SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "Agreement") is made as of this ____ day of
November, 1997, between DOUBLETREE CORPORATION (the "Company") and XXXXXXX X.
XXXXXXXX (the "Executive").
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 Executive,
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
Executive to remain in the employ of the Company, the Company agrees that the
Executive 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 Executive's gross annual salary
before any deductions, exclusions or any deferrals or contributions under any
Company plan or program, but excluding
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bonuses, incentive compensation, employee benefits or any other non-salary
form of compensation.
(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 Executive under the Company's
annual bonus plan applicable to the Executive, assuming payment at the
Executive's target level for the then-current full fiscal year or (ii) the
dollar amount of the bonus paid or payable to the Executive 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 14 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
Executive's Covered Termination pursuant to Section 3 hereof.
(h) "Disability" shall mean the absence of the Executive 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 Executive 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
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Board (the "Incumbent Board") and any other new director (other than a
director designated by a 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
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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 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 Executive as provided
hereunder. For purposes hereof, the proposed merger (the "Proposed Merger")
between Doubletree Corporation and Promus Hotel Corporation pursuant to the
terms of an Agreement of Plan and Merger dated September 1, 1997 shall
constitute a Reorganization Event.
3. COVERED TERMINATION
(a) General. The Executive shall be treated as having incurred a "Covered
Termination" hereunder if, within the "Coverage Period" (defined below), the
employment of the Executive is terminated either (1) by the Company other
than for Cause or (2) by the Executive for any reason. The Executive shall
not be treated as having incurred a Covered Termination if his employment is
terminated as a result of death or Disability. For purposes hereof, the
Coverage Period shall be a period of two (2) years following the consummation
of a Reorganization Event; PROVIDED, HOWEVER, that if the Reorganization
Event is a result of the Proposed Merger, the Coverage Period shall be the
period commencing on the consummation date of the Proposed Merger and
expiring on the later of (i) the second anniversary of such consummation date
or (ii) the date as of which Xxxxxxx X. Xxxxxxxx becomes the Chairman of the
Board and Chief Executive Officer of the Parent Holding Corp. pursuant to the
provisions of the employment agreement between Xxxxxxx X. Xxxxxxxx and the
Parent Holding Corp. to be entered into in connection with the Proposed
Merger. NOTE that, as described below, the Executive must give 30-days
advance written notice of termination by the Executive, thus effectively
requiring that such notice be given no later than 30 days prior to the
expiration of the Coverage 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 Executive's
employment for "Cause" shall mean termination as a result of:
(i) the Executive engaging in willful gross neglect of his duties
with the Company, or the Executive'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
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(ii) the Executive'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 by Executive. The Executive may terminate his employment
for any reason during the Coverage Period and it shall be treated as a Covered
Termination hereunder. The Executive shall provide the Company with 30-day
advance written notice of such termination. Such notice must be given not later
than the date that is 30 days prior to the expiration of the Coverage Period
described above. The Date of Termination for such a termination shall be the
expiration of such 30-day notice period.
4. SEVERANCE PAYMENT
The amount of the severance payment to be paid to the Executive upon
Covered Termination shall be the amount determined by multiplying 3.00 times
the sum of:
(a) the Executive's Annual Base Salary as in effect immediately prior to
the Date of Termination; plus,
(b) the Executive's Bonus Amount applicable for the fiscal year in which
the Date of Termination occurs; plus,
(c) a benefit allowance of 25% of the Executive's Annual Base Salary as
in effect immediately prior to the Date of Termination, less an amount
estimated in good faith by the Company to represent the cost of providing the
lifetime group insurance benefits described in Section 5 of the Employment
Agreement (as defined below) for a period of three years following the Date
of Termination.
5. OTHER SEVERANCE BENEFITS
In addition to the severance payment provided under Section 4 hereof, the
Executive shall be entitled to the following benefits and other rights in the
event of his Covered Termination:
(a) Accrued Rights. The Executive 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;
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(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);
(iv) a payment equal to the forfeited portion of the account balance
of the Executive under the Company's tax-qualified and non-qualified pension
and deferred compensation plans as a result of failure to satisfy vesting
requirements due to the Covered Termination; and
(v) payment of the Executive's benefits pursuant to the terms of the
Doubletree Hotels Corporation Supplemental Executive Retirement Plan (the
"SERP"), which, for the purposes thereof, the Company acknowledges that the
Proposed Merger shall constitute a "Change of Control" (as defined therein),
and which is attached as Exhibit A hereto.
(b) Outplacement Services. Upon the occurrence of a Covered Termination,
the Executive shall be provided, at the Company's sole expense, with
professional outplacement services consistent with the Executive'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 executives as to duration
and dollar amounts.
(c) Equity Rights. In the event that the Executive's termination of
employment constitutes a termination without "Cause" or a resignation for
"Good Reason", as such terms are defined in the employment agreement between
the Executive and Promus Hotel Corporation (f.k.a. Parent Holding Corp.)
dated in November 1997 (the "Employment Agreement"), all outstanding awards
of stock options and restricted stock that have been granted to the Executive
shall continue to become vested and following the Date of Termination, at the
same times and on the same basis as if the Executive had remained employed by
the Company and, in the case of stock options, shall remain exercisable
following the vesting thereof until the expiration of the original full term.
NOTE that, pursuant to Section 11.02(d) of the Employment Agreement, the
contemplated relocation of the Executive's offices from Phoenix, Arizona to
Memphis, Tennessee in connection with the Proposed Merger will constitute a
Good Reason under the Employment Agreement.
(d) Lifetime Insurance. In the event that the Executive's termination of
employment constitutes a termination without "Cause" or a resignation for
"Good Reason", as such terms are defined in the Employment Agreement, the
Executive shall also be entitled to the lifetime group insurance benefits
described in Section 5 of the Employment Agreement.
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 Executive's benefit,
whether paid or payable or distributed or 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 Executive'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 Executive at the time specified in Section 7
hereof, below, an additional amount (the
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"Gross-Up Payment") such that the net amount retained by the Executive, 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 Executive
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 Executive 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 Executive 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 Executive'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 Executive'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 Executive 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 Executive's employment (including by
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.
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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 Executive shall be entitled to a reimbursement payment from the Company
equal to his reasonable moving expenses (determined in accordance with
Company's relocation policy), as well as a payment to reimburse the Executive
for the loss of equity upon the sale of his existing principal residence (plus
an additional payment to make the Executive whole on an after-tax basis for
the federal, state and local tax consequences of such payment), incurred in
connection with the Executive'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 Executive an
additional payment in an amount such that the net amount retained by the
Executive 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.
9. NO MITIGATION OR OFFSET
The Executive 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
Executive becomes entitled hereunder shall not be reduced by any compensation
earned by the Executive 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 Executive of his obligations
under Sections 11 or 12 hereof or otherwise.
10. RELEASE OF CLAIMS
As conditions of Executive's entitlement to the severance payments and
benefits provided by this Agreement, the Executive 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 B (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 EXECUTIVE
(a) General. The Executive 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 Executive's right to
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work, earn a living, or acquire and possess property from the fruits of his
labor. The Executive 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 Executive 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 Executive'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 Executive.
"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.
"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 Executive's employment by the
Company plus a period extending two (2) years from the date of termination of
employment.
"Restrictive Covenants" means the restrictive covenants contained in
Section 11(c) hereof
(c) Restrictive Covenants.
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(i) Restriction on Disclosure and Use of Confidential
Information. The Executive 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 Executive's own use. Accordingly,
the Executive hereby agrees that the Executive 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 Executive 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
Executive's obligations under any state or federal statutory or common law
regarding trade secrets and unfair trade practices.
(ii) Nonsolicitation of Protected Employees. The Executive
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 Executive's own use. Accordingly, the Executive
hereby agrees that during the Restricted Period the Executive shall not
directly or indirectly on the Executive's own behalf or as a Principal or
Representative of any Person solicit any Protected Employee to terminate his
or her employment with the Company.
(iii) Noninterference with Company Opportunities. The Executive
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
Executive's own use. Accordingly, the Executive hereby agrees that during
the Restricted Period the Executive shall not directly or indirectly on the
Executive'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 Executive 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 Executive or his agent; (ii) becomes available to the
Executive 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 other similar agreement; (iii) was known to the Executive
on a non-confidential basis and not in contravention of applicable law or a
confidentiality or other similar agreement before its disclosure to the
Executive 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
Executive 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 Executive.
(e) Enforcement of the Restrictive Covenants.
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(i) Rights and Remedies upon Breach. In the event the Executive 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 Executive 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 Executive 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 Executive 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 Executive'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 Executive's other commitments, and the
Executive 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 Executive 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 Executive would conflict with his rights
under or ability to enforce this Agreement.
13. INDEMNIFICATION
(a) Following the Date of Termination, the Company agrees that it will,
indemnify and hold harmless the Executive, against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities or amounts paid in settlement incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Date of Termination, whether
asserted or claimed prior to, at or after the Date of Termination, to the
fullest extent that the Company would have been permitted under Delaware law
and its certificate of incorporation or bylaws in effect on the date hereof
to indemnify the Executive (and the Company shall also advance expenses as
incurred to the fullest extent
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permitted under applicable law, provided the Executive provides an
undertaking to repay advances if it is ultimately determined that the
Executive is not entitled to indemnification).
(b) For a period of six years after the Date of Termination, the
Company shall maintain (to the extent available in the market) in effect a
director's and officer's liability insurance policy covering with coverage in
amount and scope at least as favorable as the Company's existing coverage on
the Date of Termination; provided that in no event shall the Company be
required to expend in the aggregate in excess of 200% of the annual premium
paid by the Company for such coverage as of the Date of Termination; and if
such premium would at any time exceed 200% of the such amount, then the
Company shall maintain insurance policies which provide the maximum and best
coverage available at an annual premium equal to 200% of such amount.
(c) The provisions of this Section 13 are intended to be an addition to
the rights otherwise available to the Executive by law, charter, statute,
bylaw or separate agreement between the Company and the Executive. The
Company shall continue to honor any indemnification agreement between the
Company and the Executive entered into prior to the Date of Termination in
accordance with the terms thereof.
14. SUCCESSORS, BINDING AGREEMENT.
(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 Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Company terminated his employment without Cause 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 Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Executive
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 Executive's devisee, legatee or other
designee or, if there is no such designee, to the Executive's estate.
15. 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,
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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
Xxxxxxx, XX 00000
Attn: Corporate Secretary
Notice to the Executive shall be addressed to him at the business address
of the Company where the Executive is employed, with a copy to him at his
home address as follows:
Xxxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxx Xxxxxx Xx.
Xxxxxxxx Xxxxxx, XX 00000
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.
16. 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 Executive 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.
17. 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.
18. 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
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then in effect. Judgment may be entered on the arbitrator's award in any
court having jurisdiction.
19. PAYMENT OF LEGAL FEES
The Company shall pay all reasonable legal fees and expenses incurred by
the Executive in connection with any arbitration (or other proceeding whether
or not instituted by the Company or the Executive), 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.
20. NO RESTRICTIONS ON EMPLOYMENT RIGHTS
Nothing in this Agreement shall confer on the Executive 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 Executive at any time for any reason whatsoever, with or
without Cause, subject to the requirements of this Agreement. Nothing in
this Agreement shall restrict the right of the Executive to terminate his
employment with the Company at any time for any reason whatsoever.
21. AFFECT ON EMPLOYMENT AGREEMENT
Any severance payment made to the Executive under this Agreement shall
supersede and be in lieu of any severance payment to which the Executive may
become entitled under the Employment Agreement. The occurrence of a Covered
Termination following the occurrence of more than one Reorganization Event
after the date hereof shall not entitle the Executive to multiple severance
payments under this Agreement and/or the Employment Agreement.
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
EXECUTIVE
____________________________________
Name: Xxxxxxx X. Xxxxxxxx
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