HOST FUNDING, INC.
EMPLOYMENT AGREEMENT WITH
BONA X. XXXXX
This Employment Agreement is made as of January 1, 1997 between Host
Funding, Inc., a Maryland corporation ("Employer"), and Bona X. Xxxxx
("Employee").
RECITALS
A. Whereas, Employee has acquired outstanding and special skills and
abilities and an extensive background in and knowledge of Employer's business
and the industry in which it is engaged;
B. Whereas, Employer desires assurance of the association and services
of Employee in order to retain his experience, skills, abilities, background
and knowledge, and is therefore desirous of engaging his services on the
terms and conditions set forth below; and
C. Whereas, Employee desires to be in the employ of Employer and is
willing to do so on these terms and conditions.
NOW, THEREFORE, in consideration of the above recitals and of the mutual
promises and conditions in this Employment Agreement ("Agreement"), it is
agreed as follows:
1. EMPLOYMENT. Employer shall employ Employee as Chief Financial Officer.
2. DUTIES. Employee shall exercise his duties with full executive and
administrative responsibility for the areas assigned by Employer and
identified in Exhibit "A attached hereto and incorporated herein by
reference. Employee shall report to the Chief Financial Officer..
3. FULL-TIME ATTENTION. During his employment, Employee shall devote
his full energies, interest, abilities and productive time to the performance
of this Agreement. Without Employer's prior written consent, Employee shall
not render to others services of any kind of nature for compensation or
engage in any other business activity that would interfere with the
performance of his duties under this Agreement.
4. EMPLOYMENT TERM. Employee agrees to be employed for a term of
three (3) years beginning February 17, 1997 and for renewal periods after
unless he resigns or is terminated pursuant to the provisions of this
Agreement. This Agreement shall renew for periods of one year upon each
anniversary date of February 17 ("Anniversary Date") unless terminated for
any reason by written notice from either party given to the other at least
one hundred and twenty (120) days prior to the next Anniversary Date or
unless otherwise terminated pursuant to the terms of this Agreement.
5. BASIC COMPENSATION. Employer shall pay to Employee a basic
compensation ("Salary") of Seventy-Five Thousand Dollars ($75,000) per year
payable in equal semi-monthly installments. Employee will be eligible for
Salary increases in accordance with Employer's standard compensation policy
for positions of similar responsibility and as set forth in Exhibit "B"
attached hereto and incorporated herein by reference. In the event of
termination of Employee prior to completion of the term of employment
specified herein, or any renewal period, Employee shall be entitled to the
Salary earned by him prior to the effective date of termination, computed on
a pro-rata basis up to and including that termination date.
6. PERFORMANCE BONUS. Employee shall be entitled to participate in
the Performance Bonus so indicated on Exhibit "B". The Performance Bonus
will be calculated based on the financial results achieved by Employer during
any fiscal year and will be paid to Employee on or before five (5) days after
the filing of Employer's 10-K with respect to such fiscal year. In addition,
Employee shall, subject to the discretion of the Compensation Committee of
the Board of Directors, participate in the Incentive Programs, Stock Option
Programs, etc. that may be established from time to time.
7. FRINGE BENEFITS. During the employment term, Employee is entitled
to receive the standard health and life insurance benefits provided from time
to time to its executive employees by Employer. Employee shall be entitled
to receive three (3) weeks of vacation per calendar year. If health
insurance is not provided, then Employee shall be paid an additional $200 per
month. Employee may carry over a maximum of one (1) week of accrued but
unused vacation time from one year to the next. Any vacation time in excess
of one (1) week not taken during the calendar year in which it accrued shall
be forfeited at the end of the calendar year, unless the period in which to
utilize the vacation is extended in writing by the Employer.
8. EXPENSES. During the employment term, Employer shall reimburse
Employee for reasonable out of pocket expenses incurred in connection with
Employer's business, including travel expenses and food and lodging while on
travel status. Reimbursement shall be subject to the prior approval of
Employer and to such other policies as Employer may establish from time to
time. In addition, Employer shall bear all reasonable and necessary expenses
in the relocation of Employee to Dallas, Texas and if terminated prior to the
third anniversary, Employer will bear all expenses necessary to relocate
Employee to Atlanta, Georgia. In addition, Employer will provide twelve
trips per year to Atlanta, Georgia for the first two years based on a 21 day
advance purchase on Delta or American.
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9. TERMINATION.
(a) Employer may terminate this Agreement upon thirty (30) days
notice to Employee if the affairs of Employer, are being wound up and
terminated. In the event Employer terminates this Agreement pursuant to this
paragraph 9(a), Employee shall be entitled to nine months Severance Pay.
(b) Employer may terminate this Agreement for cause at any time
without notice if Employee (i) commits and fraud, crime, or material act of
dishonesty, (ii) disclosed confidential information, (iii) is guilty of gross
carelessness or misconduct, (iv) commits a material violation of any of the
provisions of this Agreement or any other agreement between the Employee and
Employer, (v) loses any license or violates the terms of any license required
to be held by him under the terms of this Agreement, (vi) violates any laws
in performing his assigned duties, (vii) unjustifiably neglects or fails to
perform his duties under this Agreement, including failure to meet
performance goals, or (viii) acts in any way that has a direct, substantial,
and adverse effect on Employer's reputation or business.
(c) If Employee dies during the initial term or an annual renewal
term of this Agreement, this Agreement shall be terminated immediately upon
the death of Employee. Employee's estate shall receive any Compensation, as
provided in paragraphs 5 and 6, above, then accrued and due to Employee, and
a one-time payment of Ten Thousand Dollars ($10,000.00).
(d) If Employee is disabled and has been disabled for a period of
one hundred and eighty (180) days, or if Employee is unable to perform his
duties under this Agreement in his normal and regular manner due to mental or
physical illness for eighty percent (80%) or more of the normal working days
during the one hundred and eighty (180) days then ending, then this Agreement
shall be terminated, and Employer shall have no further obligation to
maintain Employee in its employ or to make payments to Employee of any kind
whatsoever. For the purposes of this paragraph, "disabled" or "disability"
means that Employee has been unable to perform his duties assigned to him by
the Employer as a result of physical or mental illness. If and to the extent
that Employee received payments in respect of disability insurance provided
by Employer during the period in which Employer is obligated to make payments
to Employee, Employer shall be relieved of the obligation to make such
payments to the extent of the amounts as received by Employee, but, except as
so qualified, Employer's obligations to make such payments to Employee shall
continue in full. This benefit for Employee is the exclusive benefit from
Employer during such 180 days by reason of such disability.
(e) In the event of termination, upon payment of the accrued
amounts of Compensation to Employee or to his estate, Employer and Employee
shall have no rights or responsibilities to the other, and in particular
Employee shall have no further right or claim to above, at time of
termination except as provided in paragraph 8(c), above, where prorated from
the start of the 180 days.
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10. REASSIGNMENT OF DUTIES. If Employee gives notice of termination of
this Agreement or if this Agreement would otherwise terminate in accordance
with its provisions, Employer, in its sole discretion and subject to its
other obligations under this Agreement, may relieve Employee of his duties,
under this Agreement and may assign to Employee other reasonable duties and
responsibilities to be performed until the termination becomes effective.
11. ASSIGNMENT. In the event of a change of control of Employer,
merger in which Employer is not the surviving entity, or of a sale of all or
substantially all of Employer's assets, Employer, at its sole option (i) may
assign this Agreement and all rights and obligations under it to any business
entity that succeeds to all or substantially all of the Employer's business
through that merger or sale of assets, or (ii) on at least sixty (60) days'
prior written notice to Employee, may terminate this Agreement effective on
the date of the change of control, merger or sale of assets. If any
successor Employer assumes this Agreement, either expressly or by operation
of law, but subsequently terminates Employee without cause within twenty-
four (24) months after the date of such assumption (the "Assumption Date"),
then Employee will be entitled to severance compensation in an amount equal
to the product of (a) the Base Salary then in effect under this Agreement,
multiplied by (b) the difference between twenty-four (24) months less the
number of months after the Assumption Date during which Employee remained
employed. As used herein, "change of control" means a change in the
beneficial ownership of 15% or more of the shares in Employer, except for any
such change resulting from the public or private placement of additional
shares of stock in Employer.
12. ADHERENCE TO EMPLOYER'S RULES. At all times, during the
performance of this Agreement, Employee shall strictly adhere to and obey all
of Employer's reasonable rules, regulations, policies and procedures of
general application and governing the conduct of Employee now in effect, or
as subsequently determined.
13. WORKER'S COMPENSATION. Employer shall maintain Worker's
Compensation Insurance as required under the laws of the State of Texas in
full force and effect to cover Employee during the entire term of employment
under this Agreement.
14. OWNERSHIP OF INTANGIBLES. All processes, inventions, patents,
copyrights, trademarks, and other intangible rights that may be conceived or
developed by Employee, either alone or with others, during the term of
Employee's employment, whether or not conceived or developed during
Employee's working hours, and with respect to which the equipment, supplies,
facilities, or trade secret information or Employer was used, or that relate
at the time of conception or reduction to practice of the invention to the
business of the Employer or to Employer's actual or demonstrably anticipated
research and development, or that result from any work performed by Employee
for Employer, shall be the sole property of Employer. Employee shall
disclose to Employer all inventions conceived during the term of employment
and for one year thereafter, whether or not the property of Employer under
the terms of the preceding sentence, provided that such disclosure shall be
received by Employer in confidence. Employee
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shall execute all documents, including, but not limited to patent
applications and assignments, required by Employer to establish Employer's
rights under this paragraph.
15. OWNERSHIP OF BOOKS, RECORDS AND PAPERS. All records of the
accounts of customers, any records and books relating in any manner
whatsoever to the customers of Employer, and any and all drawings or plans,
whether prepared by Employee or otherwise coming into Employee's possession,
shall be the exclusive property of Employer regardless of whoever actually
purchased the actual books or records.
(a) All such books and records shall be immediately returned to
Employer by Employee upon termination of employment.
(b) On the termination of employment or whenever requested by
Employer, Employee shall immediately delivery to Employer all property in his
possession or under his control belonging to Employer, in good condition,
ordinary wear and tear and damage by any cause beyond the reasonable control
of Employee excepted.
16. DISCLOSURE OF CONFIDENTIAL INFORMATION AND TRADE SECRETS
PROHIBITED. In the course of his employment, Employee may have access to and
become acquainted with confidential information and trade secrets, consisting
of formulas, devices, secret inventions, processes, and compilations of
information, records, and specifications, all of which are owned by Employer
and regularly used in the operations of the Employer's business. All files,
records, documents, drawings, specifications, equipment and similar items
relating to the business of the Employer, whether they are prepared by the
Employee, or come into Employer's possession, in any way, and whether or not
they contain or constitute trade secrets owned by Employer, are and shall
remain the exclusive property of Employer, and shall not be removed from the
premises of Employer under any circumstances whatsoever without the prior
written consent of Employer. Employee promises and agrees that he shall not
misuse, misappropriate or disclose any of the trade secrets, exclusive
property or confidential information described herein, directly or
indirectly, or use them time thereafter, except as required in the course of
his employment.
17. INJUNCTION AND EQUITABLE RELIEF. Employee acknowledges the
services to be performed by him under the terms of this contract are of a
special, unique, unusual, extraordinary and intellectual character which
gives them a particular value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law. Accordingly, Employee
expressly agrees that Employer, in addition to any other rights or remedies
which Employer may possess, shall be entitled to injunctive and other
equitable relief in order to prevent a breach of this contract by Employee.
18. ATTORNEY'S FEES AND COSTS. If any action at law or in equity is
necessary to enforce or to interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs, and
necessary disbursements in addition to any other relief to which he may be
entitled. This provision shall be applicable to the entire Agreement.
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19. ENTIRE AGREEMENT. This Agreement, consisting of nine (9) pages and
two (2) exhibits, contains the entire agreement between the parties and
supersedes all prior and concurrent oral and written agreements,
understandings, commitments and practices between the parties, including all
prior employment agreements, whether or not fully performed by Employee or
Employer before the date of this Agreement. Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements,
orally or otherwise, have been made by any party or by anyone acting on
behalf of any party, which are not embodied herein, and that no other
agreement, statement, or promise not contained in this Agreement (including
the _____ exhibits) shall be valid or binding. Any modification of this
Agreement will be effective and binding only if it is in writing and signed
by the party to be charged.
20. GOVERNING LAW. The formation, construction and performance of this
Agreement shall be governed by and construed in accordance with the laws of
the State of Texas.
21. NOTICE. Any notice to Employer required or permitted under this
Agreement shall be given in writing to Employer, either by personal service
or by registered or certified mail, postage prepaid, addressed to Employer,
Attention: Xxxxxxx X. XxXxxxx, Host Funding, Inc., 0000 Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000. Notice to Employee shall be
given in a like manner and, if mailed, shall be addressed to Employee at his
home address then shown in Employer's files. Notices delivered in person
shall be deemed communicated as of actual receipt. Mailed notices shall be
deemed communicated five days after mailing.
22. SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable, the remainder of this Agreement shall nevertheless remain
in full force and effect. If any provision is held invalid or unenforceable
with respect to a particular circumstance, it shall nevertheless remain in
full force and effect in all other circumstances.
23. NO PARTNERSHIP. The Parties specifically recognize and agree that
the relationship established hereby is that of employer-employee. Without
limitation to the foregoing, in no manner have the Parties intended to
establish nor do they establish any rights of Employee as a partner of, joint
venturer with, or other relationship to the Employer.
"EMPLOYER" "EMPLOYEE"
Host Funding, Inc., a Maryland corporation
By:_______________________________ ___________________________
Title:____________________________
Date:_____________________________ Date:_____________________________
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EXHIBIT "A"
CHIEF OPERATING OFFICER
DUTIES AND RESPONSIBILITIES
* The Chief Financial Officer shall report to the Chief Executive Officer
* Duties
* To prepare or cause to be prepared and timely file all corporate
quarterly, special and annual filings with the Securities and Exchange
Commission;
* To prepare or cause to be prepared and timely file all federal,
state and local tax returns, franchise returns, return on ad valorem
assessment;
* To receive, review and summarize all lessee monthly reports and
disseminate to Board and CEO;
* To develop or cause to be developed model(s) to perform acquisitions
in order to prepare lease parameters, effect of acquisitions on
existing properties;
* To prepare financial packages as required by the Board of Directors
and Management;
* To assist in preparation of FORM S-2, loan requests, etc.;
* To participate in "road shows" as necessary;
* To maintain corporate general ledgers and assist auditors in
preparation of financial statement;
* To develop and implement an investor valuations program; and
* Meet with Lessee Chief Financial Officer to review annual operating
and corporate budgets.
EXHIBIT "B"
HOST FUNDING, INC.
COMPENSATION PACKAGE
Position: Chief Financial Officer
Base Salary: $75,000 to be adjusted as follows:
Assets Greater than $150,000,000 then Base Salary increased to
$112,500
Assets Greater than $250,000,000 then Base Salary increased to
$150,000
Term: Not greater than three years
Bonus: Up to 50% of salary with a minimum bonus in the first year of 15%
Bonus to be a weighted factor of the following:
Increase
--------
FFO Increase 5% = 2 Points
FFO Increase 10% = 7 Points
Cash Available 5% = 5 Points
Cash Available 7% = 7 Points SUBJECT TO BOARD
Cash Available 10% = 10 Points AND UNDERWRITER
Dividend 5% = 2 Points APPROVAL OF THE
Dividend 10% = 5 Points FORMULA
Dividend )10% = 10 Points
Stock Price 5% = 10 Points
Stock Price )10% = 10 Points
Board Discretion = 20 Points
Maximum Points = 50 Points
Bonus = Base Salary x (points earned/maximum points)
Bonus = Bonus as discretion of Board but based on
quantative measurement
Vacation: 3 Weeks plus six legal holidays
Insurance: Employer shall either purchase policy or reimburse
Employee up to $200.00 per month
Severance: Without cause: 9 Months
Change of Control: 24 Months unless retained at comparable
level
Exhibit B - Page 2
