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EXHIBIT 10.53
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "Agreement"), dated as of
February 10, 2000, is by and between STARWOOD HOTELS & RESORTS WORLDWIDE, INC.,
a Maryland corporation, having offices at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxx Xxxxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxx Xxxxxx ("Employee").
RECITALS
WHEREAS, Employee is employed by the Company as its Executive Vice
President, Human Resources, pursuant to the Letter Agreement, dated March 2,
1998 (the "Employment Agreement"); and
WHEREAS, Employee and the Company mutually desire to terminate their
employment relationship and Employee desires to resign her position as Executive
Vice President, Human Resources, and all other director, officer, committee and
employee positions, if any, held by Employee in the Company or any of its
affiliates or subsidiaries effective as of February 15, 2000 (the "Termination
Date"); and
WHEREAS, the parties desire to set forth their respective rights and
obligations in respect of Employee's resignation from the above positions;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties, intending to be legally
bound hereby, agree as follows:
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AGREEMENT
1. Resignation.
Effective as of the Termination Date, Employee's employment
with the Company as Executive Vice President, Human Resources, shall terminate
and Employee shall resign from all other director, officer, committee and
employee positions held by Employee in the Company or any of its subsidiaries or
affiliates. It is agreed by the parties that, on and as of the Termination Date,
all rights and obligations of Employee and the Company with respect to such
employment shall terminate.
2. Benefits. In consideration of the agreements of Employee herein,
Employee will be entitled to the benefits set forth in this Section 2, provided
that Employee delivers to the Company this Agreement fully executed and
notarized and does not revoke it pursuant to Section 16:
(a) Within 10 business days of the expiration of the revocation period
detailed in Section 16 of this Agreement, the Company shall pay to Employee a
lump sum of $773,500 less applicable withholdings, which represents one year of
Employee's regular base salary plus an additional amount as compensation for
Employee's efforts in effecting an efficient and effective transition to her
successor.
(b) Employee agrees that within a reasonable time after the Termination
Date she will actively and diligently pursue all suitable employment
opportunities. In the event Employee shall not have obtained other employment
(including self-employment) at any time prior to one year after the Termination
Date, then during the period beginning on February 15, 2001 and ending on
February 15, 2002 (the "Severance Period") the Company shall also make salary
continuation payments to the Employee at an annual rate of $556,750, payable in
monthly installments in arrears of $46,395.83 per month, less applicable
withholdings. Commencing on January 1, 2001, Employee shall periodically (but
not less frequently than quarterly) file reports with the Company's General
Counsel
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to demonstrate her efforts and progress toward finding alternative employment,
including, without limitation, reports regarding her utilization of "head
hunting" and similar services. Failure to file such reports on a timely basis
shall be presumptive evidence of the Employee's failure to have actively and
diligently pursued suitable employment. Notwithstanding the foregoing, if
Employee obtains other employment (including self-employment) before or during
the Severance Period, she agrees to notify the Company in writing of such
employment or self-employment within two (2) business days of accepting an offer
or commencing self-employment and, regardless of whether or when such notice is
given, the Company's obligations to make any payments (or during the Severance
Period, any further payments) under this Section 2(b) shall be decreased by the
aggregate total amount of compensation (base salary plus bonus) Employee obtains
from her new employer or through self-employment.
(c) Employee acknowledges her obligation to repay to the Company on the
Termination Date the proceeds of a home loan furnished to Employee by the
Company in the amount of $600,000 and a tax loan in the current amount of
$136,534.71 (representing the original principal amount of $131,805 plus accrued
interest). The Company agrees to allow Employee to defer repayment of the
$600,000 obligation until the earlier of: (i) the sale of Employee's current
residence; or (ii) June 3, 2003, provided that Employee records the $600,000
obligation as a second mortgage and furnishes proof of recording to Starwood
within 60 days of the Termination Date. Failure to timely record the second
mortgage will result in the full proceeds of $600,000 becoming immediately due
and payable to the Company. As to the tax loan, the Employee agrees to satisfy
the $136,534.71 obligation within 15 business days of the Termination Date as
follows: Employee will tender back to the Company sufficient shares of
restricted stock to cover the full amount of the obligation, provided that the
Company agrees that each share of restricted stock tendered by the Employee will
be valued at two (2) times the market value determined by the closing market
price on the next business day following the day on which the revocation period
detailed in Section 16 expires, but provided further that each share will not be
valued (after applying the foregoing formula) at more
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than $54 per share.
(d) For a period of twenty-four (24) months commencing on the Termination
Date, the Company will reimburse Employee for COBRA expenses for continuing her
medical and dental benefit coverage under her current plan elections, or if
changed by the Company under a plan or plans made available for similarly
situated employees, minus Employee's current level of contribution including any
contribution rate increases to the applicable plans for similarly situated
employees.
(e) All unvested stock options granted to Employee by the Company shall
vest 10 business days after the Termination Date. Notwithstanding the exercise
period for any of Employee's stock options, Employee shall have three (3) years
from the Termination Date within which to exercise any and all of her options.
(f) The benefits conferred upon Employee pursuant to Sections 2(a) - 2(e)
herein shall hereinafter be referred to collectively as the "Termination
Payments".
(g) Employee acknowledges and agrees that, (i) the Termination Payments
are adequate consideration for all the terms of this Agreement and do not
include any benefit, monetary or otherwise, which was earned or accrued or to
which Employee was already entitled without signing this Agreement; and (ii) any
monetary or other benefits which, prior to the execution of this Agreement,
Employee may have earned or accrued or to which Employee may have been entitled,
have been paid, or such payments have been released, waived or settled by
Employee pursuant to this Agreement other than any claims Employee may have to
accrued but unused vacation pay.
(h) The Employee and the Company acknowledge and agree that Employee
currently holds the options and other rights set forth on Schedule A hereto and
that Employee has no other such rights that relate to the securities of the
Company or any of its affiliates or subsidiaries. Nothing in this Agreement and
Release, other than the extension of the exercise period for Employee's options
pursuant to Section 2(e) herein
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shall be construed to alter, amend or modify the terms and conditions governing
any stock options or similar rights, and any rights pertaining thereto, granted
to Employee prior to the Termination Date.
(i) Employee represents that she is not required to file with the Security
and Exchange Commission an Annual Statement of Beneficial Ownership of
Securities on Form 5 for the Company's fiscal year ended December 31, 1999,
unless Employee delivers a duplicate copy of such a Form 5 to the Company prior
to the effective date of this Agreement and Release.
(j) Employee will continue to be covered under the Company's directors and
officers insurance policy for the period during which she served as an officer
of the Company, and shall be entitled to such other indemnification as is
required by applicable law.
3. Termination of All Existing Agreements. Except as otherwise expressly
provided herein, all rights and obligations of the Company and the Employee
under the Employment Agreement and any employment agreement Employee may have
had with the Company, and any other agreement, arrangement, obligation or
understanding between the Company and the Employee are hereby canceled and
terminated as of the Termination Date without liability of any party thereunder.
4. Retained Property. Within five (5) business days of the Termination
Date, Employee shall return all property of the Company in her possession,
including, but not limited to, credit cards, security key cards, telephone
cards, car service cards, computer software or hardware, Company identification
cards, Company records and copies of records, correspondence and copies of
correspondence and other books or manuals issued by the Company.
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5. Confidentiality.
(a) Employee acknowledges that she has had and through the Termination Date
will continue to have access to Confidential Information (as hereinafter
defined) of the Company. Except to the extent required pursuant to any law,
court order or similar process (based on the written opinion of counsel), in
recognition of Employee's legal obligations and the substantial consideration
represented by the Termination Payments, Employee agrees not to disclose,
communicate or divulge to, or use for the direct or indirect benefit of, any
person (including Employee), firm, association or other entity (other than the
Company or its affiliates) any Confidential Information. "Confidential
Information" includes, but is not limited to, customer lists, vendor lists,
joint venture lists, databases, computer programs and software, frameworks,
designs, models, marketing programs and plans, sales, financial, marketing,
training and technical information and plans, business methods, business
policies, personnel information and policies, procedures, techniques, research
or development projects or results, trade secrets (which Employee agrees include
the Company's customer and prospective customer lists), pricing policies,
intellectual property, any and all information relating to projected
acquisitions, dispositions, joint ventures or other business arrangements
whether involving the Company or third parties, properties or management
agreements, management organization information (including data and other
information relating to members of the Board and management), operating policies
or manuals, business plans, purchasing agreements, financial records, or other
financial, commercial, business or technical information relating to the Company
or any of its subsidiaries or information designated as confidential or
proprietary that the Company or any of its subsidiaries may receive belonging to
suppliers, customers or others who do business with the Company or any of its
subsidiaries, information concerning how the Company creates, develops, acquires
or maintains its products and marketing plans, targets its potential customers,
and operates its hotel, time share and other businesses, other than information
which is otherwise available in the public domain (other than by reason of the
breach by Employee of any confidentiality agreement with the Company) or which
was known to Employee
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prior to the date as of which she commenced employment with the Company or any
of its predecessors or affiliates.
(b) Employee hereby represents and agrees that on or before the
Termination Date (i) Employee has returned or will return to the Company, and
has not retained or will not retain any copies of, all documents, records or
materials of any kind, whether written or electronically created or stored,
which contain, relate to or refer to any Confidential Information ("Confidential
Materials"); and (ii) Employee has not disclosed and will not disclose any
Confidential Information or Confidential Materials to any person or entity
without the express authorization of an authorized officer of the Company.
(c) In the event that Employee receives a subpoena or any other written
or oral request for disclosure or release of any Confidential Information,
Confidential Materials or any other information concerning the Company or any
Releasee (defined below), Employee shall, within two (2) business days of the
service or receipt of such subpoena or other request notify the Company in
writing at the address set forth below, Attention Xxxxxx X. Xxxxxx, Xx., and
provide the Company with a copy of any subpoena or other written request, or
disclose the nature of the request for information, if oral.
6. Noninterference. During the period commencing on the Termination Date
and ending on the first anniversary of the Termination Date, Employee shall
not take or omit any action or actions which are intended to or actually cause
or encourage any prospective entity with which the Company intends to enter into
a relationship or acquire (or any agent or affiliate thereof) (i) to fail to
enter into the contemplated relationship; or (ii) to enter into a contract or
arrangement with any person or entity which is in competition with the Company
or any of its affiliates in any geographic area in which the Company or any such
affiliate is engaged in business.
7. No Solicitation. Prior to February 16, 2001, Employee shall not,
directly or indirectly, solicit, encourage or induce any person who is or was
employed by the
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Company or a subsidiary thereof to terminate employment with such entity, unless
such person shall have ceased to be employed by such entity for a period of at
least six months. The preceding sentence shall not preclude Employee from
offering to employ and employing any such person who has approached Employee for
employment and who is not solicited, encouraged, or induced to leave the Company
by Employee.
8. Injunctive Relief and Other Remedies with Respect to Covenants.
Employee acknowledges and agrees that the covenants and obligations with respect
to confidentiality relate to special, unique and extraordinary matters and that
a violation of any of the terms of such covenants and obligations will cause the
Company irreparable injury for which adequate remedies are not available at law.
Therefore, Employee agrees that (i) the Company shall be entitled to an
injunction, restraining order or such other equitable relief (without the
requirement to post bond) restraining Employee from committing any violation of
the covenants and obligations contained in Sections 5 or 6 herein, and (ii)
following any material violation by Executive of the covenants and obligations
contained in Sections 5 or 6, the Company shall be entitled to recover from
Employee any compensation and benefits payable to Employee pursuant to Sections
2 (a), (b) and (c) hereof and shall have no further obligation to make any
payments to Employee. These remedies are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity. In
connection with the foregoing provisions of this Section 8, Employee represents
that her economic means and circumstances are such that such provisions will not
prevent her from providing for herself and her family on a basis satisfactory to
her.
9. Non-Disparagement. Employee covenants and agrees not to engage in any
act or say anything that is intended, or may reasonably be expected, to harm
the reputation, business, prospects or operations of the Company, its officers,
directors, stockholders or employees. The Company agrees that it will not
intentionally make any public statements that are intended, or would reasonably
be expected, to publicly disparage or defame Employee. However, nothing in this
Agreement shall restrict any
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person from making disclosure or taking any action required by law.
10. No Inducements. Employee warrants that she is entering into this
Agreement voluntarily, and that, except as set forth herein, no promises or
inducements for this Agreement have been made, and she is entering into this
Agreement without reliance upon any statement or representation by any of the
Company and its affiliates, and its and their present and former stockholders,
directors, officers, employees, agents, attorneys, successors and assigns or any
other person, concerning any fact material hereto.
11. Arbitration. Any controversy, dispute or claim arising out of or
related to this Agreement shall, except as otherwise provided for herein, be
fully and finally settled by final and binding arbitration conducted by a single
arbitrator selected by the parties in accordance with the Employment Rules of
the American Arbitration Association. The prevailing party in any such
arbitration shall be awarded its costs and reasonable attorneys' fees if the
arbitrator determines either: (i) the claimant brought an action in bad faith or
that was clearly meritless; or (ii) the non-prevailing party had no good faith
basis to contest the claim or claims on which the claimant prevailed.
12. Public Announcement. Employee is required to request and receive
approval of the Company of the content of any voluntary statements, whether oral
or written, to be made by Employee to any third party or parties regarding
Employee's separation from employment with the Company, including, without
limitation, any press release or other statements to the press, except that this
Section 12 shall not apply to any statements required to be made by reason of
law, regulation, or any judicial or other similar proceeding or order. Employee
hereby covenants and agrees not to make any public statements to any third
party, including, without limitation, to any representative of any news
organization, which is inconsistent in any material respect with any such agreed
upon statements to the public.
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13. General Release and Waiver. Sub-sections (a) and (b) of this Section 13
provide a complete release and waiver of all existing and potential claims
Employee may have against every person and entity included within the
description below of "Releasee". Before Employee signs this Release, she should
read this Section carefully, and make sure that she understands it fully.
(a) In consideration of Employee's receipt and acceptance of the
Termination Payments from the Company and on behalf of the Company and each
Releasee (as defined below), Employee, on Employee's behalf and on behalf of
Employee's heirs, executors, administrators, successors and assigns
(collectively, "Releasor"), hereby irrevocably, unconditionally and generally
releases the Company, its current and former officers, directors, shareholders,
trustees, parents, affiliates, subsidiaries, branches, divisions, agents,
partners, joint venturers, attorneys and employees, and the current and former
officers, directors, shareholders, agents, attorneys and employees of any such
parent, affiliate, subsidiary, branch or division of the Company, and the heirs,
executors, administrators, receivers, successors and assigns of all of the
foregoing (collectively, "Releasees"), from or in connection with, and hereby
waives and/or settles, except as may otherwise be stated in this Agreement, any
and all actions, causes of action, suits, debts, dues, sums of money, accounts,
controversies, agreements, promises, damages, judgments, executions, or any
liability, claims or demands, known or unknown and of any nature whatsoever and
which Releasor ever had, now has or hereafter can, shall or may have as of the
date of this Release, including, without limitation, arising directly or
indirectly pursuant to or out of Employee's employment with the Company, the
payment or nonpayment of any wages or compensation, the performance of services
for the Company or any Releasee, the termination of such employment or services
and/or any decision not to offer to Employee any employment with any Releasee
subsequent to Employee's employment with the Company.
(b) Specifically, without limitation, this Release shall include and apply
to any rights and/or claims (i) arising under any contract, express or implied,
written or oral; (ii) for wrongful dismissal or termination of employment; (iii)
arising under any applicable
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foreign, federal, state, local or other statutes, orders, laws, ordinances,
regulations or the like, or case law, that relate to employment or employment
practices and/or, specifically, that prohibit discrimination based upon age,
race, religion, sex, national origin, disability or any other unlawful basis,
including without limitation, Title VII of The Civil Rights Act, THE AGE
DISCRIMINATION IN EMPLOYMENT ACT, the Americans with Disabilities Act, the
Family and Medical Leave Act, the Employee Retirement Income Security Act, the
Fair Labor Standards Act, the Equal Pay Act, the National Labor Relations Act,
and any similar applicable statutes, orders, laws, ordinances, regulations or
the like, or case law, of the State of New York or any political subdivision
thereof, including, without limitation, the New York State Executive Law, and
the New York City Administrative Code, and all applicable rules and regulations
promulgated pursuant to or concerning any of the foregoing statutes, orders,
laws, ordinances, regulations or the like; (iv) based upon any other foreign,
federal, state or local statutes, orders, laws, ordinances, regulations or the
like, or case law; (v) for tortious or harassing conduct, infliction of mental
distress, interference with contract, fraud, libel or slander; and (vi) for
damages, including without limitation, punitive or compensatory damages, or for
attorneys' fees, expenses, costs, wages, injunctive or equitable relief.
(c) In consideration of Employee's agreements hereunder, the Company, on
its own behalf and on behalf of its current and former affiliates, subsidiaries,
branches and divisions, and the successors and assigns of all of the foregoing
(collectively, the "Company Releasor") hereby irrevocably, unconditionally and
generally releases Employee and Employee's heirs, executors, administrators,
successors and assigns (collectively, the "Employee Releasee") from or in
connection with, and hereby waives and/or settles, except as may otherwise be
stated in this Agreement, any and all actions, causes of action, suits, debts,
dues, sums of money, accounts, controversies, agreements, promises, damages,
judgments, executions, or any liability, claims or demands, known or unknown and
of any nature whatsoever and which Company Releasor ever had, now has or
hereafter can, shall or may have as of the date hereof relating to Employee's
employment with the Company, except that this Release shall not apply to (i) any
obligation of Employee pursuant to or detailed in this Agreement or (ii) any
actions,
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causes of action, suits, debts, dues, sums of money, accounts, controversies,
agreements, promises, damages, judgments, executions, or any liability, claims
or demands related to actions or omissions occurring after the date hereof.
14. No Actions By Employee. Employee represents and warrants that Employee
has not filed or commenced any complaints, claims, actions or proceedings of any
kind against any Releasee with any federal, state or local court or any
administrative, regulatory or arbitration agency or body, and Employee agrees
not to file or commence any complaint, claim, action or proceeding of any kind
against any Releasee with any federal, state or local court or any
administrative, regulatory or arbitration agency or body, based upon events
occurring on or prior to the date of this Release, including without limitation,
with respect to Employee's employment with the Company or the termination of
such employment.
15. Consideration and Consultation Period. By executing this Agreement,
Employee acknowledges and agrees that (a) Employee has been represented by
counsel of her choosing in connection with the negotiation and the execution of
this Agreement, including this Release; (b) Employee was provided adequate time
(i.e., at least twenty-one (21) days) to review it, to consult with Employee's
counsel and to consider whether to sign this Agreement and the Release; (c) this
Agreement and the Release are written in a manner understandable by Employee,
and Employee understands all of the terms of this Agreement and the Release,
which are fair, reasonable and are not the result of any fraud, duress,
coercion, pressure or undue influence exercised by or on behalf of any Releasee;
and (d) Employee has agreed to and/or entered into this Agreement and the
Release and all of the terms hereof, knowingly, freely and voluntarily.
16. Period of Revocation. Employee understands that she shall have seven
(7) days following the execution of this Agreement to revoke it by providing the
Company with written notice of the revocation. This Agreement shall not become
effective and enforceable until after expiration of the seven day revocation
period.
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17. Non-Admission of Liability. Neither anything contained in this
Agreement nor the Termination Payments shall be considered an admission by
either party of any wrongdoing or liability under any federal, state or local
statute, public policy, tort law, contract law, common law or otherwise.
18. Future Cooperation. Employee will comply with all reasonable requests
from any Releasee for assistance and/or information in connection with any
matters and/or issues relating to or encompassed within the duties and
responsibilities of Employee's employment, including without limitation,
consulting with any of the employees and/or attorneys of any Releasee with
respect to, and/or appearing as a witness in, any dispute, controversy, action
or proceeding of any kind, and in connection with the transition of on-going
matters to other such employees.
19. Survivability. The covenants, representations and acknowledgements made
by Employee in this Agreement shall survive the execution of the Agreement and
the delivery of the Termination Payments, and this Agreement shall inure to the
benefit of each Releasee, and the successors and assigns of each of them. The
Company or any Releasee shall be excused and released from any obligation to
make payment of the Termination Payments and any installment thereof, and
Employee shall be obligated to return to the Company any such payment that has
been made, in the event that (a) Employee has made a material misstatement in or
commits or has committed any material breach of the terms, conditions or
covenants in this Agreement, in which case Employee shall also be liable for any
damages suffered by the Company or any Releasee by reason of such breach or
misstatement; provided, however, that no breach will be deemed to have occurred
under this Section 19 if the putative breach by Employee is curable and after
reasonable notice of the breach from the Company the Employee cures such
putative breach within 15 days; (b) this Agreement is determined to be invalid
or unenforceable; or (c) Employee claims in any forum that the Agreement is
invalid or unenforceable.
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20. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
any and all prior agreements or understandings between the parties arising out
of or relating to the Employee's employment and the termination thereof. This
Agreement may only be changed by written agreement executed by the parties.
21. Notice. All notices in connection with or provided for under this
Agreement shall be validly given or made only if made in writing and delivered
personally or mailed by registered or certified mail, return receipt requested,
postage prepaid, to the party entitled or required to receive the same, as
follows:
If to Employee, addressed to:
Xxxxx Xxxxxx
000 Xxx Xxxx Xxxx
Xxxxxxx, XX 00000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to Company, addressed to:
Starwood Hotels & Resorts Worldwide, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
or at such other address as either party may designate to the other by notice
similarly given. Notice shall be deemed to have been given upon receipt in the
case of personal delivery and upon the date of receipt indicated on the return
receipt in the case of mail.
22. Governing Law. This Agreement shall be governed by the laws of the
State of New York, without giving effect to the conflicts of law principles
thereof.
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23. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.
Executive Vice President and
General Counsel
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
--------------------------------
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SCHEDULE A
GRANT DATE VESTED OPTIONS EXERCISE PRICE
---------- -------------- --------------
9/8/96 45,000 $26.50
3/3/97 10,000 $38.50
5/30/97 8,400 $37.25
4/29/98 140,000 $49.19
1/26/99 90,000 $24.00
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