AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into this 4th day of December, 1995, effective as of the
28th day of June, 1995, by and between Lone Star Hospitality
Corp. (hereinafter referred to as "Employer"), a Delaware
corporation having its principal place of business at 0000 Xxxxxx
Xxxxx Xxxx., Xxxxxx, Xxxxx, and Xxxxx Xxxxxxx (hereinafter
referred to as "Employee").
RECITALS:
1. Employer desires to employ Employee as its President
and Chief Executive Officer.
2. Employee desires to be employed by Employer in such
capacity.
3. The parties to this Agreement wish to reduce to writing
their prior oral understanding and agreement as to employment and
compensation of Employee.
NOW, THEREFORE, in consideration of the representations,
warranties and mutual promises hereinafter set forth, it is
agreed as follows:
1. Employment. Employer hereby employs Employee and
Employee hereby accepts employment in an executive capacity with
Employer in Dallas, Texas, and agrees, upon election by the Board
of Director of Employer, to serve as President and Chief
Executive Officer of the Employer subject to the terms and
conditions herein set forth.
2. Term of Employment. Subject to the provisions for
termination as hereinafter provided, the term of this Agreement
(the "Term") shall commence on the 1st day of June, 1995, and
shall terminate on May 31, 2000. After May 31, 2000, the parties
may extend this Agreement for additional periods of time and at
such compensation as is mutually agreed upon by the parties from
time to time upon the execution of a mutually agreed written
Extension Agreement prior to the end of the Term or any extension
thereof Such additional extensions shall be valid until written
notice of termination is delivered by either party thirty (30)
days in advance of the termination date of this Agreement. If
the parties to this Agreement fail to execute an Extension
Agreement, unless otherwise terminated, this Agreement shall be
automatically renewed for an additional twelve (12) month period
from the expiration of the Term, or from the end of any period
covered by any subsequently executed extension, under the same
terms and conditions applicable at the end of the Term, or as may
be amended in writing, and shall automatically renew in such
manner each year thereafter.
3. Duties. Employee is hereby employed pursuant to the
terms of this Agreement, as President and Chief Executive Officer
of Employer and shall perform the duties assigned to such
positions in the Bylaws of the Employer and such other duties as
are customarily performed by a person holding such positions in
other similar businesses or enterprises as that engaged in by
Employer, and to additionally perform such other duties and
assignments relating to the business of the Employer and
consistent with the office of President and Chief Executive
Officer as the Board of Directors of Employer so directs. The
duties of Employee may be changed from time to time by the mutual
consent of Employee and Employer without resulting in a recision
of this Agreement.
4. Other Employment. Employee shall devote his entire
productive time, knowledge, skill, ability, energies, and
attention solely and exclusively to the business of Employer
during the Term of this Agreement and any extension thereof.
Employee shall not engage in any other employment activity during
such time. This restriction shall not prevent Employee from
engaging in other business or investment activities so long as
such activities do not require the personal services of Employee.
5. Compensation. As compensation for all services
rendered by Employee under this Agreement, Employer shall pay
Employee as follows:
(a) Base Salary. Employee shall receive a base salary
of the following monthly amounts which shall be payable on
the last business day of each month, beginning June 30,
1995:
Period Monthly Salary
June 1, 1995-May 31, 1996 $10,000
June 1, 1996-May 31, 1997 $11,000
June 1, 1997-May 31, 1998 $12,000
June 1, 1998-May 31, 1999 $12,000
June 1, 1999-May 31, 2000 $12,000
(b) [Reserved]
(c) [Reserved]
(d) Discretionary Bonus. Employee may receive other
bonuses or other extraordinary compensation as determined in
the discretion of the Board of Directors of Employer. Such
bonuses shall be paid at such times and in such amounts as
the Board of Directors may determine.
(e) Postponement of Payment. Employee agrees to defer
the base salary to which Employee is entitled for a period
not to exceed twelve months from the date such installment
of base salary is due (the "Deferral Period") until the
earlier of the date Employer (i) has a positive cash flow,
including general and administrative expenses and debt
service requirements or (ii) has raised $1,000,000 in
capital (including both debt and equity) or, (iii) or has
received value of at least $1,000,000 of value in
acquisition or merger for stock of Employer. Also, in
addition, upon Employer raising an additional $1,000,000 in
capital or receipt of value of $1,000,000, as aforesaid,
Employee shall be entitled to a bonus of $100,000. Payments
of salary deferred or postponed under this paragraph shall
not bear interest.
(f) Withholding for Taxes. All payments under this
Agreement shall be subject to federal withholding and other
applicable taxes.
6. Incentive Stock Options.
(a) Upon execution of this Agreement, Employee shall
be granted an option to acquire 1,000,000 shares of the
common stock ($0.04 par value) of Employer (prior to
one-for-five reverse stock split). The exercise price of
such option shall be $0.07 per share (representing more than
110% of the fair market value of such shares as of the date
hereof). Subject to any restrictions necessary to qualify
the plan described below under Section 422 of the Internal
Revenue Code of 1986, such options shall be exercisable
immediately and shall remain exercisable for a period of at
least five years. All such shares shall be subject to
adjustment pursuant to any stock split, reverse stock split,
reclassification or similar change in share structure.
Employer does not warrant any tax benefits or advantages to
Employee in respect to such option.
(b) As soon as practicable, Employer shall adopt an
incentive stock option plan in compliance with Section 422
of the Internal Revenue Code of 1986. The options granted
to Employee under paragraph (a) shall be granted under such
plan. The exercise price of any options granted hereunder
or under the incentive stock option plan may be paid either
in cash or by the delivery to Employer of a number of shares
previously issued to Employee which have a fair market value
equal to the exercise price of the options Employee seeks to
exercise at that time.
7. Automobile Allowance. Employer shall pay Employee an
automobile allowance of $950.00 per month, payable on the last
business day of each month. Employee shall, at his own cost and
expense, procure an automobile for use in Employer's business.
Employee shall further procure and maintain in force an
automobile liability policy covering such automobile with
Employer as the named insured in the minimum amount of $1,000,000
for bodily injury or death in one accident, $1,000,000 for bodily
injury or death to one person in one accident and $100,000 for
property damage in one accident. Employee shall deliver to
Employer a true copy of such automobile liability insurance
policy. Employee shall further, at his own cost and expenses,
maintain such automobile in proper operating condition. In lieu
of such allowance, Employer may provide an automobile
satisfactory to Employee and pay the insurance and maintenance
costs thereof; provided, however, that if Employee has acquired
an automobile for use in the Employer's business, the Employer
may not substitute the provision of an automobile except upon
twelve months' notice.
8. Employee Benefits.
(a) In addition to any key man insurance maintained by
Employer for its benefit, Employer shall purchase and pay
the premiums on a life insurance policy covering Employee in
the amount of at least $1,000,000. Employee shall have the
sole right to designate one or more beneficiaries under such
policy. The current one-year term cost of such policy shall
be included in Employee's income to the extent required by
law.
(b) Employer shall continue the salary of Employee for
a period of 180 days if Employee is not able to perform his
duties as a result of personal injury, disability or
illness. Employer shall maintain a disability income policy
which shall commence payment of benefits to Employee
beginning not later than the 181st day of his disability at
a rate equal to at least 60% of his compensation for the
twelve-month period immediately preceding the illness,
injury or other event causing disability (including any
deferred or postponed payments). The cost of such insurance
shall be included in the income of Employee.
(c) Employer shall include Employee and his dependents
under Employer's current major medical benefit plan at no
cost to Employee.
(d) Employee shall be entitled to participate in any
employee benefit plans or agreements maintained or adopted
in the future by Employer relating to retirement, health,
disability, dental, group term life insurance, paid
holidays, and other related benefits offered to employees
generally by Employer.
9. Vacation. Employee shall be entitled each year to
three weeks vacation for each calendar year, during which time
his compensation shall be paid in full. If Employee is for any
reason unable to take such vacation, the compensation which would
have been paid to him during such vacation shall be carried
forward from year-to-year and paid to Employee upon termination
of his employment in addition to any other severance pay to which
he shall be entitled.
10. Working Facilities. Employee shall be furnished with a
private office at Employer's principal executive office (at which
he shall be stationed). Employee shall also be provided
stenographic help and such other facilities and services,
suitable to his position and adequate for the performance of his
duties.
11. Business Expenses. Employer shall pay all costs and
expenses incurred by Employee in the performance of his duties
hereunder. Employer shall reimburse Employee for any such costs
or expenses paid by him promptly upon the submission of receipts
or other verification.
12. Termination. This Agreement shall not be terminated
prior to the expiration of its Term or any extension thereof
except upon the mutual consent of the parties hereto, or in the
event of the death or permanent total disability of the Employee,
or for due cause, upon the good faith determination by the Board
of Directors of the Company that "due cause" exists for the
termination of the employment relationship. As used herein, the
term "due cause" shall mean any of the following events:
(i) any intentional misapplication by
Employee of the Company's funds, or any other act of
dishonesty injurious to the Company committed by
Employee; or
(ii) Employee's conviction of a crime
involving moral turpitude, or
(iii) Employee's breach, non-performance or
non-observance in any material respect of a material
term of this Agreement, including his duties and
obligations as an employee, if such breach,
non-performance or non-observance shall continue beyond
a period of five (5) business days immediately after
notice thereof by the Company to Employee; or
(iv) any other action by the Employee
involving willful and deliberate malfeasance or gross
negligence in the performance of Employee's duties.
For purposes of this agreement, disability shall mean
such physical, mental or emotional disability of Employee as
defined in the disability insurance policy purchased by
Employer under Section 8(b) hereof which renders Employee
unable to perform his duties for a period of six (6)
consecutive months. Any other termination of the Agreement
shall be in breach hereof and shall not prejudice any other
remedy to which the non-terminating party may be entitled to
either at law, in equity or under this Agreement.
13. Severance Payments.
(a) If this Agreement is terminated due to the death
or disability of Employee, no severance payments shall be
due to Employee.
(b) [Reserved]
(c) If Employee's employment is terminated by Employer
otherwise than due to one of the reasons specified in
Section 12, Employee shall be entitled to a severance
payment equal to the greater of (i) the remaining payments
which would have been made during the Term of this Agreement
or any extension thereof, discounted to present value using
an interest rate of six percent (6.0%) or (ii) an amount
determined by multiplying his base salary for the most
recently completed full month of employment by 24. Such
amount shall be paid in a lump sum within 30 days after the
effective date of his termination of employment.
(d) In addition to the foregoing amounts, Employee
shall be entitled upon termination of employment for
whatever cause to any unpaid salary, bonus and vacation pay.
Such amounts shall be paid in a lump sum within 30 days
after the effective date of his termination of employment.
Any options to purchase shares which would be exercisable
during the Term of this Agreement or any extension thereof
shall become fully exercisable upon the termination of this
Agreement.
14. Waiver of Breach. The waiver by Employer of a breach
of any provision of this Agreement by Employee shall not operate
or be construed as a wavier of any subsequent breach by Employee.
15. Legal Construction and Severability. If any one or
more of the provisions contained in this Agreement shall for any
man be held invalid, illegal, unenforceable in any respect, under
present or future law, such provision shall be fully severable
and such invalid, illegal, or unenforceable provision shall not
affect any other provision of this Agreement. In such event this
Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part of
this Agreement and the remaining provisions of this Agreement
shall continue in M force and effect and shall not be affected by
the illegal, invalid, or unenforceable provision or its severance
from this Agreement. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision, there shall be added
automatically as a part of this Agreement, a provision as similar
in terms to such illegal, invalid, or unenforceable provision as
may be possible and be legal, valid, and enforceable.
16. Assignment. This Agreement is not assignable by
Employee without the prior written consent of Employer, and is
not assignable by Employer except with the consent of Employee
and then only to a partnership, corporation, or other entity
which shall purchase substantially all of its assets or shall be
its legal successor pursuant to any merger, consolidation, or
other action permitted by law. Subject to the qualification in
the preceding sentence, the rights and obligations of Employer
under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of Employer.
17. Governing Law; Venue. This Agreement shall be
construed under and in accordance with the laws of the State of
Texas. In the event that any legal proceedings are instituted
concerning the interpretation or enforcement of this Agreement,
exclusive venue over such proceedings shall be vested in courts
sitting in Dallas County, Texas.
18. Attorneys' Fees and Costs. If any action at law or in
equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs, and necessary disbursements in addition
to any other relief to which he may be entitled.
19. Notices. Any notice required or permitted to be given
under this Agreement shall be sufficient if in writing, and sent
by registered or certified mail to his residence in the case of
Employee, or to its principal office in the case of Employer.
20. Entire Agreement. This Agreement constitutes the sole
and only agreement of the parties hereto and supersedes any prior
understanding or written or oral agreement between the parties
respecting the within subject matter. This Agreement may not be
changed or-ally, but only by an agreement in writing signed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
amended and restated agreement as of this 4th day of December, 1995.
XXXXXXXX HOSPITALITY CORP.
By:
Title:
EMPLOYEE:
Xxxxxx X. Xxxxxxx
