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Exhibit 10.13
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of March 31, 1997
by and between BridgeStreet International Inc, a Delaware corporation
("BridgeStreet"), and Xxxxxxx X. Xxxxxx III, of Chagrin Falls, Ohio (the
"Executive").
In consideration of the mutual promises, terms, provisions and
conditions set forth in this Agreement, the parties hereby agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions set forth in
this Agreement, BridgeStreet hereby offers and the Executive hereby accepts
employment.
2. TERM. Subject to earlier termination as hereafter provided, the
Executive's employment hereunder shall be for a term beginning June 1, 1997 and
ending May 31, 2000. The term of this Agreement, as from time to time extended
or renewed, is hereafter referred to as "the term of this Agreement" or "the
term hereof."
3. CAPACITY AND PERFORMANCE.
(a) During the term hereof, the Executive shall serve as the
Chief Executive Officer and President of BridgeStreet. In addition, and
without further compensation, the Executive shall serve as a director
and/or officer of BridgeStreet and/or one or more of BridgeStreet's
Affiliates if so elected or appointed from time to time.
(b) During the term hereof, the Executive shall be employed
by BridgeStreet on a full-time basis. The Executive shall have all
powers and duties consistent with his position, subject to the direction
and control of BridgeStreet's Board of Directors (the "Board"), and
shall perform such other duties and responsibilities on behalf of
BridgeStreet and its Affiliates as may reasonably be designated from
time to time by the Board or by its designees.
(c) During the term hereof, the Executive shall devote his
full business time and his best efforts, business judgment, skill and
knowledge exclusively to the advancement of the business and interests
of BridgeStreet and its Affiliates and to the discharge of his duties
and responsibilities hereunder. During the term hereof, the Executive
shall not engage in any other business activity or serve in any
industry, trade, professional, governmental or academic position during
the term of this Agreement, except that the Executive may continue to
devote time to the affairs of the Rock and Roll Hall of Fame and Museum,
Inc., to the extent such activities do not materially and adversely
affect the discharge of the Executive's duties hereunder.
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4. COMPENSATION AND BENEFITS. As compensation for all services
performed by the Executive under and during the term hereof and subject to
performance of the Executive's duties and of the obligations of the Executive,
pursuant to this Agreement or otherwise:
(a) BASE SALARY. During the term hereof, BridgeStreet shall
pay the Executive a base salary as hereinafter provided, payable in
accordance with the payroll practices of BridgeStreet for its executives
and subject to increase from time to time by the Board or a compensation
committee of the Board, in its sole discretion. Such base salary, as
from time to time increased, is hereafter referred to as the "Base
Salary".
PERIOD BASE SALARY (ANNUAL RATE)
June 1, 1997 - December 31, 1997 - $200,000
January 1, 1998 - December 31, 1998 - $200,000 plus an additional
$25,000 if BridgeStreet has
achieved the net earnings per share
set forth in the budget adopted by
the Board for the period June 1,
1997 through December 31, 1997
January 1, 1999 - December 31, 1998 - The Base Salary for 1998 plus an
additional $25,000 if BridgeStreet
has achieved the net earnings
per share set forth in the budget
adopted by the Board for calendar
1998
January 1, 2000 - May 31, 2000 - The Base Salary for 1999 plus an
additional $25,000 if BridgeStreet
has achieved the net earnings per
share set forth in the budget
adopted by the Board for calendar
1999
(b) BONUS COMPENSATION. The Executive shall be entitled to
participate in the bonus plan described on Exhibit A attached hereto
which will entitle him to receive up to a maximum of fifty percent (50%)
of his Base Salary. Unless the Compensation Committee of the Board
otherwise decides and except as provided in Section 6(d), the Executive
shall receive his bonus for a year only if he is employed by
BridgeStreet on the last day of such year.
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(c) STOCK OPTIONS. Effective as of the pricing date of
BridgeStreet's initial public offering (the "IPO"), and subject to the
closing thereof, the Executive shall be granted stock options to
purchase 150,000 shares of Common Stock of BridgeStreet at a price per
share equal to the IPO price per share of BridgeStreet Common Stock.
Such stock options shall be granted pursuant to, and shall be subject to
the terms and conditions of, BridgeStreet's employee stock option plan
or other equity incentive plan then in effect and the policies of the
Board then in effect with regard to the grant of stock options and the
terms hereof, but shall in all events provide as follows:
(i) The term of the stock options shall be for ten
years (subject to earlier termination as set forth in the plan
for merger and similar transactions).
(ii) The stock options shall become exercisable in
equal installments on the first, second and third anniversaries
of the date of the IPO provided that on each such date the
Executive is employed by BridgeStreet.
(iii) In the event that the Company undergoes a Change
in Control (as defined in Exhibit B attached hereto) all of the
stock options shall become exercisable effective on the date of
the Change in Control.
(iv) All stock options exercisable by the Executive
on the date his employment with BridgeStreet terminates shall
remain exercisable for a period of one year from the date of
termination unless such termination is by BridgeStreet
notwithstanding the terms of this Agreement, in which event all
of the stock options shall become exercisable effective on the
date of such termination and shall remain exercisable for the
balance of the ten-year term of the stock options. Following
expiration of the term hereof (or of the term of any successor
to this Agreement), (A) if the Executive advises BridgeStreet in
writing that he is willing to continue his employment with
BridgeStreet and BridgeStreet does not offer the Executive
continued employment by BridgeStreet on financial terms no less
favorable to the Executive than those set forth in this
Agreement or (B) if BridgeStreet elects not to continue the
Executive's employment for any reason other than a disability
which would have entitled BridgeStreet to terminate this
Agreement pursuant to Section 5(b) or conduct of the Executive
which would have constituted Cause under Section 5(b), all of
the stock options shall remain exercisable for the balance of
the ten-year term of the stock options; otherwise, all stock
options shall remain exercisable for a period of one year from
the date the Executive's employment with XxxxxxXxxxxx
xxxxxxxxxx.
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(x) OTHER BENEFITS. During the term hereof and subject to
any contribution therefor generally required of employees of
BridgeStreet, the Executive shall be entitled to receive long-term
disability and medical insurance coverage and to participate in any and
all employee benefit plans from time to time in effect for employees of
BridgeStreet generally, except to the extent such plans are in a
category of benefit (including without limitation bonus compensation)
otherwise provided to the Executive. Such participation shall be subject
to (i) the terms of the applicable plan documents, (ii) generally
applicable BridgeStreet policies and (iii) the discretion of the Board
or any administrative or other committee provided for in or contemplated
by such plan. BridgeStreet may alter, modify, add to or delete its
employee benefit plans at any time as it, in its sole judgment,
determines to be appropriate, without recourse by the Executive.
(e) BUSINESS EXPENSES. BridgeStreet shall pay or reimburse
the Executive for all reasonable and necessary business expenses
incurred or paid by the Executive in the performance of his duties and
responsibilities hereunder, subject to any maximum annual limit and
other restrictions on such expenses set by the Board and to such
reasonable substantiation and documentation as may be specified by
BridgeStreet from time to time.
5. TERMINATION OF EMPLOYMENT. Notwithstanding the provisions of
Section 2 hereof, the Executive's employment hereunder shall terminate prior to
the expiration of the term under the following circumstances:
(a) DEATH. In the event of the Executive's death during the
term hereof, the Executive's employment hereunder shall immediately and
automatically terminate. In that event, BridgeStreet shall pay to the
Executive's designated beneficiary or, if no beneficiary has been
designated by the Executive, to his estate, any earned and unpaid Base
Salary, prorated through the date of his death.
(B) DISABILITY.
(i) BridgeStreet may terminate the
Executive's employment hereunder, upon notice to the
Executive, in the event that the Executive becomes
disabled through any illness, injury, accident or
condition of either a physical or psychological nature
and, as a result, is unable to perform substantially all
of his duties and responsibilities hereunder for ninety
(90) consecutive days or for an aggregate of one hundred
eighty (180) days during any period of three hundred
sixty-five (365) consecutive calendar days.
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(ii) The Board may designate another
executive to act in the Executive's place during any
period of the Executive's disability. Notwithstanding
any such designation, the Executive shall continue to
receive the Base Salary in accordance with Section 4(a)
and benefits in accordance with Section 4(d), to the
extent permitted by the then-current terms of the
applicable benefit plans, until the Executive becomes
eligible for disability income benefits under any
disability income plan (if one is provided by
BridgeStreet) or until the termination of his
employment, whichever shall first occur.
(iii) While receiving disability income
payments under BridgeStreet's disability income plan, if
any, the Executive shall not be entitled to receive any
Base Salary under Section 4(a) hereof, but shall
continue to participate in BridgeStreet benefit plans in
accordance with Section 4(d) and the terms of such
plans, to the extent permitted by such plans, until the
termination of his employment.
(iv) If any question shall arise as to
whether during any period the Executive is disabled
through any illness, injury, accident or condition of
either a physical or psychological nature so as to be
unable to perform substantially all of his duties and
responsibilities hereunder, the Executive may, and at
the request of BridgeStreet shall, submit to a medical
examination by a physician selected by BridgeStreet to
whom the Executive or his duly appointed guardian, if
any, has no reasonable objection to determine whether
the Executive is so disabled and such determination
shall for the purposes of this Agreement be conclusive
of the issue. If such question shall arise and the
Executive shall fail to submit to such medical
examination, BridgeStreet's determination of the issue
shall be binding on the Executive.
(c) BY BRIDGESTREET FOR CAUSE. BridgeStreet may terminate
the Executive's employment hereunder for Cause at any time upon notice
to the Executive setting forth in reasonable detail the nature of such
Cause. The following, as determined by the Board in its reasonable
judgment, shall constitute Cause for termination:
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(i) The Executive's repeated failure to perform
(other than by reason of disability), or gross negligence in the
performance of, his material duties and responsibilities
hereunder and the continuance of such failure or negligence for
a period of thirty (30) days after notice to the Executive;
(ii) Material breach by the Executive of any
provision of this Agreement or any other written agreement
between the Executive and BridgeStreet or any of its Affiliates;
(iii) Other conduct by the Executive that involves a
material violation of law or breach of fiduciary obligation on
the part of the Executive or is otherwise materially harmful to
the business, interests, reputation or prospects of BridgeStreet
or any of its Affiliates.
Upon the giving of notice of termination of the Executive's
employment hereunder for Cause, BridgeStreet shall not have any further
obligation or liability to the Executive, other than for Base Salary
earned and unpaid at the date of termination.
6. EFFECT OF TERMINATION. The provisions of this Section 6 shall
apply to termination due to the expiration of the term, pursuant to Section 5 or
otherwise.
(a) Except as otherwise provided in paragraph (d), payment
by BridgeStreet of any Base Salary and contributions to the cost of the
Executive's continued participation in BridgeStreet's group health and
dental plans, if any, that are due the Executive in each case under the
applicable termination provision of Section 5 shall constitute the
entire obligation of BridgeStreet to the Executive.
(b) Except as otherwise provided in paragraph (d), benefits
shall terminate pursuant to the terms of the applicable benefit plans
based on the date of termination of the Executive's employment without
regard to any continuation of Base Salary or other payment to the
Executive following such date of termination.
(c) Except as otherwise provided in paragraph (d),
provisions of this Agreement shall survive any termination if so
provided herein or if necessary or desirable fully to accomplish the
purposes of such provisions, including without limitation the
obligations of the Executive under Sections 7 and 8 hereof. The
Executive recognizes that no compensation is earned after termination of
employment except as provided in paragraph (d).
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(d) In the event the Executive's employment by BridgeStreet
is terminated by BridgeStreet notwithstanding the terms of this
Agreement:
(i) BridgeStreet shall continue to pay to the
Executive his Base Salary as of the date of termination for the
term of this Agreement or twelve months, whichever is longer.
(ii) BridgeStreet shall pay to the Executive a pro
rata portion of his bonus, if any, contemplated by Section 4(b)
for the calendar year in which his employment was terminated
based upon the number of days in the year elapsed prior to
termination.
(iii) BridgeStreet shall continue to provide Executive
with the medical insurance coverage contemplated by Section 4(d)
for the term of this Agreement or twelve months, whichever is
longer.
7. CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges that BridgeStreet and its
Affiliates will continually develop Confidential Information, that the
Executive may develop Confidential Information for BridgeStreet or its
Affiliates and that the Executive may learn of Confidential Information.
The Executive agrees that, except as required for the proper performance
of his duties for BridgeStreet, he will not, directly or indirectly, use
or disclose any Confidential Information, as defined below. The
Executive understands and agrees that this restriction will continue to
apply after his employment terminates, regardless of the reason for
termination.
(b) The Executive agrees that all Confidential Information
which he creates or to which he has access as a result of his employment
or the rendering of other services to BridgeStreet is and shall remain
the sole and exclusive property of BridgeStreet. Except as required for
the proper performance of his duties, the Executive will not copy any
documents, tapes or other media containing Confidential Information
("Documents") or remove any Documents, or copies, from BridgeStreet's
premises. The Executive will return to BridgeStreet immediately after
his employment terminates, and at such other times as may be specified
by BridgeStreet, all Documents and copies and all other property of
BridgeStreet then in his possession or control.
8. RESTRICTED ACTIVITIES. The Executive agrees that some
restrictions on his activities during and after his employment are necessary to
protect the goodwill, Confidential Information and other legitimate interests of
BridgeStreet and its Affiliates:
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(a) The Executive agrees that, during the term hereof and
for a period of two (2) years immediately following termination of his
employment (the "Non-Competition Period"), he will not, directly or
indirectly, whether as an owner, partner, investor, consultant, employee
or otherwise, provide services to or engage in, or undertake any
planning to engage in, any business engaged in the extended stay
lodgings business without the prior written consent of BridgeStreet, it
being understood that hotels, as such, are not included within such
prohibition.
(b) The Executive agrees that, during the term hereof, he
will not undertake any outside activity, whether or not competitive with
the business of BridgeStreet or any of its Affiliates, that could
reasonably give rise to a conflict of interest or otherwise interfere
with his duties and obligations to BridgeStreet or any of its
Affiliates.
(c) The Executive further agrees that during the term hereof
and during the Non-Competition Period, the Executive will not, and will
not assist anyone else to, (i) hire any employee of BridgeStreet or any
of its Affiliates or seek to persuade any employee of BridgeStreet or
any of its Affiliates to discontinue employment, (ii) solicit or
encourage any customer or vendor of or lessor to BridgeStreet or any of
its Affiliates to terminate or diminish its relationship with
BridgeStreet or any of its Affiliates, (iii) seek to persuade any
customer or prospective customer of BridgeStreet or any of its
Affiliates to conduct with anyone else any business or activity that
such customer or prospective customer conducts or could conduct with
BridgeStreet or any of its Affiliates, or (iv) call upon any prospective
acquisition candidates on the Executive's own behalf or on behalf of any
third party, which candidate was either called upon by the Executive or
for which the Executive made or had access to an acquisition analysis
for BridgeStreet.
9. NOTIFICATION REQUIREMENT. Until four (4) weeks after the
conclusion of the Non-Competition Period, the Executive shall give notice to
BridgeStreet of each new business activity he plans to undertake, at least
ninety (90) days prior to beginning any such activity. Such notice shall state
the name and address of the Person for whom such activity is undertaken and the
nature of the Executive's business relationship(s) and position(s) with such
Person. The Executive shall provide BridgeStreet with such other pertinent
information concerning such business activity as BridgeStreet may reasonably
request in order to determine the Executive's continued compliance with his
obligations under Sections 7 and 8 hereof.
10. ENFORCEMENT OF COVENANTS. The Executive acknowledges that he has
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 7 and 8 hereof.
The Executive agrees that said restraints are necessary for the reasonable and
proper protection of BridgeStreet and its Affiliates and that each and every one
of the restraints is reasonable in respect to subject matter, length of time and
geographic
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area. The Executive further agrees that all goodwill of BridgeStreet and its
Affiliates is their exclusive property. The Executive further acknowledges and
agrees that, were he to breach any of the covenants contained in Sections 7 or 8
hereof, the damage would be irreparable. The Executive therefore agrees that
BridgeStreet or any of its Affiliates, as the case may be, in addition to any
other remedies available to it, shall be entitled to preliminary and permanent
injunctive relief against any breach or threatened breach by the Executive of
any of said covenants, without having to post bond. The parties further agree
that, in the event that any provision of Sections 7 or 8 hereof shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its being extended over too great a time, too large a geographic area or too
great a range of activities, such provision shall be deemed to be modified to
permit its enforcement to the maximum extent permitted by law.
11. CONFLICTING AGREEMENTS. The Executive hereby represents and
warrants that the execution of this Agreement and the performance of his
obligations hereunder will not breach or be in conflict with any other agreement
to which the Executive is a party or is bound and that the Executive is not
subject to any covenants against competition or similar covenants that would
affect the performance of his obligations hereunder. The Executive will not
disclose to or use any proprietary information of a third party without such
party's consent.
12. DEFINITIONS. Words or phrases which are initially capitalized or
are within quotation marks shall have the meanings provided in this Section 12
and as provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:
(a) "Affiliates" means all persons and entities directly or
indirectly controlling, controlled by or under common control with
BridgeStreet, where control may be by either management authority or
equity interest.
(b) "Confidential Information" means any and all information
of BridgeStreet or of its Affiliates that is not generally known by
others with whom BridgeStreet or any of its Affiliates does, or plans
to, compete or do business, including but not limited to (i)
BridgeStreet's or any of its Affiliates' products and services,
technical data, methods and processes, (ii) BridgeStreet's or any of its
Affiliates' marketing activities and strategic plans, (iii)
BridgeStreet's or any of its Affiliates' costs and sources of supply,
(iv) the identity and special needs of BridgeStreet's or any of its
Affiliates' customers and prospective customers, vendors and
prospective vendors, and acquisition candidates and (v) the people and
organizations with whom BridgeStreet or any of its Affiliates has
business relationships and those relationships. Confidential Information
also includes such information that BridgeStreet or any of its
Affiliates may receive or has received belonging to customers or others
who do business with BridgeStreet or any of its Affiliates.
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(c) "Person" means an individual, a corporation, an
association, a partnership, an estate, a trust and any other entity or
organization, other than BridgeStreet or any of its Affiliates.
13. WITHHOLDING. All payments made under this Agreement shall be
reduced by any tax or other amounts required to be withheld under applicable
law.
14. ASSIGNMENT. Neither BridgeStreet nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that BridgeStreet may assign its rights and obligations under this Agreement
without the consent of the Executive in the event that BridgeStreet shall
hereafter effect a reorganization, consolidate with, or merge into, any other
Person or transfer all or substantially all of its properties or assets to any
other Person. This Agreement shall inure to the benefit of and be binding upon
BridgeStreet and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
15. SEVERABILITY. If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
16. WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of either
party to require the performance of any term or obligation of this Agreement, or
the waiver by either party of any breach of this Agreement, shall not prevent
any subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach.
17. NOTICES. Any and all notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Executive at his
last known address on the books of BridgeStreet or, in the case of BridgeStreet,
at BridgeStreet's principal place of business, attention of Chairman of the
Board, or to such other address as either party may specify by notice to the
other actually received.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior communications,
agreements and understandings, written or oral, with respect to the terms and
conditions of the Executive's employment.
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19. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by an expressly authorized
representative of BridgeStreet.
20. HEADINGS. The headings and captions in this Agreement are for
convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
22. GOVERNING LAW. This Agreement shall be construed and enforced
under and be governed in all respects by the laws of the State of Ohio, without
regard to the conflict of laws principles thereof. Each party hereby agrees to
submit himself or itself to the jurisdiction of the Common Pleas Court of the
State of Ohio and to the jurisdiction of the United States District Court for
the Northern District of Ohio, for purposes of any suit, action, or other
proceeding arising out of this Agreement and to the subject matter of the same,
and hereby waives, and agrees not to assert, as a defense in any such suit,
action, or proceeding that he or it is not subject to such jurisdiction, or that
such suit, action or proceeding may not be brought or is not maintainable in
such courts, or that any suit, action, or proceeding brought in any other court
is not transferable to any such Ohio court.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Executive and BridgeStreet, by its duly authorized
representative, as of the date first above written.
EXECUTIVE: BRIDGESTREET INTERNATIONAL INC.
/s/ Xxxxxxx X. Xxxxxx, III By: /s/ Xxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxx III Name: Xxxx X. Xxxxxxxx
Title: Chairman of the Board
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EXHIBIT A
BRIDGESTREET ACCOMMODATIONS
BONUS COMPENSATION PROGRAM
OBJECTIVE: To create a bonus compensation program which drives the
management team of BridgeStreet to build shareholder value
through stock price appreciation. An effective bonus program
should focus the management team to balance near term
profitability with long term sales growth and new market
expansion strategies.
Important variables to consider:
I. ACHIEVING QUARTERLY EARNINGS ESTIMATES
- Reduces stock price volatility
- Builds credibility in the investment community/enhances stock price
- Positively impacts stock purchase component of acquisitions (i.e.,
higher stock price reduces the number of shares issued upon acquisition)
II. ACCRETIVE ACQUISITIONS OF COMPANIES IN NEW AND EXISTING MARKETS
- Positions the Company for long term growth in sales and profitability
- Promotes regional cross sell capabilities
- Positions BridgeStreet as a national company
III. STOCK PRICE APPRECIATION
- Stockholder's yardstick for measuring success
As follows is a draft bonus compensation program for the management team of
BridgeStreet (percentages represent percent of total budgeted bonus $ amount):
BONUS CRITERIA BONUS % PAYMENT
-------------- ------- -------
Achieve qrterly earnings estimates (1st qtr) 12.5% Annually
Achieve qrterly earnings estimates (2nd qtr) 12.5% Annually
Achieve qrterly earnings estimates (3rd qtr) 12.5% Annually
Achieve qrterly earnings estimates (4th qtr) 12.5% Annually
----
50.0%
To receive all or part of the annual bonus related to achieving quarterly
earnings estimates, the annual earnings estimate must be achieved. If the annual
earnings estimate is met, management will be bonused based upon each quarterly
earnings estimate that is met.
ANNUAL STOCK PRICE APPRECIATION
[GREATER THAN]20% 30.0% Annually
[GREATER THAN]15% 20.0% Annually
[GREATER THAN]10% 10.0% Annually
DISCRETIONARY BASED UPON OTHER OBJECTIVE 20.0% Annually
Examples would be: acquisitions, geographic
expansion, implementation of best practices,
installation of information systems, etc.
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EXHIBIT B
"Change in Control" means the occurrence of any of the following events:
(a) BridgeStreet is a party to, or the stockholders approve, a merger,
consolidation or reorganization with another corporation (other than a merger,
consolidation or reorganization that would result in the voting power of the
securities outstanding immediately before such merger, consolidation or
reorganization to continue to represent (either by virtue of such securities
remaining outstanding or being converted into securities of the surviving
entity) more than 50% of the voting power immediately following such merger,
consolidation or reorganization); (b) a sale of all, or substantially all, of
the assets of BridgeStreet; (c) any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, or any
syndicate or group deemed to be a person under Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), becomes the
"beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of shares of Common Stock representing 51% or more of the voting
power of BridgeStreet's then outstanding securities entitled to vote in the
election of directors of BridgeStreet; (d) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board,
and any new directors whose election by the Board or nomination for election by
BridgeStreet's stockholders was approved by a vote of at least three-quarters of
the directors then still in office who either were directors at the beginning of
the period or whose selection or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or (e)
BridgeStreet is dissolved or liquidated; provided, however, that a change in
control under clause (a), (b), (c) or (e) shall not be deemed to be a Change in
Control as a result of an acquisition of securities of BridgeStreet (or, in the
case of clause (e), assets of BridgeStreet or securities of a successor to
BridgeStreet) by an employee benefit plan maintained by BridgeStreet (or, in the
case of clause (e), a successor) for its employees.
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