resulted or will result in a substantial portion of the assets or business of
the Company (as determined immediately prior to the transaction or series of
transactions by the Board in its sole discretion which determination shall be
final and conclusive) being held by a corporation at least 66 2/3% of whose
voting securities are held, immediately following such transaction or series of
transactions, by holders of the voting securities of the Company (determined
immediately prior to such transaction or series of transactions). The Board
may exercise such discretionary authority without regard to whether one or more
of the transactions in such series of transactions would otherwise constitute a
Reorganization Event of the Company under the definition set forth in this
Agreement. It is hereby understood and agreed that the consummation of the
business combination contemplated by the Agreement and Plan of Merger dated as
of September 1, 1997 among Doubletree Corporation, Promus Hotel Corporation and
Parent Holding Corp. shall constitute a Reorganization Event for purposes of
this Agreement.
2. TERM OF AGREEMENT
This Agreement shall commence on the date first written above and shall
continue in effect though December 31, 1998; PROVIDED, HOWEVER, that
commencing on January 1, 1999 and each
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January 1 thereafter, the term of this Agreement shall automatically be
extended for one additional year unless, not later than September 30 of the
preceding year, the Company shall have given notice that it does not wish to
extend this Agreement. Notwithstanding the foregoing, no notice of
non-renewal given by the Board shall be effective with respect to a
particular Reorganization Event if given after the occurrence of the
following events: (i) the Company enters into an agreement or letter of
intent, the consummation of which would result in such Reorganization Event,
(ii) any "person" makes a public announcement of its intention to take or
consider taking actions that would result in such Reorganization Event, or
(iii) any "person" (as defined above) initiates a tender offer which, if
consummated, would result in such Reorganization Event (it being understood
that this sentence shall not apply with respect to any unrelated
Reorganization Event). If a Reorganization Event of the Company shall have
occurred during the original or extended term of this Agreement, the term of
this Agreement shall continue in force and effect until the satisfaction of
all of the Company's obligations to the Employee as provided hereunder.
3. COVERED TERMINATION
(a) GENERAL. The Employee shall be treated as having incurred a "Covered
Termination" hereunder if his employment is terminated, within a period of
one (1) year following the consummation of a Reorganization Event of the
Company, by the Company other than for Cause or by the Employee for Good
Reason. The Employee shall not be treated as having incurred a Covered
Termination if his employment is terminated as a result of death or
Disability. NOTE that, as described below, the Employee must give 30-days
advance written notice of termination for Good Reason, thus effectively
requiring that such notice be given no later than 30 days prior to the
expiration of the one (1) year period described above (in order for the Date
of Termination to occur prior to the expiration of such period).
(b) TERMINATION FOR CAUSE. Termination by the Company of the Employee's
employment for "Cause" shall mean termination as a result of:
(i) the Employee engaging in willful gross neglect of his duties with the
Company, or the Employee's fraud or dishonesty in connection with his
performance of duties to the Company, in either case which has a materially
detrimental effect on the business or operations of the Company; or
(ii) the Employee's conviction by a court of competent jurisdiction of any
crime (or upon entering a plea of guilty or NOLO CONTENDERE to a charge of
any crime) constituting a felony.
The Date of Termination for a termination for Cause shall be the date
specified by the Company.
(c) TERMINATION FOR GOOD REASON. For purposes hereof, the Employee may
terminate his employment for "Good Reason" as a result of:
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(i) a material adverse change in the Employee's position or title
as in effect at the time of the Reorganization Event of the Company;
(ii) a substantial reduction in the Employee's overall level of
authority and responsibility with the Company as in effect at the time of
the Reorganization Event of the Company;
(iii) any reduction in the Employee's Annual Base Salary as in
effect at the time of the Reorganization Event of the Company;
(iv) any reduction in the Employee's target or maximum bonus
percentage under the Company's annual bonus plan from the percentage in
effect at the time of the Reorganization Event of the Company; or
(v) a relocation by more than 50 miles of the Employee's principal
place of business at the time of the Reorganization Event of the Company, or
the Company's requiring the Employee to locate anywhere that is more than 50
miles from the Employee's principal place of business at the time of the
Reorganization Event.
Notwithstanding the foregoing, the Employee shall not be entitled to
terminate his employment for Good Reason under items (i), (ii), (iii) or (iv)
above solely on the basis of his assignment to a new position with the
Company or its successor (which may otherwise constitute a Good Reason under
one or more of such items) if the Employee has accepted such assignment in
writing. Any such acceptance shall not waive the Employee's rights as to any
other or any future Good Reason events.
The Employee shall provide the Company with 30-day advance written notice of
a termination for Good Reason setting forth in reasonable detail the facts
and circumstances claimed to provide a basis for the termination. Such
notice may be given at any time following the occurrence of the events that
provide the basis for the termination , but not later than the date that is
30 days prior to the first anniversary date of the consummation of the
Reorganization Event of the Company; PROVIDED, HOWEVER, that where a
termination for Good Reason is on account of relocation, as provided in item
(v) above, such notice shall be provided within one (1) year of the
effective date of such relocation. If within the thirty (30) day period, the
Company takes actions reasonably satisfactory to the Employee to remedy the
basis for the Good Reason termination, such notice of termination shall be
considered null and void; PROVIDED, HOWEVER that the Company shall not have
the right to remedy a Good Reason termination occurring on the basis of a
relocation as described in item (v) above. The Date of Termination for a
termination for Good Reason shall be the expiration of the 30-day notice
period provided for above.
4. SEVERANCE PAYMENT
The amount of the severance payment to be paid to the Employee upon Covered
Termination shall be the amount determined by multiplying 1.00 times the sum
of:
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(a) the Employee's Annual Base Salary as in effect immediately prior to the
Date of Termination; plus,
(b) the Employee's Bonus Amount applicable for the fiscal year in which the
Date of Termination occurs; plus,
(c) a benefit allowance of 25% of the Employee's Annual Base Salary as in
effect immediately prior to the Date of Termination.
5. OTHER SEVERANCE BENEFITS
In addition to the severance payment provided under Section 4 hereof, the
Employee shall be entitled to the following benefits and other rights in the
event of his Covered Termination:
(a) ACCRUED RIGHTS. The Employee shall be entitled to the following
payments and benefits in respect of accrued compensation rights upon a Covered
Termination, in addition to other rights provided under this Agreement:
(i) payment of any accrued but unpaid Annual Base Salary and annual
bonus (for any completed fiscal year) through the Date of Termination;
(ii) payment of a pro-rata portion of the Bonus Amount for the
fiscal year of the Company in which the Covered Termination occurs, based on
the number of days of such year prior to the Date of Termination;
(iii) all benefits and rights accrued under the employee benefit
plans, fringe benefits programs and payroll practices of the Company in
accordance with their terms (including, without limitations, employee
pension, employee welfare, incentive bonus, stock incentive plans, and any
accrued vacation or accrued sick pay time); and
(iv) a payment equal to the forfeited portion of the account balance
of the Employee under the Company's tax-qualified and non-tax-qualified
pension and deferred compensation plans as a result of failure to
satisfy vesting requirements due to the Covered Termination.
(b) OUTPLACEMENT SERVICES. Upon the occurrence of a Covered Termination, the
Employee shall be provided, at the Company's sole expense, with professional
outplacement services consistent with the Employee's duties or profession and
of a type and level customary for persons in his position, as selected by the
Company, subject to reasonable limitations established by the Company on a
uniform basis for similarly situated employees as to duration and dollar
amounts.
6. EXCISE TAX REIMBURSEMENT
In the event it shall be determined that any payment or distribution by the
Company or any other person or entity to or for the Employee's benefit,
whether paid or payable or distributed or
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distributable pursuant to the terms of this Agreement or otherwise, or
whether prior to or following the Covered Termination in connection with, or
arising out of, the Employee's employment with the Company or a
Reorganization Event of the Company (a "Payment") will be subject to the tax
(the "Excise Tax") imposed by section 4999 of the Code, the Company shall pay
to the Employee at the time specified in Section 7 hereof, below, an
additional amount (the "Gross-Up Payment") such that the net amount retained
by the Employee, after deduction of any Excise Tax on the Payments and any
federal (and state and local) income tax, employment tax, and Excise Tax upon
the payment provided for by this paragraph, shall be equal to the amount of
the Payments. For purposes of determining whether any of the Payments will
be subject to the Excise Tax and the amount of such Excise Tax the following
will apply:
(a) any payments or benefits received or to be received by the Employee in
connection with a Reorganization Event of the Company or his termination of
employment (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions
result in a Reorganization Event of the Company or any person affiliated with
the Company or such person) shall be treated as "parachute payments" within
the meaning of section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel selected by
the Company's independent auditors and acceptable to the Employee such other
payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
section 280G(b)(4) of the Code in excess of the base amount within the
meaning of section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax; and
(b) the value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Company's independent auditors in accordance with
proposed, temporary or final regulations under Sections 280G(d)(3) and (4) of
the Code or, in the absence of such regulations, in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Employee shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Employee's residence on the Date of Termination,
net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes. In the event that the amount
of Excise Tax attributable to Payments is subsequently determined to be less
than the amount taken into account hereunder at the time of termination of
the Employee's employment, he shall repay to the Company at the time that the
amount of such reduction in Excise Tax is finally determined the portion of
the Gross-Up Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax, employment tax and federal
(and state and local) income tax imposed on the Gross-Up Payment being repaid
by the Employee if such repayment results in a reduction in Excise Tax and/or
a federal (and state and local) income tax deduction) plus interest on the
amount of such repayment at the rate provided in section 1274(b)(2) (B) of
the Code. In the event that the Excise Tax attributable to Payments is
determined to exceed the amount taken into account hereunder at the time of
the termination of the Employee's employment (including by
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reason of any payment the existence or amount of which cannot be determined
at the time of the Gross-Up Payment), the Company shall make an additional
gross-up payment in respect of such excess (plus any interest payable with
respect to such excess) at the time that the amount of such excess is finally
determined.
7. METHOD OF PAYMENT
The payments provided for in Sections 4, 5 and 6 hereof shall be made in a
cash lump-sum payment, net of any required tax withholding, upon the later of
(i) the fifth (5th) business day following the Date of Termination or (ii)
the expiration of the seven (7) day revocation period applicable under the
release of claims referred to in Section 10 hereof. Any payment required
under Sections 4, 5 or 6 or any other provision of this Agreement that is not
made in a timely manner shall bear interest at a rate equal to one-hundred
twenty (120) percent of the monthly compounded applicable federal rate, as in
effect under Section 1274(d) of the Code for the month in which the payment
is required to be made.
8. RELOCATION EXPENSES
The Employee shall be entitled to a reimbursement payment from the Company
equal to his reasonable moving expenses (determined in accordance with
Company's relocation policy) incurred in connection with the Employee's
written acceptance of a position with the Company requiring his relocation to
a metropolitan area, other than the metropolitan area where his office is
located at the time of the Reorganization Event of the Company. The Company
shall pay the Employee an additional payment in an amount such that the net
amount retained by the Employee after deduction for any federal, state, and
local income tax, employment tax and any excise tax on the reimbursement
payment shall equal the amount of the reimbursement payment. If the
employment of the Employee is terminated for Good Reason on the basis of his
relocation under Section 3 hereof, the payment to which the Employee is
entitled to under Section 4 hereof will be reduced by 25% of the relocation
payment, including tax reimbursement, that the Employee received from the
Company under this Section 8.
9. NO MITIGATION OR OFFSET
The Employee shall not be required to mitigate the amount of any severance
payment or benefit provided under this Agreement by seeking other employment
or otherwise. The amount of any payment or benefit to which the Employee
becomes entitled hereunder shall not be reduced by any compensation earned by
the Employee as the result of employment by another employer, by retirement
benefits, nor by offset against any amount claimed to be owed to the Company
by reason of a claimed breach by the Employee of his obligations under
Sections 11 or 12 hereof or otherwise (except that offset shall apply as
specifically provided in Section 8 hereof concerning relocation expenses and
Section 20 hereof concerning other severance payments).
10. RELEASE OF CLAIMS
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As conditions of Employee's entitlement to the severance payments and
benefits provided by this Agreement, the Employee shall be required to
execute and honor the terms of a waiver and release of claims against the
Company substantially in the form attached hereto as Exhibit A (as may be
modified consistent with the purposes of such waiver and release to reflect
changes in law following the date hereof).
11. RESTRICTION ON CONDUCT OF EMPLOYEE
(a) GENERAL. The Employee and the Company understand and agree that the
purpose of the provisions of this Section 11 is to protect legitimate
business interests of the Company, as more fully described below, and is not
intended to impair or infringe upon the Employee's right to work, earn a
living, or acquire and possess property from the fruits of his labor. The
Employee hereby acknowledges that the post-employment restrictions set forth
in this Section 11 are reasonable and that they do not, and will not, unduly
impair his ability to earn a living after the termination of his employment
with the Company. Therefore, subject to the limitations of reasonableness
imposed by law upon restrictions set forth herein, the Employee shall be
subject to the restrictions set forth in this Section 11.
(b) DEFINITIONS. The following capitalized terms used in this Section 11
shall have the meanings assigned to them below, which definitions shall apply
to both the singular and the plural forms of such terms:
"Confidential Information" means any confidential or proprietary information
possessed by the Company without limitation, any confidential "know-how",
customer lists, details of client or consultant contracts, current and
anticipated customer requirements, pricing policies, price lists, market
studies, business plans, operational methods, marketing plans or strategies,
product development techniques or plans, computer software programs
(including object code and source code), data and documentation, data base
technologies, systems, structures and architectures, inventions and ideas,
past, current and planned research and development, compilations, devices,
methods, techniques, processes, financial information and data, business
acquisition plans, new personnel acquisition plans and any other information
that would constitute a trade secret under the common law or statutory law of
the State of Delaware.
"Determination Date" means the date of termination of the Employee's
employment with the Company for any reason whatsoever or any earlier date
(during the Restricted Period) of an alleged breach of the Restrictive
Covenants by the Employee.
"Person" means any individual or any corporation, partnership, joint venture,
association or other entity or enterprise.
"Principal or Representative" means a principal, owner, partner, shareholder,
joint venturer, member, trustee, director, officer, manager, employee, agent,
representative or consultant.
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"Protected Employees" means employees of the Company or its affiliated
companies who were employed by the Company or its affiliated companies at any
time within six (6) months prior to the Determination Date.
"Restricted Period" means the period of the Employee's employment by the
Company plus a period extending one (1) year from the date of termination of
employment.
"Restrictive Covenants" means the restrictive covenants contained in
Section 11(c) hereof.
(c) Restrictive Covenants.
(i) RESTRICTION ON DISCLOSURE AND USE OF CONFIDENTIAL INFORMATION. The
Employee understands and agrees that the Confidential Information constitutes
a valuable asset of the Company and its affiliated entities, and may not be
converted to the Employee's own use. Accordingly, the Employee hereby agrees
that the Employee shall not, directly or indirectly, at any time during the
Restricted Period reveal, divulge or disclose to any Person not expressly
authorized by the Company any Confidential Information, and the Employee
shall not, directly or indirectly, at any time during the Restricted Period
use or make use of any Confidential Information in connection with any
business activity other than that of the Company. The parties acknowledge
and agree that this Agreement is not intended to, and does not, alter either
the Company's rights or the Employee's obligations under any state or federal
statutory or common law regarding trade secrets and unfair trade practices.
(ii) NONSOLICITATION OF PROTECTED EMPLOYEES. The Employee understands and
agrees that the relationship between the Company and each of its Protected
Employees constitutes a valuable asset of the Company and may not be
converted to the Employee's own use. Accordingly, the Employee hereby agrees
that during the Restricted Period the Employee shall not directly or
indirectly on the Employee's own behalf or as a Principal or Representative
of any Person or otherwise solicit any Protected Employee to terminate his or
her employment with the Company.
(iii) NONINTERFERENCE WITH COMPANY OPPORTUNITIES. The Employee understands
and agrees that all hotel development opportunities with which he is involved
during his employment with the Company constitute valuable assets of the
Company and its affiliated entities, and may not be converted to the
Employee's own use. Accordingly, the Employee hereby agrees that during the
Restricted Period the Employee shall not directly or indirectly on the
Employee's own behalf or as a Principal or Representative of any Person,
interfere with, solicit, pursue, or in any way make use of any such hotel
development opportunities.
(d) EXCEPTIONS FROM DISCLOSURE RESTRICTIONS. Anything herein to the
contrary notwithstanding, the Employee shall not be restricted from disclosing
or using Confidential Information that: (i) is or becomes generally available
to the public other than as a result of an unauthorized disclosure by the
Employee or his agent; (ii) becomes available to the Employee in a manner that
is not in contravention of applicable law from a source (other than the Company
or its affiliated entities or one of its or their officers, employees, agents
or representative) that is not bound by a confidential relationship with the
Company or its affiliated entities or by a confidentiality or
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other similar agreement; (iii) was known to the Employee on a
non-confidential basis and not in contravention of applicable law or a
confidentiality or other similar agreement before its disclosure to the
Employee by the Company or its affiliated entities or one of its or their
officers, employees, agents or representatives; or (iv) is required to be
disclosed by law, court order or other legal process; PROVIDED, HOWEVER, that
in the event disclosure is required by law, court order or legal process, the
Employee shall provide the Company with prompt notice of such requirement so
that the Company may seek an appropriate protective order prior to any such
required disclosure by the Employee.
(e) ENFORCEMENT OF THE RESTRICTIVE COVENANTS.
(i) RIGHTS AND REMEDIES UPON BREACH. In the event the Employee breaches, or
threatens to commit a breach of, any of the provisions of the Restrictive
Covenants, the Company shall have the right and remedy to enjoin,
preliminarily and permanently, the Employee from violating or
threatening to violate the Restrictive Covenants and to have the
Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the Company and
that money damages would not provide an adequate remedy to the Company.
The rights referred to in the preceding sentence shall be independent of
any others and severally enforceable, and shall be in addition to, and not
in lieu of, any other rights and remedies available to the Company at law
or in equity.
(ii) SEVERABILITY OF COVENANTS. The Employee acknowledges and agrees
that the Restrictive Covenants are reasonable and valid in time and
space and in all other respects. If any court determines that any
Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected
and shall be given full effect, without regard to the invalid portions.
12. COOPERATION IN FUTURE MATTERS
The Employee hereby agrees that, for a period of three (3) years following
his Date of Termination, he shall cooperate with the Company's reasonable
requests relating to matters that pertain to the Employee's employment by the
Company, including, without limitation, providing information or limited
consultation as to such matters, participating in legal proceedings,
investigations or audits on behalf of the Company, or otherwise making
himself reasonably available to the Company for other related purposes. Any
such cooperation shall be performed at times scheduled taking into
consideration the Employee's other commitments, and the Employee shall be
compensated at a reasonable hourly or PER DIEM rate to be agreed by the
parties to the extent such cooperation is required on more than an occasional
and limited basis. The Employee shall not be required to perform such
cooperation to the extent it conflicts with any requirements of exclusivity
of service for another employer or otherwise, nor in any manner that in the
good faith belief of the Employee would conflict with his rights under or
ability to enforce this Agreement.
13. SUCCESSORS, BINDING AGREEMENT.
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(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Employee to compensation from the Company in the same amount
and on the same terms as the Employee would be entitled to hereunder if he
terminated his employment for Good Reason following a Reorganization Event of
the Company, except that for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the Company as
herein before defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Employee should
die while any amount remains payable to him hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Employee's devisee, legatee or other designee or, if there is
no such designee, to the Employee's estate.
14. NOTICE
Any notice required or permitted to be given by this Agreement shall be
effective only if in writing, delivered personally against receipt therefor or
mailed by certified or registered mail, return receipt requested, to the
parties at the addresses hereinafter set forth, or at such other places that
either party may designate by notice to the other.
Notice to the Company shall be addressed to:
Doubletree Corporation
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Corporate Secretary
Notice to the Employee shall be addressed to him at the business address
of the Company where the Employee is employed, with a copy to him at his home
address as follows:
__________________________
__________________________
__________________________
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All such notices shall be deemed effectively given five (5) days after the
same has been deposited in a post box under the exclusive control of the United
States Postal Service.
15. MISCELLANEOUS
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and
signed by the Employee and such officer of the Company as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreement or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Delaware. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
16. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
17. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
18. PAYMENT OF LEGAL FEES
The Company shall pay all reasonable legal fees and expenses incurred by
the Employee in connection with any arbitration (or other proceeding whether or
not instituted by the Company or the Employee), relating to the interpretation
or enforcement of any provision of this Agreement (including any action seeking
to obtain or enforce any right or benefit provided by this Agreement) or in
connection with any tax audit or proceeding relating to the application of
Section 4999 of the Code to any payment or benefit provided by the Company.
19. NO RESTRICTIONS ON EMPLOYMENT RIGHTS
Nothing in this Agreement shall confer on the Employee any right to
continue in the employ of the Company or shall interfere with or restrict in
any way the rights of the Company, which are hereby expressly reserved, to
discharge the Employee at any time for any reason whatsoever,
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with or without Cause, subject to the requirements of this Agreement.
Nothing in this Agreement shall restrict the right of the Employee to
terminate his employment with the Company at any time for any reason
whatsoever, with or without Good Reason.
20. OTHER SEVERANCE AGREEMENTS
Any severance payments provided to the Employee under Section 4 hereof
shall be offset by the dollar amount of any other cash severance payments to
which the Employee is entitled under any other severance or termination pay
plan, policy or agreement with the Company or its affiliates (including,
without limitation, the severance or termination pay plans, policies and
agreements of Red Lion Hotels, Inc.).
21. HOSTILE TRANSACTION PROVISION
(a) Notwithstanding anything elsewhere in this Agreement to the contrary,
in the event of consummation of a "Hostile Transaction" (as defined below), the
definition of "Good Reason" set forth in Section 3(c) hereof shall be
substituted with the following definition, which shall apply for all purposes
of this Agreement:
"Termination for Good Reason. For purposes hereof, the Employee may
terminate his employment for "Good Reason" as a result of:
(i) any adverse change in the Employee's position or title as in
effect at the time of the Reorganization Event of the Company, or the
assignment to the Employee of any duties inconsistent with such position
or title;
(ii) any reduction in the Employee's overall level of authority and
responsibility with the Company as in effect at the time of the
Reorganization Event of the Company;
(iii) any reduction in the Employee's Annual Base Salary as in effect
at the time of the Reorganization Event of the Company;
(iv) any reduction in the Employee's target or maximum bonus
percentage under the Company's annual bonus plan from the percentage in
effect at the time of the Reorganization Event of the Company;
(v) a relocation by more than 50 miles of the Employee's principal
place of business at the time of the Reorganization Event of the Company,
or the Company's requiring the Employee to locate anywhere that is more
than 50 miles from the Employee's principal place of business at the time
of the Reorganization Event;
(vi) the failure by the Company to continue in effect any
compensation plan in which the Employee is participating immediately prior
to the Reorganization Event of the Company which is material to his total
compensation, including but not limited to, the bonus plans, deferred
compensation plans, equity incentive plans, unless an equitable
arrangement
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(embodied in an ongoing substitute or alternative plan) has
been made with respect to such plan, or the failure by the Company to
continue the Employee's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms
of the amount of benefits provided and the level of his participation
relative to other participants, as existed immediately prior to the
Reorganization Event of the Company;
(vii) the failure by the Company to continue to provide the Employee
with benefits substantially similar to those enjoyed by the Employee under
any of the Company's pension, savings and retirement plan, life insurance,
medical, health and accident, or disability plans in which he was
participating at the time of the Reorganization Event of the Company, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the Employee of any
material fringe benefit enjoyed by him at the time of the Reorganization
Event of the Company, or the failure by the Company to provide the
Employee with the number of paid vacation days to which he is entitled on
the basis of years of service with the Company in accordance with the
Company's normal vacation policy in effect at the time of the
Reorganization Event of the Company; or
(viii) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 13 hereof.
The Employee's right to terminate his employment pursuant to this
Agreement for Good Reason shall not be affected by his incapacity due to
physical or mental illness. The Employee's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder."
(b) In the event of consummation of a Hostile Transaction, the
provisions of Section 11 hereof (concerning restricted conduct) and Section
12 hereof (concerning required cooperation) shall not be applicable to the
Employee.
(c) For purposes hereof, a "Hostile Transaction" shall be any
Reorganization Event which has, at any time prior to the consummation thereof,
been designated by a resolution of the Board as potentially having an impact on
the Employee and other of the Company's employees, such that it would be
appropriate for the Employee (and such other employees) to be provided with the
additional protection afforded by the foregoing definition of "Good Reason."
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IN WITNESS WHEREOF, the parties have executed these presents as of the
day and year first above written.
DOUBLETREE CORPORATION
________________________________
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
General Counsel and Secretary
EMPLOYEE
________________________________
Name:
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